Colan Products Pty Ltd v Kale
[2006] NSWWCCPD 69
•28 April 2006
WORKERS COMPENSATION COMMISSION
APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:Colan Products Pty Ltd v Kale [2006] NSWWCCPD 69
APPELLANT: Colan Products Pty Ltd
RESPONDENT: Metin Kale
INSURER:Employers Mutual Indemnity (Workers Compensation) Limited
FILE NUMBER: WCC8327-04
DATE OF ARBITRATOR’S DECISION: 2 March 2005
DATE OF APPEAL DECISION: 28 April 2006
SUBJECT MATTER OF DECISION: Adequacy of evidence for section 40 of the Workers Compensation Act 1987 Award; adequacy of reasons.
PRESIDENTIAL MEMBER: Acting Deputy President Deborah Moore
HEARING:On the papers
REPRESENTATION: Appellant: Church & Grace, Solicitors
Respondent: Dennis & Co, Solicitors
ORDERS MADE ON APPEAL: 1. The decision of the Arbitrator dated 2
March 2005 is revoked.
2.The matter is remitted to another Arbitrator for rehearing and re-determination of all issues.
3. No order as to costs of the appeal.
BACKGROUND TO THE APPEAL
Metin Kale (‘Mr Kale) was employed by Colan Products Pty Ltd (‘Colan’), weavers of industrial fabrics, as a process worker. He claimed that due to the nature and conditions of his employment, and as a result of an incident on 27 October 2000 lifting a wooden shaft, he suffered an injury to his back and legs.
After a period of time off work, Mr Kale resumed selected duties and remained at work with Colan until February 2002 when his employment was terminated.
He was paid weekly compensation by Colan’s insurer, Employers Mutual Indemnity (Workers Compensation) Limited (‘EMI’) during all periods of incapacity up until 11 February 2003.
Mr Kale brought proceedings before the former Compensation Court being matter number 8672/01. There are no details as to the nature of those proceedings however, on 27 June 2003, Terms of Settlement were signed between the parties in respect of claims brought by Mr Kale pursuant to the provisions of sections 60, 66 and 67 of the Workers Compensation Act 1987 (‘the 1987 Act’).
Mr Kale received $6,000.00 in respect of 10% permanent impairment of his back, $5,625.00 in respect of 7.5% permanent loss of efficient use of his left leg at or above the knee pursuant to section 66, and $3,375.00 pursuant to section 67. He received section 60 expenses up to $3,500.00 on production of accounts or receipts. Those Terms of Settlement also reflect an award in favour of Colan in respect of “… the claim for the right leg.”
On 26 May 2004, Mr Kale lodged an ‘Application to Resolve a Dispute’ in the Commission seeking weekly benefits compensation from 30 January 2003. He claimed one child as dependant.
On 16 June 2004 Colan filed a Reply disputing all aspects of Mr Kale’s claim including ‘injury’ but in particular, whether or not he was incapacitated for work.
The matter was listed for conciliation/arbitration hearing on 6 October 2004. A ‘Certificate of Determination’ with an accompanying ‘Statement of Reasons’ was not issued until 2 March 2005. The Arbitrator’s Determination was as follows:
“1.The Respondent pay the Applicant weekly compensation at the rate of $482.65 from 11 February 2003 to date under section 40 of the Workers Compensation Act 1987. Such weekly payments to continue in accordance with the provisions of the Act.
2.The Respondent pay the Applicant’s costs as agreed or assessed.”
On 30 March 2005 Colan filed an ‘Appeal Against Decision of Arbitrator’. Colan cites seven grounds of appeal, but they may be summarised as follows:
1.The Arbitrator erred in law in awarding Mr Kale more than the maximum statutory rate of weekly compensation applicable to a worker with one dependant child.
2.The Arbitrator’s “acceptance” of the “medical case” advanced by Mr Kale was against the weight of the evidence.
3.The Arbitrator failed to follow the ‘five step’ rule enunciated in Mitchell v Central West Health Service (1997) 14NSW CCR 527 (‘Mitchell’s case’) in calculating the section 40 award.
4.The Arbitrator’s reasons for his decision were inadequate.
5.The Arbitrator erred in law by making adverse comments on Colan’s failure to cross examine Mr Kale particularly in circumstances when a transcript of the arbitration hearing was not available.
On 26 May 2005, Mr Kale filed a ‘Notice of Opposition to Appeal’. In essence, Mr Kale submits that any error as to the Arbitrator’s calculation of the section 40 award can be corrected “under the ‘slip rule’” and that the Arbitrator’s findings and reasons were open to him on the evidence before him.
Brief submissions in reply to Mr Kale’s submissions were filed by Colan on 18 May 2005.
ON THE PAPERS REVIEW
Mr Kale submits that the appeal is suitable for a determination ‘on the papers’. Colan submits that there should be an oral hearing. Colan states that on 16 March 2005, it was advised by the Commission that there was no transcript of the arbitration hearing due to a “technological difficulty”, and that for this reason alone, the Arbitrator’s award in favour of Mr Kale should be set aside and the matter referred to another Arbitrator so that a sound recording of the proceedings might then be available.
Colan submits that “in the event that such a submission is unsuccessful, it is submitted that it would be appropriate to conduct an oral hearing of this appeal” and that “… there should be an oral hearing so that the parties can make submissions in response to the written submissions of the other party.”
Whilst there is no transcript of the arbitration hearing, it is noted that no oral evidence was given. My task on appeal is concerned with claimed error, of law, fact and/or discretion as may be disclosed in the Arbitrator’s ‘Certificate of Determination’ and ‘Statement of Reasons’. Colan’s complaint as to the lack of a transcript may have some bearing on the outcome of its appeal, but insofar as the issue as to whether or not the appeal can be determined ‘on the papers’ is concerned, I am satisfied that it can. Having carefully read the Arbitrator’s ‘Statement of Reasons’, all the evidence before him, including Colan’s written submissions to the Arbitrator and both parties’ submissions on appeal, I consider that I have sufficient information within the meaning of section 354 of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’) and in accordance with Practice Direction 1 to proceed ‘on the papers’, and that this is the appropriate course in the circumstances.
LEAVE TO APPEAL
The amount at issue in the proceedings satisfies the requirements of section 352(2) of the 1998 Act. The appeal was filed in time. Leave to appeal is granted.
SUBMISSIONS, EVIDENCE AND FINDINGS
The Section 40 Calculation Error
Colan correctly submits that the Arbitrator’s award of $482.65 pursuant to section 40 of the 1987 Act exceeds the statutory maximum weekly benefit available to a worker with one dependant child as prescribed by section 37 of that Act. As at 11 February 2003, this was $363.30, increasing to $369.60 on 1 April 2003, to $376.90 on 1 October 2003, to $383.80 on 1 April 2004, and to $390.80 on 1 October 2004.
Mr Kale had clearly been in receipt of weekly payments in excess of 26 weeks. His entitlement to compensation pursuant to section 40(5) of the 1987 Act cannot exceed the statutory rates, as adjusted, prescribed by section 37 as set out in the preceding paragraph even if, as the Arbitrator determined, the difference between his probable earnings and ability to earn was greater than these amounts.
There has been a clear error of law by the Arbitrator with respect to his calculation of the section 40 award. Mr Kale in his submissions suggests that this error could be corrected “… under the ‘slip rule’ rather than the matter being redetermined …”
Colan submits that the ‘slip rule’ has no application in the Commission because of the operation of section 350(1) of the 1998 Act. That section provides that “Except as otherwise provided by this Act, a decision of the Commission under the Workers Compensation Act is final and binding on the parties and is not subject to appeal or review.”
‘Obvious errors’ in the calculation of weekly benefits compensation can be referred to the Registrar who may correct the error pursuant to the provisions of section 294 of the 1998 Act where the error is “a factual error that is apparent on the face of the document …” and does not relate “… to the basis upon which the substantive decision … was made, nor to the substance of any such decision.” (See Practice Direction 4).
In the present case, other issues on appeal have been raised by Colan in relation to the Arbitrator’s award which go to the substance and fairness of his decision, such that it was appropriate for Colan to proceed by way of appeal to a Presidential Member on this aspect of the Arbitrator’s determination.
The ‘Weight of Evidence’ Error
Colan submits that there are two aspects of the Arbitrator’s determination where his findings were against the weight of the evidence. Firstly, Colan submits that:
“The Arbitrator erred in fact in accepting the medical case advanced on behalf of the Respondent/Worker against that advanced on behalf of the Applicant/Employer when such an acceptance was against the evidence and the weight of the evidence.”
Secondly, Colan submits that “The Arbitrator erred in law in concluding that the after effects of the Respondent/Worker’s injury had not ceased, such finding being against the medical evidence and the weight of the medical evidence.”
As to the first point, in paragraph 10 of the ‘Statement of Reasons’, the Arbitrator notes that “the documents attached to the Application and Reply were in evidence before the Commission …” He then goes on to list additional material admitted into evidence for both parties at the hearing.
At paragraph 16 of the ‘Statement of Reasons’, in summarising “The Applicant’s Medical Evidence” the Arbitrator stated: “The Applicant relies substantially on the evidence of Dr P [sic – G] Mahony, whose reports start in December 2001.” He then refers to a report from Dr Attia-Soliman dated 23 February 2002, reports from Dr Ridalgh dated 4 June 2001 and 8 May 2003, an MRI Scan dated 14 November 2001 and a “whole body bone study dated 20 September 2001.”
At paragraph 17, under the heading “The Respondent’s Medical Evidence”, the Arbitrator stated: “The medical evidence is not repeated here in full as it is amply set out in the Respondent’s written submissions.”
At paragraph 18, he then commenced to summarise the parties’ submissions.
At paragraph 19, under the heading “Findings and Reasons”, he stated:
“I find the Applicant’s evidence to be acceptable as to the facts of the incident in October 2000, the injury, physical complaints, his attempts to get work, his employment as detailed in his Statement and his complaints of back pain and in his legs as at the date of his Statement on 1 April 2004.
On the medical evidence, I accept that the Respondent’s evidence suggests that Mr Kale is capable of fulltime work, subject to limitations of lifting and twisting. However, the Applicant’s medical evidence, both Dr Mahony, and Dr Ridalgh, as well as the MRI results, justify a finding that the Applicant suffered, and continues to suffer, from persistent back and leg pain, requiring ongoing medication, consistent with the Applicant’s complaints. I am satisfied therefore that the Applicant has established its case on the factual and medical evidence put forward. It is clear that especially Dr Ridalgh (as at May 2003), and Dr Mahony (September 2003 and March 2004) regard Mr Kale’s medical condition as permanent at this stage. Dr Mahony gives a certificate to that effect up to 7 June 2004, nearly four years after the injury. I am satisfied that the Applicant’s permanent impairments, symptoms and continuing complaints of back and leg problems are properly supported by his medical evidence and I accept that evidence in preference to the medical evidence put forward by the Respondent. It must be said that the Respondent’s medical evidence is at considerable variance from the Applicant’s evidence, however I am satisfied that I can prefer the medical evidence for the Applicant.”
Colan’s medical evidence was extensive. In summarising the parties’ submissions at paragraph 18, the Arbitrator makes very brief reference to reports from Doctors Barrett, Preston, Matheson and Hughes only. Colan relied upon a CT Scan conducted by Dr John Korber on 12 December 2000, which reported normal appearance at the L3/4, L4/5 and L5/S1 discs with early osteoarthritic changes in the apophyseal joints at L5/S1 only. Dr S O’Reilly reported on 13 September 2001 that he considered Mr Kale suffered “… a musculo-ligamentous sprain …” in the incident on 27 October 2000 and that he was fit for his normal work. Dr Ian Barrett, Orthopaedic Surgeon, reported on 27 July 2001 that he thought Mr Kale sustained “… a musculoligamentous injury to his back” and should be fit to resume his previous work “as a weaver/labourer.” In his report of 26 August 2004, Dr Barrett’s opinion did not change but he noted that “the prognosis in general is guarded. His back pain has become protracted. His motivation to return to the workforce appears to be poor.”
Dr Sally Preston, physician, reported on 10 January 2002, 24 September 2002 and 26 July 2004 and considered that Mr Kale had a degenerative back condition and that he “may be able to return to work as a process worker. Depending on symptoms, it would be prudent for him to avoid heavy lifting or repetitive bending.” In her report of 26 July 2004, she noted “no particular injury has been identified and it is noted that he has fairly diffuse low thoracic and lumbar back pain”.
A report from Dr Manohar dated 20 December 2000, one of Mr Kale’s treating doctors, was included in Colan’s Reply. Dr Manohar opined that Mr Kale had suffered a “strain of the thoracic and lumbar interspinous ligaments …”
Dr E Price reported on 1 May 2001 that he had seen Mr Kale on behalf of Colan for “… injury management consultation and report.” He concluded that “from my clinical examination today, there is no reason why these minor soft tissue discomforts he is complaining of should not settle …”
Dr Paul Miniter, Orthopaedic Surgeon, reported on 29 October 2002 that his diagnosis was of “chronic lower back pain without specific cause … there are a number of non-organic signs present” unrelated to his employment with Colan. Dr Matheson, Neurosurgeon, reported on 26 July 2004 that, “I am seeing him [Mr Kale] some time after the event. He may well have had a back strain on lifting but I cannot see that there has been any persisting problem since… there is considerable exaggeration of symptoms here …”
As to Mr Kale’s medical evidence, this was summarised by the Arbitrator at paragraph 16 of the ‘Statement of Reasons’. He stated:
“A medical certificate from [Dr Mahony] dated 15 March 2004 states that the Applicant was unfit for work to 7 June 2004, which would then be some 2 years and 9 months after injury in October 2000. His report dated 25 June 2003 … concluded that Mr Kale was at that time unfit for work but ‘fit for work not involving significant bending or lifting, 4 hours per day, 5 days a week … I would not suggest that he return to full duties as a process worker and would advise him to be re-trained in other areas consistent with his training, education and experience. In his report dated 17 September 2003, Dr Mahony makes similar findings …”
The Arbitrator then noted:
“Dr Attia-Soliman had found Mr Kale to be depressed in his report of 23 February 2002. Dr Ridalgh was given a history in June 2001 that Mr Kale was ‘able to stand for three or four hours and sit for one hour’. His prognosis … is ‘guarded’ and notes degenerative changes in the lower lumbar back … In May 2003, nearly three years after the injury, Dr Ridalgh records … his diagnosis then was a strain of the thoracic and lumbar spines … [and] that Mr Kale ‘continues to be disabled with his spine’.”
The Arbitrator was clearly entitled to select a preference for one medical opinion over the other, provided that he gave adequate reasons for his decision (and that aspect of the appeal I will deal with later) and that the medical opinion accepted was capable of supporting the finding.
In the present case, the parties had agreed in June 2003 that Mr Kale suffered a 10% permanent impairment of his back and a 7.5% permanent loss of use of his left leg. The Arbitrator was entitled to find on the evidence before him that “… the Applicant’s permanent impairments, symptoms and continuing complaints of back and leg problems are properly supported by his medical evidence …”, notwithstanding the clearly contradictory opinion of Dr Mahony as to Mr Kale’s capacity for work. The weight of evidence as to the degree of the impairment found and its impact on Mr Kale’s capacity for work were different issues to which Colan’s evidence was particularly relevant and I will deal with that aspect of the appeal shortly.
As to Colan’s second point, again, given the parties’ agreement as to Mr Kale’s “permanent” impairments, it was clearly open to the Arbitrator to find that “the after effects” of Mr Kale’s injury had not ceased, despite some of Colan’s medical evidence to the contrary.
The weight of the medical evidence suggested that Mr Kale suffered some form of back strain or sprain in the incident of 27 October 2000. Whilst the Arbitrator makes no specific finding as to the nature of Mr Kale’s injury, the parties had determined that, whatever it was, it resulted in a 10% permanent impairment of the back in June 2003.
In summary, the medical evidence advanced by Mr Kale was sufficient to justify a finding of ‘injury’ consequent upon the incident on 27 October 2000. It was also sufficient to establish ‘incapacity’.
What was most relevant to these proceedings was the impact of those assessments on Mr Kale’s capacity for work.
The Section 40 Award and Mitchell’s Case
As to Mr Kale’s entitlement to weekly payments, at paragraph 19 the Arbitrator stated:
“There is evidence that the Applicant has sought other work, and has attempted to do more work than the work he now does with Irsan Hair Design. I am satisfied that the Applicant has made proper attempts to find alternative work, and that alternative suitable employment in the general market place is not reasonably accessible to him in this case. I am satisfied that the work he does, approximately six hours a week, is what he is capable of earning, or would be able to earn in some suitable employment at this time. I assess that sum at $100.00 per week. The Respondent’s search on mycareer.com.au website is not a proper method to assess … simply because 52 jobs are shown.
I make no deduction on this ground [section 40] or exercise my discretion to deduct a sum under the section. There is satisfactory evidence from the Applicant on section 40(2)(b) of the Act, as stated above.
I do not accept the Respondent’s submission that the Applicant is capable of earning the agreed comparable earnings sum of $582.65 per week.”
It is clear law as set out in Mitchell’s case that in determining any award under section 40 of the 1987 Act, a ‘five-step’ process should be followed. This process was properly summarised in Colan’s submissions as follows:
“(a)Determine the weekly amount which the worker would have been earning but for injury in the same or some similar employment.
(b)Determine the amount the worker is earning or would be able to earn in some suitable employment.
(c) Subtract figure (b) from figure (a).
(d)Decide under s40(1) whether and to what extent the reduction so calculated appears proper in the circumstances of the case and exercise that discretion accordingly.
(e)Make an award in the amount arrived at by step (d).”
The parties agreed that Mr Kale’s probable earnings but for injury, were $582.65 per week. In his Application, Mr Kale included a letter from Irsan Hair Design dated 11 February 2004 which ‘certified’ that Mr Kale had worked “… on a casual on-call basis since 24 January 2004” earning “… maximum $100.00 per week.”
In his statement, Mr Kale asserted that he commenced occasional work as a hairdresser on 24 October 2003 and continued to work “… on a casual basis up to six or seven hours on Saturdays only as and when required” earning only $120.00 per fortnight.
No evidence was referred to by the Arbitrator in support of his findings that “I am satisfied that the Applicant has made proper attempts to find alternative work, and that alternative suitable employment in the general market place is not reasonably accessible to him in this case.” The evidence from Colan that 52 hairdressing jobs were available on a particular date, whilst not determinative, certainly suggested that such work was available and accessible.
A number of medical reports made reference to Mr Kale’s lack of motivation to return to work. In September 2001 when Mr Kale was still working at Colan on light duties, Dr O’Reilly in his report of 13 September 2001 noted that “… he takes up to three days off each week … he did not express any particular motivation to upgrade to normal duties.” He also noted concerns expressed by Colan that “… Mr Kale maybe working elsewhere.”
Dr Preston in her report of 24 September 2002 concluded that “He could certainly return to work as a hairdresser.” She noted Mr Kale had worked as a hairdresser both in Turkey and initially in Australia. Dr Miniter in his report of 29 October 2002 stated:
“I asked him today whether he was concerned at the prospect of not returning to work in his previous capacity. He told me that his wife worked and that it was unlikely to cause him long-term difficulties if he did not work, or ever return to work in any gainful capacity”.
Dr Matheson in his report of 26 July 2004 noted that “he tried to work as a hairdresser for which he was trained and said that was too difficult for him. He had tried a couple of other small jobs but basically seems to have abandoned work.” There was no other evidence as to these “small jobs”.
In her report of 27 July 2004, Dr Preston noted “Mr Kale said he has not worked since his last review in September 2002 … he is currently seeking employment but has not been able to obtain employment thus far. He denies any other work …” This is clearly inconsistent with Mr Kale’s statement and Dr Matheson’s report.
Dr Barrett saw Mr Kale again on 25 August 2004 and recorded in his report of 26 August 2004 “… he has been able to obtain a limited amount of hairdressing work … four hour or eight hour shifts approximately once a fortnight for the last 12 months. He volunteered the fact that he would be able to work more if the work was available.”
No reference is made by the Arbitrator to any of this material which has considerable bearing not only as to what Mr Kale would be able to earn in a labour market reasonably accessible to him but also on the exercise of the Arbitrator’s discretion as to whether any reduction under section 40 of the 1987 Act was appropriate, particularly in circumstances where much of the medical evidence suggested that Mr Kale was exaggerating his complaints and lacked motivation to return to work.
Similarly, there is simply no discernible evidence in support of the Arbitrator’s finding that Mr Kale “has attempted to do more than the work he now does …” nor in relation to his finding that Mr Kale had “… considerable limitations of age, education, skills and communication for re-training in other occupations.”
Whilst the Arbitrator has in general terms complied with the requirements of Mitchell’s case in his determination, he has failed to identify the evidence upon which he based his findings or declined to exercise his discretion. As Hodgson JA said in NSW Ambulance Service v Daniel [2000] 19 NSWCCR 697 at 718:
“… The matters actually referred to by the trial Judge do not amount to evidence capable of supporting the findings. The Trial Judge may have taken into account the matters which he did not refer to, but this court is left to speculate whether or not he did, and if so, how he took them into account. In my opinion, if a Judge’s reasons show that he or she made a finding of fact relying exclusively on material that could not as a matter of law support that finding, then, although the reasons maybe adequate, they will disclose an error of law.”
In this case, the Arbitrator has erred in law in two respects; firstly, by failing to disclose the evidentiary basis for his finding as to Mr Kale’s capacity for work and secondly, the weight of evidence as to any economic incapacity did not support his findings. Having apparently accepted the evidence of Dr Mahony in his primary determination, the Arbitrator appears to have ignored Dr Mahony’s opinion that Mr Kale was capable of 20 hours of work per week as at June 2003. His findings of fact on this issue were unsupported by probative material.
The ‘Adequacy of Reasons’ Error
I have dealt with this issue to some extent in the preceding paragraphs. It must be remembered that proceedings in the Commission are conducted with as little formality and technicality as the proper consideration of the matter permits. As Deputy President Fleming said in Mayne Health Group v Sandford [2002] NSWWCC PD6 “… the content of Statements of Reasons for decision reflect this process and should not on review be ‘construed minutely and finely with an eye keenly attuned to the perception of error …’”
Nevertheless, the Arbitrator’s reasons must be capable of unveiling clearly to the parties the grounds upon which a determination was made.
Whilst the Arbitrator was entitled to find on the evidence before him that Mr Kale’s “permanent impairments, symptoms and continuing complaints of back and leg problems are properly supported by his medical evidence and I accept that evidence in preference to the medical evidence put forward by the Respondent” he should have said why, rather than simply averting to the fact that “… the Respondent’s medical evidence is at considerable variance from the Applicant’s evidence …”
Of particular relevance to this claim however is the Arbitrator’s determination as to ‘incapacity’ in his section 40 award. As I said earlier, not only were his findings unsupported by probative evidence, no reasons were given for such findings, for example, that “I am satisfied that the work he does … is what he is capable of earning”.
As Mahoney JA said in Soulemezis v Dudley (Holdings) Pty Limited (1987) 10 NSWLR 247:
“A judge is not required to make a finding in respect of every fact leading to the final conclusion of fact … Nevertheless, a judge must distinguish between the essentials and the peripherals … Reasons are necessary as an incident to a judicial decision to provide a sufficient explanation as to why an order is made. The Judge is to apprise the parties of the broad outline and constituent facts of the reasoning upon which he or she has acted …”
Given the totality of the evidence as to Mr Kale’s capacity for work, the parties would be hard pressed to find in the Arbitrator’s decision a “sufficient explanation” as to why he determined that Mr Kale was only able to work “approximately six hours per week.” The Arbitrator’s reasons on this issue in particular are inadequate and as such, constitute an error of law.
The ‘Failure to Cross-Examine’ Error
As has been noted, no transcript of the proceedings is available. At paragraph 9 of the ‘Statement of Reasons’ the Arbitrator stated “No oral evidence was given. No cross-examination was undertaken.”
At paragraph 18 of the ‘Statement of Reasons’ wherein the Arbitrator summarised Mr Kale’s solicitor’s submissions, he stated “I am also invited to accept the Applicant as a truthful witness. In this respect, I note that cross examination of the Applicant, particularly as to attempts to get work, and fitness for work, did not occur.”
Colan submits that:
“The Arbitrator erred in law and in fact by indicating that it was significant that the Applicant/Employer had not sought leave to cross examine the Respondent/Worker at the hearing in circumstances where the Applicant/Employer had put the Respondent’s/Worker’s credit in issue during the conciliation phase of the hearing and there is no right of cross examination of a witness during a hearing before the Workers Compensation Commission.”
Section 354 of the 1998 Act governs procedures before the Commission. In particular, section 354(2) provides that:
“The Commission is not bound by the rules of evidence but may inform itself on any matter in such a manner as the Commission thinks appropriate and as the proper consideration of the matter before the Commission permits.”
Rule 70 of the Workers Compensation Commission Rules 2003 (‘the Rules’) sets out certain principles that the Commission should consider when ‘informing itself’ on any matter.
In Aluminium Louvres & Ceiling Pty Limited v Zheng [2004] NSWWCC PD26, Deputy President Fleming confirmed that the arbitrator’s decision to disallow cross examination of the worker in the particular circumstances of that case, did not amount to a denial of procedural fairness. The employer appealed to the Court of Appeal. In its decision dated 2 March 2006, the court dismissed the appeal. As Bryson JA said at paragraph 37:
“There is no legal right to cross-examine an applicant or other witness in the Workers Compensation Commission, and decisions whether to allow cross-examination or to limit it are discretionary decisions which must be made in a [sic] context of the legislation and practices which the Commission follows, and, at least as importantly, in the context of the facts and circumstances of the case under consideration.”
In other words, there is no unrestricted right of cross-examination at an arbitration hearing. It is a matter for the discretion of the arbitrator in the circumstances of the particular case, bearing in mind the objectives of the Commission.
It is therefore not strictly true that no cross-examination is permitted. In the present case, it is not clear from Colan’s submissions whether leave was sought to cross-examine Mr Kale during the conciliation phase or indeed at any time during the proceedings.
In his submissions, Mr Kale states that a transcript would be of no benefit in determining the appeal “… as no evidence was heard by way of oral evidence and the Arbitrator solely relied upon the statements and submissions made by both parties at the conclusion of the arbitration hearing.”
Given both parties’ statements, a transcript of the proceedings would be of assistance. What is of concern however is the Arbitrator’s statement as to the failure of Colan to cross-examine, given the limited entitlement to cross-examination referred to earlier. If the Arbitrator had concerns on these matters, it was open to him to ‘inform himself’. In the absence of any explanation from the Arbitrator as to why he failed to ‘inform himself’ of matters clearly relevant to the issue to be determined, it suggests that the Arbitrator failed to act “… accordingly to equity, good conscience and the substantial merits of the case …” as is required by section 354(3) of the 1998 Act.
Such conduct, in this particular case, amounts to a denial of procedural fairness. As Deputy President Fleming said in Inghams Enterprises Pty Limited v Zarb [2003] NSWWCC PD15 at 25 “[s354] does not alter the fundamental rule that a party is entitled to be heard in relation to the case against it, before the decision maker exercises the power to make the decision”.
In the absence of a transcript, it is not possible to determine whether any discussion took place as to any proposed cross-examination of Mr Kale. On the face of it, given the Arbitrator’s remarks, there appears to have been a denial of procedural fairness, such that a new arbitration hearing should take place.
CONCLUSION
(1) The Arbitrator clearly erred in law that his award of weekly benefits pursuant to
section 40 of the 1987 Act exceeded the statutory maximum prescribed by section
37 of that Act.
(2) Whilst the weight of evidence supported the Arbitrator’s finding that Mr Kale had
an incapacity consequent upon his injury, it did not support the Arbitrator’s finding to the extent of the economic incapacity Mr Kale suffered.
(3) The Arbitrator’s calculation of Mr Kale’s section 40 entitlements and reasons
therefore failed to disclose the evidentiary basis upon which he based his findings and was unsupported by adequate reasons.
(4)Colan was denied procedural fairness over the issue relating to possible cross-examination of Mr Kale and in the absence of a recording of the proceedings.
DECISION
(1) The decision of the Arbitrator dated 2 March 2005 is revoked.
(2)The matter is remitted to another Arbitrator for re-hearing and re-determination of all issues.
COSTS
No order as to costs of the appeal.
Deborah Moore
Acting Deputy President
28 April 2006
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF DEBORAH MOORE, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE