Carrington Abrasive Cleaners Pty Limited v Standen
[2009] NSWWCCPD 143
•4 November 2009
| WORKERS COMPENSATION COMMISSION | |||||||
| DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR | |||||||
| CITATION: | Carrington Abrasive Cleaners Pty Limited v Standen [2009] NSWWCCPD 143 | ||||||
| APPELLANT: | Carrington Abrasive Cleaners Pty Limited | ||||||
| RESPONDENT: | Mark Andrew Standen | ||||||
| INSURER: | Corporate Management Services (Australia) Pty Limited | ||||||
| FILE NUMBER: | A1-884/09 | ||||||
| ARBITRATOR: | Mr R Whitelaw | ||||||
| DATE OF ARBITRATOR’S DECISION: | 17 June 2009 | ||||||
| DATE OF APPEAL HEARING: | 29 October 2009 | ||||||
| DATE OF APPEAL DECISION: | 4 November 2009 | ||||||
| SUBJECT MATTER OF DECISION: | Change of circumstances; section 55 of the Workers Compensation Act 1987 | ||||||
| PRESIDENTIAL MEMBER: | Deputy President Bill Roche | ||||||
| HEARING: | Oral | ||||||
| REPRESENTATION: | Appellant: | Mr S Lowe, instructed by Hunt & Hunt | |||||
| Respondent: | Mr R Taperell, instructed by MRM Lawyers | ||||||
| ORDERS MADE ON APPEAL: | Paragraphs one, two and three of the Arbitrator’s determination of 17 June 2009 are revoked and the following orders made: “1. The award of Neilson CCJ of 12 December 1994 in matter No 30872 of 1994 in the Compensation Court of NSW is increased under section 55 of the Workers Compensation Act 1987 (‘the 1987 Act’) and the respondent employer is to pay to the applicant worker weekly compensation on the basis of partial incapacity under section 11(1) of the Workers Compensation Act 1926 (‘the 1926 Act’), as saved under Schedule 6 of the 1987 Act, in the following amounts: 30 April 2004 to 30 September 2004: $361.80 per week 1 October 2009 to date: $405.90 per week such payments to continue, as adjusted, until further order of the Commission. | ||||||
| 1A. The claims for lump sum compensation in respect of permanent loss of efficient use of the left arm or the greater part of the left arm and permanent los of efficient use of the right arm or the greater part of the right arm are dismissed. | |||||||
| 2. The applicant worker’s claim for lump sum compensation in respect of the permanent loss of efficient use of his left leg or of the greater part thereof and the permanent loss of efficient use of his right leg or of the greater part thereof as a result of his injury on 20 February 1979 is remitted to the Registrar for referral to an Approved Medical Specialist for assessment under section 16 of the 1926 Act, as saved by Schedule 6 Part 6 of the 1987 Act. All documents filed with the Commission are to be forwarded to the Approved Medical Specialist. | |||||||
| Paragraph four of the Arbitrator’s determination of 17 June 2009 is confirmed. | |||||||
| The appellant employer to pay the respondent worker’s costs of the appeal, assessed at $2,200.00 plus GST. | |||||||
INTRODUCTION
This appeal concerns the question of what “change of circumstances” will justify the Commission reviewing an award of weekly compensation under section 55 of the Workers Compensation Act 1987 (‘the 1987 Act’).
BACKGROUND
The worker, Mr Standen, is currently 51 years of age. He started work with Carrington Abrasive Cleaners Pty Limited (‘Carrington’) as a sandblaster/labourer in May 1978, when he was just 20. His duties included sandblasting, spray painting, rigging and labouring. After a short period, Carrington increased his wage to the level of a “full painter’s wage” and made him a leading hand on some contracts.
On 20 February 1979, Mr Standen lifted drums of wet sand weighing 20 to 30 kilograms over a period of one to three hours. In the course of this activity he noticed pain in his lower back. As the day progressed his pain increased and he found it painful to walk. As a result, he ceased work and saw his local doctor, Dr Chandler, who certified him unfit for work. Mr Standen attempted to return to work after a few weeks and continued on and off work because of his back pain until he was retrenched in or about April or May 1980. At some stage he also noticed pain in his upper back.
Between April 1980 and late 1983, Mr Standen was intermittently employed with several different employers as a labourer, industrial painter, or sandblaster.
As a result of his injury, Mr Standen commenced proceedings seeking compensation in the then Workers Compensation Commission of New South Wales. Those proceedings resulted in an award in his favour (‘the first award’) on 9 August 1984. The award required Carrington to pay weekly compensation at varying rates for partial incapacity from 3 May 1980 until 12 January 1984, and then on the basis of total incapacity from 1 April 1984 on a continuing basis.
In or about July 1985, Mr Standen relocated with his wife to Coonabarabran where he was offered work as a barman for 20 to 25 hours per week in a restaurant at a motel operated by his brother-in-law.
In September 1986, Mr Standen returned to live in Newcastle and worked as a barman at the Waratah Mayfield RSL Club for one five hour shift per week. Shortly after that he started work as a console operator at the Esso service station at East Maitland where his hours alternated between 16 one week and eight the next week. Those duties, which required some bending, lifting and prolonged standing, aggravated his back.
In February 1988, Mr Standen returned to Coonabarabran where he obtained work as a console operator for his brother-in-law at the Shell Service Station and Roadhouse (‘the Shell Roadhouse’) for 15 to 20 hours per week.
On 19 March 1991, Mr Standen and his wife purchased a half share in the Shell Roadhouse and he established a company known as Dust Storm Holdings Pty Limited. Though he was technically employed as a console operator, Mr Standen’s duties included bookwork, stocktaking, making up wages, banking, ordering stock and talking to trade representatives. As he was in a managerial role, he was able to delegate heavy work to employees. He found that sitting for prolonged periods to perform bookwork aggravated his lower back. Stocktaking also upset his lower back, but he was able to break up that activity so as to manage his pain. In this period he drew a wage from the business equivalent to between 10 to 20 hours work per week depending on the business’ earnings at the time.
In 1994, Carrington filed an application in the Compensation Court of New South Wales seeking that the first award be terminated or reduced. Neilson CCJ (as his Honour then was) heard that application and in a decision delivered on 12 December 1994 (‘the second award’) his Honour noted and found:
(a) Judge Moroney found that Mr Standen sustained a disc lesion at the L5/S1 level of his lower back in the course of his employment with Carrington. Shortly before that decision, Mr Standen had undergone surgery to his back when the damaged disc at L5/S1 was excised. At the time of the hearing before Judge Moroney, Mr Standen was totally incapacitated as a result of the surgery;
(b) the grounds on which Carrington sought to terminate or diminish the first award were “essentially economic”;
(c) though Mr Standen said in evidence that he effectively worked 20 hours per week at the service station, he spent any amount of time between 15 and 45 hours per week around the service station wearing its uniform. The judge inferred that Mr Standen performed some managerial tasks in addition to bookwork, stocktaking, wages, banking, ordering, and talking to representatives;
(d) the wages paid to Mr Standen for 10 hours per week were not the actual measure of Mr Standen’s earning capacity and Mr Standen denied that it was;
(e) the medical evidence did not support Mr Standen’s proposition that he was only fit to work 20 hours per week as a console operator and the judge was satisfied that Mr Standen could work a full 38-hour week as a console operator earning $324.00 per week. However, Mr Standen’s work went beyond that of a console operator and involved him in managerial work of greater responsibility. It also required him to be on call during substantial periods of time;
(f) it was agreed that, but for his injury, probable earnings were $550.00 per week;
(g) Mr Standen’s one quarter return from the business was about $45,000.00 per annum, but that was not a true reflection of his ability to earn on the open labour market because it involved a return on capital;
(h) the median of Mr Standen’s actual hours of work at the Shell Roadhouse were 30 per week. A manager could earn $15.00 per hour but, given the supervisory role played by his wife, that would not be a true reflection of Mr Standen’s ability as a manager and the appropriate hourly rate was $13.50. Allowing $13.50 for 30 hours gave an ability to earn of $405.00 per week. The difference between that figure and the agreed probable earnings was $145.00 per week, and
(i) having taken the necessary discretionary factors into account in fixing Mr Standen’s ability to earn, there were no additional reasons to discount the figure of $145.00 per week and that is the award that was entered in favour of Mr Standen. Consistent with these findings, his Honour made orders varying the first award to be one under section 11(1) of the Workers Compensation Act 1926 (‘the 1926 Act’) in the sum of $145.00 per week from 16 May 1993 on a continuing basis.
On 30 April 2004, Mr Standen sold the Shell Roadhouse to Coles Express and in September of that year he relocated with his wife to Caloundra in Queensland. He remained unemployed until March 2005 when he purchased a restaurant franchise called “The Black Dog Café” in Maroochydore where he worked in the bar during the evenings and sometimes helped out during the lunch sessions. Mr Standen found that the bar work aggravated his lower back because it involved prolonged standing and having to bend to reach drinks. He only worked for short shifts and was able to stop when he had to. The business was unsuccessful and he sold it to the franchisor in September 2005 at a heavy loss and relocated to Newcastle.
On 6 April 2006, Mr Standen obtained employment with Gardiner Petroleum Pty Limited at its BP service station at Thornton, near Newcastle, as a console operator working 16 hours per week in two consecutive eight-hour shifts. For approximately two hours in each shift he had to stack drinks in the cool room, empty garbage bins and clean pumps, which aggravated his back, hips and neck. He also found that when he served customers he had to lean forward over the counter, which also put a strain on his lower back and caused pain to radiate to his hips and sometimes down each leg. Whilst working with BP, Mr Standen also started work as an interior house painter.
Mr Standen ceased work for BP on 19 May 2007 and focused on his painting business.
Even though he could work at his own pace, he found the work very hard and after a day of painting he was in great pain in his lower back, across his hips and up to his neck. He found that he could only work for two to three days at a time. If he had a longer job, he would start it in the middle of the week so he would have the weekend to recover.
On 17 September 2007, Mr Standen’s solicitors, MRM Lawyers, claimed weekly compensation in the sum of $561.60 per week from 13 December 1994 to date and continuing together with lump sum compensation under section 16 of the 1926 Act in the sum of $2,520.00 in respect of 15 per cent loss of use of the left leg at or above the knee, $1,680.00 in respect of 10 per cent loss of use of the right leg at or above the knee, $2,760.00 in respect of 15 per cent loss of use of the left arm at or above the elbow, and $2,760.00 in respect of 15 per cent loss of use of the right arm at or above the elbow, and hospital and medical expenses. The letter did not identify the parts of the body alleged to have been injured.
As the 1926 Act was repealed in 1987, the claim for lump sum compensation is under the Savings, Transitional and Other Provisions in Schedule 6 Part 6 of the 1987 Act. Under that schedule, such a claim is calculated under the terms of the previous section 16 of the 1926 Act. That section provided for lump sum compensation for the loss, or loss of efficient use, of either arm or leg, or the greater part thereof. The quantum of compensation payable was amended in the Workers Compensation (Amendment) Act 1981 and the higher amounts in that Act are payable “whether the injury was received before or after the date of assent” of the amending Act (Schedule 6 clause 3(2)). Therefore, for the loss of a leg or the greater part thereof, the maximum payable is $22,000.00, not $16,800.00 as the figures in the Application have assumed and the appropriate amendment will need to be made to the pleadings before any award for lump sum compensation is entered.
The claim for compensation was disputed in various letters from the insurer’s solicitors, Hunt & Hunt. On 6 February 2009, an Application to Resolve a Dispute (‘the Application’) was registered in the current Workers Compensation Commission of New South Wales. Mr Standen sought compensation in the terms of his solicitor’s letter of 17 September 2007, as a result of the following injuries “Thoracic spine, lumbar spine, right leg (upper), left leg (upper), right arm (upper) and left arm (upper)”. The Application made no reference to Mr Standen’s neck.
In a Reply filed on 27 February 2009, Carrington disputed incapacity, probable earnings, actual earnings and Mr Standen’s ability to earn.
The Commission listed the matter for conciliation and arbitration on 7 May 2009. It is not known what discussions took place during the conciliation stage, but the Arbitrator’s Statement of Reasons (‘Reasons’) delivered on 17 June 2009 identified the following issues to be in dispute:
(a) had Mr Standen established a change in circumstances within the meaning of section 55 of the 1987 Act;
(b) if so, what was the proper amount of his weekly entitlement, and
(c) had Mr Standen injured his neck and arms and, if so, should the assessment of lump sum compensation resulting from that injury be referred to an Approved Medical Specialist (‘AMS’) for assessment.
Mr Standen was cross-examined at the arbitration and the Arbitrator heard lengthy submissions from each side. The Arbitrator found that Mr Standen’s circumstances had changed from 30 April 2004 (when he sold the Shell Roadhouse) and that he was entitled to weekly compensation at the “maximum statutory rate” from 30 April 2004 to date and continuing with credit for payments made. The Arbitrator did not identify the rate of compensation because the evidence on the level of dependency was uncertain.
The Commission issued a Certificate of Determination on 17 June 2009 in the following terms:
“The Commission determines:
1. That the Respondent pay to the Applicant weekly payments of compensation at the maximum statutory rate from 30 April 2004 to date and continuing with credit for payments made.
2. That the Applicant's s66 claim be remitted to the Registrar for referral to an Approved Medical Specialist as follows:
(a)Date of Injury: 20 February 1979
(b)Injury:
(i) Right arm at or above the elbow
(ii) Right [sic, left] arm at or above the elbow
(iii) Right leg at or above the knee
(iv) Left leg at or above the knee
(c)Documents to be forwarded to AMS:
(i)Application to Resolve a Dispute and attached documents;
(ii)Reply and attached documents;
(iii)Application to Admit Late Documents dated 6 April 2009 and attached documents;
(iv)Application to Admit Late Documents dated 6 May 2009 and attached documents.
3. That the Respondent pay the Applicant's s60 expenses upon production of accounts or receipts.
4. That the Respondent pay the Applicant’s costs as agreed or assessed, certified as complex with an uplift of 25 per cent.
A brief statement is attached to this determination setting out the Commission’s reasons for the determination.”
In an appeal filed on 14 July 2009, Carrington seeks leave to appeal the whole of the Arbitrator’s determination, save for the remittal to the Registrar for referral to an AMS for assessment of permanent loss of use of the lower limbs.
LEAVE TO APPEAL
Monetary Threshold
Before proceeding to deal with an appeal the Commission must determine whether the application meets the requirements of section 352 of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’).
It is not disputed that the monetary thresholds in section 352(2) of the 1998 Act are satisfied.
Time
The appeal was lodged within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act.
I grant leave to appeal.
THE EVIDENCE
Lay evidence
Mr Standen’s work history is set out in his statement of 24 October 2008 and has essentially been summarised under “Background” above. In addition to the evidence in his statement, Mr Standen completed several statutory declarations between 1989 and February 2009 setting out details of his employment and earnings.
The relevant evidence in Mr Standen’s statutory declarations may be summarised as follows:
3 March 1997 “Nothing has changed since last declaration”.
11 February 1998 “Nothing has changed since last declaration”.
24 February 1999 “Average 30 hours – wages worked out by the courts in Dec 94 – other [sic] than those wages is a return on investment – my solicitor is Moroney Mantach – defended by Mr O’Calahan please refer to him for any further information”.
22 February 2000 30 hours worked each week for a gross weekly wage of $295.00.
22 February 2001 “Average 30 hours wages worked out by the courts in Dec 94” – gross weekly wage of $295.00.
26 February 2002 Mr Standen described his occupation as “office work/petrol station roadhouse” and that his number of hours worked were “average 30 hours – wages worked out in court in Dec 94” – gross weekly wage $295.00.
5 February 2003 Mr Standen described his occupation as “office work/petrol station roadhouse” and again stated that his hours averaged 30 per week and that his wages had been “worked out in court Dec 94” – his gross weekly wage was again described as $295.00.
25 February 2004 Gross weekly wage $295.00.
14 February 2005 Mr Standen stated that his hours worked each week were “20 to 30 hours approximately” – gross weekly wage $295.00.
20 February 2006 Details of occupation and number of hours worked each week and gross wage are blank. Mr Standen declared that he was receiving unemployment benefits of $247.71 per week.
14 February 2007 Mr Standen declared that he commenced employment as a console operator on 16 April 2006 and was working 16 hours each week for a gross wage of $321.33.
25 March 2008 Mr Standen declared that he was a self-employed painter having commenced employment on 1 July 2007. His hours of work varied and his gross weekly wage was “maximum $350.00”.
25 February 2009 Mr Standen declared that he was a self-employed painter from 1 July 2007 until he ceased on 16 October 2008. He described his hours worked as “varied” and his maximum gross weekly wage as $350.00.
In his oral evidence before the Arbitrator, Mr Standen was cross-examined at length about his employment history. The key parts of his evidence may be summarised as follows:
(a) he did all the tasks required of him as a console operator with BP (T3.44);
(b) he supervised and managed the Black Dog Café at Maroochydore (T5.1-13) but his wife did most of the management (T5.37);
(c) whilst he stated on his resumé that he was responsible for rostering at the Black Dog Café, in fact he did not do that job (T5.58) although he did do rostering at the Shell Roadhouse (T6.7);
(d) he had experience in administration associated with running the Shell Roadhouse, which had 12 staff (T7.10-29);
(e) had another franchise been offered at the Shell Roadhouse, Mr Standen would still be in Coonabarabran performing the same work operating the business (T8.10-17);
(f) between 1994 and April 2004, Mr Standen adopted additional roles as a trainer and acquired various management skills referred to in his resumé (T8.56-T9.3);
(g) after the sale of the Shell Roadhouse, Mr Standen looked for another self-employment opportunity (T9.13);
(h) the Black Dog Café turned out to be a disaster and Mr Standen sold it back to the franchisor in September 2005 (T9.58-T10.12);
(i) Mr Standen denied that he only worked two shifts per week with BP because it permitted him to do other things for the rest of the week (T11.1-5) and said that he did not want to work a night shift and then back up in the morning for another shift (as he did) because it was “too strenuous” and he would have liked a day to get over the first shift, but the two shifts offered to him were all that was available and he took it (T11.11-18);
(j) he had a lot of problems getting over the shifts he did at BP and he did other things on the other days, but usually had “a couple of days rest after the two” shifts before he would do that (T11.20-26);
(k) Mr Standen agreed that he never complained to Ms Connors (the BP site manager) about the physical difficulties he was having with the work (T11.27-34);
(l) Mr Standen agreed he made no specific complaint to any person outside his family about any problems he was having as a result of his work with BP (T11.45-48);
(m) when he left BP, Mr Standen told Ms Connors that he was leaving because his painting business had increased and he was able to work full-time and did not have the time to keep working for BP (T11.56-T12.1-3);
(n) Mr Standen’s income from his painting work was disclosed through his business known as Standen Operations Pty Ltd, a company he set up with his wife (T12.51-T13.1-17);
(o) Mr Standen was trying to get himself about $300.00 per week out of the painting work he did (T13.35);
(p) Mr Standen did painting work whilst still employed at BP (T14.45-55);
(q) $300.00 a week was all he could get out of the painting business (T15.11);
(r) he did not go back to BP because he knew he was going to hurt himself more if he continued (T15.20). The work at BP was not exactly the same as the work at the Shell Roadhouse. At the Roadhouse, he was in charge and if he wasn’t feeling 100 per cent he could go home and rest and he could ask someone else to stack the cool room or stack boxes (T15.22-38);
(s) Mr Standen did not know if he could have coped with the physical requirements of being a real estate agent (T16.33);
(t) at the time of the hearing Mr Standen was training to become a driving instructor (T17.3). Mr Standen chose driving instructing because he can choose his hours. He added that he is “pretty much computer illiterate” (T17.28-38);
(u) Mr Standen started his painting business when he put an advertisement in the paper a few weeks before he left BP (T18.19-24) and his last paid painting job was done in September or October 2008 (T18.37);
(v) his statutory declarations as to his earnings were true (T19.10-17);
(w) he hadn’t earned any money since giving up painting (T19.43). When he was painting, he was being paid by his own company (T19.48);
(x) Mr Standen has no formal qualifications for running or managing a restaurant or business (T22.30-34) and his wife “pretty much ran the business” (T22.50);
(y) working two consecutive shifts built up on Mr Standen and he was “pretty sore by the time [he’d] finished those” and he was “progressively getting worse and worse and at the end of it he had to have “a day or two to get over it before [he’d] start doing anything else” (T25.7-13);
(z) when he said he was getting worse he was referring to his back (T25.15). He also got “nerve pain” down his legs (T25.21);
(aa) console operating has changed over the previous 10 or 15 years. These days you “pick up every item over the counter, pull it towards yourself and scan it” (T25.21-28);
(bb) Mr Standen has been seeing his doctors all along but there is nothing they can do for him (T25.33) other than prescribe medication (T25.38), and
(cc) whilst working at BP the most painting he would have done was a couple of days a week (T26.7-12) because he couldn’t handle any more as he was in a lot of pain by the end of the day (T26.14-18).
Mr Standen’s expert evidence
Dr Ghabrial, orthopaedic surgeon, reported to Mr Standen’s solicitors on 3 May 1984 that a CT scan showed a huge left sided L5/S1 prolapsed sequestrated disc. On 4 June 1984, Dr Ghabrial operated on Mr Standen to remove the L5/S1 disc and perform a posterolateral fusion.
On either 19 or 9 December 1994, Dr Smyth, surgeon, reported that following the surgery, Mr Standen had a good deal of improvement in the somatic referred pain in his legs and that his back pain was “somewhat improved” but he still had pain in both areas. Dr Smyth recorded that Mr Standen complained of pain in his lumbar region “with occasional radiation as true sciatica to both legs” which varied with intensity and from side to side. At the time of the examination, Mr Standen was working at the Shell Roadhouse at Coonabarabran. That work consisted mainly of sedentary work in the office for 20 – 24 hours per week, but he could not do more than that and could only do work of a sedentary nature. Mr Standen was “somewhat undecided about the pain in his neck” and uncertain that it had occurred immediately after the injury.
On examination, Mr Standen complained of pain in his lumbar region, which occasionally radiated to both legs and varied in intensity. Dr Smyth concluded that Mr Standen was unfit for any occupation requiring heavy lifting, bending or twisting of his neck or back. He was able to carry on with a “modified sedentary occupation in his business at a service station”. He expressed no opinion on the number of hours Mr Standen was fit to perform.
After concluding that the impairment of Mr Standen’s back was directly related to the incident at work in 1979, Dr Smyth added that the connection between the neck symptoms and the work incident was “a little more vague”, but he certainly had no pain in his neck or back prior to the 1979 injury and, therefore, the inference may be that his neck impairment was also related to that incident. In respect of any potential claim for lump sum compensation, Dr Smyth assessed Mr Standen to have a 32 per cent impairment of his back and a 5 per cent loss of use of each leg at or above the knee.
Dr Ghabrial reviewed Mr Standen on 4 April 2007 and submitted a report to his solicitors on that day. He recorded that Mr Standen reported continuing symptoms in his lower back and legs, together with symptoms in his neck and shoulders.
As at April 2007, Mr Standen remained working as a console operator and was finding it difficult to cope with many activities. On examination, spinal movements were mildly stiff with discomfort with flexion to the mid calf region. Extension, lateral bending and rotation were normal, but with discomfort. There was moderate paraspinal lumbar spasm. Straight leg raising was 80 degrees with a positive sciatic stretch. There were no motor or reflex deficits, but there was decreased sensation in the L5 dermatome.
Dr Ghabrial felt that Mr Standen had recovered reasonably well from his injury, but found that activities involving lifting, bending and twisting gave him increased pain. He added that he believed the neck and shoulder symptoms were related to the 1979 injury and he advised Mr Standen to avoid activities involving excessive use of the upper limbs above shoulder level or any lifting above five kilograms. In regard to his back, Mr Standen was not fit for activities involving excessive twisting and excessive bending. He assessed Mr Standen to have a 40 per cent permanent impairment of his back, a 15 per cent permanent loss of efficient use of his left leg at or above the knee, a 10 per cent loss of efficient use of the right leg at or above the knee, a 20 per cent permanent impairment of the neck, a 15 per cent permanent loss of efficient use of the left arm at or above the elbow, and a 15 per cent permanent loss of efficient use of the right arm at or above the elbow.
Carrington’s evidence
Carrington relies on several medical reports going back to September 1985. Whilst I have read all of the material tendered, I will only review the medical reports that touch on the issues relevant in the present review.
Dr Neild saw Mr Standen in September 1985 and again in June 1986. On each occasion he took a history that Mr Standen injured his back at work in 1979 and ultimately came to surgery for that injury at the hands of Dr Ghabrial in June 1984. He took no history of any neck injury or symptoms.
Dr Rowe concluded that Mr Standen was fit for work of a “selected nature on a permanent basis.” He felt that Mr Standen was ideally suited to his current job as a console operator in a service station, but he was not fit for work involving heavy lifting or a lot of bending and was unfit for his old job as an industrial painter.
Dr Plowman took a history in April 1987 that Mr Standen injured his lower back at work in 1979, but he took no history of any injury to Mr Standen’s neck.
Dr Bentivoglio, orthopaedic surgeon, examined Mr Standen on 14 September 1988 and took a history of the low back injury at work in 1979. He took no history of Mr Standen injuring his neck at or about that time, however, he reviewed Mr Standen in October 1989 and, for the first time, recorded a history that he developed neck symptoms twelve months before the spinal surgery. He received chiropractic treatment and physiotherapy for his neck, but his symptoms did not improve. The doctor concluded that, as there was no specific injury to the neck, he did not believe it should be compensable. He added, contrary to the statement in his initial history, that Mr Standen dated the onset of his neck symptoms to “around June 1981”. Dr Bentivoglio concluded that there was no specific injury to the neck and it should not be compensable. So far as Mr Standen’s back was concerned, Dr Bentivoglio felt he would continue to have low back pain in the near and distant future, especially if he did heavy activities. He added:
“As with any person who has had a spinal operation, he should avoid duties that require him to bend excessively or lift objects weighing more than a few kilos. His ongoing symptoms are not unreasonable for a person who has had a spinal condition.”
Dr Bentivoglio reviewed Mr Standen in February 1992. In his report of 5 February 1992, he stated that Dr Ghabrial performed a cervical myelogram that revealed two ruptured discs in Mr Standen’s neck. Mr Standen declined to have operative treatment for his neck symptoms. Dr Bentivoglio confirmed his previous opinion that Mr Standen would never be fit to perform his full pre-injury duties. He added that the neck symptoms developed whilst Mr Standen was not at work and he therefore found it difficult to consider them as being compensable. He confirmed his previous opinion about Mr Standen’s fitness with regard to his back.
Dr Roger Rowe, orthopaedic surgeon, examined Mr Standen on 10 May 1994 and reported on 17 August 1994. Mr Standen complained of an ache in his lower back, hips and knees. He limped if the pain was bad. Mr Standen also complained of an ache in his neck and shoulders.
Dr Edwards, surgeon, examined Mr Standen on 16 May 2007 and prepared a report the same day. He recorded that Mr Standen complained of low back pain that spread up to his neck and across the shoulders. On examination, Dr Edwards found no tenderness, spasm, scoliosis, but did note a slight loss of lumbar lordosis. Forward flexion was 60 degrees, but lateral flexion, extension and lateral rotation were normal. Straight leg raising was 50 degrees on each side. There was no leg muscle wasting, but there was complaint of tingling in the tips of the toes in the left foot.
At the time of his examination by Dr Edwards, Mr Standen was working as a console operator with BP and he admitted to also “doing some painting jobs privately.” Dr Edwards considered Mr Standen to be unfit to return to work as a sand blaster, but fit to work as a console operator or painter. He considered him to be fit to lift weights of up to 20 kilograms, but he was not fit for work that required repeated stepping or bending.
In a report dated 27 June 2007, Dr Edwards added that he considered Mr Standen fit to work full-time as a console operator, and for other light duties also on a full-time basis.
On 27 September 2007, Mr Standen attended at the Vocational Capacity Centre Pty Limited for a vocational assessment by Mr Defina, clinical and vocational psychologist. As a result of that assessment, Mr Defina prepared a job match report on 12 October 2007 in which he identified the following occupations as being suitable for Mr Standen and noted the weekly wage for each full-time position:
(a) shop manager ($785.00);
(b) painter ($964.00);
(c) parking inspector ($822.00);
(d) service station console operator ($654.00);
(e) betting agency counter clerk ($860.00);
(f) real estate sales person ($982.00), and
(g) welfare officer ($799.00).
Mr Defina also prepared a vocational assessment report in which he recorded that Mr Standen had “previously been prone to developing a ‘kinked neck’, which would persist for months once it had started.” Medical investigations apparently related the source of the difficulty to Mr Standen’s right shoulder. About 12 years ago Mr Standen underwent surgery to his right shoulder, which resolved that problem but left him with restricted mobility in that shoulder.
Mr Standen completed his schooling to the level of year nine at Broadmeadow High School. He rated his academic performance as having been “not good”. In 2004 he completed a one-week course with the Real Estate Institute of Queensland, though he never registered as a real estate sales person. He described himself as “computer illiterate”, being unable to operate any software or to type.
Though he had ambitions of becoming a butcher when he left school, his father secured employment for him as a painter and docker at the Carrington Slipways in Tomago. He worked in that capacity for about four years until he started with Carrington where he worked as a sandblaster, spray painter and scaffolder. In respect of Mr Standen’s post injury employment, Mr Defina noted that his duties at the Shell Roadhouse were “mainly administrative”. In respect of Mr Standen’s work at the BP service station, he found the work “too heavy”. He posted an advertisement in the local newspapers for painting jobs and then resigned from BP.
In respect of his work as a painter, Mr Standen said that he could get as much work as he wanted, but he “just [couldn’t] do it, [couldn’t] keep it up”. At the time of the assessment in September 2007, Mr Standen tried to work on Mondays, Tuesdays and Fridays, so he could have regular breaks of two days. He found that working three or four days consecutively was “just too much”. As a painter, he was able to work at his own pace, which he did not think would be fast enough for an employer. He said he would like to be able to work full-time because he was not earning enough in his current arrangement. Mr Standen was working three days per week as a painter.
Mr Defina noted Mr Standen’s current problems included pain in his back, shoulders, hips and both legs. The pain was exacerbated by physical activity and reduced by rest. He also had pain in his neck produced by physical activity.
At the assessment, Mr Standen was casually dressed and well groomed. He related in a friendly manner and displayed good social skills. His verbal communication was fluent and clear. Mr Defina observed the worker’s sitting tolerance to be about 60 minutes, with fidgeting and changes of posture, however, pain behaviour was not a notable feature of the assessment. The tests administered by Mr Defina revealed that Mr Standen has skills adequate for the demands of elementary to intermediate administrative tasks. Mr Standen reported restricted tolerances with respect to sitting and driving, but no restrictions with respect to walking or standing.
Assessment of Mr Standen’s psychological adjustment to pain indicated below average scores for symptoms relating to depression, anxiety and somatic concern. The data therefore suggested that Mr Standen was coping quite well with his pain, despite the emphasis he placed on issues of pain and disability at the interview. Mr Defina felt that there were no apparent barriers to full-time employment from a psychological perspective and that Mr Standen’s perception of his capacity to work increased hours may be enhanced by multi-disciplinary pain management treatment. Mr Defina was unable to comment on Mr Standen’s physical capacity for full-time work.
On 22 October 2007, Dr Edwards commented on Mr Defina’s report. In his opinion, Mr Standen was fit for the occupations identified by Mr Defina as being suitable and he would be fit for them on a full-time basis, so far as his physical abilities were concerned.
Carrington also relies on a statement from Ms Connors, the site manager at BP for the last eight years. She states that Mr Standen made no mention of any previous injury that would prevent him from performing the duties of a console operator, including lifting up to 150 cases of coke in the summer. While he worked at BP, he never complained of any injury and never appeared to be restricted in his movements. He never said he was unable to perform the work. She found Mr Standen to be well spoken, polite, and good with customers, though slow with the way he did things. He worked the afternoon shift on Fridays from 2pm until 10pm and the Saturday morning shift from 8am until 2pm. He was paid $296.90 for the two shifts. He did extra hours when other workers were away, but said he only wanted to work two days per week because he did handyman or painting work on other days. He said he left BP because his business had increased and he was able to do it full-time.
Mr Standen’s expert evidence in reply
Dr Rebecca Beiers, rehabilitation medicine consultant, examined Mr Standen on 5 March 2009 and reported to his solicitors on 12 March 2009. She took a history of the 1979 incident with Carrington and of Mr Standen’s subsequent work history. She took no history of him injuring his neck in 1979.
Mr Standen complained of a constant dull low backache, which he graded at 1 out of 10. Bending, lifting and prolonged standing aggravated his pain. When it was aggravated, his pain levels increased to 10 out of 10 and the pain radiated down either leg. Pain flare-ups lasted days at a time and were relieved with rest.
Dr Beiers also took a history of Mr Standen having undergone two previous operations on his right shoulder about 13 years ago as a result of tendon damage which had been aggravated by overhead use “and exacerbating neck pain.” He also complained of a subluxing left shoulder associated with neck pain.
Mr Standen was able to manage his own lawn mowing, vacuuming, and was able to access high shelves. His walking tolerance was not limited, but his sitting tolerance was one to two hours provided he had lumbar support. He was unable to sustain forward flexion, as occurs at a counter situation. At the time of Dr Beiers’ assessment, Mr Standen was completing a driving instructor’s course.
On examination, Dr Beiers noted Mr Standen to have a flattened lumbar lordosis. He was able to flex with his fingertips reaching below his knees. His range of extension and side bending was normal. Straight leg raising was negative and the femoral stretch test was also negative.
Dr Beiers concluded that Mr Standen had “failed back surgery syndrome with chronic pain”. He needed to avoid lifting more than 10 kilograms and avoid repetitive bending and twisting. He was unsuitable for work in manual labouring, but was fit for sedentary work. He needed to be able to change his position frequently and avoid static standing with forward flexion of his back. He was unsuitable for counter work and was only fit for work on a part-time basis. She stated that Mr Standen had not worked full-time for many years and that he lacked a lot of work fitness.
Dr Beiers considered the reports from Mr Defina. In respect of the jobs assessed by Mr Defina as being suitable for Mr Standen, Dr Beiers noted that Mr Standen is not qualified in welfare or real estate work and would require retraining. When Mr Standen worked as an independent painter, he was only able to manage three days per week, as his back and his upper limbs limited him. She believed painting was unsuitable. Mr Standen was capable of working as a shop manager provided he could adhere to the restrictions set out above and provided he could start on a part-time basis. He would be fit to work as a parking inspector on a part-time basis. Work as a console operator would pose difficulties because of the sustained forward flexion and the prolonged standing required. If he were to work as a console operator he would require specialised seating at a modified station. The same restriction and modification would apply to work as a betting agency counter clerk.
THE ARBITRATOR’S REASONS
The Arbitrator made the following findings:
(a) Mr Standen conceded that there had not really been a change in his medical condition and it was necessary to consider whether he could establish a change in probable or actual earnings (Reasons at [13]);
(b) there was no change in circumstances prior to 30 April 2004, but there had been a change after that date when Mr Standen sold his share of the Shell Roadhouse and moved to Caloundra where he was unemployed for 11 months before taking up a café franchise (Reasons at [14] and [15]);
(c) given Mr Standen’s age and demonstrated managerial abilities, he accepted that probable earnings but for the injury as at 30 April 2004 would have been $1,172.00 per week. This was based on Mr Defina’s Job match report of 12 October 2007, which stated that a supervising industrial spray painter would be paid at that level in 2006 (Reasons at [18] and [19]);
(d) Mr Standen would be able to earn as a part-time console operator working 20 to 30 hours per week between $327.00 and $490.50 per week, averaged to be $400.00 per week (Reasons at [22]);
(e) deducting $400.00 from $1,172.00 per week gave a difference of $722.00 per week. The Arbitrator saw no reason to reduce that amount in the exercise of his discretion and awarded the “maximum statutory rate”, leaving it to the parties to determine the quantum of that rate depending on the number of dependants in the relevant period;
(f) in respect of the periods when he was employed, Mr Standen earned $221.00 per week from 16 April 2006 to 30 June 2006, $345.98 per week from 1 July 2006 to 19 May 2007, and $350.00 per week from 1 July 2007 until 16 October 2008. Deducting these figures from probable earnings of $1,172.00 per week, left an amount in excess of the statutory rate of compensation;
(g) in respect of the period from 19 October 2008 to date, Mr Standen was able to earn $350.00 per week. Deducting this figure from $1,172.00 per week left an amount in excess of the statutory rate of compensation;
(h) the Arbitrator assumed that Mr Standen had previously been compensated for loss of use of his upper and lower limbs under section 66 and, if that was not the case, the parties should apply for a reconsideration of that part of his decision (Reasons at [33]);
(i) though there was some discussion about whether Mr Standen had injured his neck, since it did not appear to have been claimed by him nor responded to by Carrington he remitted the section 66 aspect of the claim to the Registrar for referral to an Approved Medical Specialist in respect of the left leg at or above the knee, the right leg at or above the knee, the left arm at or above the elbow and the right arm at or above the elbow (Reasons at [34]), and
(j) he made a general order under section 60 of the 1987 Act.
ISSUES IN DISPUTE
The issues in dispute in the appeal are whether the Arbitrator erred in:
(a) determining that Mr Standen injured his neck on 20 February 1979, or, in the alternative, failing to determine whether Mr Standen injured his neck on 20 February 1979 (‘the neck injury’);
(b) finding that Mr Standen had established a change in circumstances under section 55(1) of the 1987 Act as a threshold to reviewing his entitlement to weekly compensation (‘change in circumstances’);
(c) failing to exercise judicially the discretion invested in a decision maker by section 55(1) of the 1987 Act by failing to determine whether any change of circumstances justified any alteration to the weekly compensation payable under the second award (‘change in circumstances’);
(d) attributing inappropriate or any weight to the evidence from Mr Defina in a vocational assessment report dated 12 October 2007 (‘the section 40 assessment’);
(e) making findings as to Mr Standen’s ability to earn which were not supported by probative evidence (‘the section 40 assessment’);
(f) failing to exercise his discretion as to the quantum of weekly compensation under section 40(1) of the 1987 Act (‘the section 40 assessment’);
(g) making a determination so far against the weight of the evidence that it amounted to a failure to fairly and lawfully determine the dispute (‘weight of the evidence’), and
(h) making a general order for the payment of hospital and medical expenses in circumstances where he made no proper determination of whether Mr Standen injured his neck at work (‘medical expenses’).
SUBMISSIONS, DISCUSSION AND FINDINGS
The neck injury
The situation concerning the alleged neck injury is confused because the Application does not allege that Mr Standen injured his neck on 20 February 1979, but alleges that he injured his “thoracic spine, lumbar spine, right leg (upper), left leg (upper), right arm (upper) and left arm (upper)” and claims lump sum compensation in respect of the loss of use of both legs at or above the knees and both arms at or above the elbows. As the injury occurred before the introduction of the 1987 Act, no lump sum compensation is payable for any impairment of the neck or back. However, in the absence of an injury to the arms (and none is alleged), the claim for lump sum compensation in respect of the arms can only succeed if it is a consequential loss resulting from a neck injury. Therefore, though Mr Standen has not pleaded an injury to his neck in the Application, the Arbitrator had to determine if Mr Standen injured his neck on 20 February 1979 before he could refer any potential claim for loss of use of the arms to the Registrar for referral to an AMS. He identified that as one of the issues in dispute (see [19] above) and he erred in failing to determine that issue.
The evidence is overwhelmingly against a finding that Mr Standen injured his neck on 20 February 1979. There is no history of Mr Standen experiencing any neck symptoms until Dr Bentivoglio’s review in October 1989. That history had two possible dates for the commencement of the neck symptoms: either 12 months before the surgery, which was in June 1984, or “around June 1981”. Regardless of when the symptoms commenced, Dr Bentivoglio concluded that there had been no injury to the neck and that he did not believe it to be compensable.
Mr Standen’s statement makes no mention of any neck symptoms until he was working at the Esso service station in either 1986 or 1987. I find that Mr Standen did not injure his neck on 20 February 1979.
The only alternative basis upon which the claim for lump sum compensation for loss of use of the arms could succeed is if the alleged loss has resulted from the accepted injury to his back. There is no persuasive evidence that that is the case. In these circumstances, there is no basis for referring Mr Standen’s claim for lump sum compensation in respect of his arms to an AMS for assessment.
Change in circumstances
Carrington submits that there is no evidence to support a change of circumstances on 30 April 2004 that would justify a section 55 review. It argues that the Commission has a discretion whether to conduct a review or not and, in the circumstances of this case, no review should be conducted because Mr Standen voluntarily sold the Shell Roadhouse and relocated to Caloundra, and his situation is the same as it was at the time of the second award in 1994.
Reference is made to Sergi & another v Jurcevic (1999) 18 NSWCCR 299. In that case the employer sought to terminate a worker’s award of weekly compensation on the basis that any incapacity had ceased. It relied on certain admissions taken to have been made by the respondent worker under the Compensation Court’s Rules. The trial judge dismissed the application because she did not accept that any admissions flowed from the Rules, and was not otherwise satisfied that the respondent was not incapacitated for work, and because, in any event, she had a discretion under section 55 and that discretion should not be exercised even if cessation of partial incapacity had been established by operation of the Rules. Giles JA (Beazley JA and Davies A-JA agreeing) held that her Honour erred in her interpretation of the Rules, but (at [25]) declined to decide whether, because of the use of “may” in section 55(1), the Compensation Court could decline to end or reduce a weekly payment if the requesting employer established that the worker was no longer incapacitated. His Honour added:
“If there were a discretion, her Honour was required to exercise it judicially, that is on proper grounds, and in my view in the present case it could only have been exercised in favour of the appellant.”
Whilst the use of the word “may” generally indicates, if used to confer a power, that the power may be exercised or not (section 9 of the Interpretation Act 1987 (NSW)), it is my view that the Commission would only decline to conduct a review in circumstances where the change of circumstances relied upon made no material difference to the award being reviewed. That is not the situation in the present matter.
This approach is consistent with the decision by Kirby P (as his Honour then was) in Atlas v Bulli Spinners Pty Ltd [1993] NSWCC 17; (1993) 9 NSWCCR 378 where his Honour noted (at 384):
“Having, therefore, before her an application for review, which required proof of a change in circumstances, O’Toole CCJ should have taken the following steps. She should have determined first whether the requisite change of circumstances had been shown by the employer to warrant the exercise of the power of review. If, by reason of differing evidence about the extent of the worker’s incapacity she were convinced that an applicable ‘change of circumstances’ was shown justifying review, her Honour would then be obliged to exercise the powers conferred upon the Compensation Court by section 55(2) of the 1987 Act (or section 60(1) of the 1926 Act). This empowers the Compensation Court, relevantly, to end or reduce the weekly payment.”
Acting Deputy President O’Grady (as he then was) considered the authorities dealing with a section 55 review in NSW TAFE Commission – North Sydney Institute v Zuk [2006] NSWWCCPD 148. He concluded (at [34]):
“(i) A section 55 review is not a reconsideration of facts found in the earlier proceedings.
(ii) The review is an examination of circumstances which may have occurred since the original determination.
(iii) If such circumstances represent a change from those prevailing at the date of the original determination there may be grounds upon which a review is made.
(iv) In applying section 55 of the 1987 Act the starting point is an unqualified acceptance of the original decision maker’s findings.
(v) A review will occur only where it is established that circumstances that were before the original decision maker at the time of the award of weekly benefits and upon which the findings in relation to a statutory entitlement were made have changed.
(vi) Relevant ‘circumstances’ are not restricted to consideration of change of medical condition or capacity for work.
(vii) The onus is upon the party seeking review to satisfy the threshold issue of ‘change of circumstances’.”
I agree with this succinct and helpful summary.
Given Carrington’s surprising submissions, it is appropriate to consider some of the older authorities on reviews because they illustrate the points made by Acting Deputy President O’Grady. In Ramsay v Gramophone Co Ltd [1936] 2 All ER 752 Scott LJ held that the purpose of the review provision was to enable:
“Periodic adjustment of weekly payments in correspondence with the degree of incapacity from time to time affecting the workman in actual fact. Whereas a jury assessing unliquidated damages for personal injuries has to forecast the future and make the best prospective estimate it can, the very essence of our legislative system of workman’s compensation is the avoidance of prospective estimates and the correction of current estimates from time to time to make them correspond with reality.”
After quoting the above passage, CP Mills noted in Workers Compensation (New South Wales) 2nd edition, Butterworths, 1979, (‘Mills’), at 481:
“Hence the change of circumstance that will justify a review will include any material bearing on the degree of incapacity resulting from the injury, or on the rate of compensation benefits to which the worker is entitled, at the date of the application for review. If it justifies a different conclusion from that reached when the award was made, then the payment under that award may be varied or terminated.”
The various circumstances in which a review may be triggered are listed in Mills at 481. They include:
(a) where a worker’s physical condition as a result of the injury has either improved or deteriorated (Manly MC v Dodds [1961] WCR 212);
(b) where there has been a change as to dependency (Edmunds v Hetton Bellbird Collieries Ltd [1959] WCR 206);
(c) where a worker’s earnings have changed (Englefield Collieries Ltd v Roberts (1932) 25 BWCC 558);
(d) where there has been a general rise in the level of wages prevailing in the community (Producers Meat Supply Co Pty Ltd v McKinley [1950] WCR 149), and
(e) any change in the criteria for entitlement to benefits under the legislation (Powell v Metropolitan Coal Co Ltd [1966] WCR 213).
Having regard to the evidence and the above authorities, there are at least three relevant changes in circumstances in the present matter:
(a) Mr Standen sold his business in April 2004 and his ability to earn had to then be assessed on the open labour market;
(b) wage rates in respect of both probable earnings but for injury and ability to earn changed significantly between 1994 and 2004, and
(c) the medical evidence suggests a change in Mr Standen’s physical condition as a result of the work injury.
The sale of the Shell Roadhouse in April 2004 and the move to Caloundra were significant and relevant changes that significantly impacted on Mr Standen’s work situation and the method of calculation of his weekly compensation. Not only did he cease to be employed, he ceased to be employed by his own company where he could set his own hours and duties. Therefore, his entitlement to compensation from 30 April 2004 has to be assessed on the basis of his ability to earn in the open labour market, not as a man running his own business, but as a man with a significant disability as a result of a serious back injury for which he has undergone major surgery.
The fact that Mr Standen voluntarily sold the Shell Roadhouse and relocated to Caloundra does not prevent a finding of a change of circumstances under section 55. In Rooney v Australian Iron & Steel Pty Ltd (1993) 9 NSWCCR 372, a partially incapacitated worker who had worked as a coal miner accepted a consent award of weekly payments of compensation in respect of partial incapacity whilst continuing in the employer’s employ as an office worker. In February 1993, the worker accepted an offer of voluntary retirement and then sought a review of weekly payments under section 55. Judge Moroney held that the worker’s voluntary retirement constituted a change in circumstances and varied the award from $50.00 per week to one at the maximum statutory rate from the date of retirement.
Relying on Novello v Zinc Corp Ltd (1988) 14 NSWLR 25, Moroney CCJ observed (at 377C) that there was no evidence that Mr Rooney had thrown away his employment out of folly or irresponsibility. His Honour then calculated Mr Rooney’s entitlement to weekly compensation in the usual way, bearing in mind the worker’s injury and general circumstances.
The same comment applies in the present case. Mr Standen sold the Shell Roadhouse because he did not expect the franchise to be renewed. That was not an act of folly or irresponsibility. His entitlement to weekly compensation from 30 April 2004 must therefore be calculated by determining his ability to earn in the labour market reasonably accessible to him having regard to his injury and disability. His situation after the sale of the Shell Roadhouse was not the same as it was when he owned and managed that business. As the owner of the business, he had the opportunity to set his own hours, rest when he wasn’t feeling 100 per cent, and to delegate the heavier duties to his staff (T15.22-38). He lost all those privileges once he ceased to own and run his own business. That was a significant and relevant change of circumstances.
That a change in wage levels is sufficient to justify a review was confirmed by the High Court in Coalcliff Collieries Ltd v Campbell (1964) 112 CLR 349. That case concerned a 1951 amendment to section 11(1)(b) of the 1926 Act by which pre-injury earnings were deemed to have increased by the amount of the increase in the basic wage up to that date. The Court (Barwick CJ, Kitto, Taylor, Menzies and Windeyer JJ) held (at 351):
“An increase or decrease in the amount that a partially incapacitated worker is earning or is able to earn is, of course, a change in circumstances which would justify the review of the weekly payment to decrease or increase it, as the case may be,…”
The medical evidence provides further evidence of a change of circumstances. Dr Smyth assessed Mr Standen to have a 32 per cent impairment of his back and a 5 per cent loss of use of each leg in December 1994. Though there is no assessment of loss of use of the legs from Dr Edwards, he recorded that Mr Standen complained of tingling in the tips of his toes of his left foot and that, on examination, both ankle jerks were reduced. In 2007, Professor Ghabrial assessed a 40 per cent impairment of the back and a 15 per cent loss of use of the left leg and 10 per cent loss of use of the right leg, a significant increase compared to Dr Smyth’s assessments. This evidence is consistent with Mr Standen’s evidence, which I accept, that his back was “progressively getting worse and worse” while working at BP (T25.15) and that he got “nerve pain” down his legs (T25.21).
The section 40 assessment
Applying the five steps required in Mitchell v Central West Area Health Service (1997) 14 NSWCCR 526 (‘Mitchell’), I make the following findings.
Step one – probable earnings but for the injury - section 40(2)(a)
The first challenge to the section 40 assessment is that the Arbitrator erred in relying on Mr Defina’s evidence in his job match report that, but for the injury, it is likely that Mr Standen would have been elevated to “a supervisory level” as an industrial spray painter earning $1,172.00 in 2006.
Section 40(2)(a) requires a determination of probable earnings but for injury “had the worker continued to be employed in the same or some comparable employment”. The High Court considered the meaning of these words (in the context of section 11 of the 1926 Act) in Johnston v Commissioner of Railways [1973] HCA 46; (1973) 128 CLR 632 where Stephen J held (at 640) “…the Court is, by the subsection, required to form its own view of what would ‘probably’ have been the worker’s weekly earnings but for the injury and must, from the evidence before it, determine how the worker would have fared in his occupation had he not been injured.”
Carrington concedes Mr Defina’s expertise with respect to wage levels, but argues that there is no evidentiary basis, either in the report or otherwise, for giving any weight to the conclusion that Mr Standen would have been elevated to a supervisory level and, in these circumstances, the opinion is a mere ipse dixit (Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305; (2001) 52 NSWLR 705).
Leaving aside the fact that Carrington is seeking to disavow any reliance on a report that it obtained and tendered, I do not accept that there is no evidentiary basis for Mr Defina’s conclusion. Mr Standen started with Carrington as a sandblaster/labourer in May 1978 when he was just 20 years old. The unchallenged evidence in his statement is that after a short time Carrington acknowledged his skills as a painter and gave him pay increases until he reached “a full painter’s wage” (Mr Standen’s statement 24 October 2008, paragraph nine). A short time later he was used as a leading hand on some contracts. Since his injury, Mr Standen has worked in several different occupations and has supervised his own businesses, albeit with considerable assistance of his wife.
The tests administered by Mr Defina demonstrated Mr Standen to have a high ability to extract specific information from various work documents and to have the skills for elementary to intermediate administrative tasks, and an above average ability to do arithmetical calculations and a high ability to read for detail and to comprehend information presented in number formats. In addition, Mr Defina correctly observed that Mr Standen’s employment history required good interpersonal skills, customer relations, and retail sales skills, as well as sound administrative skills in a small business management context. All of these skills were relevant to assessing whether Mr Standen would have reached a supervisory level as an industrial spray painter. This is clearly the evidence upon which Mr Defina relied to ground the conclusion in his job match report that, but for the injury, had Mr Standen continued to work as an industrial spray painter, it was “likely” he would have been elevated to a supervisory level. It provides a proper basis for his conclusion and comfortably satisfies me, that, on the balance of probabilities, but for his injury, Mr Standen would have progressed to a supervisory level as an industrial spray painter.
I am satisfied that the figure of $1,172.00 for a supervisory level industrial spray painter is the appropriate figure under step one in Mitchell.
Step two – actual earnings or ability to earn in some suitable employment - section 40(2)(b)
Carrington submits:
(a) in respect of the periods when Mr Standen was unemployed, the Arbitrator erred in finding him to be fit for work as a part-time console operator for 20 to 30 hours per week. The Arbitrator wrongly based his finding on Mr Standen’s statutory declaration of 14 February 2005 when that document had been completed by Mr Standen on the basis of his interpretation of the findings by Neilson CCJ rather than on the reality of the work he actually performed or was able to perform. Neilson CCJ had already determined the same issue the Arbitrator had to determine and there was no material change in the considerations relevant to that determination;
(b) in respect of the period from 20 May 2007 to 30 May 2007, the Arbitrator erred in finding that Mr Standen was unemployed when, on his own evidence, he worked as a painter;
(c) in respect of the period from 1 July 2007 to 16 October 2008, the Arbitrator erred in finding Mr Standen only earned $350.00 per week. A company controlled by Mr Standen and his wife paid that figure to Mr Standen and it had no necessary relation to Mr Standen’s ability to earn in the labour market;
(d) the Arbitrator failed to take into account the assessments of Mr Standen’s ability to earn in Mr Defina’s vocational assessment report and job match report;
(e) the Arbitrator failed to exercise the section 40(1) discretion, and
(f) the Arbitrator’s Reasons do not enable the parties to see the extent to which their arguments were understood or accepted, or to understand the basis of the Arbitrator’s decision (Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247).
This part of the claim is complicated by the fact that, since April 2004, Mr Standen has worked for his own companies for two periods. First, in the Black Dog Café between March and September 2005 and, second, in his own painting business (Standen Operations) from about May 2007 until September or October 2008 (T18.37). When a worker is self-employed, there are various methods that can be used to calculate a worker’s section 40(2)(b) earnings (J & H Timbers v Nelson [1972] HCA 12; (1972) 126 CLR 625 (‘Nelson’); Cage Developments Pty Ltd v Schubert [1983] HCA 37; (1983) 151 CLR 584; [1981] 2 NSWLR 227 (‘Schubert’)). The first method requires a determination of the net remuneration being received by the worker for his or her labour. This is done by examining the business accounts and making all proper allowances for overhead expenses, costs of materials and other labour, maintenance and depreciation of plant, return on capital invested and the like (Glass JA (Reynolds JA agreeing) at 230G in Schubert in the Court of Appeal, citing Gibbs J at 652 and Windeyer J at 643 in Nelson). The second method requires a calculation of the worth of the worker’s labour to the business, but without reference to the business accounts.
Neither party has addressed on these approaches. At the oral hearing of the appeal, Carrington submitted that I would not accept Mr Standen’s claim (at T15.11) that he only earned $300.00 per week as a painter because Ms Connors’ evidence is that he left BP to work for himself full-time and he has failed to produce any relevant records from his company. Therefore, I would not accept his evidence as prima facie evidence of his ability to earn whilst he was working for Standen Operations (Aitkin v Goodyear Tyre & Rubber Co (Aust) Ltd (1945) 46 SR (NSW) 20 at 22 (‘Aitkin’)) and I should determine Mr Standen’s ability to earn by reference to Mr Defina’s vocational assessment report.
Mr Standen has produced some records from Standen Operations, but those records do not disclose any relevant information that enables a determination of the value of the work contracted by the company or the value of Mr Standen’s worth to the business. Other than Carrington’s submission that the documents are incomplete, neither party has made any detailed submissions about these documents. I have examined the documents and agree that they are incomplete and unhelpful. In these circumstances, and in the absence of any explanation for not producing all relevant documents, I accept Carrington’s submission that Mr Standen’s evidence of his actual earnings (both at the Black Dog Café and as a painter) are not a proper measure of his ability to earn and that I should look to the vocational assessment report, and the other relevant evidence in the case, to determine his ability to earn in the open labour market for all periods from 30 April 2004 to date (Aitkin at 23).
The general approach to assessing a worker’s ability to earn in the open labour market was considered in Mangion v Visy Board Pty Ltd (1992) 8 NSWCCR 175 (‘Mangion’). In that case a Commissioner of the Compensation Court found an injured worker to be partially incapacitated but did not award any weekly compensation on the ground that the worker was able to earn more as a security guard (suitable light duties) than he had in his pre-injury job. On appeal to a judge of the Compensation Court it was held by Burke CCJ that the Commissioner had fallen into error in his approach to calculating compensation under section 40 of the 1987 Act. His Honour said at 180:
“When assessing a capacity to earn under section 40(2), it is not sufficient to merely identify a particular potential avenue of employment and attribute the income from such a job as a man’s capacity to earn. Allowance must be made for the availability of work - availability, not so much in the sense of a presently depressed labour market but in the sense of the general availability in any labour market. A rarely available niche in the labour market which carries, perhaps, substantial remuneration, does not serve as a sole criterion of capacity to earn.”
His Honour added:
“When one assesses an ability to earn under section 40(2), one is really arriving at a weighted average. Wage rates for jobs within capacity that are rarely available, though perhaps highly paid, rate poorly in such an assessment. Conversely, the income derivable from more readily available work rates highly.”
The Court of Appeal in Cowra Shire Council v Quinn (1996) 13 NSWCCR 175 expressly approved the approach by Burke J in Mangion (see also Ric Developments Pty Ltd t/as Lane Cove Poolmart [2008] NSWCA 155). It is the approach I intend to apply in the present case.
Relying on the vocational assessment report, Carrington submits that Mr Standen’s ability to earn is either $822.00 per week as a parking inspector, or $785.00 per week as a shop manager. It argues that these jobs are suitable and that Mr Standen could, based on the evidence from Dr Edwards, perform them full-time. Mr Standen submits that his ability to earn is restricted to suitable part-time work for two or three days per week.
I have to assess Mr Standen’s earning capacity having regard to the whole of the evidence and the relevant authorities. I accept Mr Standen’s evidence that when he worked for his own company at the Shell Roadhouse he could manage his duties and his hours. That luxury was no longer available to him after 30 April 2004.
Mr Standen is now 51 years old. He suffered a serious back injury in 1979 and has undergone major surgery to his lumbar spine. As a result, he has been left with a significant impairment of his back. He also claims, for the first time, a loss of use of his legs as a result of his back injury. He has had a limited education (leaving school in year nine) and, without retraining or appropriate rehabilitation, his employment prospects are restricted to unskilled or semi-skilled jobs of the kind identified by Mr Defina. I do not, however, accept Dr Edwards’ evidence that Mr Standen is fit for those jobs on a full-time basis. Dr Edwards’ opinion takes no account of Mr Standen’s evidence, which I accept, that his back got worse and worse while he was at BP and that he had “occasional nerve pain” down his legs. On the other hand, as Mr Standen has demonstrated an ability to work in suitable employment for more than two or three days per week, I do not accept that his ability to earn is necessarily restricted to part-time jobs of only 16 to 24 hours per week for all suitable jobs.
As Mr Defina’s recommendations were based on his assessment “from a psychological perspective”, he provides no assistance on the question of Mr Standen’s physical fitness for full-time suitable duties. Mr Defina’s job match report lists jobs that he felt were merely “options that [Mr Standen] could consider” (vocational assessment report at page 11). In these circumstances, whilst I have had reference to Mr Defina’s reports, as urged by Carrington’s counsel, the evidence in those reports does not determine the assessment of Mr Standen’s ability to earn. On the issue of whether Mr Standen is fit for full-time suitable employment, I prefer the evidence of Dr Beiers, a consultant in rehabilitation medicine, to Mr Defina’s evidence.
Dr Beiers recorded Mr Standen’s current symptoms and noted that his sitting tolerance, with lumbar support, was one to two hours, his standing tolerance was limited, and he was unable to tolerate forward flexion as occurs at a counter situation. I accept her conclusion that Mr Standen should avoid lifting more than 10 kilograms and avoid bending and twisting, that he is unsuitable for work in a manual labouring field, and that he is only fit for part-time work. However, Dr Beiers did not give any useful guidance on exactly how many hours Mr Standen is fit to work per week.
The main impediment to Mr Standen working full-time is his pain. I accept his evidence that he experiences significant pain in his back and legs, and that bending, lifting and prolonged sitting aggravates his pain. When aggravated, his pain levels can increase to “10/10” and the pain radiates down either leg. The increase in symptoms can last for days at a time (Dr Beiers 12 March 2009, page three). This places a significant restriction on Mr Standen’s ability to obtain and retain suitable full-time employment in the labour market reasonably accessible to him.
Three of the jobs listed by Mr Defina – betting agency counter clerk, real estate agent and welfare worker – are automatically ruled out because Mr Standen would require retraining. Accepting Dr Beiers’ evidence, I find that work as a painter is unsuitable, not only because of Mr Standen’s back but also because of his upper limbs. Work as a shop manager would be suitable, provided it did not involve lifting above 10 kilograms and Mr Standen was able to change his position frequently and avoid static standing with forward flexion of his back, and provided it was part-time. Work as a parking inspector would be suitable, but only on a part-time basis. Though there is no evidence dealing with it, I have reservations about the availability of such work for a person in Mr Standen’s circumstances. The difficulty with work as an employed console operator (as opposed to being self-employed and performing only some of the duties required in such a position) is that it requires prolonged standing and forward flexion. Mr Standen has attempted this work and I accept his evidence that he found working consecutive shifts “too strenuous” (T11.11-18). I also accept his evidence that he did the two consecutive shifts at BP because that was all that was available (T11.11), that he had a lot of problems getting over the two shifts (T11.20), that he did not go back to BP because he knew he was going to hurt himself if he continued (T15.20), and that console operating has changed in the last 10 or 15 years in that operators now have to pick up every item over the counter, pull it towards them and scan it (T25.21-28). I therefore doubt that an employed position as a console operator would be suitable for Mr Standen unless it was for very short hours, preferably not involving consecutive shifts.
In respect of the finding by Neilson CCJ that Mr Standen was fit for full-time work as a console operator in 1994, I note, first, that that finding was not an essential part of his Honour’s decision. His Honour based his decision on his finding that Mr Standen worked (or could work) 30 hours per week at the Shell Roadhouse and that the value of that work was $13.50 per hour. Essentially, though not expressly stated in this way, his Honour found that the value of Mr Standen’s labour to the business was $405.00 per week. Second, the finding that Mr Standen could earn $324.00 per week as a full-time console operator was made at a time when Mr Standen was effectively self-employed and could set his own hours and duties. Because of the change of circumstances brought about as a result of the sale of the Shell Roadhouse, that is no longer the case. Third, the physical requirements of the work of a console operator have changed since his Honour’s decision in 1994 in that they are more physically demanding, especially for a person with Mr Standen’s back condition. Fourth, I accept Mr Standen’s evidence that his back was getting worse and worse at BP (T25.15). Last, the medical evidence from Dr Beiers suggests the full-time work as a console operator is not suitable for Mr Standen.
Taking all the above matters into account, and having particular regard to the nature of Mr Standen’s injury and the resulting restrictions, his limited education, his age, the fact that he has had no formal retraining, his complaints of ongoing pain and disability, the difficulty he will have in obtaining and retaining suitable employment, I believe that he has an ability to work for 30 hours per week as a shop manager, or in some similar position where he can adapt the requirements of the position to his disability. Allowing an hourly rate in such employment of $20.65 (calculated by dividing the figure provided by Mr Defina for a full-time shop manager ($785.00) by 38 hours) and rounding up to the nearest whole dollar gives an ability to earn of $620.00 per week.
As I have re-determined the matter on the basis of the submissions made on appeal, it is not necessary for me to consider the challenge that the Arbitrator’s determination should be set aside because he failed to give sufficient reasons.
Step three – deducting the figure in step two from the figure in step one
Deducting $620.00 from $1,172.00 gives a difference of $552.00. The parties agreed at the oral hearing of the appeal that the figures in step one and two could be applied for the whole period from 30 April 2004 to date without adjustment for movements in wage rates over that period.
Step four – the section 40(1) discretion
Whilst Mr Standen’s neck and shoulder problems restrict him from working as a painter, I do not accept that work as a painter would, in any event, have been suitable for him on a long term basis, having regard to his back injury and disability. Nevertheless, Mr Standen’s statement makes specific reference to the neck pain he experienced while working at BP and that is clearly a factor that has affected his ability to perform that work and similar work. In these circumstances, it is appropriate that, in light of Mr Standen’s neck and shoulder symptoms, the above figure be reduced in the exercise of the section 40(1) discretion by $50.00 per week. There are no other relevant discretionary factors.
Step five – the orders
After adjusting for the discretion, the difference is $502.00 per week. It is agreed that Mr Standen had three dependent children from 30 April 2004 until 24 November 2006 and two of those children have remained dependent from 25 November 2006 to date and continuing.
Because Mr Standen’s injury occurred before 30 June 1987 he does not get the benefit of the 20 per cent increase in weekly compensation introduced by the Workers Compensation (Benefits) Amendment Act 1991 and his compensation is calculated under the rates set in Schedule 6 Part 4 clause 4A(2)(b) of the 1987 Act (Workers Compensation (Savings and Transitional) Regulation 1992). The sum of $502.00 exceeds the maximum compensation payable under those rates and Mr Standen is therefore entitled to an award at the maximum statutory rate of weekly compensation applicable for a worker with three dependent children from 30 April 2004 until 24 November 2006 and for a worker with two dependent children from 25 November 2006 to date and continuing, as adjusted, until further order by the Commission.
CONCLUSION
Having conducted a review on the merits (per Spigelman CJ in State Transit Authority of New South Wales v Fritzi Chemler [2007] NSWCA 249; (2007) 5 DDCR 287 at [28]), I have concluded that, for the reasons given in this decision, there was a change of Mr Standen’s circumstances on and from 30 April 2004 and that the true and correct position is that he is entitled to have the award made by Neilson CCJ increased to the amounts set out at [116] below.
As Mr Standen made no claim for hospital and medical expenses in the Application, there is no dispute in respect of them properly before the Commission and no need for any order.
DECISION
Paragraphs one, two and three of the Arbitrator’s determination of 17 June 2009 are revoked and the following orders made:
“1. The award of Neilson CCJ of 12 December 1994 in matter No 30872 of 1994 in the Compensation Court of NSW is increased under section 55 of the Workers Compensation Act 1987 (‘the 1987 Act’) and the respondent employer is to pay to the applicant worker weekly compensation on the basis of partial incapacity under section 11(1) of the Workers Compensation Act 1926 (‘the 1926 Act’), as saved under Schedule 6 of the 1987 Act, in the following amounts:
30 April 2004 to 30 September 2004 $361.80 per week
1 October 2004 to 31 March 2005 $368.60 per week
1 April 2005 to 30 September 2005 $374.40 per week
1 October 2005 to 31 March 2006 $381.90 per week
1 April 2006 to 30 September 2006 $389.90 per week
1 October 2006 to 24 November 2006 $397.10 per week
25 November 2006 to 31 March 2007 $363.20 per week
1 April 2007 to 30 September 2007 $370.20 per week
1 October 2007 to 31 March 2008 $376.80 per week
1 April 2008 to 30 September 2008 $384.20 per week
1 October 2008 to 31 March 2009 $390.80 per week
1 April 2009 to 30 September 2009 $398.70 per week
1 October 2009 to date $405.90 per week
such payments to continue, as adjusted, until further order of the Commission.
1A. The claims for lump sum compensation in respect of the permanent loss of efficient use of the left arm or the greater part of the left arm and the permanent loss of efficient use of the right arm or the greater part of the right arm are dismissed.
2. The applicant worker’s claim for lump sum compensation in respect of the permanent loss of efficient use of his left leg or of the greater part thereof and the permanent loss of efficient use of his right leg or of the greater part thereof as a result of his injury on 20 February 1979 is remitted to the Registrar for referral to an Approved Medical Specialist for assessment under section 16 of the 1926 Act, as saved by Schedule 6 Part 6 of the 1987 Act. All documents filed with the Commission are to be forwarded to the Approved Medical Specialist.”
Paragraph four of the Arbitrator’s determination of 17 June 2009 is confirmed.
COSTS
Though I have varied the Arbitrator’s determination, Carrington has failed on its substantive grounds of appeal. The order I make is that Carrington is to pay Mr Standen’s costs of the appeal. Those costs are assessed at $2,200.00 plus GST.
Bill Roche
Deputy President
4 November 2009
I, TUYET WALLIS, CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF BILL ROCHE, DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
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