Department of Corrective Services v Bowditch - [2007] NSWWCCPD 244

WORKERS COMPENSATION COMMISSION

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

STATUS: Reported Decision: Department of Corrective Services v Bowditch (2007) 6 DDCR 174

CITATION:Department of Corrective Services v Bowditch [2007] NSWWCCPD 244
APPELLANT:  Department of Corrective Services
RESPONDENT:  Patricia Anne Bowditch
INSURER:Employers Mutual Limited
FILE NUMBER:  WCC4583-07
DATE OF ARBITRATOR’S DECISION:          20 August 2007
DATE OF APPEAL DECISION:  12 December 2007
SUBJECT MATTER OF DECISION: Psychological injury; notice under section 54 of the Workers Compensation Act 1987; section 74 Workplace Injury Management and Workers Compensation Act 1998; need to properly identify and determine issues in dispute; reasons
PRESIDENTIAL MEMBER:  Deputy President Bill Roche
HEARING:On the papers
REPRESENTATION:  Appellant:      Rankin Nathan
Respondent:   Carroll & O’Dea

ORDERS MADE ON APPEAL: Paragraph two of the Arbitrator’s determination of 20 August 2007 is revoked and the following order made in its place:

“2.That the Respondent pay the Applicant weekly compensation at the maximum statutory rate for a worker with no dependants as adjusted from 22 January 2007 to date and continuing under section 37 of the Workers Compensation Act 1987. Such payments to continue in accordance with the provisions of the Workers Compensation Act 1987.”

For the reasons stated in this decision, paragraphs one, three, four and five of the Arbitrator’s determination of 20 August 2007 are confirmed.
The Appellant Employer is to pay the Respondent Worker’s costs of the appeal.

BACKGROUND TO THE APPEAL

Patricia Anne Bowditch (‘the Respondent Worker/Mrs Bowditch’) started work for the Department of Corrective Services (‘the Appellant Employer/the Department’) as a Probation and Parole Officer in 1988 having previously worked in child protection with the Department of Community Services (‘DOCS’). She remained with the Appellant Employer until 1994 or 1995 when she returned to work with DOCS for about one year. She then worked with the Western Sydney Area Health Service as an Area Child Protection Co-ordinator until returning to the Appellant Employer in 2000.

Mrs Bowditch’s employment with the Department exposed her to a number of incidents (referred to in detail below), which she alleges affected her psychologically. The final incident occurred on 21 July 2006 when she had a heated verbal exchange with a colleague that caused her distress and resulted in her ceasing work. She has not returned to work since. Her claim for compensation was initially accepted but declined by letter dated 13 December 2006 from the Department’s insurer, Employers Mutual Limited (‘the insurer’), as agent for NSW Treasury Managed Fund (‘TMF’). Compensation payments ceased on 27 December 2006.

An Application to Resolve a Dispute (‘the Application’) was registered in the Commission on 22 June 2007 in which Mrs Bowditch alleged that she sustained a “psychological injury” as a result of the “nature and conditions of employment”. The Department filed a Reply on 20 July 2007 confirming that the matters in dispute were those listed in the “dispute notice” attached to the Application. The only “dispute notice” attached to the Application is the letter from the insurer dated 13 December 2006 declining liability.

At a teleconference on 30 July 2007 the Department gave notice that it would be objecting to the admissibility of the report of Dr Clarke, psychiatrist, dated 7 March 2007.

The matter was listed for conciliation and arbitration before a Commission Arbitrator on 16 August 2007 when lengthy submissions were heard from counsel for both sides. Neither party called any oral evidence and Mrs Bowditch was not cross-examined.

In a reserved decision the Arbitrator found in favour of Mrs Bowditch. The Certificate of Determination, dated 20 August 2007, records the Arbitrator’s orders as follows:
“1.That the Respondent pay the Applicant weekly compensation at the rate of $994.35 from 28 December 2006 to 21 January 2007 under section 36 of the Workers Compensation Act 1987.
2.That the Respondent pay the Applicant weekly compensation at the maximum statutory rate from 22 January 2007 to date and continuing pursuant to section 40 [sic] of the Workers Compensation Act 1987. As at 22 January 2007 that rate was $354.40 per week, from 1 April 2007 that rate was $361.30.
Such weekly payments to continue in accordance with the provisions of the Act.
3. That the Respondent pay the Applicant's section 60 of the Workers Compensation Act 1987 expenses on production of accounts or receipts.
4.That the matter be referred to the Registrar for referral to an Approved Medical Specialist to determine the whole person impairment sustained by the Applicant.
5. That the Respondent pay the Applicant's costs as agreed or assessed.
By an appeal filed on 17 September 2007 the Department seeks leave to appeal this determination.

LEAVE TO APPEAL

Monetary Threshold

Before proceeding to deal with an appeal the Commission must determine whether the application meets the requirements of section 352 of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’).

There is no dispute that the quantum of compensation at issue on appeal meets the thresholds in section 352(2) of the 1998 Act.

Time

The appeal was lodged within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act.

I grant leave to appeal.

PRELIMINARY MATTERS

Section 354(6) of the 1998 Act provides:

“(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.”

Having regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submissions by the parties that the appeal can proceed to be determined on the basis of these documents, 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.

ISSUES IN DISPUTE

In its submissions filed on 17 September 2007, the Appellant Employer alleges the Arbitrator erred in that he:

(a)failed to give adequate reasons for his decision (‘reasons’);

(b)failed to address the issues as to ongoing psychological injury and the applicability of section 11A of the Workers Compensation Act 1987 (‘the 1987 Act’) (‘issues in dispute’);

(c)failed, by reasons of the manifestly inadequate reasons, to exercise his statutory duty to fairly and lawfully determine the Application (‘reasons’), and

(d)failed to deal adequately with the issue of incapacity (‘incapacity’).

In its submissions filed on 2 November 2007, the Appellant Employer alleges the Arbitrator erred in that he:

(a)mischaracterised the issues in dispute in the proceedings and incorrectly limited himself to the issues of “causation” and “capacity for work”, and failed properly to deal with those issues (‘issues in dispute’);

(b)failed, whether properly or at all, to enter into and deal with the issues canvassed before him, and in particular failed to deal with the issue of “injury”, which was a primary issue in the proceedings (‘issues in dispute’);

(c)failed, whether properly or at all, to engage in an analysis of the expert evidence, in particular, by referring to the principles in Makita (Aust) Pty Ltd v Sprowles (2001) 52 NSWLR 705 (‘Makita’) and further in terms of the obligation to follow the precepts to be adopted when resolving expert disputes, and

(d)failed to give any or any adequate reasons for his findings and determination (‘reasons’).

REVIEW

The nature of a review and the role and function of a Presidential member on appeal has been considered in many cases in the Commission. In The King Island Company Ltd v Deery [2005] NSWWCCPD 1 it was held at [19]:

“19. A Presidential Member on appeal has a specific and limited role in the review of a decision of an Arbitrator. The review is not a rehearing. The Presidential member is not dealing with the matter de novo and is not arriving at a fresh decision based on all of the evidence available at a later time (Coal & Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194; Builders Licensing Board v Sperway Constructions (Sydney) Pty Ltd (1976) 135 CLR 616). The powers of the Presidential Member to revoke the decision pursuant to section 352(7) of the 1998 Act and to substitute a new decision in its place, are exercisable only where it is demonstrated that the decision of the Arbitrator is affected by some legal, factual or discretionary error (Allesch v Maunz (2000) 203 CLR 172). Alternatively, the Presidential Member may remit the matter back to the Arbitrator concerned, or to another Arbitrator, for determination in accordance with any decision or directions made.”

The nature of a review was considered by the Court of Appeal in Aluminium Louvres & Ceilings Pty Limited v Zheng [2006] NSWCA 34 where Bryson JA said at [38]:

“A review is a different process to an appeal and the matters which may be considered and the manner in which they may be considered are somewhat wider. See Boston Clothing Co Pty Ltd v. Margaronis (1992) 27 NSWLR 580 at 584 (Kirby P). An attack, on review or otherwise, on an Arbitrator's discretionary decision in controlling procedure may be based on the test stated in House v. R (1936) 55 CLR 499 at 504 - 505; but that is not the only basis on which the Presidential member may act. The powers of a Presidential member on review are somewhat wider and extend to power to reopen consideration of a matter of which an Arbitrator has disposed; the manner in which the powers of the Presidential member are to be exercised is itself the subject of discretion of the Presidential member.”

This passage was recently quoted with approval by McColl JA in South Western Sydney Area Health Service v Edmonds [2007] NSWCA 16 at [134] (‘Edmonds’). To describe the relative weight and relevance of the expert evidence as “a discretionary decision which could only be disturbed on House v The King principles” was described by McColl JA as “an over-generalisation” (at [133]).

The nature of a review was further considered by the Court of Appeal in State Transit Authority of New South Wales v Fritzi Chemler [2007] NSWCA 249 where Spigelman CJ said at [28] and [30]:

“28. The concept of a review on the merits is wider than the concept of an appeal in a judicial context. There is a well established line of authority on the use of the terminology of ‘review’ instead of ‘appeal’ with respect to the workers compensation system in this State which establishes the breadth of a review on the merits.
30. A Presidential member exercising a power to review a decision must decide whether the original decision is wrong or, as it is often put in the context of administrative appeals on merits, must decide what is the true and correct view. If s/he does so decide then s/he should substitute his or her own views, unless it is an appropriate case to remit. The power to remit is not constrained in the manner for which the Appellant contends.”

Before an Arbitrator’s decision will be revoked on review it must be demonstrated that it contains or has resulted from an error of fact, law or discretion. The error must be such that, but for it, a different decision should have been made (see Snow Confectionary Pty Ltd v Askin [2004] NSWWCCPD 56; Section 294 of the 1998 Act; YG & GG v Minister for Community Services [2002] NSWCA 247, and Absolon v NSW TAFE [1999] NSWCA 311).

I intend to apply the above principles in the matter before me.

SUBMISSIONS AND FINDINGS

Issues in Dispute

The Appellant Employer submits:

(a)the primary issue in the proceedings was whether any “condition” affecting Mrs Bowditch was a diagnosable psychiatric entity that could properly be characterised as an “injury” for the purposes of the workers compensation legislation (T3.53-54) and the Arbitrator did not address this issue but only dealt with the issues of “causation” and “incapacity”, and

(b)counsel for Mrs Bowditch identified (without accepting) the grounds of declinature as employment being a substantial contributing factor to the worker’s condition (T3.32), which the Arbitrator characterised as the “causation” issue; the “injury” issue (T3.53-54) and section 11A in relation to the incident of 21 July 2006 (T4.6). The Arbitrator did not deal with the “injury” issue or the section 11A issue.

The Respondent Worker submits:

(a)the Application attached compliance documentation in the form of a section 74 notice from the insurer dated 13 December 2006;

(b)the Appellant Employer’s Reply acknowledged that the matters in dispute were confirmed as per the “dispute notice” attached to the Application;

(c)at the arbitration, her counsel submitted that the section 74 notice, in reality, did not raise any issue requiring determination by the Arbitrator due to the imprecise language adopted. The Arbitrator rejected this submission;

(d)in the alternative, she proceeded on the basis that the use of the language “substantial contributing factor” in the letter of 13 December 2006 suggested that the claim was resisted under section 9A of the 1987 Act;

(e)the reference to the absence of a “diagnosis in line with the DSM-IV” suggested a reference to section 11A(3) of the 1987 Act, presumably to the effect that whatever medical condition she was suffering from it was not a “psychological injury” within the meaning of that section;

(f)the third matter raised in the letter of 13 December 2006 was that the actions taken by the Appellant Employer with respect to the incident on 21 July 2006 were reasonable. This appeared to import some of the language of section 11A of the 1987 Act, but it is not clear how they were said to apply. Her case before the Arbitrator proceeded on the basis that part of the Appellant Employer’s case was that she was suffering from a psychological condition that was wholly or predominantly caused by reasonable action taken by the Appellant Employer in relation to one or other of the specified criteria in section 11A, and

(g)in the face of the imprecision in the section 74 notice, the Arbitrator’s refinement of the issues to “causation” and “incapacity” was generous to the Appellant Employer and overstated the ambit of the issues properly the subject of dispute.

The notice referred to by the Respondent Worker as the section 74 notice is a letter from TMF dated 13 December 2006 addressed to Mrs Bowditch. It states in the first three paragraphs:

“Re: Liability declined
Reference is made to your claim for workers compensation.

Following further inquiries and a review of all relevant material held on file, we wish to advise that liability for your claim is declined. Two copies of our formal notice are enclosed for your assistance.

It is our opinion that your employment is not a substantial contributing factor to your condition [‘the first issue’], you are not suffering a diagnosis in line with the DSM-IV [‘the second issue’] and that actions taken by your employer with respect to the incident on 21/07/06 were reasonable [‘the third issue’]. This is supported by independent Medical reports from Dr Eva Lowy, Dr Leonard Lee and Factual Investigation conducted by Austrace Investigations….”

The documents referred to as “our formal notice” are not in evidence.

At the arbitration, counsel for Mrs Bowditch (Mr Stockley), argued that there was no legitimate basis upon which his client’s claim had been denied (T4.25). He argued that the letter denying liability purports to raise three issues. First, that Mrs Bowditch’s employment was not a substantial contributing factor to her “condition”, second, that she was not suffering a “diagnosis in line with the DSM-IV” and, third, that the actions taken by the Department “with respect to the incident on 21 July 2006 were reasonable”. Mr Stockley’s argument may be summarised as follows:

(a)the first issue appears to import the language of section 9A of the 1987 Act but does not do so accurately because that section relates to the causal connection between employment and injury, not employment and “the condition”. The law relating to causation between injury and incapacity does not require an identification of a substantial contributing factor, so there is an ambiguity or uncertainty as to what the notice meant and this ground does not “join an issue on which liability would be denied” (T3.50);

(b)the second issue may be read to mean “you’re not suffering from a condition that is categorised in DSM-IV” (T3.56). Mr Stockley then said “So the applicant would take that on board on those terms, if that’s what’s meant, and I’ll take you to the medical evidence in due course”, and

(c)the third issue appears to attempt to import the language of section 11A of the 1987 Act, but unsuccessfully and the Arbitrator could ignore any argument founded on that defence.

Counsel for the Appellant Employer (Mr Lowe) made no submissions on these matters at the arbitration.

In his Statement of Reasons for Decision (‘Reasons’) the Arbitrator stated, incorrectly, that the insurer declined liability on two grounds: first, that Ms Bowditch’s employment was not a substantial contributing factor to her condition and that actions taken by the Department with respect to the incident on 21 July 2006 were reasonable (Reasons, paragraph four). He then stated that the parties agreed that the only issues in dispute were causation and capacity for work (Reasons, paragraphs five to seven inclusive). As the above summary of Mr Stockley’s submissions demonstrates, the parties did not agree on the issues in dispute.

At paragraph 11 of his Reasons the Arbitrator noted that the legislation most relevant to the determination was section 9A of the 1987 Act. He then referred (at paragraph 12) to Mr Stockley’s submission that the letter of 13 December 2006 did not adequately identify any basis on which liability could be denied and added:

“However, I note that this letter refers to the enclosure of ‘two copies of our formal notice’. These documents were not filed with the Application and I do not propose to deal with this submission in their absence.”

The fact that the “formal notice” was not in evidence did not relieve the Arbitrator of his duty to determine the matters argued by Mr Stockley and to identify and determine the issues in dispute. The Arbitrator was in error in not dealing with Mr Stockley’s submissions.

A number of preliminary comments can be made about the letter of 13 December 2006:

(a)on its face, it does not purport to be a notice under section 74;

(b)as Ms Bowditch’s claim was initially accepted and she had been paid compensation for a continuous period of more than 12 weeks but less than one year, she was entitled to continue to receive compensation for two weeks after the date of the notice (section 54(3)(a) of the 1987 Act). That is what she received;

(c)therefore, it would seem, the notice was a section 54 notice under the 1987 Act;

(d)if notice is given under section 54 of the 1987 Act and it contains “the statements and information” required in a notice under section 74 of the 1998 Act, it is not necessary for a notice to be given under section 74 (section 74(4));

(e)notices issued under section 54 of the 1987 Act must be in such form or contain such information “as may be prescribed by the regulations” (section 54(4)(b)) and, unless a separate section 74 notice has been issued, must contain the “statements and information” that a notice under section 74 of the 1998 Act is required to contain;

(f)because the notice was issued after 1 November 2006, the amended regulations introduced by the Workers Compensation Amendment (Miscellaneous Provisions) Regulation 2006 apply (‘the Amended Regulation’);

(g)under the Amended Regulation, Part 6 clause 15 of the Workers Compensation Regulation 2003 (‘the 2003 Regulation’) provides:

“15 Notice of intention to discontinue or reduce weekly payments

(1) The notice referred to in section 54 of the 1987 Act must include the following:
(a) a statement of the reason for the decision to discontinue payment, or reduce the amount, of weekly payments of compensation and of the issues relevant to the decision,
(b) a statement identifying all the reports and documents submitted by the worker in making the claim for weekly payment of compensation,
(c) a statement identifying all the reports of the type to which clause 37 applies that are relevant to the decision, whether or not the reports support the reasons for the decision,
(d) a statement advising that a copy of a report required to be provided by the insurer under clause 37 (3) (except as provided by clause 37 (5) or (6)) accompanies the notice,
(e) a statement to the effect that the worker can request a review of the decision by the insurer,
(f) a statement to the effect that the matters that may be referred to the Commission or District Court are limited to matters specified as disputed in the notice, in a request for a further review of the decision or in a notice after a further review of the decision,
(g) advice as to the procedure for requesting a review of the decision,
(h) unless paragraph (i) applies, a statement to the effect that the worker can refer the dispute about the decision for determination by the Commission (in the case of a dispute about a matter other than a coal miner matter) or the District Court (in the case of a dispute about a coal miner matter),
(i) if the insurer has referred or proposes to refer the disputed discontinuation or reduction for determination by the Commission or District Court, a statement to that effect specifying the date of referral or proposed referral,
(j) a statement to the effect that the worker can seek advice or assistance from the worker’s trade union organisation, from a lawyer or from the WorkCover Claims Assistance Service,
(k) the street address and email address of the Registrar of the Commission or Registrar of the District Court, as appropriate.
…”

(h)the letter of 13 December 2006 did not comply with clause 15 in that it did not advise Mrs Bowditch of the matters set out in clause 15(e), (f) or (g). However, this point was not taken at the arbitration nor on appeal and I express no concluded view about it save to note that in B W Esler Services Pty Ltd v Dulhunty (2000) 21 NSWCCR 267 Powell JA held at [46] that substantial compliance with clause 15(1)(a) (in its previous form) was sufficient in that case (see Interpretation Act 1987, section 80) and that section 54 did not provide that a notice that did not comply with the provisions of section 54 and clause 15 was ineffective to terminate compensation payments;

(i)section 74(1) of the 1998 Act provides:

“74 Insurers to give notice and reasons when liability disputed

(1) If an insurer disputes liability in respect of a claim or any aspect of a claim, the insurer must give notice of the dispute to the claimant.
(2) The notice must contain the following:
(a) a statement of the reason the insurer disputes liability and of the issues relevant to the decision,
(a1) a statement to the effect that the worker can request a review of the claim by the insurer,
(b) unless paragraph (c) applies, a statement to the effect that the worker can refer the dispute for determination by the Commission,
(c) if the insurer has referred or proposes to refer the dispute for determination by the Commission, a statement to that effect specifying the date of referral or proposed referral,
(c1) a statement to the effect that the matters that may be referred to the Commission are limited to matters notified in the notice, or in a notice after a further review or in correspondence prior to any such referral concerning an offer of settlement or in a request for a further review,
(d) a statement to the effect that the worker can also seek advice or assistance from the worker’s trade union organisation or from a lawyer,
(e) such other information as the regulations may prescribe or, subject to the regulations, as the Authority may from time to time approve and notify to insurers and self-insurers.
…”

(j)section 74 notices must indicate the provisions of the workers compensation legislation on which the insurer relies (section 74(2A) and must be expressed in “plain language” (section 74(2B)). The letter of 13 December 2006 has not complied with either of these requirements. Whilst these omissions do not necessarily make the notice invalid so as to prevent the Commission having jurisdiction to determine the dispute, it has resulted in uncertainty that could have been avoided with the use of reasonable care by the person who drafted the notice.

Except as set out in section 289A(4) of the 1998 Act, a dispute cannot be referred for determination by the Commission unless it concerns “only matters previously notified as disputed” (section 289A(1)). However, section 289A(2) provides:

“(2) A matter is taken to have been previously notified as disputed if:
(a) it was notified in a notice of dispute under this Act or the 1987 Act after a claim was made or a claim was reviewed, or
(b) it concerns matters, raised in writing between the parties before the dispute is referred to the Registrar for determination by the Commission, concerning an offer of settlement of a claim for lump sum compensation.”

The term “notice of dispute” is not defined in either the 1987 Act or the 1998 Act but it seems reasonable to conclude that it refers to a notice issued under either section 74 of the 1998 Act or section 54 of the 1987 Act. This is consistent with the definition of “dispute notice” in clause 2 of Schedule 6 of the 2003 Regulation, which deals with costs. The word “dispute” is defined in section 76 of the 1998 Act to mean (for the purposes of Division 3) “a dispute in connection with a claim for compensation between” a person who makes a claim and the person or insurer on whom the claim is made. In my view the letter of 13 December 2006 was a “notice of dispute” for the purposes of section 289A, though it did not strictly comply with clause 15. The question remains: what issues were notified in that letter as being in dispute?

The letter of 13 December 2006 is poorly drafted and does not clearly state the reason the insurer disputed liability and the issues relevant to that decision. The reference to “substantial contributing factor” in the letter implies that reliance is placed on section 9A of the 1987 Act. That section states that “No compensation is payable under this Act in respect of an injury unless the employment concerned was a substantial contributing factor to the injury” (emphasis added). The term “condition” is not used in the legislation and should not have been used in the letter of 13 December 2006. If the term meant to refer to Ms Bowditch’s health in general and her incapacity in particular, it was a fundamentally incorrect and misleading statement. The employment concerned does not have to be a substantial contributing factor to the incapacity that is said to have resulted from the injury. The connection between the employment injury and the worker’s incapacity is established according to whether the incapacity has resulted from the injury (Kooragang Cement Pty Limited v Bates (1994) 35 NSWLR 452).

It is clear, however, that the parties, by the conduct of their respective cases, regarded section 9A as being in issue and the word “condition” was interpreted to mean “injury”. They called evidence on and made submissions about that issue. Whilst the letter of 13 December 2006 did not identify that issue with the degree of clarity that should normally be used in a notice under section 54 or section 74, and whilst it would have been preferable if the Arbitrator had ruled on this issue before hearing argument on the merits of the claim (so that an application could have been made under section 289A(4) of the 1998 Act, if necessary), I find, not without considerable hesitation, that section 9A was an issue in dispute at the arbitration. That is, was Ms Bowditch’s employment a substantial contributing factor to her injury?

The second issue raised in the letter is equally poorly expressed. Whether Mrs Bowditch suffered an injury with the Department is not decided simply by asking if she has a “diagnosis in line with DSM-IV”, though that is a most relevant issue. The question is: did Mrs Bowditch suffer an injury arising out of or in the course of her employment (section 4(a) of the 1987 Act). An “injury” in section 4 includes:

“(i) a disease which is contracted by a worker in the course of employment and to which the employment was a contributing factor, and
(ii) the aggravation, acceleration, exacerbation or deterioration of any disease, where the employment was a contributing factor to the aggravation, acceleration, exacerbation or deterioration, and
…”

By stating that Mrs Bowditch was not suffering a “diagnosis in line with DSM-IV” the insurer was apparently attempting to indicate an intention to deny liability on the grounds that Mrs Bowditch had not suffered a compensable injury. That view is confirmed when one reads the medical evidence in support of the denial. However, a notice under section 54 or section 74 should clearly and plainly identify on its face the reason liability is disputed and the issues relevant to the decision. A worker should not be forced to wade through attachments to the notice in an attempt to uncover the real issues. The issues must be clearly and succinctly stated in the notice itself (see Mateus v Zodune Pty Limited t/as Tempo Cleaning Services [2007] NSWWCCPD 227 (‘Mateus’)).

Therefore, on balance, and again having particular regard to the way the matter was presented and argued before the Arbitrator, I am inclined to the view (not without considerable reluctance) that the insurer disputed injury in this part of the notice. That is, it disputed whether the nature and conditions of Ms Bowditch’s employment with the Department caused or aggravated a psychological injury under section 4 of the 1987 Act.

The third issue in the letter of 13 December 2006 is even more poorly expressed. It is presumably a reference to section 11A of the 1987 Act. If it is, it is inadequate to identify 11A as an issue in dispute. If section 11A was to be relied on then, at the minimum, the insurer should have identified the grounds for it relying on it and whether it was alleged that Ms Bowditch’s psychological injury was wholly or predominantly caused by reasonable action taken or proposed to be taken by the Department with respect to one or more of the circumstances set out in section 11A. The notice did not do that. As explained in Mateus, it is not sufficient for an insurer to attempt to rely on issues contained in documents attached to the relevant notice disputing liability. The reasons for the insurer disputing liability and the issues relevant to the decision must be stated in plain language in the body of the notice.

For these reasons I believe the notice did not properly and adequately identify section 11A as a matter in dispute in the section 54 notice. Notwithstanding this omission, I have considered the merits of this issue at paragraph [142] below.

The above conclusion means that the Arbitrator erred in failing to consider or determine the issue of “injury” notified (albeit in an unsatisfactory way) in the notice of dispute and that issue must be re-determined.

Whilst the Arbitrator did consider the issue of “causation”, that is a separate and distinct issue from “injury” (see Tuwai v Rail Services Australia & anor [2007] NSWWCCPD 232 at [31] and Mateus).

The Appellant Employer argues that the Arbitrator failed to give adequate reasons in support of his conclusion on the issue of causation. The Arbitrator briefly referred to each parties’ medical evidence (Reasons, paragraphs 14, 15, 16, 18 and 19) and the Department’s submission that Mrs Bowditch had not established that work was a substantial contributing factor to her condition (Reasons paragraph 17). He then concluded at paragraphs 20 to 22:

“20.I do not agree with the Respondent’s submissions that the Applicant’s doctors have failed to specify the events on which they base their opinions. Dr Clark is quite specific in this regard on page 1 of his report of 7 March 2007, and it appears obvious from the history related that there is no ambiguity as to the basis on which his opinion was formed.
21.I note that the Applicant’s first incapacity arose during her employment with the Respondent. Other employment stressors have been a consistent part of the Applicant’s history as she sets out in her statement. However I do not believe these detract from the Applicant’s case.
22.After consideration of the matters set out above, and the submissions made by both parties, I have formed the view that the Applicant’s employment was a substantial contributing factor to her injury within the meaning of section 9A of the Workers Compensation Act 1987.”

To succeed in having the decision set aside on this ground the Department must demonstrate not only that the reasons are inadequate, but that their inadequacy discloses that the Arbitrator has failed to exercise his statutory duty to fairly and lawfully determine the application (YG & GG v Minister for Community Services [2002] NSWCA 247; Absolon v NSW TAFE [1999] NSWCA 311; ADCO Constructions Pty Ltd v Ferguson [2003] NSWWCCPD 21).

The standard by which the adequacy of reasons must be determined is relative to the nature of the decision itself and the decision-maker (Mayne Health Group t/as Nepean Private Hospital v Sandford [2002] NSWWCCPD 6). An Arbitrator’s reasons should be read as a whole and it is not for a Presidential member on review to comb through the Arbitrator’s findings and reasons in search of error (Beale v GIO (NSW) (1997) 48 NSWLR 430 at 444; Minister for Immigration and Multicultural Affairs v Wu Shu Liang (1996) 185 CLR 259). It is not necessary for an Arbitrator to refer to every piece of evidence (Yates Property Corporation Pty Limited (in Liq) v Darling Harbour Authority (1991) 24 NSWLR 156; Ainger v Coffs Harbour City Council [2005] NSWCA 424).

In Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 (‘Soulemezis’) McHugh JA (as he then was) stated at 280:

“If an obligation to give reasons for a decision exists its discharge does not require lengthy or elaborate reasons: Ex parte Powter; Re Powter (1945) 46 SR (NSW) 1 at 5: 63 WN 34 at 36. But it is necessary that the essential ground or grounds upon which the decision rests should be articulated. In many cases the reasons for preferring one conclusion to another also need to be given.”

The resolution of disputes between medical experts requires a rational examination and analysis of the evidence and the issues (per Ipp JA in Sourlos v Luv A Coffee Lismore Pty Ltd & anor [2007] NSWCA 203 at [25] citing Wiki v Atlantis Relocations (NSW) Pty Ltd (2004) 60 NSWLR 127). In Hume v Walton [2005] NSWCA 148, McColl JA said at [69]:

“The primary judge’s duty was not only to record the evidence but also to record the findings she made based on that evidence: Mifsud v Campbell (1991) 21 NSWLR 725 at 728. While the extent of that duty may depend upon the circumstances of the individual case, where there is disputed expert evidence, the ‘parties are entitled to have the judge enter into the issues canvassed before the Court and to an explanation by the judge as to why the judge prefers one case over the other’: Archibald v Byron Shire Council [2003] NSWCA 292; (2003) 129 LGERA 311 at [54] per Sheller JA (with whom Beazley JA agreed); see also Bright v Joodie Holdings No 2 Pty Ltd [2005] NSWCA 134 at [33] per Santow JA (with whom Sheller JA and Campbell AJA agreed).”

Her Honour’s comments in Hevi-Lift (PNG) Limited v Etherington [2005] NSWCA 42 at [100] are also relevant:

“The primary judge must state generally and briefly the grounds which have led him or her to conclusions concerning disputed factual questions and to list the findings on the principal contested issues. Although it is not necessary that the judge refer to all the evidence, ‘[w]here nothing exists but an assertion of satisfaction on undifferentiated evidence the judicial obligation has not been discharged’: Soulemezis, at 259, per Kirby P.”

After a very brief reference to part of the conflicting evidence, the Arbitrator merely concluded that he formed a view that Mrs Bowditch’s employment was a substantial contributing factor to her injury within the meaning of section 9A of the 1987 Act. He did not set out his understanding of the applicable law, as required by Part 15 Rule 15.6 of the Workers Compensation Commission Rules 2006. He did not consider the terms of section 9A. He provided no rational examination or analysis of the conflicting medical evidence and did not adequately explain his reasoning process on any of the issues argued by the Appellant Employer. In my view the Arbitrator failed to comply with the standard required by the above authorities and this part of his decision must be revoked.

The Department seeks, without providing any reason, that the matter be referred to another Arbitrator for re-determination according to law. The Respondent Worker submits that as neither party led any oral evidence, there is no benefit to be derived by having the matter re-heard by another Arbitrator and the Presidential member allocated to hear the appeal is in as good a position to re-determine the matter as an Arbitrator.

If it is possible for a Presidential member to re-determine a matter on appeal without any prejudice or denial of procedural fairness to either side that is the course that should usually be adopted as it will save time, costs and stress to the parties (Chubb v Security Australia Pty Ltd v Trevarrow [2004] NSWCA 344). I agree with the Respondent Worker’s submission that as no oral evidence has been led and as both parties have made lengthy submissions on all issues, it is appropriate that I re-determine the matter and that is the course I propose to adopt.

RE-DETERMINATION

Injury and Causation

The Authorities

In Stewart v NSW Police Service (1998) 17 NSWCCR 202 (‘Stewart’) Judge Neilson considered at [6] what a claimant must establish in a claim for a psychological or psychiatric injury:

“In psychological cases, it is important to realise what must be proved. In Kirby v Trustees of the Society of St Vincent de Paul (NSW), NSWCC, No. 20708/94, 11 April 1997, unreported, I set out at 4 what must be proved where an allegation of psychiatric injury is made. This analysis of the law, of course, was made when s 11A was not applicable. That summary of the law is this:
‘To succeed in this Court, the applicant must prove that the conduct complained of constituted ‘injury’ within the meaning of the Act. Where, as here, a psychiatric injury is alleged the applicant must prove either:
(i) that the nervous system was so affected that a physiological effect was induced, not a mere emotional impulse: Yates v South Kirkby Collieries Ltd [1910] 2 KB 538; Austin v Director-General of Education (1994) 10 NSWCCR 373; Thazine-Aye v WorkCover Authority (NSW) (1995) 12 NSWCCR 304; Zinc Corporation Ltd v Scarce (1995) 12 NSWCCR 566, or
(ii) the aggravation, acceleration, exacerbation or deterioration of a pre-existing psychiatric condition: Austin’s case.’

Frustration and emotional upset do not constitute injury: Thazine-Aye’s case; nor, semble, where [sic] a mere ‘anxiety state’: the Zinc Corporation case per Meagher JA at 575B. A ‘straight litigation neurosis’ is not compensable: Karathanos v Industrial Welding Co Ltd [1973] 47 WCR (NSW) 79 at 80. A misperception of actual events, due to the irrational thinking of the worker leading to a psychiatric illness is not compensable: Townsend v Commissioner of Police ( NSWCC, No. 8061/89, McGrath CJ, 17 February 1992, unreported [see now (1992) 25 NSWCCR 9]).

It follows that subsequent rationalisation of earlier innocuous events, which rationalisation leads to psychiatric illness is also not compensable. Furthermore, once the applicant has established ‘injury’ she must prove that an incapacity for work resulted therefrom.”

There are three important additional requirements that must now be added to the above comments:

1.under section 9A of the 1987 Act a claimant for compensation for a psychological injury must now prove that his or her employment was a substantial contributing factor to the injury;

2.he or she must not be prevented from receiving compensation by reason of the provisions of section 11A of the 1987 Act, and

3.the authority of Townsend v Commissioner of Police (1995) 25 NSWCCR 9 must be read subject to the Court of Appeal decision in State Transit Authority of New South Wales v Fritzi Chemler [2007] NSWCA 249.

In Bhatia v State Rail Authority of NSW (1997) 14 NSWCCR 568 (‘Bhatia’) Judge Burke reviewed several authorities dealing with psychiatric injuries and considered what was needed in order to recover compensation. After referring to emotional responses to life events his Honour said at 578:

“Emotion is a fact of day-to-day life. If your daughter is ill, you can tend to be anxious; if she dies, you can tend to be depressed. Neither reaction is a physiological abnormality both being emotional reactions, or impulses, appropriate to the stimulus. This type of emotional impulse is the normal reaction of a human person or organism to a particular event. If that reaction becomes excessive in degree or duration, or is inappropriate to the stimulus, then there can be a physiological problem.
This approach is certainly consistent with the views expressed by Powell JA in Austin v. Director General of Education (1994) 10 NSWCCR 373 at 386-7. In his view, the symptoms of anxiety, mania and depression experienced by the worker were physiological effects manifesting the effects of injury. While his Honour has no need of my approbation, such an approach I would regard as impeccably correct. In my view if it be accepted that a worker has symptoms of this type and degree, then it is axiomatic that he has suffered an injury. A particular case then becomes a question of whether such arises out of or in the course of the employment--as in Zinc Corporation Ltd v. Scarce (1995) 12 NSWCCR 566--or whether it results from a relevant work cause--as in Anderson Meat Packing Co Pty Ltd v. Giacomantonio [1973] 47 WCR (NSW) 3.”

His Honour added at 579A:

“In my lexicon, a diagnosis of anxiety state of such degree and long duration would be axiomatically a physiological effect. I would not expect that any psychiatrist, unless specifically asked, would feel it necessary to so categorise such a reaction. It would be taken for granted. ‘Impulse’ has to me connotations of spontaneity and transience. The Macquarie dictionary suggests ‘sudden, involuntary inclination prompting to action’. Probably a common occurrence is in the term beloved of marketing people when they speak of impulse buying. It’s a spur of the moment affair. This concept fits quite well with the accepted emotional responses of people to particular stimuli--it comes, it lasts relatively briefly and it passes.”

His Honour concluded at 579F:

“All the Act is concerned with is injury to a worker. A worker is what he is. He is both mind and matter which function as one integrated, symbiotic entity--as a single organism. Whether it is either or both of the perceived elements that is injured is really immaterial. The ultimate question is, has the worker received injury? Has the human organism which is the worker become dysfunctional? Any condition as debilitating and long lasting as the effects of these relevant incidents on Mr Bhatia could hardly be conceived as anything but injury.”

Since Bhatia was decided the High Court has considered the recovery of damages for psychiatric injuries in Tame v New South Wales (2002) 211CLR 317 (‘Tame’) where Gummow and Kirby JJ (with Gaudron J agreeing) held at 447:

“It has been noted earlier in these reasons that the common law in many United States jurisdictions has developed differently. In Australia, as in England, Canada and New Zealand, a plaintiff who is unable affirmatively to establish the existence of a recognisable psychiatric illness is not entitled to recover [168]. Grief and sorrow are among the ‘ordinary and inevitable incidents of life’ [169]; the very universality of those emotions denies to them the character of compensable loss under the tort of negligence [170]. Fright, distress or embarrassment, without more, will not ground an action in negligence. Emotional harm of that nature may be evanescent or trivial.”

In Commonwealth v Smith [2005] NSWCA 478 (‘Smith’) Handley JA noted at [16] and [17]:

“16 Thus the law does not recognise that emotional and mental problems constitute an injury unless they constitute a psychiatric illness that has been recognised as such by ‘professional medical opinion’. Accordingly a plaintiff, such as Mr Smith, who is aware of all his symptoms, cannot know that he has suffered a mental injury unless he knows that they constitute a recognisable psychiatric illness. Without this knowledge he cannot know that he has suffered something which the law recognises as an injury.
17 In Tame v New South Wales Gummow and Kirby JJ explained the rationale for this restriction at 382-3:
‘The apparent disregard of the distinction between emotional distress and a recognisable psychiatric illness in some United States jurisdictions is significant in appreciating the restrictive common law rules that have there applied. Properly understood, the requirement to establish a recognisable psychiatric illness reduces the scope for indeterminate liability or increased litigation. It restricts recovery to those disorders which are capable of objective determination. To permit recovery for recognisable psychiatric illnesses, but not for other forms of emotional disturbance, is to posit a distinction grounded in principle rather than pragmatism, and one that is illuminated by professional medical opinion rather than fixed purely by idiosyncratic judicial perception. Doubts as to adequacy of proof ... are to be answered not by the denial of a remedy in all cases of mental harm because some claims may be false, but by the insistence of appellate courts upon the observance at trial of principles and rules which control adjudication of disputed issues’.”

The authorities of Tame and Smith are consistent with section 11A(3) of the 1987 Act where “psychological injury” is defined as “an injury (as defined in section 4) that is a psychological or psychiatric disorder. The term extends to include the physiological effect of such a disorder on the nervous system.” In light of the above authorities it should now be accepted that a worker has suffered a psychological injury under section 4 of the 1987 Act if he or she has sustained a psychological or psychiatric disorder in the course of or arising out of employment and employment has been a substantial contributing factor to the injury, and section 11A does not apply to prevent the recovery of compensation. Such a disorder will, almost invariably, result in a physiological effect (as it has in the present case) thus also satisfying the test propounded by Judge Neilson in Stewart. Compensation is not recoverable for an emotional impulse or mere anxiety state.

Mrs Bowditch’s Case

Mrs Bowditch is a married woman with two independent adult children. Her husband is self-employed. She was born on 30 September 1951 and is now 56 years of age. On completion of her high school education she started work in the banking industry. She then worked in various government departments. She worked as a welfare officer for Centrelink until 1984 and then in child protection for DOCS until 1988 when she started with the Appellant Employer as a Probation and Parole Officer. In 1994 or 1995 she returned to work for DOCS for one year and then for the Western Sydney Area Health Services as an Area Protection Co-ordinator. In 2000 she returned to work with the Appellant Employer.

In her statement of 4 June 2007 she outlined a number of incidents that occurred whilst she worked for the Department that, she says, affected her psychologically. In November 2002 she was the sole attending officer on a home detention site visit for an offender named Abdul (Albert) Alameddine. In the course of the visit she discovered a substantial quantity of drugs and laboratory equipment in Mr Alameddine’s room. She said at paragraph 13 of her statement that she was in fear for her safety and pulled out her mobile phone to call her unit leader. Mr Alameddine tried to burn the drugs and the fire exploded into a fireball (Ms Bowditch’s statement 4 June 2007, paragraph 14). At paragraph 15 of her statement she added:

“I ran out of the house to save myself. I saw the offender emerge from the burning building with severe burns to his hands, face and head. The offender’s girlfriend yelled at me saying ‘Look what you have done to him’. I was traumatised and felt numb after this incident, but I was never offered any counselling. Later that day I made a statement to the police. I returned to duty the following day.”

In June 2004 Mrs Bowditch supervised a woman on Drug Court and received written threats from the woman’s partner. She spoke to her unit leader and advised she had been affected by the threats, but was told to continue with the case.

In September/October 2004 Mrs Bowditch was on a home detention case for a female offender when the woman’s partner assaulted her and abducted their child. Mrs Bowditch was involved with the Federal Police in recovering the child.

In October 2004 she was suffering anxiety and consulted Dr Clarke, psychiatrist, on referral from her general practitioner, Dr Houwing. In his hand written report addressed to Dr Houwing (spelt “Howing” in the report) dated 12 October 2004, Dr Clarke stated:

“Patricia has classical symptoms of a PTSD. This is getting worse and she is becoming frantic at times.

She has insomnia, bad dreams & flashbacks. I do not think she should return to work for the next six weeks. She is becoming a hazard to herself & her future.
I have she [sic] suggested W.C. leave
She is doubtful & I would be grateful for your advice.
She is to take a course of Stilnox and I have suggested some relaxation techniques, perhaps a direct method would be acupuncture.
Thanks for the referral.”

Mrs Bowditch did not take any leave from work as she “felt under pressure from work not to be weak” (Ms Bowditch’s statement 4 June 2007, paragraph 18). She felt she would have little support from her unit leader, as she had been critical and unsupportive in the past. She saw Dr Clarke several times between October 2004 and February 2005.

In December 2004 Mrs Bowditch approached the district manager and, because of her distress, requested an early transfer to the district office if a vacancy was available. She was told, “adults should fight their own battles” (Ms Bowditch’s statement 4 June 2007, paragraph 19).

On 29 March 2005 Mrs Bowditch was transferred to the Parramatta District Office. When she discovered that Mr Alameddine was reporting to the Parramatta office she informed the district manager that she was extremely fearful and distressed at the prospect of encountering him in the course of her work and she requested that he be assigned to another office. She was extremely fearful, especially when entering or leaving the office or in the car park.

On or about 18 May 2006 a client became very aggressive and started to scream and swear at her. He also banged on a protective screen and demanded that she give him a report she had written. Another colleague saw him. As a result, Mrs Bowditch was shaking and went home for the day. She was given no support and was allegedly told that she should be able to deal with an angry client.

As a result of increasing difficulty and anxiety during direct dealing with offenders, Mrs Bowditch applied for a position delivering training services at the Brush Farm Academy (‘the Academy’). She was appointed to that position in May 2006. When she started at the Academy she found there appeared to be little organised orientation, the working environment was negative, and roles and resources were not always clear. A colleague, Faye Parkinson, responded to such difficulties with extreme emotion and Mrs Bowditch found it difficult to work with her.

Graduation day at the Academy was 21 July 2006. Things seemed “a bit chaotic”. Mrs Bowditch walked into the office and Ms Parkinson was present and began shouting at her. Mrs Bowditch felt like she “was about to be attacked” and held her hand up and said, “Stop, stop shouting at me” (Ms Bowditch’s statement 4 June 2007, paragraph 27). Ms Parkinson started to move towards Mrs Bowditch (who feared that she may be hit) and shouted “I don’t think I can work with you anymore” to which Mrs Bowditch responded, “well leave then”.

Mrs Bowditch immediately informed the acting manager, Mr Vrzic, of the incident who organized a meeting with both women on the same morning. Mrs Bowditch was crying and hyperventilating but composed herself sufficiently to participate in the balance of the graduation day though she felt like she was in a haze and had pains in her chest. She could barely eat and found it difficult to sleep that night and felt like her body could not move. She started to have increased nightmares and experience flashbacks of all the incidents that happened to her while working for the Department including that three clients or their partners had been murdered. She was also troubled by intrusive memories of tragic and alarming incidents she experienced with DOCS.

Mrs Bowditch ceased work on 21 July 2006 and has not returned.

On 22 July 2006 she saw Dr Houwing who issued her with a WorkCover medical certificate diagnosing “adjustment disorder with anxiety & depression” alleged to have occurred as a result of being “screamed at by another person in the workplace as precipitating event”.

On 4 August 2006 Mrs Bowditch saw Dr Malhotra (general practitioner at the same practice as Dr Houwing). A WorkCover certificate was issued diagnosing “anxiety, depression, cumulative post-traumatic disorder”.

She saw Mr Lavidis, clinician/councillor, and Dr Clarke soon after the July 2006 incident.

Dr Malhotra completed a questionnaire at the insurer’s request on 20 September 2006. It records that Mrs Bowditch gave the following history (presumably to Dr Houwing) on 22 July 2006:

“Patient c/o stress since teaching role at Academy. Finding it a hostile environment. Was screamed at by [a] colleague. Pt asked her to stop but she continued. It was the trigger point for increasing symptoms.” (emphasis added)

Under “Initial symptoms, continuing symptoms and further complaints”, Dr Malhotra wrote:

“Not coping, not cooking, not eating regularly, wt loss, unable to do chores, anxious, tearful. Nightmares related past client’s patient has dealt with. Fear of going [out]. Insomnia. Fear of driving.”

Under “Diagnosis and general prognosis” he wrote:

“Accumulative post traumatic stress disorder. Unable to assess prognosis as yet to [sic] her ability to cope with day to day tasks. But patient unlikely to be able to again work with clients of the Dept of Corrective Services.”

Under “In your diagnosis did you consider the employment to be the most significant contributing factor?” he wrote:

“Most definitely.”

Dr Malhotra did not think Mrs Bowditch would be able to return to her pre-injury duties but may be able to get back to work that does not involve working with clients. He added “until the patient is able to cope with the fear of going out of the house & driving it would be hard to return to any type of duties”.

In an undated report from Mr Lavidis it is recorded that Mrs Bowditch contacted Australian Psychological Health Assessment and Counselling Services in a distressed state on 21 July 2006. Whilst this report is undated, it has a fax date of 29 September 2006 and was presumably prepared before that date. Mrs Bowditch saw Mr Lavidis on 28 July 2006 when she was confused, having telephoned on numerous occasions asking for directions, which she seemed unable to follow. She arrived one hour late for her appointment and seemed frightened. Mr Lavidis took a history of an altercation while working for the Department as a training officer. The clear inference is that this was the incident with Ms Parkinson. While explaining the altercation she said she would see the faces of children who died whilst she was working as a child protection specialist. She also described the incident with Mr Alameddine, saying that she was fearful and saying to herself “this is how people are killed” (Mr Lavidis’ report, page one). She was never asked to attend counselling or debriefing but she did organise an attendance at the Employment Assistance Program to receive counselling, which consisted of relaxation therapy.

Mrs Bowditch reported to Mr Lavidis that she experiences “flashbacks”, which cause a resurgence of her symptoms. She described feelings of panic and overwhelming terror, which tend to surface in stressful situations. Following the “multiple traumata” she experienced while working for the Department “she feels nauseous, tired, increased heart rate, problems concentrating, pains in the chest, pins and needles to her hands and feet that are often followed by flashbacks” (Mr Lavidis’ report, page two).

Mr Lavidis administered the Detailed Assessment of Posttraumatic Stress (‘DAPS’), a comprehensive 104-item clinical measure of trauma exposure and posttraumatic stress in individuals over 18 years who have a history of exposure to one or more potentially traumatic events. Mr Lavidis thought that Mrs Bowditch’s DAPS profile was most likely valid. Mrs Bowditch returned “clinically significant” scores in the re-experiencing, avoidance, hyperarousal and ‘suicidality’ scales. In Mr Lavidis’ opinion, the results placed Mrs Bowditch in the severe range for over all post-traumatic symptomatology and she fulfilled the criteria for post-traumatic stress disorder (‘PTSD’). He added that, though this is the original nature of her disorder her overall reaction has evolved into a chronic depression and anxiety, which diagnoses are “interlinked”.

Dr Clarke reported to Dr Malhotra on 18 October 2006 in the following terms:

“As you know Pat suffers a complex PTSD. This is obviously work-related. She is now agitated, phobic [and] at times housebound. She has bad times travelling, unable to organise her local tasks.
…

Pat is not able to work with psychopaths any longer, either as clients or bosses as she perceives it. She should continue on the cipramil for the next 9-18 months.
Thanks for your referral.” (emphasis added)

On 16 November 2006 Dr Clarke again wrote to Dr Malhotra and said:

“Pat is only content when she is home. She has become a dependent person and is unlikely to ever go back to work as a Probation & Parol Officer.
She is sleeping and better able to organise household tasks. She has stopped her night medication.

However, she is not fit to enter into any rehabilitation. I will review her in February.
Thanks for your care [sic].”

On 15 November 2006, Dr Kohler, consultant clinical psychologist, saw Mrs Bowditch at the request of the Department. Mrs Bowditch was referred for an Injury Management Assessment to determine, among other things, “psychological diagnosis”. Dr Kohler took a history of the incident with Mr Alameddine and that at the time she feared that her life was under threat. She said that after this incident she became paranoid and thought that people were following her and she could not go anywhere near the locality where the incident occurred. Under “conclusions” Dr Kohler stated that “Ms Bowditch was assessed to be suffering from a severe Post Traumatic Stress Disorder” and her prognosis for returning to her previous position was poor.

On 1 November 2006 Ms Tang and Ms Polglase, psychologists with Injury Management & Rehabilitation, assessed Mrs Bowditch and prepared an Initial Rehabilitation Assessment Report on 30 November 2006. In the course of their assessment they administered the Beck Depression Inventory and Beck Anxiety Inventory. The tests indicated that Mrs Bowditch was suffering moderate to severe depression and moderate anxiety.

Dr Clarke saw Mrs Bowditch again on 5 March 2007 and provided a medico legal report on 7 March 2007. He took a history of the incident with Mr Alameddine in 2002, the threat made against her in 2004 and the incident in the office described at [68] above when a client became violent. He also recorded her history that a new unit leader, Ms Simms, was hypercritical, demeaning her, provoking and harassing her resulting in increasing anxiety.

Dr Clarke then set out the psychiatric history and examination at pages three and four of his report. He diagnosed Mrs Bowditch to be suffering from “Post-traumatic Stress Disorder with an ensuing Severe Depression” (Dr Clarke report 7 March 2007, page four). Under “opinion” he stated:

“This woman suffered an acute trauma and developed a Post-traumatic Stress Disorder. This then developed into a chronic depressed state, known as a Severe Depression.”

Dr Clarke then set out at page five of his report the criteria from the Diagnostic and Statistical Manual of the American Psychiatric Association, 4^th edition (DSM-IV). He then set out his answers to specific questions posed by Ms Bowditch’s solicitor:

“1. History of injury obtained
This is in the body of the report above and is a consistent history.
2. Nature and extent of our client’s injury

She suffers a Severe Depression.

3. The client’s fitness for employment
Not fit.
4.Prognosis
Poor.
5.Your opinion as to whether our client’s employment was a ‘substantial contributing factor’ to her condition
This is the case.
6.Comment on future treatment needs
She should continue in present treatment. She should continue to attend a treating psychiatrist and psychologist. This would cost appropriately $250 a session. Her case is chronic and she should continue to attend for the foreseeable future. Medication would cost in the region of $150 a month.”

Dr Clarke again wrote to Dr Malhotra on 16 April 2007 saying that Mrs Bowditch was relatively settled and her headaches had gone with a change in medication, but she was still subject to “nightmares, hypervigilance and flashbacks”. He added:

“It is most unlikely she will ever get over this, rather it is a case where she has readjusted to a different avoidant lifestyle.
Thanks for your care.”

The Department’s Case

The Department relies on reports from Dr Eva Lowy, psychologist, and Dr Leonard Lee, psychiatrist, together with the reports from Injury Management & Rehabilitation and a factual investigation report to which several statements are attached.

Dr Lee saw Mrs Bowditch on 29 August 2006. He took a history of the altercation on 21 July 2006 and the incident with Mr Alameddine in 2002 and its impact on Mrs Bowditch. He thought many of her behaviours were “somewhat theatrical” (Dr Lee’s report 29 August 2006, page seven). He also noted that her former line managers described her as being “calculating, manipulating and a drama queen” (Dr Lee’s report 29 August 2006, page seven). It was suggested that she did not want to work full time, but her husband made her. She told neither line manager of the “previous issues now being raised by her”. It is alleged she did things for attention, such as pretend to faint or “similar antics”. He also referred extensively to the statements attached to the factual report. Those statements were critical of Mrs Bowditch’s standard of work, her attitude and her punctuality. It was suggested that Mrs Bowditch was argumentative, challenging, difficult and manipulative.

In Dr Lee’s opinion, given Mrs Bowditch’s presentation and the factual investigation, there is no psychiatric diagnosis and Mrs Bowditch “appears to be exaggerating her symptoms” (Dr Lee’s report 29 August 2006, page 10). He concluded that:

“Her employment is not the most substantial contributing factor to her condition as it appears that she has somewhat dysfunctional personality traits. These constitute significant pre-existing factors.
Moreover, it appears that she is unhappy with having to be at work full-time, but is being made to do so by her husband. I do not believe that further counselling would give her any benefit. It appears that she would be able to work if motivated.” (emphasis added)

Dr Lowy assessed Mrs Bowditch on 25 October 2006. She took a detailed history of the incident with Mr Alameddine and noted that Mrs Bowditch thought she was going to die at the house. Mrs Bowditch stated that she becomes “stressed” when she “experiences flashbacks of the scene” (Dr Lowy report 25 October 2006, page four). Dr Lowy also recorded the other major events relied on by Mrs Bowditch as causing her psychiatric injury and reviewed the factual report. She quoted large sections from the statements given by Ms Parkinson, Ms King and Ms Simms.

Ms Parkinson concedes that she did shout at Mrs Bowditch on 21 July 2006, but suggests that was because of her frustration at Mrs Bowditch talking over the top of her. Ms Parkinson denies doing anything that could be described as threatening and states that after lunch on 21 July 2006 she worked through some evaluations with Mrs Bowditch in a professional manner. She says they parted on “frosty but amicable terms”. Ms Parkinson alleges that Mrs Bowditch said to her on several occasions, “I have had a lot of problems, I am exhausted, I’m worn out, I’m fucked” (Ms Parkinson’s statement 29 August 2006, paragraph 10).

Mr Vrzic confirms that both Mrs Bowditch and Ms Parkinson were angry and that he heard raised voices coming from the office on 21 July 2006. About 30 minutes later Mrs Bowditch came to see him quite upset, crying, panting very quickly and breathless. Mrs Bowditch said that after what happened she was more determined than ever to stay in the unit.

Under “Pre-existing problems”, Dr Lowy set out that Mrs Bowditch saw Dr Clarke in 2004 and an EAP psychologist for four sessions as a result of “post-traumatic type symptoms”. She said she became stable after six sessions with Dr Clarke.

Dr Lowy does not feel that Mrs Bowditch’s current symptoms satisfy criterion “A” for PTSD as on 21 July 2006 she was not exposed to a traumatic event in which she witnessed or was confronted with an event that involved actual or threatened death or serious injury or a threat to the physical integrity of self or others and her response did not involve intense fear, helplessness or horror (Dr Lowy report 25 October 2006, page 11).

Dr Lowy states that Mrs Bowditch did not become ill with symptoms at the time of the incident with Mr Alameddine and did not seek medical treatment and was not diagnosed with PTSD. The symptoms in 2004 did not, according to Dr Lowy, show clinically significant distress or impairment in social, occupational or other important areas of function. Mrs Bowditch continued at work. Mrs Bowditch stopped seeing Dr Clarke in 2004 after only six sessions after becoming “stabilised”. If she had been diagnosed with PTSD at that time the medication prescribed (sleeping medication and valium) and the six sessions of treatment would not have been appropriate. Therefore, Dr Lowy concluded that Mrs Bowditch was possibly only experiencing anxiety at that time.

Dr Lowy notes that Mr Lavidis’ history does not specify any dates as to when her symptoms developed. Dates are important because symptoms of PTSD usually begin within the first three months following trauma.

Dr Houwing’s initial certificate dated 22 July 2006 diagnosed Mrs Bowditch to have an adjustment disorder with anxiety and depression as a result of being “screamed at by another person in the workplace as [the] precipitating event”. Dr Malhotra’s certificate of 4 August 2006 diagnosed anxiety, depression and “cumulative post-traumatic disorder”. Cumulative post-traumatic stress disorder is not a diagnosis found in the DSM-IV.

Dr Lowy lists the following factors in Mrs Bowditch’s history as lessening the possibility that her symptoms could be diagnosed as PTSD:

(a)Mrs Bowditch was fit and functional when she applied for and won a two year secondment as a trainer at the training unit (the Academy) in May 2006;

(b)she had not complained of psychological symptoms to any of her managers whilst working at Parramatta Probation and Parole;

(c)the incident on 21 July 2006 with Ms Parkinson was not such that it would be expected to trigger the full spectrum of symptoms involved in a diagnosis of PTSD;

(d)Mr Vrzic acted appropriately by speaking to both women to diffuse an emotional climate. They both attended the graduation lunch and participated in the presentation of certificates after the altercation;

(e)it would be highly unlikely that the discussion between Mrs Bowditch and Ms Parkinson on 21 July 2006, albeit a heated one, would have triggered the full spectrum of PTSD symptoms in a person such as Mrs Bowditch, who had worked as a welfare/probation and parole officer for over 20 years, and

(f)the symptoms generated by the interaction with Ms Parkinson may have led to emotional upset on the part of Mrs Bowditch which would have been expected to resolve in a few days. This would also be expected with a diagnosis of a short term adjustment disorder as made by Dr Houwing on 22 July 2006.

Dr Lowy concluded that Mrs Bowditch might have been upset by the exchange on 21 July 2006, but any symptoms generated would have led to an emotional upset or a mild and transient adjustment disorder with anxiety expected to last a few days. Mrs Bowditch’s current psychological symptoms are not consistent with the history provided and are not consistent with PTSD or cumulative PTSD and would not be work-related. Personal and constitutional factors substantially contributed to any “PTSD-like symptoms” Mrs Bowditch alleged following the incident on 21 July 2006.

Dr Lowy repeats the error made by Dr Lee and states that Mrs Bowditch employment was not the “most substantial contributing factor to her emotional upset or the brief and transient adjustment disorder”. This error is partly corrected in a further report from Dr Lowy dated 1 December 2006 where she states that Mrs Bowditch’s employment was not a substantial contributing factor to her “condition”.

Discussion and Findings

At the arbitration, counsel for the Department, Mr Lowe, placed reliance on Tame where at [293] and [294] Hayne J noted there is an imperfect fit between the questions of ultimate concern to the law and those of concern to the clinician. Whilst that is true, Tame concerned a claim for common law damages not a claim for compensation under the 1987 Act. Mr Lowe did not explain the relevance of the passages quoted in the context of the present claim and I have found his reference to Tame unhelpful.

Mr Lowe also made reference to a NSW Court of Appeal judgment by Spigelman CJ, but he did not provide the name of that authority. The issue of PTSD was discussed in a detailed judgment by Spigelman CJ in State of New South Wales v Seedsman [2000] NSWCA 119 (‘Seedsman’), which I have read. That case also concerned a claim for common law damages. Nothing in that case advances the Appellant Employer’s position.

Mr Lowe criticises Dr Clarke’s opinions on the ground that in 2004 the doctor did not get any history of the circumstances giving rise to the “condition which he described as depression in October 2004” (T21.58-22.1). This is a reference to Dr Clarke’s report of 7 March 2007. It is only partly correct. To understand the full import of Dr Clarke’s evidence it is necessary to consider all of his reports. The history of the 2002 incident is clearly set out in his 7 March 2007 report. The fact that it did not appear in the 2004 report to the general practitioner is of no consequence. Mrs Bowditch did not claim compensation at that time and the history was not his main concern. What is important is that in 2004 Dr Clarke was firmly of the following opinions:

(a)Mrs Bowditch had “classical symptoms of a PTSD”, which was getting worse;

(b)she experienced insomnia, bad dreams and flashbacks, and

(c)she should not return to work for six weeks.

Mrs Bowditch did not have time off work, as suggested by Dr Clarke, but continued at work and was exposed to further stressful events in the course of her employment with the Department. In his March 2007 report Dr Clarke took a detailed history of the “acute trauma” that led to the development of Mrs Bowditch’s condition, which he believed was PTSD that developed into chronic depression. The basis for his opinion is clearly stated. Dr Clarke states that he first saw Mrs Bowditch for “treatment for her depression in October 2004”. She related that her depression followed a major trauma in 2002. The “acute trauma” was clearly the 2002 incident with Mr Alameddine. I reject Mr Lowe’s submission that it is not known what trauma the doctor relies upon to base his diagnosis of PTSD (T28.34).

The Appellant Employer also relies on Makita. In that case Heydon JA said at 731-32:

“The basal principle is that what an expert gives is an opinion based on facts. Because of that, the expert must either prove by admissible means the facts on which the opinion is based, or state explicitly the assumptions as to fact on which the opinion is based. If other admissible evidence establishes that the matters assumed are ‘sufficiently like’ the matters established ‘to render the opinion of the expert of any value’, even though they may not correspond ‘with complete precision’, the opinion will be admissible and material: see generally Paric v John Holland Constructions Pty Ltd [1984] 2 NSWLR 505 at 509-510; Paric v John Holland Constructions Pty Ltd (1985) 59 ALJR 844 at 846. One of the reasons why the facts proved must correlate to some degree with those assumed is that the expert’s conclusion must have some rational relationship with the facts proved.”

His Honour added at 743-744:

“In short, if evidence tendered as expert opinion evidence is to be admissible, it must be agreed or demonstrated that there is a field of ‘specialised knowledge’; there must be an identified aspect of that field in which the witness demonstrates that by reason of specified training, study or experience, the witness has become an expert; the opinion proffered must be ‘wholly or substantially based on the witness’s expert knowledge’; so far as the opinion is based on facts ‘observed’ by the expert, they must be identified and admissibly proved by the expert, and so far as the opinion is based on ‘assumed’ or ‘accepted’ facts, they must be identified and proved in some other way; it must be established that the facts on which the opinion is based form a proper foundation for it; and the opinion of an expert requires demonstration or examination of the scientific or other intellectual basis of the conclusions reached: that is, the expert’s evidence must explain how the field of ‘specialised knowledge’ in which the witness is expert by reason of ‘training, study or experience’, and on which the opinion is ‘wholly or substantially based’, applies to the facts assumed or observed so as to produce the opinion propounded. If all these matters are not made explicit, it is not possible to be sure whether the opinion is based wholly or substantially on the expert’s specialised knowledge. If the court cannot be sure of that, the evidence is strictly speaking not admissible, and, so far as it is admissible, of diminished weight. And an attempt to make the basis of the opinion explicit may reveal that it is not based on specialised expert knowledge, but, to use Gleeson CJ’s characterisation of the evidence in HG v R (1999) 197 CLR 414, on ‘a combination of speculation, inference, personal and second-hand views as to the credibility of the complainant, and a process of reasoning which went well beyond the field of expertise’ (at [41]).”

Judge Armitage considered the above authorities in Brady v Commissioner of Police (2003) 25 NSWCCR 58 at 76 where he stated:

“In Paric at the above reference, Samuels JA refers to the situation where facts stated in an expert’s report do not completely correspond to the facts proved at trial, and held that where there is a ‘fair climate’ for the acceptance of the expert’s opinion, this may occur, notwithstanding the discrepancy just referred to, relying on various authorities which his Honour cited from America and elsewhere. His Honour said that this question is essentially one of fact and degree.”

Dr Clarke’s opinion was soundly based on the history he took from Mrs Bowditch about the incident with Mr Alameddine, the time when she was threatened by a client’s partner and “other incidents at the office where clients/criminals threatened her” (Dr Clarke report 7 March 2007, page two). Mrs Bowditch’s statement of 4 June 2007 confirmed that history. In my view Dr Clarke’s history provided a detailed and “fair climate” for the acceptance of his opinion and, for the reasons expanded on below, I accept his conclusions on diagnosis and causation.

Whilst Mr Lowe made much of the fact that the date of Mrs Bowditch’s first consultation with Dr Clarke is not identified, I do not see that as being of critical importance. Mrs Bowditch’s statement makes it clear that she saw Dr Clarke in October 2004 (Mrs Bowditch’s statement 4 June 2007, paragraph 18).

Mr Lowe criticises Dr Clarke’s use of the expression “full blown stress disorder” (page two of his report) on the basis that is not found in “the DSM-IV or any other psychiatric diagnostic lexicography” (T23.17). However, Spigelman CJ made several important observations in Seedsman about the use of DSM-IV. At [114] to [122] his Honour said:

“114.    DSM-IV is not a statutory formulation which a court must construe and decide whether the requirements are satisfied. It is, as its title suggests, a ‘diagnostic manual’ for clinical use. It contains within itself a number of explicit warnings against the kind of use to which the Appellant sought to put it and which emphasise that the criteria are only guidelines for professional judgment.
115.    Under the heading ‘Cautionary Statement’, the authors say:
‘The specific diagnostic criteria for each mental disorder are offered as guidelines for making diagnoses, because it has been demonstrated that the use of such criteria enhances agreement among clinicians and investigators. The proper use of these criteria requires specialised clinical training that provides both a body of knowledge and clinical skills’.
116.    Under the heading ‘Use of Clinical Judgment’ the authors say:

‘It is important that DSM-IV not be applied mechanically by untrained individuals. The specific diagnostic criteria included in DSM-IV are meant to serve as guidelines to be informed by clinical judgment and are not meant to be used in a cookbook fashion. For example, the exercise of clinical judgment may justify giving certain diagnoses to an individual even though the clinical presentation falls just short of meeting the full criteria for the diagnosis as long as the symptoms that are present are persistent and severe.’
117. Finally, under the heading ‘Limitations of the Categorical Approach’, the authors say:

‘DSM-IV is a categorical classification that divides mental disorders into types based on criteria sets with defining features. ... A categorical approach to classification works best when all members of a diagnostic class are homogenous, when there are clear boundaries between classes; and when the different classes are mutually exclusive. Nonetheless, the limitations of the categorical classification system must be recognised.

In DSM-IV, there is no assumption that each category of mental disorder is a complete discrete entity with absolute boundaries dividing it from other mental disorders or from no mental disorder. There is also no assumption that all individuals described as having the same mental disorder are alike in all important ways. The clinician using DSM-IV should therefore consider that individuals sharing a diagnosis are likely to be heterogeneous even in regard to the defining features of the diagnosis and that boundary cases will be difficult to diagnose in any but a probabilistic fashion.’
118. As one commentator has noted:

‘The DSM represents guidelines that should be subjected to clinical judgment, adherence to the diagnostic criteria is not mandatory but advisory’. (Neal ‘The Pitfalls of Making a Categorical Diagnosis of Post Traumatic Stress Disorder in Personal Injury Litigation’ (1994) 34 Med, Science and the Law 117 at 121).

119.    DSM-IV also contains reservations about its use in litigation which it is unnecessary to set out. The limitations of such use was also referred to in Vernon v Bosley (No 1) [1997] 1 All ER 577 esp at 610-611 per Thorpe LJ. At 611 his Lordship rejected the proposition that the existence of a recognised psychiatric illness can be reduced to PTSD as defined in the DSM-IV or nothing.
120.    Aspects of the application of Post Traumatic Stress Disorder in litigation remain controversial. (See e.g. Mendelsohn ‘Post Traumatic Stress Disorder and Litigation’ (1999) 15 Aust Forensic Psychiatry Bull 3; Freckelton ‘Post Traumatic Stress Disorder: A Challenge for Public and Private Health Law’ (1985) 5 J of Law & Med 252).
121.    The issue is not one of labelling, but of establishing a psychiatric injury of some character. As Brennan J put it in Jaensch v Coffey (1983-1984) 155 CLR 549 at 560:
‘Compensation is awarded for the disability from which the plaintiff suffers, not for its conformity with a label of dubious medical acceptability.’
122.    In each case, the Court must deal with the particular submissions made to it.” (emphasis added)

The highlighted passages above are of particular relevance in the present matter. They make it clear that the DSM-IV classifications are “guidelines that should be subjected to clinical judgment”. Dr Clarke is Mrs Bowditch’s treating psychiatrist. He is not only entitled to use his clinical judgment, but he is required to do so. He saw her on many occasions and has never wavered in his diagnosis, which he has always maintained is work related. His opinion is therefore entitled to considerable weight in assessing Mrs Bowditch’s claim. The critical event in development of Mrs Bowditch’s symptoms was the event with Mr Alameddine when she was in fear for her safety and witnessed Mr Alameddine on fire as he emerged from a burning building. She felt “traumatised” and “numb” as a result of the incident.

Dr Lowy refers to the two-year delay between the incident with Mr Alameddine and the attendance on Dr Clarke in 2004, stating that symptoms of PTSD usually begin within the first three months following trauma (Dr Lowy report 25 October 2006, page 11). The reference to symptoms usually beginning within the first three months after the trauma is found in DSM-IV at page 466. The full quote from the text is:

“Posttraumatic Stress Disorder can occur at any age, including childhood. Symptoms usually begin within the first 3 months after the trauma, although there may be a delay of months, or even years, before symptoms appear. Frequently, a person’s reaction to a trauma initially meets criteria for Acute Stress Disorder (see p. 469) in the immediate aftermath of the trauma. The symptoms of the disorder and the relative predominance of reexperiencing, avoidance, and hyperarousal symptoms may vary over time. Duration of the symptoms varies, with complete recovery occurring within 3 months in approximately half of cases, with many others having persisting symptoms for longer than 12 months after the trauma. In some cases, the course is charaterized by a waxing and waning of symptoms. Symptom reactivation may occur in response to reminders of the original trauma, life stressors, or new traumatic events.”

In my view, the delay in seeing Dr Clarke is not determinative. Mrs Bowditch’s evidence, which I accept, is that:

(a)she was traumatised by the 2002 incident in which she feared for her safety;

(b)she was not offered any counselling after the 2002 incident;

(c)after the incident she was fearful that Mr Alameddine’s “mates would turn up and kill her. When she was out and about, she thought people were following her” (Dr Lowy’s report 25 October 2006, page four);

(d)after the 2002 incident she “became paranoid and thought that people were following her and she could not go anywhere near the locality where the incident occurred” (Dr Kohler’s report 20 November 2006, page two);

(e)she was exposed to several other traumatic events between 2002 and ceasing work in 2006, and

(f)she considered the incident in July 2006 as the “triggering factor”.

The Appellant Employer also relies on the absence of complaints about the 2002 event to work supervisors and colleagues. Mrs Bowditch’s evidence, which I accept, is that she did not report symptoms of anxiety or other stress problems to some supervisors because she clearly understood the prevailing attitude that she “should be able to cope and that to suffer from stress was considered weak and unprofessional” (Mrs Bowditch’s statement 4 June 2007, paragraph 64, and also at paragraph 18). Mrs Bowditch stated that she approached the district manager about her distress in the Intensive Supervision Unit and requested an early transfer and was told that he believed “adults should fight their own battles” (Mrs Bowditch’s statement 4 June 2007, paragraph 19). These statements are supported to some extent by evidence from Ms King who described Mrs Bowditch’s reaction to an angry client (when Mrs Bowditch took cover behind a unit leader’s desk) as unprofessional because part of “your skills are being able to deal with angry clients” (Ms King’s statement 16 August 2006, paragraph eight).

Mr Lowe also points to inconsistencies between the reports of Dr Clarke and Mr Lavidis. For example, Mr Lavidis refers to Mrs Bowditch having suffered a weight loss of 10 kilograms and Dr Clarke refers to a weight gain of eight kilograms. However, it is not clear if they are each referring to the same time period. This error is hardly something that reflects adversely on Mrs Bowditch. In any event it is not something that is of critical importance in the determination of the issue of liability. Similarly, I do not see the absence of a history of suicidal ideation in Dr Clarke’s reports as being of significance.

Dr Clarke’s opinion is also criticised for diagnosing Mrs Bowditch with “complex PTSD” which, it is argued, is “inconsistent with his report of major depression perhaps as a sequel of her condition reflecting some features of PTSD” (T30.20). I do not accept this criticism. Dr Clarke’s report makes it perfectly clear that Mrs Bowditch’s PTSD and her symptoms of depression are related (see also Mr Lavidis’ opinion on this aspect, discussed at [83] above). At page two Dr Clarke said “Looking at her change since the immolation in 2002, she has developed many signs of a chronic Post-traumatic Stress Disorder. However, the presenting picture is of a Severe Depression”. At page four he reaffirmed that opinion under “Psychiatric Diagnosis” where he said “This woman suffers a Post-traumatic Stress Disorder with an ensuing Severe Depression”. The doctor’s opinion is logical, consistent with the history and with Mrs Bowditch’s presentation to her general practitioner and to Mr Lavidis. Tests done by Mr Lavidis confirm the diagnosis of PTSD and placed Mrs Bowditch in the “severe range” for over all PTSD symptomatology. I accept the validity of those tests and place significant weight on them in reaching my conclusions.

The questionnaire completed by Dr Malhotra (see [76] to [80] above) is also attacked for not identifying the “underlying condition” (T31.51). However, this document must be read in the context of the full history. The claim form completed by Mrs Bowditch on 28 September 2006 refers to the altercation with Ms Parkinson on 21 July 2006 and adds “NB triggering factor”. It also refers to “previous traumatic events in 2002 & 2004”. That is, Mrs Bowditch saw the events on 21 July 2006 as the trigger for her symptoms. This is consistent with the passage from DSM-IV quoted above where it is stated “symptom reactivation may occur in response to reminders …life stressors, or new traumatic events”.

Further, Dr Malhotra was providing a response to specific questions in very limited space. It is hardly surprising that he did not set out a more detailed history. I draw no conclusion adverse to Mrs Bowditch from the alleged inconsistency between this note and Dr Clarke’s report. The questionnaire gives Mrs Bowditch consistent support for her claim, which I accept, that she was not coping, not eating, unable to do chores, anxious and tearful, fearful of going out and experiencing nightmares.

As with its own doctors, the insurer asked Dr Malhotra a fundamentally incorrect question when it asked if Mrs Bowditch’s employment was “the most significant contributing factor”. Nevertheless, Dr Malhotra’s answer, “Most definitely”, is strongly supportive of Mrs Bowditch’s claim. Mr Lowe attacks this answer, as I understand his argument, on the ground that the employment that allegedly caused the condition was not properly identified. I do not accept this criticism. The immediate cause for Mrs Bowditch seeing Dr Malhotra was the incident on 21 July 2006. That event (the trigger) and its consequences must be considered against the background of the numerous other traumatic events to which Mrs Bowditch was exposed in the course of her employment with the Department. This is consistent with Mr Lavidis’ history that her feelings of panic and overwhelming terror tend to surface when she is in stressful situations (Mr Lavidis’ report, page two).

Mr Lavidis’ report is challenged because of his reference to Mrs Bowditch having experienced multiple traumata while working for correctional facilities and because of an inadequate history. It is argued that her flashbacks relate to trauma while working for other employers. It is true that some flashbacks do relate to children with whom she had contact when she worked at DOCS. That does not mean that her current psychiatric condition has not resulted from the events she experienced during her employment with the Department. The fact that other traumatic events may also be contributing to her symptoms does not prevent her employment with the Department from being “a substantial contributing factor” to her injury. Employment does not have to be the substantial contributing factor or the most substantial contributing factor to the injury (see the discussion about substantial contributing factor at [134] below).

Mr Lavidis’ history was more than adequate to provide a basis for his conclusion, which I accept. I reject the challenge to his opinion.

The report from Dr Kohler also supports the conclusion that Mrs Bowditch is suffering from PTSD. Whilst his history noted that Mrs Bowditch had been exposed to numerous critical incidents during her period working with children, he also took a history of the 2002 incident and several other significant events in the course of her employment with the Department. He noted that after the 2002 incident she became paranoid and could not go anywhere near the locality where the incident took place, but did not receive any treatment until 2004. Though he does not specifically deal with causation, he has no recorded history of any non-work related events that might have caused her illness. Whilst he also refers to traumatic events while Mrs Bowditch worked with DOCS, he took no history of her developing symptoms immediately after those events as she did after the 2002 incident. Nevertheless, in the absence of his express opinion on causation, it would not be appropriate for me to speculate and I therefore do not rely on his report on the issue of causation.

The fact that Mrs Bowditch sees the incident on 21 July 2006 as merely the ‘trigger’ for her injury is significant. Both Dr Lee and Dr Lowy focus on 21 July 2006 as the “date of injury” and, in my view, do not properly consider or place sufficient weight on the fact that Mrs Bowditch’s claim is that she sustained injury as a result of numerous other traumatic events (particularly the incident on 2002) over the whole period of her employment with the Department.

I do not accept the opinions of Dr Lee and Dr Lowy. Dr Lee’s opinion that there is no psychiatric diagnosis is inconsistent with the overwhelming evidence in the case, including evidence from Dr Kohler, Dr Clarke and Mr Lavidis. Dr Lee’s conclusion that Mrs Bowditch’s employment was not the most substantial contributing factor is of no weight. As explained above, that is not the question for determination by the Commission. His conclusion that Mrs Bowditch was unhappy with having to work fulltime is firmly denied by Mrs Bowditch, and I accept her denial. His reference to alleged dysfunctional personality traits is mainly based on the statements attached to the factual report. The statements tendered in evidence do not support Dr Lee’s assertion that Mrs Bowditch’s former line managers described her as “calculating, manipulating and a drama queen”. Ms Simms described Mrs Bowditch as “a difficult and manipulative person to work with” (Ms Simms’ statement 16 August 2006, paragraph 10), but there is no statement to the effect that she was calculating or a drama queen. This error is not determinative but it further undermines the reliability of Dr Lee’s report and the weight to be attached to it.

Dr Lowy does not accept that Mrs Bowditch’s current symptoms, reported to have begun following the incident on 21 July 2006, satisfy criterion “A” for PTSD. She seems to accept that the incident with Mr Alameddine could possibly be commensurate with criterion “A” but discounts it because Mrs Bowditch did not become ill with symptoms, did not seek medical attention and was not diagnosed with PTSD. However, this ignores Mrs Bowditch’s evidence of the affect the incident had on her (see paragraph [61] above) and the diagnosis by Dr Clarke of PTSD with depression as a result of that incident.

Dr Lowy’s opinion is focused to a large extent on the consequences of the incident on 21 July 2006, which she did not believe would be expected to trigger the full spectrum of symptoms involved in a diagnosis of PTSD. If Dr Lowy means by this statement that Mrs Bowditch’s psychiatric injury has not resulted from the incident on 21 July 2006, I agree that the incident on 21 July 2006 would, on its own, be unlikely to have caused Mrs Bowditch’s injury. However, that event must be considered in light of the full history of the nature and conditions of Mrs Bowditch employment with the Department. That history included several stressful incidents, the most significant being the incident with Mr Alameddine when she feared for her safety and was a witness to a person receiving extensive burns that required admission to hospital in a critical condition (see Breach Report, 1 December 2002).

In addition, Dr Lowy’s mental state examination of Mrs Bowditch appears to have been very brief and limited to her casual observations during a single consultation. It is set out in six lines at page 10 of her report and involved no testing of the kind conducted by Mr Lavidis (see [83] above) or by Ms Tang and Ms Polglase (see [87] above). The lack of formal testing by Dr Lowy is not determinative but is a factor that further undermines the weight to be attached to her conclusion.

For the above reasons, I find that Mrs Bowditch sustained a psychiatric injury in the nature of PTSD with depression as a result of the nature and conditions of her employment with the Department. If it is necessary, I also find that Mrs Bowditch suffered more than an emotional impulse and that she experienced a physiological response as a result of the nature and conditions of her employment with the Department. Those physiological effects manifested in the form of increased heart rate, pains in her chest, pins and needles in her hands and feet.

Was Mrs Bowditch’s Employment With the Department a Substantial Contributing Factor to Her Injury?

Section 9A of the 1987 Act provides:

“9A No compensation payable unless employment substantial contributing factor to injury

(1) No compensation is payable under this Act in respect of an injury unless the employment concerned was a substantial contributing factor to the injury.
(2) The following are examples of matters to be taken into account for the purposes of determining whether a worker’s employment was a substantial contributing factor to an injury (but this subsection does not limit the kinds of matters that can be taken into account for the purposes of such a determination):
(a) the time and place of the injury,
(b) the nature of the work performed and the particular tasks of that work,
(c) the duration of the employment,
(d) the probability that the injury or a similar injury would have happened anyway, at about the same time or at the same stage of the worker’s life, if he or she had not been at work or had not worked in that employment,
(e) the worker’s state of health before the injury and the existence of any hereditary risks,
(f) the worker’s lifestyle and his or her activities outside the workplace.

(3) A worker’s employment is not to be regarded as a substantial contributing factor to a worker’s injury merely because of either or both of the following:
(a) the injury arose out of or in the course of, or arose both out of and in the course of, the worker’s employment,
(b) the worker’s incapacity for work, loss as referred to in Division 4 of Part 3, need for medical or related treatment, hospital treatment, ambulance service or occupational rehabilitation service as referred to in Division 3 of Part 3, or the worker’s death, resulted from the injury.

(4) This section does not apply in respect of an injury to which section 10, 11 or 12 applies.”

The question of whether the section 9A test is satisfied is a question of fact and is a matter of impression and degree (Dayton v Coles Supermarkets Pty Ltd (2001) 22 NSWCCR 46 (‘Dayton’) at [29]). Employment must be a substantial contributing factor to the injury not the substantial contributing factor. It is possible that an injury may be caused by two or more substantial contributing factors. For a worker to recover compensation it is necessary that he or she satisfy the Commission that employment was one of those substantial contributing factors (Dayton at [22], Mercer v ANZ Banking Group Ltd (2000) 48 NSWLR 740 at 745, and Department of Education & Training v Sinclair [2005] NSWCA 465 at [49]).

Drs Lowy, Lee and Malhotra were asked a fundamentally incorrect and misleading question. Namely, was Mrs Bowditch’s employment the most substantial (or, the case of Dr Malhotra, “significant”) contributing factor to her condition? Dr Lowy issued a second report on 1 December 2006 stating that Mrs Bowditch’s employment was not a substantial contributing factor to her condition. That is still an error. However, for the purposes of this decision I have assumed that Dr Lowy has used the term “condition” to mean “injury”.

Dr Lowy stated at page 13 of her report:

“Any psychological symptoms continuing beyond a few days would not be work-related. They would be due to Mrs Bowditch’s personal and constitutional factors.”

Apart from a brief reference to the death of Mrs Bowditch’s mother in September 2005 (Dr Lowy’s report 25 October 2006, page 10), Dr Lowy has not listed the personal and constitutional factors that have allegedly caused Mrs Bowditch’s continuing psychological symptoms. In respect of the death of her mother, it is noted that Mrs Bowditch did not suffer any undue grief and that her mother had been ill for some time.

Dr Lowy does not expand upon the reference to the “personal and constitutional factors” in any meaningful way. Though she did refer to the lay witness statements from Ms Parkinson, Ms Simms and Ms King, the vast majority of the matters in those statements were unsubstantiated allegations that have no direct bearing on whether Mrs Bowditch sustained a psychological injury caused by or arising out of her employment with the Department. I have found those statements to be generally unhelpful in determining the issues in this case. The reference in those statements to the fact that Mrs Bowditch’s work was sometimes late provides some corroboration of Mrs Bowditch’s complaint that she was having difficulty in organising her thoughts at that time. Whether that was a sign of her stress disorder is not addressed in the medical evidence (and I express no concluded view about it) but I note Mrs Bowditch’s comment that she has subsequently learned that the problem is a common aspect of her stress disorder (Mrs Bowditch’s statement 4 June 2007, paragraph 47).

Applying the above authorities to the specific subsections of 9A(2) I make the following findings:

(a)“the time and place of injury”: the injury occurred at work while Mrs Bowditch was performing her usual duties;

(b)“the nature of the work performed and the particular tasks of that work”: the tasks involved in being a Probation and Parole officer exposed Mrs Bowditch to stressful situations where she feared for her safety;

(c)“the duration of the employment”: Mrs Bowditch’s exposure to stressful events extended over several years;

(d)“the probability that the injury or a similar injury would have happened anyway, at about the same time or at the same stage of the worker’s life, if he or she had not been at work or had not worked in that employment”: subject to what I say below about her work with DOCS, there is no evidence that Mrs Bowditch would have developed PTSD at about the same stage of her life if she had not been working for the Department as a Probation and Parole officer;

(e)“the worker’s state of health before the injury and the existence of any hereditary factors”: Mrs Bowditch had been exposed to stressful events when she worked for DOCS and that work has no doubt had an impact on her. Whilst that work may have made Mrs Bowditch’s more vulnerable to the development of PTSD as a result of her work with the Department and may have been a factor in the development of her injury, the evidence falls well short of establishing that it was the only factor, or even a major factor. Further, if the work at DOCS did leave Mrs Bowditch in a vulnerable or even an injured state (which is by no means certain), that is of no assistance to the Appellant Employer. As held by the Court of Appeal in State Transit Authority of New South Wales v Fritzi Chemler [2007] NSWCA 249 at [40], “employers take their employees as they find them”. I am comfortably satisfied that Mrs Bowditch’s work with DOCS was, at most, no more than a factor in the development of her injury. There are no hereditary factors relevant, and

(f)“the worker’s lifestyle and his or her activities outside the workplace”: there are no lifestyle factors relevant to the injury.

I am firmly of the view, and I find, that Mrs Bowditch’s employment with the Department was a substantial contributing factor to her injury.

Section 11A

The Appellant Employer made no attempt before the Arbitrator, or on appeal, to support this ground of dispute. There is no evidence to even hint at a legitimate defence under section 11A and the obtuse reference to that section in the section 54 notice was improper and misleading. There is no suggestion in the evidence that Mrs Bowditch’s injury was wholly or predominantly caused by “reasonable action taken or proposed to be taken by or on behalf of the employer with respect to transfer, demotion, promotion, performance appraisal, discipline, retrenchment or dismissal”. If this ground had been properly notified, I would have no hesitation in rejecting it.

Incapacity

The insurer gave no notice that it wished to dispute incapacity and did not seek leave (under section 289A(4) of the 1998 Act) to dispute that issue at the arbitration. The Arbitrator was in error in allowing the matter to be argued in the absence of an application for leave under section 289A(4). Similarly, because the issue of incapacity is an “unnotified matter” I do not believe it is open to the Appellant Employer to argue the issue of incapacity on appeal. If I am wrong in this view, and as the arbitration was conducted on the basis that incapacity was in issue and the Arbitrator purported to determine the issue, I intend to deal with it on appeal. Having considered the issue of incapacity, the Arbitrator was obliged to do so according to law.

It is argued that the Arbitrator failed to deal with or determine the contents of the Vocational Capacity Assessment Report prepared by Ms Tang, intern psychologist/rehabilitation consultant with Injury Management & Rehabilitation dated 9 February 2007 (‘the Vocational Assessment’) and has not dealt adequately with the issue of whether Mrs Bowditch is either totally or partially incapacitated.

The Arbitrator made no reference to the Vocational Assessment. After noting the Appellant Employer’s submission that Mrs Bowditch is, at best, only partially incapacitated and referring to Dr Clarke having certified her not fit for employment, the Arbitrator said at paragraph 28 of his Reasons:

“Having considered all the evidence before me I am satisfied that the Applicant’s psychological injury is of a serious nature and has resulted in her total incapacity for work. In the circumstances, she has an entitlement to weekly benefits compensation pursuant to sections 36 and 40 of the 1987 Act.” (emphasis added)

The Arbitrator’s reference to section 40 is an obvious error and is inconsistent with his finding that Mrs Bowditch is totally unfit for work. The Arbitrator clearly intended to refer to sections 36 and 37 of the 1987 Act. Neither party has made submissions on this point.

The authorities dealing with the requirement to give reasons are set out at [44] to [49] inclusive above. In my view the Arbitrator’s reasons on the incapacity issue do not comply with the standard required by the above authorities. He did not properly consider or analyse the issues presented in the evidence or indicate the essential ground upon which his decision was based. He made no reference to the Appellant Employer’s evidence. In these circumstances the Arbitrator’s finding of total incapacity must be revoked and the issue of incapacity be re-determined. For the reasons set out at paragraph [51] above, it is appropriate that I re-determine this issue.

The evidence suggesting that Mrs Bowditch is totally unfit for work is as follows:

(a)certificates from Dr Malhotra, the last dated 16 March 2007 in which he declared her unfit for work and added “Recommend medical retirement”;

(b)Dr Clarke’s opinion in his report of 7 March 2007 that she is “not fit”;

(c)Dr Kohler’s report of 20 November 2006, in which he noted that she was not able to drive more than 5 kilometres unless absolutely necessary and assessed her to be unfit to undergo current rehabilitation to return her to her pre-injury duties and that “it is unlikely that rehabilitation will be successful as any return to an environment where she needs to deal face to face with client[s] is likely to significantly exacerbate her condition”. He felt that after a period of treatment Mrs Bowditch would be fit for rehabilitation aimed at permanent re-deployment in an administrative position;

(d)Mr Lavidis’ opinion that Mrs Bowditch retire as a correctional officer, and

(e)her own evidence.

The Department relies on the following evidence:

(a)Dr Lowy’s opinion is that Mrs Bowditch is not suffering from PTSD and any adjustment disorder resulting from the emotional upset caused by the incident on 21 July 2006 would have only lasted a few days. She also felt that Mrs Bowditch’s reported difficulties appeared to be exaggerated;

(b)Dr Malhotra’s opinion in the questionnaire dated 20 September 2006, where he stated that Mrs Bowditch may be able to get back to duties/work which do not involve working with clients such as the ones on parole and in a supportive and not emotionally challenging type of work;

(c)Dr Lee’s conclusion that there was no psychiatric diagnosis and Mrs Bowditch appeared to be exaggerating her symptoms, and

(d)the Vocational Assessment by Ms Tang dated 9 February 2007.

The Vocational Assessment requires detailed consideration. Ms Tang noted at page three of the report that “the treating medical parties jointly recommended for Mrs Bowditch to not return to work at present and that she is unfit for work”. Ms Tang liaised with Mr Lavidis. He explained that Mrs Bowditch’s reactions to unfamiliar environments and her ability to deal with workplace interactions are required to be improved to enable her to become work ready, but he was unable to project a timeframe for Mrs Bowditch’s “anticipated improvement”. He added that her vocational options should be reviewed when she achieves suitable improvement as her capacity to work will depend on the extent of her improvement.

Mrs Bowditch told Ms Tang that she is currently housebound but has started visiting peers and travelling to the local shopping centre, predominantly with a family member or close friend. Her husband has been supportive and she is heavily dependent on him for transport and emotional support because she experiences anxiety when she travels to unfamiliar places.

Mrs Bowditch obtained her school certificate (year 10 level). At the age of 26 she completed a Certificate of Welfare and later an Associate Diploma of Welfare, both at TAFE. In 1995 she graduated with a Bachelor of Social Work Degree from Charles Sturt University, having studied part time while holding a fulltime job. She enjoyed studying and is open to further education to enhance her career options.

Ms Tang has set out in detail Mrs Bowditch’s employment history and her transferable skills (Vocational Assessment, pages four to six inclusive). However, Mr Lavidis stated that from his observation of Mrs Bowditch in her recent presentation, there is likely to be a discrepancy between her previous skills and her current capacity to display those skills in a work environment.

Whilst Ms Tang identified potential clerical positions with the Department, “liaison with all treating parties revealed that Mrs Bowditch is strongly advised against returning to work at her previous employment” (Vocational Assessment, page eight).

Ms Tang also identified three potential employment options she considered appropriate for Mrs Bowditch: payroll clerk, florist and conveyancer. Ms Tang spoke to Mr Lavidis about these options and he confirmed his view that Mrs Bowditch is currently considered unfit for work.

Ms Tang recommended that Mrs Bowditch continue to undertake psychological intervention with regular reviews of her progress. On proper analysis, the Appellant Employer receives no support from the Vocational Assessment.

I find the Respondent Worker’s evidence on incapacity to be persuasive and compelling and I prefer it to the Appellant Employer’s evidence. Her support comes not only from her treating specialists and her general practitioner, but also from Dr Kohler. It is consistent with Mrs Bowditch’s own evidence, which I accept. Mrs Bowditch’s evidence is set out at paragraphs 37 to 42 of her statement of 4 June 2007 and may be summarised as follows:

(a)she was still having distressing recollections and dreams and still cries when remembering some of the incidents or if she has to talk about them;

(b)she often becomes disoriented, over-vigilant and responds with great fear at even slight dangers or unfamiliar situations. As a result she is restricted in the areas she can attend alone and is unable to use public transport;

(c)she has insomnia and is constantly tired, and

(d)she has difficulty concentrating and has little motivation.

Having carefully considered the evidence and submissions on incapacity, I find that Mrs Bowditch was and is totally unfit for employment and entitled to compensation accordingly. The Vocational Assessment report provides the Department with no support, unless all of the evidence from the treating specialists is rejected. The evidence relied on by the Appellant Employer provides no credible support for its argument that Mrs Bowditch is only partially incapacitated.

DECISION

Paragraph two of the Arbitrator’s determination of 20 August 2007 is revoked and the following order made in its place:

“2.That the Respondent pay the Applicant weekly compensation at the maximum statutory rate for a worker with no dependants as adjusted from 22 January 2007 to date and continuing under section 37 of the Workers Compensation Act 1987. Such payments to continue in accordance with the provisions of the Workers Compensation Act 1987.”

For the reasons stated in this decision, paragraphs one, three, four and five of the Arbitrator’s determination of 20 August 2007 are confirmed.

COSTS

The Appellant Employer is to pay the Respondent Worker’s costs of the appeal.

Bill Roche
Deputy President
12 December 2007

I TUYET WALLIS CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF BILL ROCHE, DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.

ASSOCIATE