Caretakers Cottage Incorporated v Hughes
[2005] NSWWCCPD 56
•29 June 2005
WORKERS COMPENSATION COMMISSION
APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:Caretakers Cottage Incorporated v Hughes [2005] NSW WCC PD 56
APPELLANT: Caretakers Cottage Incorporated
RESPONDENT: Merran Hughes
INSURER:Employers Mutual Indemnity (Workers Compensation) Ltd
FILE NUMBER: WCC 2674-04
DATE OF ARBITRATOR’S DECISION: 2 June 2004
DATE OF APPEAL DECISION: 29 June 2005
SUBJECT MATTER OF DECISION: Partial incapacity for work; suitable employment.
PRESIDENTIAL MEMBER: Acting Deputy President Robin Handley
HEARING:On the papers
REPRESENTATION: Appellant: Vandervords, Solicitors
Respondent: Beston Macken McManis, Solicitors
ORDERS MADE ON APPEAL: The decision of the Arbitrator is confirmed.
The Appellant, Caretakers Cottage Incorporated, is to pay the Respondent, Ms Hughes’ costs in this appeal as agreed or assessed.
BACKGROUND TO THE APPEAL
On 29 June 2004, the Appellant, Caretakers Cottage Incorporated, sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Workers Compensation Commission (‘the Commission’) in respect of a decision dated 2 June 2004.
The Respondent to the Appeal is Merran Hughes.
Ms Hughes was born on 12 January 1968 and is aged 37. Ms Hughes commenced casual employment with Caretakers Cottage as a youth worker in February 1998. She was injured on 15 February 1999 while working at Caretakers Cottage’s premises at Coogee when she was held hostage and assaulted by “Cindy”, a disturbed adolescent client. Ms Hughes notified Caretakers Cottage of the injury on the day it occurred and, on 22 April 1999, lodged a claim for weekly benefits. She has not returned to work for Caretakers Cottage following the incident, although she worked part-time for another community organisation for about six months in 2001, before resigning when she was no longer able to cope.
In February 2000, Ms Hughes enrolled in a Graduate Certificate in Multimedia at the University of Technology, Sydney (‘UTS’). She subsequently transferred to a Master of Design program at the College of Fine Arts, University of New South Wales, which she was aiming to complete mid 2004. In late 2003, she began to obtain casual design work.
Liability for Ms Hughes’ compensation claim was accepted, and Employers Mutual Indemnity (Workers Compensation) Ltd (‘EMI’), the Insurer, made weekly payments to Ms Hughes until 23 December 2003 when payments were terminated. However, from 20 May 2001, payments had been significantly reduced, to $59.03 per week.
On 10 February 2004, Ms Hughes lodged an ‘Application to Resolve a Dispute’ with the Commission describing her injury as “Psychiatric injury – post traumatic stress disorder, anxiety, depression”, stating that the period of weekly compensation in dispute was from 12 April 2002 to date and continuing, and that the weekly amount in dispute was $305. Caretakers Cottage’s ‘Reply’ was lodged on 2 March 2004. On 22 April 2004, the Arbitrator conducted a teleconference with the parties at which it was agreed that the Arbitrator would determine the matter ‘on the papers’. On 2 June 2004, the Arbitrator determined the matter as set out below.
THE DECISION UNDER REVIEW
The Certificate of Determination, dated 2 June 2004, records the Arbitrator’s orders as follows:
“That the Respondent pay the Applicant the sum of $97.62 per week pursuant to section 40 of the Workers Compensation Act 1987 for the period commencing on 23 December 2003 to date and continuing otherwise in accordance with the Act.”
In her ‘Statement of Reasons for Decision’, at paragragh 41, the Arbitrator found that the incident with Cindy:
“had an immediate and colossal negative impact on her [Ms Hughes’] behaviour. Prior to this she had worked in the area of Youth Welfare since 1996. She had no prior history of psychiatric illness. Afterwards she could not cope with face to face contact with clients. Dr White [Dr Allan White, Consultant Psychiatrist, by whom she was examined at the request of Caretakers Cottage] felt she had a genetic vulnerability to mental illness, but he conceded that the events of 15 February 1999 were upsetting.”
The Arbitrator found that at the time weekly benefits were terminated on 23 December 2003, Ms Hughes “was partially incapacitated for work as a result of her injury and continues to be partially incapacitated for work”. She found that Ms Hughes’ probable earnings, but for the injury, in the same or comparable employment are $285.62 per week, and that from 23 December 2003 to date and continuing, Ms Hughes was earning or could earn in some suitable employment a weekly amount averaging $188.00. Ms Hughes was therefore entitled to weekly payments in respect of partial incapacity of $97.62.
ISSUES IN DISPUTE
The issues in dispute in the appeal are first, whether Ms Hughes has had a partial incapacity for work since 23 December 2003 and, if so, second, what was the nature of the suitable employment of which she was capable?
ON THE PAPERS REVIEW
Section 354(6) of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’) states:
“(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.”
Having regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submission by Ms Hughes’ solicitors 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. I reject Caretakers Cottage’s submission that there is a need for oral submissions on the interpretation of the evidence. I have the benefit of written submissions from both parties on the appeal, as well as their written submissions to the Arbitrator.
Neither party sought to adduce fresh evidence.
LEAVE
Before proceeding to deal with an appeal the Commission must determine whether the application meets the requirements of section 352 of the 1998 Act, which states:
“352Appeal against decision of Commission constituted by Arbitrator
(1)A party to a dispute in connection with a claim for compensation may, with leave of the Commission constituted by a Presidential member, appeal to the Commission as so constituted against a decision in respect of the dispute by the Commission constituted by an Arbitrator.
(2)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.
(3)If the Commission refuses to grant leave to appeal, the Commission must state reasons for the refusal in writing to the parties.
(4)An appeal can only be made within 28 days after the making of the decision appealed against.
(5)An appeal under this section is to be by way of review of the decision appealed against.
(6)Evidence that is fresh evidence or evidence in addition to or in substitution for the evidence received in relation to the decision appealed against may not be given on an appeal to the Commission except with the leave of the Commission.
(7)On appeal, the decision may be confirmed or may be revoked and a new decision made in its place.
Alternatively, the matter may be remitted back to the Arbitrator concerned, or to another Arbitrator, for determination in accordance with any decision or directions of the Commission.
(8)In this section, decision includes an award, interim award, order, determination, ruling and direction.”
The appeal was lodged within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act.
With regard to section 352(2), Caretakers Cottage states that the amount of compensation at issue is $5,076 per annum plus arrears of weekly compensation, and constitutes 100% of the amount awarded in the decision appealed against. I am therefore satisfied that the section 352 threshold is met, and grant leave to appeal.
SUBMISSIONS
Caretakers Cottage identified the following grounds of appeal:
“(1) The Arbitrator’s determination that the worker has since 23 December 2003 suffered work related incapacity was contrary to or against the overwhelming weight of the unchallenged and accepted evidence of Dr White.
(2) The Arbitrator misquoted and/or misunderstood the evidence of Dr White.
(3) The Arbitrator was bound to apply the unchallenged evidence of Dr White and failed to do so.
(4) The Arbitrator was bound on the evidence to enter an award in favour of the Respondent but failed to do so.
(5) Alternatively the Arbitrator erred in the application of s 40 of the Act and in particular her assessment of the worker’s ability to earn was inadequate and contrary to or against the weight of the evidence.”
Caretakers Cottage point to paragraph 39 of the Arbitrator’s ‘Statement of Reasons for Decision’ where she said:
“ I agree with the Respondent that the only medical evidence which is available to determine the issue of injury and incapacity is the report of Dr White.”
Caretakers Cottage submit that the Arbitrator “misquoted or misinterpreted Dr White’s report by omitting parts of it with a result that her determination of the evidence was erroneously and fatally flawed”. In particular, the Arbitrator, while quoting Dr White as saying that Ms Hughes “was suffering from panic disorder and agoraphobia which may have been precipitated by the incident”, omitted the second part of the sentence where he said “but the effects of that event have long worn off”. Having expressly accepted Dr White’s opinion, there being no other evidence favouring Ms Hughes, the Arbitrator should have made an award in favour of Caretakers Cottage in respect of the period since 23 December 2003. Caretakers Cottage submit that the Arbitrator failed to disclose any basis for rejecting Dr White’s evidence and her determination was “against the overwhelming weight of unchallenged and accepted evidence”. Her reference to unreasonable refusal of medical treatment not being established on the evidence, was irrelevant to the question of whether the injury had resolved by 23 December 2003.
Caretakers Cottage also submit that the Arbitrator, in finding Ms Hughes had:
“an ability to earn of $188.00 based on the earnings of a design artist working 12.65 hours per week … failed to recognise or acknowledge the obvious teaching qualifications of the Applicant and indeed her application for employment on a full-time basis”.
Ms Hughes’ solicitors point to Dr Gray’s report of 13 December 2002, quoted above, stating that Ms Hughes would not be able to return to her “old work”. They submit that the Arbitrator was entitled to rely on this evidence and Ms Hughes’ detailed statement, and find that Ms Hughes “was unable to return to her pre-injury employment as a result of the work injury” and that she has some ongoing disability consequent on the injury. For example, Ms Hughes states that she continues to find counselling with Dr Barbara Newton to be extremely useful and continues to require an ongoing prescription of anti-depressants under the supervision of Dr Gray. Caretakers Cottage notes that the Arbitrator “did not purport to accept that the worker ‘continues to require ongoing prescription of anti-depressants under the supervision of the general practitioner’”.
EVIDENCE
There is no dispute that Ms Hughes was involved in a frightening incident when a disturbed adolescent client, Cindy, held Ms Hughes hostage and assaulted her. Ms Hughes managed to escape but was very distressed by the incident. She consulted her then general practitioner, Dr Ray Burns, who referred her to a psychologist who, apparently, provided some counselling but without benefit. Several months later, Dr Burns referred her to another psychologist, Dr Barbara Newton, whom Ms Hughes was still seeing in late 2003. When Dr Burns retired in approximately 2001, Ms Hughes started seeing another general practitioner, Dr Melanie Gray, who prescribed a low dose of antidepressants. Ms Hughes also consulted a naturopath.
Ms Hughes was examined by Dr Allan White, Consultant Psychiatrist, at the request of EMI for the purpose of Dr White preparing a medico-legal report. In his report of 27 October 2003, Dr White acknowledged that Ms Hughes:
“was significantly distressed by the event and, in due course, developed panic attacks, fear of leaving home, cognitive symptoms, and depression. In reality, she developed Panic Disorder with Agoraphobia which is a common sequel to a traumatic event if the individual has a genetic vulnerability to the illness.”
Dr White referred to a report by Dr Michael McGrath, “independent psychiatrist for the Respondent” dated 3 April 2001 [which is not in evidence], in which Dr McGrath reviewed Ms Hughes’ condition and made a “dual diagnosis of Post-Traumatic Stress Disorder [‘PTSD’] and Major Depression”. Dr White doubted that diagnosis but stated:
“While it is possible that Ms Hughes may have suffered from PTSD or an Adjustment Disorder initially, her emotional distress has evolved into Panic Disorder which is a necessary and sufficient explanation for all her symptoms.”
Dr White said that, in his view, the Panic Disorder with Agoraphobia from which Ms Hughes was suffering may have been precipitated by the incident in February 1999 “but the effects of that event have long worn off”. Her ongoing psychological symptoms “are due to constitutional problems and to suboptimal treatment”. In a subsequent report dated 30 October 2003, Dr White assessed Ms Hughes’ disability as moderate but said she should make a good recovery with proper treatment. He said she was “currently unfit for full-time work but a gradual return to work is therapeutic”. She required “psychiatric treatment by a psychiatrist experienced in the medical management of mood and anxiety disorders”.
Dr White also referred to a report by Dr Gray, Ms Hughes’ general practitioner, dated 9 March 2001 [not in evidence] in which Dr Gray wrote:
“She remains very depressed, anxious, tearful and introverted after the incident at work and is extremely fragile in any social situation or interview. I do not foresee much hope of return to her pre-morbid personality, which was outgoing, secure and confident, working in a challenging field.”
In a report dated 13 December 2002, Dr Gray commented on Ms Hughes’ capacity for work:
“It will not be possible now or in the future for Merran to return to her old work. Although she is passionate about the need for Youth and Community work, she is incapable of having any face to face contact with the Youth Workers or their clients. She has sought job retraining, and is attempting to find work that she can do from the safety of her own home or in a small office setting where contacts with clients will not be required. Physically she may be very well, but she remains considerably disturbed by her experience.”
In evidence, there is also a letter to Ms Hughes, dated 20 April 2000, from Karen Castledine, Rehabilitation Counsellor with Kairros Pty Ltd, enclosing approval from EMI for Ms Hughes to study a Computer Graphics subject at the UTS School of Design at a cost of $1,100 with an allowance of $300 for travel. The stated goal is “desktop publishing, web design”. In addition, there are three UTS fee statements with receipt number endorsements relating to the year 2000.
In a statement dated October 2003, Ms Hughes says she has made “an enormous effort to get my life back on track” and to gain a postgraduate qualification in design with a view to pursuing a career in that area. She said she hoped to complete her Master of Design program at the College of Fine Arts, which she had been undertaking part-time, in mid 2004. In the meanwhile, she was trying to work part-time: she had secured some contract design work and was trying to establish her own design business. Eventually she hoped the contract work would “land me a permanent position”.
Ms Hughes said she worked part-time for the Inner West Community Development Organisation for about six months in 2001. Initially, this was an office position, but later she was expected to work on projects in community services involving visiting and working with several youth centres. She experienced:
“physical fear reactions in a work situation – sweating profusely and shaking while trying to do a job and be rational. I found this incredibly tiring and depressing. I came home crying everyday for weeks before I finally resigned. This was all very upsetting for me and made a great deal worse financially as the insurer reduced my benefit to $118.06 a fortnight, as a result.”
Ms Hughes said she found it difficult to find work in her new field of design because of her inexperience. She had also applied for various part-time teaching positions related to the areas that she had been studying, but without success.
Caretakers Cottage provided copies of their ‘Individual Pay Record’ for Ms Hughes during the period 10 February 1998 to 9 July 1999 together with information on the award rates for casual youth workers and part-time casual TAFE teachers.
DISCUSSION AND FINDINGS
The role of the Presidential Member on appeal is to review the Arbitrator’s decision as a whole. The review is not a rehearing. In this case, Caretakers Cottage must demonstrate that the decision of the Arbitrator is affected by some legal, factual or discretionary error (Allesch v Maunz (2000) 203 CLR 172; The King Island Company Limited v Deery [2005] NSW WCC PD 1) in order to enliven the Presidential Member’s power to interfere with the Arbitrator’s decision pursuant to section 352(7) of the 1998 Act.
It appears that one of the difficulties facing the Arbitrator in resolving this matter was the very limited medical evidence, especially that presented on behalf of Ms Hughes. Her solicitors only filed Dr Gray’s report of 13 December 2002 and did not file any specialist psychiatric evidence. The only psychiatric evidence was that of Dr White. In his report dated 27 October 2003, Dr White diagnosed Ms Hughes as “suffering from Panic Disorder with Agoraphobia which may have been precipitated by the events in 1999 but the effects of that event have long since worn off”. He said her “ongoing symptoms are due to constitutional factors and to suboptimal treatment”. In his report of 30 October 2003, Dr White said Ms Hughes’ disability was of moderate level and although she is “currently unfit for full-time work … a gradual return to work is therapeutic”. He said her prognosis was good and she should make a full recovery.
Contrary to Caretakers Cottage’s submission, the Arbitrator, at paragraph 45 of her ‘Statement of Reasons for Decision’ noted Dr White’s evidence “that the effect of the incident has long since worn off and that the Applicant’s refusal to work is existential and should not be medicalised”. However, the Arbitrator, at paragraph 42, citing the High Court decision in Ramsay v Watson (1961) 108 CLR 642 (‘Ramsay’), said that in deciding whether there is a nexus between the frightening event and the disability, while the tribunal may be assisted by the medical evidence, the task is not limited to the medical witnesses alone. The Arbitrator noted Ms Hughes’ evidence was “that she found the incident with her client, Cindy very frightening and that it changed her life”. At paragraph 43, the Arbitrator then said of Ms Hughes’ evidence:
“It is her case, supported by Dr Gray and Dr White, that she finds herself threatened and afraid and unable to return to youth work. Dr White reports that she described that the event precipitated acute anxiety, insomnia, distress, nightmares and ‘flashbacks’. This is in stark contrast to her pre-injury situation where she in fact was undertaking youth work concurrently, for two organisations. A commonsense approach would dictate that the worker suffered an injury arising out of or [sic] the course of her employment and this is supported by Dr White’s comment.”
In my view, there is nothing to indicate that the Arbitrator misunderstood the evidence of Dr White and she did not misquote him. Although she may have referred to his evidence selectively at paragraph 40 of her ‘Statement of Reasons for Decision’, later, at paragraph 45, she also referred to Dr White’s evidence that the effect of the incident has long since worn off. As the Full Court of the High Court stated in Ramsay at 645, in relation to a jury trial:
“A qualified medical practitioner may, as an expert, express his opinion as to the nature and cause, or probable cause, of an ailment. But it is for the jury to weigh and determine the probabilities. In doing so they may be assisted by the medical evidence. But they are not simply to transfer their task to the witnesses. They must ask themselves ‘Are we on the whole of the evidence satisfied on a balance of probabilities of the fact?’”
Similarly, in the case of a tribunal, as the NSW Court of Appeal held in MMI Workers Compensation (NSW) v Kennedy (1993) 9 NSWCCR 482, it is not always necessary for a tribunal to have a medical opinion to support an inference drawn from other evidence.
The Arbitrator was entitled to take into account Dr Gray’s and Ms Hughes’ evidence and I am not satisfied that she made an error of law in relation to the weight she accorded Dr White’s evidence as to Ms Hughes’ ongoing partial incapacity for work in late 2003: in his report of 30 October 2003, Dr White said Ms Hughes was “currently unfit for full-time work”. I note the Arbitrator recognised, at paragraph 41 of her ‘Statement of Reasons for Decision’, referring to Dr White’s comment that Ms Hughes’ problems had persisted due to “kindly but suboptimal treatment”, that a work injury need not be the only cause of incapacity (although it must be a substantial contributing factor). The Arbitrator’s reference to unreasonable refusal of treatment appears to be no more than an example of another cause of incapacity that she acknowledged was not contended by Caretakers Cottage. She concluded that the causal chain between the injury and the incapacity was unbroken and rejected Caretakers Cottage’s submission that Ms Hughes’ injury had resolved by 23 December 2003.
The Arbitrator said of Dr Gray’s report of 13 December 2002 that it does not contain a diagnosis, and no medical basis is given for her opinion that Ms Hughes cannot return to youth work then or in the future. However, the Arbitrator noted that Dr Gray:
“places restrictions on the Applicant having face to face contact with clients. This is supported by Dr White’s diagnosis of Agoraphobia. The difficulty is that the medical evidence is quite unclear as to what or how much work the Applicant can do.”
Thus, the Arbitrator found Ms Hughes’ capacity for work was subject to restrictions but recognised that a question remained as to how much work Ms Hughes was capable of. The Arbitrator noted Ms Hughes had undertaken rehabilitation and further education, and agreed with Caretakers Cottage that “her desire to obtain educational qualifications should not be confused with her capacity to be engaged in suitable employment”. The Arbitrator found that Ms Hughes’ evidence:
“in relation to job seeking and the work she has been able to find would suggest that she has sufficient skills to find work of an alternative suitable nature since 2001 when she commenced work with Inner South West Community Development Organisation. Her reason for leaving that position was that her duties, which were initially suitable, changed and became unsuitable.”
The Arbitrator accepted Caretakers Cottage’s wage figures and found Ms Hughes’ average weekly earnings at the time of the injury were $239.98 (12.65 hours at $18.97 per hour) gross based on the award for a Community Services Worker. At the time of the Arbitrator’s determination on 2 June 2004, based on the then award rate, her probable earnings, had she not been injured, would be $285.62. The Arbitrator did not accept Caretakers Cottage’s submission that because Ms Hughes had applied for part-time teaching positions, she was capable of earning a minimum of $511.56 per week for working 12.65 hours, the hourly rate being $40.44. The Arbitrator found “the weight of evidence is that the Applicant is capable of working as a design artist”, for which she found a casual hourly rate of $14.86, giving a total of $188.00 for 12.65 hours. The Arbitrator found this to be the sum Ms Hughes was able to earn in suitable employment.
I reject Caretakers Cottage’s submission that “the Arbitrator failed to recognise or acknowledge the obvious teaching qualifications of the Applicant”. The fact that she may have applied for part-time positions does not establish that Ms Hughes has obvious teaching qualifications. In terms of the criteria to which regard is had in determining what is ‘suitable employment’ pursuant to section 43A of the 1987 Act, there is no evidence of Ms Hughes having any teacher training, teaching skills or experience. Ms Hughes’ statement clearly evidences that she is trying to establish a career in design. The part-time teaching positions she applied for were “in the area in which I have been studying and because they were largely part time”, thereby enabling her to continue in the pursuit of her goal of retraining in design by finishing her degree program and obtaining casual design work with a view to “building up my experience and my portfolio”. She hoped that this would “eventually land me a permanent position”. The fact that she applied for part-time teaching positions does not establish that these positions constituted suitable employment.
The Arbitrator could have emphasised the five step approach to be adopted to determining an injured worker’s entitlement to weekly payments of compensation pursuant to section 40 of the 1987 Act, as set out by the NSW Supreme Court, Court of Appeal, in Mitchell v Central West Health Service (1997) 14 NSWCCR 526 (‘Mitchell’). In the present case, that approach required the Arbitrator to take the following steps (Mitchell at 529):
“1. To determine the weekly amount the worker would probably have been earning if uninjured (section 40(2)(a)) …
2. To determine ‘the average weekly amount the worker is earning or would be able to earn in some suitable employment from time to time after the injury’ (section 40(2)(b)). Section 40(3) provides that the determination of this amount is subject to the following:‘(a) the determination is to be based on the worker’s ability to earn in the general labour market reasonably accessible to the worker;
(b) the determination is to be made having regard to suitable employment for the worker within the meaning of section 43A’ …
3. To subtract the figure derived from (2) from the figure derived from (1) (section 40(2)).
4. To decide whether and to what extent that reduction calculated as above bears ‘such relation to the amount of the reduction as may appear proper in the circumstances of the case’ (section 40(1)) …5. To make an award in the amount arrived at in step (4).”
However, it is clear from her ‘Statement of Reasons for Decision’ that the Arbitrator did follow those steps in the process of determining the award for Ms Hughes of $97.62 per week from 23 December 2003 to the date of the determination and continuing (see paragraphs 50 to 54). I am not, therefore, satisfied that the Arbitrator made an error of law in applying section 40 of the 1987 Act as submitted by Caretakers Cottage.
In conclusion, I am not satisfied that the Arbitrator’s decision is affected by some legal, factual or discretionary error and her decision must, therefore, be confirmed.
DECISION
The decision of the Arbitrator is confirmed.
COSTS
The Appellant, Caretakers Cottage Incorporated, is to pay the Respondent, Ms Hughes’ costs in this appeal as agreed or assessed.
Robin Handley
Acting Deputy President
29 June 2005
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF ROBIN HANDLEY, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
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