Forests NSW v Hancock No.2 - [2007] NSWWCCPD 191

WORKERS COMPENSATION COMMISSION

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

CITATION:Forests NSW v Hancock No.2 [2007] NSWWCCPD 191
APPELLANT:  Forests NSW
RESPONDENT:  Mark Hancock
INSURER:Self insurer
FILE NUMBER:  WCC10406-2006
DATE OF ARBITRATOR’S DECISION:          10 April 2007
DATE OF APPEAL DECISION:  6 September 2007
SUBJECT MATTER OF DECISION: Dispensing with compliance with Rules (Rule 1.6(2)); extension of time to appeal; whether factual error; principle in Jones v Dunkel; putting matters in cross-examination – principle of fairness; actual bias allegation – need for care in suggesting; determination of probable earnings – Commission specialist tribunal; adequacy of reasons; determination of ability to earn – specialist tribunal, intermittency of employment.
PRESIDENTIAL MEMBER:  Acting Deputy President Michael Snell
HEARING:On the papers
REPRESENTATION:  Appellant: Leigh Virtue & Associates
Respondent: Whitelaw McDonald

ORDERS MADE ON APPEAL: Time to appeal is extended to 16 May 2007.

The decision of the Arbitrator dated 10 April 2007 is confirmed.
The Appellant Employer is to pay the Respondent Worker’s costs of this appeal.

BACKGROUND TO THE APPEAL

On 16 May 2007 Forests NSW (‘the Appellant Employer’) sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Workers Compensation Commission (‘the Commission’) against a decision, dated 10 April 2007.

The Respondent to the Appeal is Mark Hancock (‘the Respondent Worker’).

The Respondent Worker was born on 15 November 1970. He is separated, but claims three dependant children. He is a qualified motor mechanic, having worked in this trade (according to his statement of 17 March 2004) for virtually the whole of his working life. He was employed as such by the Appellant Employer, from the late 1990’s. His statement described his toolbox weighing “approximately 80 Kilograms”, and said he had to physically load it onto a work vehicle, if required to carry out mechanical work on vehicles at sites outside the workshop.

His statement says an injury occurred on Friday 3 January 2002, when unloading the toolbox from the tray of a work vehicle, after attending an outside site. He was standing on the ground, lifting one end of the toolbox to clear the metal channel at the edge of the tray, when he developed sharp pain across the lower back and down the left leg. He saw a GP, obtained some medication, and rested over the weekend. He worked the following Monday and Tuesday, he said avoiding lifting as much as possible. On the Wednesday he saw another GP, and was put off work. He had scans, physiotherapy and hydrotherapy.

He resumed work on a rehabilitation program doing clerical work, from 22 April 2002. He ceased work from November 2002. He had ongoing urinary and erection problems, in addition to his back and leg pain. He came under psychological care for anxiety and depression.

The Appellant Employer accepted voluntary liability, and made payments of weekly benefits and medical expenses, until 27 October 2004, when it declined further liability on the basis of a report it had obtained from Dr K Edwards, that the Respondent Worker’s condition was “no longer work related”. Weekly payments actually ceased on 12 December 2004.

The Respondent Worker, in a supplementary statement dated 17 May 2005, described being prescribed oxycontin, and said he became addicted to this medication. He described “at least” five occasions between Christmas 2004 and 17 May 2005, when he was admitted to the Mater Hospital, for problems with pain, and withdrawal from that drug. The history recorded by Dr ALG Smith on 12 September 2006 indicates he subsequently ceased this medication.

There is a third statement of the Respondent Worker dated 15 September 2006. He underwent spinal fusion at the levels L4/5 and L5/S1, performed by Professor Ghabriel, on 9 August 2005. The statement set out his ongoing problems thereafter.

The Application to Resolve a Dispute (‘ARD’) lodged 10 July 2006, claims weekly compensation from 12 December 2004, medical expenses in a sum of $5,527.99, and lump sums pursuant to sections 66 and 67 of the Workers Compensation Act 1987 (‘the 1987 Act’). The Reply lodged by the Appellant Employer pleaded the issues in dispute in the following fashion:

“The Respondent is not yet able to identify with precision the issues in dispute because insufficient time is allowed for the filing of the Reply and investigations are continuing. At the present time the issues which remain in dispute are duly made claim and compliance with the legislation generally, injury, causation, substantial contributing factor (section 9A), incapacity, extent of impairment and quantum of entitlements generally, whether medical and treatment expenses are reasonably necessary and other issues to be advised.”

This pleading was the subject of some criticism by Roche DP in State Forests of NSW v Hancock [2007] NSWWCCPD 3 (‘Hancock No 1’).

The matter was initially listed for arbitration hearing on 26 September 2006 and 25 October 2006. The Respondent Worker succeeded, and an award (set out in Hancock No 1 at [20]) was entered in his favour. The weekly claim resulted in an award on the basis of total incapacity, from 12 December 2004, on a continuing basis. The Appellant Employer appealed that decision. Unfortunately, no transcript or recording of the first arbitration hearing, and the arbitrator’s ex tempore reasons, was available. Roche DP in Hancock No 1, said it was impossible for him to conduct a review in such circumstances, describing the situation as “most regrettable”. He held this amounted to a constructive failure to give reasons, revoked the arbitral decision, and remitted the matter to a different arbitrator for determination.

The arbitration hearing from which the current appeal results, was held on 20 March 2007. Both parties were represented by counsel. The Appellant Employer made an application, which was declined, that the arbitrator disqualify himself. That decision is not challenged in this appeal. There was an application, on the Respondent Worker’s part, that he be given leave to give oral evidence. Two reasons were given for this application. Firstly, it was proposed the Respondent Worker give evidence regarding “a lack of symptoms and particularly in his lower back prior to the incident”. Secondly, it was proposed to update his evidence on “his current state of capacity” (see T5.45). The Appellant Employer opposed this application, and the arbitrator refused it. There was some disputation about the use by the Respondent Worker of a report of Dr Lloyd Hughes, dated 2 September 2004. This report had been attached to the Reply, but the Appellant Employer, when tendering its Reply, specifically refrained from tendering that report (T3.50). The Arbitrator, over the Appellant Employer’s objection, permitted the Respondent Worker to tender that report (T11.50). The Arbitrator heard addresses from both counsel, and reserved his decision.

THE DECISION UNDER REVIEW

The ‘Certificate of Determination’, dated 10 April 2007 records the Arbitrator’s orders as follows:

1.   Respondent to pay $558.40 per week from 12 December 2004 to 31 March 2005, $567.30 per week from 1 April 2005 to 30 September 2005, $578.90 per week from 1 October 2005 to 31 March 2006 and $590.80 per week from 1 April 2006 to 30 May 2006 pursuant to s37.
2.   Respondent to pay $385.92 per week from 1 June 2006 to 30 June 2006 and $422.70 per week from 1 July 2006 to date and continuing pursuant to s40.
3.   Respondent to pay s60 expenses.
4.   Respondent to pay the Applicant’s costs as agreed or assessed.
5.   I refer the claim for permanent impairment benefits to an AMS.

The Certificate of Determination was accompanied by a Statement of Reasons

ISSUES IN DISPUTE

The Appellant Employer’s Application to Appeal raises the following grounds:

1. The arbitrator erred in his consideration and interpretation of records from the ‘Centre for Wellbeing Pty Limited’ (‘the Centre’) tendered by the Appellant Employer, and failed to have regard to a reference to “low back” in those records. It is further put the arbitrator “reversed the onus of proof as to what is disclosed by those records”.
2. The arbitrator erred in admitting the Respondent Worker’s tender of the report of Dr Lloyd Hughes, when the document had not been served by the Respondent Worker. It is submitted this, and the preceding error, resulted in an erroneous finding on ‘causation’ and ‘substantial contributing factor’.

3. The arbitrator erred in accepting the Respondent Worker’s assertions regarding ‘probable earnings’ (the upper limb of the section 40 equation – section 40 (2)(a)), as these assertions were not supported by the evidence.

4. The arbitrator erred in finding the Respondent Worker’s ability to earn (the lower end of the section 40 equation – section 40(2)(b)) was $350.00 per week, rather than some greater figure. It is also argued he failed to give adequate reasons for that finding.

ON THE PAPERS REVIEW

Section 354(6) of the Workplace Injury Management and Workers Compensation Act 1998 (‘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.”
The Appellant Employer submits an oral hearing should be held, proffering two reasons. The first is that transcript of the arbitration hearing was unavailable, when the appeal documentation was lodged. The transcript was subsequently forwarded to the parties’ solicitors by letter dated 5 June 2007. That letter indicated the parties should complete and lodge final grounds or submissions, if these had not been lodged previously, due to the unavailability of transcript. The parties have had in excess of two months since then, to lodge further submissions or grounds, if they wished. No further material has been put on by the Appellant Employer. I do not regard the initial absence of transcript as a persuasive reason for holding an oral hearing.

The second reason advanced by the Appellant Employer for holding an oral hearing, is that the issues are “quite complex”, and accordingly would benefit from an oral hearing. I do not regard the issues raised on the appeal as unusually complex, and the parties have had ample opportunity to make such submissions as they wish, in writing. I also have transcript of the parties’ submissions before the Arbitrator. The Respondent Worker submits the matter can be satisfactorily determined on the papers.

I should note the Appellant Employer, at 2.7 of its submissions, submitted that records from ‘the Centre’ had been provided by it to the Arbitrator, and not returned to it. The Appellant Employer submitted it had not yet been able to complete its submissions, as it did not, when preparing such documentation, have the records of ‘the Centre’, nor the transcript. The Appellant Employer asserted as it had “sought a hearing before a Presidential Member the most appropriate way to complete its submissions in support of its grounds of appeal is orally at such a hearing. For this reason the following submissions are in short form only.” As I have noted, transcript was subsequently forwarded to the solicitors for the Appellant Employer, accompanied by advice it should lodge final grounds and submissions, if these had been waiting on transcript. It did not lodge further submissions or grounds.

Material from ‘the Centre’ (a chiropractic and naturopathic practice) was originally produced to the Commission pursuant to a Direction for Production. The parties were advised on 25 August 2006 of an access order, pursuant to which the Respondent Worker had first access, from 28 August 2006 to 1 September 2006, and the Appellant Employer thereafter. The material was three pages in length, plus a covering letter. The transcript confirms counsel for the Appellant Employer provided a copy of that material to the Arbitrator, when he tendered it from documents produced on direction (T4.45). The Appellant Employer’s solicitors wrote to the Registrar on 27 June 2007, advising they had tendered a copy of the records at the first arbitration hearing, and had then provided their second copy to the Arbitrator on the rehearing. They requested a copy.

The Registrar forwarded copies of documents produced by the Centre, to the solicitors for the Appellant Employer, under cover of letter dated 2 July 2007. The Appellant Employer’s solicitor then wrote to the Registrar on 3 August 2007, thanking the Registrar for the letter of 2 July 2007, and continuing “the documents enclosed with same may not be a complete copy of these records. We will contact you shortly to make arrangements to inspect the Commission file to determine whether a clearer copy can be obtained.”

It is clearly the responsibility of the Appellant Employer (or those acting on its behalf) to keep appropriate copies of documents it may tender. It is not the Commission’s responsibility. Whether or not the Appellant Employer was content with the quality of the copy, was not a basis to assume its submission that an oral hearing be held, contrary to the submission of the Respondent Worker, would prevail. I note also the Respondent Worker’s Notice of Opposition was lodged on 29 June 2007, a copy having been served on the Appellant Employer by DX (according to the Certificate of Service) on 27 June 2007. Thus the Appellant Employer had ample opportunity to put on such material as it wished, including material in reply if necessary.

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

LEAVE

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

The quantum of the weekly award and section 60 expenses significantly exceeded the sum of $5,000.00 prescribed in section 352(2)(a) of the 1998 Act. If the Appellant Employer’s argument, that causation and substantial contributing factor should have been decided adversely to the Respondent Worker, were accepted, the effect would be that the whole of the award would be set aside. Section 352(2)(b) is satisfied.

The appeal was originally lodged on 7 May 2007, within 28 days of the Arbitrator’s decision. However the appeal was rejected, and returned to the Appellant Employer’s solicitors by letter dated 10 May 2007. The reason given was that the Application to Appeal had failed to attach a copy of the Certificate of Determination, contrary to rule 16.2(4) of the Workers Compensation Commission Rules 2006 (‘the Rules’). The Appellant Employer’s solicitors re-lodged the Application to appeal by letter dated 15 May 2007, received in the Commission on 16 May 2007. This letter also enclosed a copy of the Certificate of Determination. However it was now outside the twenty-eight day period specified in section 352(4). The letter re-lodging the documentation disputed it had been validly rejected, on the basis the only Certificate of Determination in the solicitors’ possession, when the appeal was originally lodged, was not sealed. That letter goes on to make “submissions in favour of granting any extension of time…(without conceding that extension is necessary)”. These submissions make the following points:

1. The appeal was originally filed within twenty-eight days.
2. A sealed Certificate of Determination could not be attached, as the solicitors did not have one.

3. Neither the Act or Rules require that a Certificate of Determination be filed within twenty-eight days, only that the appeal be filed within that time.

4. Failure to extend time would deprive the Appellant Employer of its appeal rights, thereby working a “demonstrable and substantial injustice”.

The provisions in the Rules which led to the appeal being rejected are in subrules 16.2(1), (2), (3) and (4), which provide:

(1)       A party to any proceedings applying for leave to appeal under section 352 of the 1998 Act against a decision of an Arbitrator must lodge the application within 28 days after the making of the decision, or within such extended time for making the appeal as may be ordered under subrule (11).
(2)       For the purposes of subrule (1), a decision is made, in respect of a dispute, when the Commission issues a certificate as to the determination of the dispute as required by section 294 (1) of the 1998 Act.
(3) If the Registrar determines that he or she is not satisfied that the requirements of section 352 of the 1998 Act, or any applicable Rules and regulations, as to the making of the appeal have been complied with, the Registrar is to return the application to the party who lodged it, with a statement particularising the non-compliance.
(4)       An application referred to in subrule (1) must have attached to it a copy of the certificate as to the determination of the dispute referred to in subrule (2)…

Section 294(1) of the 1998 Act, requires that the Commission, “as soon as practicable after determination of the dispute issue the parties” with a certificate as to the determination.

Clearly lodgement of the appeal without a Certificate of Determination was in breach of subrule 16.2(4), which is mandatory. The Registrar was consequently required by subrule (3) to return the document to the party who lodged it, as occurred. However the Certificate of Determination was, as asserted by the Appellant Employer, unsealed. Rule 2.5 relevantly provides:

(1) The Commission is to have a seal.
…
(4)The seal is to be affixed to all documents registered by the Commission and to all certificates of decisions and determinations by the Commission and to such other documents as may be prescribed in these rules or as the President may determine from time to time.

The appeal, when originally lodged, was rejected by the Registrar, for non-compliance with subrule 16.2(4). Given subrule 2.5(4) required the seal of the Commission be affixed to the certificate, and it was not, the Appellant Employer’s reasons for not attaching the unsealed copy are not unreasonable. As a consequence, however, the appeal was ultimately lodged out of time.

Rule 1.6(2) of the Rules gives the Commission power to dispense with compliance with any of the requirements of the Rules, either before or after the occasion for the compliance arises. In so far as it is necessary, it is clearly appropriate that non-compliance with subrule 2.5(4) be dispensed with, to the extent that such non-compliance could arguably lead to a conclusion no valid Certificate of Determination had been issued. In so far as a seal was not affixed to the certificate, this would appear to be purely a result of administrative oversight.

Subrules 16.2(11) and (12) have the following provisions governing extension of time for making an appeal:

(11) The Commission constituted by a Presidential member may, if a party satisfies the Presidential member, in exceptional circumstances, that to lose the right to seek leave to appeal would work demonstrable and substantial injustice, by order extend the time for making an appeal.
(12) A party who seeks an extension of time as referred to in subrule (11) must:
(a) as soon as practicable give notice to the other parties of the intention to seek the extension, and
(b) lodge and serve with the application for leave to appeal an application for the extension of time, including full details of the arguments to be put in favour of granting the extension.

The following passage of Gallo v Dawson (1990) 93 ALR 479 (‘Gallo’), has been frequently applied in Presidential decisions dealing with extensions of time pursuant to subrule (11):

“The discretion to extend time is given for the sole purpose of enabling the court or justice to do justice between the parties: see Hughes v National Trustees Executors & Agency Co of Australasia Ltd [1978] VR 257 at 262. This means that the discretion can only be exercised in favour of an applicant upon proof that strict compliance with the rules will work an injustice upon the applicant. In order to determine whether the rules will work an injustice, it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation, and the consequences for the parties of the grant or refusal of the application for extension of time: see Avery v No 2 Public Service Appeal Board [1973] 2 NZLR 86 at 92; Jess v Scott (1986) 12 FCR 187 at 194-5; 70 ALR 185. When the application is for an extension of time in which to file an appeal, it is always necessary to consider the prospects of the applicant succeeding in the appeal: see Burns v Grigg [1967] VR 871 at 872; Hughes at 263-4, Mitchelson v Mitchelson (1979) 24 ALR 522 at 524. It is also necessary to bear in mind in such an application that, upon the expiry of the time for appealing, the respondent has “a vested right to retain the judgment” unless the application is granted: Vilenius v Heinegar (1962) 36 ALJR 200 at 201.” (per McHugh J at 480)

I have no difficulty in concluding the circumstances which led to the appeal ultimately being lodged outside the twenty-eight day period, should be regarded as “exceptional”, within the meaning of subrule 16.2(11). This enlivens the discretion to extend time. Applying the above passage in Gallo, strict compliance with the rules would work an injustice. The appeal was not out of time due to any delinquency by the Appellant Employer, which attempted to lodge the appeal in time. Failure to extend time would work an injustice against the Appellant Employer, which would be deprived of its rights on appeal. The subject matter of the appeal is such the Appellant Employer has an argument which can be validly argued on appeal. For the purpose of doing justice between the parties, it is appropriate I extend time to file the appeal pursuant to subrule 16.2(11) to 16 May 2007, and grant leave to appeal.

DISCUSSION AND FINDINGS

Nature of the Review Process

In Westpac Banking Corporation v Kilby & Bananacoast Credit Union Ltd [2005] NSWWCCPD 24 Byron DP said at [54]:

“As stated in South Western Sydney Area Health Service v Edmonds [2005] NSW WCC PD 18, the weight and relevance to be given to evidence before an Arbitrator is a matter in the discretion of that Arbitrator. The decision of the Arbitrator should not be overturned unless it can be demonstrated that the Arbitrator has failed to exercise that discretion fairly and according to law. This may occur when an Arbitrator has acted upon an incorrect legal principle, allowed irrelevant considerations to influence the decision, made a material mistake as to the facts, or failed to take into account relevant and material considerations, (House v The King (1936) 55 CLR 499 at 504-505; Norbis v Norbis (1986) 161 CLR 513 at 520, and In the Matter of National Roads and Motorists Association Ltd [2003] FCAFC 206 at [21]).

Clearly the review process extends to correction of error of the kind identified House v The King (1936) 55 CLR 499. However the above passage must be read subject to Aluminium Louvres & Ceilings Pty Limited v Zheng [2006] NSWCA 34, in which Bryson JA at [38] said:
“A review is a different process to an appeal and the matters which may be considered and the manner in which they may be considered are somewhat wider. See Boston Clothing Co Pty Ltd v. Margaronis (1992) 27 NSWLR 580 at 584 (Kirby P). An attack, on review or otherwise, on an Arbitrator's discretionary decision in controlling procedure may be based on the test stated in House v. R (1936) 55 CLR 499 at 504 - 505; but that is not the only basis on which the Presidential member may act. The powers of a Presidential member on review are somewhat wider and extend to power to reopen consideration of a matter of which an Arbitrator has disposed; the manner in which the powers of the Presidential member are to be exercised is itself the subject of discretion of the Presidential member.”

This passage was quoted with approval by McColl JA in South Western Sydney Area Health Service v Edmonds [2007] NSWCA 16.

Roche DP in Combined Civil Pty Limited v Rikaloski [2007] NSWWCCPD 181 recently also observed:

Before an Arbitrator’s decision will be revoked on review it must be demonstrated that it contains or has resulted from an error of fact, law or discretion. The error must be such that, but for it, a different decision should have been made (see Snow Confectionary Pty Ltd v Askin [2004] NSWWCCPD 56; Section 294 of the 1998 Act; YG & GG v Minister for Community Services [2002] NSWCA 247; Absolon v NSW TAFE [1999] NSWCA 311). (at [21])

The Arbitrator’s Consideration of Records from the Centre

The first two grounds raised by the Appellant Employer, the substance of which are described at [15.1] above, relate to the Arbitrator’s consideration of records produced by the Centre.

The Respondent Worker’s statement of 17 March 2004 does not actually refer to the condition of his back prior to the injury of 3 January 2002. By implication, it would suggest his back was not causing significant trouble prior to that date, as it describes him carrying out duties as a mechanic with the Appellant Employer (including lifting the toolbox weighing about eighty kilograms) (at [3]), and also coaching a junior soccer team (at [23]). A document signed by the Respondent Worker, headed “Notice of Claim”, also dated 17 March 2004, describes “Previous injuries, pre-existing conditions or abnormalities” as “Nil”. A number of doctors who reported in the case, recorded a history of the Respondent Worker not suffering from back symptoms or injuries, prior to the incident of 3 January 2002 (see for example Drs Edwards, Hollo, Ghabriel and Ehrlich). It clearly would be a matter of significance if, contrary to this history, the Respondent Worker had in fact been suffering from lower back symptoms prior to 3 January 2002.

The notes from the Centre consist of a cover sheet containing personal details, and information dealing with the history of the presenting problems. The date on the top right corner of this cover sheet is “11.8.01”. The “Problem Area” is described as “Neck + Back”. “Past History Have you ever had this problem in the past. If yes…when?” has written next to it “Yes 4 & 10 years ago”. “On this occasion when did it first begin?” has the response “4 years (neck)”. A diagram of a human form on the sheet, has marks inserted over the left shoulder and neck, marked “1” and “2” respectively, and a mark on the low back at about the top of the buttocks, which is not numbered. It appears the telephone number written into the document has been crossed out, and another written in beneath it. This is potentially consistent with the contents of the document not having been all produced at a single point in time.

There is a second page, which appears designed to contain details of consultations. The first column appears to relate to a consultation on “11/8/01”, which would be consistent with the date on the cover sheet. The second column is headed “16/8”. The third column appears to have the date “11/8” written in, and crossed out. The information in these columns is largely incomprehensible to the lay observer, although the words “L shoulder mob.” (which I take to mean left shoulder mobilisation) appear in the first column. The partial date “- - FEB 2003” is stamped at the foot of the third column, above a reference to a sum of “42” being paid. There is a column at the right side of the page. The first entry there is “16.8.01”, and says “L shoulder no better in lat flex.” The second entry in this column is dated “9.2.05” and reads “No feeling R arm T8, T1, T2 Numbness/tingling + UT”. Beneath that entry the words “Disc Herniation ? in LB”.

The third page of the notes appears designed for details of examination findings, and is basically incomprehensible to a lay observer, except for writing under the heading “Notes”, which reads “L shoulder (No P ful arc) Neck (chronic) Schuermanns Disease?”. There is a box headed “Ranges of Movement” with printed contents, part of which is marked “L”, and appears designed to relate to findings on examination of the lumbar spine. There is a handwritten notation adjacent to this, with a line and a marking on a movement diagram. Its significance is not apparent without explanation.

At the arbitration hearing the Appellant Employer’s counsel made submissions based upon these documents. It was put the documents indicated the Respondent Worker had attended the Centre on 11 August 2001, “not five months” before the date of injury, complaining of a problem area being “neck and back”. Such complaints were contrasted with the Respondent Worker’s denial of prior problems in various medical histories. It was submitted “…when it comes to truthfulness and being forthright, in my respectful submission, you must be very wary now as to whether the applicant can be accepted on his complaints.” (T12 to 14).

The Arbitrator dealt with this issue at [24] to [25] of his Reasons. He did not accept the submission the notes proved the Respondent Worker had been complaining of low back symptoms prior to the injury of 3 January 2002. He noted the reference to “possible disc herniation” appeared in a note on 9 February 2005, well after the injury relied upon in these proceedings. He said:

“Apart from the marks on the diagrams the notes do not record any complaint in respect of the lower back until well after the subject injury. It is unknown when those marks were placed on the diagrams however the markings in respect of the neck and left shoulder are different in that they are numbered.” (at [25])

The Appellant Employer’s submissions on the appeal put that the Arbitrator referred to the records:

“as recording complaints of pain in the neck and left shoulder only however the Appellant submits that those records in fact recorded complaints in respect of the neck left shoulder and lower back such that the Arbitrator’s failure to recognise the reference in those records to complaints in respect of the lower back constitutes an error of fact and an error of law.
The Appellant submits that it is not a matter for the Arbitrator to seek to interpret those records in a manner favourable to the Respondent Worker and rather the records need to be considered on their face in which circumstance the records indicate that the Respondent Worker apparently make (sic) complaints of low back pain to the Centre for Wellbeing Pty Limited in August, 2001 and the records on their face disclose a history of pre-existing low back problems. The onus is on the Respondent Worker to call evidence to dispute what appears on the face of those records and the Respondent Worker has failed to do so.”

The submissions, dealing with “Ground 2”, go on to submit the onus was on the Respondent Worker to call evidence from the practitioner at the Centre, or obtain a report from the Centre addressing the issue. It is then submitted the Arbitrator reversed the onus of proof in considering the records.

The Arbitrator did not fail to observe the reference to low back in the notes. His analysis involves a reference to the low back complaint, as part of his consideration of when the complaint was made. Obviously the timing was crucial. If the complaint was made a matter of months prior to the pleaded injury, and then subsequently denied to other medical practitioners who reported in the matter, this could potentially undermine the Respondent Worker’s medical case. If the complaint was made on 9 February 2005 (where the entry “Disc Herniation ? in LB” is to be found, the entry is quite consistent with the Respondent Worker’s case.

The Appellant Employer submits the notes, on their face, establish low back complaints prior to 3 January 2002, at the least placing an evidentiary onus on the Respondent Worker to call evidence to contradict this proposition. Like the Arbitrator, I do not accept the notes establish this. The notes point to at least three consultation dates, an initial one on 11 August 2001, a second on 16 August 2001, and another on 9 February 2005. The significance of the stamped date “- - FEB 2003”, apparently near some account details, is unclear. There is nothing on the second and third pages of the notes which could be taken as establishing low back complaints on the two consultations in 2001, which are the only ones to predate the pleaded injury. The entry for 9 February 2005 is consistent with the low back being mentioned on that occasion.

The Appellant Employer’s contention, regarding what is to be gleaned from the notes, accordingly comes down to whether the cover sheet, on its face, establishes low back complaints on one or other of the consultations in 2001. One might reasonably infer, from the way in which one telephone number has been crossed out and another inserted, that the cover sheet was potentially added to or varied from time to time. To put it another way, one could not be satisfied the whole contents of the cover sheet were recorded on the single date, 11 August 2001, which appears at its top right hand corner. It is true, as the Arbitrator observed, that it is unknown when the mark over the low back region was placed on the diagram. The same observation could be made about the entry “+ Back” which follows the word “Neck” in the box marked “Problem Area”. The only entry on the second page of the notes, recording consultations, which one would be confident had any reference to the low back, is that for 9 February 2005.

Although not clearly expressed as such, the Appellant Employer’s submission, referred to at [47] above, suggests a reliance on the principle in Jones v Dunkel (1959) 101 CLR 298. The submission suggests one would more easily reach a conclusion unfavourable to the Respondent Worker, regarding whether he complained of low back symptoms at the Centre prior to 3 January 2002, in circumstances where he has failed to call evidence from, or tender a report from, a practitioner from the Centre. Sheahan P observed, in Castree v Jimari Pty Ltd t/as Hazelbrook Post Office [2004] NSWWCCPD 69, that there are difficulties in sustaining “a Jones v Dunkel argument in a tribunal where there are statutory restrictions on the number of medical reports upon which a party may rely” (at [64]). This is doubtlessly true, if a party is seeking such an inference in respect of failure by his opponent to utilise a medical report, where use of the report may have been restricted in any event (see Regulation 43 of the Workers Compensation Regulation 2003 (‘the Regulation’)). However such considerations would not appear relevant to potential evidence from a practitioner from the Centre. There is no indication such people were medical practitioners.

The following statement of the principle in Jones v Dunkel was recently quoted without criticism by Basten JA in King v Collins [2007] NSWCA 122 (‘King’):

“His Honour noted that the submission was based on the principle stated in Jones v Dunkel (1959) 101 CLR 298 that an inference favourable to the plaintiff for which there was support in the evidence might more confidently be drawn when a person who might have given evidence to the contrary and whom one might expect the defendant to call, was not called, without explanation for his or her absence.” (at [40])

The same judgment of Basten JA contains a passage relevant to the balance of the submission of the Appellant Employer, referred to at [47] above:

“The trial judge relied on the reasoning of Gleeson CJ and McHugh J in Schellenberg v Tunnel Holdings Pty Ltd (1999) 200 CLR 121 at [51]-[53] for the proposition that the principle does not apply to allow an inference to be drawn in the absence of supporting evidence. That proposition may be accepted: to draw an inference in favour of the plaintiff in circumstances where the plaintiff has failed to prove sufficient facts to demonstrate negligence, is in effect to reverse the onus of proof and place on the defendant the obligation of proving that it took reasonable care in the circumstances.” (at [42])

For an inference to be drawn against the Respondent Worker based upon the rule in Jones v Dunkel, it would have been necessary that the Appellant Employer prove sufficient facts from the tender of the Centre notes, to create an expectation the Respondent Worker would call evidence to the contrary. This point, in my view, had not been reached. Because of the difficulty in construing those notes, to establish when they supported the contention a complaint relevant to the low back was made at the Centre, there was not a valid expectation the Respondent Worker needed to call evidence to the contrary.

Even if this were not so, it is difficult to identify any good reason why one would expect the Respondent Worker (as opposed to the Appellant Employer) to call evidence from a practitioner from the Centre. A witness from the Centre would have been as readily compellable to give evidence at the behest of the Appellant Employer, as the Respondent Worker. The Commission file indicates the Appellant Employer had in fact lodged, and had sealed, a Summons to Attend at the arbitration hearing on 20 March 2007, directed to “Mr G. Edwards C/- Centre for Wellbeing”. There is no indication of whether the Summons was served, or why the attendance of Mr Edwards was not arranged. The transcript does not indicate any application was made by the Appellant Employer’s counsel to call oral evidence from Mr Edwards, or anyone else from the Centre. However it is clear the Appellant Employer was well aware it was at liberty to summons someone from the Centre to give evidence, if this would advance its case.

A further matter, relevant to the drawing of any inference based upon the principle in Jones v Dunkel, is the Appellant Employer’s (successful) opposition to the Respondent Worker’s application to give oral evidence, in part going to whether he suffered from low back symptoms prior to the pleaded incident (see [12] above).

In Davis v Council of the City of Wagga Wagga [2004] NSWCA 34 (‘Davis’), a defendant attacked a plaintiff’s credit regarding the mechanics of a playground accident, on the basis there were inconsistencies between his evidence and various medical histories. In upholding an appeal against a verdict for the defendant, Mason P (delivering the judgment of the Court of Appeal) said:

“33. The trial judge acknowledged that a significant aspect of his credibility assessment turned upon the inconsistencies that he identified in the passages set out above.
34. In my view it was not fairly open for these matters to be taken into account in the way they were. A challenge of this significance ought to have been taken to the witness by cross-examination, yet he was never confronted with a suggestion that he had held back the S-hook scenario until he saw Dr Middleton. Nor was it put to him that he had given inconsistent histories and that this was indicative of a lack of credibility casting doubt upon the critical question whether his clothing got caught on a partially-opened S hook.
35. Experience teaches that busy doctors sometimes misunderstand or misrecord histories of accidents, particularly in circumstances where their concern is with the treatment or impact of an indisputable, frank injury. It is possible, and not merely speculatively so, that Dr Middleton misunderstood the precise mechanics of the immediate antecedent of the fall.
36. One can also envisage several reasons why the early hospital records make no mention of the mechanics of the fall. They had little to do with the diagnosis and treatment of an obviously serious injury. The plaintiff ought in fairness to have been given the opportunity to explain the entries if (which I doubt) they were inconsistent with his later testimony.”

The question of an attack on the credibility of a plaintiff, based upon allegedly inconsistent records, was recently considered in King. The plaintiff asserted he had fallen due to a loose step on a truck, which he had previously reported. His evidence on the point was attacked on the basis no reference to a loose step was to be found in various histories of the accident. Basten JA (with whom the other members of the Court concurred), upholding an appeal against a verdict for the defendant, said:

“34. There is no doubt that his Honour was entitled to place weight on the fact that the written records did not demonstrate any indication that the accident was caused by movement in the step when the plaintiff trod on it. However, some care must be taken in attributing too much weight to such documents.
35. As the trial judge noted, difficulties can arise where weight is placed upon statements prepared by others (or even by the plaintiff) where the contents of those statements are said to be inconsistent with the plaintiff’s testimony and those contents are not put to the plaintiff in cross-examination: see Boston Clothing Co Pty Ltd v Margaronis (1992) 27 NSWLR 580 at 590 (Kirby P, Waddell and Samuels AJJA agreeing) and Davis v Council of the City of Wagga Wagga [2004] NSWCA 34 at [34]-[36] (Mason P, Beazley and Tobias JJA agreeing). However, that problem did not, as his Honour correctly noted, arise in the present case. Relevant material was put to the plaintiff and he was given an opportunity to explain why the records did not contain reference to the defect in the step.
36. There is, however, a separate point which is that the omission of particular material must be assessed against the purpose and nature of the documentary record, the circumstances in which it was created and by whom. As Mason P noted in Davis, there may be various reasons why hospital records “make no mention of the mechanics of” an accident, in circumstances where the mechanics of the accident have “little to do with the diagnosis and treatment of an obviously serious injury”: at [36]. In other circumstances, it may be necessary to give consideration to the context of a particular statement or omission in particular documents.

In my view the analysis by the Arbitrator of the records from the Centre, and his refusal to draw the conclusion urged upon him by the Appellant Employer, did not disclose error. His conclusion the records did not prove the existence of complaint relevant to the low back prior to 3 January 2002 was perfectly open to him, and was the same conclusion I would reach. The records established the low back was mentioned at the Centre, but did not establish it was mentioned at a point in time prior to the consultation of 9 February 2005, well after the pleaded incident.

The care with which the Arbitrator needed to treat the significance of the records is demonstrated by the passages quoted above. It is necessary to have regard to the purpose and nature of the record, the purpose for which it was created, and by whom. In this instance it was created by someone practicing at a Centre describing itself (according to the letter forwarding the notes to the Commission) as offering services of “chiropractor, naturopath and massage”. It was not a medical practice. It was not preparing the material for the purpose of a formal record of medical complaints from time to time. Much of the material, in respect of findings on the individual consultations, is not readily comprehensible without explanation.

Care must be taken, in the context of the Commission, considering passages such as those quoted above, dealing with the need to put propositions to a plaintiff in cross-examination. Cross-examination is not available as of right, but is discretionary; it may be disallowed completely, or limited in its extent (see Aluminium Louvres & Ceilings Pty Limited v Zheng [2006] NSWCA 34). The operation of the rule in Browne v Dunne, and the applicability of such rules of procedural fairness, in the Commission, are discussed by Roche DP in Prestige Property Pty Limited v Rafiq [2006] NSWWCCPD 355. Consistent with the passages quoted above, if an employer proposes asserting a worker’s evidence is lacking in credit, based upon alleged specific inconsistencies with other evidence, it would be a reasonable expectation the employer would seek to cross-examine, at least to a limited extent, so the matters allegedly going to credit can be put to the worker. This is consistent with principles of fairness discussed in Davis and King. See also Boston Clothing Co Pty Ltd v Margaronis (1992) 27 NSWLR 580. It also is likely to be of assistance to the arbitrator, in assessing the success (or otherwise) of the attack on the worker’s credit. Obviously the availability of cross-examination, in each individual case, will be in the discretion of the arbitrator. These principles of fairness would need to be considered, along with other competing considerations, including the ‘Guideline for the Practice of Conciliation/Arbitration Process’.

That part of the Appellant Employer’s submission quoted at [46] above, in which reference is made to the Arbitrator seeking “to interpret those records in a manner favourable to the Respondent Worker”, effectively amounts to an allegation of actual bias. In South Western Sydney Area Health Service v Edmonds [2007] NSWCA 16 (‘Edmonds’) McColl JA at [97] said:

“The appellant alleges that the Arbitrator displayed actual, not apprehended, bias. A party asserting actual bias on the part of a decision maker carries a heavy onus. The allegation must be ‘distinctly made and clearly proved’: Minister for Immigration and Multicultural Affairs v Jia Legeng [2001] HCA 17; (2001) 205 CLR 507 at [69] per Gleeson CJ and Gummow J and [127] per Kirby J; SCAA v Minister for Immigration & Multicultural & Indigenous Affairs [2002] FCA 668 at [36] per von Doussa J. A finding of actual bias should not be made lightly; cogent evidence is needed: Sun Zhan Qui v Minister for Immigration and Ethnic Affairs [1977] FCA 1488; (1997) 81 FCR 71 at 123 per Wilcox J; a finding of bias is a grave matter: ibid (at 127) per Burchett J.”

The suggestion of bias having been raised in the submission, the point is not further developed, nor is evidence in support of the allegation forthcoming. The Appellant Employer’s application, at the commencement of the arbitration hearing, that the arbitrator disqualify himself, apparently on the basis of bias although this is not clearly spelled out in the transcript, failed (T1 to 2). The suggestion of actual bias is made in the submission, notwithstanding that the Arbitrator’s refusal to disqualify himself is not raised as a ground of appeal. It is, in my view, inappropriate to make suggestions of such a nature in passing, and is inconsistent with the judgment of McColl JA in Edmonds.

It follows from the above, the Appellant Employer’s challenge to the Arbitrator’s consideration and interpretation of the records of the Centre for Wellbeing Pty Limited fails. I do not accept the Arbitrator reversed the onus of proof, nor that the Arbitrator failed to draw some inference contrary to the position of the Respondent Worker, which he should have drawn.

The Challenge to the Admission of Dr Hughes’ Report

The third ground of appeal is that the Arbitrator erred in admitting the Respondent Worker’s tender of the report of Dr Lloyd Hughes dated 2 September 2004, when the Respondent Worker had not served the report. This ground is not expanded upon, nor the basis of the alleged error further identified, beyond the assertion the tender should not have been permitted over objection, when the Respondent Worker had not served or lodged the report. There were in fact three reports of Dr Hughes dated 2 September 2004, a longer report of three pages, and two short supplementary reports. Argument on the arbitration hearing did not differentiate between them as regards admissibility, and the Arbitrator’s reasons for admitting them treat them as a single tender. Realistically, it is only the longer report to which the Appellant Employer would have objection, the supplementary reports do not advance the Respondent Worker’s position.

This report resulted from an examination of the Respondent Worker on 1 September 2004, arranged by the Appellant Employer. It was addressed to the solicitors for the Appellant Employer, and has a ‘Received’ stamp on it dated 6 September 2004. I infer this was the date the report was received by those solicitors. It was part of the material attached to the Reply, lodged on the Appellant Employer’s behalf on 31 July 2006. From when the Reply was served upon them, the solicitors for the Respondent Worker would reasonably have anticipated the Appellant Employer proposed to rely on the report of Dr Hughes, along with the other documents attached to the Reply (see Rule 10.3(1) of the Workers Compensation Commission Rules 2006 (‘the Rules’), there was an equivalent provision in Rule 40 of the Workers Compensation Commission Rules 2003 (‘the 2003 Rules’)).

The only basis on which the tender is challenged on this appeal, is that the report had not been served or lodged by the Respondent Worker, prior to its tender. Counsel for the Appellant Employer conceded his client had not given notice, prior to the morning of the arbitration hearing of 20 March 2007, that it did not intend relying on the report (T7.5). The Arbitrator gave reasons for permitting the tender, at T10.40 to 11.55:

(i)The report was tendered on the Appellant Employer’s behalf in the earlier arbitration hearing. The Appellant Employer had included the report in its Reply, and only gave notice on the morning of the arbitration re-hearing, 20 March 2007, that it no longer proposed relying on the report. In these circumstances the Respondent Worker had been entitled to expect the report to be tendered by the Appellant Employer. The Rules do not make specific provision for re-service of documents. “Rapid service is not a bar to its being tendered.”

(ii)The Appellant Employer submitted the report should not be admitted, as Dr Hughes was an orthopaedic surgeon, and the Respondent Worker had already relied on medical practitioners of that specialty (T7.55). (See Regulations 43 and 43A of the Regulation). The report pre-dated the proceedings by approximately two years, and could not have been arranged in defence of this particular application. The matter is governed by the Workers Compensation Rules 2003, as the proceedings were instituted prior to commencement of the current Rules on 1 November 2006. It is consistent with the decision of Fleming DP in ‘Debner’ that the report be treated as an ‘injury phase management report’ pursuant to section 118, and therefore its tender not be prevented by the Regulations. (The Arbitrator’s reasons on the point were delivered without having the relevant legislation and rules before him – T9.25. The Respondent Worker submits (without contradiction by the Appellant Employer), and I accept, the reference to ‘Debner’ is a reference to State Transit Authority of NSW v Dadras [2004] NSWWCCPD 87, and the reference to ‘injury phase management report’ is a reference to ‘claims management phase report’. The Arbitrator’s reference to section 118 should be a reference to section 119 of the 1998 Act.)

(iii)The Appellant Employer’s claim of prejudice was based upon an assertion it would have sought to cross-examine Dr Hughes, on the Respondent Worker’s medical history since his spinal surgery (which post-dated Dr Hughes’ report). Such matters could be properly dealt with by way of submissions.

The only challenge to the tender, in this appeal, is to the first of the points raised in the preceding paragraph. Subrule 38(1) of the 2003 Rules required the Respondent Worker to lodge, with his Application to Resolve a Dispute, all information and documents on which he proposed to rely, which were in his possession or control at that time. Subrule 38(2) prevented evidence being used, if not lodged with the Application, unless it was revealed in a statement accompanying the Application, and other procedural requirements were complied with. Subrule 38(3) gave the Commission a discretion to permit the introduction of evidence, the use of which would otherwise be prevented by subrules (1) and (2), “for the avoidance of injustice”. The Commission was also given a discretion, pursuant to Subrule 6(2) to dispense with compliance with any of the requirements of the Rules. Subrule 13(1) gave the Commission a discretion to extend or abridge any time fixed by the Rules.

The 2003 Rules clearly gave the Arbitrator power to permit the tender of the report, notwithstanding it had not previously been served or lodged. The power was discretionary, and any appeal against the exercise of that discretion would be governed by the principles in House v The King (1936) 55 CLR 499. The Appellant Employer’s submissions on this appeal do not raise any basis on which it is asserted the Arbitrator erred, in the exercise of this discretion. The Arbitrator’s reasons dealt with the various arguments raised by counsel for the Appellant Employer, opposing the tender. In my view, the Arbitrator, in exercising his discretion, did not fall into appealable error.

The Arbitrator’s Finding on Causation and Substantial Contributing Factor

The fourth ground of appeal asserts when the records of the Centre, disclosing “pre-existing low back problems”, are considered, and contrasted with medical histories to the contrary, the evidence overall leads to a conclusion adverse to the Respondent Worker, on causation, and substantial contributing factor (section 9A of the 1987 Act). This ground is not really a separate ground, and is dependant upon the Appellant Employer’s argument in grounds 1 and 2 being successful, which it was not. I have accepted the Arbitrator’s analysis of the records from the Centre, and have not found error in his approach. It follows that the fourth ground of appeal fails. Suffice it to say that, on the evidence overall, it was clearly open to the Arbitrator to reach the conclusion which he did, on these issues.

Determination of Probable Earnings

The fifth ground of appeal is that the Arbitrator erred in accepting the Respondent Worker’s assertions as to the weekly amount the Respondent Worker would probably have been earning but for injury (the upper end of the section 40 equation – section 40(2)(a)). The Appellant Employer’s submissions argue the Arbitrator simply adopted the Respondent Worker’s Wages Schedule, when the figures in it were disputed, and not supported by evidence. It is submitted the “records relied on” would support a finding of “approximately $690.00 per week in the period of the claim”. The Arbitrator in fact found $735.92 per week from 1 July 2005 to 30 June 2006, and $772.70 per week from 1 July 2006 to date and continuing.

The Arbitrator’s reasons for his finding on probable earnings are at [35] of his Reasons:

“The Applicant has filed a wages schedule which asserts that the Applicant’s earnings but for injury for the period December 2004 to 30 June 2005 are $700.87 per week, $735.92 per week for the period of 1 July 2005 to 30 June 2006, and $772.70 per week for the period 1 July 2006 to date and continuing. That wages schedule is supported by the Applicant’s notices of assessment for the years ending 30 June 2001, 2002 and 2003. The Respondent, consistent with its attitude to agreeing to nothing, would not accept the Applicant’s probable earnings, but put forward no reason why I should not accept the Applicant’s wages schedules. Accordingly I accept the wages schedule as being what the Applicant would have earned if he had remained in the employ of the Respondent.”

Neither party addressed in any detail on the appropriate figure for ‘probable earnings’. The Appellant Employer’s counsel addressed on the section 40 equation, saying “if you accept that his probables are somewhere about $600 or $700” (T22.25), without indicating where these figures came from. Counsel for the Respondent Worker addressed “The wages schedule filed by the applicant, we say, is reasonable and should be accepted. There seems to be documentary evidence to support the figures quoted.” (T34.40).

The wages schedule is dated 20 September 2006, and indicates it was served on the Appellant Employer on that date. It has annexed to it copy Notices of Assessment from the Australian Taxation Office, for the years ended 30 June 2001, 2002 and 2003. As the relevant injury occurred on 3 January 2002, the only one of these, for which the earnings would be unaffected by injury, would be for the year ended 30 June 2001. The taxable income for that financial year was $36,954.00, the equivalent of $710.65 per week. One would expect earnings for subsequent years, post injury, to be reduced to some extent by the consequences of injury, it is impossible to say to what extent. As the Respondent Worker submits, periods of incapacity would be compensated at the current weekly wage rate (normally the appropriate award rate) for the first twenty-six weeks of incapacity, and then at the statutory rate provided pursuant to section 37 of the 1987 Act. These figures would be likely to be less than the Respondent Worker’s normal earnings, and accordingly earnings depicted in the notices of assessment, for 2001/02 and 2002/03, would probably be somewhat less than the Respondent Worker’s normal earnings if not for injury.

The Respondent Worker submits the Appellant Employer did not tender any material to contradict the Respondent Worker’s wages schedule, notwithstanding it is reasonable to assume “that the Appellant is an employer of a large number of workers and would employ other mechanics doing similar work and receiving similar pay”. It is submitted an inference should be drawn, that such evidence would not have assisted the Appellant Employer’s case, based upon the principle in Jones v Dunkel. It is submitted the Respondent Worker’s wages schedule is based upon an increase of 5% each year, which is a reasonable extrapolation. In fact, the schedule is more conservative than that. If one took the year ended 30 June 2001 as a starting point (it being the last year unaffected by injury), and applied increases of 5% per annum, this would yield figures higher than those in the wages schedule.

The Respondent Worker also refers to the decision of the NSW Court of Appeal in Akawa Australia Pty Ltd v Cassells (1995) 25 NSWCCR 385 (‘Akawa’), where Rolfe A-JA said:

“The Compensation Court is a specialised tribunal the judges of which are well qualified by their experience and knowledge of matters in the labour market and wages paid to make the type of assessment Burke CCJ was called on to make in this case. This has been recognised by appellate courts for many years. In Australian Iron & Steel Pty Limited v Elliott (1966) 67 SR (NSW) 87, Sugerman JA said words, which are equally applicable to this case, at 94:
The parties do not seem to have raised the question of quantum, or to have placed before his Honour any evidence on which he might determine either the amount of the “difference” mentioned in s11(1), or the amount proper to be awarded under the circumstances of the case, being content, apparently, to leave all questions of quantum to his Honour’s decision in reliance on the fund of information as to the conditions of employment and rates of pay which the Commission should be taken to possess…

In J & H Timbers Pty Limited v Nelson (1972) 126 CLR 625, Barwick CJ referred to similar considerations: see at 632 – 633.”

In Goktas v Goodyear Australia Pty Limited [2007] NSWWCCPD 1 (‘Goktas’), Roche DP considered the Commission’s function as a specialist tribunal, specifically in the context of finding probable earnings if not for injury:

“31. It is certainly not appropriate that an Arbitrator guess at probable earnings. However, there was some evidence of both the award under which Mr Goktas was employed and his actual rate of pay as at 1990. It was appropriate for the Arbitrator to use that evidence as a basis for calculating probable earnings from August 2000. Due to the delay in bringing this claim the evidence available was far from satisfactory. However, as Mr Goktas was found to be entitled to lump sum compensation in respect of a 15% permanent impairment of his back and as his level of education was such that he was unlikely to ever be able to earn a living other than through physical exertion, he has a clear entitlement to weekly compensation which is capable of calculation though the means of making that calculation are less than ideal.

32. In these circumstances it was open to the Arbitrator to accept the figure of $594.19 as the appropriate figure for probable earnings. Whether any adjustment should be made to that figure to allow for wage movements since 1990 is open to debate. However, as a specialist tribunal the Commission is entitled to draw on its knowledge of the labour market and wages.”

The notices of assessment represented some evidentiary basis, for the task on which the Arbitrator was obliged to embark, of assessing probable earnings if not for injury. If the weekly figure of $710.65, representing the Respondent Worker’s actual earnings for the most recent financial year unaffected by injury, is simply adjusted to reflect movements in the Australian Consumer Price Index thereafter, this exercise yields figures higher than those in the wages schedule, which were found by the Arbitrator to be appropriate. Thus there was an evidentiary basis for the approach taken by the Arbitrator. I accept the submission of the Respondent Worker that, if the Appellant Employer wished to mount a case to the contrary, it was open to it to put on some evidence. This it failed to do. It would, in my view, be appropriate, as the Respondent Worker submits, to draw an inference based upon the principle in Jones v Dunkel, that evidence from the Appellant Employer of probable earnings would not have assisted the Appellant Employer’s case. The Arbitrator’s findings on probable earnings but for injury were open to him, on the limited material before him on the point.

The Appellant Employer’s challenge, on the basis the Arbitrator erred in determining probable earnings, fails.

The Finding of ‘Ability to Earn’

The sixth (and final) ground of appeal, is that the Arbitrator erred in his assessment of the Respondent Worker’s ability to earn (the lower end of the section 40 equation – section 40(2)(b)), and in failing to give adequate reasons for that finding.

It is submitted the “finding of an ability to earn of only $350.00 per week was, in any event, inadequate having regard to the totality of the evidence and in particular the video evidence.” It is submitted the evidence would have supported a finding the Respondent Worker could work full-time in “a range of employment activities particularly in areas involving sedentary work”, and an appropriate finding would have been of an ability to earn of “between $500.00 and $600.00 per week”. The Appellant Employer does not rely on any authority in support of this ground, or make any more specific attack on how the Arbitrator dealt with this issue.

The Respondent Worker submits the Arbitrator considered the available medical evidence, the video, and the limited work experience of the Respondent Worker. It is submitted the finding was reasonable, and disclosed no appealable error.

The Arbitrator engaged in a review of the medical evidence, at [22] to [29] of his Reasons. He noted the Respondent Worker, after undergoing a two level spinal fusion on 9 August 2005, “considers himself to still be totally incapacitated”, and that this view is supported by the operating surgeon, Professor Ghabriel (at [32]). The Arbitrator then referred to the Appellant Employer’s video evidence.

The challenge of the Appellant Employer to the finding of ability to earn relates to the period from 1 June 2006. There were two periods of observation material relied upon by the Appellant Employer. The earlier of these is from 17 May 2005 to 25 May 2005 a little less than three months before the Respondent Worker underwent his two level fusion. It demonstrates the Respondent Worker driving his children to and from school. He is described as adopting an unusual method of entering his car, placing his buttocks on the seat, and then swinging his legs into the vehicle. The second period of observations was carried out from 14 August 2006 to 16 August 2006. Again it demonstrates the Respondent Worker driving to and from his children’s school, and dropping a small item off at the school. It shows him mowing his front lawn on 14 August 2006. This is done in two stages, the first at about 9.30am, and the second at a little before 2pm. Neither instance was lengthy. The mowing was finished by another man who came to the property, and the Respondent Worker’s wife operated a whipper snipper.

The Arbitrator described the video material at [33] of his Reasons, he watched it and clearly took it into account. He stated at [34] that the video was one of the factors which led him to the conclusion the Respondent Worker “would be capable of performing some form of work of a light nature”.

He had previously analysed the medical evidence with some care, including noting various of the opinions going to the Respondent Worker’s ability to work. These ranged from Professor Ghabriel (who thought the Respondent Worker unfit for work) to Dr Edwards who thought he could carry out work of a light nature, and Dr A Smith, who thought him fit for full-time sedentary or office work at a job where he could sit or stand if desired and did not have to do any heavy or repetitive bending and lifting activities.

The Arbitrator referred to the fact that, since leaving school, the Respondent Worker’s employment history had been that of a motor mechanic. This was clearly a relevant matter, and one the Arbitrator was required to consider, pursuant to sections 40(3)(b) and 43A of the 1987 Act. The Arbitrator’s finding on ‘ability to earn’ is at [36] of his Reasons, where he stated “doing the best that I can I consider that he was capable of earning in some suitable employment the sum of $350.00 per week”.

The finding of the Arbitrator on the point was clearly one open to him. The most pessimistic view of the Respondent Worker’s ability to earn was that of Professor Ghabriel, who thought him unfit. The Appellant Employer’s medical case, for example Dr A Smith, thought him fit for full-time sedentary work, with restrictions on lifting and bending. Whilst the video of the Respondent Worker mowing his lawn demonstrated some capacity for moderate physical activity, it was for fairly short periods, with a break of some hours between the two episodes of mowing. The mowing was finished by someone else, and the Respondent Worker’s wife did the whipper snipping. The balance of the observation material did not, in my view, much assist the Appellant Employer’s case.

The passages from Akawa Australia and Goktas referred to above, are relevant to the Arbitrator’s determination of the Respondent Worker’s capacity to earn. In Cowra Shire Council v Quinn (1996) 13 NSWCCR 175 (‘Cowra Shire Council’) Handley JA at 179D said:

The case, in my judgment, falls within a well-established principle applied by this Court in Australian Iron & Steel v Elliott (1966) 67 SR (NSW) 87 at 94 and recognised by the High Court in J & H Timbers Pty Limited v Nelson (1972) 126 CLR 625 at 633 where Barwick CJ said “the value of described work in the labour market is a matter well within the knowledge and experience of the Commission”, which was the predecessor of the Compensation Court.”

The Arbitrator clearly considered the evidence, medical and lay, in considering whether the Respondent Worker had an ability to earn, and if so, what. He clearly was entitled, as a specialist tribunal, to use his knowledge and experience in attaching a monetary value to that ability to earn, in “some form of work of a light nature”. However the actual basis on which he fixed on the figure of $350.00 per week is not spelled out. The figure is such as to be inconsistent with the Respondent Worker being able to carry out full-time work, even of a light nature, on a permanent basis. It must be explained on some other basis, for example that the Respondent Worker is fit for part-time work only, or will have his earnings reduced by intermittency of employment.

Mitchell v Central West Health Service (1997) 14 NSWCCR 526 involved an appeal by a worker against a finding of a trial judge that he had an ability to earn of $700.00 per week. The finding, like that in the current matter, was challenged, inter alia, on the basis of inadequate reasons and the finding not being adequately supported by evidence. In a joint judgment the Court of Appeal said:

“Giving due acknowledgement to the statements concerning the capacity of judges of the Court to have regard to general knowledge and experience, the fact remains that the Compensation Court is a court which is bound by the rules of evidence, subject to the limited power in section 24 of the Compensation Court Act 1984 to dispense with the rules of evidence for proving matters not bona fide in dispute and such rules of evidence as might cause expense and delay arising from any commission to take evidence or arising otherwise. We do not overlook the power of the Court to proceed on less than formal evidence if it is clear that the parties understand that this is happening. However the capacity to proceed informally as regards proof of evidence does not relieve the Court of the duty to disclose its essential reasoning process. Indeed that duty may be heightened where the Court dips into its general store of knowledge rather than proceeds on the basis of the evidence tendered before it.
The reader of the critical passage in the judgment is left with no basis for determining how or from what source the judge arrived at the figure of $700 per week.” (at 533D to G)

In Jennifer Tyack formerly t/as Country Kidz v Cain [2007] NSWWCCPD 119 Byron DP referred to the duty of an arbitrator in the Commission to give reasons in the following fashion:
“102. The Arbitrator must not only note the relevant evidence and give reasons for findings made, but where the evidence is disputed, he must give a clear explanation of the reasons why some evidence is preferred over other evidence (Mayne Group Limited v Mikhail [2006] NSWWCCPD 249 at [41]. See also, Mifsud v Campbell (1991) 21 NSWLR 725 at 728; Bright v Joodie Holdings No 2 Pty Ltd [2005] NSWCA 134, and Hume v Walton [2005] NSWCA 148). The Arbitrator did not achieve that in his Statement of Reasons for Decision, as outlined above.
103. In the High Court in Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Palme [2003] HCA 56 at [64], Kirby J said:
“The more significant the decision the clearer the duty may be, the clearer the reasons should be and the clearer the consequences will be for the breach. Some decisions cry out for a clear explanation ... Especially is this so where the legislature has recognized the need and imposed a duty to give reasons and where the decision is very important for the person affected and for others close to that person.”
104. The duty to give reasons in the Commission is prescribed by statute at section 294(2) of the 1998 Act and at Rule 15.6 of the 2006 Rules.”
Whilst the adequacy of reasons can be a question of degree, in my view sufficient exposure of the Arbitrator’s reasoning process, in determining the lower end of the section 40 equation, required more than a simple finding of a figure. The attack on this particular aspect of the decision, on the basis of the adequacy of the reasons, is made out.

Given the history of the matter, it is desirable that I re-determine the issue, rather than return it to another arbitrator for re-hearing: see generally Chubb Security Australia Pty Limited v Trevarrow [2004] NSWCA 344. The issue requiring re-determination is the Respondent Worker’s ability to earn subsequent to 1 June 2006. The finding the Respondent Worker was totally unfit for work prior to that date has not been challenged in this appeal.

The Respondent Worker is now thirty-six years of age. His employment history is exclusively in his trade as a motor mechanic (see statement 17 March 2004 at [2]). The occupational physician Dr Hollo took a history of the Respondent Worker’s duties with the Appellant Employer. He recorded “his specific job was to repair vehicles and plant. Quite often he would need to work on-site and this meant that he did not have access to the mechanical lifting devices that might be present in the workshop…I gained the impression that much of his work involves heavy manual handling and access to mechanical lifting devices is minimal. He has to climb into awkward positions above, through and underneath various pieces of equipment.” (at page 2.5).

The Respondent Worker’s condition, subsequent to his two-level spinal fusion, is described in his statement of 15 September 2006. He said he remained in a great deal of pain, requiring Panadol on a daily basis, “with hardly any relief” [6]. His parents assisted him with domestic matters, including looking after his children. He recorded being “in a lot of pain”, and “still unable to attend to the domestic duties such as mowing my lawns, looking after the yard, cleaning and maintaining the swimming pool, household maintenance, house cleaning, cleaning my car and the like” [9]. He said he was “unfit for any type of work since having the operation in August 2005”, and “unable to attempt any type of employment with lifting, bending, twisting and sitting or standing for lengthy periods”. ([13])

Clearly this must be viewed in light of the observation material of 14 August 2006, in which the Respondent Worker operated a lawn mower. The Appellant Employer addressed on the observation material, on the basis it went to both the level of the Respondent Worker’s incapacity, and to credit (T22.20). In my view it would be unsafe to make a credit finding adverse to the Respondent Worker on the basis of this material, in the absence of any application by the Appellant Employer to cross-examine on it. Indeed the Respondent Worker sought to give evidence, and this application was successfully opposed by the Appellant Employer. There may or may not have been some explanation for the apparent discrepancy between the statement and the observation material. Be that as it may, the observation material clearly demonstrated some capacity for moderate physical activity, although it did not involve heavy lifting or sustained activity.

On 31 May 2006 Professor Ghabriel described the Respondent Worker’s capacity for work:

“I believe that Mr Hancock is totally incapacitated regarding any type of employment since I saw him first on 7 April 2004 to the present.
Mr Hancock is not fit for any type of employment regarding lifting, bending, twisting and sitting or standing for lengthy periods.”

Dr Taylor, urologist examined the Respondent Worker at the request of his own solicitors on 15 June 2006. He confined his opinion to the urological aspects of the case (page 2.6), and specifically refrained from offering an opinion on fitness for work (page 7.3), as bladder dysfunction and loss of use of the sexual organs did not bear upon capacity for work. He did comment, apparently as a matter of history:

“Mr Hancock has not been able to work since the above described accident. He realises that he will have to get a job with minimum physical activity and his present plans are to attend a Technical College Course in Electronics and hopefully eventually get a job as a teacher of Electronics.” (page 5.4)

Dr ALG Smith examined the Respondent Worker at the request of the Appellant Employer on 12 September 2006. His report of that date describes his view on working capacity:

“Since he has had a successful fusion based on the very recent x-ray and his examination today I would have thought he would be fit to work on a full-time basis but he probably couldn’t work as a motor mechanic. He would need sedentary work or office work, a job where he could sit or stand as desired and he didn’t have to do any heavy repetitive bending and lifting activities.” (page 5.2)

It is relevant, in considering Dr ALG Smith’s views on capacity, to note the history he recorded regarding fluctuating symptoms:

“It is 12 months since his operation now; he describes some improvement in his back pain. He doesn’t require Oxycontin anymore and he thinks overall he might be 50% better although on some occasions the back pain is as bad as ever and then he feels he is only 5% better.” (page 2.6)

Dr RD Smith examined the Respondent Worker at the Appellant Employer’s request on 13 September 2006, and reported on the same date. His views on working capacity were as follows:

“In summary we can be quite sure that the Applicant’s employment on January 3, 2002 could not have been a substantial contributing factor to any alleged injury. Judging by the state of his hands as discussed above I consider the Applicant is fit for employment in general according to his skills and including his previous employment as a mechanic.”

The Appellant Employer also had the Respondent Worker examined by Dr PM Katelaris, urological surgeon on 14 September 2006. His reports of that date restrict themselves to matters relating to the Respondent Worker’s sexual and urological functioning, and are not relevant to the issue of work capacity subsequent to 1 June 2006.

Like the Arbitrator, I find the views of Dr RD Smith of no assistance. Dr RD Smith’s history of the incident is not set out in full, he describes being given a six page document setting out the history (page 2.5). This may well have been the statement of 17 March 2004; that is unclear. Whatever the doctor’s understanding of what occurred, he clearly was told it was associated with the onset of sharp pain across the lower back and down the left leg (page 2.6). At page 4.4 of his report he said “The diagnosis so far is somewhat uncertain.” His conclusion “we can be quite sure that the Applicant’s employment on January 3 2002 could not have been a substantial contributing factor to any alleged injury” (emphasis added) is at odds with the other medical evidence (of which there is a considerable body). It is also difficult to see how Dr RD Smith arrives at this view, when he regards the diagnosis as uncertain. There is not, as the Arbitrator observed, any explanation by Dr Smith of this view, where the mechanics of injury appear to constitute a relatively uncomplicated lifting injury, associated with the onset of low back and leg pain. Furthermore, in assessing a man who has undergone disc excision and fusion from L4 to S1, Dr RD Smith was able to say “As today’s examination was really so satisfactory there is no objective evidence that he is suffering from any genuine whole person impairment in relation to his lumbar spine and thoracic spine.” (page 11.8, the emphasis is Dr RD Smith’s). Given the lack of any credible explanation for his views, which are well outside the spectrum of other medical evidence, his views do not assist.

Like the Arbitrator, I have formed the view the Respondent Worker does have a capacity for some light work, based upon both the medical evidence which post-dated the surgery, and the observation material. I accept the views of Dr ALG Smith as to the type of duties which may be suitable. It would need to be work without heavy, repetitive bending and lifting, where the Respondent Worker could sit or stand at will, of a sedentary or office nature. The complaints, according to Dr ALG Smith’s history, are variable. There are occasions where the Respondent Worker feels he is little better than before his surgery, other times where he feels fifty per cent improved. On those occasions when the pain was more severe, the Respondent Worker would have great difficulty undertaking even light work. He would require a sympathetic employer to accommodate his significant physical restrictions, and likely requirement for time off when the symptoms were at their most severe.

It is necessary that I consider the matters set out in section 43A of the 1987 Act. Relevantly the Respondent Worker’s only qualifications and work experience are as a motor mechanic, an occupation for which he is now unfit, on any of the credible medical evidence. His only clerical experience has been on the rehabilitation program supplied by the Appellant Employer in 2002, before the Respondent Worker’s symptoms forced him to cease in November 2002. He may well be fit for some form of light work such as process work, shop work, console operator or car park attendant, it would need to exclude heavy, repetitive bending and lifting, and he would need to stand or sit as required. He would be likely to require time off from time to time, when his symptoms were more severe.

In Cowra Shire Council Handley JA, at 179E, adopted the following passage from the judgment of Burke J in Mangion v Visy Board Pty Ltd (1992) 8 NSWCCR 175 at 180:

“When assessing a capacity to earn under section 40(2), it is not sufficient to merely identify a particular potential avenue of employment and attribute the income from such a job as a man’s capacity to earn. Allowance must be made for the availability of work – availability, not so much in the sense of a presently depressed labour market but in the sense of the general availability in any labour market. A rarely available niche in the labour market which carries, perhaps, substantial remuneration, does not serve as a sole criterion of capacity to earn. A good proportion of the workforce are engaged in clerical or sales type occupations. They are avenues of employment with higher than average availability as far as the less physical types of work are concerned. To someone in Brewarrina or Mungindi there is little point in considering jobs such as console operator in a self-service garage or a lift-driver in a department store. Whether the man has the capacity to do such a job or not, it doesn’t constitute any real part of his accessible labour market. One always seeks to assess the capacity to earn of this particular worker in his particular circumstances.”

The Appellant Employer submitted, on the arbitration hearing, that the Respondent Worker was fit for work such as process work, car park attendant or console operator (T22.35). In the concluding paragraph of its submissions on this appeal, the Appellant Employer submits sedentary work on a full-time basis would be suitable, resulting in an ability to earn of “between $500 and $600 per week”.

There may well be some positions as a process worker, car park attendant or console operator that would be suitable. However there would be very many that would not. For example, positions such as console operator frequently involve carrying heavy stock, bending, stacking shelves and the like. Many process work positions involve elements of heavy manual handling, lifting and bending. A car park attendant may be required to sit or stand for long periods, or walk lengthy distances.

The evidence does not address the availability, in the Newcastle area, of suitable light work, such as sales work, console operator, or process work, for a person with the qualifications, work history, and physical restrictions affecting the Respondent Worker. Having regard to the medical evidence overall, the fluctuating nature of the Respondent Worker’s symptoms, and the unlikelihood of him regularly having available an employer sufficiently sympathetic to accommodate his various restrictions, my view is that although he may be fit for light sales, car park attendant or process work, it is unlikely such suitable employment would be available on a regular basis. He is likely to experience difficulty both in obtaining, and retaining, such employment. His earnings in any of these occupations are likely to be affected by intermittency of employment. The Respondent Worker has looked for no such work since his surgery, his view being that he is totally unfit for work. In Summerson v Alcan Australia Ltd (1994) 10 NSWCCR 571 Neilson J, assessing the ability to earn of a worker who was fit for work as a telephonist, but subject to restrictions which would have precluded many such positions, said:

“Therefore, the number of jobs which she could hold down has been reduced. That reduction means that if the applicant finds herself unemployed, it is harder and would take longer to obtain suitable employment – that is, employment suitable to a lady with her disability in her dominant left arm.”

If one takes a weekly figure of $550.00 (the mid-point in the range suggested by the Appellant Employer) as representing the earnings applicable to the occupations suggested by it as suitable, if carried out on a full-time basis, a figure of $350.00 per week represents a little less than two-thirds of that sum. It is consistent with the Respondent Worker being able to find suitable employment, in one of the suggested occupations, but in the reduced labour market accessible to him in such occupations, for a little less than two-thirds of the time. Such a finding in my view is appropriate, and I find this figure of $350 per week represents the lower end of the section 40 equation (section 40(2)(b)). It is, of course, the same figure found by the Arbitrator.

It may well be the Respondent Worker would also have difficulty in carrying out such occupations on a full-time basis, even when they were available to him. However this aspect is not explored in such of the medical evidence as post-dates the Respondent Worker’s surgery, and on the evidence it would not, in my view, be appropriate to further reduce the ‘ability to earn’ figure which I have found, on this account.

The Appellant Employer has not raised any ‘discretionary factors’ as potentially reducing the sum to which the Respondent Worker would otherwise be entitled pursuant to section 40, by way of weekly compensation. For the sake of completeness, I find there are no such factors in the circumstances of this case.

Thus, although I have found error in the Arbitrator’s decision, in that reasons for the finding on ‘ability to earn’ were inadequate ([93] above), it is not an error “such that, but for it, a different decision should have been made.” (see the passage quoted at [38] above).

DECISION

The decision of the Arbitrator dated 10 April 2007 is confirmed.

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

Michael Snell
Acting Deputy President
6 September 2007

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

ASSOCIATE