Fletcher International Exports Pty Ltd v Lott and anor
[2009] NSWWCCPD 40
•14 April 2009
| WORKERS COMPENSATION COMMISSION | |||||
| DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR | |||||
| STATUS: Decision confirmed by Court of Appeal: Fletcher International Exports Pty Ltd v Lott & Anor [2010] NSWCA 63 | |||||
| CITATION: | Fletcher International Exports Pty Ltd v Lott and anor [2009] NSWWCCPD 40 | ||||
| APPELLANT: | Fletcher International Exports Pty Ltd | ||||
| FIRST RESPONDENT: SECOND RESPONDENT: | Daniel James Lott Scott and Tracey Swain, Geoffrey and Rosalyn Gae Swain, Darren and Linda Swain, Rosalie and Andrew Hewitt t/as Glenam Farming | ||||
| SECOND RESPONDENT’S INSURER: APPELLANT’S INSURER: | QBE Workers Compensation (NSW) Ltd Self insured | ||||
| FILE NUMBER: | A1-7432/08 | ||||
| DATE OF ARBITRATOR’S DECISION: | 18 December 2008 | ||||
| DATE OF APPEAL DECISION: | 14 April 2009 | ||||
| SUBJECT MATTER OF DECISION: | Injury; causation; section 9A of the Workers Compensation Act 1987; summons to give evidence | ||||
| PRESIDENTIAL MEMBER: | Acting President Bill Roche | ||||
| HEARING: | On the papers | ||||
| REPRESENTATION: | Appellant: | Leigh Virtue & Associates | |||
| First Respondent: Second Respondent: | Firths Moray & Agnew | ||||
| ORDERS MADE ON APPEAL: | Paragraphs three and four of the Arbitrator’s determination dated 18 December 2008 are revoked and the following orders made: “3. The matter is remitted to a different Arbitrator to re-determine the applicant worker’s entitlement to weekly compensation in accordance with the reasons in this decision. 4. The first respondent (Fletcher International Exports Pty Ltd) is to pay the applicant’s costs and the second respondent’s costs, as agreed or assessed.” Paragraphs one and two of the Arbitrator’s determination dated 18 December 2008 are confirmed. | ||||
| The appellant is to pay Mr Lott’s costs and the second respondent’s costs of the appeal. Costs of the second arbitration are at the discretion of the Arbitrator who determines that matter. | |||||
BACKGROUND
Daniel Lott injured his left knee on 15 February 2002 whilst working for Fletcher International Exports Pty Ltd (‘the appellant/Fletcher Exports’) as a station hand. The injury occurred when a sheep struck his left knee causing a lateral patella dislocation and associated injury of the medial patella retinaculum, bone bruising at the medial patella facet and impaction fracture at the anterior-lateral surface of the lateral femoral condyle. He underwent surgery on 13 March 2002, from which he made an uneventful recovery and eventually returned to his normal work with Fletcher Exports. He stopped work with Fletcher Exports in 2003 for reasons unconnected with his injury.
Though his knee improved after surgery, he continued to have intermittent difficulties with it, but was able to continue his normal day-to-day activities including his work. On 11 July 2005, Mr Lott commenced employment as a Grade 2 station hand with the second respondent, Scott and Tracey Swain, Geoffrey and Rosalyn Gae Swain, Darren and Linda Swain, Rosalie and Andrew Hewitt t/as Glenam Farming (wrongly named as Scott Swain t/as Glenam Farming Pty Ltd in the various applications in the Commission). On 12 July 2005, Mr Lott attempted to turn to walk in the course of his employment when his left leg collapsed. Exactly what caused his leg to collapse, and whether he twisted as he turned, is the subject of conflicting evidence and is considered further in the body of this decision. He ceased work and attended at Tamworth Base Hospital later that day.
He submitted a claim form on Glenam Farming’s insurer, QBE Workers Compensation (NSW) Ltd (‘QBE’), who initially denied liability on the ground that the incident on 12 July 2005 was a recurrence of Mr Lott’s injury with Fletcher Exports. Mr Lott’s solicitors, Firths, lodged a formal claim for compensation against both Fletcher Exports and QBE on 27 September 2005. Fletcher Exports arranged for Mr Lott to be examined by Dr Lloyd-Hughes and Dr Smith on 19 January 2006. By letter dated 8 February 2006, Fletcher Exports denied liability. This letter is not in evidence but is referred to in a letter from Firths to Fletcher Exports dated 20 February 2006 stating that the matter would be referred to the Commission.
Mr Lott filed an Application to Resolve a Dispute in the Commission on 13 March 2006 (Matter no. 3883-06, ‘the first application’) in which he claimed weekly compensation from 10 September 2005 together with hospital and medical expenses against Fletcher Exports in respect of his injury on 15 February 2002 and against Scott Swain t/as Glenam Farming Pty Ltd in respect of the injury on 12 July 2005.
Fletcher Exports filed a Reply on 23 March 2006 listing the following issues in Part 3 as being in dispute:
“It is not yet possible to identify with precision the issues in dispute and this will be done at the conclusion of investigation. At the present time the following issues remain in dispute so far as the first respondent is concerned based on the evidence available:
Injury: notice, claim for compensation, causation, substantial contributing factor (s 9A), incapacity, whether treatment expenses are reasonably necessary, probable earnings uninjured and ability to earn. In addition an issue remains to be resolved as to the application of the disease provisions of the Act such as require the payment of any proven entitlement to compensation by the second respondent.”
A Reply was filed on behalf of Glenam Farming Pty Ltd on 4 April 2006. This reply disputed injury, whether employment was a substantial contributing factor to any injury, incapacity, whether the injury was a manifestation of an earlier injury, whether the incapacity was related to Mr Lott’s employment with Glenam Farming, and probable weekly earnings.
The first application was listed for teleconference on 23 May 2006 when QBE agreed to pay for surgery to Mr Lott’s knee without admission of liability and on a voluntary/provisional basis (see Consent Orders 24 May 2006).
Mr Lott underwent further surgery to his left knee in June 2006 and was declared fit for suitable duties on 1 September 2006. He returned to casual employment with various employers in late 2006 and throughout 2007. On 27 February 2008 he obtained fulltime employment with Leeton Pty Ltd and he remained employed with that company performing full duties as at December 2008.
By letters dated 11 March 2008, Mr Lott claimed from Fletcher Exports and QBE lump sum compensation in respect of a 12% whole person impairment as a result of his injuries in 2002 and 2005. By letter dated 16 July 2008, Fletcher Exports offered to settle the claim in the sum of $6,250.00, representing a 5% whole person impairment. The offer was based on a report from Dr Tony Blue dated 8 May 2008. This report was never tendered in evidence.
By letter dated 22 July 2008, QBE served notice on Mr Lott under section 74 of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’) that it disputed liability for the claim on the grounds that he had not sustained an injury as defined by section 4 of the 1998 Act, his employment was not a substantial contributing factor to his injury and he had not sustained any “permanent impairment” as a result of his injury with Glenam Farming.
Fletcher Exports has never served a section 74 notice.
By letters dated 19 August 2008, Mr Lott’s solicitors claimed weekly compensation against both Fletchers Exports and QBE from 10 September 2005 to date and continuing.
By an Application to Resolve a Dispute filed in the Commission on 17 September 2008 (‘the second application’), Mr Lott sought weekly and lump sum compensation against Fletcher Exports as a result of the injury on 15 February 2002 when a sheep struck his left knee and against Scott Swain t/as Glenam Farming Pty Ltd in respect of the incident on 12 July 2005, which was described as having occurred as follows:
“The applicant sustained an injury when he stood stationary at work and as he attempted to turn and walk away he injured his knee.”
Fletcher Exports filed a Reply to the second Application on 3 October 2008. Under “Matters in Dispute” at Part 3 of the Reply, the matters in dispute are said to be “Confirmed as per dispute notice(s) attached to the Application” and “Confirmed as per exchange of offers attached to the Application”. In addition, the words “See Attached” are written. Attached to the Reply is a document headed “Schedule of Issues”, which contains the following list:
“1.Injury
2.Causation
3. Substantial contributing factor
4. Incapacity
5. Impairment
6. Disease Provision
7. Apportionment
8. Claim Not Made Within Limitation Period”
The practice of adding a schedule of ‘catch all’ issues is unacceptable and is inconsistent with the express terms of the legislation. An insurer or self-insurer is obliged to comply with section 74 of the 1998 Act and properly identify the issues in dispute, and the reason those issues are in dispute, in a notice before the application is filed in the Commission (Mateus v Zodune Pty Ltd t/as Temp Cleaning Services [2007] NSWWCCPD 227). If that is not done, an application must be made, supported by appropriate evidence, for leave to put issues in dispute. A solicitor is not entitled to file a ‘schedule’ listing everything as being in dispute, as has happened in the present case. Such a schedule does not comply with section 74 and indicates a clear and improper attempt to avoid the terms of the legislation. Though it is far from clear from the transcript, it seems from the Arbitrator’s decision that the parties agreed to the issues in dispute as set out at [57] below, namely, whether there was a second injury on 12 July 2005 (including section 9A), incapacity, permanent impairment and the responsibility for that permanent impairment. The case was conducted on the basis that probable and actual earnings were also in dispute.
Moray & Agnew filed a Reply on behalf of Scott Swain t/as Glenam Farming Pty Ltd on 9 October 2008. Under “Matters in Dispute” in Part 3 of its Reply, it relied on the matters in dispute in its section 74 notice dated 22 July 2008 (see [10] above).
The Commission listed the matter for arbitration on 8 December 2008. By consent, the name of the second respondent was amended to be Scott and Tracey Swain, Geoffrey and Rosalyn Gae Swain, Darren and Linda Swain and Rosalie and Andrew Hewitt t/as Glenam Farming. The arbitration proceeded with Mr Lott being cross-examined by Fletcher Exports’ counsel (Mr Judd) and the parties making submissions.
In a reserved decision delivered on 18 December 2008, the Arbitrator made an award in favour of Glenam Farming and an award against Fletcher Exports. A Certificate of Determination issued by the Commission on 18 December 2008 records the Arbitrator’s formal determination as follows:
“1.A finding in favour of the Second Respondent as regards the alleged injury on 12 July 2005.
2.The matter to be remitted to the Registrar to be referred to an Approved Medical Specialist to assess the Applicant’s whole person impairment (if any) arising from the injury to his left lower extremity on 15 February 2002. The documents to be supplied to the Approved Medical Specialist should include the Application and both Replies together with their annexures.
3.The First Respondent to pay the Applicant weekly benefits pursuant to Section 40 of the Act as follows:
a.Between 10 September 2005 and 30 September 2005, the statutory maximum of $474.90.
b.Between 1 October 2005 to 28 October 2005, the statutory maximum of $484.60.
c.Between 28 October 2005 to 31 March 2006 (having regard to the birth of the Applicant’s third child), the statutory maximum of $578.90.
d.Between 1 April 2006 to 30 September 2006, the statutory maximum of $590.80.
e.Between 1 October 2006 to 31 November 2006, the statutory maximum of $601.80.
f.Between 1 December 2006 to 27 February 2008 (being $730.00 less $137.19), a figure less than the statutory maximum and being $582.80.
g.Between 28 February 2008 to date and continuing (being $730.00 less $549.40) a figure less than the statutory maximum and being $180.60.
4.The Respondents to pay the Applicant’s costs as agreed or assessed.”
By an appeal filed on 14 January 2009, Fletcher Exports seeks leave to appeal the Arbitrator’s 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 1998 Act.
There is no dispute that the monetary threshold in section 352(2) of the 1998 Act is satisfied.
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.
ON THE PAPERS
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.”
Fletcher Exports submits that the matter should not be determined on the papers but should be given an oral hearing because the appeal involves complex issues which would benefit from an oral hearing and that transcript of the proceedings was not available at the time the appeal was filed. Both Mr Lott and Glenam Farming submit that the appeal can be determined on the papers.
Since Fletcher Exports filed the appeal a transcript of the proceedings before the Arbitrator was forwarded to the parties and the appellant has filed additional submissions dealing with matters arising out of the transcript. I do not believe that the appeal raises issues that warrant an oral hearing.
Having regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submissions by Mr Lott and Glenam Farming 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.
THE EVIDENCE
Lay Evidence
Mr Lott’s evidence is set out in his statement of 7 August 2008. The main features of his evidence are as follows:
(a)on 15 February 2002, a sheep ran into his left knee resulting in an injury to that knee. He lodged a claim against Fletcher Exports and liability was accepted;
(b)he came under the care of Dr Musgrove who operated on his left knee on 13 March 2002. Mr Lott made a fairly uneventful recovery from that surgery and returned to his duties with Fletcher Exports where he remained until he resigned for reasons unconnected with his injury;
(c)at the time of his injury he earned approximately $538.40 per week as a station hand with Fletcher Exports;
(d)his knee improved after the surgery, but his left knee was “never again the same” and he continued to have intermittent difficulties with it and he was always “weary and conscious of that leg”, because of those ongoing difficulties. Notwithstanding those difficulties, he managed to continue with his day-to-day activities, albeit favouring the left leg (Mr Lott’s statement, at [7]);
(e)after leaving Fletcher Exports he continued to have difficulties with his left knee but those difficulties did not prevent him from working. He was careful with what he did “given the weakness and tendency for it [the left knee] to give way” (Mr Lott’s statement, at [8]);
(f)in July 2008, he obtained employment with Glenam Farming earning approximately $830.00 per week. He started work on 11 July 2005;
(g)in addition to his base salary of $35,880.00 per annum, he also received various allowances including accommodation in a four bedroom home at a rental of $30.00 per week. He estimated that, but for his employment, the rent for the property would have been approximately $100.00 per week and he claims the value of that accommodation in these proceedings (Mr Lott’s statement, at [10]);
(h)he described the incident on 12 July 2005 in the following terms:
“I was standing stationary when I attempted to turn to walk away. As I did so my left leg collapsed from under me for no reason whatsoever.” (Mr Lott’s statement, at [11]);
(i)he completed an “Employee’s Report of Injury” form for QBE on 14 July 2005 in which he described the incident as follows:
“Turned to the left and left knee gave way”
(j)he attended at Tamworth Base Hospital on the day of the accident and was treated in the emergency department and certified unfit for work;
(k)QBE referred Mr Lott to Dr Caldwell, orthopaedic surgeon, who examined him on 22 August 2005. As a result of Dr Caldwell’s opinion, QBE denied liability;
(l)by letter dated 7 November 2005, Fletcher Exports also denied liability;
(m)as a result of proceedings commenced in the Commission in the first application, QBE agreed to accept liability for further surgery on a without admission of liability basis;
(n)Mr Lott underwent further surgery to his left knee at the hands of Dr Berton, orthopaedic surgeon, on 7 June 2006. Mr Lott was declared fit for suitable duties from 1 September 2006 and obtained casual work with various employers from December 2006 until the end of February 2008 when he started fulltime employment with Leeton Pty Ltd;
(o)by the time he started work with Leeton, his leg had regained some strength and he felt ready to return to fulltime employment. He added that from that point his earnings were “relatively comparable” to what he used to earn and he did not claim thereafter (Mr Lott’s statement, at [44]);
(p)he confirms that he is currently able to fulfil his duties, and
(q)he left school at the age of sixteen having completed his School Certificate. He then attended TAFE and obtained qualifications as a butcher, a trade in which he worked for approximately seven years. He then travelled and worked in various manual jobs, including fruit picking, until he started with Fletcher Exports in about 2001 as a station hand. Since that time he has always worked as a station hand, or in a similar capacity. As a station hand, his duties required him to undertake fencing, feeding stock, lifting, bending, squatting, walking on uneven ground, riding motorbikes, getting on and off tractors, and maintenance duties, all of which he had been unable to perform because of his left knee, though he has since been able to return to it.
Medical Evidence
The surgery on 13 March 2002 revealed Mr Lott to have a stable right knee with a subluxating patella. The articular surface and menisci were intact except for Grade II – IV chondral changes throughout the medial facet of the patella. An osteochondral fragment was noted lying below the lateral meniscus locked between the tibial plateau and meniscus. The fragment was removed and the menisci cruciate ligaments were noted to be intact. The medial retinacular ligaments and patellofemoral ligaments showed haemorrhagic change, but no gross division. Some debridement of the tissue was performed. After the surgery, Mr Lott underwent physiotherapy and made an apparently uneventful recovery.
Apart from an attendance on Dr Brookman on 20 November 2002, when he was prescribed tinidazole, and an after hours attendance on a general practitioner (Dr Kelly) on 2 May 2004 for a severe sore throat, it appears that Mr Lott did not again seek medical attention until his injury in July 2005.
At about 6.40pm on the evening of 12 July 2005, Mr Lott attended at the emergency department of Tamworth Base Hospital where Dr Cartwright attended him at about 9.39 that night. The clinical record from the hospital records the following:
“27yo ♂ – station hand – 2nd day on job
twisting injury sustained to (L) knee at work today
standing still – twisted to (L) – pivot on (L) leg – felt (L) knee give way
(L) leg buckled and pt fell down
sharp pain in knee +++
gradually able to weight bear – limped to see manager – sent home
drove 30mins – by time he got home unable to weight bear
swelling +++
â ROM +++
aching pain
neurofen – little relief
panedine forte – mod. Relief
Hx of injury to same knee 3yrs ago
standing straight – sheep rammed leg- dislocated patella
- chipped patella – fragments falling into lock joint
- arthroscopy + removal of bone fragments
- also told that ACL had been stretched”
Dr Cartwright issued a WorkCover medical certificate on 12 July 2005. That certificate diagnosed “(L) knee - twisting injury - ? meniscal tear”. The certificate also referred to a previous twisting injury while at work.
On 19 July 2005, Mr Lott was seen by either Dr Gultekin, orthopaedic registrar, or Dr Lennox, orthopaedic surgeon, at the Plaster Clinic. In a report of that date headed “Copy to Medical Records” and signed by Dr Gultekin, the following is recorded:
“Daniel was seen in the Plaster Clinic on 19 July 2005 six (6) days after having a left knee injury. He injured his left knee while turning around at work. The left knee immediately began to swell. He could not weight bear. The swelling and pain has improved although he can still not walk properly. He had a knee injury three (3) years ago while at work. He had arthroscopic surgery in Sydney. He states that some small fragments were removed from the joint. After the surgery, he had occasional locking and giving way. But otherwise it did not cause him any major problems.
On examination today, the left knee is swollen. There is tenderness on the medial side. He can actively extend fully. He can flex up to 110°. I can not detect instability. X-rays show two small intra-articular fragments. One of them looks old and one new. We have referred him for an MRI scan. Following this he will be reviewed in Dr Lennox’s consulting rooms.”
The MRI scan was performed on 2 August 2005. Under “History” the radiologist recorded “Twisting injury. Arthroscopy. ? meniscal pathology or articular pathology”. Under “Impression”, the radiologist stated:
“MR of the left knee demonstrates sequillae [sic] of lateral patella dislocation with impaction fracture lateral condyle anteriorly and mild oedema to the medial patella pole at the retinacular attachment. Retinacula do not appear discontinuous. There is a lipohaemarthrosis. Contusion lateral condyle is associated with focal area of full thickness cartilage loss. Remainder of the study is within normal limits.”
Mr Lott was referred to Dr Berton, orthopaedic surgeon, in August 2005. In a report addressed to Dr Ferguson on 5 August 2005, Dr Berton recorded the following history:
“He was at work on 15th July turning to walk as a truck was loading. The ground was not uneven and as he simply turned his knee buckled with a sense of the knee coming apart.”
Commenting on the MRI scan, Dr Berton stated that there “must be an intraarticular fracture therefore in the presence of full thickness loss of lateral femur there must be a loose body somewhere” even though the radiologist was unable to identify it and Dr Berton was unable to see it on his examination of the scan. He also took a history of Mr Lott’s 2002 injury and the treatment that followed. After that treatment, Mr Lott always felt apprehensive the knee would give way and he avoided high grade pivoting sport. He was, however, able to return to his farm hand duties without difficulty though they were quite physical. Dr Berton concluded that Mr Lott had evidence on the MRI scan of patella dislocation. In addition, he felt that the cruciate ligament did not look normal, though the radiologist had not commented on it.
On the “greyer issue” of why Mr Lott’s knee disrupted, Dr Berton speculated that Mr Lott might have had a partial anterior cruciate ligament injury for some time.
In his report of 11 August 2005, Dr Berton made the following observations under “Comment”:
“In order to have dislodged the medial facet of the patella the patellofemoral joint must have dislocated.
The management of acute dislocation of the patellofemoral joint remains one of the more controversial areas of orthopaedics with management ranging from non-operative treatment with a brace and physiotherapy as was performed, it would seem in this case, to primary repair of damaged tissue reinforced by tendon transfer.
From my understanding of contemporary literature and conference attendance it would seem that with non-operative treatment the rate of redislocation is in the order of 40% whereas with primary repair plus or minus tendon reinforcement, the rate falls to about 10%.
Going off Daniel’s history it would seem that he made a reasonable recovery in that he could do heavy work but was aware of a structural weakness, which he self managed by avoidance of high grade pivoting activity.
The great difficulty as I see this case is determining whether a substantial injury took place or whether the event in question would have occurred in a non work related setting.
As I see it the key aspect is whether the ground on which he was walking was uneven or slippery.
I can well imagine that if a truck was unloading that there may be situations where workers are walking without visualising ground underfoot in order to avoid trucks or other at risk pieces of machinery.
If his boot did get caught or slip it could create a force on the knee, which could lead to tissue disruption and in this case an aggravation of an underlying condition.
The other issue, which one may consider contributory to his problem is that if he had been working very hard that day he may have suffered muscular fatigue, which can contribute to seeming spontaneous instability of the limb as a result of loss of core stability.
Certainly from what we can see apportionment will be needed between the insurer from 2002 and [the] current insurer.
My recommendation is that an opinion from [the] file be sought from Dr Tim Musgrove outlining his postoperative thoughts on whether recovery was complete or incomplete. I would be happy to review Dr Musgrove’s thoughts and then give a further opinion.
Finally, the CT scan from 9 August confirms subluxation and tilt of the left patellofemoral joint. Femoral alignment is normal.”
In his report of 25 August 2005, Dr Berton confirmed the diagnosis of patellofemoral instability and excluded anterior cruciate ligament instability.
Dr Caldwell reviewed Mr Lott on 22 August 2005 and reported to QBE on the same day. He took a history that Mr Lott worked as a station hand on a cattle and sheep property and that his recreational activities included “hunting pigs by chasing and touch football and tennis”.
Dr Caldwell referred to Dr Musgrove’s operation report from March 2002 and noted that, following the surgery, Mr Lott returned to being “fairly normal” other than for some “cold ache in the patello-femoral joint he felt the knee was stable and was able to undertake all activities”.
Dr Caldwell stated that there is a 40% recurrence rate for patella dislocation following the kind of injury sustained by Mr Lott in 2002. After he recovered from his 2002 operation, Mr Lott moved to Queensland where he worked for a couple of years until he returned to NSW and obtained employment with Glenam Farming. In respect of the 2005 injury, Dr Caldwell recorded:
“On the second day of his new job he simply turned to walk and his knee popped and gave way.
Note: There was no force or directive force from any part of his work place. That is the knee gave way because of his own motions nothing to do with his work.”
Under “Diagnosis”, Dr Caldwell concluded:
“All this is consistent with the diagnosis of a recurrent dislocation of the patella.
This re-dislocation is the sole result of the original injury occurring whilst working for Fletcher International Sheep Farm.
It is known that 40% of patients who have a dislocation as occurring in those circumstances will have recurrent instability and re-dislocation. This man had a violent injury from a sheep that caused the original injury. The simple turning in [sic] the second occasions [sic] in Gunnedah cannot be considered as an injury as no force came from any external factor it is solely due to the instability caused by the original injury.
There is no substantial contributing factor from the injury on the 15th July 2005.
For this reason I cannot consider this as an aggravation and the onus for this compensation reverts to the original Fletcher International injury.
There is a permanent impairment relative to the original injury and there is a continuing problem the [sic] needs rectification.” (emphasis included)
Fletcher Exports arranged for Mr Lott to see Dr Robert Smith, consultant surgeon, on 19 January 2006. In his report of the same date, Dr Smith took a history of the 2002 injury, the treatment provided by Dr Musgrove, and the fact that Mr Lott ultimately returned to perform his full duties with Fletcher Exports until he resigned in April 2003 and started work with Afflecks, butchers in Newcastle. He then moved to Queensland where he worked for a period before returning to NSW and starting work with Glenam Farming. In respect of the 2005 injury Dr Smith merely recorded “there was a recurrence of his earlier injury on July 12, 2005 when apparently he was working with Scott Swain Sheep Station”.
Mr Lott told Dr Smith that he had not engaged in any work since 12 July 2005, but the doctor noted that his hands were markedly calloused, which led the doctor to conclude that he was “obviously” doing a lot of manual work despite his statement to the contrary. On examination of the left knee, Dr Smith concluded that there was “not the slightest evidence that he has any obvious current problems with his left knee that could have anything to do with the alleged injury of February 2002”. The doctor added that because of a suggested delay in reporting the 2002 injury, Mr Lott’s employment “could not be said to be a substantial contributing factor to any alleged injuries” (emphasis included).
Mr Lott’s medical case primarily rests on Dr Patrick, surgeon, who also examined him on 19 January 2006. Dr Patrick took a history of both injuries. In respect of the first injury, he noted that Mr Lott eventually returned to his normal duties and resigned for reasons unrelated to his knee injury. In respect of the 2005 injury, Dr Patrick took the following history:
“Just about two days after commencing work there, he was involved in some unloading of grain and, on 12 July 2005, he was simply standing on firm, dry ground, waving to a reversing truck. He could see the driver in the external rear view mirror. There was an auger going up nearby. Mr Lott simply took a step to the left and immediately the left knee gave way, with the patella popping out and he went to ground and was unable to get to his feet for some time. There was no frank injury. He simply turned and took a step to the left.”
Dr Patrick noted the worker’s presentation to be straight forward, with no exaggeration. There was significant muscle wasting of the left leg and increased patellofemoral crepitus in the left knee. He also thought there was consistent weakness of the extensor mechanism. There was a small/moderate knee joint effusion on the left with mild tenderness medially. The cruciate ligaments were clinically intact. In respect of Mr Lott’s left knee symptoms between 2002 and 2005, Dr Patrick took a history consistent with the worker’s statement, namely, that there were some ongoing difficulties with both strength in the left knee and also confidence regarding stability. The knee had never been the same since the 2002 injury.
On the history given, Dr Patrick regarded the 2005 incident as being a direct consequence of the knee injury on 14 February 2002. He believed that further patella stabilisation and surgery was required and it was reasonable that the cost of that surgery be met fully by the insurer on risk for the February 2002 injury. He added:
“The subsequent incident on 12 July 2005, I believe, has simply been a manifestation of his pathological left knee following the injury of 14 February 2002.”
Dr Patrick considered Mr Lott to be incapacitated for work involving significant twisting/turning, significant squatting/knelling, handling a lot of stairs or ladder work or walking on uneven ground. The prognosis was for continuing symptoms. He assessed Mr Lott to have a 12% whole person impairment as a result of the injury on 14 February 2002 and a zero whole person impairment as a result of the 12 July 2005 incident. He did not regard Mr Lott as having a disease.
Dr Patrick re-examined Mr Lott on 27 April 2007 and reported on 10 May 2007. He recorded that Mr Lott was living on a property at Cobbadagh where he worked as a caretaker and lived in a house on the property. He had not worked for the previous four weeks or so as he had fractured his wrist in a fall from a horse. He was employed doing stock work casually on an adjacent property for 2-3 days per week.
Dr Patrick took a history of the surgery performed by Dr Berton on 7 June 2006. That surgery consisted of an arthroscopy to the left knee together with chondroplasty and patella realignment at the left knee, utilising hamstring transfer.
In summary, Dr Patrick recorded Mr Lott’s continuing symptoms as at April 2007 as follows:
(a)feeling he was not able to fully extend (straighten) the left knee;
(b)slightly diminished flexion at the left knee;
(c)if he stays in one position for more than a short period, he will have increased pain in the left knee;
(d)he has been favouring his left lower limb for about four years, ever since the injury in February 2002;
(e)he still has a feeling of weakness in the left lower limb, and
(f)he has difficulty with squatting and kneeling.
On examination, Dr Patrick noted the range of movement of the left knee to be only slightly less than the right knee (0-130° on the left as opposed to 0-140° on the right). There was muscle wasting at the left thigh. There was weakness of left knee extension and weakness of left knee flexion, which was consistent to repeated examination. Essentially, Dr Patrick’s re-examination of the worker did not cause him to significantly alter the opinion he expressed at pages 4, 5 and 6 of the January 2006 report, except to note that Mr Lott had undergone patella stabilisation surgery.
In a supplementary report dated 24 September 2007, Dr Patrick confirmed his previous opinion that Mr Lott has a 12% whole person impairment “following frank work injury of 14 February 2002”. He also added that Mr Lott has an “ongoing permanent partial incapacity in that he is not fit for physical work involving significant squatting/kneeling, working down low for long periods, handling a lot of steps/stairs or ladder work.”
He thought Mr Lott was a well-motivated worker.
THE ARBITRATOR’S REASONS
The Arbitrator’s Statement of Reasons (‘Reasons’) may be summarised as follows:
(a)the issues to be dealt with from the point of view of Fletcher Exports were: whether there was a second injury on 12 July 2005 (including section 9A), incapacity, permanent impairment and the responsibility for that permanent impairment (Reasons, at [4]);
(b)the issues to be dealt with from the point of view of Glenam Farming were: whether there was an injury on 12 July 2005 (including section 9A), incapacity, permanent impairment and the responsibility for the payment of compensation for any permanent impairment, and costs;
(c)there was no injury in July 2005;
(d)probable earnings but for injury for the period of the claim were $730.00 per week, based on earnings with Glenam Farming (Reasons, at [31]-[32]);
(e)he understood counsel for Fletcher Exports to cite Mercer v ANZ Banking Group Ltd (2000) 48 NSWLR 740 (‘Mercer’) as authority “on working capacity”, though in fact it is an authority relating to section 9A of the Workers Compensation Act 1987 (‘the 1987 Act’) (Reasons, at [35]);
(f)Mr Lott’s earning capacity was as set out in Part 5.2 of the second application, namely, $137.19 per week from 1 December 2006 until 27 February 2008 and $549.40 per week from 28 February 2008 to date and continuing (Reasons, at [36b]);
(g)he saw no basis upon which to exercise his discretion under section 40(1) of the 1987 Act and he therefore made an award in favour of Mr Lott as per the terms of the Certificate of Determination set out at [18] above (Reasons, at [37]), and
(h)the claim for lump sum compensation was remitted to the Registrar for referral to an Approved Medical Specialist for assessment of Mr Lott’s whole person impairment (if any) arising from the injury to his left lower extremity on 15 February 2002 (Reasons, at [38ii]).
ISSUES IN DISPUTE
The issues in dispute in the appeal are whether the Arbitrator erred in:
(a)finding that Mr Lott did not sustain an injury in his employment with Glenam Farming (‘the injury issue’);
(b)his consideration and understanding of the submissions made regarding the decision of Mercer and his application of that authority (‘application of Mercer’);
(c)finding that Mr Lott was incapacitated for work as a result of injury with Fletcher Exports and generally in his assessment of probable earnings but for injury, actual earnings and earning capacity (‘incapacity and earnings’);
(d)denying Fletcher Exports procedural fairness in the conduct of the proceedings (‘procedural fairness’);
(e)failing to consider the issue of apportionment under section 22 of the 1987 Act (‘apportionment’);
(f)failing to give adequate reasons (‘reasons’), and
(g)such further grounds as are appropriate upon receipt of the transcript of proceedings.
Whilst Fletcher Exports filed additional submissions upon receipt of the transcript, it has not identified any additional grounds of appeal in that document.
SUBMISSIONS, DISCUSSION AND FINDINGS
The Injury Issue
It is submitted on behalf of Fletcher Exports that:
(a)the uncontradicted evidence clearly demonstrates that Mr Lott was involved in an incident in the course of his employment with Glenam Farming on 12 July 2005, either as a result of turning or twisting, with the result of “acute onset of pain and immediate swelling” resulting in Mr Lott collapsing to the ground and being unable to get to his feet for some time and then being immediately taken to Tamworth Base Hospital;
(b)Mr Lott submitted an Employee’s Report of Injury form dated 14 July 2005 in which specific reference was made to the injury on 12 July 2005, said to have resulted in “left knee ligament damage, or muscle”;
(c)Mr Lott specifically referred to having sustained an injury with Glenam Farming on 12 July 2005 (see Mr Lott’s statement, [12]);
(d)there is no objective evidence of Mr Lott having ongoing problems with his left knee between mid 2002 and the injury on 12 July 2005. The evidence from Dr Kelly dated 2 May 2004 is to the contrary. Clinical records suggest that Mr Lott consulted Dr Brookman on 20 November 2002 and he made no complaint in respect of his left knee at that time or at the consultation with Dr Kelly on 2 May 2004;
(e)Mr Lott returned to his normal employment with Fletcher Exports in 2002, before ceasing that employment for reasons unrelated to his injury and he subsequently performed heavy and arduous employment until 12 July 2005;
(f)the clinical notes from Tamworth Base Hospital dated 12 July 2005, make a clear and unequivocal reference to Mr Lott having sustained a twisting injury on that date;
(g)the contemporaneous WorkCover medical certificate from Dr Fergusson makes specific reference to the date of injury as being 12 July 2005;
(h)the proper consideration of the meaning of “injury” should have been determined having regard to the decision in Lyons v Master Builders Association of NSW (2003) 25 NSWCCR 422 (‘Lyons’), where it was held that “injury” refers to both the injurious event and the pathology arising from it, and
(i)the injurious event and the pathology arising from it are all clearly and directly related to the injury at work on 12 July 2005.
It is submitted on behalf of Mr Lott that:
(a)following the 2002 injury, Mr Lott was always at risk of his knee giving way without any further injury necessarily occurring. The Arbitrator was entitled to make that finding as it was an available and correct finding based on the evidence, and
(b)Fletcher Exports’ submissions that Mr Lott’s further problems were “either as result of turning or twisting” on 12 July 2005 have confused timing with cause. The evidence was that Mr Lott felt further problems in his knee “whilst” turning to walk away.
It is submitted on behalf of Glenam Farming that the Appellant’s submissions do not accurately reflect the entirety of the evidence. The matters raised by Fletcher Exports were contradicted by the evidence considered and preferred by the Arbitrator at [14]-[18] of his decision.
The term “injury” is defined in section 4 of the 1987 Act and in section 4 of the 1998 Act as follows:
“4 Definition of ‘injury’
In this Act:
‘injury’:
(a) means personal injury arising out of or in the course of employment,
(b) 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
(c) does not include (except in the case of a worker employed in or about a mine) a dust disease, as defined by the Workers’ Compensation (Dust Diseases) Act 1942 , or the aggravation, acceleration, exacerbation or deterioration of a dust disease, as so defined.”
This definition is of limited assistance. In Lyons, Neilson CCJ held that “injury” refers to “both the [injurious] event and the pathology arising from it”. I accept that statement as being appropriate for many (but not all) purposes under the 1987 Act and the 1998 Act.
For many years the courts have determined “personal injury” in workers’ compensation legislation, both in England and Australia, by reference to whether the worker has suffered a pathological change. The High Court considered the meaning of “injury” in the 1987 Act in Zickar v MGH Plastic Industries Pty Ltd [1996] HCA 31; (1996) 187 CLR 310 (‘Zickar’). In that case, a worker collapsed at work after the rupture of a cerebral aneurism and suffered severe brain damage. The aneurism was a congenital weakness. The High Court held that he had suffered a personal injury in the course of his employment. Kirby J noted (at 347) that for a long time under English legislation, the rupture of an artery has been held to be capable of constituting a “personal injury by accident”. That was because “it had the hallmarks of an ‘injury’, being a sudden or identifiable pathological change” (emphasis added). Referring to this passage, Armitage CCJ held (at [129]) in Castro v State Transit Authority (NSW) [2000] NSWCC 12; (2000) 19 NSWCCR 496 that:
“This passage...makes it clear that what is required for an ‘injury’ within par (a) [of section 4] to occur is a ‘sudden or identifiable pathological change’ in the body, whether internal or external.”
Armitage CCJ then quoted at length from Willis v Moulded Products (Australia) Ltd [1951] VLR 58 (‘Willis’), a case also cited by Kirby J in Zickar. In that case the Full Court of the Supreme Court of Victoria held that the rupture of a cerebral artery constituted an “injury by accident”. Armitage CCJ observed (at [134]) that Willis was “all of a piece with the line of authority ending in Zickar that a sudden pathological change whether internal or external is sufficient to constitute an ‘injury’...”.
Applying the above authorities to the present matter the conclusion is inescapable that Mr Lott experienced a sudden pathological change on 12 July 2005, namely, a re-dislocation of the patella in his left knee with pain and swelling. It occurred while he was at work performing his usual duties and therefore occurred in the course of his employment. He therefore received an injury, as defined in the legislation.
The next question is whether Mr Lott’s employment was a substantial contributing factor to that injury.
Section 9A of the 1987 Act provides:
“9A No compensation payable unless employment substantial contributing factor to injury
No compensation is payable under this Act in respect of an injury unless the employment concerned was a substantial contributing factor to the injury.
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.
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.”
In the second reading speech, Legislative Council on 26 November 1996, page 6501-10, the Attorney General said, with respect to the introduction of section 9A:
“Turning to the details of this package, the bill will limit compensation coverage to situations where employment is a substantial contributing factor to the worker’s injury or disease. This is in line with the primary objective of compensating workers who suffer injuries that have a proper link with the workplace, rather than those whose injuries have only a remote or tenuous connection with work. The amendments specify that the weaker test of considering whether an injury arose out of or in the course of employment will no longer be enough by itself. Questions relevant to whether the employment was a substantial contributing factor in a worker’s injury can include the time and place of the injury, the nature and duration of the work, whether it was merely a coincidence that the injury occurred at work, and the extent of any non‑employment contributing factors” (emphasis added).
In ICM Agriculture Pty Ltd v Perry [2002] NSWCA 257 (at [17]) Mason P said (Meagher and Handley JJA agreeing):
“Nothing in those cases suggested that s9A is satisfied merely because the injury arose out of or in the course of employment. Nor does Mercer. Section 9A(3)(a) explicitly states that a finding that the injury arose out of or in the course of employment is not, in itself, a basis for a finding of substantial contributing factor.”
The Court of Appeal has confirmed in McMahon v Lagana [2004] NSWCA 164 at [33] that ‘substantial contributing factor’ in section 9A is a separate and distinct question from the issue of ‘in the course of’ employment.
In Dayton v Coles Supermarkets Pty Ltd (2001) 22 NSWCCR 46 (‘Dayton’) Giles JA noted at [22]:
“…‘substantial’ qualifies ‘contributing factor’, indicating that it is the strength of the causal linkage that is in question; and it is ‘the employment concerned’ which must be a substantial contributing factor, meaning not the fact of being employed but what the worker was doing in his employment.” (emphasis added)
There is conflicting evidence as to exactly what Mr Lott did at the time his knee gave way on 12 July 2005. His evidence is that he merely “attempted to turn to walk away”. That is largely consistent with the Employee’s Report of Injury form in which he wrote, “Turned to the left and left knee gave way”. The notes from Tamworth Base Hospital refer to a “twisting injury”. I do not believe this difference is of critical importance to the determination of the case. If a person turns, he or she necessarily twists or pivots his body to change direction. I think that hospital notes were merely describing the same event, but in different language that is of no consequence. If it is thought to be relevant to the outcome, I prefer and accept Mr Lott’s description of the 2005 incident as set out in his statement. That version is essentially consistent with the claim form and with his histories to Dr Caldwell and Dr Patrick. He merely attempted to turn and walk and, as he did that, his leg collapsed. Nothing in the cross-examination undermined that description.
The more relevant evidence is the history of the prior knee injury and surgery. Whilst Mr Lott made a good recovery from the first injury, his evidence, which I accept, is that after that injury his left knee was “never again the same” and that he was always “wary and conscious of that leg”. He was careful with what he did “given the weakness and tendency for it to give way”. The absence of so-called “objective evidence” of Mr Lott having ongoing problems with his knee between mid 2002 and July 2005 is not determinative. I accept his evidence that he was always conscious of his left leg and that it was weak. This evidence is partly corroborated by Dr Berton’s history that Mr Lott was aware of a structural weakness in his left leg “which he managed by avoidance of high grade pivoting activity”. I place no weight on the absence of a reference to his knee in the brief notes from Dr Brookman and Dr Kelly.
The determination of the section 9A issue requires a careful consideration of the whole of the evidence. The medical evidence is overwhelmingly against the proposition that Mr Lott’s employment with Glenam Farming was a substantial (or even a relevant) contributing factor to the 2005 injury.
Dr Berton’s evidence is of limited assistance as he merely speculated about whether the ground where Mr Lott had been walking was uneven or slippery. The evidence does not suggest that it was but, in any event, Dr Berton did not express a concluded view on whether the event in question would have occurred in a non-work related setting.
Dr Caldwell took an accurate and detailed history of the 2002 injury, the subsequent surgery and recovery, and the 2005 injury. Based on the history that Mr Lott had “simply turned to walk and his knee popped and gave way”, he observed that there was “no force or directive force from any part of his work place”. He therefore concluded that the re-dislocation was the “sole result of the original injury” with Fletcher Exports and there was no “substantial contributing factor from the injury on the 15th July 2005”. Given the detailed history Dr Caldwell took and that he saw Mr Lott within weeks of the 2005 injury, I find his opinion plausible and persuasive, and I accept it.
Dr Smith’s evidence provides the appellant with no support. He merely dealt with the 2005 injury by referring to it as “a recurrence of his earlier injury”, but expressed no opinion on any of the injury or section 9A issues before me. Rather than dealing with whether employment was a substantial contributing factor to the 2005 injury, Dr Smith concluded, apparently because of a suggestion that there had been a delay in the reporting of the 2002 injury, that Mr Lott’s employment was not a substantial contributing factor to any alleged “injuries”. So far as his opinion relates to the 2002 injury, it is untenable. Liability for the first injury was never in issue at the arbitration. Even if that had not been the case, I would have no hesitation in rejecting his conclusion as being contrary to the objective evidence, the history, and the clinical findings in 2002. So far as his opinion relates to the 2005 incident, it suggests that that injury, being a “recurrence of” the earlier injury, resulted from the 2002 injury.
Dr Patrick’s history is that Mr Lott “simply took a step to the left and immediately the left knee gave way”. Whilst this is slightly different to Mr Lott’s evidence that he “attempted to turn to walk away”, I do not believe the difference is of any relevance. It provided a “fair climate” for the acceptance of his conclusion (Paric v John Holland Constructions Pty Ltd [1984] 2 NSWLR 505 at 509-510; Brady v Commissioner of Police (2003) 25 NSWCCR 58 at 76). His conclusion, that the 2005 incident was “a manifestation of the pathological left knee” following the first injury, is both logical and consistent with the reasoned opinion of Dr Caldwell. It is consistent with the 2005 injury having resulted from the 2002 injury and is inconsistent with a finding that employment with Glenam Farming was even a factor in causing the second injury, let alone a substantial contributing factor.
I note also that the appellant has not tendered the report it obtained from Dr Blue dated 8 May 2008 (see [9] above) and, in the absence of any explanation as to why that report has not been tendered, I infer that it would not have advanced the appellant’s case (Jones v Dunkel (1959) 101 CLR 298).
Considering the specific provisions of section 9A(2), I make the following observations:
(a)the time and place of the injury: the injury occurred at work during working hours;
(b)the nature of the work performed and the particular tasks of that work: Mr Lott was employed as a station hand. He was performing those duties at the time his knee gave way, but, based on the medical evidence, there was nothing about those duties that caused his knee to give way;
(c)the duration of the employment: the injury occurred on the second day of Mr Lott’s 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: the evidence is that Mr Lott had a 40% chance of having a re-dislocation after his first injury, regardless of his employment situation;
(e)the worker’s state of health before the injury and the existence of any hereditary risks: Mr Lott’s evidence, which I accept, is that his left knee was never the same again after the first injury, he was careful with it, and there was a tendency for it to give way, and
(g)the worker’s lifestyle and his or her activities outside the workplace: the evidence does not suggest that Mr Lott’s lifestyle contributed to his injury.
Having regard to the whole of the evidence, I am not satisfied that the “strength of the causal linkage” (per Giles JA in Dayton) between the injury and Mr Lott’s employment with Glenam Farming is sufficient to satisfy section 9A of the 1987 Act. I accept the evidence from Dr Patrick and Dr Caldwell and I find that the 2005 injury and the condition of Mr Lott’s left knee has resulted solely from the 2002 injury and not from the incident at work with Glenam Farming in 2005.
Application of Mercer
The Arbitrator erred in stating that the appellant’s counsel relied on Mercer on the question of incapacity. He didn’t. He referred to Mercer in the context of whether Mr Lott had established that his employment with Glenam Farming was a substantial contributing factor to his 2005 injury (T31.7). I have carefully considered the authority of Mercer in my analysis of section 9A above. It does not assist the appellant. In that case the history and medical evidence were totally different. The worker had not undergone previous knee surgery and was not at risk of a re-dislocation of the kind experienced by Mr Lott. Therefore, the Arbitrator’s error is of no consequence.
Incapacity and Earnings
It is submitted on behalf of Fletcher Exports that:
(a)the Arbitrator erred in finding Mr Lott to be incapacitated for work in circumstances where he admitted in cross-examination that his current employment was the same as the employment he carried out with the appellant, save that it involved cattle rather than sheep;
(b)the Arbitrator erred in his consideration and determination of the issue of “probable earnings but for injury” (section 40(2)(a) of the 1987 Act (‘probable earnings’)). Mr Lott’s probable earnings with the appellant were in the order of $518.15 per week and he adduced no evidence to contradict this amount or any objective documentary evidence to establish his actual earnings in the relevant period;
(c)even if probable earnings are determined by reference to Mr Lott’s earnings with Glenam Farming, such earnings are $690.00 per week not $730.00 per week as found by the Arbitrator;
(d)the Arbitrator erred in accepting that Mr Lott’s capacity to earn was, in all relevant periods, his alleged actual earnings;
(e)the Arbitrator’s reasons are inadequate, particularly where Mr Lott did not produce any documentary evidence to substantiate his actual earnings;
(f)the Arbitrator should have determined Mr Lott’s probable earnings but for injury to be approximately $518.00 per week and his capacity to earn to be not less than approximately $549.00 per week, with the result that Mr Lott has no entitlement to weekly compensation, or no entitlement from 27 February 2008, and
(g)Mr Lott carried the onus of proving probable earnings, actual earnings and ability to earn. In the absence of Mr Lott adducing sufficient evidence to discharge the onus, a determination ought not have been made in his favour for weekly compensation.
It is submitted on behalf of Mr Lott that:
(a)it was never put to the worker, and he never agreed, that his current employment is the same as he carried out with the appellant;
(b)the Arbitrator’s findings were in accordance with the evidence and his knowledge as a specialist tribunal.
The cross-examination about Mr Lott’s current work with Leeton Pty Ltd (referred to as Leeton Grazing in the evidence) is at page 22 of the transcript where the following questions were asked:
“Q. Now, you started work now in February of this year. Who was it you started work with?
A. Leeton Grazing.
Q. Can I just have that letter that I handed up to you firstly? That’s Leeton Grazing?
A. Leeton, yep.Q. And what sort of work were you doing?
A. Just farm, station work.Q. That’s farmhand work?
A. Yeah.Q. Like, what were you doing?
A. Everything in general, like, a bit of mustering, just looking after --Q. Mustering on bikes or horses?
A. Bikes.Q. Yeah.
A. Fencing, tractor driving, yeah.Q. What’s the tractor you’re driving?
A. A Case and [inaudible], crop spraying, just general.Q. So some of the work is heavy, some of it’s not so heavy?
A. Yeah, like everything.Q. And have you had any time off from the time you started in February 08?
A. Have I had any time off?Q. Yes, because of your leg?
A. No, it only comes down to things related to this, sort of thing.Q. So, would you agree with me that - oh, sorry, you were earning there $549.10?
A. Yes.Q. That’s gross. That’s similar sort of work that you were doing at Fletchers?
A. Yeah, pretty much.Q. Pretty much the same?
A. Pretty much, yes.Q. And --
A. Oh, except that we don’t have sheep. We’re cattle where I am. Fletchers was all sheep.”
It is clear from this evidence that Mr Lott’s current work with Leeton Pty Ltd is farmhand work and that it is “pretty much” the same as the work he did with Fletcher Exports except that he works with cattle instead of sheep. Mr Lott was asked no questions on this issue in re-examination. In his statement, Mr Lott said that by the time he found full-time employment with Leeton Pty Ltd in February 2008, his leg had regained some strength and he felt ready to return to full-time employment (Mr Lott’s statement, at [44]). He added that from that point on his earnings were relatively comparable to what he used to earn and that he did not claim thereafter. His statement then referred to the stress caused to his family because of his injury, the argument between the two insurers and the delay in getting treatment. He then identified the duties required of a station hand (see [28(q)] above), and concluded:
“There was also maintenance duties, all of which I was unable to do given the status of my knee at the time although I have since been able to return to it.” (emphasis added)
From the evidence noted at page 22 of the transcript (see [86] above), it is clear that Mr Lott has successfully returned to “Everything in general” in farm work, including mustering, fencing, tractor driving, and crop spraying, and that he has not had any time off work because of his knee. Whether the fact that he now works with cattle rather than sheep has made his work more demanding or less demanding than his pre-injury work with Fletcher Exports was not explored in the evidence. He gave no evidence, either in his statement or orally, that he experienced any difficulties with his current duties or that he is restricted in any way.
Dr Patrick’s assertion that Mr Lott had “significant” ongoing symptoms (as at May 2007) is not borne out by Mr Lott’s evidence that he returned to his pre-injury duties in February 2008, which he has performed without complaint or restriction up to the date of the arbitration in December 2008. The only relevant findings by Dr Patrick on examination in May 2007 were of wasting, a 10-degree reduction in flexion and a weakness of left knee extension. Based on these findings, Dr Patrick concluded (in his September 2007 report) that Mr Lott had a permanent partial work incapacity in that he was not fit for physical work involving significant squatting/kneeling, working down low for long periods, handling a lot of steps/stairs or ladder work. This evidence was never brought up to date – Dr Patrick did not examine Mr Lott after May 2007 – and is difficult to reconcile with Mr Lott’s evidence in his statement that by February 2008 he had regained strength in his leg and returned to full-time employment in his pre-injury duties.
The fact that a worker returns to his or her pre-injury duties does not necessarily mean that no incapacity exists on the open labour market, as the appellant seems to argue. In the present case, however, the medical evidence is so out of date and Mr Lott’s evidence so inadequate, I am not able to determine if he has an incapacity in the labour market reasonably accessible to him. As the matter must be remitted in any event, this issue will also have to be re-determined.
Turning to the proper figure for Mr Lott’s probable earnings but for injury under section 40(2)(a), I do not accept the appellant’s submissions. Mr Lott asserts that his probable earnings are the wage he contracted to receive from Glenam Farming ($830.00 per week). Fletcher Exports’ argument seems to be as follows: since it asserted a different figure in its Reply ($518.15 per week) and Mr Lott called no evidence to contradict that amount, that figure must be accepted. This submission is patently wrong and misleading.
Mr Lott’s case, that his probable earnings are his earnings with Glenam Farming and that those earnings were $830.00 per week, is supported by the following evidence:
(a)his statement, which establishes that he was employed by Fletcher Exports as a station hand and that he was employed by Glenam Farming for $830.00 per week;
(b)the QBE Employee Report of Injury form and Employer Report of Injury form, which establish that he was employed by Glenam Farming as a station hand;
(c)the Contract of Employment with Glenam Farming dated 4 July 2005, which confirms that Mr Lott was employed as a station hand Grade 2 on a salary of $35,880.00 per annum, plus annual allowances totalling $2,110.00 and the option of renting a cottage at $60.00 per fortnight, and
(d)his statement that the market rental for the cottage was approximately $100.00 per week.
The first issue is whether it is appropriate to consider Mr Lott’s earnings with Glenam Farming. The appellant argues that the earnings with Glenam Farming are irrelevant because Mr Lott sustained no injury with them. That submission ignores the words of section 40(2)(a) which require a determination of probable earnings but for injury “had the worker continued to be employed in the same or some comparable employment”. The section does not dictate that a worker can only look to wages currently being paid by the employer with whom he sustained his or her injury. It requires a consideration of the worker’s earnings in “the same or some comparable employment”. The appellant has selectively quoted from part of a decision of Mahoney JA in NSW Harness Racing Club Ltd v Forrest (1996) 12 NSWCCR 217, where his Honour said (at 220) that a Court “in estimating the uninjured earnings of an applicant will ordinarily have regard to what the applicant would have earned in the employment in which she was at the time of the injury rather than in some other comparable employment”. The next sentence in the passage reads:
“But that principle, to the extent that it is accepted, does not require that in every case the court must confine its attention to the same employment as that in which the uninjured applicant was engaged. Circumstances may make it appropriate for the court to assess the uninjured earnings by reference to another comparable employment.”
The High Court considered the meaning of the phrase “the same or some comparable employment” in Johnston v Commissioner of Railways [1973] HCA 46; (1973) 128 CLR 632 (‘Johnston’) in the context of section 11 of the Workers Compensation Act 1926, which was in substantially the same terms as section 40 of the 1987 Act. The Court considered the situation where the worker was a “cleaner, acting foreman” at the time of his injury but the trial judge accepted evidence that he would have progressed to the position of an engine-driver and awarded him compensation on the basis that the wage of an engine-driver was the “same or some comparable employment”. Stephen J held at 640:
“If, in the relevant phrase of s 11(1)(a), ‘employment’ bears the meaning ‘occupation’ the reference to the worker continuing ‘to be employed in the same or some comparable employment’ means that the worker is to be treated as if he continued in the same or some similar occupation as that in which he was engaged when injured. Neither the same employer nor the same task, classification or rank is stipulated but this will occasion no difficulty; the Court is, by the subsection, required to form its own view of what would ‘probably’ have been the worker’s weekly earnings but for the injury and must, from the evidence before it, determine how the worker would have fared in his occupation had he not been injured.” (emphasis added)
At 642 his Honour concluded:
“It follows from the view which I have formed concerning the phrase ‘employed in the same or some comparable employment’ that when his Honour, having heard Johnston’s application for an award of compensation, made the findings of fact which he did, he was then required, in ascertaining the weekly amounts which Johnston would probably have been earning but for his injury, to postulate Johnston’s continued engagement in the occupation in which he was engaged when injured. On the facts as found Johnston’s occupation was that of an officer of the Commissioner employed in the locomotive branch of the Commissioner for Railways and in those circumstances his Honour was, in my view, required to act as he did and to pay regard to the promotion within his chosen occupation which Johnston would probably have received had he not been injured.” (emphasis added)
In the same case Mason J (as he then was) held at 644:
“The subsection provides a yardstick by which weekly payments by way of compensation for incapacity are to be measured. It conforms more closely with the compensatory character of the provision that the weekly payments should be assessed by reference to the probability of what the employee would have earned in his occupation had he not been injured and had he continued in that occupation rather than that the weekly payments should be assessed by reference to probable earnings in the performance of the particular work or duties which the employee happened to be performing at the date of his injury.” (emphasis added)
In Australian Wheat Board v Pantaleo (1984) 3 NSWLR 530 (‘Pantaleo’) the Court of Appeal considered the situation where a secretary became a beautician after her injury. The trial judge calculated her potential earnings as an uninjured beautician (found to be $400.00 per week) and compared them to “her earnings situation” (at 534), which he found to be $350.00 per week and he awarded the difference. The Court of Appeal set aside the decision because, among other reasons, the trial judge had not addressed whether the work as a beautician was “comparable” to that of a secretary. On that issue, Glass JA (with whom Samuels JA agreed) noted (at 545) that the evidence disclosed “no point of comparison” between the work of a beautician and that of a secretary.
Kirby P (as he then was) stated (at 540) that:
“Where the hypothesis required by s 11(1)(a) of the Act leads to the conclusion that there is a real prospect (as distinct from a fanciful speculation) that but for the injury the worker would have moved from the same employment to some other employment, the question is then raised as to whether that other employment is ‘comparable’. Only if it is, may the earnings it attracts be taken into account in computing the first limb of the formula. Judging comparability of employment requires commonsense and experience of the labour market and its variety such as judges of the Compensation Court acquire in performing their duties. It is essentially a factual question though regard may be had to a variety of indicia of comparability in this context. It may, for example, refer to the physical attributes of the former and the hypothesized job. It may refer to the career progression that could reasonably have been expected of the worker, uninjured. It may refer to the award classifications likely to be open to a person such as the injured worker. It may refer to the range of salaries that might reasonably have been within the worker’s pre-injury achievement, as a worker; whilst the decision-maker is involved in a hypothetical exercise, the requirement of comparability keeps the speculation within practical bounds. That is its objective. It should not be read narrowly as confined to physical attributes only. Nor is the speculation to be limited strictly to the orthodox career path of uninjured workers with the respondent employers, where evidence establishes the likelihood of other career prospects. It is a matter for the application of the commonsense and experience of the decision-maker in each case.”
In the present case, the evidence establishes that Mr Lott moved from station hand work with Fletcher Exports to other jobs and, ultimately, to station hand work with Glenam Farming. The work with Glenam Farming is directly comparable to, if not exactly the same, as the work that Mr Lott performed with Fletcher Exports. He is entitled to rely on the evidence he called as to his earnings with Glenam Farming because it is “comparable employment” within the meaning of section 40(2)(a) and “but for” the injury with Fletcher Exports it is the employment that he would have continued to perform. His employment with Glenam Farm was not “fanciful speculation” (per Kirby P in Pantaleo), but a reality.
Fletcher Exports asserted that probable earnings with it were only $518.15 per week, but it called no evidence to support that assertion. It is not known how that figure was arrived at or whether it was up-to-date. In these circumstances the Arbitrator was right to accept that Mr Lott’s work with Glenam Farming was comparable to his employment with Fletcher Exports.
The next question is: what is the appropriate figure for probable earnings? The Arbitrator found probable earnings to be $730.00 per week. The only reference to specific figures in the transcript is at page 38 line 30, where Glenam Farming’s representative submitted that the correct figure, with allowances, was $730.00 per week. The Arbitrator appears to have accepted that submission. That calculation is arithmetically correct, but it makes no allowance for the subsidised accommodation Mr Lott received as part of his remuneration package.
The evidence is that Mr Lott’s package included the option of renting a cottage at $60.00 per fortnight, which he accepted (Mr Lott’s statement, at [10] and his evidence at T20.38). He was not cross-examined about his statement that, but for his employment, the rental of the property would have been approximately $100.00 per week. Therefore, he received an additional benefit of $70.00 per week in the form of subsidised rent. Such a benefit should, if supported by the evidence, as it is here, be taken into account in determining probable earnings (see Dabav Pty Ltd v Fowler (1998) 17 NSWCCR 301). Therefore, the correct figure for probable earnings under section 40(2)(a) is arguably $800.00 per week. However, as the parties have not made submissions on this issue, I make no formal finding as to probable earnings.
The appellant’s submission that the proper figure for probable earnings with Glenam Farming is $690.00 per week is not supported by any reasoned argument. I assume it is based on the assumption that Mr Lott’s allowances should be excluded from the calculation. That is not correct. In calculating probable earnings under section 40(2)(a) it is proper to take into account allowances of the type included in Mr Lott’s remuneration package and the commercial value of the rental accommodation. Such allowances, however, are excluded when calculating a worker’s current weekly wage rate.
As to actual earnings or ability to earn (section 40(2)(b)) in the period from 10 September 2005 until 27 February 2008, the appellant submits that the Arbitrator erred in accepting Mr Lott’s alleged actual earnings when no objective evidence was adduced of those earnings. This submission is specious and ignores Mr Lott’s evidence and the evidence in his tax returns.
The evidence is that Mr Lott was totally unfit from 10 September 2005 until 5 November 2005 (see medical certificates from Dr Dong dated 5 September and 5 October 2005). Dr Patrick saw Mr Lott on 19 January 2006 and declared him to be incapacitated for work involving significant twisting/turning, significant squatting/kneeling, handling a lot of steps/stairs or ladder work, walking on uneven ground. Dr Smith thought Mr Lott was fit without restriction. I do not accept Dr Smith’s evidence as it is contrary to Mr Lott’s evidence that, as at January 2006, he continued to experience pain and restrictions in his left leg. Dr Patrick’s evidence supports a finding of partial incapacity as at 19 January 2006.
There is no medical evidence covering the period from 19 January 2006 until Mr Lott was declared fit for suitable duties on 1 September 2006. He underwent surgery on 7 June 2006 and presumably was totally unfit for a period while he recovered from that surgery, but there are no medical certificates covering that period.
In the financial year ending 30 June 2006, Mr Lott’s tax return reveals that he earned $4,157.00 with Glenam Farming, though the period in which he earned that sum is not disclosed. The evidence is that this payment was for the period after the July 2005 incident when Glenam Farming kept paying Mr Lott though he was not working (T20.38).
For the financial year ending 30 June 2007, Mr Lott’s tax return reveals that he earned $294.00 with Appledore Pastoral Co (‘Appledore’) and $3,863.00 with Wiranya Pastoral Co (‘Wiranya’), and that he received $8,040.00 in Australian Government allowances (Newstart and sickness). The group certificate from Wiranya suggests that Mr Lott worked for “various” periods up to 30 June 2007 and he was paid $3,863.00, which gives an average of $74.28 per week over 52 weeks.
Mr Lott’s evidence is that from 1 December 2006, he obtained “bits and pieces” of casual employment with Wiranya and that he worked for a day or two with Appledore, and that his total income for the 2007 financial year from these two sources was $4,157.00 (Mr Lott’s statement, at [40] to [42] inclusive), as per his tax return for that year. He said that that work was good as it allowed him to strengthen his leg following the surgery and “to get back into condition”. He added that that situation continued until he could manage to find full-time employment on 27 February 2008 with Leeton Pty Ltd (Mr Lott’s statement, at [43]). The figure in Mr Lott’s 2007 tax return averages $79.94 per week over 52 weeks. What he earned from 1 July 2007 until 17 February 2008 is not known. Part 5.2 of the Application alleges that Mr Lott’s actual earnings from 1 December 2006 until 17 February 2008 were $137.19 per week. How this figure was calculated is unclear, but it does not seem to be supported by the evidence.
Dr Patrick’s history in his report of 10 May 2007 suggests that Mr Lott was working as a caretaker at that time. Though the transcript is unclear, Mr Lott is said to have denied this in cross-examination (T28.16) and the Arbitrator accepted that denial (Reasons, at [33]). Dr Patrick also recorded that Mr Lott did stock work on the property next door to Wiranya for two or three days per week, but it is not known over what period that work continued. Dr Patrick also recorded that Mr Lott had been off work for four weeks as at May 2007 because of a fractured wrist sustained when he fell from a horse. Whether that fall prevented him from working and, if so, for how long, is not addressed in the evidence.
The Arbitrator noted that Mr Lott was not cross-examined that he had been selective about his employment or that he had limited his earnings in any particular fashion (Reasons, at [34]). He considered it would not be fair to accept the appellant’s assertion that if Mr Lott could work two or three days a week for part of the time (without evidence as to whether that depended upon the availability of work, his physical fitness or any other factor) he could maintain employment at that level for all of the time (Reasons, at [34]). The fact that Mr Lott was earning $549.40 per week suggested that he was doing his best.
The Arbitrator stated that there was no evidence that Mr Lott’s earning capacity before 28 February 2008 exceeded his actual earnings (Reasons, at [35]). He also had regard to the fact that Mr Lott badly injured his knee and he was seeking physical labour in the hard-pressed rural industry. The Arbitrator then accepted the figures in part 5.2 of the second application as representing Mr Lott’s earning capacity from time to time and he awarded the difference between $137.19 and $730.00, without any reduction in that difference in the exercise of his discretion.
At the arbitration, counsel for Fletcher Exports made submissions about the period up to February 2008 at pages 28 to 29 of the transcript. His main points may be summarised as follows:
(a)the figures for this period were “just smoke and mirrors” (T28.6);
(b)it was necessary to work out the period in which the worker was doing the work and his capacity to earn (T28.8);
(c)when he saw Dr Patrick in May 2007, Mr Lott was doing work two to three days a week as a station hand doing the same work he did at Fletcher Exports (T28.12);
(d)in April 2007, Mr Lott fell from a horse and broke his wrist and was unable to work for three or four months as a result of that injury (T28.18);
(e)if you have a bad knee, you can’t ride a horse (T28.43);
(f)Mr Lott had a capacity to earn in May 2007 much greater than that which was reflected in the wage schedule, and it was a matter for the Arbitrator to exercise his discretion (T28.45), and
(g)there were obviously periods between 1 December 2006 and 27 February 2008 when Mr Lott was doing his normal work as a farm labourer (T28.52) and “there is no suggestion that he couldn’t do that work, so the only conclusion you can draw is that he had a capacity to earn and you would be required to exercise your discretion, and you would exercise your discretion in a way that would limit the amount of compensation that Mr Lott is entitled to” (T28.54 to T29.1-5).
Whether Mr Judd was speaking of the discretion under section 40(1) of the 1987 Act is unclear. If he was, I am not aware of any circumstances in the present case that would justify the exercise of that discretion. Counsel identified none. If he was suggesting that the earnings disclosed in Mr Lott’s tax returns did not reflect his actual earnings, he did not put that in cross-examination and the evidence is unclear.
The submissions made by counsel for Mr Lott at the arbitration and on appeal are unhelpful. They merely refer to the wage figures set out in the second application and note that Mr Lott claims the difference between upper and lower figures, subject to the statutory maximum (T27.3). They concluded that there was no reason to exercise any discretionary factors under section 40 to give anything other than the mathematical difference (T27.20). Counsel “asked for Mitchell’s case to be applied, full stop” (T27.23). The reference to Mitchell’s case is a reference to Central West Area Health Service v Mitchell (1997) 14 NSWCCR 526.
The Arbitrator’s finding that Mr Lott’s earnings and/or ability to earn in the period from 10 September 2005 until 27 February 2008 were $137.19 per week is not supported by the evidence set out at [107] and [108] above. The Arbitrator may also have erred in stating that there was no evidence that Mr Lott’s earning capacity before 28 February 2008 exceeded his actual earnings. Dr Patrick’s history of Mr Lott working for two to three days per week provided some evidence that Mr Lott’s capacity to earn was greater than his actual earnings, as disclosed in the tax returns. The more important issue, however, is whether Mr Lott’s actual earnings are a proper test of his earning capacity. The evidence did not adequately deal with that issue. Where a worker is currently working his actual earnings are prima facie evidence of his ability to earn (per Jordan CJ in Aitkin v Goodyear Tyre & Rubber Co (Aust) Ltd (1945) 46 SR (NSW) 20 (‘Aitkin’) at 22). Jordan CJ added (at 23):
“If, however, it is proved that his actual earnings are not a proper test, because there is some reason unconnected with his earning power which makes them lower than they should be, the other alternative, what he is ‘able to earn’, must be adopted. This is so where it is shown that he is deliberately taking lower-paid work than he could get, or is idling and on this account receiving less than he could be reasonably expected to obtain, or where his actual earnings have been compulsorily reduced by something unconnected with his injury or general earning power: Jones v Amalgamated Collieries; but, if the compulsory outside influence, instead of reducing, increases his actual earnings beyond what his injury would make him otherwise capable of earning, his actual earnings must be taken as the basis: Heaney v B A Collieries. If, however, he is not earning anything, or, for some good reason, what he is earning cannot be treated as a proper basis, regard must be had to the alternative basis provided by the section – what he is ‘able to earn’.”
The Court of Appeal considered and applied Aitkin in Pira Pty Ltd t/as Langdon & Bartley v Tucker (1996) 14 NSWCCR 26 (‘Tucker’) where Beazley JA said (at 31 and 32):
“In Aitkin, Jordan CJ held that the test to be applied in determining the rate of compensation to be awarded under section 11 for partial incapacity was, prima facie, the person’s actual earnings unless it is proved that the worker’s actual earnings are not a proper test, because there is some reason unconnected with the worker’s earning power which makes them lower than they should be.
Jordan CJ stated at 22 that this will occur where a worker is ‘deliberately taking lower paid work than he could reasonably be expected to get, or is idling...or if his actual earnings are compulsorily reduced by something unconnected with his injury or general earning power’. These are instances, or examples, only and do not represent an exhaustive list of the circumstances in which it will be inappropriate to apply the ‘prima facie’ test.
It is clear, not only from the statement of Jordan CJ but also from the manner in which this Court applied the test in Ludowici, that as a first step, one has to approach the matter on a prima facie basis and only move from that basis if the evidence establishes that the actual earnings are not, in the circumstances of the case, a proper test.”
These matters require that Mr Lott’s entitlement to weekly compensation be re-determined. Given the lack of evidence relating to several keys periods and issues (in particular, whether his actual earnings up to 27 February 2008 should be accepted as the proper test of his ability to earn), I am unable to conduct that re-determination. In addition, I note that whilst the claim was presented as one of partial incapacity, the evidence suggests that Mr Lott was totally unfit up to 5 November 2005. The only medical evidence of incapacity in the period from 6 November 2005 to 6 June 2006 is from Dr Patrick who assessed Mr Lott to be partially incapacitated at the time of his examination on 19 January 2006. Mr Lott underwent surgery on 7 June 2006 and presumably was totally unfit for a period after that surgery, yet there is no evidence of how long that period of total incapacity lasted. Further, there is no evidence of Mr Lott’s earnings in the period from 1 July 2007 until 27 January 2008, though he worked in casual employment in that period.
Procedural Fairness
By an order made on 4 December 2008, the Arbitrator excused the attendance of Scott Swain under summons and set aside the summons under Part 13 Rule 13.14 of the Workers Compensation Commission Rules 2006 (‘the Rules’). Essentially, the Arbitrator concluded that requiring Mr Swain’s attendance would cause him serious inconvenience and it was not apparent how his attendance would benefit the appellant. The Arbitrator did not hear submissions from the appellant in respect of the application to set aside the summons, but dealt with it “on an interim basis allowing both parties the opportunity to argue further in due course”. He took that course because the matter was listed for hearing on 8 December 2008 and required urgent attention, but left it open to the parties to make further submissions at the arbitration.
The appellant argues that the Arbitrator denied it procedural fairness, as it was not given the opportunity of being heard, and that it was precluded from having the opportunity of questioning Mr Swain about a large number of issues, including, but not limited to, the injuries sustained by Mr Lott with Glenam Farming, the circumstances of his employment with Glenam Farming, his earnings and other matters relevant to the proceedings.
At the arbitration, Mr Judd submitted (at T3.11) that the summons was issued:
“to cross-examine both plaintiff and the gentlemen under direction [summons] as to the relationship between the two. It would be effected [sic, submitted] by the first respondent [the appellant] that there is a close relationship between the applicant and …Scott Swain.”
He further argued that the appellant was entitled to have that tested and to test the “letter of employment” [sic, contract of employment] on the basis that there was “some issue as to whether that letter of employment is genuine” (T3.28). The Arbitrator indicated that the summons was ineffective because conduct money had not been tendered (T3.58 – T4.1). In response, the appellant’s solicitor, Mr Macken, said, without referring to any authority, that the rules do not require conduct money because Mr Swain is a party.
For the following reasons, I do not accept the appellant’s submissions.
First, Mr Macken’s assertion that it is not necessary to serve conduct money on a party is incorrect. Under section 359 of the 1998 Act, the Registrar has power to issue a summons requiring the attendance of a person at a conference or hearing. The procedure for issuing a summons is governed by Part 13 Rule 13.13 of the Rules. Under Rule 13.13(5), an attendee is not required to comply with a summons unless it is served in accordance with the Rules and an amount sufficient to meet the reasonable expenses of compliance is paid or tendered to the attendee. If the attendee is not a party and incurs expenses or loss substantially exceeding any amount paid or tendered, the Registrar may order an additional amount in respect of the expense or loss. The Rules make it perfectly clear that if conduct money is not offered to an attendee, then he or she is not required to comply with the summons. It draws no distinction between a party and a non-party. As no conduct money was paid or tendered at the time of service of the summons, Mr Swain was not required to comply with it (Rule 13.13(5)(b)).
Second, the Arbitrator gave leave to Mr Judd to cross-examine Mr Lott. That leave was not restricted to any particular issue or issues, though it should have been. Mr Judd put no questions to Mr Lott about his relationship with Mr Swain or about his contract with Glenam Farming. In particular, he did not suggest that the contract was anything other than what it appears to be, namely, a contract of employment between Mr Lott and Glenam Farming. Given that the cross-examination did not touch on those issues, I do not accept the assertion that the relationship between Mr Lott and Mr Swain has any relevance to the issues in dispute.
Third, Part 14 Rule 14.2 of the Rules provides:
“14.2 Calling of witnesses
(1) Where a party proposes to rely on the oral evidence of a witness, the party must
lodge and serve a document containing:(a) the name of the witness, and
(b) a written statement of the evidence to be given by the witness, signed by
the witness,
with the information and documents required under rule 10.3 to be lodged and served
by the party.
(2) Subject to subrules (3) and (4), a party may not in proceedings call a witness to
give oral evidence that has not been included in a document lodged and served as
required by subrule (1) unless:(a) the party has lodged and served with the information and documents
required under rule 10.3 a statement revealing:
(i) the specific nature of the evidence, and
(ii) the reliance the party intends to place on the evidence, and
(iii) the reasons why the evidence has not been included in a
statement as required by subrule (1), and
(iv) the time the evidence is expected to be so included, and
(b) the evidence is included in a written statement lodged and served on all
other parties as soon as practicable after that statement can be obtained.
(3) Where:
(a) a person refuses to sign a statement of the oral evidence to be given in
proceedings by the person, and
(b) the party wishing to adduce the evidence has served a summons issued
under rule 13.13 in respect of the person,
this rule does not prevent the party from calling the person to give the evidence.
(4) The Commission may, for the avoidance of injustice, allow a party to introduce
oral evidence that the party would otherwise be prevented from introducing because
of the operation of subrule (2).(5) Where a party proposes to give oral evidence, this rule applies to the party as
though the party were the party’s witness as well as being the party.”
Whilst it was not possible for Mr Macken to take a statement from Mr Swain, there is no evidence that Mr Macken complied with the terms of Rule 14.2(2). In these circumstances, and given that Mr Swain was not a witness to the 2005 incident and was not the author of the contract of employment, there was no reason to permit him to be cross-examined “for the avoidance of injustice” under Rule 14.2(4).
It therefore follows that, if the Arbitrator erred in initially failing to hear submissions (on 4 December 2008) on whether to set aside the summons, that error was of no consequence because it has not affected the outcome as the appellant had no right to enforce compliance with the summons and no right to cross-examine Mr Swain in any event.
Having heard full submissions on this issue, I agree with the Arbitrator’s decision to set aside the summons. There was no proper basis for requiring Mr Swain to attend and he should not have been summonsed. Mr Macken’s conduct in attempting to summons Mr Swain demonstrates, yet again (see Rinker Group Limited v Mackell [2008] NSWWCCPD 100), either his fundamental lack of understanding of the Commission’s Rules and procedures, or a deliberate attempt to circumvent those Rules.
Apportionment
Given my finding that no liability attaches to Glenam Farming, the question of apportionment does not arise. I should add in passing, that it did not arise before the Arbitrator either. Mr Judd made no submissions on apportionment. It is difficult to see how he could have, the doctors who considered the question of liability were all of the opinion that liabilty rested solely with the appellant.
Reasons
This ground is not developed as a separate issue but seems to be relied upon in support of the other grounds. Those grounds have been comprehensively dealt with above.
COSTS
Glenam Farming seeks an order that Fletcher Exports pay its costs of the arbitration and the appeal. It is clear that Mr Lott’s solicitor joined Glenam Farming as a respondent to the proceedings because of the stance taken by Fletcher Exports and its suggestion that Glenam Farming was liable (see letter from Firths to Fletcher Exports dated 20 February 2006). At the arbitration, Fletcher Exports called no persuasive evidence to justify that stance. It tendered no evidence from Dr Blue and Dr Smith’s report did not advance its case.
The Commission has full power to determine by whom, to whom and to what extent costs are to be paid (section 340(2) of the 1998 Act). In the circumstances of the present case it is just and reasonable that Fletcher Exports pays Glenam Farming’s costs of the arbitration and the appeal and that is the order that I make.
OTHER MATTERS
The parties may wish to consider the state of the evidence and the general presentation of this case. In particular, I note that the medical evidence is now nearly two years out of date and it must be brought up to date. Mr Lott’s evidence will also need to be updated and expanded. It does not adequately deal with several issues, in particular, the current state of his leg and its impact, if any, on his ability to work, the impact of his injured wrist and whether it stopped him from working and, if so, for how long, whether he is in fact claiming for periods of total incapacity and the period/s of those claims, the nature of the work he performed between July 2007 and February 2008 and his earnings in that period, and the period of total incapacity as a result of the surgery in June 2006.
CONCLUSION
Having conducted a review on the merits (per Spigelman CJ in State Transit Authority of New South Wales v Fritzi Chemler [2007] NSWCA 249; (2007) 5 DDCR 287 at [28]), I have determined that the condition of Mr Lott’s left knee has resulted solely from his injury with Fletcher Exports in 2002. For the reasons set out above, however, his entitlement to weekly compensation against Fletcher Exports must be re-determined. Because of the unsatisfactory state of the evidence, I am unable to conduct that re-determination and the matter must be remitted to a different Arbitrator for that re-determination to be conducted in accordance with the reasons in this decision.
DECISION
Paragraphs three and four of the Arbitrator’s determination dated 18 December 2008 are revoked and the following orders made:
“3.The matter is remitted to a different Arbitrator to re-determine the applicant worker’s entitlement to weekly compensation in accordance with the reasons in this decision.
4.The first respondent (Fletcher International Exports Pty Ltd) is to pay the applicant’s costs and the second respondent’s costs, as agreed or assessed.”
Paragraphs one and two of the Arbitrator’s determination dated 18 December 2008 are confirmed.
COSTS
The appellant is to pay Mr Lott’s costs and the second respondent’s costs of the appeal. Costs of the second arbitration are at the discretion of the Arbitrator who determines that matter.
Bill Roche
Acting President
14 April 2009
I, TUYET WALLIS, CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF BILL ROCHE, ACTING PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
4
12
0