Chapels on Whatley v Bedford - [2015] WADC 129

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION: PERTH

CITATION: CHAPELS ON WHATLEY -v- BEDFORD [2015] WADC 129

CORAM: O'NEAL DCJ

HEARD: 30 SEPTEMBER 2015

DELIVERED : 30 OCTOBER 2015

FILE NO/S: APP 41 of 2015

BETWEEN: CHAPELS ON WHATLEY
Appellant
AND
SHERYN LISA BEDFORD
Respondent

ON APPEAL FROM:
Jurisdiction              :  WORKERS' COMPENSATION ARBITRATION SERVICE (WA)
Coram  :ARBITRATOR HOLYOAK-ROBERTS
File No  :A 11148 of 2014

Catchwords:

Workers' compensation - Appeal from Workers' Compensation Arbitration Service - Leave to appeal - Whether an amount of compensation is at issue - Whether on the evidence it was within the power of the arbitrator to find the appellant liable to pay the respondent weekly payments of compensation for partial incapacity - Whether arbitrator gave adequate reasons for decision

Legislation:

Workers' Compensation and Injury Management Act 1981 (WA) s 57, s 58, s 188(2), s 247(2), sch 1

Result:

Leave granted with respect to ground 1
Appeal allowed

Representation:

Counsel:

Appellant: Mr D R Clyne
Respondent: Mr G J Pynt

Solicitors:

Appellant: Mills Oakley
Respondent: Simon Walters

Case(s) referred to in judgment(s):

Mitchell v Canal Rocks Beach Resort [2002] WASCA 331
Thomas v Chandler MacLeod [2015] WADC 78
Westralian Farmers Co-operative Ltd v Bunce (Unreported, WASC, Library No 7691, 31 May 1989)

O'NEAL DCJ: This is an appeal pursuant to s 247 of the Workers' Compensation and Injury Management Act 1981 (the Act) from a decision of an arbitrator of the Workers' Compensation Arbitration Service. On 30 and 31 March 2015 the arbitrator heard the respondent's application for weekly payments for total incapacity.
On 18 May 2015 the arbitrator delivered her reasons for decision and made the following orders:
1.The Respondent is liable to pay the Applicant forthwith:
(a)weekly payments of compensation for total incapacity from 31 December 2012 to 1 January 2013;
(b)weekly payments of compensation for partial incapacity from 16 February 2013 onwards.
2.If the parties cannot agree, there is liberty to apply as to costs and quantification of the above orders.
This appeal challenges the power of the arbitrator to make the orders in 1(b) and 2. There is no challenge to order 1(a).

Background

According to the respondent's witness statement tendered before the arbitrator, the respondent has a long and proven track record in sales and retail management. She has also been employed as a medical practice manager and retail store and area manager. She has been a State trainer and State manager as well as working as a general manager in hospitality. She has a number of useful work‑related qualifications and achievements.
Between 2011 and 2013 she was employed in the appellant's café. She commenced paid work for the appellant on 18 April 2011. She was engaged as a general manager. On that same day she was the victim of a rear end collision motor vehicle accident. For present purposes it is sufficient to say that as a result of the motor vehicle accident she was unable to return to work for a period of weeks. She finally returned at around the end of May 2011 working on weekends in a lesser role. She continued working part‑time with the appellant and 19 hours a week for another employer. In March 2012 she was once again offered the general manager position by the appellant. She accepted that position and was working in that role in December 2012 and January and February 2013.
The injuries that she suffered in her motor vehicle accident were long lasting. The arbitrator had before her reports from Dr Rosenthal, a physician in rehabilitation medicine.
One report dated 13 September 2012 was prepared for the Insurance Commission of Western Australia following a review of the respondent on 13 September.
Dr Rosenthal observed at that time that headaches then being experienced by the respondent had become more frequent since she had increased her working hours. She was particularly aware of neck pain and that reduced movement of her neck. There was persisting left and right periscapular referred pain. She had not then resumed the activity of jogging and her participation in an exercise program had been intermittent because that would 'often increase her symptoms'. In her role as general manager of the café she found 'it necessary to avoid lifting'. Dr Rosenthal described the respondent's injury as a 'musculo‑ligamentous cervico‑thoracic strain'.
On 28 December 2012 the respondent had an accident at work. She bent over and attempted to move half a box of beer. When she did, so she says, she felt immense pain through her left rib radiating through her chest. According to the respondent's witness statement the pain was so severe that she could not breathe. Because of the place where this accident occurred it has come to be called the 'loft incident' in the course of these proceedings.
The respondent missed a couple of days of work, as reflected by order 1(a), but then returned to her position. That the respondent returned to work for the appellant is not in dispute. There was a finding of fact by the arbitrator to the effect that following the loft incident the respondent returned to work for just five hours a day. Given the evidence of the respondent at the hearing to the effect that she did '… a few five hour shifts and left a bit early so I could get to ‑ uh, yeah, I was working more days. I spread my hours out, so I was doing a couple of days with five‑hour shifts so that I could go off and have physio, which was what I was doing', the correctness of that finding must be in doubt. Because of the nature of the claim made by the respondent, a claim of total incapacity, this particular factual issue was not closely examined at the hearing.
The respondent's case was that she had another accident at work on 6 February 2013. According to the respondent's witness statement, she was sitting on a wooden barrel while speaking on the telephone, when the barrel gave way underneath her. She said that she fell to the ground injuring herself. Another barrel then fell across her leg and scraped all of the skin off of her shin. According to the respondent she was in pain in her back, neck, chest, shoulders, arms and backside. This particular accident came to be known as the 'barrel incident'.
On 21 January 2013 the respondent made a claim for compensation in respect of the loft incident. No claim has ever been made in respect of the barrel incident.
The respondent was made redundant by the appellant two days after the barrel incident.
It is common ground between the parties that the respondent's compensation claim has always been a claim of total incapacity for work. The matter went to conciliation and then proceeded to arbitration on the same basis.
The idea that there could be a finding in favour of the respondent short of a claim of total incapacity for work arose for the first time in the course of the closing arguments of the parties' legal representatives. That was a proposition which was opposed by counsel for the appellant when it was raised by the arbitrator: AB415.
The fact that the arbitrator was not persuaded that the respondent had a total incapacity for work should not have come as a surprise to the respondent's legal representatives. Since early September 2013 they had been in possession of a letter report from the plaintiff's general practitioner. After describing her observations with respect to the respondent's symptomology and offering her opinion as to the cause of those problems Dr Ho went on, in her letter of 29 August 2013 to say,
3.Sheryn's capacity to work in (sic) was reduced from the date of the accident until now.
4.Sheryn's current work capacity is such that she is able to do part time work (no more than 5 hours per day) in an administrative or managerial role.
5.Sheryn's future work capacity might improve such that she may be able to perform increased hours, perhaps in a full time capacity. However the duties that she can perform will be limited to an administrative or managerial role.
Given the nature of the medical evidence it was a fairly courageous decision on the part of the respondent's legal representatives to not advance an alternative claim for partial incapacity. There may of course have been forensic reasons for not doing so, apart from the potentially embarrassing inconsistency in those two positions. Whatever those forensic reasons might be, it appears that the way in which this matter was advanced on behalf of the respondent has managed to obscure rather than resolve the real matters in issue.
It was apparent however both from the witness statement that she filed and from the evidence that she gave in cross‑examination, that the respondent felt herself capable of more demanding and responsible positions than that of a café manager. Indeed the flavour of her cross‑examination was that she was effectively doing the appellant a favour by accepting what was '… still a fairly humble wage …' in circumstances where the respondent thought that she was '… worth a lot more …'.
There was no evidence before the arbitrator as to what the respondent was capable of earning, even on a part‑time basis, in other positions that she was capable of performing. The case for the respondent was that she was totally incapacitated.
As I have already suggested it was hardly surprising that the arbitrator was not satisfied, whatever it was that had caused any physical or psychological issues that the respondent was suffering, that the respondent was not in fact totally incapacitated for work. However, despite the absence of any evidence of the respondent's earning capacity in other positions for which she was or might be qualified, the arbitrator went on to find and to order,
The Respondent [Appellant] is liable to pay the Applicant [Respondent] forthwith
…
(b)weekly payments of compensation for partial incapacity from 16 February 2013 onwards.
Order number 2 giving '… liberty to apply as to costs and quantification of the above orders' was the arbitrator's solution to the rather vexed fact that, despite order 1(b), what payments had to be made (and, as the respondent's submissions rightly observe) 'if any'.

Leave to appeal

The appellant seeks leave to appeal pursuant to s 247(2)(a) or s 247(2)(b) of the Act in respect of orders 1(b) and 2 made by the arbitrator.
Regardless of whether s 247(2)(a) or s 247(2)(b) is relied on, the applicant for leave must demonstrate that a question of law is involved here.
The applicant advances three matters relied on as questions of law. Two of these grounds arise directly from the arbitrator's order that the appellant be liable for weekly payments of compensation when there was no evidence of the respondent's 'total weekly earnings' or the 'weekly amount' which the worker was earning or able to earn in some suitable employment or business after the occurrence of an injury, and logically therefore, no evidence of the amount by which the 'total weekly earnings' would exceed the 'weekly amount'. The first ground involves what might be described as the 'pure' question of law as to whether the arbitrator in fact has the jurisdiction or power to make the order that she did. A second and related ground is whether in doing so the arbitrator deprived the appellant of procedural fairness by making the order that she did in the circumstances where, among other things, the appellant did not have the opportunity to cross-examine the respondent on that particular issue or itself call evidence relevant to such a finding. Another issue raised by the applicant as a question of law relates to the adequacy of the reasons given by the arbitrator. In particular the applicant challenges whether the arbitrator's reasons properly reconcile and articulate issues of causation arising from the facts in this case.
The relevant provisions of the Act are as follows:
57A.Claims procedure where employer insured
(1)This section applies where —
(a)a claim for compensation by way of weekly payments for total or partial incapacity is made on an employer in accordance with section 178(1)(b); and
….
58.Liability for weekly payments, arbitrator may determine
(1)Where, in the circumstances mentioned in section 57A(1) —
(a)a period of 19 days has elapsed since those circumstances arose and the worker has not received the first of the weekly payments claimed; or
….
an arbitrator may, on the application of the worker hear and determine the question of liability to make the weekly payments claimed.
Schedule 1 to the Act sets out the compensation entitlements of workers. Clause 7 relevantly provides,
7.Total or partial incapacity
(1)Subject to section 56 and subclause (3) when total incapacity for work results from the injury a weekly payment during the incapacity equal to the weekly earnings of the worker calculated and varied in accordance with this Schedule.
(2)Subject to section 56 and subclause (3), where partial incapacity for work results from the injury, a weekly payment during the partial incapacity equal to the amount by which the total weekly earnings of the worker calculated and varied in accordance with this Schedule would exceed the weekly amount exclusive of payments for overtime or any bonus or allowance which he is earning or is able to earn in some suitable employment or business after the occurrence of the injury.
The respondent's answer to the central issue raised by the appellant is set out at par 1 of the written submissions filed:
It is the respondent's primary position that the present application for leave to appeal and appeal are premature in that in real terms the application before the arbitrator remains live with both parties having the opportunity to lead evidence and make submissions on the issue of quantum of payments (if any).
The submission made in support of this was that, in effect, there would be further opportunities to present evidence and make submissions with respect to what, 'if anything', might be payable by way of weekly payments for partial incapacity and that it could be open to the arbitrator to correct or amend order 1(b) which, by its terms, unequivocally makes the appellant liable for weekly payments in some unspecified amount.
Counsel for the respondent, who was not counsel in the matter before the arbitrator, effectively concedes that an issue of law arises. In my view, a question of law plainly arises as to whether indeed the arbitrator had the jurisdiction to make the order that she did.
That leaves the question as to whether this is an appeal 'in which an amount of compensation is at issue' and accordingly whether the question of leave falls within sub (a) or sub (b) of s 247(2). In Thomas v Chandler MacLeod [2015] WADC 78 I considered the proper construction to be given to s 247(2). I will not repeat here what is set out in that decision. In my view, this appeal does not involve 'an amount of compensation'. Indeed, the manner in which the arbitrator proceeded has left unresolved the question as to whether there is or is not liability to pay compensation, notwithstanding the peremptory nature of the order that she made.
This appeal involves an unresolved claim of entitlement but not 'an amount' that is determinable. Accordingly in my view, this appeal falls into category 247(2)(b) '… any other case …'. Because the appeal involves a question of law, leave should be granted.

The grounds of appeal

The appellant relies on the following grounds:
Ground 1
The Arbitrator erred in law in ordering the Appellant to make weekly payments of compensation to the Respondent for partial incapacity without any evidence that her 'total weekly earnings' would exceed the 'weekly amount': WCIM Act, Schedule 1, cl 2.
The Arbitrator should not have ordered the Appellant to make weekly payments of compensation to the Respondent for partial incapacity without evidence that her 'total weekly earnings' would exceed the 'weekly amount'.
Ground 2
The Arbitrator erred in law in granting the parties liberty to apply to quantify her order that the Appellant make weekly payments of compensation to the Respondent for partial incapacity in circumstances where the 'total weekly earnings' would not necessarily exceed the 'weekly amount': WCIM Act, Schedule 1, cl 2.
The Arbitrator should not have granted the parties liberty to apply to quantify her order that the Appellant make weekly payments of compensation to the Respondent for partial incapacity in circumstances where the 'total weekly earnings' would not necessarily exceed the 'weekly amount'.
Ground 3
The Arbitrator erred in law by denying the Appellant procedural fairness by not giving it the opportunity to cross examine the Respondent or itself call evidence in relation to the possibility of a finding of partial incapacity in circumstances where the Respondent only claimed total incapacity and partial incapacity had not been the subject of conciliation.
The Arbitrator should not have made any findings in relation to partial incapacity.
Ground 4
The Arbitrator erred in law or mixed law and fact in concluding (at [69] and [71]) that as a result of the Loft incident, the Respondent suffered aggravation 'to a significant degree' of the MVA accident injuries to her neck, thoracic spine and left shoulder.
The Arbitrator should have found that as a result of the Loft incident, the Respondent's injuries were limited to:
a)an injury to her left rib radiating to her chest; or
b)an injury to her left rib radiating to her chest and temporary neck or back pain.
The Arbitrator should have found that if one or other of the Loft incident or the incident on 6 February 2013 ('Barrel incident') aggravated the Respondent's MV accident injuries, it was the Barrel incident and not the Loft incident, that did that.
Ground 5
The Arbitrator erred in law or mixed law and fact in concluding (at [71]) that the Respondent reduced her hours to 5 hours per shift between 2 January and 8 February 2013 when there was no evidence of that.
Particulars
The Respondent gave evidence that she limited herself to light duties after the Loft incident: T 82, [5].
The Respondent did not give evidence that she reduced her hours to 5 hours per shift: T82 [20].
See also: Dr Ho's Progress Certificate dated 15 January 2013; Dr Rosenthal's report dated 24 January 2013; Dr Bowles report dated 22 March 2013; Dr Kennedy's 'Report on Worker's Condition Not Stabilised' dated 21 June 2013.
The Arbitrator should have found that Ms Bedford worked full weeks as General Manager between 2 January and 8 February 2013, albeit on light duties.
Ground 6
The Arbitrator erred in law or mixed law and fact in concluding (at [87] ‑ [89]) that the Respondent was only capable of working 5 hours per shift from 2 January 2013 when there was no evidence to support that conclusion.
Particulars
The Respondent repeats the Particulars to Ground 5.
The Arbitrator should have found that the Respondent was capable of working full weeks as General Manager from 2 January 2013 which she did, albeit on light duties.
Ground 7
The Arbitrator erred in fact in concluding (at [103]) that the Respondent suffers from a psychiatric or psychological condition as a result of the Loft incident injuries.
The Arbitrator should have found that:
a)the Respondent does not suffer from a psychiatric or psychological condition;
b)if the Respondent suffers from a psychiatric or psychological condition, it is not as a result of the Loft incident injuries. Instead, it is the result of her 'complex compensation/legal issues and financial hardship': Perth City Psychology report to Dr Ho dated 23 April 2014. See also, Dr Mander report dated 18 December 2014.
Ground 8
The Arbitrator erred in fact in concluding (at [106]) that the Respondent is as fit 'from a psychiatric point of view, for work as she is physically; that is, she has a partial incapacity for work'.
The Arbitrator should have found that the Respondent's psychiatric condition, if any, does not affect her work capacity.

In oral submissions before me, the parties agreed that if I were to uphold ground 1, the appropriate order was then to simply allow the appeal without embarking on consideration of the remaining grounds.

Ground 1

In advancing ground 1, the appellant relies upon the decision of the Full Court in Westralian Farmers Co-operative Ltd v Bunce (Unreported, WASC, Library No 7691, 31 May 1989). In that case the Full Court held to succeed in a claim for partial incapacity pursuant to sch 1, cl 7(2), a worker must prove:
(a)that she was partially incapacitated for the period of time contended; and
(b)what she earned or was able to earn in some suitable employment or business during that period, and that this was less than her pre‑accident earnings.
This decision has been followed and applied in several decisions since, including Mitchell v Canal Rocks Beach Resort [2002] WASCA 331 (Templeman J [10] – [11]); (Roberts-Smith J [72] – [84]).
It is the fact that the respondent did not adduce evidence of her weekly earnings for the purpose of sch 1, cl 7(1). No evidence was before the arbitrator. In the circumstances it is puzzling, to say the least, that the arbitrator determined to find the appellant liable to forthwith pay the respondent weekly payments of compensation for partial incapacity.
Faced with find authority directly on point, the respondent invokes the extent of an arbitrator's discretion in such matters. The respondent's position is perhaps best summarised by par 1 of the written submissions that were filed, set out above at [27].
The 'tell' in this submission is found in the two words between parentheses. There is more than a distinct possibility here that nothing will be found to be payable. That really begs the question as to how an order for payment could be made, even allowing that the arbitrator has given 'liberty to apply'.
Beyond invoking the discretion that an arbitrator has in such matters, the respondent's submissions do not engage the central point raised by the appellant. They do not acknowledge, much less try to respond to or distinguish, the binding authorities of the decisions of Bunce and Mitchell. That would appear to be because there is no answer.
The provisions of the Act do give Arbitrators considerable discretion as to the manner in which they conduct hearings, among other things. What they do not do in my view is give Arbitrators power to order employers to pay compensation in circumstances where there is no evidence that the employer is in fact liable under the Act.
In my view, the arbitrator was plainly wrong to make the orders that she did and I would allow ground 1.
Although the parties agreed that if I were to allow the appeal based on ground 1 it was unnecessary for me to then deal with the subsequent grounds, it is appropriate that I say something about them.
This was a case where there were very live issues of causation given the symptoms that the respondent was exhibiting as a result of her motor vehicle accident, and the fact that there were said to be two workplace accidents. The respondent's sworn testimony was that the second accident, for which no claim of compensation was made, was far more significant in terms of the problems that it caused. With respect to the barrel incident, the arbitrator said, at par 7:
There has been no application for compensation in respect of that accident, nor any application for conciliation, nor is it part of the application before me, so I am unable to make any determination with respect of that accident (sic).
While the correctness of this last proposition is not in question, with respect, the same might have been said with respect to a claim for partial incapacity.
It appears that the arbitrator erroneously concluded that following the loft incident, the respondent reduced her hours of work to five hours per day. The testimony of the respondent suggested that it was the barrel incident and not the loft incident that was responsible for the aggravation of the pre-existing motor vehicle accident injuries. Despite that and for reasons that are, with respect, far from clear, the arbitrator concluded at par 70:
Whilst I am not required to make any finding with respect to the barrel incident, I am satisfied that, inter alia, the barrel incident also aggravated her pre-existing motor vehicle accident injuries but to a lesser extent.
Based on the evidence at the arbitration this conclusion, stated as boldly as it is, is not readily understandable.
It is not necessary for me to resolve the other issues but, with respect, it is difficult to understand the process of reasoning that the arbitrator followed with respect to a number of factual findings that she makes about symptomology at various times and its causes.

Conclusion

For the reasons set out above, leave to appeal is granted. Ground 1 of the appeal is allowed.