Eades v Capral Aluminium Limited

[2006] NSWWCCPD 201

WORKERS COMPENSATION COMMISSION

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

CITATION:Eades v Capral Aluminium Limited [2006] NSWWCCPD 201

APPELLANT:  Kevin Eades 

RESPONDENT:  Capral Aluminium Limited 

INSURER:CGU Workers Compensation (NSW) Limited

FILE NUMBER:  WCC17451-05

DATE OF ARBITRATOR’S DECISION:          2 February 2006

DATE OF APPEAL DECISION:  25 August 2006

SUBJECT MATTER OF DECISION: Absence of transcript – Procedural Fairness; partial incapacity and application of section 40 of the Workers Compensation Act 1987.

PRESIDENTIAL MEMBER:  Acting Deputy President Deborah Moore

HEARING:On the papers

REPRESENTATION:  Appellant:      Steve Massellos & Co

Respondent:    TurksLegal

ORDERS MADE ON APPEAL:  1.   Paragraphs 3 and 4 of the decision

of the Arbitrator dated 2 February 2006 are confirmed.

2.   Paragraphs 1 and 2 of that decision are revoked.

3.   The matter is remitted to another Arbitrator for determination of the outstanding issues in accordance with these reasons.

4.   Capral is to pay the costs of the appeal.

BACKGROUND TO THE APPEAL

1.Kevin Eades (‘Mr Eades’) was employed by Capral Aluminium Limited (‘Capral’) as a process worker. He claimed that as a result of the nature and conditions of his employment with Capral until November 2004, and in particular on 17 March 2002, he suffered injuries to his back and left leg.

2.On 12 October 2005, Mr Eades filed an ‘Application to Resolve a Dispute’ in the Commission seeking weekly benefits compensation from 26 October 2004, medical, hospital and related expenses and permanent impairment/pain and suffering compensation pursuant to the provisions of the Workers Compensation Act 1987 (‘the 1987 Act’) and the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’).

3.On 2 November 2005 Capral filed a ‘Reply’ raising as issues in dispute, inter alia, whether Mr Eades’ employment was a substantial contributing factor to his injury, and the extent of any incapacity suffered by him.

4.The parties attended a conciliation/arbitration hearing on 20 January 2006. On 2 February 2006 a ‘Certificate of Determination’ with an accompanying ‘Statement of Reasons’ was issued. The decision of the Arbitrator was as follows:

“1.Respondent to pay weekly compensation to the Applicant at the rate of $50.00 per week from 26.11.2004 to date and continuing in accordance with the provisions of the Act.

2.Respondent to pay s.60 expenses claim in the total amount detailed in the invoices for medical related expenses attached to the Application.

3.Applicant’s whole person impairment assessment be referred by Registrar to an AMS.

4.Respondent to pay Applicant’s costs as agreed or assessed.”

5.On 28 February 2006, Mr Eades lodged an ‘Appeal Against Decision of Arbitrator’. Mr Eades cites three grounds of appeal as follows:

“1.That the Arbitrator’s award of weekly compensation under s.40 of $50.00 per week was against the weight of the evidence and was outside the bounds of a reasonably discretionary range. The Arbitrator misconceived the lay and medical evidence.

2.The Arbitrator failed to apply Mitchell v The Central West Health Service [1997] 14 NSWCCR 527 at 529 [Mitchell]. The five stages of a section 40 assessment.

3.The Arbitrator failed to give any or any sufficient reasons in relation to a number of crucial areas.”

6.On 28 March 2006, Capral filed a ‘Notice of Opposition to Appeal’. In essence, Capral submits that the Arbitrator’s award was consistent with the evidence before him, that he adequately and appropriately applied the test in “Mitchell”, supra, and that his reasons were adequate.

LEAVE TO APPEAL

7.The amount at issue on the appeal satisfies the criteria set out in section 352(2) of the 1998 Act. The appeal was filed within the time limits prescribed by section 352(4) of that Act.

8.Leave to appeal is granted.

ON THE PAPERS AND PROCEDURAL FAIRNESS

9.Mr Eades submits that:

“… It would be inappropriate to have this matter determined solely on the written application and any written notice of opposition lodged. It is the Appellant’s submission that the Arbitrator in coming to his determination gave weight to extraneous or irrelevant matters and failed to give weight to relevant matters including medical evidence and the lay oral evidence of the Applicant. The lay evidence of the Applicant deals with the primary issue of the claim being his capacity to work. In order to assess this evidence, the appeal panel needs to observe this witness giving sworn testimony. Such an observation should not be limited to what is being adduced and the veracity of the testimony, but should also encompass a general observation of the Applicant, which includes but is not limited to, the Applicant’s manner, character and manner in which the questions are answered.”

10.Capral submits that the matter is suitable for a determination ‘on the papers’.

11.Section 352 of the 1998 Act makes provision for an ‘Appeal Against a Decision of the Commission’ constituted by an Arbitrator. Section 352(5) provides that “An appeal under this section is to be by way of review of the decision appealed against.”  Section 352(6) provides that “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.” Thus not only would it be necessary for Mr Eades to seek leave to give further evidence, such evidence may not be appropriate if it amounted to a “second hearing” of the dispute which is contrary to the objectives of the Commission as discussed by Deputy President Fleming in Fraternity Bowling & Recreation Club Limited v Sartor [2004] NSWWCCPD 7 (Sartor), to which I will refer in more detail shortly.

12.The ‘review’ is by way of re-hearing where the powers of the Commission to confirm, revoke or substitute a new decision are exercisable only where it can be demonstrated that the original decision of the Arbitrator is affected by some legal, factual or discretionary error. (See Ross v Zurich Workers Compensation Insurance [2002] NSWWCCPD 7.)

13.Section 354 of the 1998 Act governs procedure before the Commission. Section 354(6) provides that:

“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.”

14.In the present case, both parties have provided detailed submissions on appeal. Mr Eades has also relied on a number of authorities in support of his grounds of appeal to which I will refer later. However, the Commission has advised the parties that no transcript of the proceedings is available due to technical difficulties in the Commission in March 2006 resulting in the loss of significant data.  This poses considerable difficulties in relation to some of Mr Eades’ grounds of appeal. Mr Eades apparently gave oral evidence and was cross examined. It is his submissions that the Arbitrator has failed to give adequate weight to his oral evidence.

15.The absence of a transcript is relevant to the substance of the appeal with which I will deal shortly. It also has implications in terms of my conduct of the ‘review’ process.

16.In Sartor the Commission noted at paragraph 15 that:

“The absence of a transcript of the arbitration may be fatal to the conduct of a fair review on appeal where no written reasons have been provided. The task of the Presidential Member is to ‘review’ the Arbitrator’s decision, wherever it is possible to do so, either ‘on the papers’ or after an oral hearing. Where an Arbitrator has erred in making the decision, it may not be possible for a Presidential Member to proceed to substitute a new decision … if the evidence on appeal is inadequate. This has frequently occurred because the evidence was not properly filed or given in accordance with the Rules or because it was not properly recorded in the arbitral proceedings. In these circumstances, to grant leave for fresh evidence to be given on appeal can lead to the review becoming a complete second hearing of the dispute … this is not the intention of the statutory scheme. The particular circumstances of each case will influence the course of the review.”

17.In Sartor, not only was there no transcript of the oral evidence or of the Arbitrator’s ex tempore decision, but part of the Commission’s file was missing. Ultimately the decision was revoked and the matter remitted to a new Arbitrator for re-hearing.

18.In Aluminium Louvres & Ceiling Pty Limited v Zheng [2006] NSWCA 34, (‘Zheng’) Bryson JA stated at [32]:

“In the present case, for reasons which were not explained, there was no compact disc or sound recording of the Arbitration hearing and the evidence given there. This is a serious shortcoming, because it great impedes the right of appeal and the due exercise of powers of the Presidential Member under s.352; and also impedes the conduct of a further appeal under s.353. According to circumstances, the absence of sound recording could fairly readily lead a Presidential Member to a decision to require a re-hearing; although that result would not be automatic.”

19.The circumstances in Zheng’s case were a little different since the employer’s solicitor had prepared a “narration” of the evidence, and the Court of Appeal determined that the Deputy President was not in error in accepting that “narration” where it was not disputed.

20.In the present case, the Arbitrator has given a detailed ‘Statement of Reasons’. Reference is made to the documentary evidence before him and also to “sworn evidence of Kevin Eades”. After dealing with the issue of the relevance of section 9A of the 1987 Act the Arbitrator then went on to consider “… the extent (if any) of the Applicant’s incapacity for work following his redundancy with the Respondent on 26 November 2004.” The Arbitrator then set out principles to be applied in determining this issue and made reference to a number of authorities. At paragraph 32, he went on to refer to “the relevant evidence discloses in relation to the Applicant’s alleged incapacity for work the following: …” The Arbitrator then set out the evidence as he saw it in respect of that issue. He made reference to medical reports, Mr Eades’ “statement”, and documents consisting of emails from some representatives of the employer. At no stage did he make reference to Mr Eades’ oral evidence.

21.Capral submits that:

“… There is no justification for the Appellant’s assertion that the Appellant’s oral evidence should have been preferred over the documentary evidence of the Respondent. This is particularly the case given that, by the Appellant’s own admission, there was not a ‘proper [written] statement’ from the Appellant in respect of the issues raised in the emails.”

22.I am not clear as to the significance of Capral’s submission on this point, adding further emphasis to the difficulties posed by the absence of a transcript.

23.At paragraphs 36 and 37, the Arbitrator did make some reference to Mr Eades’ oral evidence. For example, at paragraph 36 he noted:

“The Applicant, now aged 44, in his statement and oral evidence said he completed Year 10 at school, he then worked for three and a half years as a storeman and after that was second in charge of packing … before joining the Respondent as a multi skilled process worker.”

24.At paragraph 37, the Arbitrator went on as follows:

“Under cross examination the Applicant indicated he held a light crane certificate but his left leg problem would prevent him from doing a crane operator’s job. Also that he had experience in computer work – printing out labels and believed he could still do this sort of work again. He also said that since being made redundant, he had not gone to job interviews (as he would have some difficulty in standing up straight) except a hospital job which he did not get.”

25.The Arbitrator then went on to refer to his observations of Mr Eades at the hearing.

26.Mr Eades in his submissions claims that he gave evidence contrary to the “emails” from the employer referred to by the Arbitrator as “evidence” relating to his incapacity for work.

27.Mr Eades in his submissions also notes: “The Applicant gave evidence under oath and there was no attack on his voracity either under cross-examination or by any documentary material.”

28.Mr Eades maintains that his oral evidence was crucial to the “primary issue” of the claim being his capacity to work. The Arbitrator’s ‘Statement of Reasons’ makes scant reference to this oral evidence such that I do not believe that the review process can be properly and fairly conducted in this case

29.As the Commission pointed out in the second appeal decision in Fraternity Bowling & Recreation Club v Sartor [2004] NSWWCCPD 79:

“The fundamental problem for the review of the Arbitrator’s findings as the relative weight to be given to the evidence is that he did not have all of it before him, nor did he have a clear recall of the evidence, when writing the reasons. This is not to say that the decision is against the weight of the evidence, but rather than on review, I cannot be satisfied that it is not. The Appellant has the burden of proving that the Arbitrator made an error in failing to make the decision on the basis of logically probative evidence.”

30.Similarly, in the present case, Mr Eades’ submission that the Arbitrator’s award under section 40 was against the weight of the evidence may or may not be correct: I am simply unable to be satisfied either way.

31.Whilst I consider that the other grounds of appeal raised by Mr Eades are capable of being fairly and properly determined ‘on the papers’, I am of the view that both parties would be prejudiced if I were to proceed to review the challenge to the Arbitrator’s award of weekly compensation, in the absence of a transcript and only on the material available.

THE ADDITIONAL GROUNDS OF APPEAL

32.Having determined, for the reasons stated above, that a rehearing is required because of the absence of a transcript, it is not strictly necessary for me to deal with the additional grounds of appeal however, some brief comments are appropriate. These matters also have some bearing as to the issue of costs.

The Section 40 and ‘Mitchell’s Case’ Error.

33.Mr Eades challenges a number of aspects of the Arbitrator’s determination on this issue, in particular that the Arbitrator failed to adopt the “five stage process” set out in Mitchell’s case.

34.At paragraph 46, the Arbitrator stated: “Doing the best I can, based on the limited evidence before me in relation to the Applicant’s overall work capacity, I am of the opinion the Applicant’s earning capacity, as a result of his injury, in the relevant labour market at the present time would be reduced but only to the extent of $50.00 gross per week.”

35.The Arbitrator had previously determined that Mr Eades was “… capable of performing a wide range of duties …” subject to a “weight lifting restriction on him in excess of 15 kilograms.” That assessment was based on the opinion of Dr Roth, qualified by Capral, in his report dated 23 November 2005.

36.Whilst the Arbitrator at paragraphs 36 and 37 made reference to Mr Eades’ schooling and work history and skills, nowhere did he identify the “wide range of work duties” for which he considered Mr Eades capable.

37.As the court pointed out in Mitchell’s case [page 533] “Some particularity was therefore required in identifying the particular types of … duties that the worker was found (though incapacitated) to be able to perform”. The Court went on:

“… The capacity to proceed informally as regards proof of evidence does not relieve the Court of the duty to disclose its essential reasoning process. Indeed, that duty may be heightened where the court dips into its general store of knowledge rather than proceed upon the basis of the evidence tendered before it … the reader of the critical passage in the judgment is left with no basis for determining how or from what source the Judge arrived at the figure of [$700.00] per week.”

38.In the present case, whilst noting Mr Eades’ apparent oral evidence under cross-examination that he would be unable to do a crane operator’s job and that he had some skills in computer work, the Arbitrator nonetheless made no reference to these ‘skills’ or ‘occupations’ in concluding that Mr Eades was capable of a “wide range of work duties”. Similarly, it is impossible to discern on what basis or from what source the Arbitrator arrived at the “reduction” of his capacity “… to the extent of $50.00 gross per week.”

39.The Arbitrator noted in paragraph 32 of the ‘Statement of Reasons’ that “On 1 November 2005 the Applicant obtained work as an examination supervisor”. As to this employment, Dr Roth recorded in his report of 23 November 2005 “… approximately three weeks ago … he commenced working as an examination supervisor and he has worked in this capacity on several occasions for three to four hours at a time. He last worked in this capacity last week”.

40.No further reference is made to this employment in respect to the calculation of the award pursuant to section 40 of the 1987 Act.

41.Whilst it is true that at paragraph 47 the Arbitrator set out the “five steps” in his ultimate decision, that decision failed to disclose the essential steps in the reasoning process which determined the ultimate award.

42.The Arbitrator’s failure to disclose the essential steps of his reasoning process is further evidenced by his statement at paragraph 49 that “I opine that it may be desirable that an assessment of the Applicant’s ability to earn be carried out by the Respondent/Insurer pursuant to 40A, of the 1987 Act in the near future.” This statement suggests is clearly at odds with the Arbitrator’s statement of Mr Eades’ ability to earn would be “… reduced but only to the extent of $50.00 gross per week”.

43.Mr Eades also submits that the Arbitrator failed to give any weight to the opinion of Dr Patrick, qualified by Mr Eades as to his incapacity. He submits:

“The Arbitrator did not at any stage during his assessment of the Applicant’s incapacity refer to Dr Patrick either accepting or rejecting his views or explaining as to why he was of the opinion that Dr Patrick did not assist in an assessment of the Applicant’s incapacity… There was no reasons given for the rejection of Dr Patrick’s view.”

44.Whether or not this issue was raised or debated in oral evidence given by Mr Eades is unclear.

45.In his report of 10 January 2005, Dr Patrick identified a detailed list of Mr Eades’ present symptoms including ongoing low back pain and pain radiating to the left leg, swelling of the left leg and weakness of the left foot. He concluded that his re-examination of Mr Eades on this occasion “… does not cause me to significantly alter the opinions as expressed on the final pages (pages 4 and 5) of my report … of 27 February 2003”.

46.In the earlier report, Dr Patrick opined that Mr Eades:

“… Continues with significant ongoing permanent partial work incapacity in that he is not fit for physical work involving heavy lifting, frequent bending, prolonged stooping, or working in awkward situations. He needs to be careful with his back indefinitely.”

47.No reference is made by the Arbitrator to either of these reports in the Arbitrator’s reasons or his findings in relation to the issue of partial incapacity.

48.The nature and extent of the evidence available to the Arbitrator as to Mr Eades’ capacity for employment must remain unclear. There was certainly considerable evidence from Dr Patrick, and the fact that Mr Eades obtained some apparently casual employment in November 2005 appears to have been overlooked by the Arbitrator to the extent that it was not incorporated into his findings or reasons relative to his assessment of a weekly award pursuant to the provisions of section 40 of the 1987 Act.

49.A failure to give adequate reasons is an error of law. The Arbitrator has erred in this respect in relation to his findings as to Mr Eades’ “earning capacity”. The Arbitrator has also erred in failing to disclose the essential steps in the reasoning process required in accordance with the decision in Mitchell.

CONCLUSION

50.For the reasons set out in paragraphs 14 – 31 hereof it is not possible to adequately review all aspects of the decision under appeal because of the absence of a transcript, and for this reason, the matter must be remitted to another Arbitrator for a re-hearing.

51.The Arbitrator has also made errors in his findings and reasons relative to his interpretation of the requirements of Mitchell’s case.

DECISION

52.1.           Paragraphs 3 and 4 of the decision of the Arbitrator dated 2 February 2006 are

confirmed.

2.          Paragraphs 1 and 2 of that decision are revoked.

3.The matter is remitted to another Arbitrator for determination of the outstanding issues in accordance with these reasons.

COSTS

53.Capral is to pay the costs of the appeal.

Deborah Moore

Acting Deputy President  25 August 2006

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

ASSOCIATE