Caulfield v Whelan Kartaway Pty Ltd
[2014] NSWWCCPD 34
•11 June 2014
| WORKERS COMPENSATION COMMISSION | |||
| DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR | |||
| CITATION: | Caulfield v Whelan Kartaway Pty Ltd [2014] NSWWCCPD 34 | ||
| APPELLANT: | Michael Caulfield | ||
| RESPONDENT: | Whelan Kartaway Pty Ltd | ||
| INSURER: | Employers Mutual NSW Ltd | ||
| FILE NUMBER: | A1-11583/12 | ||
| ARBITRATOR: | Mr J Wynyard | ||
| DATE OF ARBITRATOR’S DECISION: | 10 February 2014 | ||
| DATE OF APPEAL HEARING: | 5 June 2014 | ||
| DATE OF APPEAL DECISION: | 11 June 2014 | ||
| SUBJECT MATTER OF DECISION: | Second claim for lump sum compensation where the first claim for such compensation was “specifically sought” prior to 19 June 2012; whether amendments introduced by the Workers Compensation Legislation Amendment Act 2012 apply to such a claim; cl 15 of Pt 19H of Sch 6 to the Workers Compensation Act 1987; cl 1 1 of Sch 8 to the Workers Compensation Regulation 2010; ADCO Constructions Pty Ltd v Goudappel [2014] HCA 18 discussed and applied; whether any need to establish deterioration since initial claim for lump sum compensation; estoppel; no estoppel in a changing situation; effect of initial assessment by an Approved Medical Specialist; power of Arbitrator in claim for lump sum compensation where liability is not in issue; application of principles in Abou-Haidar v Consolidated Wire Pty Ltd [2010] NSWWCCPD 128 | ||
| PRESIDENTIAL MEMBER: | Deputy President Bill Roche | ||
| HEARING: | Oral | ||
| REPRESENTATION: | Appellant: | Mr B McManamey, instructed by Law Partners | |
| Respondent: | Mr S Grant, instructed by Sparke Helmore Lawyers | ||
| ORDERS MADE ON APPEAL: | 1. The Arbitrator’s determination of 10 February 2014 is revoked and the following orders are made: “1. The matter is remitted to the Registrar for referral to an Approved Medical Specialist to assess the applicant worker’s whole person impairment as a result of the injury to his right knee on 9 August 2005. 2. The respondent employer is to pay the applicant worker’s costs, as agreed or assessed, regardless of the outcome of the assessment by the Approved Medical Specialist.” 2. The respondent employer is to pay the appellant worker’s costs of the appeal, assessed at $2,530 plus GST. | ||
INTRODUCTION
This appeal concerns whether a worker who specifically sought lump sum compensation for permanent impairment before 19 June 2012 is entitled to make a second claim for such compensation arising out of the same injury and, if so, the limits, if any, on the making of such a claim.
The first issue concerns the effect of the amendments introduced by the Workers Compensation Legislation Amendment Act 2012 (the 2012 amending Act) on workers who have “specifically sought” lump sum compensation under s 66 or 67 of the Workers Compensation Act 1987 (the 1987 Act) before the commencement of those amendments, that is, before 19 June 2012.
This question requires consideration of the High Court’s decision in ADCO Constructions Pty Ltd v Goudappel [2014] HCA 18 (Goudappel No 2), the transitional provisions introduced by the 2012 amending Act, and the amendments introduced to the Workers Compensation Regulation 2010 by the Workers Compensation Amendment (Miscellaneous) Regulation 2012 (the amending Regulation).
The second issue is whether, in bringing a second claim for lump sum compensation for permanent impairment, a worker must establish a deterioration before the Registrar can refer that claim to an Approved Medical Specialist (AMS) for assessment. Related to this issue is whether the first assessment of whole person impairment by an AMS creates an estoppel that prevents a worker bringing a second claim without first establishing a change in his or her condition.
BACKGROUND
On 9 August 2005, the appellant worker, Michael Caulfield, injured his right knee in the course of his employment with Whelan Kartaway Pty Ltd, the respondent employer. Liability for this injury has never been disputed.
On 2 February 2009, Mr Caulfield underwent surgery on his knee, which revealed a complex tear of the medial meniscus and a complex tear of a discoid lateral meniscus, which the treating surgeon described as “quite an extensive tear requiring a subtotal lateral meniscectomy”. He also had full thickness articular cartilage defect.
In proceedings in the Commission in 2010 (matter No 6076/10), Mr Caulfield claimed permanent impairment compensation under s 66 of the 1987 Act in the sum of $20,000 in respect of a 15 per cent whole person impairment due to his injury. Dr Guirgis, consultant orthopaedic surgeon, supported the claim in a report dated 23 February 2010, his second report.
Dr Guirgis’s assessment under the WorkCover Guides for the Evaluation of Permanent Impairment, 3rd ed, and the AMS Guides to the Evaluation of Permanent Impairment, 5th ed, was:
“• According to Chapter 17 Table 17-33 Impairment Estimates for Certain Lower Extremity Impairments page 546 the medial and lateral meniscal injury attracts 4% Whole Person Impairment;
· According to Table 17-31 page 544, ‘Arthritis Impairments Based on Radiologically Determined cartilage Intervals’ there is 4% whole-person impairment for the knee joint (2 mm cartilage interval in the patellofemoral compartment of the knee).
· According to Table 17-31 Page 544, ‘Arthritis Impairments Based on Radiologically Determined cartilage Intervals’ there is 8% whole-person impairment for the knee joint (2 mm cartilage interval in the medial compartment of the knee as compared to the normal 4 mm in the lateral compartment).
“ Total Whole Person Impairment according to the combined charts = 15% Whole Person Impairment.” (emphasis included in original)
Impairments under the second and third bullet points above were for assessments for arthritis and were based on investigations in 2008.
In an earlier report, dated 11 August 2009, Dr Guirgis assessed Mr Caulfield to have an eight per cent whole person impairment made up by combining the assessments in the first and second bullet points set out at [8] above.
The Commission referred Mr Caulfield’s claim to an AMS for assessment under s 321 of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act). The referral included a copy of Dr Guirgis’s report of 23 February 2010, among other documents.
On 14 October 2010, the AMS, Dr Crane, issued a Medical Assessment Certificate (MAC) in which he assessed Mr Caulfield to have an eight per cent whole person impairment as a result of his injury. In his reasons for assessment, Dr Crane said that there was “potential impairment for restricted range of motion in the knee, arthritis and impairment related to partial medial lateral meniscectomy”. He said that “[i]t was not possible to combine these three types of impairment and the highest is taken”, namely, eight per cent.
On 19 November 2010, the Commission issued a Certificate of Determination ordering the respondent to pay Mr Caulfield lump sum compensation under s 66 in the sum of $10,000 in respect of eight per cent whole person impairment as a result of the injury on 9 August 2005. The respondent has paid that amount.
In March 2011, Mr Caulfield underwent further surgery to his right knee in the form of further trimming of the meniscal remnant and further chondroplasty.
On 6 December 2011, Dr Guirgis reviewed Mr Caulfield and, in his report of the same date, stated that the injury had initiated the onset of post-traumatic osteoarthritis in the knee joint. Apparently applying the same individual assessments as used in his 2010 report (see [8] above), Dr Guirgis assessed Mr Caulfield to have a 17 per cent whole person impairment “according to the combined charts” including “any previously awarded impairments”. (Whether Dr Guirgis actually applied the same individual assessments is discussed below.)
On 29 August 2012, Mr Caulfield claimed lump sum compensation of $13,000, being $23,000 for a 17 per cent whole person impairment less the $10,000 previously paid.
On 18 September 2012, Mr Caulfield filed an Application to Resolve a Dispute (the Application) in the Commission claiming lump sum compensation of $13,000 for a further nine per cent whole person impairment.
In a Reply filed on 4 February 2013, the respondent disputed liability on the grounds that:
(a) Mr Caulfield was not entitled to pursue a claim for further lump sum compensation pursuant to s 66(1A) of the 1987 Act (as amended by the 2012 amending Act) as he received lump sum compensation on 19 November 2010 in respect of the injury on 9 August 2005;
(b) there had been no deterioration in the condition of Mr Caulfield’s right lower extremity (knee), because the assessment by Dr Guirgis was identical to that made by him in his 23 February 2010 report, and
(c) Mr Caulfield was estopped from pursuing a claim for further lump sum compensation because “the assessment on which he relies has already been determined by the AMS”.
After an oral hearing on 5 December 2013, the Arbitrator delivered a reserved decision on 10 February 2014. He determined that there was no prima facie case of a deterioration since the award of 19 November 2010 and, because of that award, Mr Caulfield was estopped from claiming additional compensation and the matter could not be referred to an AMS. (While there is no transcript of the hearing, neither side has suggested that the absence of a transcript is an impediment to the appeal proceeding.)
The Arbitrator did not determine the first issue identified in the Reply because, on 29 April 2013, the Court of Appeal held in Goudappel v ADCO Constructions Pty Ltd [2013] NSWCA 94 (Goudappel No 1) that if a worker had made any claim for compensation prior to the commencement of the amendments introduced by the 2012 amending Act, those amendments do not apply to later claims for lump sum compensation. Therefore, the first issue could not be sustained. Since then, however, the High Court has reversed the Court of Appeal’s decision and this issue is again alive.
The Commission issued a Certificate of Determination on 10 February 2014 as follows:
“The Commission determines:
1. There will be an award for the respondent.
2. No order as to costs.”
Mr Caulfield has challenged the Arbitrator’s determination. For the reasons explained below, the Arbitrator erred in his approach and conclusion and the appeal is successful.
ISSUES IN DISPUTE
The issues in dispute in the appeal were initially identified as whether the Arbitrator erred in:
(a) finding that it was necessary for Mr Caulfield to establish a deterioration in his condition before his claim could be referred for assessment;
(b) determining the claim without remitting the claim to the Registrar for referral to an AMS to assess the impairment resulting from the admitted injury to the right knee;
(c) finding that Mr Caulfield was estopped by the previous award;
(d) considering he could analyse the assessment of whole person impairment expressed by Dr Guirgis to determine whether there was a relevant increase in impairment resulting from injury, and
(e) failing to appreciate that Dr Guirgis’s assessments in 2010 and 2011 were based on different x-rays.
An issue also arises as to the effect of the 2012 amending Act, in light of Goudappel No 2 and the amending Regulation. It is convenient to deal with this issue first and to then consider the issues identified above, which I will deal with globally under the heading “Deterioration and Determination of the Claim”.
THE 2012 AMENDING ACT
Submissions
Counsel for Mr Caulfield, Mr McManamey, submitted that, in the circumstances of the present matter, the amendments introduced by the 2012 amending Act do not apply to Mr Caulfield. That is because of the combined effect of cls 3 and 15 of Pt 19H and cl 11 of Sch 8 in circumstances where Mr Caulfield “specifically sought” compensation under s 66 prior to 19 June 2012. Counsel for the respondent, Mr Stuart Grant, did not oppose that submission and did not suggest an alternative interpretation of the provisions.
For the reasons advanced by Mr McManamey, I have concluded that his submission is correct and should be accepted.
The legislation
As a result of the amendments introduced by Sch 2 of the 2012 amending Act, s 66(1) and (1A) were amended to read:
“66 Entitlement to compensation for permanent impairment
(1) A worker who receives an injury that results in a degree of permanent impairment greater than 10% is entitled to receive from the worker’s employer compensation for that permanent impairment as provided by this section. Permanent impairment compensation is in addition to any other compensation under this Act.
Note : No permanent impairment compensation is payable for a degree of permanent impairment of 10% or less.
(1A) Only one claim can be made under this Act for permanent impairment compensation in respect of the permanent impairment that results from an injury.”
Prior to the amendments, excluding claims for hearing loss, there was no threshold for the recovery of lump sum compensation for permanent impairment. The effect of the amendments is that no permanent impairment compensation is payable for a permanent impairment unless the injury has resulted in a degree of permanent impairment greater than 10 per cent. In addition, only one claim can be made under the 1987 Act for permanent impairment compensation in respect of permanent impairment that results from an injury.
The 2012 amending Act also introduced extensive transitional provisions. It is only necessary to consider cl 15 of Pt 19H of Sch 6 to the 1987 Act, which provides:
“15 Lump sum compensation
An amendment made by Schedule 2 to the 2012 amending Act extends to a claim for compensation made on or after 19 June 2012, but not to such a claim made before that date.”
As a result of amendments introduced in the amending Regulation, cl 11 of Sch 8 to the 2010 Regulation provides:
“(1) The amendments made by Schedule 2 to the 2012 amending Act extend to a claim for compensation made before 19 June 2012, but not to a claim that specifically sought compensation under section 66 or 67 of the 1987 Act.
(2) Clause 15 of Part 19H of Schedule 6 to the 1987 Act is to be read subject to subclause (1).”
The Court of Appeal’s decision
The Court of Appeal held in Goudappel No 1 that “a claim” in cl 15 of Pt 19H includes any claim for compensation made before 19 June 2012 and that cl 11 of Sch 8 was invalid and did not apply. It followed that, as Mr Goudappel had made a claim for weekly compensation in 2010, the amendments to s 66 introduced by the 2012 amending Act did not apply to his later claim for lump sum compensation, even though he did not make that claim until 20 June 2012.
The High Court’s decision
In the High Court, there was no challenge to the Court of Appeal’s finding that “a claim” in cl 15 of Pt 19H means any claim. However, overturning the Court of Appeal, the High Court held that cl 11 of Sch 8 is valid and applies according to its terms.
The Court therefore held that the amendments to Div 4 of Pt 3 of the 1987 Act (which deal with compensation for non-economic loss) introduced by Sch 2 of the 2012 amending Act apply to claims for compensation pursuant to s 66 of the 1987 Act made on or after 19 June 2012, where “the worker has not made a claim specifically seeking compensation under s 66 or s 67 before 19 June 2012” (emphasis added) ([36]).
As Mr Goudappel had not made a claim specifically seeking compensation under s 66 or 67 before 19 June 2012, the 2012 amendments applied to him and he had no entitlement to lump sum compensation because his claim did not meet the threshold in the new s 66.
The present claim
The present matter is different. Mr Caulfield “specifically sought” compensation under s 66 prior to 19 June 2012. Given the High Court’s ruling, Mr McManamey submitted, and I accept, that the “clear words of the High Court are that the amendments do not apply where the worker has made a claim for s 66 prior to 19 June 2012”.
This submission is supported by the following statement by the plurality, French CJ, Crennan, Kiefel, and Keane JJ, at [29]:
“The purpose of cl 11, … , was clear enough. It applied the new s 66 to entitlements to permanent impairment compensation which had not been the subject of a claim made before 19 June 2012 that specifically sought compensation under the old s 66.”
It is clear, as Mr McManamey contended, that their Honours did not limit the exclusion from the operation of cl 11 to one set of proceedings for s 66 compensation, but expressed the exclusion as occurring when there has been a claim (before 19 June 2012) under that section. In other words, the exclusion is not limited to any specific claim.
This conclusion is consistent with the combined effect of cl 15 of Pt 19H and cl 11 of Sch 8. This is because, as accepted by the Court of Appeal, and not challenged in the High Court, the amendments do not apply to claims for compensation made before 19 June 2012.
As cl 15 must be “read subject to” cl 11, the proper interpretation of the two provisions is that the permanent impairment amendments apply to claims made on and after 19 June 2012, but not where a worker has claimed before that date. However, cl 11 modifies that position to make the amendments apply to claims made before 19 June 2012 but not if the worker made a claim that “specifically sought” compensation under s 66 or 67.
It follows that, applying the text of the legislation, having regard to its context and history, as Mr Caulfield “specifically sought” compensation under s 66 before 19 June 2012, the amendments to s 66 in the 2012 amending Act do not apply to him and his claim is entitled to be determined without regard to the restrictions in the new s 66. In other words, he is not caught by the new threshold and not restricted to making only one claim for permanent impairment compensation.
It follows that, though this is Mr Caulfield’s second claim for permanent impairment compensation, he is entitled to make the claim. Though the combined value of his claims is over 10 per cent, as the amendments do not apply to him, it would not matter if they were not.
The end result “produces the greatest harmony and the least inconsistency” (Australian Alliance Assurance Co Ltd v Attorney-General (Qld) and Goodwyn [1916] St R Qd 135 at 161 per Cooper CJ; T v T (2008) 216 FLR 365 at 394) in the legislation overall. The interpretation construes the provisions so they are “consistent with the language and purpose of all the provisions of the statute” (Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 at [69]) and in a way that preserves rights accrued before 19 June 2012, except where the legislature has used clear language to remove those rights, as it did with respect to workers in Mr Goudappel’s situation.
DETERIORATION AND DETERMINATION OF THE CLAIM
The arbitration
The Arbitrator approached the claim on the basis that Mr Caulfield had to establish a deterioration in his condition (since the award of 19 November 2010) before the matter could be referred to an AMS. He identified (at [4]) the issues to be:
“• Has [Mr Caulfield] lodged any proof prima facie demonstrating deterioration of [Mr Caulfield’s] condition since the award of 19 November 2010?
·Was it necessary for [Mr Caulfield] to so?”
Mr McManamey argued that where the dispute is solely about the degree of permanent impairment (as it is in this case), the claim must first be referred to an AMS to determine the degree of permanent impairment (Abou-Haidar v Consolidated Wire Pty Ltd [2010] NSWWCCPD 128 (Abou-Haidar)) and that no relevant estoppel arises from the previous orders.
He submitted that the Arbitrator’s only interest was whether an assessment had been filed that was greater than that found by the AMS. He contended that, on their face, the reports from Dr Guirgis demonstrated that there had been such an increase. That was because Dr Guirgis now assessed a 17 per cent whole person impairment and the AMS had previously assessed the impairment to be only eight per cent.
The solicitor for the respondent submitted that:
“the assessment of impairment in respect to the right lower extremity as currently claimed by [Mr Caulfield] has already been determined by the Approved Medical Specialist in the Medical Assessment Certificate dated 14 October 2010.”
The Arbitrator referred to the assessments in Dr Guirgis’s three reports and the reasoning of Dr Crane in the MAC. He said that:
(a) Dr Guirgis’s arithmetic in his third report, which assessed a 17 per cent impairment, “did not add up” ([22]);
(b) Dr Guirgis had failed to apply “the combined values scale applicable to his last calculations” ([22]);
(c) Dr Guirgis had an incorrect history that Mr Caulfield had had surgery on 20 January 2010 ([34] and [51]), and
(d) while Dr Guirgis said that the latest MRI studies (performed before the last operative procedure) were enclosed, no MRI studies “were lodged” ([36]) and “the only evidence that post dated the issue of the Certificate of Determination [on 19 November 2010] was this one report [from Dr Guirgis]” ([36]).
The Arbitrator said (at [40]) that he assumed that the basis for Mr Caulfield’s Application was that there has been further surgery to the knee since the MAC was issued and degeneration must have occurred. He noted that, apart from Dr Guirgis’s third report, the evidence in the Application all predated the award of 19 November 2010. The Arbitrator said (at [41]) that Dr Guirgis’s report did not assist him, as there was no detail of the further surgery undertaken and no opinion as to whether, as a result of that surgery, or for any other reasons, there had been any deterioration since he last examined Mr Caulfield on 23 February 2010.
The Arbitrator said that Mr McManamey’s submissions begged the question “as to how to assess the order [of 19 November 2010]” ([45]). Dr Crane had Dr Guirgis’s earlier report and gave reasons for disagreeing with it. The effect of Dr Crane’s reasons was to reject the opinion of Dr Guirgis. Those reasons were that it was not possible to combine assessments for range of motion, arthritis or impairment arising out of a meniscectomy.
The Arbitrator (at [47]) illustrated the “inaccuracy” of Dr Guirgis’s mathematics. He said (at [48]) that Dr Guirgis had, in his second report, correctly used the “combined values table” to calculate the “Table [sic]”. However, in his third report, Dr Guirgis’s total “does not add up arithmetically as it shows ‘17’ instead of the arithmetically correct ‘16’” ([49]). Though the doctor said he had used the combined charts, the Arbitrator said, “he obviously did not” ([50]). He said that the combined values Table provides for a total of 15 per cent, thus demonstrating that Dr Guirgis had not certified an increase in whole person impairment since 19 November 2010.
The Arbitrator said (at [51]) that Dr Guirgis had purported to support a claim for further impairment by:
(a) giving an incorrect history;
(b) failing to apply the requisite Guidelines notwithstanding the finding in the MAC that his method of application of the Guidelines was impermissible;
(c) failing to add up his assessments accurately in either report, and
(d) failing to use the combined value chart notwithstanding his statement to the contrary.
The Arbitrator said that a prima facie case is usually established when evidence provided by one party is not met by countervailing evidence from the other party. Noting that there was no statement in evidence from Mr Caulfield, the Arbitrator said that evidence from Mr Caulfield “may well have satisfied the burden of evidence as to his establishing a prima facie case” ([55]).
The Arbitrator said, at [56]–[58]:
“56. It would be absurd if all that was required from an evidential point of view to have the matter reassessed was for the same report of the Specialist to be resubmitted, or as in this case, a further report containing the same opinion. It does not take much thought [sic] appreciate that there would be no end to litigation as to the assessment of whole person impairment, and s.326(1) 1998 Act would be so reduced in its effectiveness as to cease to have the effect desired by the legislature when it provided that assessments by an AMS were conclusively presumed to be correct.
57. Without Commission oversight to ensure that the application for further lump sum compensation had a prima facie basis, it is not difficult to see that an abuse of process could easily follow.
58. Moreover, to refer a further application for WPI without prima facie evidence of an increase in WPI has the potential to cause unnecessary confusion for the AMS to whem [sic] the matter would be referred.”
The Arbitrator said that, if a conflict existed between Presidential decisions, he applied the view in E v Sydney South West Area Health Service (Concord Hospital) [2009] NSWWCCPD 108 (E) that a prima facie case (of a deterioration) must be proved. That was because, “without a prima facie proof of an actual change in the situation, the estoppel created by the original award or judgment … would apply” ([77]). He said the question of estoppel was a matter for the Commission and if a prima facie case (of a deterioration) is not made out the employer is entitled to rely on the estoppel raised.
Where a legal defence exists, the Arbitrator said there seemed no point in involving the time and cost which attends upon a referral to an AMS. Similarly, he said, the administrative costs of such a procedure would be reduced where a prima facie case is not made out. He was satisfied that no prima facie case had been made out and he had no evidence to establish a deterioration. It did not follow that, because there has been further surgery, there automatically is a deterioration. The only evidence of the further surgery was from Dr Guirgis that it consisted of further trimming of the meniscal remnant and further chondroplasty.
Submissions
Mr McManamey submitted that Abou-Haidar determines the appeal because that case decided (at [54]) that where the only dispute is a medical dispute within the meaning of s 319 of the 1998 Act, such as the extent of a worker’s whole person impairment as a result of an accepted work injury, that question cannot be determined by the Commission but must be assessed by an AMS. Abou-Haidar also held (at [55]) that it is not necessary for the Commission to determine, as a threshold issue, whether the worker has demonstrated that his or her condition has deteriorated before the matter is referred to an AMS for a further assessment.
This must be so, Mr McManamey contended, even if there is a requirement to prove a deterioration in order to obtain further compensation. Any relevant deterioration can only be one that results in an increased whole person impairment. Whether there has been a deterioration in Mr Caulfield’s condition requires a resolution of the dispute about the degree of permanent impairment. The Arbitrator’s conclusion involves a determination of that issue because, by finding that there has been no deterioration, he has determined that the degree of impairment is no greater now than in 2010. Sections 65(3) of the 1987 Act and 293(2) of the 1998 Act require an assessment by an AMS before determining a dispute about the degree of permanent impairment and the Arbitrator’s approach is contrary to those sections.
Mr McManamey submitted that the only limitation identified in Abou-Haidar is that the claim (for further lump sum compensation) must be for an amount greater than that previously awarded. This means that the claim must be accompanied by a report from a WorkCover trained assessor that assesses an impairment greater than the amount previously awarded. In this case, that merely requires a report assessing more than eight per cent. Dr Guirgis’s third report does that and it is not relevant what Dr Guirgis assessed in 2010.
At the oral hearing of the appeal, Mr McManamey pointed out that Dr Guirgis’s report of 6 December 2011 contains Table 17-31 headed “Arthritis Impairments Based on Roentgenographically Determined Cartilage Intervals” in which the part indicating a 10 per cent impairment is “blocked” (shaded). Notwithstanding this, he conceded that the report only asserts an eight per cent impairment due to the arthritis impairment. If one assumes that that should have been 10 per cent, this explains the doctor’s conclusion that Mr Caulfield’s impairment is now 17 per cent.
The Table referred to in the preceding paragraph appears as follows in Dr Guirgis’s report of 6 December 2011:
Table 17-31 Arthritis Based on
Roentgenographically Determined
Cartilage Intervals
Whole Person (Lower Extremity) [Foot]
Impairment (%)
Cartilage Interval
Joint
3mm
2mm
1mm
0mm
Knee (4mm)
3 (7)
8 (20)
10 (25)
20 (50)
Patellofemoralt [sic]
4 (10)
6 (15)
8 (20)
Mr Grant submitted that the Arbitrator correctly highlighted the following comments at [55] in Abou-Haidar: “if the assessment [in the further claim] is the same as in a previous award or order of the Commission, there will no basis for referral to an AMS”.
Mr Grant said that the Arbitrator’s analysis of Dr Guirgis’s evidence was not an exercise to determine whether a deterioration had in fact occurred, but rather was an analysis of the evidence directed to determining whether there was any evidence of a change in assessment such as to justify the referral of the matter to an AMS. The appellant accepted, so Mr Grant contended, that this was part of the task required of the Arbitrator when Mr McManamey made the submission noted at [56] and [57] above. This must mean that the Arbitrator was required to consider the evidence to determine whether evidence was in fact available to meet this requirement.
Mr Grant contended that the Arbitrator was entitled to look at the evidence to see if there was material that supports an increase in impairment and, if there was no such evidence, the matter could not be referred to an AMS.
Last, Mr Grant submitted that the worker was estopped from bringing the current claim unless there was evidence of a change since the previous award. If there is no evidence of a change, the respondent could rely on the previous assessment of permanency.
Discussion and findings
Mr McManamey’s submissions are correct.
The reasoning in Abou-Haidar is tolerably clear and applies to this case. Abou-Haidar held, at [54]–[55]:
“54.An arbitrator’s task is to determine injury and other liability issues. Once that is done, the question of the extent of any whole person impairment as a result of the injury is a matter for an AMS. The insurer conceded that Mr Abou-Haidar injured his thoracic spine, but disputed his entitlement to lump sum compensation. That gave rise to a medical dispute within the meaning of s 319. As the only issue in dispute was and is the extent of the Mr Abou-Haidar’s whole person impairment as a result of an accepted injury, that question cannot be determined by the Commission but must be assessed by an AMS.
55.I do not accept Mr Flett’s submission that the position is different in a claim for additional lump sum compensation compared to an initial claim for such compensation. Nothing in the legislation provides any direct or implied support for that submission. It is not necessary for the Commission to determine, as a threshold issue, whether the worker has demonstrated that his or her condition has deteriorated before the matter is referred to an AMS for a further assessment. A worker must make a claim under s 282 and support that claim with a whole person impairment assessment in the proper form from a WorkCover trained assessor. If the assessment is the same as in a previous award or order of the Commission, there will be no basis for referral to an AMS. If the assessment is higher than in a previous award or order, then, assuming that there are no liability issues in dispute, the Registrar will refer the matter to an AMS for further assessment.”
The respondent’s solicitors challenged the correctness of Abou-Haidar in Railcorp NSW v Registrar of the Workers Compensation Commission of NSW [2013] NSWSC 231. Harrison AsJ clearly rejected that challenge. The subsequent appeal to the Court of Appeal did not challenge that part of her Honour’s decision (RailCorp NSW v Registrar of the Workers Compensation Commission of NSW [2014] NSWCA 108). In these circumstances, unless the Court of Appeal overturns Abou-Haidar it should be accepted as correct and should be applied. Mr Grant did not suggest otherwise.
Mr Grant’s reliance on the sentence “[i]f the assessment is the same as in a previous award or order of the Commission, there will be no basis for referral to an AMS” from [55] of Abou-Haidar does not assist the respondent. The previous award was for an eight per cent whole person impairment. The current assessment, based on an assessment from a WorkCover trained assessor, Dr Guirgis, is for 17 per cent whole person impairment. Plainly, that is not the same as the previous award.
I do not accept Mr Grant’s submission that the Arbitrator did not analyse Dr Guirgis’s evidence to determine if a deterioration had in fact occurred. That is exactly what he did. Indeed, he identified the issue in terms of whether Mr Caulfield had “lodged any proof prima facie demonstrating deterioration of [Mr Caulfield’s] condition since the award of 19 November 2010”. He then embarked upon an analysis of the evidence to determine whether Mr Caulfield’s condition had deteriorated and whether he had an impairment greater than the impairment determined by the AMS in 2010. That is the very thing an Arbitrator is not permitted to do (s 65(3) of the 1987 Act and s 293(2) of the 1998 Act).
As explained (at [57]) in Abou-Haidar, the Commission has jurisdiction to determine liability issues. However, once those issues are determined, the Commission has no jurisdiction to determine medical disputes that come within the terms of s 319. A claim for further or additional lump sum compensation as a result of an alleged increased impairment since a previous assessment or award, where there is no dispute as to injury, is such a medical dispute. A worker does not have to establish a prima facie case of a deterioration before such a claim can be referred to an AMS for assessment and, to the extent that E suggests the contrary, it is not consistent with the legislation and should not be followed.
Contrary to Mr Grant’s submission, Mr McManamey did not concede that it was part of an Arbitrator’s task to analyse the evidence to determine whether there was any evidence of a change in assessment to justify the referral of the matter to an AMS. Mr McManamey consistently, and correctly, maintained that it was not open to the Arbitrator to analyse the evidence in that way. Whether there has been a deterioration will be determined by whether there has been an increase in whole person impairment. Whether there has been an increase in whole person impairment is a medical dispute that is exclusively within the domain of an AMS.
Moreover, as explained at [60] in Abou-Haidar, the question of deterioration is not strictly relevant and is certainly not determinative of a later claim for whole person impairment. An assessment of whole person impairment is not based on a worker’s subjective complaints of a deterioration, but depends on an objective assessment based on the American Medical Association’s Guides to the Evaluation of Permanent Impairment (5th ed) (AMA5) and the WorkCover Guidelines.
The argument that the Arbitrator was entitled to consider if there was evidence of an increase in impairment is incorrect. As explained in Abou-Haidar, whether, since the previous award, there has been an increase in impairment is a matter for an AMS, not an Arbitrator.
Dealing with the estoppel point, the Arbitrator’s assertion (at [77]), which Mr Grant essentially repeated on appeal, that without prima facie proof of “an actual change in the situation, the estoppel created by the original award or judgment … would apply” is incorrect and misunderstands the fundamental nature of an estoppel. An estoppel prevents a party to the litigation from disputing, against any other parties, in later litigation, the correctness of the earlier decision (The Doctrine of Res Judicata by Spencer Bower, Turner and Handley, 3rd ed, 1996, at [2] (Spencer Bower)). Mr Caulfield is not disputing the correctness of the earlier award. He is claiming additional compensation on the ground that his circumstances have changed.
It is well established that there is no estoppel in a changing situation (Spencer Bower at [199]; O’Donel v Commissioner for Road Transport & Tramways [1938] HCA 15; 59 CLR 744; Rail Services Australia v Dimovski [2004] NSWCA 267; 1 DDCR 648; Hamersley Iron Pty Ltd v The National Competition Council [2008] FCA 598 at [114] to [116]; Prisk v Department of Ageing, Disability and Home Care (No 2) [2009] NSWWCCPD 13 at [55]; Brumar (Vic) Pty Ltd v Norris; Brown v Maurice Blackburn Cashman [2010] VSCA 206 at [84]–[86]). A claim for lump sum compensation, which depends on a person’s physical condition, is such a situation.
The only estoppel that arises from the 2010 award is that the parties are estopped from denying that, as a result of the accepted work injury to his right knee, Mr Caulfield has an eight per cent whole person impairment. That does not prevent Mr Caulfield from later claiming additional lump sum compensation because of a change in his condition. However, as explained above, whether there has been a relevant change will depend on whether there has been an increase in whole person impairment as a result of the injury. Assuming there are no liability issues, an AMS must determine that question and, unless it is alleged that the claim is vexatious, frivolous or lacking in substance (see s 354(7A) of the 1998 Act), it is not open to an Arbitrator to undertake a preliminary medical assessment to determine if there is prima facie evidence of a change.
While Dr Guirgis’s second and third reports appear to be substantially the same, when one closely examines the third report, it is apparent that the doctor may have assessed the arthritis impairment based on radiologically determined cartilage intervals to in fact be 10 per cent and not eight per cent (see the table at [60] above). If that is so, then the assessment of 17 per cent under the combined chart is arithmetically correct. While it is not strictly necessary for the Commission to conduct that kind of analysis of the doctor’s report, though it would have to do so if it were considering dismissing the claim as vexatious or frivolous under s 354(7A), it gives a potential explanation for the apparently illogical assessment of 17 per cent in the third report.
The Arbitrator’s decision involves another error. In considering the estoppel issue, the Arbitrator said that Dr Crane had rejected Dr Guirgis’s reasoning in his second report, about combining the three assessments made in that report, and Mr Caulfield was therefore estopped from relying on that approach in his current claim. This was because Dr Crane said that it was “not possible to combine assessments for range of motion, arthritis or impairment arising from a meniscectomy” ([46]). The Arbitrator said that that “ruling” was accurate and meant that Dr Guirgis’s methodology could not be accepted.
Even if the Arbitrator’s statement was correct, it was not for the Arbitrator to assess the validity of Dr Guirgis’s methodology. More importantly, Dr Crane’s “ruling” was not a finding that was “legally indispensable” to the award and could not create an estoppel in any event (Blair v Curran [1939] HCA 23; 62 CLR 464 at 532). Dr Crane based his assessment of eight per cent impairment on the restricted range of motion in Mr Caulfield’s right knee.
While it is correct, as Dr Crane stated, that it is not permissible to combine potential impairment from “restricted range of motion in the knee, arthritis and impairment related to partial medial lateral meniscectomy”, Mr McManamey submitted that you can combine the impairment from arthritis and the impairment from the meniscectomy (Table 17-2 AMA5 at 526). Whether that is so or not is not a matter for me to determine, but is a medical issue for an AMS or, if an appeal is lodged under s 327 of the 1998 Act, for a Medical Appeal Panel.
As Dr Crane did not have the x-rays, and was not able to assess the impairment from the arthritis, he selected the higher of the impairments for restricted range of motion (eight per cent) and for the meniscectomy (four per cent). It is for an AMS, not an Arbitrator, to assess if there is now a higher impairment, as claimed, because of the effects of the operation and/or osteoarthritis, or for some other reason, such as a greater restricted range of motion. The AMS will make that assessment in light of the current evidence, which, on this occasion, will include the x-rays.
One last point should be noted. To a large extent, the difficulty in this matter arose from an apparent error in Dr Guirgis’s report that could have been easily clarified by the doctor, had he been asked to do so. That should have happened and it is surprising that it did not. Be that as it may, the profession is reminded, as it was in Abou-Haidar, that unmeritorious applications that merely seek to cavil with a conclusive and binding MAC that has not been appealed under s 327 (or challenged in the Supreme Court) may be liable to be dismissed as “frivolous or vexatious or otherwise misconceived or lacking in substance” (s 354(7A)).
COSTS
As Mr Caulfield has been put to the expense of an arbitration and an appeal to vindicate a position where there is no valid point of distinction with the binding decision in Abou-Haidar, Mr McManamey has sought costs of the appeal and the arbitration, regardless of the AMS’s assessment. Mr Grant submitted that Mr Caulfield is not entitled to costs of the arbitration and that, should the appeal fail, the Commission should order Mr Caulfield to pay the respondent’s costs of the appeal.
As Mr Caulfield has succeeded on all issues, and as the matter should have been referred to an AMS without the need for an arbitration, it is appropriate that he have his costs of the arbitration and the appeal, regardless of the outcome of the AMS’s assessment.
CONCLUSION
It follows that the amendments to s 66 introduced by the 2012 amending Act do not apply to Mr Caulfield. Further, and in addition, the Arbitrator erred in refusing to refer the claim to an AMS for assessment and in making an award for the respondent. The Arbitrator analysed the evidence and determined that there was no evidence of a deterioration and that, in those circumstances, there was no basis for a referral to an AMS. That approach was inconsistent with binding authority and was wrong. The Arbitrator had no power to determine the claim for whole person impairment and, in the absence of any liability issues, should have referred the claim to an AMS.
DECISION
The Arbitrator’s determination of 10 February 2014 is revoked and the following orders are made:
“1. The matter is remitted to the Registrar for referral to an Approved Medical Specialist to assess the applicant worker’s whole person impairment as a result of the injury to his right knee on 9 August 2005.
2. The respondent employer is to pay the applicant worker’s costs, as agreed or assessed, regardless of the outcome of the assessment by the Approved Medical Specialist.”
COSTS
The respondent employer is to pay the appellant worker’s costs of the appeal, assessed at $2,530 plus GST.
Bill Roche
Deputy President
11 June 2014
I, JACQUELINE HAGGER, 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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