Department of Corrective Services v Taylor
[2005] NSWWCCPD 79
•29 July 2005
WORKERS COMPENSATION COMMISSION
APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:Department of Corrective Services v Taylor [2005] NSW WCC PD 79
APPELLANT: Department of Corrective Services
RESPONDENT: Narelle Taylor
INSURER:GIO General Ltd
FILE NUMBER: WCC16727-03
DATE OF ARBITRATOR’S DECISION: 30 June 2004
DATE OF APPEAL DECISION: 29 July 2005
SUBJECT MATTER OF DECISION: Adequacy of reasons
PRESIDENTIAL MEMBER: Acting Deputy President Robin Handley
HEARING:On the papers
REPRESENTATION: Appellant: Phillips Fox, Lawyers
Respondent: Beilby Poulden Costello, Lawyers
ORDERS MADE ON APPEAL: (1) Clause 2 of the Arbitrator’s decision dated 30 June 2004 is revoked and the following clause is substituted in its place:
“2. That the Respondent pay the Applicant weekly compensation:
(a) from 12 December 2002 to 25 July 2003 pursuant to section 37 of the Workers Compensation Act 1987; and
(b) from 26 July 2003 to date and continuing pursuant to section 40 of the Workers Compensation Act 1987, such weekly payments to continue in accordance with the provisions of the Act.”
(2) The Arbitrator’s decision is otherwise confirmed.
(3) The rates at which weekly compensation is to be paid to Ms Taylor under sections 37 and 40 are to be remitted to a different arbitrator for settlement or determination in accordance with the reasons for this decision.
(4) After the rates at which weekly compensation is to be paid to Ms Taylor under sections 37 and 40 are determined, the Department of Corrective Services is to be given credit for any payments made.
(5) No order is made as to the costs of this appeal.
BACKGROUND TO THE APPEAL
On 27 July 2004, the Department of Corrective Services (‘the Department’) sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Workers Compensation Commission (‘the Commission’) in respect of a decision dated 30 June 2004.
The Respondent to the Appeal is Narelle Taylor.
Ms Taylor was born on 11 August 1967 and is aged 37. She is married with two children who are now aged seven and four. Ms Taylor commenced work as a Correctional Officer with the Department on 11 June 1991. At the relevant time in 2002, she was employed as a Senior Correctional Officer in the Lifestyles Unit at Long Bay Correctional Complex in Sydney. Ms Taylor claims to have suffered psychological injury between April and June 2002 as a result of the nature and conditions of her employment. She notified the Department of the injury on 13 May 2002 and lodged a claim for compensation shortly thereafter.
In 2003, Ms Taylor moved to Cooma with her family as a result of her husband obtaining a transfer in his employment. On 26 July 2003, she commenced part-time employment with a local real estate agent.
On 23 October 2003, the Commission registered Ms Taylor’s ‘Application to Resolve a Dispute’ in respect of weekly benefits compensation of $923.37 from 2 August 2002 to date and continuing, and medical, hospital or related expenses. On 13 November 2003, the Department filed a ‘Reply’. The Arbitrator conducted teleconferences with the parties on 4 March 2004, 8 April 2004 and 11 May 2004, and on 16 June 2004, after a conciliation proved unsuccessful, the Arbitrator conducted an arbitration hearing. On 30 June 2004, he made the determination set out below.
THE DECISION UNDER REVIEW
The Certificate of Determination, dated 30 June 2004, records the Arbitrator’s orders as follows:
“1. That the Respondent pay the Applicant weekly compensation at the rate of $553.41 from 26 August 2002 to 11 December 2002 under s36 of the Workers Compensation Act 1987.
2. That the Respondent pay the Applicant weekly compensation at the rate of $363.30 from 12 December 2002 to 31 March 2003 and at the rate of $369.50 from 1 April 2003 to 30 September 2003 and at the rate of $376.90 from 1 October 2003 to 31 March 2004 and at the rate of $383.80 from 1 April 2004 under s37 of the Workers Compensation Act 1987. Such weekly payments to continue in accordance with the provisions of the Act.
3. That the Respondent pay the Applicant’s s60 [sic] of the Workers Compensation Act 1987 reasonable expenses on production of accounts or receipts.
4. That the Respondent pay the Applicant’s costs as agreed or assessed. I certify that this is a complex matter.”
In his ‘Statement of Reasons for Decision’, the Arbitrator summarised the resolution of the issues in dispute. He found Ms Taylor received a psychological injury arising out of or in the course of her employment with the Department and that her employment was a substantial contributing factor to her injury. She was totally incapacitated for work because of her injury from 18 June 2002 to 25 July 2003, and partially incapacitated for work from 26 July 2003. Her probable weekly earnings but for the injury had she continued to be employed in the same or comparable employment were $553.31 to 1 May 2003 (part-time employment of three days a week following the birth of her second child) and $1,348.00 thereafter (when she would have returned to full-time employment). The Arbitrator found Ms Taylor had been paid weekly compensation from 11 June 2002 to 26 August 2002, and that during her period of partial incapacity for work from 26 July 2003, her average weekly earnings were $212.03.
ISSUES IN DISPUTE
The issues in dispute in the appeal are:
(1) whether the Arbitrator erred in clause 2 of his determination by making an award pursuant to section 37 of the Workers Compensation Act 1987 (‘the 1987 Act’);
(2) whether the Arbitrator erred in making his findings of fact; and
(3) whether the Arbitrator’s ‘Statement of Reasons for Decision’ was ‘adequate’ in law.
ON THE PAPERS REVIEW
Section 354(6) of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’) states:
“(6)If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”
I have had regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submissions by the parties. The Department submits that it has been denied procedural fairness and requests that it be afforded the opportunity to cross-examine Ms Taylor and to call two further witnesses. Ms Taylor’s counsel rejects the Department’s contention that it was denied procedural fairness, but assumes that if the Commission were of a mind to revoke the Arbitrator’s decision, then the Commission would not proceed to determine the matter ‘on the papers’. Whilst I have considered these submissions, I am nevertheless 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.
LEAVE
Before proceeding to deal with an appeal the Commission must determine whether the application meets the requirements of section 352 of the 1998 Act. The appeal was lodged within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act. With regard to section 352(2), the amount of compensation at issue is more than $5,000 and exceeds 20% of the amount awarded by the Arbitrator. I therefore grant leave to appeal.
FRESH EVIDENCE
‘Fresh evidence’ on appeal is governed by section 352(6) of the 1998 Act, which states:
“(6) Evidence that is fresh evidence or evidence in addition to or in substitution for the evidence received in relation to the decision appealed against may not be given on an appeal to the Commission except with the leave of the Commission.”
Practice Direction No.6 sets out the process for seeking leave of the Commission to give ‘new evidence’ on appeal. It provides as follows:
“New Evidence
Where a party seeks leave to give new evidence in relation to the decision appealed against, that party must serve a copy of the new evidence on the other parties to the dispute when serving the Application or Opposition.
In general, the Commission will allow new evidence to be introduced only where it can be demonstrated that the new evidence could not reasonably have been obtained by the party and tendered in proceedings before the Arbitrator and that failure to allow the new evidence would cause a substantial injustice in the circumstances of the individual case.”
Practice Direction No.6 also provides that if new evidence is sought to be relied upon, the Application or Opposition to the Appeal must contain:
“ -a schedule of the new evidence,
-a copy of the new evidence,
-a brief outline of the new evidence and the reasons why it was not given in the
proceedings before the Arbitrator, and
-submissions why the new evidence should be admitted.”
The Department contends that its counsel was not given leave to cross-examine Ms Taylor “on the salient issues relating to the claim” and requests an opportunity to cross-examine her and to call two further witnesses, Stella Miliatas and Janet Cochrane. There is no indication that at the teleconferences before the hearing, the Department sought leave to cross-examine Ms Taylor at the hearing. At the hearing, Ms Taylor’s counsel sought and was granted leave to adduce some further oral evidence from her and the Department was granted leave to cross-examine on the matters on which Ms Taylor gave oral evidence.
The Department has provided no other explanation for its request to cross-examine Ms Taylor at a further hearing nor of its request to be permitted to call the two further witnesses, except in so far as it seeks to establish that the Arbitrator erred in his findings of fact. However, in further submissions dated 29 October 2004, the Department refers to the statement by Ms Miliatas dated 30 March 2004 which was admitted as evidence in these proceedings and to a further document headed “Notes” that was not admitted.
The admission of new or fresh evidence in an appeal has been considered by the Commission in a number of cases and the principles are well established: see, for example, Shipman Pty Ltd v Matters [2003] NSW WCC PD 19, McMahon v Laguna and Lavella t/as the Vessel “Nimble II” [2003] NSW WCC PD 22. The factors that weigh in favour of the exercise of the discretion to admit fresh evidence in an appeal include:
• if the request is refused, a substantial injustice will result to the party who seeks to have the evidence admitted;
• the evidence could not have been discovered, with reasonable diligence, at the time of the original proceedings; and
• the evidence is of such probative value that there is a high degree of probability that it would lead to a different outcome in the case.
Factors weighing against the exercise of the discretion include:
• the interest in the finality of the litigation and the importance of the successful party being able to rely on the outcome of the proceedings;
• the prejudice, if any, that may result to the other party, particularly if the fresh evidence raises new arguments in the appeal; and
• the intention of the legislative scheme in relation to the nature of the proceedings.
With regard to the intention of the legislative scheme, it should be noted, in particular, that section 352(5) of the 1998 Act provides that “[a]n appeal under this section is to be by way of review of the decision appealed against” – the appeal is not a rehearing of the matter. The Presidential Member’s role is to review the decision of the Arbitrator, and the Presidential Member may only revoke, substitute or remit in relation to that decision (section 352(7)) where it can be demonstrated that the decision is affected by some legal, factual or discretionary error (Allesch v Maunz (2000) 203 CLR 172, Mayne Health Group t/as Nepean Private Hospital v Sandford [2002] NSW WCC PD 6).
The Department has not satisfied me that the Commission should, essentially, reopen the hearing. The Department chose to present evidence and run its case in the way it did and I am not persuaded that because of the way in which the Arbitrator conducted the hearing, substantial injustice will result to the Department if fresh evidence is not admitted. On the other hand, prejudice may be caused to Ms Taylor and, in my view, it is important that I should have particular regard to the interest in the finality of the litigation. Leave to admit fresh evidence is therefore refused, including Ms Miliatas’ contemporaneous file notes that the Department attached to its further submissions.
SUBMISSIONS
At the outset, I note that the Department’s submissions were in parts confusing and difficult to follow. The paragraph numbering system and incomplete paragraphs, including a reference to partial incapacity “for employment as an enrolled nurse”, indicate a ‘cut and paste’ approach to composition. More succinct and well-reasoned submissions would have served the Department better.
The Department submits the Arbitrator erred by making an award in respect of periods of partial incapacity pursuant to section 37 of the 1987 Act (which is applicable only in respect of periods of total incapacity) when such awards should have been made pursuant to section 40. Ms Taylor’s counsel submits that the Arbitrator, having found that Ms Taylor was partially incapacitated for work from 26 July 2003, made a “grammatical or typographical error” in the placement of words. Weekly payments from 26 July 2003 were payable pursuant to section 40 and the Arbitrator followed the methodology prescribed by that section. The Department also submits that the Arbitrator’s use of the words “Such weekly payments to continue in accordance with the provisions of the Act’ is ambiguous. Ms Taylor’s counsel contends that the Arbitrator’s intention was to provide weekly compensation pursuant to section 40 in respect of the period from 1 April 2004 at a rate equivalent to the maximum statutory rate for a worker with one dependent child.
The Department submitted Ms Taylor was only entitled to payment for a single worker. It contended there was insufficient evidence in relation to the dependency of Ms Taylor’s children and the Arbitrator did not give reasons for his determination on the issue. Ms Taylor’s counsel responded that the issue of dependency was addressed by him in submissions to the Arbitrator (arbitration hearing transcript page 21). He noted that the Department made no submissions on this issue, which had also not been raised in its ‘Reply’.
The Department submits the Arbitrator erred in determining that Ms Taylor had an ongoing incapacity for work and submits she was capable of significantly greater earnings than those currently being earned. It submits she was offered a suitable full-time position at Cooma Correctional Centre that she declined, telling Ms Miliatas, the Department’s Health, Safety and Rehabilitation Co-ordinator, that this would jeopardise her workers compensation entitlements. The Department contends the Arbitrator appeared not to have considered Ms Miliatas’ statement and that of Janet Cochrane, the Programs Co-ordinator of the Lifestyles Unit at Long Bay Correctional Complex. The Department also submits Ms Taylor’s psychological injury should have resolved, and that the Arbitrator appears to have completely discounted the medical evidence of Ms Edwina Birch, Ms Taylor’s treating Clinical Psychologist.
Ms Taylor’s counsel rejects these submissions and asserts the Arbitrator accepted that Ms Taylor “is not fit for employment in prisons or corrective services because of the fear and anxiety this would cause” (paragraph 18, ‘Statement of Reasons for Decision’). With regard to Ms Miliatas’ statement, Ms Taylor’s counsel contends this incorrectly refers to Ms Taylor declining an offer of transfer to the Cooma Correctional Centre in a telephone conversation with Ms Miliatas on 4 March 2004. In fact, Ms Taylor’s formal advice of her declining this offer was received by the Department on 4 February 2003, at a time when her treating general practitioner, Dr Alex Tahmindjis, said she was unfit to return to the prison system. In further submissions, the Department seeks to adduce fresh evidence by producing “Notes” made by Ms Miliatas about this telephone conversation. In reply, Ms Taylor’s counsel objects to this.
Ms Taylor’s counsel submits there is no evidence that Ms Taylor could earn more in performing suitable duties if she so elected, as suggested by the Department. Ms Birch’s evidence was not completely discounted. There was conflicting medical evidence, for example that of Dr Peter Morse, Consultant Psychiatrist (report dated 6 May 2004).
The Department submits the Arbitrator failed to identify and address a number of issues in dispute between the parties. However, Ms Taylor’s counsel says these issues were not raised by the Department in its submissions to the Arbitrator.
The Department makes various submissions with regard to the adequacy of the Arbitrator’s reasons, contending that his findings of fact on various matters and, in particular, on the alleged threats made by inmates of the prison and the effect of those threats on Ms Taylor, were mistaken. Ms Taylor’s counsel contends the Arbitrator was entitled to rely on Ms Taylor’s evidence. Moreover, the Department had the opportunity to file and adduce evidence in respect of all Ms Taylor’s allegations contained in the documentary and medical evidence filed by her. Ms Taylor’s counsel submitted the Department’s complaint of denial of procedural fairness is without substance.
EVIDENCE
In her statement dated 28 May 2003, Ms Taylor said a dispute arose between her and Janet Cochrane, the Programs Co-ordinator of the Lifestyles Unit at Long Bay Correctional Complex, who made an allegation that Ms Taylor had breached the privacy of a prisoner by revealing to the prisoner’s cellmate that he was HIV Positive. Ms Taylor was distressed by the allegation, that she said was untrue and of which she was informed only when called in to see the Acting Deputy Governor of the Complex. Ms Taylor subsequently consulted her doctor who provided her with a medical certificate. Thereafter she was off work until 12 May 2002.
Ms Cochrane provided a statement dated 11 March 2004 to Brian Davis, who investigated the matter for the Department, referring to her memorandum to the Acting Governor of the Complex dated 12 April 2002 about Ms Taylor’s conduct. Ms Cochrane did not speak to Ms Taylor about the complaints of the inmates of the Unit before sending her memorandum, stating she “had no reason to doubt the credibility of the allegation” about Ms Taylor. In her statement, Ms Cochrane did not address the threat made by the inmates of the Unit to Ms Taylor’s safety and why Ms Taylor was not warned of this.
In a memorandum to the Governor of the Complex dated 19 April 2002, Ms Taylor set out her version of events and complained that the proper procedures had not been followed by Ms Cochrane. On 18 June 2002, Ms Taylor attended a mediation with Ms Cochrane, the aim of which was to resolve their dispute. In her statement dated 28 May 2003, Ms Taylor said that in the course of the mediation, Ms Cochrane revealed that the inmates of the Lifestyles Unit had threatened to harm Ms Taylor because she had upset them. In her memorandum, Ms Taylor stated:
“21. … Upon hearing this I felt extremely furious, upset and physically ill. My life had been placed at risk and nothing had been done about it. The inmates at the Lifestyles Unit have been diagnosed with Hepatitis B, Hepatitis C or HIV. The particular inmate that I had the altercation with was a known rapist and sex offender. To have him make a threat against me and no action taken by an employee of the Department made me feel violated.
22. The fact that my life had been threatened and this had not been reported to anyone alarmed and frightened me terribly.”
Ms Taylor said nothing was resolved by the mediation. She consulted Dr Anne Beaufils, her then local doctor, who diagnosed anxiety and depression. Dr Beaufils referred Ms Taylor to a clinical psychologist, Ms Edwina Birch, who saw her on 22 July 2002, 29 August 2002 and 11 September 2002. In a report dated 25 July 2002, Ms Birch said Ms Taylor was suffering from moderate to severe clinical depression. In August 2002, Ms Taylor’s husband, who is also a Correctional Officer, obtained a transfer from Long Bay to Cooma Correctional Centre and, in October 2002, Ms Taylor and their two children joined him in Cooma. Her new local doctor in Cooma, Dr Hamish Steiner, referred her to a doctor specialising in psychological medicine, Dr Alex Tahmindjis. In a report to Ms Taylor’s solicitors dated 12 March 2003, Dr Tahmindjis diagnosed moderate stress, moderate to severe depression and severe anxiety. He said she was “suffering from major depression that is becoming chronic” and she was not fit to return to work in the prison system. In a later report dated 14 April 2004, Dr Tahmindjis said Ms Taylor “appeared to have no prior history of any psychological disorder”. He repeated his opinion that “the probability is that Ms Taylor did suffer severe trauma [as a result of the incidents at Long Bay] and what she perceived as a threat to her life, and developed a psychological disorder”.
Ms Taylor’s other medical evidence comprises a report from Ms Anne Grapas, Forensic Psychologist, dated 8 April 2004, and a report from Dr Peter Morse, Consultant Psychiatrist, dated 6 May 2004. Ms Grapas diagnosed “moderate to severe depression, dysthymia and anxiety”. She said that in her opinion, “Ms Taylor’s feelings of hopelessness and vulnerability are entirely understandable when the context of the threats made are taken into account”. In his report, Dr Morse diagnosed Ms Taylor’s then current condition as “Major Depression Partially Treated with Residual Features”. He said:
“In my opinion the experience of the work situation was the cause of the psychological change which resulted in Major Depression and Panic Attacks.”
Dr Morse said there was “no evidence of pre-existing bi-polar disorder as suggested by Dr Lee nor of a diagnosis of postpartum disorder”. He said:
“I do not believe your client is fit for employment in prisons or corrective services at this time because of the fear and anxiety this would cause, the continued emotional state with depression and anxiety and liability to panic attacks. She is able to work in a situation such as she is presently employed in a real estate office where there is no particular threat and she is suitable for such duties.”
The Department’s medical evidence comprised reports from Dr Eva Lowy, Clinical and Organisational Psychologist, dated 8 March 2004, and from Dr Leonard Lee, Consultant Psychiatrist, dated 16 March 2004. Dr Lowy said:
“In my opinion Ms Taylor’s current symptoms are not consistent with a psychological condition of disorder. I consider she may be lacking in motivation to return to work.
Although her mood may be somewhat depressed I consider that this is due to constitutional factors as is indicated in her doctor’s notes.
I consider that her symptoms did not reach criteria for Major Depressive Disorder as diagnosed by Dr Tahmindjis in his report of March 2003, page 3.”
Dr Lowy said in her opinion, “Ms Taylor’s current condition and disability is not consistent with the incidents, which are alleged to have occurred”. She considered Ms Taylor was “fit to return to her pre-injury duties on a rehabilitation return-to-work program”. Any incapacity for work “is due to constitutional/personal factors” and “not related to any work-related component”. The “anger/upset caused by the work-related incident was short-term. It did not aggravate her pre-existing tiredness/depressed mood”.
In his report, Dr Lee suggested Ms Taylor might suffer from a pre-existing condition, and said he could not reject “the possibility of an underlying bipolar disorder”. He said:
“If one accepts that her description is accurate, she would not be capable of resuming work as a prison officer due to her fluctuating mood. However, she is coping with more limited duties two days per week. It is unclear to me whether this apparent partial incapacity is due to work–related incidents. They could well be some unrelated cause such as aunt [sic] underlying mood instability, which could combine with the incidents.”
I note that Dr Tahmindjis commented on Dr Lee’s report in his report on 14 April 2004 and disagreed with some of Dr Lee’s comments. Dr Morse also disagreed with a number of Dr Lee’s comments and his suggested diagnoses: “I do not believe there is any evidence of a pre-existing bipolar disorder as suggested by Dr Lee nor of a diagnosis of postpartum disorder”. Dr Morse is also critical of Dr Lowy’s comments, her interpretation of the evidence and conclusions, to the extent that in relation to her comments about Dr Tahmindjis’ opinion, Dr Morse accuses her of “a gross distortion of events”.
With regard to her capacity for work, Ms Taylor gave evidence at the arbitration hearing, confirming her statement dated 28 May 2003, that she commenced part-time employment with a local real estate agent in Cooma on 26 July 2003, working two days a week as a casual receptionist. Her counsel stated, and this was not disputed, that Ms Taylor was earning an average of $212.03 per week in this employment.
The Department has provided a statement from Stella Miliatas, Health, Safety and Rehabilitation Co-ordinator for the Metropolitan Region of the Department, dated 30 March 2004. Ms Militas stated that she had a telephone conversation with Ms Taylor on 4 March 2004, during the course of which Ms Taylor advised her that she intended to decline the recent offer of a transfer to the Cooma Correctional Centre “on the grounds that in doing so she would jeopardise her Workers Compensation entitlements”. Attached to the statement is a copy of a letter from Ms Taylor to the Department received on 4 February 2003, declining “the recent offer of transfer”, with a notation on the letter that Ms Taylor was “removed from Cooma transfer list 4/2/03”. This copy letter was apparently faxed to Ms Miliatas on 4 March 2004. I note the date Ms Taylor’s letter was originally received (4 March 2003), the date of the fax (4 March 2004) and Ms Miliatas’ account of her telephone conversation with Ms Taylor, suggest Ms Miliatas may have misunderstood what Ms Taylor told her as to the timing of events.
There was no documentary evidence before the Arbitrator as to the financial dependency of Ms Taylor’s children. Ms Taylor’s ‘Application to Resolve a Dispute’ lists both children as dependants in relation to her claim for weekly payments. At the arbitration hearing, Ms Taylor said in evidence that she has two dependent sons. She said she and her husband contribute their funds equally to the family and household support, but agreed that in fact she would have contributed more at the relevant time because her position was of a higher classification than her husband’s and he was receiving a lower salary (arbitration hearing transcript page 3/4). (Her husband has since received a promotion and is now classified at the same level.)
Ms Taylor said she took maternity leave before the birth of her second son on 18 May 2001 and returned to work on a three day a week basis in January 2002. It was her intention to resume full-time work on her son’s second birthday on 18 May 2003, in accordance with departmental policy (arbitration hearing transcript pages 3 and 4).
Ms Taylor’s counsel submitted that the appropriate rate of weekly compensation for her should be based on that of a worker with one dependent child. This was on the basis that Ms Taylor and her husband have equal responsibility for the care of their two children, and were earning roughly similar incomes and applying their incomes for the family’s needs. The Department did not challenge this and, although he did not say so, the Arbitrator appears to have accepted this since his calculations of weekly compensation were based on the entitlement of a worker with one dependent child.
DISCUSSION AND FINDINGS
As stated above, the role of the Presidential Member on appeal is to review the Arbitrator’s decision as a whole. The review is not a rehearing. In this case, the Department must demonstrate that the decision of the Arbitrator is affected by some legal, factual or discretionary error (Allesch v Maunz (2000) 203 CLR 172; The King Island Company Limited v Deery [2005] NSW WCC PD 1) in order to enliven the Presidential Member’s power to interfere with the Arbitrator’s decision pursuant to section 352(7) of the 1998 Act.
Ms Taylor’s counsel accepts, and it is obvious from the Arbitrator’s determination, that he made an error of law in his determination by awarding weekly compensation for partial incapacity pursuant to section 37 of the 1987 Act when this should have been pursuant to section 40. I note that in his ‘Statement of Reasons for Decision’, under the heading “Issues in Dispute”, the Arbitrator did identify correctly that it is section 40 to which regard must be had in relation to partial incapacity, and he also identifies the issues that must be addressed pursuant to subsections 40(2)(a) and (2)(b). He does not, however, address the other steps prescribed by the NSW Court of Appeal in Mitchell v Central West Health Service (1997) 14 NSWCCR 527, in particular step 4, whether to exercise the discretion in section 40(1). Nevertheless, in my view, there is no evidence that would justify exercising the section 40(1) discretion to adjust the amount of the reduction in earnings and therefore the amount of the weekly compensation payable. Despite the inadequacy of the Arbitrator’s reasons, and the error of law in not specifically addressing step 4, I am not satisfied that a rehearing and redetermination of this issue would lead to any different outcome. I therefore intend to make such amendments to his decision as are required.
With regard to the Department’s submission about the continuing nature of the award, I do not accept that the standard award for “weekly payments to continue in accordance with the provisions of the Act” was, in itself, ambiguous. In my view, that part of the award is perfectly clear.
With regard to whether Ms Taylor was entitled to an award for a worker with one dependent child, it is apparent from the rates awarded by the Arbitrator that he considered this to be her correct entitlement although he did not specifically state this or explain the basis for his so determining. I note Ms Taylor’s evidence at the hearing and counsel’s submissions on this issue to the Arbitrator: “the appropriate rate would be for a worker with one dependent child, given that the parents have equal responsibility and there are two children and they were earning roughly a similar income and applying it to the family’s needs” (arbitration hearing transcript page 21). This issue was neither raised by the Department, nor addressed by the Department’s counsel in his submissions to the Arbitrator.
In my view, the Arbitrator’s lack of a proper determination on this issue and lack of any findings, or reference to relevant evidence that might support such findings, is an error of law. The Arbitrator should have considered the application of subsections 37(4) and (7) of the 1987 Act, which state relevantly:
“(4) For the purposes of this section, a person is a dependent wife, husband, de facto spouse or other family member, child, brother or sister in relation to a worker if the person is totally or mainly dependent for support on the worker at the date compensation becomes payable to the worker or (whether married to the worker or born before or after that date) becomes so dependent after that date.”
“(7) In this section: …
child, in relation to a worker, means:
(a) child or stepchild of the worker who is under the age of 16 years,
(b) a person under the age of 16 years to whom the worker stands in the place of a parent, or
(c) a student who is a child or stepchild of the worker or is a person to whom the worker stands in the place of a parent.”
The issue for the Arbitrator to determine was whether Ms Taylor’s children were “totally or mainly dependent for support on the worker” at the relevant date. Relevant authorities for consideration include Campbell v Department of Community Services (2000) 19 NSWCCR 336 (‘Campbell’), a decision of Curtis J in the Compensation Court of NSW, where the applicant suffered injuries at a time when she was earning $35,000 per annum and her husband $42,000. His Honour rejected a submission that a child is ‘mainly dependent’ upon the parent who earns more money. He said:
“15. A child may in some circumstances be totally dependent upon each of two sources of income, the continuation of which is necessary for the support of that child.”
In Spenceley v Deniliquin Shire Council (2001) 22 NSWCCR 7 (‘Spenceley’), Armitage J, in the Compensation Court of NSW, discussed the meaning of ‘mainly dependent’. He suggested that this would not include a situation where the difference between the incomes of the husband and wife is substantial. The facts of the case were that the applicant’s monthly workers compensation benefits of $893 were his only source of income. His wife’s monthly income was $1,536. His Honour said, at paragraph 12, that he was guided by Meagher JA’s “remark” in the the Court of Appeal decision in McCafferty’s Management Pty Ltd v Pimlott (1995) 12 NSWCCR 360 (at 364B):
“that the obligation of each parent to support a child is joint and several, and a child may in a particular case be totally dependent upon one parent for support notwithstanding that he or she is totally dependent also upon the other parent. I gain also considerable assistance from the observation by Giles JA at 642 [51] in Holdlen [Holdlen Pty Ltd v Walsh (2000) 19 NSWCCR 629] that ‘total dependence is not incompatible with the receipt of support from someone else’.”
Armitage J said, at paragraph 13, that he was also guided by the decision in Campbell, where Curtis J recognised that dependency is a question of fact:
“to be judged on the circumstances of the particular case, and is not always excluded as a matter of law in circumstances where a child receives support also from a parent other than the injured worker.”
Discussing the facts in Spenceley, Armitage J said that when one looked at the total monthly income of the applicant and his wife,
“14. … it is obvious that subtraction of one or other parent’s income would be catastrophic to the household finances generally, and by extension to the support provided by both parents to Nykita [the child].
15. It seems to me reasonable in those circumstances to say that the child Nykita has at all material times been mainly, though perhaps not totally, dependent upon the applicant, even though she is also dependent to a considerable degree upon her mother …
16. … It seems to me that the expression ‘mainly’ is intended to focus not so much on the relative contributions of the worker and other persons to a child’s support but rather upon whether the child has any income of his or her own and the degree to which that interacts with the support received from the worker, although, of course, the support received from other persons, such as in this case the wife, must also be relevant in that calculus.”
In the present case, the Arbitrator should have made a determination on the issue of dependency. Unfortunately, because of the lack of evidence before the Commission as to Ms Taylor’s and her husband’s financial and household arrangements, I am not in a position to make the appropriate findings and make a determination on this issue. In the absence of agreement between the parties to resolve this, the issue will have to be remitted to an arbitrator for determination.
With regard to the Department’s submission that the Arbitrator erred in determining that Ms Taylor had an ongoing incapacity for work, in my view there was ample evidence to support his so finding. I find Ms Taylor’s medical evidence, in particular that of Dr Tahmindjis and Dr Morse, to be persuasive, and I prefer this evidence to that of Dr Lowy and Dr Lee. I note the critical comments made of Dr Lowy’s and Dr Lee’s reports by Dr Tahmindjis and Dr Morse that seem to me have some substance. I also note Ms Taylor’s evidence in relation to her capacity for work and her ongoing anxiety that seems credible. The Arbitrator refers to Ms Cochrane’s memorandum in his findings, and I note her statement was part of the investigation report, prepared for the Department by Brian Davis, which the Arbitrator included in his list of the documents in evidence before the Commission and said he took into account in making his determination. I note the Arbitrator did not refer to Ms Miliatas’s statement. However, even if the Arbitrator did not take this statement into account, given the possibility of Ms Militas having misunderstood that part of the telephone conversation with Ms Taylor as to the date of her declining the offer of transfer, I am not persuaded that consideration of her statement adds anything of substance to the evidence.
The Department submits that because of the Arbitrator’s error regarding the cause of injury, the issue of section 11A of the 1987 Act should be redetermined. Section 11A provides that no compensation is payable in respect of an injury that is a psychological injury, if the injury was wholly or predominantly caused by reasonable action taken by the employer in relation to, amongst other matters, appraisal of the worker’s performance. The facts establish that there were two incidents that caused Ms Taylor anxiety and led to her being unfit for work: first, the way in which Ms Cochrane’s complaint against Ms Taylor was handled, and second, Ms Cochrane’s disclosure during the course of the mediation session that inmates of the Lifestyles Unit had made a threat to harm Ms Taylor which Ms Cochrane had not reported. It appears from Ms Taylor’s evidence and the medical evidence that it was the second incident that had the more significant effect on Ms Taylor. She had returned to work after the first incident and before the mediation session was held.
The Arbitrator made no specific finding that one rather than the other incident caused the psychological injury to which he found Ms Taylor’s employment was a substantial contributing factor. Ms Taylor’s claim was that she suffered a psychological injury between April and June 2002 as a result of the nature and conditions of her employment. Contrary to the Department’s assertion that Ms Taylor’s injury was wholly or predominantly caused by reasonable action taken with respect to her appraisal, the Arbitrator found that the Department’s action in failing to adequately address the threat to Ms Taylor’s safety was not reasonable and, consequently, the Department’s conduct fell outside the province of section 11A. In my view, it was reasonable for the Arbitrator to reach this conclusion on the basis of the evidence before him. The context, it should be remembered, was one in which the Department had not apparently given Ms Taylor the opportunity to respond to Ms Cochrane’s allegation before the Governor issued an instruction to the Acting Deputy Governor to counsel Ms Taylor, albeit that he did in fact afford her that opportunity when she went to see him.
I am also not satisfied that the Department was denied procedural fairness. It had ample opportunity during the course of the exchange of documents, three teleconferences and the arbitration hearing to raise issues of concern to it and, for example, during the course of those teleconferences to seek leave to cross-examine Ms Taylor at the arbitration hearing. It was a matter for the Department to decide how to run its case and for its counsel to decide how to address particular evidence and what submissions to make at the hearing.
Aside from the Arbitrator’s obvious mistake as to the section of the 1987 Act pursuant to which weekly compensation for partial incapacity is payable and his error of law in relation to the issue of dependency, another major but more general issue is the inadequacy of his ‘Statement of Reasons for Decision’. The Arbitrator has a statutory duty, pursuant to section 294(2) of the 1998 Act, to attach a brief statement to the Certificate of Determination setting out the Commission’s reasons for the determination. Rule 73 of the Workers Compensation Commission Rules 2003 requires that a statement of reasons is to include:
“(a) the findings on material questions of fact, referring to the evidence or other material on which those findings were based, and
(b) the Commission’s understanding of the applicable law, and
(c) the reasoning processes that lead the Commission to the conclusions it made.”
As Deputy President Fleming said in Cargill Meat Processors Pty Ltd v Clark [2005] NSW WCC PD 7, failure to provide adequate reasons:
“constitutes an error of law and may be a ground to set aside the Arbitrator’s decision. The standard by which the adequacy of the reasons must be determined is relative to the nature of the decision itself and the decision-maker (see discussion in Mayne Health Group t/as Nepean Private Hospital v Sarah Sandford [2002] NSW WCC PD 6). The Commission is not a court, and its proceedings are conducted with as little formality and technicality as the proper consideration of the matter permits. Lengthy written reasons will not generally be necessary to convey simply, clearly and concisely, the reasons why a decision has been made.”
Moreover, for a party to succeed on the grounds of inadequate reasons, it must also be demonstrated that the error of law warrants the inference that the decision-maker did not exercise his or her jurisdiction in accordance with the law (YG & GG v Minister for Community Services [2002] NSWCA 247 at paragraph 47). In the context of the Commission: “It is only where the Arbitrator can be said to have failed to exercise his discretion fairly and according to law that his decision should be overturned” (South Western Area Health Service v Edmonds [2005] NSW WCC PD 18 at paragraph 25; see also Kinerson v Café 106 [2005] NSW WCC PD 8).
In my view, the Arbitrator, in his ‘Statement of Reasons for Decision’ in the present case, neither sets out adequately the evidence upon which he relied in making his findings nor explains adequately the reasoning processes that lead him to his conclusions. However, despite this error of law, I am not satisfied that the Arbitrator failed to exercise his discretion fairly and according to law except in relation to the issue of dependency. A reading of his reasons, together with a close examination of the evidence and the submissions of the parties, leads me to conclude that apart from his mistake in relation to sections 37 and 40 of the 1987 Act and his error of law in relation to the issue of dependency and the application of section 40(1) of the 1987 Act, he exercised his discretion fairly and in accordance with the law and reached an outcome that can be supported on the evidence. Thus, although the errors of law in relation to the payments for partial incapacity must be corrected, the appropriate course is to otherwise not interfere with the determination.
DECISION
1. Clause 2 of the Arbitrator’s decision dated 30 June 2004 is revoked and the following clause is substituted in its place:
“2. That the Respondent pay the Applicant weekly compensation:
(a) from 12 December 2002 to 25 July 2003 pursuant to section 37 of the Workers Compensation Act 1987; and
(b) from 26 July 2003 to date and continuing pursuant to section 40 of the Workers Compensation Act 1987, such weekly payments to continue in accordance with the provisions of the Act.”
2. The Arbitrator’s decision is otherwise confirmed.
3. The rates at which weekly compensation is to be paid to Ms Taylor under sections 37 and 40 are to be remitted to a different arbitrator for settlement or determination in accordance with the reasons for this decision.
4. After the rates at which weekly compensation is to be paid to Ms Taylor under sections 37 and 40 are determined, the Department of Corrective Services is to be given credit for any payments made.
COSTS
No order is made as to the costs of this appeal.
Robin Handley
Acting Deputy President 29 July 2005
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF ROBIN HANDLEY, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
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