Energy Australia Pty Limited v Butler

[2010] NSWWCCPD 102

WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:		Energy Australia Pty Limited v Butler [2010] NSWWCCPD 102
APPELLANT:		Energy Australia Pty Limited
RESPONDENT:		Brian Butler
INSURER:		Self-insured
FILE NUMBER:		A1-2838/09
ARBITRATOR:	Mr B McManamey
DATE OF ARBITRATOR’S DECISION:		12 November 2009
DATE OF APPEAL DECISION:		24 September 2010
SUBJECT MATTER OF DECISION:		Medical Appeal Panel decision quashed in proceedings in the Supreme Court; effect of Certificate of Determination issued on the basis of an invalid Medical Assessment Certificate.
PRESIDENTIAL MEMBER:		President Judge Keating
HEARING:		On the papers
REPRESENTATION:		Appellant:	Leigh Virtue & Associates
Respondent:	White Barnes
ORDERS MADE ON APPEAL:		The decision of the Arbitrator dated 12 November 2009 is revoked. The costs of the arbitration hearing on 3 November 2009 are to follow the orders made when the matter is determined after remitter to a new Medical Appeal Panel. Each party to pay his or its own costs of the appeal.

BACKGROUND TO THE APPEAL

1.Mr Butler (the worker/respondent) was employed as a patrolman/street lighter with the appellant, Energy Australia Pty Limited (Energy Australia). 

2.In 2005, Mr Butler resolved, by consent, proceedings against Energy Australia in the previous Compensation Court of New South Wales for 15per cent loss of use of the left leg at or above the knee under s 66 of the Workers Compensation Act 1987 (the 1987 Act), 10 per cent loss of use of the right hand under s 16 of the former Act, $10,000 under s 67 and interest. The Short Minutes of Order and Consent Award in the Compensation Court of NSW No 15573/94 dated 30 June 1995 did not particularise the date/s of injury for which the compensation was agreed.

3.In a claim form (Permanent Impairment Claim) completed on 29 September 2008, Mr Butler claimed 40 per cent permanent loss of use of the right wrist as a result of injury on 24 July 1977. He also made two separate claims for injury to his left knee. He claimed 20 per cent permanent loss of efficient use of the left leg at or above the knee as a result of injury on 13 July 1981 and on or about “19 October 1992 (deemed date of injury 30 June 1995)” and a further 10 per cent whole person impairment as a result of injury to the left knee as a result of a gradual process from an unspecified disease with a nominated a date of injury of 10 July 2008.  The claim form also recorded the details of the previous compensation as detailed above.

4.On 15 April 2009, Mr Butler lodged an Application to Resolve a Dispute in the Commission. He particularised his claim as one for further lump sum compensation in respect of an injury to his right hand, when he tripped and fell on 24 July 1977, and an injury to his left knee. The dates of injury to the left knee were detailed as follows:

“On or shortly after 24 July 1977 and various dates including on or shortly after 13 July 1981, on or shortly after 19 October 1992 and 1 October 2008.”

5.In the description as to how the injury occurred, the following is recorded:

“ The Applicant sustained injury to his left knee from [the] performance of heavy and repetitive duties on the course of his employment including specific incidents on 13 July 1981 and 1992. In earlier proceedings the Applicant’s injury was deemed to have a date of injury of 30 June 1995. In the alternative the Applicant argues the deemed date of injury as the date of lodgement of the Permanent Impairment Claim Form.”

6.The Respondent filed a Reply on 30 April 2009. It did not dispute injury. The only issues in dispute were whether there had been any deterioration in Mr Butler’s condition, whether he was entitled to any further lump sum compensation and, if so, the quantum thereof.

7.The Commission listed the matter for a conciliation and arbitration on 9 June 2009. A Certificate of Determination-Consent Orders issued on 12 June 2009. By consent, the date of injury was amended to delete the claim in respect of the deemed date of injury of 1 October 2008. The Arbitrator remitted the matter to the Registrar for referral to an Approved Medical Specialist (AMS) to assess loss of use of the right hand/wrist and loss of use of the left leg at or above the knee.

8.The Registrar referred Mr Butler to Dr Bye, AMS.  Dr Bye examined Mr Butler on 29 June 2009 and issued a Medical Assessment Certificate (MAC) on 15 July 2009.  In relation to the left knee, Dr Bye assessed that Mr Butler had suffered a medial collateral ligament injury in 1981, in the presence of chondral lesions of the patello-femoral joint.  These progressed with time, requiring a number of surgical procedures. Initially, he underwent an arthroscopic partial medial meniscectomy and chondroplasty, later progressing to high tibial osteotomy and, finally, a total knee replacement.  Dr Bye assessed a 30 per cent whole person impairment. He assumed the date of injury nominated as 30 June 1995, was a deemed date on injury, given the original injures occurred in 1981.

9.In relation to the right wrist, Dr Bye noted Mr Butler suffered a comminuted fracture of the radial styloid involving the articular surface, a fracture of the ulnar styloid, and a rupture of an extensor tendon when he fell on 24 July 1977. He underwent arthroscopic debridment and had a significantly restricted range of movement. Dr Bye assessed a 20 per cent “loss of efficient use of the dominant right upper extremity at or below the elbow, principally involving the wrist injury” (page 9).

10.Energy Australia filed an appeal against the Medical Assessment Certificate under section 327 of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act).

11.The Panel noted that whilst neither party disputed the assessment of a 20 per cent loss as a result of the right wrist injury, both agreed that the AMS had not expressed the loss in accordance with the terminology used in Table 1 under s 16 of the former Workers Compensation Act 1926.  The Panel found that the AMS had erred in referring to that loss as a loss of use of the “right hand and wrist”. The Panel corrected the right wrist injury assessment to read a 20 per cent “loss of lower part of right arm”. 

12.In relation to the assessment of the left leg injury, the Panel found, based on the Application to Resolve a Dispute, the Reply and the Certificate of Determination dated 12 June 2009, that the deemed date of injury was 30 June 1995, that the AMS had assessed the matters that were referred to him and had not applied incorrect criteria, and that there was no demonstrable error in the MAC.

13.The Panel revoked the MAC and issued an Appeal Panel Medical Assessment Certificate and Statement of Reasons dated 6 October 2009. However, other than the technical correction of the terminology used in respect of the assessment of the right wrist injury, the Medical Appeal Panel certificate issued with the same assessments as found by the AMS.

14.The Arbitrator listed the matter for a teleconference on 27 October 2009 and set the matter down for conciliation and arbitration on 3 November 2009 to determine the claims under ss 66 and 67.

15.The matter proceeded to arbitration hearing on 3 November 2009. At the hearing, the Arbitrator noted that the employer had filed an application in the Supreme Court seeking a declaration that the Panel’s decision contained an error on the face of the record and jurisdictional error, and that the Supreme Court quash the Panel decision (T1.30).

16.The arbitration proceeded and, consistent with the Panel Medical Assessment Certificate, the Commission issued a Certificate of Determination and accompanying Statement of Reasons on 12 November 2009. 

DECISION UNDER REVIEW

17.The Certificate of Determination dated 12 November 2009 recorded the Arbitrator’s orders as follows:

“1.     Respondent to pay $2,065.00 for 10 percent further loss of use of the lower part of the right arm.

2.    Respondent to pay $14,478.45 for 15 percent further loss of use of the left leg at or above the knee.

3.    Respondent to pay $16,360.00 for further pain and suffering.

4. Respondent to pay interest on the sum of $26,313.45 from 1 October 2008 at the rate prescribed by Schedule 5 of the Uniform Civil Procedure Rules.

5.    Respondent to pay the Applicant’s costs as agreed or assessed. I certify that the matter is complex and the parties are entitled to a 30% uplift.”

18.On 27 November 2009, Energy Australia sought leave to challenge the Arbitrator’s decision dated 12 November 2009. Annexed to the Appeal Application was a copy of a Summons filed by Energy Australia in the Supreme Court Administrative Division, seeking an order quashing the Medical Appeal Panel decision.

19.Whilst some appeal grounds were particularised, the application was incomplete because the appellant was unable to complete its grounds of appeal and submissions until the Supreme Court proceedings concluded. The parties were provided with a copy of the transcript from the arbitration hearing held on 3 November 2009.  

20.The appellant sought the revocation of the Arbitrator’s decision and that the matter be remitted to another Arbitrator for determination after the Supreme Court proceedings were finalised.  The appellant anticipated that, if the Supreme Court proceedings set aside the Medical Appeal Panel decision, Mr Butler would consent to the Arbitrator’s decision being revoked.

21.On 11 December 2009, Mr Butler filed a Notice of Opposition, reserving his right to file further submissions once the appellant finalised its grounds of appeal and submissions.

22.On 3 February 2010, the appellant’s solicitor wrote to the Commission requesting that the appeal proceedings be stayed until the Supreme Court proceedings were finalised.

23.On 12 February 2010, the Registrar advised the parties that it was appropriate to defer the appeal proceedings until the Supreme Court proceedings were finalised, and inviting Mr Butler to make any submissions if he opposed the appeal being deferred.

24.Mr Butler did not object and the matter was deferred.

25.On 10 May 2010, Barr AJ delivered judgment in Energy Australia v Butler [2010] NSWSC 487 (Butler). He made the following orders:

“1.     Set aside the decision of the Medical Appeal Panel of 6 October 2009.

2.    Remit the matter to the Medical Appeal Panel to be dealt with according to law.

3.     Order the plaintiff to pay the first defendant’s cost of the hearing.”

26.On 2 June 2010, the Commission listed the matter for a teleconference before Arbitrator McManamey.  The parties agreed that no orders be made pending the outcome of the arbitral appeal.

27.On 21 June 2010, the Registrar set a timetable for the parties to file and serve final submissions on appeal. The appellant filed further submissions on 25 June 2010 and Mr Butler filed further submissions on 28 July 2010.

ISSUES IN DISPUTE

28.The appellant submits that the Arbitrator erred in:

a)determining the matter because the decision of the Medical Appeal Panel was a nullity, and

b)finding that the Medical Assessment Certificate issued by the Medical Appeal Panel complied with the requirements of s 325 of the 1998 Act.

ON THE PAPERS REVIEW

29.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.”

30.Having regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submission by the parties, 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. 

LEAVE

31.Before proceeding to deal with an appeal the Commission must determine whether the application meets the requirements of section 352 of the 1998 Act.

32.The appeal was lodged on 27 November 2009, within 28 days of the Arbitrator’s decision in compliance with s 352(4) of the 1998 Act.

33.The monetary thresholds in s 352 (2)(a) and (b) are met.

34.Leave to appeal is granted.

FRESH EVIDENCE

35.Neither party seeks to rely on fresh and/or additional evidence on appeal.

SUBMISSIONS

Appellant

36.The appellant submitted that a determination made on the basis on an invalid Medical Assessment Certificate was also invalid, and all orders and decisions based on it must be revoked (Cemex Australia Pty Ltd v Freriechs [2009] NSWWCCPD 101 at [38]–[39] (Freriechs)).

37.In relation to costs, the appellant submitted that the costs order made by the Arbitrator should also be revoked and orders made after the matter is re-determined. Further, the appellant submitted that Mr Butler should pay the appellant’s costs of the appeal because the appellant invited the respondent to consent to the revocation of the Arbitrator’s decision on three occasions, but the respondent failed to consent.

Mr Butler

38.Two separate injuries to two different body parts (the right hand/wrist injury and the left knee injury) were referred for assessment by an AMS. Dr Bye assessed additional loss of function of both the right arm and left leg.

39.The appellant appealed the MAC only in relation to the assessment of the left leg and the Medical Appeal Panel confirmed the assessment of the right arm as found by Dr Bye.

40.At the arbitration hearing on 12 November 2009, the Arbitrator noted that there was no dispute in respect of the worker’s right wrist claim (see [13] of the Arbitrator’s Statement of Reasons).

41.The Medical Appeal Panel decision in respect of the assessment of the worker’s right wrist claim was not the subject of appeal to the Supreme Court (see Butler at [11]).

42.Mr Paul Mackin’s affidavit filed in the Supreme Court proceedings did not refer to any basis upon which his challenge to the Panel certificate related to its decision in respect of the injury to the right wrist.

43.The Arbitrator’s decision dealing with the orders made in relation to the right wrist injury and the order for costs should not be revoked on appeal.

44.Consent orders dated 14 June 2009 recorded an agreed date of injury for the left leg, as set out in the Application for Determination, namely, as amended by omitting the alleged date of injury of injury of 1 October 2008. The date of injury cannot be a matter for determination by an arbitrator on any subsequent hearing. There is no reason for the matter to be referred to an arbitrator. The matter should be referred to a new Medical Appeal Panel in accordance with the orders made by the Supreme Court.

DISCUSSION AND FINDINGS

45.A determination made in reliance on an invalid MAC is also invalid (see Jopa Pty Limited t/as Tricia’s Clip-n-Snip v Edenden [2004] NSWWCCPD 50; 5 DDCR 321 at [37]; Ryan v State Transit Authority of NSW [2004] NSWWCCPD 81 and Freriechs).

46.In the present case, like that of Freriechs, the Arbitrator’s decision and orders made on 12 November 2009 were based on the assumption that a valid and binding Medial Appeal Panel decision was issued. In light of the Supreme Court decision in Butler, that assumption is no longer valid. The Supreme Court set aside the whole of the Panel decision on the basis of a denial of procedural fairness.  It follows that the decisions and orders of the Commission based on that Panel decision, and consequential to it, cannot stand and must be revoked. 

47.Whilst I acknowledge Mr Butler’s submission that the Panel findings in respect of the right wrist injury were not challenged in the Supreme Court and should therefore be preserved, such a submission should more properly have been made in the Supreme Court. The decision of the Supreme Court in Butler was final. It was not an interlocutory decision which left in place elements of the reasoning of the Medical Appeal Panel decision (Osland v Secretary, Department of Justice (2010) 84 ALJR 528 at [32]). Barr AJ did not set aside that part of the Panel decision that dealt with the left leg assessment, but he set aside the entire Panel decision and remitted the matter to a new Medical Appeal Panel. Therefore, for the reasons already given, the Commission’s decisions based on the Panel decision, including that relating to the wrist injury, cannot stand and must be revoked.

CONCLUSION

48.Having conducted a review on the merits (per Spigelman CJ in State Transit Authority of New South Wales v Fritzi Chemler [2007] NSWCA 249; 5 DDCR 2878 at [28]), the setting aside of the Medical Appeal Panel decision affects the entirety of the Arbitrator’s decision dated 12 November 2009 and necessitates the revocation of that decision.

DECISION

49.The Certificate of Determination dated 12 November 2009 is revoked. The matter is remitted to the Registrar for referral to a Medical Appeal Panel in accordance with the Supreme Court’s decision in Butler.

50.The costs of the arbitration hearing on 3 November 2009 are to follow the orders made when the matter is determined after remitter to the new Medical Appeal Panel.

COSTS

51.Having considered the history of this matter and the submissions on appeal, the appropriate cost order is that each party to pay his or its own costs of the appeal.

His Hon Judge Keating

President

24 September 2010

I, MELANIE CURTIN, CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF HIS HON JUDGE KEATING, PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE