Cole v Baytech Industrial Pty Limited
[2005] NSWWCCPD 70
•15 July 2005
WORKERS COMPENSATION COMMISSION
APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:Cole v Baytech Industrial Pty Limited [2005] NSW WCC PD 70
APPELLANT: Yomi Cole
RESPONDENT: Baytech Industrial Pty Limited
INSURER:GIO Workers Compensation (NSW) Limited
FILE NUMBER: WCC11585-03
DATE OF ARBITRATOR’S DECISION: 16 February 2004 & 1 March 2004
DATE OF APPEAL DECISION: 15 July 2005
SUBJECT MATTER OF DECISION: Error in Certificate of Determination; procedural fairness; estoppel, res judicata; error in referral to Approved Medical Specialist.
PRESIDENTIAL MEMBER: Dr Gabriel Fleming, Deputy President
HEARING:On the papers
REPRESENTATION: Appellant: R L Whyburn & Associates
Solicitors
Respondent: Turks Legal
ORDERS MADE ON APPEAL: The decisions of the Arbitrator dated 16
February 2004 and 1 March 2004 are revoked
and the following decision is made in their
place:
1. That the Respondent pay the Applicant, as lump-sum compensation under section 66 of the Workers Compensation Act 1987, the amount of $10,500.00 in respect of a further 15% permanent loss of efficient use of the right leg below the knee.
2. That the Respondent pay the Applicant’s expenses under section 60 of the Workers Compensation Act 1987 on production of accounts or receipts.
3. The matter is referred back to the Arbitrator for determination of Mr Cole’s claim for compensation pursuant to section 67 of the Workers Compensation Act 1987.
Background to the Appeal
Yomi Cole was working for Baytech Industrial Pty Limited as a labourer when, on 26 October 1998, he injured his leg. He was using a steel chisel during which a fragment came free and lodged in his right calf. He continued working with Baytech for only a short time after the injury, until the job on which he was working finished. He now works as a Chef in his own restaurant.
Some months after the injury, Mr Cole began to feel discomfort in his calf, so underwent radiological investigations, which revealed the presence of a foreign body, which was a metal shard, embedded in his right calf. He underwent two separate operative procedures to remove it, but each was unsuccessful.
Mr Cole lodged a claim in the Compensation Court of NSW for compensation related to his injury, including medical expenses, $12,600 for 18% permanent loss of efficient use of the right leg below the knee, and $15,000 for pain and suffering. Baytech’s workers compensation insurer is GIO Workers Compensation (NSW) Limited. On 20 October 2000, the parties reached a consent agreement, under which Mr Cole was paid $3,500 for 5% permanent loss of use of his right leg below the knee, as well as his legal costs.
In November 2000 Mr Cole underwent a third operative procedure on his right leg, which was successful in removing the metal shard. He continues to notice numbness above his right ankle and also now experiences pain and extreme sensitivity in the area of the scar remaining after the procedure, as a result of possible nerve damage, caused by the foreign body.
On 20 February 2003, Mr Cole wrote to Baytech claiming further compensation of $10,500 for 15% further permanent loss of the use of his right leg below the knee, in addition to $20,000 for pain and suffering. Neither Baytech nor GIO responded to this claim and on 20 June 2003, Mr Cole lodged an ‘Application to Resolve a Dispute’ in the Commission for the said compensation, in addition to medical expenses.
The Arbitrator’s Decision
The Arbitrator held a teleconference with the legal representatives of Mr Cole and GIO on 9 September 2003. Following this the matter was referred to Dr Weisz, an Orthopaedic Surgeon and Approved Medical Specialist, for assessment of permanent impairment. On 29 January 2004 the Medical Assessment Certificate was issued.
A further teleconference was held on 16 February 2004, and on the same day the Arbitrator issued a ‘Certificate of Determination’ and a ‘Direction’ purporting to determine the dispute.
A copy of the ‘Direction’ is on the Commission file, stamped but unsigned. It is not clear from the file when the parties were provided with a copy. Mr Coles’ legal representative states that a copy was received on 15 June 2004. The ‘Direction’ states that :
“At the teleconference on 16th February 2004 I directed as follows:
1.That pursuant to a Medical Assessment Certificate of Permanent Impairment [sic] signed by Dr. George Weisz, the Respondent is to pay the Applicant s66 Workers Compensation Act 1987 compensation of $1,400 in respect of 2% permanent impairment of the Applicant’s right leg [sic].
2.That the Applicant’s claim for section 60 Workers Compensation Act 1987 is struck out [sic]…”
A ‘Certificate of Determination’ was also issued on 16 February 2004 after the teleconference, and was re-issued on 1 March 2004. The letter of 1 March 2004 purported to attach a ‘Statement of Reasons’ for decision, which, if it ever existed, was not attached. The Certificate, headed ‘Consent Orders’ states:
“By reason of their agreement, and in accordance with Rule 75(1) of the Workers Compensation Commission Rules 2003, the determination of the Commission in this matter is a follows:
1. The Respondent pay the applicant’s costs as agreed or assessed.
2.Notice of Discontinuance is waived pursuant to rule 6 Workers Compensation Commission Rules 2003.”
On 12 March 2004 Mr Cole sought leave to appeal against the Arbitrator’s decisions.
The Registrar rejected an appeal to a Medical Appeal Panel against Dr Weisz’s assessment on 15 June 2004.
The threshold criteria of section 352(2) of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’) are satisfied and accordingly leave to appeal is granted.
Issues in Dispute
Mr Cole argues that the Arbitrator’s decision was wrong, should be revoked and that the matter should be referred, for a second time, to an Approved Medical Specialist (‘AMS’) for assessment of the medical issues. He asserts that the Arbitrator made an error of law in determining that the parties had reached an agreement and that her orders are therefore based upon a mistaken belief. Mr Cole also submits that she erred in denying him the opportunity to make submissions on issues of ‘res judicata’ and ‘estoppel’, presumably because she wrongly believed the parties were in agreement.
Baytech submits that the Arbitrator’s decision was correct and that the Direction of 16 February 2004, in addition to the chronology of events, indicates that there was no error. The Arbitrator’s decision should be confirmed.
The issues in dispute may be summarised as follows:
· Did the Arbitrator err in purporting to make a determination ‘by consent’?
· Did the Arbitrator err in law in failing to determine issues of res judicata and estoppel?
· What is the status of the Medical Assessment Certificate?
On the Papers Review
The parties have made written submissions on the appeal. I also have before me all of the documents that were before the Arbitrator in addition to the Certificate of Determination. There is no transcript of the telephone conference held by the Arbitrator.
Both parties submit that the appeal should not be determined on the papers and that an oral hearing should be held.
I have considered the parties submissions. I am satisfied that I have sufficient information to proceed ‘on the papers’ pursuant to Section 354(6) of the 1998 Act, without holding any conference or formal hearing, and that this is the appropriate course in the circumstances.
Did the Arbitrator err in purporting to make a determination ‘by consent’?
On 8 March 2004, (received in the Commission on 9 March 2004) Mr Coles legal representative wrote to the Arbitrator, pointing out that the ‘Certificate of Determination’ was erroneous in that it was purported to be made by consent, and asking that the Arbitrator not make a final determination in the matter until an appeal against the Medical Assessment Certificate had been heard by the Medical Appeal Panel. This letter appears to have been written in ignorance of the ‘Direction’ of 16 February 2004, which may not have been issued by the Commission. On 18 March 2004 the Arbitrator personally responded to this letter.
The Arbitrator advised that the “agreement by consent” reflected her orders for Baytech to pay Mr Cole’s costs as agreed or assessed, and that she had waived the necessity for the parties to lodge a ‘Notice of Discontinuance’. She noted that her ‘Direction’ was in accordance with the AMS assessment and that the assessment is binding. She also stated that she found the correct method for determining the increase in permanent impairment was to award the difference between the percentage claimed in the original suit, and that assessed currently by the AMS, that difference being 2%. The Arbitrator noted that although Mr Cole’s solicitors had raised the issue of res judicata in the teleconference, that issue had no relevance as the original agreement in the Compensation Court was a consent agreement between the parties, rather than a judgement of the Court. She concluded that the ‘Certificate of Determination’ was correct and should stand.
Mr Cole submits that as the Arbitrator has entered her orders on the basis of a supposed agreement between the parties, the orders are flawed given that no such agreement existed. The Arbitrator has therefore issued an erroneous ‘Certificate of Determination’, so the consent orders in both the ‘Certificate of Determination’ and the ‘Direction’ of 16 February 2004, should be revoked. Despite the indication that Mr Cole’s submissions would be rejected, his solicitor submits that he did not give any indication that Mr Cole would accept an amount of compensation below the amount sought. Mr Cole’s legal representative submits that Mr Cole was not present at the teleconference and he had instructions solely to argue that Mr Cole was entitled to compensation based on a further 15% permanent loss of efficient use of the right leg below the knee.
The way in which the Arbitrator purported to finalise this dispute and the documentation of her decision are unusual. There are a number of irregularities, namely:
· The substantive determination of Mr Cole’s section 66 entitlements is found in the document entitled ‘Direction’. This is not in compliance with Section 294 of the 1998 Act. While the requirement to issue a ‘certificate as to determination’ should be interpreted flexibly it seems to me that a ‘Direction’ is something other than a ‘certificate as to determination of the dispute’. This is particularly so where a separate document headed ‘Certificate of Determination’ was also issued.
· The ‘Certificate of Determination’ that was issued addressed different matters to those that were covered in the ‘Direction’.
· No statement of reasons accompanied the ‘Certificate of Determination’ or the ‘Direction’ issued by the Arbitrator, nor was there a transcript which could have been relied upon to support oral reasons. This was not in compliance with section 294 of the 1998 Act and Rule 73 of the Workers Compensation Commission Rules 2003 (‘the Rules’).
· It appears that the ‘Direction’ was not sent to the parties until some months after it was issued despite the ‘direction’ that this occur “in the most expeditious method”.
· Order 2 of the ‘Direction’ dated 16 February 2004 purports to ‘strike out’ the worker’s claim for medical expenses pursuant to section 60 of the Workers Compensation Act 1987 (‘the1987 Act’). There is no record of the Arbitrator finding that the proceedings were a nullity, prior to making a ‘determination’ to strike them out, as required by Rule 6(4) (Morgan v Hacken Pty Limited previously known as Jennifer McGregor Enterprise Limited [2004] NSW WCC PD 83).
· The Arbitrator has purported to make a section 66 award in favour of Mr Cole in the ‘Direction’ dated 16 February 2004. However Order 2 in the ‘Certificate of Determination’ provides that the requirement for a ‘Notice of Discontinuance’ is waived. In her letter to the parties the Arbitrator states that “[T]he agreement by consent, reflected in my orders, was for the Respondent to pay the Applicant’s costs as agreed of assessed, and that I waived the necessity for the parties to lodge a Notice of Discontinuance”. The reason why the parties would file a ‘Notice of Discontinuance’, and in relation to what aspect of the dispute, is not apparent to me, given that the issues of permanent impairment, medical expenses and costs had all been determined. Moreover this order is purported to be made ‘by consent’.
· The Arbitrator has failed to make an order in relation to Mr Cole’s claim for compensation pursuant to section 67 of the 1987 Act.
It was inappropriate for the Arbitrator to engage in correspondence with the parties after the ‘Certificate of Determination’ and the ‘Direction’ were issued. Other than for the purpose of reconsideration of the decision pursuant to section 350 of the 1998 Act (requested only after the Arbitrator’s letter of 18 March 2004) her jurisdiction had been fully exercised with the issue of the ‘Certificate of Determination’ and the ‘Direction’, and thereafter she was effectively functus officio. It is clear that this correspondence and the ‘clarification’ that was offered by the Arbitrator were in fact necessary because no reasons for the decision were given. No written reasons were given and there was no record of the telephone conference evidencing oral reasons, if they were given on the day. The Arbitrator’s failure to give reasons is itself an error of law (Absolon v NSW TAFE [1999] NSWCA 311; Fox v Percy (2003) 214 CLR 118).
Whether these irregularities amount to an error of law, fact or discretion by the Arbitrator, and whether the error is such that the decision should be revoked, have not been properly or comprehensively argued by either party on appeal. A Presidential Member has the specific and limited role of ‘review’ on appeal (section 352(5) of the 1998 Act). The ‘review’ on appeal, before the Commission, is by way of rehearing, where the powers of the Commission to confirm, revoke or substitute a new decision are exercisable only where it can be demonstrated that the original decision of the Arbitrator is affected by ‘some legal, factual or discretionary error’ (Allesch v Maunz (2000) 203 CLR 172; Mayne Health Group t/as Nepean Private Hospital v Sandford [2002] NSW WCC PD 6).
The defects in form in the Arbitrator’s orders are, on their own, not such that they should be revoked for that reason alone. I accept that the Arbitrator gave notice of her decision orally to the parties at the telephone conference and that the orders, albeit not made by consent, are those which the Arbitrator would have made in any event. The defects in the form of the orders, and in the administration of their issue to the parties, reflect an unacceptable lack of care and attention rather than an appellable error.
Taken together, the Arbitrator has erred in failing to give reasons for the decision and in ‘striking out’ the section 60 claim without a finding of nullity. Her inexplicable direction waiving the requirement to file a ‘Notice of Discontinuance’ further undermines the validity of the decision.
Did the Arbitrator err in law in failing to determine issues of res judicata and estoppel?
Mr Cole argues that, given the complex nature of this matter in regards to res judicata and estoppel, he should have been given the opportunity to present evidence and for his legal representative to make oral or written submissions. He did not personally attend the telephone conference. Such submissions would have included reference to the decision of Burke J in Almario v Carringron Constructions Pty Ltd [1996] NSWCC 37 (20 November 1996).
Baytech submits that Mr Cole had been on notice of the issues arising as a result of his having had a previous Court settlement, not only because he had maintained the same legal representation throughout, but because Baytech had raised these issues in its Reply. Mr Cole made no response to the Reply although he was presented with the opportunity to address the matter. Further, Baytech did raise the issue of estoppel in the teleconference of 9 September 2003, to which Mr Cole’s legal representative responded and a discussion was had. Mr Cole had the opportunity then to request that legal arguments on estoppel be decided prior to the AMS making an assessment, but Mr Cole did not do so, and instead consented to the questions, as formulated, being put to the AMS.
Baytech submits that the Arbitrator has not erred in issuing her orders that Mr Cole be compensated for a further 2% permanent loss of efficient use of his right leg below the knee. Baytech submits that in 2000 Mr Cole had made a claim in the Compensation Court of NSW for 18% permanent loss of use of the right leg below the knee. In October 2000 Mr Cole consented to an order in respect of 5% permanent loss of efficient use of the leg at that time. As Mr Cole now claims 20% permanent loss of efficient use of the right leg, the difference in his claims represents only a further loss of 2% efficient use. This submission, apparently repeated before the Arbitrator, is not supported by the documents produced by Baytech. A ‘Terms of Settlement’ document was filed, but no formal “order” or award of the Compensation Court has been produced. Baytech argue that the Arbitrator was therefore correct to find that, on the evidence before her, no order or award of the Court has been made.
It is difficult to understand, on appeal, the way in which Mr Cole and the Insurer presented their respective cases to the Arbitrator. The ‘Application to Resolve a Dispute’ does not attach submissions outlining the nature of the claim, its legal basis and the reason for its refusal by the insurer. The error apparently alleged on appeal by Mr Cole is not that the Arbitrator erred in determining that the doctrine of res judicata did not apply, but that she denied him procedural fairness by not allowing him to present his arguments in relation to both res judicata and estoppel in answer to the case made against him. On this ground I am satisfied that the Arbitrator has not erred.
The Arbitrator, in her letter of 18 March 2004, states that she “ . . . found during the teleconference that the issue . . .of res judicata had no relevance as the original agreement was a consent agreement between the parties”. There was no evidence before the Arbitrator that the consent agreement was made an order of the Compensation Court of NSW and in my view the Arbitrator was correct to find that res judicata, in the sense that the same claim had already been adjudicated by the Court, did not arise. The application of res judicata in a matter where a redemption agreement reached between the parties had been made an order of the Compensation Court, was considered by Acting Deputy President Handley in JP Cordukes Pty Ltd v Mangarelli [2005] NSW WCC PD 52.
The ‘Reply to the Application to Resolve a Dispute’ lists a number of issues in dispute, under the headings ‘factual’, ‘medical’ and ‘legal’. This ‘generic’ list does not appear to have been refined with any great precision to address the particular facts of this case (referring throughout to the worker as ‘her’). The exception is where it lists the following matters in dispute:
· “Whether the worker’s condition has deteriorated since the settlement of her [sic] lump sum claim on 20 October 2000.
· Whether an issue of estoppel arises regarding the order of the Compensation Court made on 20 October 2000.”
Mr Cole also argues that the Arbitrator failed to properly consider estoppel. The parties have, on appeal, made inadequate written submissions on the nature of the estoppel arguments that are said to arise, and the distinction between the narrow doctrine of res judicata, which I find was expressly considered and decided by the Arbitrator, and other principles of estoppel. The Applicant’s reference, on appeal, to the decision of Almario is not self-explanatory, nor is its application to this case evident from a reading of the decision. The relevant principles, and their application in workers compensation disputes, are carefully set out in the decision of Acting Deputy President Lansdowne in Quarmby v Motor Traders Association of NSW Group Apprenticeship Scheme [2005] NSW WCC PD 43, where she said:
“24. The authorities establish that there are three types of instances in which a party may be estopped from raising an issue, claim or defence in subsequent proceedings because, in broad terms, of the principle of res judicata. These are as follows:
(1) Cause of action estoppel (res judicata in the narrow sense)
(2) Issue estoppel
(3) Anshun estoppel.25. The difference between res judicata and issue estoppel was expressed as follows by Dixon J. in Blair v Curran (1939) 62 CLR 464 (as quoted by Priestley J.A. in Lambidis v Commissioner of Police (1995) 12 NSWCCR 225 at 240):
“ The distinction between res judicata and issue-estoppel is that in the first the very right or cause of action claimed or put in suit has in the former proceedings passed into judgment, so that it is merged and has no longer an independent existence, while in the second, for the purpose of some other claim or cause of action, a state of fact or law is alleged or denied the existence of which is a matter necessarily decided by the prior judgment, decree or order.”
26. The Anshun estoppel is different from both cause of action and issue estoppel. It relates not to what was determined by the previous proceedings, but what could have been. The principle was discussed by the High Court in Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589. It arises where a party seeks in subsequent proceedings to raise a defence (and possibly a claim) that could have been raised in earlier proceedings between the same parties, but was not. In certain circumstances, the party may be estopped from raising that defence or claim in later proceedings.”
There is a further doctrine of estoppel, which is not dependent upon the recording of an order or judgement of the Court, namely equitable estoppel or estoppel in pais. This is not applicable in this matter as it involves inducement to rely upon a representation that is in some way unconscionable (Waltons Stores (Interstate) Limited v Maher & Anor (1987 - 1988) 164 CLR 387).
There is no evidence that the Arbitrator anywhere considered whether an issue estoppel arose on the facts of this case, as opposed to the narrower doctrine of res judicata. Nor is there a clear submission in the documents filed by either party before the Arbitrator to indicate what the tenet of that argument, relative to the facts of this particular case, might be. Mr Cole’s submissions rely upon the alleged fact of the earlier consent agreement being an order of the Compensation Court. This is a fact that, as noted above, is not demonstrated by the evidence. However, it is arguable that even if the consent settlement of the parties in this matter had been made an award of the Compensation Court, an estoppel would not arise. This was the case in Anderson v Charles Sturt University [2002] NSWCC 63, where Neilson J said, at paragraph 30:
“Parties can ask the Court to enter up an award in accordance with their agreement. The Court, provided jurisdiction exists, can enter up that award. However, even though formed in the terms of a Court award, it is still in effect an agreement between the parties. It does not create any issue estoppel. Mere payment of compensation cannot amount to an estoppel but, at most, if anything, an admission. Such was the decision of Court of Appeal in APD Snack Foods Pty Limited v Vuic [1984] WCR62, a decision of Hutley AP, Glass and Mahoney JJA.”
This is the correct approach to the facts evidenced in the ‘Terms of Settlement’ signed by the parties in October 2000. Whether there was any procedural unfairness, and therefore error on the part of the Arbitrator, reflected in the Arbitrator’s failure to directly address the issue of estoppel is not clear from the documents before me, however nor is it critical to the matters argued on appeal. In my view the agreement does not give rise to an estoppel but should be treated as an admission of the facts by both parties. However, even if I am wrong on this, and an issue estoppel does arise from the agreement (Rail Services Australia v Dimovski & Anor [2004] NSWCA 267), it does not alter the result in this case. Specifically, the admission, or the issue concluded, is that Mr Cole, as a result of a work injury, had received compensation for a 5% permanent loss of efficient use of his right leg below the knee, as at October 2000. This is clearly a fact before the Arbitrator that is not disputed.
The more relevant and determinative question concerns the effect of this fact on Mr Cole’s further entitlement, if any, to compensation for a further loss or permanent impairment.
Effect of the admission of 5% permanent loss in settlement of the earlier claim.
Changes to the statutory workers compensation scheme in 2001 established a new way of determining such entitlements. An AMS can now make an assessment that is a binding determination on the matters set out in section 326 (1) of the 1998 Act, namely:
(a)“the degree of permanent impairment of the worker as a result of an injury,
(b)whether any proportion of permanent impairment is due to any previous injury or pre-existing condition or abnormality,
(c)the nature and extent of loss of hearing suffered by a worker,
(d)whether impairment is permanent,
(e)whether the degree of permanent impairment is fully ascertainable.”
Section 323(1) of the 1998 Act provides that in assessing the degree of permanent impairment that arises as a result of an injury, a deduction must be made for any proportion of the impairment that is due to a previous injury. It is clear from section 323(3) of the 1998 Act that it is the AMS who is required to undertake this assessment. Thus, while section 326(1)(b) of the 1998 Act does not specifically state that the AMS’s finding on the amount of that proportion is binding, a reading of Part 7 of Chapter 7 of the 1998 Act as a whole, leads inescapably to that conclusion.
It is necessary to consider the Arbitrator’s findings in relation to the issue of apportionment pursuant to Section 323 of the 1998 Act. The Arbitrator has accepted that the AMS’ assessment of the degree of permanent impairment arising from the injury of 26 October 1998, that would have existed in October 2000 (18% loss of efficient use of the right leg below the knee), and his assessment of the further loss suffered since then (2% loss of efficient use of the right leg below the knee) are ‘conclusively presumed to be correct’ and are therefore binding upon her. However the issue in dispute in this matter was not one of ‘apportionment’ between two discreet injuries, but one of the assessment of a further loss from the one single injury, namely the injury that occurred on 26 October 1998.
Section 323(2) of the 1998 Act requires an AMS to apportion the degree of permanent impairment between an injury and a ‘previous injury’. Section 326(1)(b) of the 1998 Act provides that the AMS assessment of this apportionment is ‘conclusively presumed to be correct’. Neither of these provisions apply to an assessment of further loss or permanent impairment that is due to the same, single, injury. In the case of only one injury, the further entitlement to compensation will be referable, as it is in this case, to the compensation that the worker has, in fact, previously received.
Prior to legislative changes in 2001 affecting the assessment of claims made under section 66 of the 1987 Act, it was common in cases of deterioration or further alleged permanent loss to present evidence as to the assessment of any change from the same medical practitioner who initially examined the worker. Under the current scheme for the resolution of medical disputes it is the AMS who makes this latter determination.
This matter should have been referred to the AMS for an assessment of Mr Cole’s permanent loss or impairment, if any, as at the date of the AMS assessment. On this issue the AMS opinion is binding. However it is then for the Arbitrator to calculate Mr Cole’s actual entitlement to compensation, if any, for further loss or permanent impairment, due to the original injury (Lourdes House Hospital v Wheeler (1996) 13 NSWCCR 495; Department of Education; Parkes High School v Howlett NSWCA 40284/96, (Unreported 27/11/96). The previous assessment of loss or permanent impairment for which Mr Cole was actually compensated is the starting point for the later claim. The Arbitrator was not required to revisit the parties’ agreement as to a 5% permanent loss of efficient use of the right leg below the knee. The approach adopted by the Arbitrator has led to an outcome that is inherently unfair. The result of the Arbitrator’s determination is that while Mr Cole has a 20% permanent loss of efficient use of the right leg as a result of a work injury, he can be compensated for only 7% (5% in 2000 and 2% in 2004) of that loss.
What is the status of the Medical Assessment Certificate?
Mr Cole argues that the Arbitrator’s erroneous decision issued in the ‘Certificate of Determination’ and ‘Direction’ prevented acceptance of an ‘Appeal Against Decision of Approved Medical Specialist’. The Arbitrator’s decision should therefore be revoked in order that Mr Cole be permitted to seek leave to appeal the AMS’s decision. This submission ignores that fact that Mr Cole’s appeal against the Medical Assessment Certificate (‘the MAC’) was filed out of time, on 9 March 2005, and it was also filed after the Arbitrator’s determination of the dispute. Review of the documents filed by both parties in the proceedings before the Arbitrator, and the nature of the matters raised by the Arbitrator in the written ‘Annexure’ which accompanied the referral to the AMS, raise the issue of whether the ‘medical dispute’ was properly referred to the AMS in the first instance.
It was submitted that at the telephone conference on 9 September 2004 the parties, with the assistance of the Arbitrator, discussed and formulated the questions to be posed to an AMS. As it transpired, the AMS nominated by the parties was not available so the Registrar appointed Dr Weisz. As noted above there is no transcript of the telephone conference (which is consistent with Commission practice for telephone conferences where no substantive issues are decided).
Attached to the ‘Application to Resolve a Dispute’ are a number of medical reports, copies of Compensation Court documents, correspondence between the parties’ legal representatives and various WorkCover Authority forms. The ‘Application’ states the ‘date of injury’ to the ‘right leg below the knee’ as 26 October 1998. The medical report of Dr Darveniza, dated 16 April 2003 and attached to the Application, states that it was the surgery Mr Cole underwent in 2000 for the injury he received in 1998 that caused him to develop “a patch of dysaesthesia above the scar limiting him in many ways” (at page 3). Dr Jensen, reporting in February 2003, describes symptoms, which only developed ‘post surgery’ for the initial injury. The medical evidence is consistent with the fact of one injury, on 26 October 1998, which occasioned a definite loss of efficient use of the right leg below the knee as at October 2000 and then a further loss, due to the same injury, including surgery for that injury, following November 2000.
The referral of the ‘medical dispute’ to Dr Weisz (AMS) asked a number of specific questions of him and included a list of matters framed by the Arbitrator. The referral ‘form’ stated the ‘date of injury’ as 26 October 1998. In a document attached to the referral the Arbitrator set out the following matters:
1.“The Applicant was injured in the course of his employment on 26 October 1998.
2.A piece of metal was lodged in the Applicant’s right leg.
3.Several attempts were made to remove the metal to not avail.
4.On 20th October 2000 the Applicant settled the workers compensation claim relating to this injury.
5.At the time of the settlement the metal remained lodged in his leg.
6.During the settlement negotiations the Applicant relied upon the medical assessment of Dr. Wallace of 18% permanent loss of right leg below the knee; the Respondent relied upon the medical assessment of Dr Bodel of 5% (These documents are attached to the file)
7.The settlement reached was at 5% based on Dr Bodel’s report.
8.After settlement, the Applicant complained of ongoing and more serious symptoms and eventually the metal piece was removed from his leg under surgery.
9.The Applicant again claims s.66 compensation for the injury arguing that the metal piece and its removal caused further permanent damage to his leg.
10.The Respondent argues that any compensation paid at this time must be based on the difference between the Applicant’s impairment now, and the impairment then. If the impairment is assessed now at 20% then the difference is between the 18% the Applicant claimed in 2000 and the 20% now claimed, which is 2%.
11.What is therefore required to settle this dispute is an assessment, based on the medical reports and settlement agreement in 2000, and your assessment now, of the percentage difference between the Applicant’s impairment in 2000 for which he has already been compensated and the permanent impairment he has suffered, if any, since then.”
This referral to the AMS does not clarify the matters upon which the AMS is asked to comment. Point 10 does not convey whether the Arbitrator has in fact accepted the Respondent’s submissions on this issue, although in her later letter of 18 March 2004 she states that she found this to be the correct method of dealing with the assessment of permanent impairment. In my view the Arbitrator has erred in purporting to accept the submission of Baytech to the assessment of Mr Cole’s entitlement. As set out above, this matter involves an assessment of further permanent loss of efficient use of the right leg below the knee, due to the one injury, on 26 October 1998. There is only one injury that is the subject of the dispute, although there have been two claims for permanent loss, and it is for the Arbitrator to make the assessment of any further entitlement to compensation. The AMS assessment of the current degree of loss is binding however the calculation set out in Point 11 is not correct nor is it for the AMS to make in this case.
As a result of the referral, Dr Weisz issued a MAC on 29 January 2004. He states that 18% of Mr Cole’s current 20% loss of efficient use of the right leg below the knee is due to a ‘pre-existing injury, abnormality or condition’. However there was no ‘pre-existing injury, abnormality or condition’ before 26 October 1998, as that was the date of the initial injury, and the only injury the subject of the original claim and this claim. As noted above, the medical reports suggest a further loss of efficient use of the right leg below the knee occurred in November 2000, as a result of the surgery for the initial injury of 26 October 1998. This is consistent with the settlement of the matter, and the admissions made, in relation to the facts as they stood at October 2000, prior to the surgery.
Determinations of the legal basis of the claim, and issues such as ‘liability’, ‘injury’, ‘date of injury’ and ‘causation’ are matters which should be determined by the Arbitrator prior to the referral to the AMS (see discussion in Ryan v State Transit Authority of NSW [2004] NSW WCC PD 81). The parties’ submissions in this matter did little to clarify the exact nature of the claim and the Arbitrator has not done so for the purpose of the referral to the AMS.
This leaves the question of the status of the MAC issued by Dr Weiscz.
The approach to ascertaining the validity of a MAC was discussed at length in Jopa Pty Limited t/as Tricia’s Clip-n-Snip v Edenden [2004] NSW WCC PD 50. The validity of the MAC rests with its compliance with the requirements of section 325 of the 1998 Act. It must properly ‘certify as to the AMS’s assessment with respect’ to the ‘matters referred’ to him or her. In this matter the Arbitrator has requested the AMS to make an assessment that is not relevant, nor binding on the determination of Mr Cole’s entitlement. However the AMS assessment of Mr Cole’s current degree of permanent impairment/loss is binding pursuant to section 326(1)(a) of the 1998 Act. The fact that he has purported to apportion the degree of permanent impairment/loss where ultimately this was not required does not invalidate the MAC nor his other assessment. In effect this purported apportionment may simply be disregarded in the circumstances of this case.
Calculation of the award of Compensation to Mr Coles
In my view the Arbitrator’s decision should be revoked on the ground that she has made a number of errors, as discussed above.
In accordance with Dr Weisz’ MAC, Mr Cole has suffered a 20% loss of efficient use of the right leg below the knee. This loss is due to a compensable injury that occurred on 26 October 1998 and for which Baytech is liable. He has been compensated for a 5% loss of efficient use of the right leg below the knee for the same injury. Mr Cole is entitled to a further award of 15% loss of efficient use of the right leg below the knee.
The Arbitrator made no determination in relation to Mr Cole’s entitlement to an award, if any, for pain and suffering pursuant to section 67 of the 1998 Act. As such there is no determination for me to review on appeal. The parties have also not made submissions on this matter. In these circumstances this issue should be referred back to the Arbitrator for determination.
The Arbitrator’s decision to ‘strike out’ Mr Coles application for an order that Baytech pay him medical expenses that are reasonably necessary as a result of his injury was purported to be made because Baytech failed to file receipts or other evidence of payment of such expenses. This approach to a section 60 award misunderstands the nature of that entitlement. Section 60 is an indemnity provision (NSW Sugar Milling Co-Operative Ltd v Manning (1998) 16 NSW CCR 606). Mr Cole’s entitlement will only arise where he incurs such a cost. In the circumstance where liability has been established, there is no bar to the Arbitrator making an order in the form of: “That the Respondent pay the Applicant’s expenses under section 60 of the Workers Compensation Act 1987 on production of accounts or receipts”. The requirement that such claims, when submitted to Baytech, be ‘reasonably necessary’ as the result of the compensable injury, must then be met in relation to each expense.
The difficulties with the preparation and conduct of this dispute do not bode well for the achievement of the Commission’s objectives. Both parties in this matter were represented by legal advisers, however the issues in dispute were not properly distilled at an early stage. Added to this were a number of errors in the conduct of the matter by the Arbitrator and the failure of the administration to advise the parties promptly of the decision. Unfortunately it is the parties, personally, whose rights and interests are adversely affected by these matters.
Decision
The decisions of the Arbitrator dated 16 February 2004 and 1 March 2004 are revoked and the following decision is made in its place:
1. That the Respondent pay the Applicant, as lump-sum compensation under section 66 of the Workers Compensation Act 1987, the amount of $10,500.00 in respect of 15% permanent loss of efficient use of the right leg below the knee.
2. That the Respondent pay the Applicant’s expenses under section 60 of the Workers Compensation Act 1987 on production of accounts or receipts.
3. The matter is referred back to the Arbitrator for determination of Mr Cole’s claim for compensation pursuant to section 67 of the Workers Compensation Act 1987.
Costs
Mr Cole has been successful on the appeal and it is appropriate that the Respondent pay the costs of the appeal as agreed or assessed.
Dr Gabriel Fleming
Deputy President
15 July 2005
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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