City & Suburban Pty Ltd v Syrianos

[2006] NSWWCCPD 73

WORKERS COMPENSATION COMMISSION

DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR

CITATION:City & Suburban Pty Ltd v Syrianos [2006] NSWWCCPD 73

APPELLANT:  City & Suburban Pty Ltd

RESPONDENT:  Chris Syrianos

INSURER:Allianz Australia Workers Compensation (NSW) Ltd

FILE NUMBER:  WCC 13864-03

DATE OF ARBITRATOR’S DECISION:          18 February 2005

DATE OF APPEAL DECISION:  2 May 2006

SUBJECT MATTER OF DECISION: Leave to appeal; treatment of evidence; section 40 of the Workers Compensation Act 1987

PRESIDENTIAL MEMBER:  Acting Deputy President Robin Handley

HEARING:On the papers

REPRESENTATION:  Appellant: Sparke Helmore, Lawyers

Respondent: Steve Masselos & Co, Solicitors

ORDERS MADE ON APPEAL:  The decision of the Arbitrator is confirmed.

The Appellant, City & Suburban Pty Ltd, is to pay the costs of the Respondent, Mr Syrianos, in this appeal.

BACKGROUND TO THE APPEAL

1. On 21 March 2005, City & Suburban Pty Ltd (‘the Appellant’) sought leave in the Workers Compensation Commission (‘the Commission’) to bring an appeal against the decision of an arbitrator dated 18 February 2005. The Respondent to the Appeal is Chris Syrianos. The Appellant’s workers compensation insurer is Allianz Australia Workers Compensation (NSW) Ltd (‘Allianz’).

1. Mr Syrianos was born in Greece on 1 August 1947 and is aged 58. He has a dependent spouse. Mr Syrianos commenced employment with the Appellant as a painter on 4 November 1997. He states that he had a prior injury to his back in 1993, but claims that, on 22 December 1997, he injured his right shoulder and neck while moving heavy paint tins. Mr Syrianos attempted a return to work on 17 January 1998 but claims he was unable to perform his pre-injury work. He was paid weekly compensation until 17 April 2002 after which Allianz denied any further liability. He has not worked since. Mr Syrianos also claims to have aggravated, exacerbated or accelerated the degenerative condition of his back as a result of the nature and conditions of his employment between 4 November 1997 and January 1998.

1. On 26 August 2003, the Commission registered Mr Syrianos’ ‘Application to Resolve a Dispute’ in his respect of his claim for weekly compensation, for medical, hospital or related expenses, and for compensation for permanent impairment and pain and suffering. The Appellant’s ‘Reply’ was filed on 15 September 2003. On 25 March 2004, following teleconferences with the parties conducted by the Arbitrator, Mr Syrianos was examined by an Approved Medical Specialist (‘AMS’), Dr Brian Noll, Orthopaedic Surgeon. Dr Noll’s Medical Assessment Certificate (‘MAC’) was issued on 28 April 2004. A Medical Appeal Panel confirmed Dr Noll’s assessment on 13 September 2004.

1. The Arbitrator conducted several further teleconferences with the parties and, on 10 November 2004, conducted a conciliation conference. Conciliation having proved unsuccessful, the Arbitrator proceeded to conduct an arbitation hearing, which was concluded on 28 January 2005. There is no transcript of that hearing. The Arbitrator’s decision, dated 18 February 2005, is set out below.

THE DECISION UNDER REVIEW

1. The Certificate of Determination, dated 18 February 2005, records the Arbitrator’s orders as follows:

“1. Respondent pay the Applicant pursuant to section 66 of the Workers Compensation Act, 1987, the sum of $4,750, being the total sum payable pursuant to net percentages found by Dr Noll in his Medical Assessment Certificate, as follows:

In respect of the injury on 22 December 1997 –

• Permanent loss of efficient use of the right arm at or above the elbow, 2%, $1600

• Permanent Impairment of the Neck, 2%, $800.

In respect of the deemed date of injury 21 January 1998 –

• Permanent Impairment of the Neck, 1%, $400

• Permanent Impairment of the Back, 2%, $1200

• Permanent loss of efficient use of the right leg at or above the knee, 1%, $750.

2. Respondent pay the Applicant the following weekly payments (including dependant wife) pursuant to section 40 of the Workers Compensation Act, 1987:

1 April 2002 to 30 September 2002, $380.80

1 October 2002 to 31 March 2003, $386.30

1 April 2003 to 30 September 2003, $393.10

1 October 2003 to 31 March 2004, $400.80

1 April 2004 to 30 September 2004, $408.10

1 October 2004 to date, $415.60

Such weekly payments to continue in accordance with the provisions of the Act.

3. Respondent pay the Applicant’s medical expenses under section 60 of the Workers Compensation Act, 1987 on production of accounts or receipts.

4. Respondent pay the Applicant’s costs as assessed or agreed, on a complex basis.”

1. In his Statement of Reasons for Decision, the Arbitrator summarised the resolution of the issues in dispute as follows:

“Weekly Benefits Claim:
• The Applicant received the injuries arising out of or in the course of his employment with the Respondent.
• The Applicant’s employment was a substantial contributing factor to his injury.
• The Applicant was partially incapacitated for work as a result of his injuries from 18 April 2002.
• The Applicant’s weekly earnings, but for the injury, had he continued to be employed in the same or some comparable employment, are $600 per week.
• During the Applicant’s period of partial incapacity for work the average weekly amount he was earning or would be able to earn in some suitable employment after the injury was $nil.
• He did not seek suitable employment.
• The Applicant’s entitlement to weekly benefits should not be reduced.
• The Applicant is therefore entitled to weekly benefits for the period of partial incapacity for work from 18 April 2002 of $600.

Medical Expenses Claim:
• The Applicant’s medical and related expenses incurred as a result of treatment, services or assistance were reasonably necessary for the compensable injury.”

ISSUES IN DISPUTE

1. The Appellant states it has “no objection” to the orders made pursuant to section 66 of the Workers Compensation Act 1987 (‘the 1987 Act’). However, it contends the Arbitrator made errors of law in relation to his findings and his award of weekly benefits to Mr Syrianos. In particular, the Appellant submits the Arbitrator failed to properly apply sections 40 and 43A of the 1987 Act, and failed to properly consider the findings of the AMS and evidence admitted on behalf of the Appellant. The parties’ submissions on these issues are considered below.

ON THE PAPERS REVIEW

1. Section 354(6) of 1998 Act states:

“(6)If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”

1. Having regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submission by Mr Syrianos’ solicitors that the matter can be determined ‘on the papers’, the Appellant not having made a submission on this issue, 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. 

1. Neither party sought to adduce fresh evidence.

LEAVE

1. Before proceeding to deal with an appeal, the Commission must determine whether the threshold requirements for leave to appeal set out in section 352 of the 1998 Act are satisfied. There are two relevant requirements: subsections 352(2) and (4). Section 352(2) states:

“(2) The Commission is not to grant leave to appeal unless the amount of compensation at issue on the appeal is both:

(a) at least $5,000 (or such other amount as may be prescribed by the regulations), and

(b) at least 20% of the amount awarded in the decision appealed against.”

1. In the decision under appeal, I accept that the amount of weekly compensation at issue is at least $5,000 – the appellant states past benefits total $59,500 – and that the amount of compensation at issue exceeds 20% of the award made by the Arbitrator.

1. Section 352(4) states that “[a]n appeal can only be made within 28 days after the making of the decision appealed against”. The Arbitrator’s determination was made on 18 February 2005. The Commission’s file indicates the determination was sent to the Appellant’s solicitors by DX with a covering letter dated (Friday) 18 February 2005. The Appellant’s appeal was lodged on 21 March 2005, more than 28 days later. The Appellant’s solicitors claim they did not receive the determination until (Monday) 21 February 2005, and that because the appeal has been filed within 28 days of that date, it has been filed within time.

1. Rule 77(2) of the Workers Compensation Commission Rules 2003 (‘the Rules’) provides that a decision is made when the Commission issues the Certificate of Determination. Thus, in this case, where the determination was issued on 18 February 2005, the appeal had to be made by 18 March 2005. The appeal was lodged on 21 March 2005, and therefore outside the required time for lodging an appeal.

1. Rule 77(8) provides that a Presidential Member may extend the time for making an appeal where the Appellant demonstrates that exceptional circumstances exist, and that they would suffer a substantial injustice if the right of appeal were lost. The onus of proving exceptional circumstances rests with the Appellant.

1. The Rules do not set out the factors to be considered in the exercise of the discretion to extend the time for filing an appeal against the decision of an Arbitrator. However, this issue has often been the subject of judicial consideration. A leading case is Gallo v Dawson (1990) 93 ALR 479 where Justice McHugh set out a number of guiding principles. He emphasised that the discretion to extend time should only be exercised where strict compliance with the rules will lead to an injustice for the applicant. In so deciding, regard should be had to (i) the history of the proceedings, (ii) the conduct of the parties, (iii) the nature of the litigation, (iv) the consequences for the parties of the grant or refusal of the application for extension of time, (v) the prospects of the applicant succeeding if leave is granted, and (vi) the respondent’s right, after the expiry of the time for appealing, to rely upon the decision made. These principles have been applied in Commission proceedings: see, for example, Howell v Stringvale Pty Ltd [2004] NSW WCC PD 22, and Alexandru v State Rail Authority of NSW [2004] NSW WCC PD 54.

1. In the present case, the Appellant has made no specific submissions in relation to exceptional circumstances; instead claiming the appeal was filed within time. A consideration of the history of the proceedings, the conduct of the parties, and the nature of the litigation provide little assistance in determining how to exercise the discretion. As noted above, the Appellant submits the Arbitrator made errors of law in relation to the medical evidence and his application of section 40 of the 1987 Act. Having considered the parties’ submissions on the substantive issues and reviewed the Arbitrator’s decision for the purpose of this leave determination, I have concluded that while the Arbitrator’s Statement of Reasons for his decision contains a proper discussion of the medical evidence, his analysis and application of the law is inadequate. For this reason I consider it arguable that the Appellant would suffer an injustice if I did not extend the time for filing the appeal and undertake a review of those parts of the decision challenged by the Appellant, given, in particular, that the appeal was lodged only one business day late. I therefore grant an extension of time for the filing of the appeal up to and including 21 March 2005.

SUBMISSIONS, DISCUSSION AND FINDINGS

1. The role of the Presidential Member on appeal is to review the Arbitrator’s decision as a whole. The review is not a rehearing. In this case, the Appellant must demonstrate that the decision of the Arbitrator is affected by some legal, factual or discretionary error (Allesch v Maunz (2000) 203 CLR 172; The King Island Company Limited v Deery [2005] NSW WCC PD 1) in order to enliven the Presidential Member’s power to interfere with the Arbitrator’s decision pursuant to section 352(7) of the 1998 Act. Where the weight accorded to the evidence by the Arbitrator is challenged, Deputy President Fleming’s comment in Knight v Eyles Nominees Pty Ltd [2004] NSW WCC PD 73 at paragraph 40 should be borne in mind:

“Interference with an Arbitrator’s discretionary judgement as to the weight of evidence should only be done where it is manifestly obvious that the discretion has so miscarried that it has not been exercised fairly and lawfully.”

The Arbitrator’s exclusion of medical evidence

1. The Appellant submits the Arbitrator should not have excluded parts of the MAC on the basis that the AMS had received reports from more than one specialty. The Appellant refers to Rule 43A meaning, it would seem, clause 43A of the Workers Compensation Regulation 2003 (‘the 2003 Regulation’), and submits this had no application as clause 43A did not exist at the time of the referral to the AMS. Mr Syrianos’ solicitors point out that the restriction imposed is in relation to “medico-legal” reports – that is reports obtained by the parties from independent medical experts for the purpose of proving or disproving an entitlement under the 1987 Act - and does not apply to reports by treating doctors: State Transit Authority of NSW v Dadras [2004] NSW WCC PD 87, at paragraphs 30 to 31.

1. Regulation 43A took effect on 3 September 2004 and thus was not in effect at the time that the Arbitrator referred the matter to the AMS on 10 February 2004. The Arbitrator’s Statement of Reasons records that he did not admit the reports of Dr J Goldberg and Dr R Clark, sought to be relied on by the Applicant, both of whom appear to have been treating doctors, or of Dr Kuo and Dr Marsh, sought to be relied on the Respondent, and who appear to have provided ‘medico-legal reports’ to the Respondent. In the section of the MAC on the history of the incident and treatment, the AMS refers to both Dr Goldberg and Dr Clark, and he refers to Dr Goldberg, Dr Clark and Dr Kuo in summarising Mr Syrianos’ injuries and diagnoses. The AMS also comments on the opinions expressed in the various medical reports with which he had been provided, including those of Drs Goldberg, Clark, Kuo and Marsh.

1. At paragraph 35 of his Statement of Reasons, the Arbitrator states that the MAC is a report to the Commission and is in evidence without leave. However:

“It does not import the contents of medical reports referred to by the AMS which would otherwise be inadmissible. That would be contrary to the Regulations, and be an abuse of the AMS referral process.”

1. I interpret this as meaning that while the Arbitrator recognised that the MAC formed part of the evidence before the Commission, those reports that were provided to the Arbitrator but were inconsistent with clause 43A of the 2003 Regulation should not be separately admitted in the arbitration. In my view, both parties were affected by the refusal of the Arbitrator to admit these reports, and particularly the Applicant, where neither of the reports excluded appears to have been a medico-legal report. I reject the Appellant’s submission that the Arbitrator denied procedural fairness and natural justice to the Appellant. While the content of those excluded reports was obviously taken into account by the AMS in making his assessment of permanent impairment, for the purpose of assessing capacity to work in the arbitration hearing, reports inconsistent with clause 43A were not admissible. The Appellant was, of course, still able to rely on a report in the particular specialty other than those excluded. Thus, I reject this ground of appeal.

Application of section 40

1. The Appellant submits there is an inconsistency in the Arbitrator’s finding, on the one hand, that Mr Syrianos was only partially incapacitated for work but, on the other, that his earning capacity was $nil. The Appellant submits that “[i]t is clear from the evidence given by the worker and from the medical evidence available to the Arbitrator that the worker was able to earn something on the open labour market and his capacity to earn could not be $nil”. The Appellant also submits the Arbitrator erred by making no deduction for the fact that most of his impairment was not work-related. The Appellant notes the Arbitrator stated incorrectly that Mr Syrianos commenced employment with the Appellant in 1993 when in fact he did not commence until 1997: this means discussion of the prior injury in 1993 should have been more comprehensive.

1. Mr Syrianos’ solicitors acknowledge the Arbitrator made an error of fact by stating Mr Syrianos commenced his employment with the Appellant in 1993. However, they contend the error is not relevant because no claim was made to the period before 1997. Nevertheless, Mr Syrianos’ solicitors point to an error of fact made by the Arbitrator when he found, at paragraph 37, that Mr Syrianos’ probable weekly earnings but for the injury had he continued in the same or some comparable employment were $600. At paragraph 16, the Arbitrator had previously found Mr Syrianos’ pre-injury earnings were $650 per week. Mr Syrianos’ solicitors state that because this error did not affect the outcome, they had not challenged this.

1. Mr Syrianos’ solicitors note that the Arbitrator specifically commented on the credibility of Mr Syrianos, noting that his evidence was “informative” and “truthful” despite “rigorous cross-examination”. I note the Arbitrator’s comment on Mr Syrianos’ truthfulness, at paragraph 30 of the Statement of Reasons, was that Mr Syrianos was “generally a truthful, if sometimes dismissive witness”.

1. With regard to the Arbitrator’s application of section 40, Mr Syrianos’ solicitors appear to suggest that having found Mr Syrianos has a partial incapacity for work on his admission that he was capable of working two hours daily performing light cleaning work, the Arbitrator misdirected himself on the issue of Mr Syrianos’ ability to earn in suitable employment. Mr Syrianos’ solicitors submit there were two alternative approaches open to the Arbitrator. Either, first, Mr Syrianos is unable to obtain or secure any suitable employment on the open labour market in which case his earning capacity would be nil and he should be treated as totally incapacitated; or, second, if he is considered capable of finding work, then his earnings as a cleaner would be no greater than $15 to $16 per hour so that the most he could earn per week (on the basis of two hours per day, five days a week) would be $150 to $160. The difference between S600 and $160 is $440, an amount exceeding the statutory maximum, so that in respect of both alternatives Mr Syrianos would be entitled to the maximum statutory amount under section 40.

1. With regard to exercise of the discretion in section 40(1), Mr Syrianos’ solicitors note the Arbitrator found, at paragraph 37 of the Statement of Reasons, that Mr Syranios’ entitlement should not be reduced. The Arbitrator made it clear that he did not consider a reduction appropriate. Even though the incident in December 1997 “resulted in a relatively small disability by itself ... it was the final straw so far as the worker’s employability was concerned ... the additional disability which led to his overall incapacity”. Thus, Mr Syrianos’ solicitors submit the “Arbitrator made no error by considering the worker’s incapacity in this way”.

1. As noted above, the Arbitrator’s Statement of Reasons lacks adequate analysis of the law and its application. While it is reasonably clear that the Arbitrator had in mind the approach to section 40 prescribed by the NSW Court of Appeal in Mitchell v Central West Health Service (1997) 14 NSWCCR 527 (‘Mitchell’) at 529, there is no specific mention of the approach and, in particular, there is no analysis of the facts by reference to the definition of “suitable employment” in section 43A. Thus, in my view, the Arbitrator made an error of law by failing to provide adequate reasons for his decision in terms of his obligation under section 294(2) of the 1998 Act and Rule 73 of the Workers Compensation Commission Rules 2003.

1. Having so decided, should the Arbitrator’s decision in relation to Mr Syrianos’ entitlement under section 40 be set aside? In Mitchell, at 529, the Court of Appeal prescribed a five step approach. The first step is to “determine the weekly amount the worker would probably have been earning if uninjured (section 40(2)(a))”. In Mr Syrianos’ case, his evidence indicates that was $650 rather than the $600 found by the Arbitrator.

1. The second step is to determine “the average weekly amount that the worker is earning, or would be able to earn in some suitable employment from time to time after the injury” (section 40(2)(b)). Section 40(3) provides that the determination of this amount is subject to the worker’s ability to earn in the general labour marker reasonably accessible to the worker, and having regard to suitable employment for the worker within the meaning of section 43A. Section 43A defines “suitable employment” as meaning employment for which the worker is suited having regard to such factors as the nature of the worker’s incapacity and pre-injury employment, his or her age, education, skills and work experience and other relevant circumstances.

1. In Mr Syrianos’ case, the Arbitrator was satisfied on the medical evidence and that of Mr Syrianos that he “could undertake 2 hours work a day in light cleaning or sedentary work, with restrictions” (Statement of Reasons paragraph 32). The question then posed by the Arbitrator was whether, given Mr Syrianos’ circumstances, he was likely to obtain and keep that kind of work. The Arbitrator said he was “not satisfied that a man of 57, in the medical condition of Mr Syrianos, could, or is likely to obtain or secure suitable work such as cleaning, for such short hours, or with the restrictions placed on him by his doctors” (paragraph 32). In my view, it was reasonable for the Arbitrator to make such a finding based on the evidence before him, and there is no basis for my interfering with this finding. Thus, in my view, it was open to the Arbitrator to find that Mr Syrianos’ ability to earn in some suitable employment after the injury was nil.

1. The third step prescribed by Mitchell is to subtract the figure derived from step two from that derived from step one. In this case, this gives a figure of $650.

1. The fourth step is to decide whether and to what extent the reduction calculated under step three bears “such relation to the amount of that reduction as may appear proper in the circumstances of the case” (section 40(1)). This is the discretionary exercise the Arbitrator must undertake. While acknowledging that Mr Syrianos had not sought suitable employment since ceasing work, the Arbitrator found Mr Syrianos’ “entitlement to weekly benefits should not be reduced” (Statement of Reasons paragraph 37). I note the Arbitrator preferred Mr Syrianos’ medical evidence to that of the Appellant, citing the opinions of Drs Mahony, Berry and Costa, “all of whom ... link the aggravation of degenerative conditions and incapacity to the injuries in 1997 and 1998” (paragraph 31). The Arbitrator also noted that “after Mr Syrianos suffered his injury in 1993, he returned to full-time work as a painter and continued that until his injuries in 1997/1998” (paragraph 33). Thus, in my view, there was evidence to support the Arbitrator’s determination on this issue – it was just not adequately explained.

1. The fifth step required the Arbitrator to make an award in the amount arrived at in step four. Since the Arbitrator’s decision in step four not to make a reduction can be supported on the evidence, the award should be of $650 per week, subject to the statutory maximum for a worker with a dependent spouse. Because $650 per week is below the statutory maximum, the award should be that of the statutory maximum for a worker with a dependent spouse. Thus, if I were to set aside the Arbitrator’s decision in relation to Mr Syrianos’ entitlement under section 40 because of an error of law, the decision I would substitute would be the same as the award made by the Arbitrator. For this reason, I confirm the award in relation to section 40, noting the Appellant accepts the Arbitrator’s award in relation to permanent impairment under section 66 of the 1987 Act and makes no submission challenging the award for medical expenses under section 60 of the 1987 Act.

DECISION

1. The Arbitrator’s decision is confirmed.

COSTS

1. Although I found an error of law by the Arbitrator, I have rejected the Appellant’s submissions with regard to the Arbitrator’s treatment of the evidence and the error of law has not led to my changing the Arbitrator’s award. In these circumstances, in my view, it is appropriate to order the Appellant to pay Mr Syrianos’ costs in this appeal.

Robin Handley

Acting Deputy President  

2 May 2006

I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF ROBIN HANDLEY, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.

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