Chen v WorkCover Authority of New South Wales
[2004] NSWWCCPD 13
•19 March 2004
WORKERS COMPENSATION COMMISSION
APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:Chen v WorkCover Authority of NSW [2004] WCC PD 13
APPELLANT: Chen Gui Jin formerly t/as A.C. Furniture
RESPONDENT: WorkCover Authority of NSW
FILE NUMBER: WCC5640-2002
DATE OF ARBITRATOR’S DECISION: 5 November 2003
DATE OF APPEAL DECISION: 19 March 2004
SUBJECT MATTER OF DECISION: Uninsured Liability and Indemnity Scheme, Section 145 of Workers Compensation Act 1987, WorkCover Authority duty to investigate, Section 14(3) of Workers Compensation Act 1987, Fresh evidence.
PRESIDENTIAL MEMBER: Dr Gabriel Fleming
HEARING:On the Papers
REPRESENTATION: Appellant: Hunt & Hunt Lawyers
Respondent: Turks Legal
ORDERS MADE ON APPEAL: Pursuant to section 145 of the Workers Compensation Act 1987 I make the following orders:
1. The Arbitrator’s order ‘That the Application be dismissed’ is revoked.
2. Chen Gui Jin formerly t/as A.C. Furniture is liable to pay weekly compensation to Bing Li at the rate of $450 per week from 15 September 1999 to 14 April 2000.
3. Chen Gui Jin formerly t/as A.C. Furniture is liable to pay Bing Li’s section 60 of the Workers Compensation Act 1987 expenses on production of accounts or receipts.
4. Chen Gui Jin formerly t/as A.C. Furniture is liable for the payment of $13,500 for Bing Li’s claim under section 66 of the Workers Compensation Act 1987.
5. Chen Gui Jin formerly t/as A.C. Furniture is liable for the payment of $8,000 for Bing Li’s claim under section 67 of the Workers Compensation Act 1987.
6. Chen Gui Jin formerly t/as A.C. Furniture is ordered to reimburse the WorkCover Authority of NSW for the amount of compensation to which Bing Li is entitled, in accordance with this decision plus disbursements as itemised in the Schedule to the ‘Notice to Reimburse’ issued on 8 July 2002.
7. The Arbitrator’s order ‘That the Applicant Employer pay the Respondent’s costs’ is confirmed.
.
BACKGROUND
On 3 December 2003 Chen Gui Jin (‘the Appellant/Ms Chen’), sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Workers Compensation Commission against a decision, dated 5 November 2003.
The Respondent to the Appeal is the WorkCover Authority of NSW (‘the Authority’).
The appeal was referred to me for review on 3 February 2004.
THE DECISION UNDER REVIEW
The Appellant was an employer, formerly trading as A. C. Furniture. In 1999 the Appellant employed a worker named Bing Li (‘the worker/Mr Li’) in her small furniture manufacturing business. Mr Li subsequently seriously injured his right thumb at work. He made a claim for weekly payments of workers compensation, medical expenses and compensation for permanent impairment of his right thumb.
The Appellant did not hold a policy of workers compensation insurance.
Mr Li made a claim on the Uninsured Liability and Indemnity Scheme (‘ULIS’), which the Authority administers, on 7 December 1999. The Authority ultimately met the worker’s claim.
On 8 July 2002 the Authority served a notice on Ms Chen seeking reimbursement for compensation paid to the worker plus medical expenses and disbursements, totalling $85,286. Ms Jin applied to the Commission for a determination as to her liability to reimburse the WorkCover Authority Fund for these monies.
The Arbitrator’s determination is contained in the ‘Certificate of Determination’, dated 5 November 2003 as follows:
1. That the Application be dismissed.
2. That the Applicant Employer pay the Respondent’s costs.
A lengthy ‘Statement of Reasons for Decision’ (the Reasons) is attached to the Certificate of Determination.
The effect of these orders is that Ms Chen must reimburse the Authority for the monies claimed.
The Arbitrator found that the worker had sustained a compensable injury and that the Authority had not mismanaged the claim.
The Appellant seeks a determination as to her liability to reimburse the Authority.
ISSUES IN DISPUTE
The Appellant seeks review of the entire determination of the Arbitrator on the basis that the Arbitrator has made errors of law, fact, and discretion.
The Appellant disputes the worker’s entitlement, and submits that he is excluded from an award of compensation by operation of section 14(3) of the Workers Compensation Act 1987 (‘the 1987 Act’). Section 14(3) provides that “Compensation is not payable in respect of an injury to or death of a worker caused by an intentional self-inflicted injury”.
The primary issue in dispute is whether the Appellant (the employer) was liable to pay workers compensation to the worker. The Appellant claims that the worker’s conduct comes under the self-infliction clause at section 14(3) of the 1987 Act, and as such, she is under no obligation to pay him compensation.
This is an unusual claim, as the worker is not a party to these proceedings, and it is the employer (who was the Applicant in the proceedings before the Arbitrator) who seeks a determination of her own liability.
ON THE PAPERS REVIEW
The Workers Compensation Act 1987 (‘the 1987 Act’) and the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’) are referred to together in these Reasons as the ‘Workers Compensation Acts’.
Section 354(6) of the 1998 Act provides:
354Procedure before Commission
(6)If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.
The Appellant does not consent to a review ‘on the papers’. She submits that the opportunity to make oral submissions on the appeal should be provided.
The Authority does not object to the determination of the appeal on the papers.
The evidence and submissions that were before the Arbitrator are before me on the appeal as are further substantial written submissions by the parties.
I am satisfied that I have sufficient information to proceed ‘on the papers’, without holding any conference or formal hearing, and that this is the appropriate course in the circumstances.
The parties were advised, on 4 February 2004, that the matter was to be determined on the papers. No application to file further submissions was made.
LEAVE
Leave to appeal was granted on 4 February 2004 on the basis that I was satisfied that:
· The appeal was filed within 28 days of the decision appealed against (section 352(4) of the 1998 Act).
· The amount of compensation at issue on the appeal is at least $5,000 (section 352(2)(a) of the 1998 Act), and
· No amount was awarded in the decision appealed against and therefore section 352(2)(b) of the 1998 Act has no application (Mawson v Fletchers International Exports Pty Limited [2002] NSW WCC PD 5).
FRESH EVIDENCE
The Appellant seeks to introduce fresh evidence on appeal. The fresh evidence is two witness statements, one from Hai Ping Liu, Ms Chen’s husband, dated 26 November 2003 and the other from Bing Hua Chen, a former employee of Ms Chen, dated 26 November 2003.
Section 352 (6) of the 1998 Act provides that:
352 Appeal against decision of Commission constituted by Arbitrator
(6)Evidence that is fresh evidence or evidence in addition to or in substitution for the evidence received in relation to the decision appealed against may not be given on an appeal to the Commission except with the leave of the Commission.
Practice Direction No. 6 provides that: “In general, the Commission will allow new evidence to be given only where it can be demonstrated that the new evidence could not reasonably have been obtained by the party and tendered in proceedings before the Arbitrator and that failure to allow the new evidence would cause a substantial injustice in the circumstances of the individual case.”
The Appellant seeks leave to submit the two additional witness statements to address the Arbitrator’s finding that there was a lack of corroborating evidence of the Appellant’s claim that the worker intentionally injured himself. The Appellant submits that the fresh evidence supports the proposition put by the Appellant, that the worker’s injury was self-inflicted.
The Appellant submits that this evidence was not produced before the Arbitrator because it was not reasonably available at the time. The Appellant had attempted to locate the witness before the arbitral hearing but was unsuccessful as the witness, and other former employees, had gone their own way when the business was wound up. The Appellant submits that it was only after the Arbitrator’s determination that these efforts to obtain further evidence were successful.
The Authority submits that the Commission should not admit fresh evidence unless there is some “insistent demand of justice” requiring the admission (Wollongong Corporation v Cowan [1955] 93 CLR 435 at 434; McCann v Parsons [1954] 93 CLR 418). The Authority submits that Hai Ping Liu did not outline in his statement, the specific efforts that were made to locate the witness Bing Hua Chen. Additionally, Bing Hua Chen was located only seven days after the decision of the Arbitrator, suggesting that with reasonable diligence he may have been contacted before the arbitration. Nor is the statement probative as to whether the injury was intentional. It is no more than opinion or hearsay. Finally, the Authority submits that the evidence of Hai Ping Liu lacks veracity as he is the husband of the Appellant. The Authority submits that the version of events offered by Bing Hua Chen is inconsistent with that of the Appellant.
The submissions on this issue, by both parties, would have benefited from reference to decided cases on the admission of fresh evidence within the particular statutory framework governing the operation of this Commission (see M & S Shipman Pty Ltd v Matters [2003] NSW WCC PD 19, Ross v Zurich Workers Compensation Insurance [2002] NSW WCC PD 7). The principles relevant to the exercise of this discretion are set out in Shipman (at paragraphs 21-27) and I adopt them here.
Taking into account the relevant legal principles and Practice Direction No. 6, I am not satisfied that leave should be granted to allow fresh evidence, in the form of these two statements, to be given on the appeal. The Authority’s submissions on this issue have much merit. Absent a compelling reason to allow fresh evidence, the parties should be entitled to rely upon the evidence that was before the Arbitrator. In this case the Appellant has been on notice of the worker’s claim since September 1999. I do not accept that the evidence of witnesses, who could corroborate a particular version of events in relation to the injury, could not have been obtained prior to the dispute coming before the Arbitrator for determination in November 2003. In addition, the statements of Hai Ping Liu and Bing Hua Chen are not sufficiently relevant, credible and probative to have changed the outcome of the matter before the Arbitrator, nor on appeal.
In all the circumstances there are no compelling Reasons to allow the Appellant to file fresh evidence and it would be unfair and unjust to the Authority to do so.
Leave to the Appellant to give fresh evidence on the appeal is refused.
EVIDENCE AND SUBMISSIONS
The Facts
The facts of the dispute are set out at length in the decision of the Arbitrator and are not repeated in full here.
In summary, in September 1999 the Appellant, Chen Gui Jin, employed the worker, Bing Li, to work as a sander in her furniture factory. On 15 September 1999, after having worked on and off over a period of a few weeks, Mr Li sustained a deep cut to his thumb whilst using a circular saw at work. The injury resulted in an incapacity for work.
Mr Li made a claim for workers compensation on the employer on 29 September 1999. However Ms Chen had not taken out compulsory workers compensation insurance before the date of the injury.
Mr Li then, on 7 December 1999, made a claim on the ULIS.
The Authority accepted Mr Li’s claim and commenced payments of weekly compensation for total incapacity pursuant to section 36 of the 1987 Act.
The Authority subsequently paid for Mr Li’s medical expenses in relation to the injury and came to an agreement as to an amount of compensation to be paid to him for permanent impairment of his right hand and associated pain and suffering.
The Authority ceased payments of weekly compensation to Mr Li on 23 March 2001.
On 8 July 2002 the Authority served a ‘Notice to Reimburse’ monies paid to Mr Li, on the employer, Ms Chen.
The Appellant disputes her liability to reimburse the Authority for compensation paid to Mr Li, as she contends that the worker injured himself intentionally. Ms Chen said, in her statement of 25 August 2003, that after she warned the worker to move his hand away from the saw, “He ignored me and put his hand slowly into the saw holding a little piece of scrap timber”.
The Parties’ Submissions
The Appellant made lengthy submissions as to numerous alleged errors made by the Arbitrator.
The Appellant does not identify whether the alleged errors are of law, fact or discretion. The Appellant’s submissions may be summarised as follows:
The Arbitrator erred in:
· Finding that section 148A of the 1987 Act resulted in the Authority assuming the rights and responsibilities of the uninsured employer. This finding excludes the employer from the matter, and contradicts the tri-partite nature of workers compensation, as highlighted in Part 4 Division 6 of the 1987 Act (at paragraph 41 of the Reasons). The Arbitrator has misunderstood the scheme of workers compensation in the Workers Compensation Acts (at paragraphs 69-71, 73 of the Reasons) (‘The Scheme of the Workers Compensation Acts, Role of WorkCover and ULIS Error’)
· Applying a common law test instead of the remedy in section 145 of the 1987 Act (at paragraphs 50-53, 60-68, 75, 82 and 101.2 of the Reasons) (‘The Common Law Test Errors’)
· Failing to give sufficient weight to the evidence or making findings that are contrary to the evidence or based on no evidence (at paragraphs 47, 77, 89 and 101.3 and 101.4 of the Reasons). Failing to make a determination as to payments and rate of payments in accordance with the evidence (at paragraphs 97-100 of the Reasons) (‘The Weight of the Evidence Error’)
· ‘Excluding’ the expert report of Dino Zanella, dated 25 August 2003 (at paragraphs 54-59 of the Reasons) (‘The Zanella Report Error’), and
· Failing to make the decision pursuant to section 354(3) of the 1998 Act, in accordance with equity, good conscience and the substantial merits of the case. The common law approach taken by the Arbitrator failed to determine the dispute according to section 354(3) of the 1998 Act (‘The Section 354 of the 1998 Act Error’).
The Authority submits that the appeal should be dismissed and the Appellant ordered to pay the Respondent’s costs.
The parties’ further submissions on each of these alleged errors are set out below.
The Scheme of the Workers Compensation Acts, Role of WorkCover and ULIS Error
The Appellant submits that the Arbitrator erred in finding that section 148A of the 1987 Act resulted in the Authority assuming the rights and responsibilities of the uninsured employer. This finding excludes the employer from the matter, and contradicts the tri-partite nature of workers compensation, as highlighted in Part 4 Division 6 of the 1987 Act.
The Authority submits that the Arbitrator did not conclude that the employer is excluded from the consideration of the claim under the ULIS and that the Appellant has misconstrued the Arbitrator’s reliance upon the decision of GRE Workers Compensation Insurance (NSW) v Nohil Pty Limited & Ors [1996] 13 NSWCCR 74.
The Appellant also submits that the Arbitrator has made an error of law by misdirecting himself as to the operation of the worker’s compensation scheme. In his Reasons, the Arbitrator erroneously suggested that rehabilitation efforts could not be made whilst a worker is totally incapacitated. The Appellant submits that the Arbitrator erred in finding that the Respondent’s management of the claim was not incompetent. This was despite the Respondent having taken eleven months to implement an injury management plan for the worker.
The Authority submits that the submissions of the Appellant in regard to the failure to implement an injury management plan, overlook the finding of the Arbitrator that a plan could not be implemented while the worker was totally incapacitated.
The Common Law Test Errors
The Appellant submits that the Arbitrator made an error of law in applying an inappropriate common law test to the workers compensation jurisdiction. The Arbitrator erroneously found that the Authority’s conduct of the matter must have been totally incompetent in order for the Appellant to invoke a declaration for relief pursuant to section 145 of the 1987 Act. The Arbitrator relied on common law principles in determining the level of mismanagement required of the Authority before the Appellant would be entitled to relief.
The Arbitrator also allegedly fell into error (at paragraph 53 of the Reasons) in his reliance on the case of Gibson v The Parkes District Hospital and Anor (1991) 26 NSWLR 9.
The Appellant submits that the Arbitrator again erred in law in stating that the Respondent’s failure to comply with section 43(4) of the 1998 Act did not amount to the tort of misfeasance in public office. The task of the Appellant is not to prove a tort. The Arbitrator erred in finding that the Appellant had to show that the Respondent had committed a tort, before it could be released from its own liability.
The Authority submits that the Arbitrator’s finding, that the Authority did not breach its duty to the Appellant, was based on the submission by the Appellant that the Authority first owed the Appellant a common law duty. The Arbitrator has, therefore, not erred, as he merely applied the test submitted by the Appellant.
The Weight of the Evidence Error
The Appellant submits that the Arbitrator erred in finding that the worker was entitled to compensation, as this is contrary to the weight of the evidence. The Arbitrator erred in not giving proper consideration to evidence that the worker’s injury was self-inflicted.
The Appellant submits that the Arbitrator erred in failing to make a determination as to the correct rate of payment and also in upholding of the payment of continuing weekly compensation after 17 March 2000 (when Mr Li’s visa expired). The Arbitrator allegedly had no evidence as to the worker’s entitlement under his visa, to work in Australia after that date.
The Authority submits that the Arbitrator took account of the weight, credibility and inconsistencies in all evidence before him, and made no error in regard to it. The Authority further submits that the finding of the Arbitrator was not predicated on credit or fact, and so the Appellant’s submission that the rejection of her evidence constituted an error, is unfounded. The Appellant’s evidence, asserting that the injury was self-inflicted, was challenged by the Authority because of inconsistencies in the statements relied upon. The Arbitrator considered both versions of the evidence at paragraph 66 of his Reasons. The Appellant’s submissions fail to take into consideration the Arbitrator’s finding that there was insufficient evidence upon which to conclude that the injury was self-inflicted.
The Authority also submits that the Appellant has ignored the conclusion of the Arbitrator that the Authority was entitled to make payments at the rate of $450 per week. This rate was based on information declared by Ms Chen, through an interpreter and in the presence of a solicitor, and is information upon which the Authority was entitled to rely. It was only contradicted by later evidence of wage records that stated Mr Li’s gross average weekly wages were $304. The Arbitrator did not err in relying upon information provided him by the Department of Immigration and Multicultural and Indigenous Affairs. This information stated that the worker was permitted to work at the time he was employed by the Appellant.
The Zanella Report Error
The Appellant submits that the Arbitrator erred in not allowing the Report of Dino Zanella to be admitted in evidence. No objection was made to this report when it was tendered whilst both parties were represented, but the Arbitrator subsequently ‘excluded’ it on the basis of a late objection by the Authority. The Appellant submits that the Arbitrator misapplied R v Gilmore (1977) 2 NSWLR 935, and erred in not applying sections 354(1), (2), and 367(1)(a) of the 1998 Act.
The Authority claims that the Appellant has misconstrued the decision of the Arbitrator in regard to the report of Dino Zanella. The Arbitrator in fact admitted the report into evidence. However, he then gave it no weight, as it was unsigned and contained no evidence of Mr Zanella’s expertise or qualifications.
The Section 354 of the 1998 Act Error
The Appellant submits that the Arbitrator, in applying common law principles, did not apply section 354 (3) of the 1998 Act.
The Appellant further submits that the Arbitrator failed to make his decision in accordance with section 354 of the 1998 Act which provides, in part, as follows:
354 Procedure before Commission
(1)Proceedings in any matter before the Commission are to be conducted with as little formality and technicality as the proper consideration of the matter permits.
(2)The Commission is not bound by the rules of evidence but may inform itself on any matter in such manner as the Commission thinks appropriate and as the proper consideration of the matter before the Commission permits.
(3)The Commission is to act according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms.
DISCUSSION AND FINDINGS
The Reasons issued by the Arbitrator are difficult to read. They do not clearly set out the evidence that was before the Arbitrator and the form of that evidence. Apart from any alleged substantive errors, the Reasons suffer from:
· a lack of attention to formatting (see, for example, paragraphs 4, 30, 33, 47,48,50 51, 54, and others),
· a lack of correction of spelling and grammatical errors (see, for example, paragraphs 50, 67, 71, 72, 100, and others), and
· a lack of clarity in reference to the Workers Compensation Acts (it is not clear whether ‘the Act’ referred to in paragraph 8 and following is the 1987 Act or the 1998 Act).
Before considering the parties’ submissions it is necessary to consider exactly what the Arbitrator was required to determine in this dispute.
The Uninsured Liability and Indemnity Scheme
The ULIS is created by Division 6 of Part 4 of the 1987 Act. It provides for payment of workers compensation and ex gratia payments from the WorkCover Authority Fund. The Authority is the administrator of the scheme.
The ULIS makes payments for claims by employees, for workers compensation, against employers, who are found to have been uninsured at the relevant time in relation to a claim.
The 1987 Act sets out who is eligible to make a claim on the ULIS and the manner of making a claim.
Section 143 of the 1987 Act gives the Authority a discretion as to the payment of compensation to a worker under the ULIS. This discretion is expressed in broad terms as follows:
143 Determination of claim by Authority
(1) From the WorkCover Authority Fund the Authority may, in respect of a claim under the Scheme:
(a) pay compensation in accordance with this Act or work injury damages, with or without admission of liability, or
(b) make ex gratia payments.
(2) The Authority may refuse to satisfy a claim under the Scheme.
(3) If the Authority does not, wholly or in part, satisfy a claim under the Scheme, it shall, within 14 days of making the relevant decision, advise the claimant of its decision and the Reasons for its decision.
Section 144(1) of the 1987 Act provides that if a worker is dissatisfied with a decision in relation to the claim on the ULIS, he or she may apply to the Commission for determination of the claim.
Where the Authority has paid compensation in respect of a claim upon ULIS, it may serve on either the relevant employer, or insurer, a ‘Notice’ requiring reimbursement of all or part of the amount so paid (section 145(1) of the 1987 Act).
A person on whom the ‘Notice’ is served may apply to the Commission “. . . for a determination as to the person’s liability in respect of the payment concerned” (section 145(3) of the 1987 Act).
Section 145(4) of the 1987 Act provides that:
145Employer or insurer to reimburse Authority
(4)The Commission may hear any such application and may:
(a) make such determination in relation to the application, and
(b) make such awards or orders as to the payment of compensation under this Act to or in respect of the injured worker concerned,
as the Commission thinks fit.
This provision confers jurisdiction on the Commission in exactly the same terms as, prior to amendment, it did on the Compensation Court. It gives an Arbitrator, acting as the Commission, a broad power to “. . . make appropriate orders adjusting the rights of all persons or bodies who may have an existing or potential liability or entitlement to be relieved of liability because of insurance in respect of the compensation claimed by or awarded to the injured worker” (GRE Workers Compensation Insurance(NSW) v Nohil Pty Ltd [1996] 13 NSWCCR at 81).
In this matter the Authority served a Notice, pursuant to section 145(1), on the employer Ms Chen, requiring reimbursement of amounts paid to Bing Li under the ULIS. Application is now made to the Commission for a determination of Ms Chen’s liability in respect of the payment concerned (section 145(3) of the 1987 Act).
The decision that an Arbitrator may make under section 145(4) of the 1987 Act relates to the “existing or potential liability or entitlement to be relieved of liability” of the parties under the Workers Compensation Acts. The Arbitrator must be satisfied that the requirements of those Acts, in relation to the worker’s entitlements, have been met, and that the worker is not precluded from an award of compensation by any provision of those Acts. The Arbitrator has a discretion in the making of a decision under section 145(4), and factors relevant to that discretion must be considered in the circumstances of the particular case.
In this matter there is no dispute between the parties that Bing Li was a ‘worker’ for the purpose of the Workers Compensation Acts and that he suffered an ‘injury’ as defined in section 4 of the 1987 Act.
I now move to a consideration of the Arbitrator’s alleged errors in the original decision.
The Scheme of the Workers Compensation Acts, Role of WorkCover and ULIS Error
The Appellant submits that the Arbitrator has misunderstood the role of the Authority and the ULIS.
At paragraph 41 of the Reasons the Arbitrator attempts to summarise the effect of Part 4 Division 6 of the 1987 Act, which provides for the establishment of the ULIS. The Arbitrator refers to section 148A of the 1987 Act which provides for the ‘Authority’s Right of Subrogation’, to any right of the employer or insurer.
The role of the Authority in relation to the ULIS is to administer the scheme. Section 148(3) of the 1987 Act states that “. . . the Regulations may provide for the application ( with such modifications as may be prescribed) of other provisions of this Act with respect to any matter arising under this Division”. Other than by express modification of the Workers Compensation Acts, the Authority is not an employer or an insurer, nor does it have the obligations of an employer or insurer.
The Workers Compensation Acts are modified by the Workers Compensation Regulations 2003 (‘the Regulations’) in relation to claims under the ULIS (section 148 (3) of the 1987 Act). Clause 197 of the Regulations provides for the application of certain of the provisions of the Workers Compensation Acts that refer to an “insurer, self-insurer or employer” to be read as references to “the Authority’’ for the purpose of claims made under the ULIS.
Pursuant to Clause 197 of the Regulations only section 58 of Chapter 3 of the 1998 Act applies to the Authority. The result is that nothing done by the Authority in connection with the provision of injury management and rehabilitation for a worker who has made a claim on the ULIS constitutes an admission of liability by the Authority for the payment of workers compensation under the Workers Compensation Acts. The other provisions of Chapter 3 of the 1998 Act do not apply to claims made under the ULIS.
I accept the Appellant’s submissions that the Arbitrator’s summary of the effect of Part 4, Division 6 of the 1987 Act (at paragraph 41 of the Reasons) incorrectly states the role of the Authority in relation to the administration of the ULIS.
The Arbitrator’s misunderstanding of the relevant provisions of the Workers Compensation Acts, is an error of law.
The Common Law Test Errors
The Arbitrator accepted the proposition that the Authority owed a ‘duty of care’ to Ms Chen in relation to the management of the claim by Mr Li (paragraphs 50-53 of the Reasons). The Arbitrator further found that this duty of care, ‘to act in good faith’, would be breached where the Authority “was found to be totally incompetent” in relation to the administration of the compensation claim.
In my view this is not the appropriate legal framework within which to consider the role of the Authority in the determination of a claim made upon the ULIS. An Arbitrator has no power to make a determination, award or orders other than those express powers set out in Workers Compensation Acts. An Arbitrator does not have the inherent powers of a Judge of a Court, nor any power to make an award or order in relation to claims in tort. An Arbitrator also has no power to order general declaratory relief. The broad power of an Arbitrator to determine the liabilities of the parties, pursuant to section 145(3) of the 1987 Act, is to be exercised within the scope and objects of the Workers Compensation Acts, and does not extend to empowering an Arbitrator to make an award of damages for breach of a duty to act in good faith.
The case of Gibson v Parkes District Hospital and Another (1991) 26 NSWLR 9 (Gibson) was referred to by the Appellant as providing “. . . an indication of the standards expected of an Insurer”. The Arbitrator relied upon Gibson as imposing upon the Authority a ‘duty of care in tort’. Gibson is not relevant to the matters for determination in this case. Gibson concerned a worker who sued her employer for negligence and then sought to join her workers compensation insurer, claiming a breach of the duty to act in good faith in the processing of her worker’s compensation claim. In the Supreme Court, Justice Badgery-Parker did not ‘. . . find in the existence of detailed and comprehensive provisions for the enforcement of rights under the Workers Compensation Act 1926, and for the control of and disciplinary action against licensed insurers, any reason to conclude that the suggested cause of action in tort for breach of the duty of good faith must be denied” (Gibson at 29). However the Authority, as the administrator of the ULIS, is not, in fact, an insurer, and is not, unless expressly included by operation of Clause 197 of the Regulations, subject to the obligations placed upon an insurer under the Workers Compensation Acts. It is only for the purpose of a claim under the ULIS for work injury damages do the Workers Compensation Acts apply generally to the Authority “. . . as if the Authority were an Insurer” (section 141A of the 1987 Act).
The Appellant alleges that the Authority failed to meet the obligations imposed on an insurer under sections 43-49 of the 1998 Act. Chapter 3 of the 1998 Act, sections 41-59, deal with ‘Workplace Injury Management’. As discussed above, the Authority is not an ‘insurer’ for the purpose of Chapter 3, other than in relation to section 58 of the 1998 Act. Therefore the Authority is not otherwise obliged to comply with the workplace injury management provisions.
In determining a claim on the ULIS the Authority is exercising administrative power under the Workers Compensation Acts. The legal principles relevant to the exercise of discretionary power by administrative decision-makers apply. The discretion must be exercised lawfully and fairly, taking into account the scope of the discretion, and the objects or purpose for which it is conferred (R v Australian Broadcasting Tribunal; ex p 2HD Pty Ltd [1979] 144 CLR 45, Swan Hill Corporation v Bradbury [1937] 56 CLR 746).
The purpose of the Workers Compensation Acts is set out in section 3 of the 1998 Act, which describes the objectives of the workplace injury management and workers compensation system established by the statutory scheme. These purposes will be relevant to the exercise of the Authority’s discretion in relation to payment of a claim under the ULIS (pursuant to section 143 of the 1987 Act). In other words, the Authority, in the management of a claim to the ULIS, must act in a way that is consistent with these objectives.
It is not necessary that I determine whether an injury management plan could, or should, have been devised by the Authority for Mr Li during his period of total incapacity. Suffice it to say, as noted above, that the Authority should act at all times in accordance with the objectives of the Workers Compensation Acts, which are directed at returning a worker to employment as soon as he or she is able. In this matter the issue of return to work was complicated by Mr Li’s immigration status. This is discussed further below.
The conduct of the Authority in relation to the management and determination of a claim on ULIS may, in the circumstances of the particular case, be a matter that is relevant to any order the Commission may make pursuant to section 145(4) of the 1987 Act.
At paragraph 50 of the Reasons the Arbitrator stated that findings in relation to the conduct of the claim by the Authority ‘may be enough to invoke a declaration of relief under section 145” (although the Commission has no declaratory powers). However the Arbitrator then considered the conduct of the Authority in the management of the claim and concluded that he was “. . . unable to make a finding that the absence of any evidence upon which to make payments of compensation must connect to some act of negligent management” (at paragraph 77 of the Reasons). To the extent that the Arbitrator considered the Authority’s conduct for this purpose, rather than as one factor to be considered in the exercise of the broad discretion to adjust the entitlements and liabilities of the parties under section 145(4) of the 1998 Act, he made an error of law.
For the same Reasons the Arbitrator erred in finding that “mistakes made by an insurer equate to less than perfect management of the claim. That does not make the management on an overall basis negligent. Nor does it equate to negligence through the tort of misfeasance of public office”. These findings are not consistent with the issues that the Arbitrator had to determine under section 145(4) of the 1987 Act, namely the respective entitlements and liabilities of the parties pursuant to the Workers Compensation Acts.
The Weight of the Evidence Error
The Appellant alleges that the Arbitrator’s decision is against the weight of the evidence. This ground must fail unless the Appellant can demonstrate that there was no logically probative evidence upon which the Arbitrator could reasonably base his decision. It is entirely a matter for the Arbitrator as to what weight to accord the evidence before him, but a decision against the weight of the evidence would be an error of law, and contrary to the requirements of Rule 70 of the Workers Compensation Commission Rules 2003, which provides as follows:
70 Principles of Procedure
When informing itself on any matter, the Commission is to bear in mind the following principles:
(a)evidence should be logical and probative,
(b)evidence should be relevant to the facts in issue and the issues in dispute,
(c)evidence based on speculation or unsubstantiated assumptions is unacceptable,
(d)unqualified opinions are unacceptable.
In particular, the Appellant submits that the weight of the evidence supports a finding of fact that the worker’s injury was self-inflicted, and, therefore, is not compensable. The Arbitrator’s consideration of the evidence in relation to this is set out at paragraphs 60-68 of the Reasons.
The critical issue for determination by the Arbitrator was whether or not the worker was precluded from payment of compensation by operation of section 14 of the 1987 Act. The Arbitrator considered the evidence relevant to this issue and concluded that the employer had “. . . not satisfied me on her own evidence, that the actions of the Worker represented injury caused by an intentional self inflicted injury”.
The Arbitrator considered and accepted the worker’s evidence of the injury. The Arbitrator also considered and found that Ms Chen’s evidence “. . . at its highest” suggested only that the worker ignored her instructions to him at the time of the relevant incident. The Arbitrator does not set out at length all of the evidence that was before him in relation to this issue, and in my view this was not necessary. The Arbitrator stated that he reviewed the entirety of the Authority’s file and it is clear from the Reasons that he considered the relevant evidence of Mr Li and Ms Chen in coming to a view as to whether the injury was self-inflicted.
In my view the Arbitrator did not err in finding that the weight of the evidence did not support the claim that Mr Li’s injuries were self-inflicted.
The Appellant also submits that the Arbitrator’s findings as to compensation payments for incapacity and the rate of payment are against the weight of the evidence. This is challenged in three respects, namely that the Authority did not pursue the worker’s ability to work in suitable employment, that the Authority paid compensation to the worker for periods when he did not have lawful permission to work in Australia, and that the evidence did not support a payment at the rate of $450 per week.
The Arbitrator’s finding in relation to the issue of ‘suitable employment’ is supported by logically probative evidence. The Arbitrator sets out his consideration of the amount of the payments made to the worker, and includes the medical reports of Drs Tse, Stapleton, Cummings, and Green, at paragraphs 78-100 of the Reasons. He accepted the evidence of Drs Cumming, Green and Stapleton that the worker “. . . had a genuine injury with serious consequential disability”.
The Arbitrator accepted evidence that the worker was seeking suitable employment and had provided “. . . some forms to the Respondent as to alleged attempts to find suitable employment as required by Section 38A(2)(2)(d)”. Attached to the Authority’s ‘Reply’ in the proceedings before the Arbitrator was a document headed ‘Employee Section 38 Questionnaire’ which detailed six employers approached by Mr Li in relation to employment as a carpenter, cleaner or ‘assistant’. None of these approaches had resulted in an offer of employment.
The Arbitrator did not err in his finding in relation to the amount of the weekly payment made to the worker. He considered the information that was before the Authority in relation to the worker’s gross income for the purpose of weekly payments of compensation. The employer had certified in the ‘Section 141(2) Notice’ that Mr Li’s gross average weekly earnings were $450 per week. This was contradicted by later evidence from the employer’s accountant that disclosed Mr Li’s gross income was $304 per week for 38 hours. The Arbitrator accepted that the Authority was entitled to rely upon the earlier statement by the employer of average weekly earnings.
The Arbitrator also considered the impact of Mr Li’s immigration status on his ability to earn, and thus his entitlement to workers compensation weekly payments. A copy of Mr Li’s passport is attached to the Reply filed by the Authority in the proceedings before the Arbitrator. The passport shows that Mr Li was granted a temporary business visa (Sub Class 456) on 7 November 1995. This permitted him to remain in Australia for one month after his arrival on 30 November 1996. On 17 December 1996 he was granted a Class WA Bridging Visa without any condition restricting work. The visa is clearly marked ‘Conditions, Mig. Reg. Sched.8. NIL’ in his passport. This visa was stated to expire 28 days following notification of a primary, or review, decision on his application for a permanent visa. Advice from the Department of Immigration, Multicultural and Indigenous Affairs was that this decision was notified on 17 March 2000. Thus Mr Li was permitted to work in Australia from 17 December 1996 to 14 April 2000. This was the finding of the Arbitrator, and is supported by the evidence. However, the Arbitrator did not appear to take this finding into account in any adjustment of the employer’s liability to reimburse the Authority for payments of weekly compensation made to Mr Li on and from 14 April 2000.
The entitlement of Mr Li to weekly payment of workers compensation following 14 April 2000 is in issue. This entitlement does not turn on whether the Authority made relevant inquiries as to his immigration status, as it is a matter of the proper application of the statutory scheme for payment of workers compensation under the Workers Compensation Acts. Mr Li was not able to earn any income after that date and therefore the assessment of his lost earning capacity and entitlement to compensation must be nil (Villami v National Springs (1993) 9 NSWCCR 453).
If he is not entitled to payments of weekly compensation under the Workers Compensation Acts, it is not reasonable that the Authority make such payments and then seek to recover them from the employer pursuant to section 145 of the 1987 Act. It is incumbent on the Authority, at least, to determine whether a worker has actual and continuing permission to work, before making payments of compensation under the ULIS.
The Authority did not decline liability for weekly payments until 23 March 2001. The Arbitrator directed his findings in relation to this issue to the action of the Authority in making proper inquiries at the time of the worker’s claim. In my view this approach fails to properly consider the relative entitlements and liabilities of the parties in order that the appropriate determination, award or order, may be made under section 145 of the 1987 Act.
The Zanella Report Error
The Appellant, wrongly, submitted that the Arbitrator ‘excluded’ the report of Dino Zanella.
The Arbitrator admitted the report in evidence but determined to give it no weight because it was, firstly, not in accordance with Practice Direction No. 3 and, secondly, was not signed.
In my view the Arbitrator was entitled to accord the report no weight, and his Reasons for doing so are considered and appropriate. The fact that Mr Zanella was ‘on standby to give evidence’ is not relevant.
The Arbitrator did not err in giving no weight to the report of Dino Zanella.
The Section 354 of the 1998 Act Error
The Appellant submits that the Arbitrator did not come to his determination in accordance with section 354 of the 1998 Act.
Section 354 governs the ‘Procedure before [the] Commission’. It is not a provision that alters the application of the relevant substantive law to a dispute before the Commission. Nor does it require an Arbitrator to accept evidence that he or she otherwise considers not to be probative or relevant.
There is nothing before me that demonstrates the Arbitrator to have been in breach of his obligations under section 354 of the 1998 Act.
FINDINGS ON REVIEW
The Arbitrator has made a number of errors of law. However the decision of the Arbitrator should not be overturned unless the errors are such that, on review, a different decision would be made.
I have reviewed the whole of the evidence and submissions before the Arbitrator and on appeal. For the reasons set out here, and elsewhere, in this decision, make the following findings:
·On 15 September 1999 Bing Li injured his right thumb in the course of his employment as a sander/carpenter with Chen Gui Jin, formerly trading as A.C. Furniture.
·Mr Li’s employment was a substantial contributing factor to his injury.
·The injury suffered by Bing Li was not self-inflicted.
·The injury was a deep laceration of his right thumb.
·At the time of the injury the employer did not have a compulsory policy of workers compensation insurance for her employees.
·Mr Li made a claim for workers compensation on the employer on 29 September 1999.
·Mr Li made a claim on the ULIS on 7 December 1999.
·At the time of his injury the employer’s records show that Bing Li’s gross average weekly earnings were $304 per week.
·At the time of the injury Bing Li was a temporary resident of Australia with permission to work. This permission expired on 14 April 2000 and thereafter he was not entitled to compensation by way of weekly payments for loss of income.
·As a result of the injury Bing Li was totally incapacitated for work from 15 September 1999 to 14 March 2000.
·As a result of his injury Bing Li was partially incapacitated for work, not in suitable employment and entitled to compensation under the Workers Compensation Acts from 14 March 2000 to 14 April 2000.
·Bing Li incurred medical and related expenses as a result of his injury. Where it was reasonably necessary that these services be provided in relation to his injury, they must be met by the employer. I do not accept that the employer must accept the account of medical expenses, as set out in the Schedule to the Notice provided, at face value. Accounts and receipts to justify this expenditure must be provided.
·As a result of his injury Bing Li suffered a 45% permanent impairment of his right hand and is entitled to compensation for pain and suffering pursuant to section 67 of the 1987 Act. Having reviewed the medical evidence I find it persuasive as to the extent of the permanent impairment suffered by the worker and accept that the Agreement reached pursuant to section 66A of the 1987 Act, which provides for payment of $13,500 for 45% loss of use of the right thumb and $8,000 for pain and suffering, is the correct assessment of these entitlements.
In making this decision, pursuant to section 145 of the 1987 Act, I have considered the entitlements and liabilities of employers, workers, insurers and the Authority under the statutory workers compensation scheme set out in the Workers Compensation Acts. I also consider the following matters are relevant to the exercise of discretion in relation to the decision:
· The alleged overpayment of weekly payments of compensation to Bing Li, ($450 instead of $304 gross weekly earnings) based upon his claim to the ULIS, and the information provided to the Authority by the employer in relation to his average weekly earnings. It was reasonable for the Authority to rely upon the employer’s own statement of the worker’s weekly earnings and it is not persuasive for the employer in this appeal to seek to have her liability for payment of compensation at that rate reduced. Mr Li is entitled to payments of weekly compensation based on average weekly earnings for the relevant period of $450 per week.
· The conduct of the Authority in making payments to Bing Li after 14 April 2000, the date on which his permission to work in Australia ceased. It was incumbent on the Authority to determine whether the worker was lawfully permitted to work in Australia and to continue to be satisfied that he did so. The Authority had from December 1999 to make these inquiries and did not do so until March 2001. It is not reasonable for the Authority to seek reimbursement from the employer for payments of weekly compensation to Bing Li after his entitlement to work expired on 14 April 2000.
· The conduct of the Authority in the management of Bing Li’s claim on the ULIS. Mr Li was considered fit for ‘suitable duties’ on and from 15 March 2000. Following this the Authority sought confirmation from Mr Li that he was seeking suitable employment. There was significant delay by the Authority in taking steps to institute rehabilitation and injury management processes for Mr Li. Ultimately, however, I am not satisfied that its conduct of the claim was such that the liability of the employer to reimburse the Authority should be reduced. I am strengthened in this view by the fact that the Authority does not have the same obligations as an insurer in relation to work injury management under the Workers Compensation Acts.
Taking these factors into account the entitlements and liabilities of the parties should be adjusted. The result is that the Appellant is not liable to reimburse the Authority for the total amount set out in the ‘Notice to Reimburse’ issued pursuant to section 145(1) of the 1987 Act. The terms of the following orders reflect these findings.
DECISION
Pursuant to section 145 of the Workers Compensation Act 1987 I make the following orders:
1.The Arbitrator’s order ‘That the Application be dismissed’ is revoked.
2.Chen Gui Jin formerly t/as A.C. Furniture is liable to pay weekly compensation to Bing Li at the rate of $450 per week from 15 September 1999 to 14 April 2000.
3.Chen Gui Jin formerly t/as A.C. Furniture is liable to pay Bing Li’s section 60 of the Workers Compensation Act 1987 expenses on production of accounts or receipts.
4.Chen Gui Jin formerly t/as A.C. Furniture is liable for the payment of $13,500 for Bing Li’s claim under section 66 of the Workers Compensation Act 1987.
5.Chen Gui Jin formerly t/as A.C. Furniture is liable for the payment of $8,000 for Bing Li’s claim under section 67 of the Workers Compensation Act 1987.
6.Chen Gui Jin formerly t/as A.C. Furniture is ordered to reimburse the WorkCover Authority of NSW for the amount of compensation to which Bing Li is entitled, in accordance with this decision, plus disbursements as itemised in the Schedule to the ‘Notice to Reimburse’ issued on 8 July 2002.
7.The Arbitrator’s order ‘That the Applicant Employer pay the Respondent’s costs’ is confirmed.
COSTS OF THE APPEAL
The appeal has been partly successful and costs fall to be determined in accordance with section 345 of the 1998 Act. That section provides, relevantly, that:
345 Costs penalties where appeal unsuccessful
(1)On an appeal from the Commission constituted by an Arbitrator to the Commission constituted by a Presidential member:
(a) if the appellant is the claimant and is unsuccessful on the appeal, the Commission must not make an order for the payment of the appellant’s costs on the appeal by any other party to the appeal, or
(b) if the appellant is an insurer (other than a licensed insurer that maintains a statutory fund under the 1987 Act) and is unsuccessful on the appeal, the Commission may order the insurer to pay to the Authority for payment into the WorkCover Authority Fund an administration fee of $1,000 or such other amount as may be prescribed by the regulations.
(2)If the appellant in any such appeal is a licensed insurer that maintains a statutory fund under the 1987 Act and is unsuccessful on the appeal:
(a) the insurer’s costs on the appeal, and
(b)the costs of any other party to the appeal that the insurer is ordered to pay, are not to be paid out of the statutory fund.
(3)If an appeal concerns lump sum compensation, weekly payments of compensation or medical expenses compensation, the appellant is considered to be unsuccessful on the appeal unless the decision on appeal results in a change in favour of the appellant in the amount awarded or ordered to be paid in the decision appealed against of at least $5,000 (or such other amount as may be prescribed by the regulations) and at least 20% of the amount awarded or ordered to be paid.
(4)An administration fee that an insurer is ordered to pay is recoverable as a debt due to the Authority.
(5)The Registrar is to notify the Authority of an order to an insurer under this section to pay an administration fee.
The parties are urged to come to an agreement as to costs, taking the above provisions into consideration. In the absence of agreement, a further application may be made.
Dr Gabriel Fleming
Deputy President
19 March 2004
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF DR GABRIEL FLEMING, DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
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