Bonds Industries Limited v Borg

[2007] NSWWCCPD 80

WORKERS COMPENSATION COMMISSION

DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR

CITATION:Bonds Industries Limited v Borg [2007] NSWWCCPD 80

APPELLANT:  Bonds Industries Limited

RESPONDENT:  Susan Borg

INSURER:Self insurer

FILE NUMBER:  WCC15624-04

DATE OF ARBITRATOR’S DECISION:          6 October 2005

DATE OF APPEAL DECISION:  8 March 2007

SUBJECT MATTER OF DECISION: Leave to appeal; factual errors not affecting the result; estoppel from prior consent award for lump sum compensation; section 67 – pleading, approach on review; procedural fairness; section 40.

PRESIDENTIAL MEMBER:  Acting Deputy President Michael Snell

HEARING:On the papers

REPRESENTATION:  Appellant: Leigh Virtue & Associates          

Respondent: Beilby Poulden Costello           

ORDERS MADE ON APPEAL:  Paragraph 1 of the decision of the Arbitrator, dated 6 October 2005, is revoked and the following decision is made in its place:

“The Respondent is to pay the Applicant weekly compensation pursuant to section 40 at the following rates:

(i)$222.00 per week from 12 January 2004 to 30 June 2004:

(ii)$161.49 per week from 1 July 2004 to date and continuing.”

The balance of the decision of the Arbitrator dated 6 October 2005 is confirmed.

No order as to costs of the appeal.

BACKGROUND TO THE APPEAL

1. On 26 October 2005 Bonds Industries Limited (‘the Appellant Employer’) sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Workers Compensation Commission (‘the Commission’) against a decision, dated 6 October 2005.

1. The Respondent to the Appeal is Susan Borg (‘the Respondent Worker’).

1. The Respondent Worker was born on 30 April 1960. She commenced employment with the Appellant Employer from about 2 October 1990, as a picker and packer, working full-time. She relied upon an injury to her left shoulder suffered on 30 January 1992, when lifting in the course of this employment. She came under the care of the orthopaedic surgeon, Dr Matthew Giblin, who carried out manipulations and injections to the shoulder, followed by an arthroscopic procedure on 18 November 1992. She was then referred to Professor Sonnabend, who carried out surgery to the left shoulder on 10 March 1993, involving “a routine anterior capsular shift”. Post-operatively a diagnosis of ‘frozen shoulder’ was made. The Respondent Worker came under the care of a pain management specialist, Dr Salmon. He administered various treatments, including injections to the shoulder. She was assessed by other treating specialists, including Dr Howell, rheumatologist, Dr Rail, neurologist, and Dr Bokor, orthopaedic surgeon.

1. About two years after Professor Sonnabend’s surgical procedure, the Respondent Worker resumed employment with the Appellant Employer full-time, but with restrictions on the use of her left arm. She did this work for about one year. As at 21 June 1996, when she was being examined by Dr Maloney at the Appellant Employer’s request, she said she was continuing in office duties, which she had commenced in October 1995. She told Dr Noll, on about 10 September 2003, that after carrying out the light work for approximately one year, she was unemployed until commencing childcare work, further described below.

1. The Respondent Worker brought proceedings for lump sum compensation pursuant to sections 66 and 67 of the Workers Compensation Act 1987 (‘the 1987 Act’) in the Compensation Court. A consent award was entered on 9 August 1996, for a sum representing 30% permanent loss of the left arm, together with $12,500 in respect of pain and suffering.

1. The Respondent Worker commenced working as a childcare assistant at St Andrews Child Care Centre from about 2000. She normally worked twenty hours per week, although sometimes more if teachers were on leave or sick. She said she had not worked more than thirty hours per week in this job. Her statement of 15 August 2004 described some difficulties with this work. She said she did not lift or carry children, tried to avoid nappy changing, avoided the setting up or packing away of chairs or tables, and tried to avoid children knocking her left shoulder. She said her workmates assisted her with heavier tasks. She believed the hours she was working reflected the full extent of her capacity.

1. The Appellant Employer advised the Respondent Worker, by letter dated 2 December 2003, that voluntary weekly payments pursuant to section 40 of the1987 Act would be reduced to $85.57 on the basis she was fit for various jobs, including that of child care worker, on a full-time basis. It appears she was being paid weekly compensation on a voluntary basis, at a rate of $150.00 per week, prior to that time. The Respondent Worker’s Application to Resolve a Dispute sought weekly compensation at the appropriate maximum statutory rate, from 12 January 2004, on a continuing basis. It also claimed further lump sum compensation, resulting from an alleged ten percent additional loss of the left arm at or above the elbow.

1. The Appellant Employer’s Reply listed the issues as the “cause, nature and extent of any incapacity for work since 12 January 2004”, quantification of the Respondent Worker’s section 40 entitlement since 12 January 2004, and whether there was any further loss of use of the left arm, since the earlier settlement.

1. The Respondent Worker was examined by Dr Bates, an approved medical specialist (‘AMS’) on 5 May 2005. This resulted in the issue of a medical assessment certificate (‘MAC’) certifying the Respondent Worker suffered from 35% permanent loss of efficient use of her left arm.

1. The matter was listed for arbitration hearing on 22 August 2005. Both parties were legally represented. The Respondent Worker sought and was granted an adjournment, over the opposition of the Appellant Employer, on the basis the Appellant Employer had failed to comply with earlier orders made on a telephone conference, for the production of certain wage material going to the probable earnings of the Respondent Worker if not for injury. The Appellant Employer contended it had supplied the best material it could. Directions were made for the production of additional material.

1. The matter was listed again for arbitration hearing on 20 September 2005. Both parties relied upon their documentary material; no oral evidence was called. The Arbitrator heard addresses from both sides, and reserved his decision.

THE DECISION UNDER REVIEW

1. The ‘Certificate of Determination’, dated 6 October 2005 records the Arbitrator’s orders as follows:

“1.The Respondent is to pay the Applicant weekly compensation, pursuant to

s 40 of the 1987 Act, in the amount of $222.00 per week, from 12 January 2004 to date and continuing.

2.The Respondent is to pay the Applicant the sum of $3,701.25 pursuant to

s 66 of the 1987 Act, in respect of an additional 5% permanent impairment as conclusively found by the AMS.

3.The Respondent is to pay the Applicant the sum of $2,320 pursuant to s 67 of the 1987 Act for pain and suffering.

4.The Respondent is to pay the Applicant’s costs as agreed or assessed.”

ISSUES IN DISPUTE

1. The Application to Appeal Against Decision of Arbitrator lists fifteen grounds of appeal. I shall not quote them verbatim. The issues they touch on are as follows:

1.   The Arbitrator erred in not having regard to evidentiary material put on by the Appellant Employer. Such material it is said, in so far as it went to the topic of earnings, is not listed in [4] of the Arbitrator’s Reasons, as material he took into account in reaching his decision.

2.   The Arbitrator erred in saying, at [7] of his Reasons, that the Respondent Worker had been in receipt of an award of weekly compensation, when this was incorrect.

3.   The Arbitrator incorrectly identified the issues in dispute between the parties (at [5] to [11] of his Reasons).

4. The Arbitrator, in making the award for a further payment pursuant to section 66 of the 1987 Act, incorrectly stated the MAC of Dr Bates was “accepted by the parties”, when in fact the Appellant Employer had submitted the MAC could not form the basis of a further award pursuant to sections 66 and 67. It is also said the Arbitrator failed to give adequate reasons for his decision on this point.

5. The award of a further lump sum for pain and suffering pursuant to section 67, when considered in conjunction with the quantum of the earlier consent award pursuant to section 67, is manifestly excessive.

6.   The Arbitrator erred in giving undue weight to the statement of the Respondent Worker, as it was not adopted by the Respondent Worker, and was inconsistent with surveillance material relied upon by the Appellant Employer.

7.   The Arbitrator denied the Appellant Employer procedural fairness, in granting the Respondent Worker an adjournment when the matter was initially listed for arbitration hearing on 22 August 2005.

8.   The Arbitrator erred in stating Ms McMahon, a Human Resources Manager with the Appellant Employer had attended at the Commission, when this was not the case, and in having regard to this in determining the matter.

9.   The Arbitrator erred in having regard to information said to have been provided by Ms McMahon, when this was not in evidence.

10.  The Arbitrator erred in his understanding of the Appellant Employer’s submissions on probable earnings if not for injury (as stated in his Reasons), erred in failing to give adequate reasons for rejecting such submissions, and erred in the assessment he made of the adequacy of earning information supplied by the Appellant Employer.

11.  The Arbitrator erred, at [31] of his Reasons, in saying nothing had been put to him to the effect the Respondent Worker’s actual earnings, and ability to earn, were other than as evidenced by her taxation returns. The Appellant Employer says it had in fact submitted to the Arbitrator that the Respondent Worker’s ability to earn exceeded her average earnings as reflected in the group certificates and taxation returns. It is also submitted the Arbitrator failed to give adequate reasons for rejecting the submissions of the Appellant Employer on this point.

12.  The Arbitrator erred in finding the Respondent Worker’s actual earnings subsequent to 30 June 2004 were the same as for the financial year ended 30 June 2004, in that this was contrary to the evidence of her taxation return for the financial year ended 30 June 2005. There is an assertion the Arbitrator’s finding in this regard was an attempt to “punish the employer for providing comparable information with which the Arbitrator was apparently (and unjustifiably) dissatisfied”. The decision, it is said “evinces bad faith and/or bias”.

13.  The Arbitrator erred, in considering the acceptability of the evidence of Dr Noll (in the Appellant Employer’s case) on incapacity for work, in comparing that doctor’s views on permanent loss with those of the AMS. 

1. The Notice of Opposition to Appeal lodged on behalf of the Respondent Worker takes issue with all the grounds of appeal raised by the Appellant Employer, and submits the Arbitrator’s decision should be confirmed.

1. The Application to Appeal, and grounds therein, were lodged with the Commission prior to transcript of the arbitration hearing being available. The Appellant Employer, at the conclusion of the appeal document, sought leave to make further submissions when transcript was available. Additionally, the solicitor for the Appellant Employer wrote to the Registrar of the Commission on 23 November 2005, seeking the right to be heard on the question of whether the Respondent Worker should be allowed to rely upon submissions filed out of time. As a consequence, when the appeal was allocated to me, I made a Direction on 12 December 2006 in the following terms:

“1.The Appellant is invited to make written submissions on, and limited to, the following matters, should it wish, on or prior to 22 December 2006:

(i)   Whether the Respondent should be given leave to rely upon its submissions lodged 22 November 2005, given that such submissions were filed outside the period specified in clause 1(3) of the Commission’s directions dated 27 October 2005.

(ii)    Any matters arising from the Transcript of the arbitral proceedings, or from the submissions of the Respondent attached to its Notice of Opposition to Appeal lodged 22 November 2005. 

2.The Respondent is invited to make written submissions, should it wish, in response to the further submissions of the Appellant, on or prior to 12 January 2007.”

1. At the request of the solicitor for the Respondent Worker, the date in the second of these directions was varied to 2 February 2007.

1. Pursuant to my Direction, further submissions were lodged by the Appellant Employer, under cover of letter dated 22 December 2006. These further submissions, inter alia, opposed the Respondent Worker being given leave to rely upon the submissions attached to her Notice of Opposition to Appeal. The Notice of Opposition had been lodged on 22 November 2005, a little after 18 November 2005, the date provided for its filing in the Commission’s Direction of 27 October 2005. The Respondent Worker ultimately did not seek to make further submissions, and advised the Commission of this by letter dated 13 February 2007.

ON THE PAPERS REVIEW

1. 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.”

1. The Respondent Worker has indicated she does not object to the matter being dealt with on the papers, although nor would she object to an oral hearing. The Appellant Employer submitted there should be an oral hearing. Two reasons were proffered for this.

1. The first was that “additional information and documentation” sought had not yet been provided. Subsequent to that submission, the Appellant Employer was furnished with transcript, and had an opportunity (which it has availed itself of) to make submissions on the transcript. It also wrote to the Commission on 24 October 2005 asking for a copy of the Commission’s file, as it was said to be unclear which of the documents filed in the matter were considered by the Arbitrator. This request would seem unnecessary. Clearly the Appellant Employer was aware of the documentation on which it had relied, and there was no suggestion documents from the Respondent Worker’s side, beyond those served on the Appellant Employer, were used in evidence. The documents before the Arbitrator were a matter of record. The Appellant Employer’s solicitor appeared on the arbitration hearing, and would have been aware of documents used by both sides. This also would be apparent from the transcript. Now the Appellant Employer has had an opportunity to make submissions in writing, flowing from the transcript, I do not regard the first of the reasons it gives for requiring an oral hearing as being persuasive.   

1. The second reason relied upon is that careful consideration will be required of whether any error can be corrected on appeal, or rather, whether error, if found, would require the matter be referred back to a different arbitrator for rehearing. These alternative approaches are available in most Presidential appeals (if upheld). I do not, in the circumstances of the current appeal, regard it as a persuasive reason for holding an oral hearing.

2. Having regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submission by the Respondent Worker that the appeal can proceed to be determined on the basis of these documents, I am satisfied that I have sufficient information to proceed ‘on the papers’, without holding any conference or formal hearing, and that this is the appropriate course in the circumstances. 

LEAVE

1. Before proceeding to deal with an appeal the Commission must determine whether the application meets the requirements of section 352 of the 1998 Act.

1. The Application for Leave to Appeal in fact purports to appeal two decisions. On the front page of the document it gives the date of the decision appealed against as 6 October 2005. This is the date of the decision in the Certificate of Determination referred to above. However a somewhat discursive ground of appeal found at paragraph [1(g)] of the grounds, asserts a denial of procedural fairness in “granting an adjournment to the worker over the objection of the employer”. This must be a reference to the decision of the Arbitrator on 22 August 2005, referred to at [10] above. It is the issue on appeal I have referred to at paragraph [13(7)] above. The decision of 22 August 2005 was not part of the decision of 6 October 2005. The decision of 22 August 2005 can only be appealed if it is appropriate to grant leave pursuant to section 352(2) of the 1998 Act.

1. Section 352(2) provides:

“The Commission is not to grant leave to appeal unless the amount of compensation at issue on the appeal is both:

(a)  at least $5,000 (or such other amount as may be prescribed by the regulations), and

(b)  at least 20% of the amount awarded in the decision appealed against.

1. The decision of 22 August 2005 to grant an adjournment did not involve any award of compensation. It has been held the monetary prerequisite in section 352(2)(a) does not have application, where no sum is awarded: Mawson v Fletchers International Exports Pty Ltd [2002] NSWWCCPD 5. However, in applying section 352(2) to an appeal involving an adjournment, Fleming DP in Tagg v International Flavours and Fragrances (Australia) Pty Ltd [2003] NSWWCCPD 5 (‘Tagg’) said:

   “Section 352 refers to the ‘amount of compensation at issue on the appeal’. This ‘amount’ may be different from the amount of compensation at issue in the dispute as a whole. A party may, for example, have received an award that results in partial success in relation to the amount of the original claim. In my view an appeal against a decision to grant an adjournment of a telephone conference does not concern the amount of compensation at issue in the dispute, nor in the appeal. There is no evidence that the grant of the adjournment in this matter put in issue the amount of the Appellant’s claim, affected the ability to pursue the amount claimed in the Commission or caused the Appellant a substantial injustice. The granting of an adjournment in this case was purely procedural and does not meet the threshold test in section 352(2)(a). The Appellant will have a full opportunity to conduct its case before the Commission at a later date. The right of appeal in relation to the Arbitrator’s decision on the substantive issues remains.

2. These remarks are, in my view, apposite to the Appellant Employer’s application for leave to appeal the decision of 22 August 2005. As in Tagg, the decision on the adjournment application was procedural, and the threshold test in section 352(2) is not met. Accordingly, to the extent the Appellant Employer’s Application to Appeal seeks to review the decision of 22 August 2005, leave to appeal is refused. 

3. The decision of 6 October 2005 is quite different. The quantum of compensation awarded in that decision exceeds the sum of $5,000.00 prescribed in section 352(2), and the whole of the sum awarded is appealed against. The threshold requirements are satisfied, in so far as that decision is concerned.

1. The appeal was lodged within 28 days of the Arbitrator’s decision of 6 October 2005, in compliance with section 352(4) of the 1998 Act.

1. It is appropriate I grant leave to appeal, in respect of the decision of 6 October 2005.

DISCUSSION AND FINDINGS

Preliminary

1. The Appellant Employer, in its submissions lodged 22 December 2005, opposes the Respondent Worker being allowed to rely upon her submissions on the appeal, attached to her Notice of Opposition to Appeal. The reason for this is that the Directions made by the Registrar’s delegate on 27 October 2005 provided the Respondent Worker should file and serve her Notice of Opposition and supporting documentation by 18 November 2005. The document was lodged with the Commission (according to the Commission’s date stamp) on 22 November 2005, four days late. 

1. The Appellant Employer does not suggest it is prejudiced in any way by this relatively minor non-compliance with the earlier Direction. The basis of its opposition is simply that the Respondent Worker’s document was late, and if “the direction is to have any meaning at all it can only be that the failure to comply with the Direction will have the result in (sic) the respondent not being able to rely on any submissions”. Having regard to the limited extent to which the document was late, the lack of any claim of prejudice, and the consequence for the Respondent Worker if I did not grant leave for the document to be relied upon, the interests of justice require that I grant leave to the Respondent Worker to rely upon her Notice of Opposition, and the submissions incorporated therein. I do so.

The Nature of Review

1. A Presidential member, conducting a review pursuant to section 352 of the 1998 Act, clearly has power to correct errors of the kind identified in House v The King [1936] 55 CLR 499. In The King Island Company Limited v Deery [2005] NSWWCCPD 1 Fleming DP said:

“A Presidential Member on appeal 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 a 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 the Presidential Member to revoke the decision pursuant to section 352(7) of the 1998 Act and to substitute a new decision in its place, are exercisable only where it is demonstrated that the decision of the Arbitrator is affected by some legal, factual or discretionary error (Allesch v Maunz (2000) 203 CLR 172). Alternatively, the Presidential Member may remit the matter back to the Arbitrator concerned, or to another Arbitrator, for determination in accordance with any decision or directions made.” (at [19])

1. In Westpac Banking Corporation v Kilby & Bananacoast Credit Union Ltd [2005] NSWWCCPD 24 (Byron DP) at [54] said:

“As stated in South Western Sydney Area Health Service v Edmonds [2005] WCCPD 18, the weight and relevance to be given to evidence before an Arbitrator is a matter in the discretion of that Arbitrator. The decision of the Arbitrator should not be overturned unless it can be demonstrated that the Arbitrator has failed to exercise that discretion fairly and according to law. This may occur when an Arbitrator has acted upon an incorrect legal principle, allowed irrelevant considerations to influence the decision, made a material mistake as to the facts, or failed to take into account relevant and material considerations, (House v The King (1936) 55 CLR 499 at 504-505; Norbis v Norbis (1986) 161 CLR 513 at 520, and In the Matter of National Roads and Motorists Association Ltd [2003] FCAFC 206 at [21]).

1. However the review process is broader than correction of error of the kind identified in House v The King. In Aluminium Louvres & Ceilings Pty Limited v Zheng [2006] NSWCA 34 (‘Zheng’) Bryson JA said:

“A review is a different process to an appeal and the matters which may be considered and the manner in which they may be considered are somewhat wider. See Boston Clothing Co Pty Ltd v. Margaronis (1992) 27 NSWLR 580 at 584 (Kirby P). An attack, on review or otherwise, on an Arbitrator's discretionary decision in controlling procedure may be based on the test stated in House v. R (1936) 55 CLR 499 at 504 - 505; but that is not the only basis on which the Presidential member may act. The powers of a Presidential member on review are somewhat wider and extend to power to reopen consideration of a matter of which an Arbitrator has disposed; the manner in which the powers of the Presidential member are to be exercised is itself the subject of discretion of the Presidential member.”

1. This passage was recently quoted with approval by McColl JA in South Western Sydney Area Health Service v Edmonds [2007] NSWCA 16 (‘Edmonds’) at [134]. Thus, where there was expert evidence on a medical question amounting to a bare ipse dixit, it was insufficient to regard the weight and relevance to be attached to such evidence as a matter in the discretion of the Arbitrator. To describe the relative weight and relevance of the expert evidence as “a discretionary decision which could only be disturbed on House v The King principles” was described by McColl JA as “an over-generalisation” (at [133]).

The Appellant Employer’s Grounds of Appeal

Failure to Consider Evidence

1. The first of the grounds of the appeal relied upon is expressed in very broad terms. It is said the Arbitrator failed to have regard to material admitted in evidence “on behalf of the Appellant (and even the worker)”. It goes on to complain the Arbitrator failed to list certain material relevant to the question of ‘wages’, at [4] of his Reasons, where he described the documentary evidence before him. Much of the Arbitrator’s Statement of Reasons, from [24] to [34], is devoted to description of the material before him relevant to determining actual earnings, and probable earnings if not for injury, the two limbs of the section 40(2) equation. He there analyses the documentary evidence, and sets out his reasons for reaching his conclusions. It is of no significance that the Arbitrator failed to list the documentary material relevant to the ‘wages’ issue at [4] of his Reasons. The material the Arbitrator considered is apparent from those sections of his Reasons dealing with this issue. Some of the grounds of appeal of the Appellant Employer raise more substantive arguments going to the Arbitrator’s fact finding relevant to section 40, and are dealt with subsequently in these Reasons.

Misstating the Evidence – Prior Consent Award

1. The second of the grounds of appeal asserts error in the Arbitrator’s description at [7] of his Reasons, of the Respondent Worker having “received an Award of compensation and that this was common ground”. The Appellant Employer states the Respondent Worker had not previously “received any Award for weekly compensation”. The Respondent Worker, in the submissions filed on her behalf, accepts there had not been any prior award of weekly compensation, however says she “was in receipt of an agreed payment of compensation of $150.00 gross per week”. The Further Submissions of the Appellant Employer, filed subsequently, do not cavil with this assertion regarding the voluntary payment. The source of the Arbitrator’s misapprehension is readily apparent. It was submitted, on the Respondent Worker’s behalf, that there was “an agreed award” of $150 per week, when agreement was “reached in court” on 9 August 1996 (T15.15). In fact, this was the date when the earlier consent awards for lump sum compensation were made in favour of the Respondent Worker.

1. Although this represented a factual error, it is submitted on the Respondent Worker’s behalf it had “no bearing on the Arbitrator’s ultimate decision”. I accept this submission. The reference to the weekly “award” is made in passing, in a passage where the Arbitrator is reciting the history of the matter. There is no indication from his Reasons that this misapprehension had any effect on the decision reached. Whether the weekly payment was made on a voluntary basis, or pursuant to a consent award, was of little legal significance in any event. In Anderson v Charles Sturt University (2002) 25 NSWCCR 407 Neilson J said:

“Parties can ask the Court to enter up an award in accordance with their agreement. The Court, provided jurisdiction exists, can enter up that award. However, even though formed in the terms of a Court award, it is still in effect an agreement between the parties. It does not create any issue estoppel. Mere payment of compensation cannot amount to an estoppel but at most, if anything, an admission. Such was the decision of the Court of Appeal in APD Snack Foods Pty Ltd v Vuic [1984] 58 WCR (NSW) 62, a decision of Hutley AP, Glass and Mahoney JJA.” (at [30])

Incorrectly Identifying the Issues

1. The third ground of appeal relied upon, states the Arbitrator “incorrectly identified the issues in dispute between the parties”. It does not go on to further elucidate this ground. The issues in dispute are set out at [11] of the Arbitrator’s Reasons, as follows:

“1)Whether the applicant had suffered any increase in the permanent loss of use of her left arm since the prior settlement on 9 August 1996 which would entitle her to additional lump sum compensation pursuant to sections 66 and 67 of the 1987 Act.

2)The nature and extent of any incapacity for work since the Applicant’s weekly compensation was reduced on 12 January 2004 and the determination of her entitlement to weekly compensation pursuant to s 40 of the 1987 Act from that date.”

1. This statement is generally consistent with the issues raised by the Reply lodged on the Appellant Employer’s behalf by its original solicitors, on 20 October 2004. The supplementary submissions lodged by the Appellant Employer, at [4], point to an incorrect identification of the issues by the Arbitrator, being evidenced at T16.36 to T16.41. The passage referred to is in fact a submission by the solicitor for the Appellant Employer, in which he submits the claim for further lump sum compensation should fail, on the basis there is not evidence of “alteration” in the Respondent Worker’s condition, since the earlier consent award. I cannot see it supports a submission the Arbitrator incorrectly identified the issues. The issues the Arbitrator identified were those flowing from the Appellant Employer’s Reply. This ground of appeal in my view has no merit.

Status of the MAC/ Estoppel

1. The fourth ground of appeal relates to the Arbitrator’s description of the MAC, at [17] of his Statement of Reasons, where he says:

“The MAC was accepted by the parties on which basis the Applicant should receive a further sum of 0.5 X $74,025 or $3,701.25 in respect of the additional 5% permanent impairment found by the AMS.”

1. The Appellant Employer asserts it made no such concession, and indeed submitted to the contrary, maintaining the MAC did not, of itself, entitle the Respondent Worker to further lump sum compensation. It was submitted the Respondent Worker needed to establish deterioration in her condition, since the earlier consent award in 1996, if she were to be entitled to further compensation pursuant to section 66. The complaint by the Appellant Employer with how the Arbitrator dealt with this issue is also raised at [4] and [13] of its Further Submissions.

1. Section 326 of the 1998 Act provides:

   “326 Status of medical assessments

   (1) An assessment certified in a medical assessment certificate pursuant to a medical assessment under this Part is conclusively presumed to be correct as to the following matters in any proceedings before a court or the Commission with which the certificate is concerned:

   (a) the degree of permanent impairment of the worker as a result of an injury,
   (b) whether any proportion of permanent impairment is due to any previous injury or pre-existing condition or abnormality,
   (c) the nature and extent of loss of hearing suffered by a worker,
   (d) whether impairment is permanent,
   (e) whether the degree of permanent impairment is fully ascertainable.

   (2) As to any other matter, the assessment certified is evidence (but not conclusive evidence) in any such proceedings.”

2. The Respondent Worker’s submissions say the MAC represented conclusive evidence of “an additional 5% permanent impairment”, and this was correctly awarded. The consent award of 9 August 1996 was “in respect of 30% loss of use of the applicant’s left (non-dominant) arm” (see the Consent Award annexed to the Appellant Employer’s Reply). The MAC conclusively certified as to 35% loss of the left arm at or above the elbow, and that the whole of this loss was attributable to the relevant injury. These matters are conclusively presumed to be correct, pursuant to section 326(1). If effect is given to the conclusive nature of the MAC, there is an additional 5% loss.

3. The Appellant Employer’s argument against this proposition is that any further award pursuant to section 66 must represent an additional loss, since the 1996 award. To be satisfied there was such an additional loss, one would need evidence of deterioration in the condition of the Respondent Worker. It was submitted the evidence did not support the proposition there had been deterioration (see T16.40, T66.5 and T68.45). The Appellant Employer’s solicitor submitted:

   “What needs to be demonstrated is a material alteration in the applicant’s condition. What the evidence actually demonstrates is no alteration in the applicant’s condition.” (at T65.45)

   And:

   “Because you don’t get to the MAC unless the applicant is able to demonstrate the material alteration in the condition from the agreed 30 per cent compensation paid in 1995 (sic).” (at T66.20)

   It was submitted this flowed from an estoppel arising from the earlier consent award, requiring evidence of an alteration in the condition of the Respondent Worker, if a further award pursuant to section 66 were to be made. (T67.40 and T69.35).

4. If the passage of the Arbitrator’s Reasons for decision at [17] (quoted at [42] above) is taken as a statement it was common ground the Respondent Worker was entitled to a further award, representing an additional 5% loss, it misstated the position of the Appellant Employer. The passage certainly can be read in this way. The Appellant Employer also is correct, that the Arbitrator did not give reasons for rejecting its argument, paraphrased at [42] above.

5. However these errors are not of such a nature as to change the result. There was evidence of deterioration since the earlier consent award, to be found in the MAC. The solicitor for the Respondent Worker referred the Arbitrator to it (at T66.55). At page 11.5 of the MAC, Dr Bates, after setting out a table comprising a summary of findings on examination of multiple doctors dating back to 1994, and briefly discussing its significance, said “As a result it was my belief that there had been a slight measurable deterioration since the Award in 1996”. Pursuant to section 326(1) the MAC was conclusively presumed to be correct, on the degree of permanent impairment resulting from the injury. The Arbitrator would have been in error had he not given effect to the conclusive nature of the 35% loss as certified by the MAC. Although the MAC would not, on the discrete issue of whether there had been a deterioration, be conclusively presumed correct, this conclusion would flow, as a matter of logic, from the existence of the 35% loss, on which it was presumed correct. In this context, the view of the AMS regarding the “slight measurable deterioration” would be highly persuasive.

6. If it were necessary, as part of the review process, that I make a finding of fact regarding whether a deterioration had occurred, I would have no hesitation in accepting the evidence of the AMS on the point.

7. However it is unnecessary that I do so. The argument put by the Appellant Employer on this point, summarised at [46] above, is contrary to the reasoning of the NSW Court of Appeal in Rail Services of Australia v Dimovski & Anor [2004] NSWCA 267 (‘Dimovski’). In that case one of the issues related to the status to be ascribed to a prior consent award for a lump sum. There had been a consent award under section 66 of the 1987 Act, for 25% loss of use of the leg resulting from one injury. There was evidence of two subsequent injuries with the same employer. As a matter of fact, the trial judge found these to have resulted in permanent aggravation of the same leg. However the trial judge also made a factual finding that the loss at the time she was assessing the matter was 25%, that being a figure for which the worker had already been compensated. Accordingly she made no additional award for lump sums in respect of that leg, although logically the loss should have increased beyond 25%, due to the effects of the two further permanent aggravations. Handley JA found that a consent award can create a res judicata estoppel (at [9]). However His Honour then applied the following passage from O’Donel v Commissioner for Road Transport (1938) 59 CLR 744:

   “The argument involves and is based upon the fallacy that where an issue between A and B related to a state of things which is capable of subsequent alteration, the conclusive determination in A’s favour of that state of things as at one date plus conclusive proof that up to a later date there has been no alteration of that state of things establishes in A’s favour as against B an estoppel as to the state of things existing at the later day...this method, though logically sound, is not permitted by law...The unsuccessful party is bound by the authoritative determination of every fundamental issue but when a distinct and separate issue arises subsequently, he is not bound to submit to the second issue being established by the combination of a former issue with additional evidence, no matter how strong such evidence may be.” (Evatt J at 763, quoted in Dimovski at [12])

8. In upholding the approach taken by the trial judge, that the prior consent award did not oblige her to make an award for a figure higher than the 25% loss she had found to exist, Handley JA went on:

   “She had to determine the extent of the impairment at the date of trial. The consent award involved admissions by the parties and these, coupled with the presumption of continuance, were of some weight. However there was much other evidence, lay and expert, relating to the worker’s impairment at the later date and the weight to be given to the admissions and the presumption of continuance was a question of fact for the judge.
   Her task was to assess the extent of the worker’s current impairment following the later injuries without legal constraints flowing from the earlier award.
   Having made her award she was not obliged to find an explanation for the discrepancy.” (at [14] and [15])

9. Applying the above passages from Dimovski, it was the task of the Arbitrator to assess the current impairment of the Respondent Worker, on the evidence before him. That evidence included a MAC which was conclusively presumed to be correct as regards the degree of permanent impairment resulting from the injury. He accepted the MAC on this point, as he was obliged to do. He was not obliged, as part of this exercise, to consider whether there had been a deterioration in the condition of the Respondent Worker, to explain any difference between the impairment as certified by the MAC, and the impairment previously compensated pursuant to the consent award: Dimovski.

10. Thus the errors identified at [47] above did not affect the result. The result flowed in any event, from the conclusive nature of the MAC. The employer’s argument to the contrary could not succeed, applying the reasoning in Dimovski.

Section 67

1. The fifth ground of appeal raised, is that the Arbitrator’s award pursuant to section 67 was “so manifestly excessive as to constitute an error of law”. In tandem with this submission, it is said the Arbitrator failed to have regard to the submissions of the Appellant Employer on the topic.

2. At T70 to T71 the solicitor for the Appellant Employer made submissions relevant to section 67. He raised two points. He submitted the issue did not need to be addressed, as further compensation pursuant to section 67 was not claimed in the Respondent Worker’s Application to Resolve a Dispute. He submitted in any event, the entitlement of the Respondent Worker on this basis overall would be “between $7,500 and $10,000”, less than had already been paid pursuant to the 1996 consent award.

3. In the Application to Resolve a Dispute, on its front page, a cross has been inserted in the box adjacent to “(This application is for) permanent impairment/pain and suffering”. At paragraph 4.3 of that Application on page 5, under the heading “Permanent impairment/pain and suffering”, the lump sum claim is pleaded as “An increase in the permanent loss of efficient use of the left arm at or above the elbow”. It sets out a percentage as 10%, and the amount claimed as $7,500.00”. This figure is almost certainly a reference to the further sum the Respondent Worker sought pursuant to section 66. The form, at paragraph 4.3, did not invite any separate insertion of an amount pursuant to section 67.

1. If a worker has previously recovered lump sums pursuant to sections 66 and 67, and becomes entitled to a further lump sum pursuant to section 66, for additional loss or impairment resulting from the same injury, the worker will also be entitled to seek further lump sum compensation for pain and suffering in respect of the additional loss or impairment: Lourdes House Hospital v Wheeler (1996) 13 NSWCCR 495. It followed that, if the Respondent Worker became entitled to a further lump sum for loss of use of her left arm at or above the elbow, this would potentially entitle her to further compensation pursuant to section 67. Whilst the pleading filed on her behalf did not claim a specific sum by way of additional pain and suffering compensation, it did involve crossing boxes asserting a claim was being made for both permanent impairment and pain and suffering. The availability of a further claim pursuant to section 67 would flow, as a matter of course, if she succeeded in obtaining an additional award pursuant to section 66.

2. The Reply lodged on behalf of the Appellant Employer by its then solicitors, in so far as it relates to the lump sum claim/s, says the issues in dispute are:

   “Whether the applicant has suffered any increase in the permanent loss of use of the left arm since the prior settlement on 9.8.1996 which would entitle her to additional lump sum compensation pursuant to s66.”

3. The Reply does not deal specifically with section 67 compensation for pain and suffering. However it would have flowed, as a matter of course, that success for the Respondent Worker on the further claim pursuant to section 66, would involve consequential rights pursuant to section 67.

4. When the solicitor for the Appellant Employer raised with the Arbitrator the question of whether the claim pursuant to section 66 needed to be separately pleaded in the Application to Resolve a Dispute, the following was said:

   “ABRITRATOR: …I understood there was an entitlement to section 67 if one succeeded in achieving a certain level of section 66. You didn’t have to actually – you made a claim for section 66 permanent impairment but that therefore entitled you to a claim for section 67. Anyway, I’ll hear Mr Garling on that. Mr Macken, anything further?
   MR MACKEN: No, Arbitrator.” (T71.5)

5. When the issue was raised between the Arbitrator and the solicitor for the Respondent Worker, the following exchange occurred:

   “ARBITRATOR: Well, firstly can you address the issue about it not being – whether it’s claimed?
   MR GARLING: Well, I agree with your comments. I mean, it’s an entitlement. You claim section 66, and if she does obtain an increase in her award, then she’s clearly entitled to a further 67. It flows from that.” (T72.20)

6. The Commission is not a court of strict pleadings, although parties should be afforded procedural fairness, and have adequate notice of the case they are to meet: Far West Area Health Service v Radford [2003] NSWWCCPD 10, Barbour v BHP Steel Pty Limited [2004] NSWWCCPD 42. Both parties were represented by solicitors well experienced in the jurisdiction (in the Appellant Employer’s case, two such firms). In my view, on the pleadings as they stood, both parties would have been well aware the Respondent Worker would be entitled to seek a further award pursuant to section 67, if she obtained further lump sum compensation pursuant to section 66. Both parties addressed briefly on the quantum of any such award. Although the question of the Respondent Worker’s entitlement to a further award pursuant to section 67 was raised only in passing on the pleadings, neither party would have been taken by surprise by the availability of an award on this basis, were the Respondent Worker to succeed in her further claim pursuant to section 66.

7. Additionally, determination of the Respondent Worker’s entitlement pursuant to section 67, at the same time as her entitlement to further compensation pursuant to section 66, was in my view generally consistent with the ‘System objectives” set out in section 3 of the 1998 Act, and with section 263 of that Act.

8. Thus, I do not accept there was error on the Arbitrator’s part in determining the Respondent Worker’s entitlement pursuant to section 67, on the pleadings as they stood.

9. The Further Submissions lodged by the Appellant Employer raise, at [14], what I take to be a somewhat different point, regarding the availability of the Respondent Worker’s entitlement pursuant to section 67. It is there asserted part of the dispute between the parties was the absence of a claim, and a consequential absence of jurisdiction.

10. The procedural framework within which disputes come to be decided in the Commission is described in Edmonds at [61]. In short, a party makes a claim for compensation, and if there is a dispute, the dispute may be referred to the Registrar, for determination by the Commission. Thus the making of a claim is a necessary step in the Commission acquiring jurisdiction.

11. Claims pursuant to both sections 66 and 67 fall within the definition of “lump sum compensation” found in section 4 of the 1998 Act. Section 281 of the 1998 Act deals with such claims. It gives an employer (in the absence of agreement on quantum or determination of quantum by a MAC) two months from the claimant providing “all relevant particulars about the claim”, in which to either accept liability and make a reasonable offer, or dispute liability. The “relevant particulars” are governed by section 282, which sets out matters that must be included, together with “such other matters as the Workcover guidelines may require” (section 282(1)(g)). The Workcover guidelines make provision at Part 2 rule 6 regarding the information required to claim compensation for both permanent impairment and pain and suffering.

12. Commencement of proceedings in the Commission for recovery of lump sum compensation is then restricted by section 289(3). The dispute cannot be referred to the Commission unless liability has been wholly denied, or one month has passed after an offer of settlement was made to the claimant as and when required by the Act, or the employer failed to determine the claim as and when required by the Act. Thus, if a worker fails to supply “all relevant particulars” in compliance with section 282, the consequence is that the employer is not obliged to determine liability pursuant to section 281. This, in turn, may prevent a worker commencing proceedings in the Commission, due to the operation of section 289(3).

13. The printed form of Application to Resolve a Dispute seeks information going to the question of whether the relevant pre-conditions for commencement of proceedings exist. In respect of claims for “permanent impairment/pain and suffering” (that is claims for “lump sum compensation”) paragraph 4.3 provides various boxes an applicant may cross as being applicable. These alternatives are relevant to whether a matter falls within one of the categories of matter specified in section 289(3), permitting the institution of proceedings in the Commission.

14. In the current matter, the Respondent Worker’s solicitors have inserted a cross, adjacent to the box marked “The insurer has not made a decision within 1 month of the degree of permanent impairment being fully ascertainable or two months of being given all relevant particulars about the claim”. This alternative would permit commencement of the proceedings for lump sum compensation due to a combination of section 289(3)(c), and section 281(2). In short, it amounted to an assertion the Commission had jurisdiction on this basis. For the reasons discussed above, the claim for lump sum compensation, as set out in the Application to Resolve a Dispute, could be properly viewed as one pursuant to both sections 66 and 67.

15. The Appellant Employer, in the Reply filed on its behalf, took no issue with this assertion regarding jurisdiction. In the circumstances, the material put on by the parties did not contain documents going to jurisdiction, and the various matters which could permit commencement of proceedings for lump sum compensation in the Commission. The question of jurisdiction could be properly regarded as having been conceded by the Appellant Employer.

16. The passage of the transcript where the solicitor for the Appellant Employer addresses the Arbitrator on the pleadings relevant to section 67 occurs at T70:

    “MR MACKEN: And as to section 67, it’s not claimed in the application, so you don’t need to look at it, but, were it claimed in the application, it would be a reasonably straightforward matter, we would submit. We would say that in our view the applicant would represent between 15 and 20 per cent of a most extreme case.
    ARBITRATOR: Mm-mm.
    MR MACKEN: That would be between $7,500 and $10,000 and there’s no further entitlement to lump sum compensation.
    ARBITRATOR: Right.
    MR MACKEN: But as it’s not in the application we don’t really need to address it.
    ARBITRATOR: Does it need to be in the application?
    MR MACKEN: Yeah, it does, Arbitrator. There needs to be a claim. There needs to be a claim made.”

17. Notwithstanding the references to the word “claim”, looked at in context, it is apparent what is being referred to is the depiction of a head of claim in the pleadings, rather than a reference to whether the claim provisions in the 1998 Act had been complied with, so as to give the Commission jurisdiction.

18. No issue was raised in the grounds of appeal contained in the Appellant Employer’s Application to Appeal, going to whether the claim pursuant to section 67 was precluded by the operation of section 289(3) of the 1998 Act. Thus the first time an argument was raised, that the Commission did not have jurisdiction to entertain the claim pursuant to section 67, due to non-compliance with the provisions of the 1998 Act which restrict commencement of proceedings in the Commission, was in the Further Submissions filed under cover of letter dated 22 December 2006.

19. As mentioned above, the parties did not put on material going to the question of whether there had been compliance with these procedural requirements. There may or may not have been such compliance. There is a further complicating factor. The procedural requirements vary between ‘existing claims’ and ‘new claims’, which are defined in section 250 of the 1998 Act. These proceedings involve an injury in January 1992, and an original claim for lump sum compensation sometime prior to the 1996 consent award. If the jurisdictional point was to be seriously argued by the Appellant Employer, it would have needed to be raised in sufficient time that proper consideration could be given to which of the ‘claim’ regimes had application, and whether the procedural requirements had been complied with. It would be quite inappropriate to permit this procedural argument to be raised at this stage of the proceedings: Department of Corrective Services v Evans [2005] NSWWCCPD 58, K-Mart Australia Pty Limited v Duggan [2006] NSWWCCPD 137.

20. This leaves the argument that the sum awarded by the Arbitrator by way of further compensation pursuant to section 67 was “manifestly excessive”. It is asserted the Arbitrator failed to consider the matter by comparison to a most extreme case. The Arbitrator’s reasons on this topic are at [18] to [21] of his Reasons for Decision. He notes the Respondent Worker was previously awarded a sum of $12,500.00 pursuant to section 67, in the consent award in 1996. He relates the evidence going to ‘pain and suffering’, and concludes the matter stands as 30% compared with a most extreme case. He calculates 30% of $49,400 at $14,820.00, and after allowing credit for the sum of $12,500 already paid under the consent award, enters an award for $2,320.00, representing the balance. The figure of $49,400.00 would be applicable on the basis the date of claim was the date of the original claim, prior to the 1996 consent award. Neither party has taken objection to the Arbitrator’s use of this figure, in calculating the further entitlement pursuant to section 67.

21. The Arbitrator referred to reports of the pain management consultant Dr Salmon, and to the Respondent Worker’s statement regarding her ongoing pain and restrictions. He referred to the decision of the NSW Court of Appeal in Jones Bros Bus Co Pty Ltd v Baker (1992) 26 NSWLR 322. He made it clear (at [21] of his Reasons) he was assessing the Respondent Worker’s entitlement in proportion to a most extreme case. I can see no error of principle in how the Arbitrator has gone about the task of assessing the Respondent Worker’s entitlement under section 67.

22. The decision of the NSW Court of Appeal in Offset Alpine Printing Pty Ltd v Porteous (1992) 8 NSWCCR 489 (‘Offset Alpine Printing’) involved an appeal by an employer against an award under section 67 it claimed was excessive. This was at a time when appeals from the Compensation Court to the Court of Appeal were not restricted to ‘error of law’. Kirby P, who was in the majority, said:

    “As I have explained, this Court’s function is to disturb the trial Judge’s award only if it is shown to be wrong. I do not believe that I can conclude that such an award was not open to Thompson CCJ on the evidence. No mathematical formula, nor assignment of a particular association between intensity, duration and quantification of pain and a particular limb of the body is posited by the terms of section 67.” (at 501E)

    And:

    “The assessment of compensation for pain and suffering at common law has always been a difficult task. It is no easier under the statute. Inescapably it involves a high measure of subjective assessment on the part of the tribunal of fact. Necessarily, different decision-makers will react in different ways to the same evidence. There are therefore extremely strong reasons why this Court should limit its intervention to cases where the primary judge has reached a conclusion which is clearly wrong. Given the advantages which the primary judge enjoys and the very general language by reference to which the award must be determined in proportion to the statutory maximum, the cases in which this Court will interfere in a section 67 award will be relatively few. This is not such a case.” (at 502B)

23. My function on review under section 352 of the 1998 Act is broader than that of a judge on appeal: Zheng, Edmonds. However I should only reopen consideration of the Arbitrator’s decision on the point if there is error. I should not approach the matter afresh, and simply substitute my views for those of the Arbitrator. In considering whether error exists, it is appropriate that I bear in mind the subjective nature of the assessment, as referred to in Offset Alpine Printing. I do not detect error in how the Arbitrator has approached the task of assessing the Respondent Worker’s entitlement pursuant to section 67. There is nothing in the quantum of the figure which suggests the Arbitrator’s approach must have been infected by error. The conclusion he reached was well open to him on the facts. It is noteworthy the figure he reached was only a little in excess of the figure to which the Appellant Employer consented in 1996, when the original lump sum awards were made.

24. Accordingly, the challenge to the award pursuant to section 67, on the basis it was manifestly excessive, must fail.

The Respondent Worker’s Statement

1. The next ground of appeal raises two matters. Firstly, it says the Arbitrator erred in having regard to, or giving undue weight to, the Respondent Worker’s statement, it not being adopted or attested to. Secondly, it is said the Arbitrator erred in the weight he gave to the Respondent Worker’s statement, in that it was inconsistent with surveillance material utilised by the Appellant Employer.

2. The statement by the Respondent Worker, used in her case, was that dated 15 August 2004, attached to her Application to Resolve a Dispute. It is signed, apparently by her. Paragraph [5] of the Appellant Employer’s Further Submissions, under the heading “Submissions with the Notice of Opposition”, suggest the basis of the Appellant Employer’s complaint is that the statement is unsigned. This is not so, it is signed on its fourth page. It was incumbent upon the Respondent Worker to include with her Application to Resolve a Dispute the information and documents on which she proposed relying; it is hardly surprising her statement was such a document. Neither the transcript, nor the submissions of either party, suggest there was an application by either party that the Respondent Worker give oral evidence, or be cross-examined. There is no indication the solicitor for the Appellant Employer challenged the statement being used by the Respondent Worker in her case. Clearly in the circumstances the Arbitrator was not only entitled, but obliged, to have regard to the statement, and give it such weight as was appropriate in the circumstances. It is difficult to understand the complaint that the Arbitrator should not have had regard to it, in the absence of it being adopted or attested to.

3. The second submission made by the Appellant Employer regarding the statement, is that undue weight was attached to it, in circumstances where it was inconsistent with surveillance material. No particular inconsistencies are raised, in either the Application to Appeal, or the Further Submissions lodged by the Appellant Employer.

4. Two surveillance reports were relied upon by the Appellant Employer. They were attached to its Reply, and are dated 26 March 2003 and 4 August 2003. They describe the Respondent Worker being observed at her home, at a children’s soccer game, and at work at the child care centre, where she had part-time employment. She is described at one point in the earlier report as “using a full range of arm movements with no obvious signs of pain or strain” (at 2.7). She is described in the second report as using “both hands/arms without evident restriction when carrying parcels and on one occasions (sic) a box of groceries and also while caring for the young children under her care at the preschool” (at 3.8). It is conceivable such material could have been inconsistent with the Respondent Worker’s statement. For example at [19] of her statement she said:

   “I have a severe restriction in the movement of my arm and am unable to lift at (sic) above shoulder height. I cannot move my arm behind my back. I try to avoid any repetitive or heavy activities with my left arm and tend to use my right arm for most activities.”

5. The passage of transcript where the solicitor for the Appellant Employer dealt with the surveillance material is to be found at T56 to T57, and reads:

   “MR MACKEN: Oh, well, the surveillance report – it speaks for itself. It demonstrates the applicant having, in my submission, no restrained capacity at all.
   ARBITRATOR: Okay. Now, we haven’t seen this video. Should we watch it?
   MR MACKEN: Oh, I’m happy if you want to watch it.
   ARBITRATOR: Well, it’s generally my case not to watch a video without the parties present, because I think the parties should be present. If we watch a video, then someone can say, “Well, you know what happened there,” where one person said, “Well, a person” – two persons ripping up a cardboard box “and it required a certain amount of force,” and the other person says “Well, actually it was a wet box, so it didn’t require any force at all.” I mean, I think we’re assisted by that sort of stuff. But we don’t have the video. We haven’t seen it. Do you want to take me to anything in particular in the report?
   MR MACKEN: Oh, no, Arbitrator. I think it all speaks for itself.”

6. The Commission and arbitral files do not include any videos.

7. Clearly, statements by witnesses such as investigators, who are not medically trained, dealing with issues such as whether people are exhibiting full ranges of movement, need to be approached with some care. In this instance, it does not appear the Appellant Employer sought to cross-examine the Respondent Worker on the video material, with a view to challenging the consistency of her complaints, when compared with the surveillance. No specific part of the surveillance material was the subject of address, on the basis it demonstrated inconsistency. It does not appear the actual video was ever shown to the Arbitrator. There is no medical evidence dealing with it, to say it was inconsistent with the Respondent Worker’s complaints or findings on examination.

1. The Arbitrator referred to the surveillance reports as part of the material before him (at [4] of his Reasons). He clearly remained conscious of the contents of the surveillance material, as he later referred to it (at [31]) in the context of whether the Respondent Worker’s actual earnings were consistent with her ability to earn. In my view the weight to be afforded the surveillance reports in the circumstances, when they were not the subject of an application to cross-examine, were not commented upon by any medical practitioners, and the video was not even shown or put into evidence, was not great. They were not, in the circumstances, persuasive. In my view it would have been quite inappropriate for the Arbitrator to rely upon the surveillance reports, so as to reduce the weight to be given to the statement of the Respondent Worker, in such circumstances. The Arbitrator did not err in giving weight to the Respondent Worker’s statement, having regard to the surveillance material.

Procedural Fairness – Directions Regarding Wages

1. The next ground of appeal is more in the nature of a narrative. It asserts a denial of procedural fairness by the Arbitrator, in granting the Respondent Worker an adjournment when the matter was originally listed for arbitration hearing on 22 August 2005. It then asserts the Arbitrator notified the Respondent Worker of certain “orders or directions”, at the same time failing to notify the Appellant Employer of these. It then asserts the Arbitrator erred in “purporting to criticise the employer for alleged non-compliance with any such orders or directions”. It asserts the Appellant Employer had in fact complied with such orders, although it had not been notified of them.

2. This ground of appeal is expressed in an imprecise manner, and is not easy to comprehend. In so far as it challenges the decision of 22 August 2005 granting the Respondent Worker an adjournment, that aspect has already been dealt with, in that leave to appeal that particular decision was refused. The “orders or directions” are not identified. The Appellant Employer’s Further Submissions, at [10] and [15], refer to specific parts of the transcript as supporting the Appellant Employer’s procedural fairness argument. Reference is made to T35.50 to T36.25, and T37.12 to T37.30. The other passage relied upon is from T74.13

3. The passage from T35.50 to T36.25 is predominantly a passage in which the Arbitrator expresses dissatisfaction with the state of the wage material before him, for the purpose of making a calculation pursuant to section 40. He indicates it is not readily apparent, from certain material produced, whether the wage figures going to probable earnings if not for injury (the upper level of the section 40 equation) in fact are for “Full-time permanent employees working as picker and packer and holding the position of a leading hand”. This is the basis on which the Respondent Worker alleged she would have been remunerated if not for injury. The Arbitrator indicated, “I’m not going to adjourn it.”, although no actual application for adjournment was being made by either party at that stage. The Arbitrator then indicated the solicitor for the Appellant Employer should have worked out the wage figures, and sought agreement on the arithmetic. The Arbitrator said, “it’s not my job to add up the numbers in this and I don’t intend to”.

4. The passage from T37.12 to T37.30 has the Arbitrator referring to a “table” he requested regarding earnings. He says without a statement from the Appellant Employer on its information saying the information is that requested, he would have trouble accepting it was in fact the information requested. The solicitor for the Appellant Employer then indicates neither he nor the Appellant Employer had “the directions that were made on the last occasion”. The Arbitrator says he will ensure they are provided with a copy.

5. The ground asserting a denial of procedural fairness is not spelt out with any precision. Having regard to what is in the passages of transcript referred to as supporting the argument, the basis of it appears to be that the Appellant Employer (or its solicitor) did not have a copy of whatever directions or orders were made, either when the matter was listed for teleconference on 22 July 2005, or when the matter was adjourned on 22 August 2005. Written directions were issued after each of these dates, on 25 July 2005 and 25 August 2005.

6. In response to this, the submissions of the Respondent Worker say the “employer’s Solicitor and representative were both present at the initial telephone conference when original Orders were made in relation to the production of comparable wage information”. It is said “the employer’s current Solicitor was present at the Arbitration Hearing when Orders and Directions were made in respect of the production of wage information”.

7. The Commission file indicates the following chronology of events relevant to the issue of directions going to the topic of wage material:

   22 July 2005              A telephone conference was held. Mr Robert McKenna from Moray & Agnew appeared for the Appellant Employer, with Ms Joylene McMahon of the Appellant Employer. The Respondent Worker was represented by her solicitor, Mr Garling. Directions were made by the Arbitrator relating to the filing of wage material by both parties.

   25 July 2005              The direction was reduced to writing. The written form of the direction is dated 25 July 2005. There is a facsimile cover sheet indicating the direction was successfully forwarded by facsimile to the solicitors for both parties on 25 July 2005. In the case of the Appellant Employer, this involved it being forwarded to Moray & Agnew.

   26 July 2005              Letter from Moray & Agnew to the Registrar advising they no longer act on behalf of the Appellant Employer, and further correspondence should be addressed to the Appellant Employer direct, to the attention of Ms Joylene McMahon. That letter was received by the Commission, according to the date stamp, on 27 July 2005.

   5 August 2005            Letter from Leigh Virtue & Associates to the Registrar, advising Mr Paul Macken of that office is now instructed on the Appellant Employer’s behalf, and that solicitor’s office is now the Appellant Employer’s address for service.

   22 August 2005          Matter is listed for arbitration hearing. Mr Garling appears for the Respondent Worker, and Mr Macken for the Appellant Employer. Mr Garling sought an adjournment, on the basis the Appellant Employer had not complied with orders made at the telephone conference, requiring it to produce certain wage information. Mr Macken opposed the adjournment, saying the relevant wage material had been provided (T2.5). The Arbitrator granted the adjournment, and made a direction for the filing by the Appellant Employer of a schedule setting out certain wage material (T3.15).

   25 August 2005          A written form of direction was issued. It recited the history of the matter, and at paragraph [5] directed the Appellant Employer to file a schedule on or before 12 September 2005 setting out the earnings of a specified person, Ms Joan Mason, together with two other persons being full-time permanent employees working as a ‘picker & packer’ and holding the position of a leading hand. Three facsimile cover sheets are attached to that direction, in the Commission file. Two of these confirm the direction was forwarded by facsimile to the Respondent Worker’s solicitor, and to Moray & Agnew, who initially acted on the Appellant Employer’s behalf. The third has the details of Moray & Agnew crossed out by hand, and the name, firm and facsimile number of Mr Macken inserted by hand. This third facsimile cover sheet does not contain confirmation it was forwarded.

8. Thus it is possible the written form of direction issued on 25 August 2005 was forwarded to the Appellant Employer’s previous solicitors, but not to the offices of Leigh Virtue & Associates.

9. In so far as the original Direction is concerned, it is clear the Appellant Employer’s then solicitor (together with an officer of the Appellant Employer, Ms McMahon) participated in the telephone conference on 22 July 2005, when the oral directions were made. It is clear the written direction dated 25 July 2005, which issued subsequent to that telephone conference, was forwarded by facsimile to the solicitors then on the record for the Appellant Employer. Whether those solicitors forwarded the document on to the current solicitors, or to their client, is not the subject of evidence, or something into which I need to enquire. The material the direction required the Appellant Employer to produce included payroll details of two comparable employees from January 2004 to date, and a description of the type of work those comparable employees were engaged in. These were ordinary procedural steps designed to ensure the matter was in a position to proceed when it came on for arbitration hearing. It is difficult to envisage any basis on which they could amount to a denial of procedural fairness.

10. The new solicitors for the Appellant Employer wrote to the Commission on 5 August 2005, purporting to enclose wage records and award details in accordance with the Arbitrator’s direction, and also a “Respondent’s Wages Schedule”. The only wage material accompanying that letter, for any person other than the Respondent Worker, was group certificates for one person for the financial years 1991/92, 1992/93, 1993/94, and 1994/95. There were group certificates of the Respondent Worker for the same financial years. There was also a typed document, the origin of which is not apparent, headed “Storeman and Packer Wages Information 04/05”. It asserted the award rate was $487.70, the earnings of “comparable employee 1” were $453.00 gross per week, and of “Comparable employee 2 (higher grade)”  $502.00 gross per week. The Wages Schedule reproduced the figures of $487.70 and $453.00 as representing the award rate and “comparable earnings”. Thus the only source documentation produced at that point was old group certificates, the most recent of which was for 1994/95, about nine years prior to commencement of the pleaded weekly claim.   

11. Mr Macken appeared on the Appellant Employer’s behalf, at the arbitration hearing on 22 August 2005. There was a dispute regarding whether the figures produced truly represented the Respondent Worker’s probable earnings if not for injury (T1.50). The dispute related to whether the figures produced were for persons working as a “picker and packer”, and were for leading hands. The Respondent Worker’s case was that her probable earnings would have involved being a leading hand picker and packer. The Arbitrator stated the Respondent Worker’s position to be, that the material produced did not permit a proper assessment of whether the records produced truly reflected the position the Respondent Worker said she would have occupied, if not for injury (T2.50). The Arbitrator directed that “the respondent file a schedule setting out comparable wage material for two full-time permanent employees working as pick and packers and holding the position of a leading hand for the period from January 2004 to date on a week-by-week basis” (T3.15). The transcript clearly is consistent with Mr Macken being present when this order was made.

12. The written Direction, issued 25 August 2005, directed the production by the Appellant Employer of substantially the same material, although it sought wage information relating to a named person, Ms Joan Mason, in addition to two other unidentified employees. It also sought the information on a three weekly basis (presumably to reflect roster variations), something not mentioned in the oral direction of 22 August 2005. Mr Macken, during the arbitration hearing on 20 September 2005 stated he did not get a copy of the directions (T35.25). However clearly he was aware of the substance of the directions made on 22 August 2005, he having been present at the time. When he stated he did not have a copy, the Arbitrator said he would ensure a copy was provided (T37.30). In my view, a lack of procedural fairness cannot be demonstrated, simply by the fact that the solicitor for the Appellant Employer did not (assuming this be the case) receive a copy of the written Direction of 25 August 2005, probably due to administrative error.

13. When the matter was next listed for arbitration hearing on 20 September 2005 Mr Garling (for the Respondent Worker) complained the Appellant Employer had not complied with the “directions issued on 22 August 2005” (T14.40). Mr Macken asserted “we have provided those records and they’re before the Commission” (T14.50). Mr Garling addressed on the basis the only evidence of probable earnings if not for injury, was to be found in correspondence between Moray & Agnew (who originally acted for the Appellant Employer) and Robert Tricca & Associates (who at one stage acted for the Respondent Worker). Those items of correspondence were attached to the Reply filed on behalf of the Appellant Employer, and described two named employees as being comparable, and each earning $16.6342 per hour. The evidence of the Respondent Worker in her statement (at [6]) was that she used to work forty hours per week plus overtime. On the basis of forty hours work per week, at the rate of $16.63 per hour, Mr Garling calculated earnings if not for injury at $665.20.

14. Mr Macken addressed on the basis the employees referred to in the correspondence “have been rejected as comparables” (he did not say how they came to be nominated as comparables in the first place). He submitted the calculation should be based on thirty-eight hours per week rather than forty, (he did not say on the basis of what evidence). He then submitted, “comparable employees show earnings, average earnings, of about $400 per week” (T28.40). Mr Macken then addressed the Arbitrator on the basis earnings of two named people, Jane Epple and Lorraine Stanbridge, whose week by week figures were available from 6 January 2004 to 29 June 2005, represented the Respondent Worker’s probable earnings. Those records were part of the arbitral file, and were before the Arbitrator.

15. It is apparent, from the transcript, the issue concerning the Arbitrator was whether he could be satisfied the further material produced reflected the probable earnings of the Respondent Worker. The Respondent Worker’s case regarding her probable earnings was that she would have worked full-time as a picker and packer and leading hand (T35.40). The material produced did not indicate what function the further employees being nominated as comparables carried out. It was understandable the Arbitrator would have reservations about accepting evidence of probable earnings, significantly different from the earnings calculated by reference to the admission in the correspondence on which Mr Garling had addressed.

16. The phrase “the same or some comparable employment” in section 40(2)(a) is a reasonably flexible one. The same words were used in section 11(1)(a) of the Workers Compensation Act, 1926 (‘the 1926 Act’). The High Court authority of Johnston v Commissioner for Railways [1973] 128 CLR 632 (‘Johnston’) dealt with whether “the same or some comparable employment” could extend to earnings in a higher classification than that occupied at the date of injury, where the evidence established a worker would probably have progressed to the higher position. Stephen J said:

    “The reference in the sub-section to “some comparable employment” appears
      to me to place no obstacle in the way of the view I take of the meaning of
      “employment”; it does not refer to a comparable employer or to a comparable
      contract of employment but to a comparable occupation.  It is unnecessary in
      this appeal to determine in what circumstances it might be appropriate to look

    to some other occupation comparable to but distinct from that engaged in by
      the worker when he was injured; it suffices to say that, as I interpret the

    sub-section, occasions may arise in which, perhaps because some occupation has ceased altogether to exist because of technological change, it becomes

    necessary to hypothesize an occupation comparable to that in fact engaged in

    by the worker at the time of his injury in order to ascertain what weekly amount he would probably have earned but for the injury.” (at 641)

17. In the same case, Mason J said:

“The sub-section provides a yardstick by which weekly payments by way of
                  compensation for incapacity are to be measured.  It conforms more closely with
                  the compensatory character of the provision that the weekly payments should be
                  assessed by reference to the probability of what the employee would have
                  earned in his occupation had he not been injured and had he continued in that
                  occupation rather than that the weekly payments should be assessed by
                  reference to probable earnings in the performance of the particular work or

duties which the employee happened to be performing at the date of his injury.” (at 644)

1. Kirby P considered the phrase “some comparable employment” in Australian Wheat Board v Pantaleou [1984] 3 NSWLR 530:

“Clearly, it was designed to add flexibility to the hypothetical computation required to be made. The decision maker is not limited to assuming that the worker remained employed in exactly the same employment. He is entitled to have regard to the fact that employment changes, for many reasons.” (at 540)

1. The figure suggested by Mr Macken of “about $400 per week”, was roughly similar to the earnings of the Respondent Worker, as revealed in her group certificates, for the financial years ending 30 June 1992, 1993, 1994, and 1995. It would have been surprising if there had not been some upward movement in the earnings of comparable employees over subsequent years.

2. There are multiple interchanges between the Arbitrator and Mr Macken, going to probable earnings if not for injury, recorded in the transcript. In my view, they are not consistent with a denial of procedural fairness. It is apparent the Arbitrator was attempting to find a basis to compute probable earnings in the same or some comparable employment, in circumstances where he had been presented with competing sets of figures. He needed to consider which of these best reflected the Respondent Worker’s probable earnings had she continued in the same occupation (not necessarily precisely the same job description, or even the same employer): Johnston, Pantaleou. It is apparent why he would have been concerned to have information regarding not only the basis on which allegedly comparable employees were employed, but the duties they carried out. This would have been clearly relevant information, if he were to accept Mr Macken’s submissions regarding why certain employees were comparable. In my view, the behaviour of the Arbitrator during such interchanges does not tend to establish a lack of procedural fairness. Rules of procedural fairness are not breached by a judge informing the parties of his or her preliminary view: Daw v Toyworld (NSW) Pty Ltd (2001) 21 NSWCCR 389. In Edmonds (at [101]) McColl JA quoted with approval from the judgment of Brennan, Deane and Gaudron JJ in Vakauta v Kelly (1989) 167 CLR 568 at 571, where their Honours said:

   “[A] trial judge who made necessary rulings but otherwise sat completely silent throughout a non-jury trial with the result that his or her views about the issues, problems and technical difficulties involved in the case remained unknown until they emerged as final conclusions in his or her judgment would not represent a model to be emulated.”

The References to Ms McMahon

1. The next two grounds of appeal relate to Ms Joylene McMahon, and the view the Arbitrator took of her role. It is said the Arbitrator erred “in asserting that the Human Resources Manager of the respondent attended at the Commission as this did not occur”. It is then asserted this “mistaken belief” of the Arbitrator caused him to err, (it does not say precisely how), in assessing weekly compensation. The next (and related) ground says the Arbitrator erred in having regard to information said to have been provided by Ms Joylene McMahon, when such evidence was prevented by the Rules of the Commission, and no such evidence was adduced.

1. In its Further Submissions the Appellant Employer (at [5]) refers to a passage of the transcript around T20.15 as demonstrating the error. That passage involves a submission by the Respondent Worker’s solicitor relating to Ms McMahon. He said “I believe (she) is in the Human Resources Department, although I could be corrected”. He submitted she had not attended to give evidence, nor provided a statement for use in the case, and this warranted an inference that her evidence would not have assisted the employer in its case. This on its face is a reference to what is commonly referred to as a Jones v Dunkel inference. It is a common enough submission, and whether such an inference was available or not, it is difficult to see how the submission by the solicitor for the Respondent Worker is indicative of error.

2. The Respondent Worker submits Ms McMahon did attend the Commission in the form of the telephone conference.

3. The relevant passages of the Arbitrator’s Reasons for Decision are at [24] and [26], and read:

   “24. The determination of the Applicant’s probable earnings but for injury was the subject of much angst and argument. The difficulty arose as the Applicant suffered an injury in the employ of the Respondent nearly fourteen years ago. Ms Joylene McMahon, a human resources manager with the Respondent who attended the telephone conference on 22 July 2005 alluded to changes in the organisational structure since the Applicant had been employed, however, none of this was subsequently put into evidence.” 
   “26. Despite the earlier indications of Ms Joylene McMahon, that the information could be provided, I reflect, without further comment, that unfortunately for whatever reason, no clear information emerged from the Respondent that provided clarity and transparency as to the proper and comparable wages.”

4. It is clear, from the submissions of the parties, from the Directions made, and from the Commission’s file, that Ms McMahon did participate in the telephone conference (along with the solicitor Mr McKenna) on 22 July 2005. Whether she physically attended the Commission is of no great relevance. The Respondent Worker has made a Jones v Dunkel submission based upon her ultimate failure to either give evidence, or furnish a statement, for use in the proceedings. The Arbitrator at [25] of his Reasons sets out the “three sets of information” provided by the Appellant Employer relevant to probable earnings. The Arbitrator (at [26]) has referred to an earlier indication by Ms McMahon (presumably at the telephone conference) that the information could be provided. He noted there were problems with the various sets of information provided, described at [25] of his Reasons. He does not engage in any particular criticism of Ms McMahon.

5. The Arbitrator then goes on to prefer, from the various sets of wage information furnished by the Appellant Employer, the first set he described at [25]. This is perfectly understandable. He has simply taken the evidence of the Respondent Worker regarding the hours she used to work with the Appellant Employer, and multiplied those hours by an hourly rate furnished by the Appellant Employer, via its then solicitors, to the then solicitors for the Respondent Worker. This produced the figure of $665.37 per week, which he found to represent probable earnings if not for injury. Notwithstanding the submissions of the Respondent Worker, he did not add any sums to this, representing a leading hand allowance, or overtime earnings.

6. Whilst he referred to Ms McMahon, the conclusion the arbitrator reached, regarding probable earnings if not for injury, was readily available on the evidence, regardless of Ms McMahon’s role. It was the hours the Respondent Worker said she used to work (excluding overtime), multiplied by an hourly rate to which the Appellant Employer had admitted, through its solicitors at the time. It was valid to observe the Appellant Employer had not put on evidence regarding “changes in the organisational structure”. This observation would more readily permit the conclusion probable earnings should be calculated on the basis on which the Respondent Worker was originally employed, for forty hours per week. It should also be borne in mind that, although what transpires in the telephone conference and conciliation phases may not represent evidence, an arbitrator is entitled to take into account views he has formed during those earlier stages. In Edmonds McColl JA said:

   “As Hayne J observed in Minister for Immigration and Multicultural Affairs v Jia Legeng (at [187]), in assessing whether a decision-maker has been guilty of actual (or apprehended) bias, it is necessary to consider the extent to which that person is constrained from taking into account an opinion formed in the course of undertaking his or her task. Thus, while the Arbitrator was under an obligation to act impartially, he was entitled, in my view, in discharging his decision-making function to take into account views he had formed in the course of discharging his primary role of achieving a settlement acceptable to both parties: s 355(1).” (at [106])

7. Accordingly, in my view the Arbitrator did not err in his references to Ms McMahon. Even if he did, I cannot see a consideration of her role was a factor in him reaching the decision he did on probable earnings.

Calculation of the Section 40 Entitlement

1. The next two grounds assert some error, in the Arbitrator finding the figure he did for probable earnings. For reasons apparent from what I have already said, I cannot see any such error. There was an admission by the Appellant Employer, in the letter setting out the hourly rate, which the Arbitrator was entitled to have regard to. Whilst the Appellant Employer’s solicitor described the persons nominated in that letter as having been “rejected” as true comparable employees (T28.40), the Arbitrator was not obliged to accept this. It was an admission by a party, with legal advice, to which he was entitled to have regard. The Appellant Employer did not adduce evidence to satisfactorily explain why the admission should be disregarded, for example how it came to be made in error. The Arbitrator simply multiplied this hourly rate by forty hours per week, which is the number of hours the Respondent Worker worked per week, according to her statement. In some ways the figure was conservative, as it included no separate allowance for a leading hand allowance, or overtime, contrary to submissions made on behalf of the Respondent Worker. This approach was clearly open to the Arbitrator. The contrary evidence, adduced in the Appellant Employer’s case, put forward figures which, in real terms (after inflation) would have represented a reduction in the probable earnings since the Respondent Worker left the Appellant Employer’s employ. Such evidence was not greatly persuasive, in the absence of some evidentiary basis for finding such a reduction would probably have reflected the Respondent Worker’s probable earnings in her ‘occupation’ at the time of injury: Johnston, Pantaleou. The Arbitrator was not under any obligation to accept one of the alternative bases of calculation put to him by the Appellant Employer.

2. The next ground of appeal relied upon, refers to a passage of the Arbitrator’s Reasons at [31]. The Arbitrator is quoted as saying “…nothing was put to me to indicate that the Applicant’s current earnings as stated in her three contiguous tax returns since gaining employment…were anything but an accurate reflection of both her current earnings and her ability to earn.” The Appellant Employer submits that, contrary to this statement, it made lengthy submissions regarding why the Respondent Worker’s ability to earn exceeded her average earnings as revealed by her taxation returns. The Arbitrator is said to have erred in failing to consider such submissions, and in failing to give reasons for rejection of such submissions.

3. This ground of appeal, in my view, is based upon a misreading of what the Arbitrator says at [31] of his Reasons. In the preceding paragraphs [30] and [31], the Arbitrator has referred to the well known authorities of Aitken v Goodyear Tyre & Rubber Company (Australia) Limited (1945) 46 SR (NSW) 20 (‘Aitken’) and Novello v Zinc Corporation Ltd (1988) 14 NSWLR 25 (‘Novello’). He then continues, at [31]:

   “In my view, the above mentioned decisions provide is (sic) clear authority for prima facie, taking into account the actual earnings as her ability to earn, and only moving from that basis, if there is evidence that she is “malingering, shirking or deliberately taking lower paid work”. Despite extensive video surveillance of the Applicant both at her home and her place of employment and the production under direction of her banking records, nothing was put to me to indicate that the Applicant’s current earnings as stated in her three contiguous tax returns since gaining employment with the St Andrews Childrens Neighbourhood Centre were anything but an accurate reflection of both her current earnings and her ability to earn.”

4. The passage, when read as a whole, makes it clear the Arbitrator is not referring to an absence of submissions by the Appellant Employer, but rather to an absence of what he regarded as persuasive evidence to depart from the principles in Aitken, that actual earnings are prima facie evidence of the lower limb of the section 40 equation, unless there is some evidence to the contrary. The Arbitrator has then accepted the average weekly earnings of the Respondent Worker, as revealed by her taxation returns, as representing the lower limb of the section 40 equation. Such a course was entirely unexceptional.

5. A subsequent ground of appeal appearing at 1(n) largely recapitulates submissions already made on the Appellant Employer’s behalf, that the Arbitrator should have found a lower level of probable earnings and/or a higher ability to earn, such that any section 40 award should have been either lower or non-existent. For reasons I have already given, I can see no error in how the Arbitrator, as a matter of principal, approached determination of these figures.

6. This is subject to one exception, which is the figure the Arbitrator has used as actual earnings subsequent to 30 June 2004. In calculating the weekly entitlement subsequent to 30 June 2004, the Arbitrator said:

   “I therefore find that the Applicant’s ability to earn is best demonstrated by her actual earnings as summarised in her taxation returns. The 2005 tax return shows the highest weekly amount, but as there is no recent comparable information with which it can be compared due to the inability of the respondent to provide identified comparable information, I consider it more accurate to take the 2004 weekly amount of $443.78 per week as the Applicant’s probable weekly earnings.” (This should be a reference to “actual weekly earnings”).

7. What the Arbitrator effectively is doing at this point, is saying he will ignore the evidence of actual earnings for 2004/05, and carry forward the lower actual earnings figure from 2003/04. This constitutes error. The clear evidence, from the taxation return for 2004/2005, was of actual earnings averaging $503.88 per week. The clear words of section 40(2)(b) require that this figure represent the lower limb of the section 40 equation, subject to other matters discussed subsequently. It is an error to take, as the lower limb of the section 40 equation, a figure lower than the worker’s actual earnings. In J C Ludowici v Cutri (1992) 26 NSWLR 580 (‘Ludowici’) Kirby P said:

   “Parliament included the reference to what the worker “is earning” for a purpose. The phrase cannot be ignored. The earnings are not mere evidence of what the worker is “able to earn”. In fact, if the worker is “earning” that will normally be the end of the enquiry. It is only if, for some reason, that amount, where it exists, or existed, is suggested to be an under-estimate or a false measure of the worker’s ability to earn that the alternative enquiry will be embarked upon.” (at 593D)

8. The Arbitrator expressed disquiet, that the figure on which he had calculated probable earnings if not for injury (the upper limb of the section 40 equation) was not itself an up-to-date figure. This did not represent a valid basis to find actual earnings at a rate inconsistent with (and lower than) the evidence he had otherwise accepted (the average actual earnings calculated from the taxation returns).

9. It follows the award from 1 July 2004 should be varied, to a figure representing the probable weekly earnings as found by the Arbitrator ($665.37), less the actual weekly earnings of $503.88, a figure of  $161.49. The Arbitrator found there were no discretionary factors calling for a reduction in the arithmetical difference thrown up by the section 40 equation from time to time. This question is further dealt with below.

10. The way in which the Appellant Employer framed its ground of appeal on this particular point is unfortunate. It submitted (I have found with justification) that the actual earnings figure for 2003/2004, should not have been carried through to the period subsequent to 30 June 2004, when this was inconsistent with the evidence. However the ground of appeal then continued (at [1(m)]:

    “The Decision of the Arbitrator in this regard is clearly an error and would appear to be nothing more than an attempt by the Arbitrator to punish the Employer for providing comparable information with which the Arbitrator was apparently (and unjustifiably) dissatisfied. To this extent the Arbitrators (sic) decision evinces bad faith and/or bias.”

11. This amounts to an assertion of actual bias. It was not something the Appellant Employer needed to establish, in challenging the erroneous finding referred to at [119] above. It is not raised as a more general ground of appeal. As was recently observed by Mason P in Kinnell v Connelly & Anor [2007] NSWCA 17, “To suggest that a judge descends into the arena is a conclusion of a pejorative nature.” (at [41]) Actual bias was one of the grounds of appeal in Edmonds, where McColl JA said:

    “The appellant alleges that the Arbitrator displayed actual, not apprehended, bias. A party asserting actual bias on the part of a decision maker carries a heavy onus. The allegation must be “distinctly made and clearly proved”: Minister for Immigration and Multicultural Affairs v Jia Legeng [2001] HCA 17; (2001) 205 CLR 507 at [69] per Gleeson CJ and Gummow J and [127] per Kirby J; SCAA v Minister for Immigration & Multicultural & Indigenous Affairs [2002] FCA 668 at [36] per von Doussa J. A finding of actual bias should not be made lightly; cogent evidence is needed: Sun Zhan Qui v Minister for Immigration and Ethnic Affairs [1977] FCA 1488; (1997) 81 FCR 71 at 123 per Wilcox J; a finding of bias is a grave matter: ibid (at 127) per Burchett J.” (at [97])

12. Given the assertion of actual bias is only raised (unnecessarily) in relation to this single ground, on which the Appellant Employer was entitled to succeed in any event, it is unnecessary I further consider the issue. Suffice it to say, no attempt was made to distinctly make and clearly prove the allegation, and in my view it would have been better not made. It is not an assertion which should be made in passing, without a clear basis for doing so.

Capacity to Earn/Section 40 Discretion

1. There is a further ground of appeal at [1(o)] of the Appellant Employer’s grounds, going to the Arbitrator’s analysis of the medical evidence relevant to his assessment of the Respondent Worker’s ability to earn. It is asserted he erred in rejecting the evidence of Dr Noll and the Vocational Guidance Report (in the Appellant Employer’s case) that the Respondent Worker was fit to undertake full time work. It is said he rejected the employer’s evidence  on this point, based (at least in part) upon the contrast between Dr Noll’s assessment of loss of use of the Respondent Worker’s left arm at or above the elbow (18%), and the assessment of the AMS (35%). This comparison is said to have been irrelevant to the issue of the Respondent Worker’s ability to earn.

2. The relevant passage is at [35] to [42] of the Arbitrator’s Reasons. This passage of the Arbitrator’s Reasons is essentially misconceived.

3. The Arbitrator went through the various section 40 steps, after referring to Mitchell v Central West Health Service (1997) 14 NSWCCR 527 (‘Mitchell’) and Snow Confectionary Pty Limited v Askin [2004] NSWWCCPD 56. He followed the five steps set out in Mitchell at 529E to 530E. He initially determined probable earnings if not for injury (the upper limb of the equation, pursuant to section 40(2)(a)), at [24] to [28] (Step 1). He then, at [29] to [32], determined the lower limb of the equation, pursuant to section 40(2)(b). He quoted from Aitken  and Novello, and applying these, found the lower limb of the equation was best demonstrated by the Respondent Worker’s actual earnings as summarised in her taxation returns (Step 2). He then, at [33] to [34], deducted the lower from the upper limb of the equation, to calculate the arithmetical difference (Step 3).

4. It was inherent in the nature of the finding the Arbitrator made at [29] to [32], that he found the worker was actually earning, and that the evidence did not suggest a valid reason for departing from the actual earnings, as representing the lower limb of the section 40 equation. Accordingly it was unnecessary to determine ‘ability to earn’. This is consistent with Aitken, Novello, and the passage of Ludowici quoted at 119 above.

5. The Arbitrator then embarked on Step 4, a consideration of whether it was appropriate that he apply his discretion to reduce the arithmetical difference. In this passage of his Reasons, at [35] to [42], the Arbitrator discussed the Respondent Worker’s statement, set out part of the vocational material put in evidence by the Appellant Employer, and referred to medical evidence from Dr Noll, Dr Marnie, and the AMS. The Arbitrator concluded the Respondent Worker was, contrary to the Appellant Employer’s case, unfit for full-time work, particularly in the child care industry in which she was employed part-time. He concluded the Respondent Worker was not capable of working greater hours than those she was actually working. He therefore found there was no reason to exercise his discretion to reduce the arithmetical difference. This part of the Reasons includes that about which the Appellant Employer complains, at [1(o)] of its grounds of appeal.

6. What the Arbitrator has done, in purporting to apply Step 4, was unnecessary. He had already found the actual earnings, and had found none of the circumstances contemplated in authorities such as Aitken and Novello (such as shirking, or intentionally taking lower paid work) had application. Thus he had found the lower limb of the section 40 equation, based upon the actual earnings. It would only have been necessary for him to embark upon an assessment of the Respondent Worker’s capacity to earn, if the actual earnings were not, for some reason, an appropriate measure. As was observed in Mitchell, “self-induced diminution of earning capacity lies squarely within the exercise required to be carried out at what we have identified as the second stage” (at 534G to 535A). If the Respondent Worker’s earnings, working part-time in the child care industry, did not represent an appropriate measure of the lower limb of the equation, as she was fit for and could have been carrying out such work on a full-time basis, this was a matter to be dealt with at Step 2 (using the Mitchell steps). The Arbitrator had already made a finding (in my view well justified on the evidence) that the actual earnings constituted the Step 2 figure. The further analysis of the evidence in which he engaged, purportedly in applying the discretion, was unnecessary. The matters he referred to at [35] to [42] were not relevant to the section 40 discretion.

7. Matters which may operate to reduce the arithmetical difference pursuant to the section 40 discretion have been considered in a number of cases. As was observed in Mitchell, “The discretion is a broad one and it is proper to refrain from endeavouring to define its outer limits” (at 534F). Some examples are a worker who retired (Australian Wire Industries v Nicholson (1985) 1 NSWCCR 50), a worker who would have been precluded by law from carrying out the work in a coal mine on which his probable earnings were based (Australian Iron & Steel Pty Limited v Elliott (1966 67 SR (NSW) 87), a worker who was imprisoned (Stranlund v Mid Coast Meat Co Pty Ltd (1999) 19 NSWCCR 91), and a worker who was not seeking to work due to pregnancy and child birth (Wrigley Co Pty Ltd v Holland (2002) 23 NSWCCR 463).

1. Accordingly, the passage of the Reasons referred to at [1(o)] of the Appellant Employer’s grounds, would not have affected the result in any event. It was irrelevant to exercise of the discretion, and it could no longer have relevance to the lower limb of the section 40 equation, that issue having already been decided by reference to the actual earnings.

2. As the Arbitrator’s Reasons demonstrate error in relation to his treatment of his discretion (step 4 of the Mitchell steps), I should deal with this as part of the review process. In my view there was nothing in the evidence, or which was put to the Arbitrator, which would warrant any reduction of the arithmetical difference, in applying the discretion pursuant to section 40.

DECISION

1. Paragraph 1 of the decision of the Arbitrator dated 6 October 2005 is revoked, and the following decision is made in its place:

“The Respondent is to pay the Applicant weekly compensation pursuant to s 40 of the 1987 Act at the following rates:

(i)$222.00 per week from 12 January 2004 to 30 June 2004;

(ii)$161.49 per week from 1 July 2004 to date and continuing.

1. The balance of the decision of the Arbitrator dated 6 October 2005 is confirmed.

COSTS

140.I make no order as to costs of the appeal.

Michael Snell

Acting Deputy President  

8 March 2007

I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF MICHAEL SNELL, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.

ASSOCIATE