Galea v Galaxy Rooflite Pty Ltd
[2009] NSWWCCPD 1
•7 January 2009
| WORKERS COMPENSATION COMMISSION | |||||
| DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR | |||||
| CITATION: | Galea v Galaxy Rooflite Pty Ltd [2009] NSWWCCPD 1 | ||||
| APPELLANT: | John Galea | ||||
| RESPONDENT: | Galaxy Rooflite Pty Ltd | ||||
| INSURER: | GIO Workers Compensation (NSW) Limited | ||||
| FILE NUMBER: | WCC3921-08 | ||||
| DATE OF ARBITRATOR’S DECISION: | 26 August 2008 | ||||
| DATE OF APPEAL DECISION: | 7 January 2009 | ||||
| SUBJECT MATTER OF DECISION: | Partial incapacity; section 40 Workers Compensation Act 1987 | ||||
| PRESIDENTIAL MEMBER: | Acting President Bill Roche | ||||
| HEARING: | On the papers | ||||
| REPRESENTATION: | Appellant: | Eugene Lepore & Associates | |||
| Respondent: | Sparke Helmore | ||||
| ORDERS MADE ON APPEAL: | Paragraphs one and three of the Arbitrator’s determination of 26 August 2008 are revoked and the follow orders made: “1. Award for the applicant worker under section 40 of the Workers Compensation Act 1987 (‘the 1987 Act’) in the following amounts: (a) $25.00 per week from 9 September 2004 to 30 June 2005; (b) $45.00 per week from 1 July 2005 to 30 June 2006; (c) $65.00 per week from 1 July 2006 to 30 June 2007, and (d)$85.00 per week from 1 July 2007 to date and continuing. 3. The respondent employer is to pay the applicant worker’s costs of the arbitration, as assessed or agreed. 4. Award for the applicant worker in the sum of $6,250 in respect of a 5% whole person impairment as a result of injury to his thoracic spine on 1 May 2003. 5. Award for the respondent employer in respect of the claim for compensation under section 67 of the 1987 Act.” Paragraph two of the Arbitrator’s determination of 26 August 2008 is confirmed. | ||||
| The respondent employer is to pay the appellant worker’s costs of the appeal. | |||||
BACKGROUND
The appellant, Mr Galea, alleges that he injured his thoracic spine and right upper extremity at work for the respondent, Galaxy Rooflite Pty Ltd (‘Galaxy’), on or about 1 May 2003, while lifting and carrying six to 10 sheets of polycarbonate with a co-worker. After a few days off, he returned to work performing suitable duties on reduced hours. He gradually returned to full-time hours, but continued to have restrictions on his ability to lift and carry.
Mr Galea remained on suitable duties until the insurer denied liability by letter dated 5 July 2004 on the basis of evidence from Dr Carr, rheumatologist, that his problem and pain was substantially due to his pre-existing Scheuermann’s disease. By letter dated 16 August 2004, Galaxy invited Mr Galea to provide evidence of his fitness for work. Mr Galea provided certificates that he was unfit for any work from 24 July 2004 until 11 September 2004. In the absence of any evidence of Mr Galea’s fitness for work, Galaxy terminated his employment on or about 9 September 2004.
By a document headed “Notice of Claim” dated 23 August 2007, Mr Galea claimed weekly compensation in the sum of $570.00 per week from 9 September 2004 to date and continuing, lump sum compensation in respect of 14% whole person impairment, $30,000 in respect of pain and suffering under section 67 of the Workers Compensation Act 1987 (‘the 1987 Act’), and hospital and medical expenses under section 60 of that Act.
The insurer denied the claim by a section 74 notice dated 12 May 2008. It asserted, relying on a report from Dr Bodel, orthopaedic surgeon, dated 18 December 2007, that it had no liability in respect of the claim because Mr Galea:
(a)had “non-specific mechanical backache” and there was “no clinical evidence of any firm pathological diagnosis”;
(b)was fit for his pre-injury duties and had no incapacity for work and no whole person impairment, and
(c)was fit to work as a gardener, truck driver, forklift driver or equipment assistant, and, as a result, he had an earning capacity in excess of his pre-injury earnings of $478.04 per week.
By an Application to Resolve a Dispute (‘the Application’) registered in the Commission on 26 May 2008, Mr Galea claimed weekly compensation in the sum of $478.00 per week from 9 September 2004 to date and continuing together with lump sum compensation and medical expenses, as a result of an injury to his thoracic spine and right upper extremity received while lifting roofing material at work on 1 May 2003.
Galaxy filed a Reply on 13 June 2008, in which it relied on the issues identified in its section 74 notice of 12 May 2008.
An Approved Medical Specialist (‘AMS’), Dr Pillemer, issued a Medical Assessment Certificate (‘MAC’) on 30 July 2008, in which he assessed Mr Galea to have a 5% whole person impairment as a result of his thoracic spine injury and a 0% impairment as a result of his right upper extremity injury. Neither party has appealed Dr Pillemer’s assessment, but the Arbitrator made no award in respect of it or in respect of the claim for compensation under section 67.
The Commission listed the matter for conciliation and arbitration on 4 August 2008. In a reserved decision delivered on 26 August 2008, the Arbitrator found in favour of Galaxy in respect of the claim for weekly compensation on the grounds that Mr Galea’s earning capacity exceeds his probable earnings but for injury. The Certificate of Determination issued by the Commission on 26 August 2008, recorded the Arbitrator’s formal orders as follows:
“1.Award for the Respondent with respect to the Applicant’s claim for weekly benefits compensation.
2.That the Respondent pay the Applicant’s reasonably necessary expenses incurred under s60 upon production or accounts or receipts.
3.No order as to costs.”
The Arbitrator made no orders in respect of the claim for lump sum compensation.
By an appeal filed on 22 September 2008, Mr Galea 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 Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’).
The quantum in issue on the appeal is in excess of $5,000.00 and therefore the threshold in section 352(2)(a) of the 1998 Act is satisfied. No award of compensation has been made in this case but the Arbitrator’s finding, if it stands, will result in the appellant worker receiving no weekly compensation and therefore the second limb of section 352(2) does not apply (see Mawson v Fletchers International Exports Pty Ltd [2002] NSWWCCPD 5).
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.”
Having regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submission by the parties 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.
ADDITIONAL EVIDENCE
A surveillance report from Verifact dated 11 March 2008 was in evidence before the Arbitrator. It referred to 88 minutes of film taken on 10 March 2008 that allegedly showed Mr Galea moving without restriction while mowing a lawn and using a lawn trimmer or ‘whipper snipper’. In the course of the arbitration, an issue arose as to whether the film had been filed. The Arbitrator did not resolve this question, but said he would make enquires with the Registry and if the video had been filed he would watch it, but if not he wouldn’t.
In addition, the papers in the Commission’s administration file include an Application to Admit Late Documents filed on 4 July 2008. Attached to that application is a further statement from Mr Galea dated 30 June 2008, which was not before the Arbitrator.
Both the film and Mr Galea’s further statement are material and relevant to the issues in dispute. In light of the omission of this material and the Commission’s statutory obligation to act “according to equity, good conscience and the substantial merits of the case” (section 354(3) of the 1998 Act), I held a teleconference on 12 December 2008 when Mr Lepore, solicitor, represented Mr Galea, and Mr Grimes, solicitor, represented Galaxy.
I informed the parties that neither the film nor Mr Galea’s further statement were in evidence. Both parties agreed that the material was relevant and should have been tendered. They consented to the film and the statement being admitted as additional evidence on appeal. I therefore granted leave for that material to be admitted as additional evidence on appeal under section 354(6) of the 1998 Act.
Parties should understand that all relevant evidence should be tendered at the arbitration and the admission of additional evidence on appeal is only permitted in exceptional circumstances. Arbitrations should not be treated as a ‘trial run’. In the present matter, however, given the relevance of the material and the fact that both parties consent, it is in the interests of justice that the additional material be admitted so that the case can be determined on its substantial merits.
THE EVIDENCE
In his statement of 12 September 2007, Mr Galea gave the following evidence. He was born in 1974 and completed his schooling to year 10. He completed one year of a TAFE course in automotive engineering and then worked in various positions as either a factory labourer or carpet cleaner until he started with Galaxy in about 1996 as a sheet metal worker/machine operator and labourer. His pre-injury duties required him to operate a fibreglass-making machine and to load fibreglass sheets.
After his injury, he continued at work full-time performing suitable duties until those duties were withdrawn in mid 2004 after the insurer denied liability on the basis of Dr Carr’s report. Since September 2004, Mr Galea has completed a six-month hospitality course. He attends Mission Australia at least once per week to receive assistance in job seeking. His girlfriend does garden maintenance part time and he has tried to do that work on two occasions, but after a few hours he was “totally exhausted”. He also did a two-day job in the city as a cleaner in a hotel.
He has tried household maintenance including grass cutting and has found he is able to do some of those duties. He normally does “one lawn per week on average at a cost of $35.00 per job”. He claims that “on average” he earns about $35 to $50 (presumably per week, but his statement is silent on this) and then has to pay his expenses. He is trying to increase his hours of work and hopes to shortly increase to 20 hours per week “in accordance with” his doctor’s certificate. He claims that in about March 2007 he was offered “the same job” for $720.00 per week. Though it is unclear, this seems to have been an offer to perform his pre-injury duties with Galaxy.
In his statement of 30 June 2008, Mr Galea added:
(a)he relies on his previous statement dated 12 September 2007. He has been on Centrelink benefits since September 2004 and continues to look for suitable work. Since “that time” he has probably worked a maximum of 25 to 40 days of five to six hours per day;
(b)over a period of about 18 months, starting in about 2005, he helped a neighbour with his tree lopping business by doing “light work” with the neighbour on 10-12 days;
(c)at the end of 2007 or beginning of 2008, he attempted to work as a pest controller for four or five days but “could not cope” and went back to Centrelink benefits;
(d)as he was having trouble finding work, he registered a business called JG Mowing & Maintenance and started mowing lawns for friends and relatives, some of whom paid him but some did not;
(e)he disclosed to Centrelink all of his earnings from his mowing business and he estimates that “at best” he averaged $30.00 - $40.00 per week. The running costs of the business took most of the earnings, if not more. He did not keep any official receipts or Business Activity Statements (‘BASs’);
(f)since the business was registered he estimated that he had worked no more than 10-15 days where he worked three hours in the morning, with breaks, and one or two hours in the afternoon, with breaks;
(g)he asked Centrelink to help him find work and requested that they upgrade him from 15 to 20 hours. He believes he can work 15 to 20 hours per week provided the work is not too heavy and he can have breaks;
(h)he has registered with Wesley Uniting Employment seeking their help in finding suitable work. They have offered one day per week working for the dole, which he does at the Buddhist temple at Canley Vale cleaning vegetables, and
(i)in the last two weeks he probably did two mowing jobs, one of which was for his elderly neighbour.
His medical investigations include the following: an x-ray and ultra sound of his right shoulder on 5 July 2003, which was normal; an x-ray of his thoracolumabar spine on 22 September 2003, which revealed no significant wedging of the vertebral bodies and no significant disc space narrowing; a bone scan on 26 September 2003, which revealed no significant increased abnormality in the mid-thoracic or thoracolumbar region; and an MRI scan of the thoracic spine on 19 March 2004, which revealed evidence of old Scheuermann’s changes but no disc protrusion.
Mr Galea’s medical case consists of several medical certificates from his general practitioner, Dr Ferraro, and a report for Dr Howard Rivett, Consultant Physician in Musculoskeletal and Psychological Rehabilitation, dated 8 May 2007. The most recent medical certificate, dated 20 July 2004, declared Mr Galea fit for suitable duties lifting up to 7.5 kilograms for eight hours per day five days per week from 20 July 2005 until 30 August 2005. Either the period is incorrect or the certificate should have been dated 20 July 2005. As the certificate is now several years out of date, nothing turns on this inconsistency.
Dr Rivett recorded that Mr Galea was put off work in September 2004 and has not worked since. Mr Galea complained that he was upset he was unable to start his own “garden maintenance work”. He experienced constant thoracic pain with referral to the anterior chest with a general upper torso discomfort and, occasionally, an acute locking sensation in the upper chest and shoulder region. His right arm was occasionally weak with heavy work. He was unable to perform heavy work due to his right arm weakness. His gardening capacity was “limited due to his symptoms”. He had “some neck pain and headache” and he had limited use of his right arm.
On examination, Dr Rivett noted some tenderness over the T5 spinous process and adjacent paraspinal muscles on the right side, but there was no wasting of the shoulder girdle or upper back. Reflexes of the upper limbs were intact and grip strength was 55 kilograms in each hand. Muscle mass was equal in the upper arms with no evidence of atrophy. Shoulder movements were full. Dr Rivett thought Mr Galea had sprained the costovertebral joints at the T5 level “which has been attended to by the Chiropractor and time”. He felt that the prognosis was fair to good for eventual recovery from an acute sprain. In his opinion, Mr Galea was unfit for his pre-injury work as it involved heavy lifting above his head and twisting the back. He was also unfit for lifting or holding weights above 10 kilograms, lifting weights in excess of five kilograms above head height and should avoid twisting his spine and overusing the right shoulder for pulling, pushing and/or lifting above 10 kilograms.
The employer’s medical case consists of reports from Dr Smith, Fellow of the Royal College of Surgeons, who assessed Mr Galea to be fit for normal duties in July 2003, Dr Herlihy, WorkCover Injury Management Consultant, in March 2004, and Dr Carr, rheumatologist, who initially thought that Mr Galea’s injury was consistent with a focal disc injury at the level of the thoracic spine affected by Scheuermann’s disease. When Dr Carr examined Mr Galea in March 2004 (report 12 March 2004), he was still getting pain, but the doctor was not sure that the pain related to the original injury.
Dr Carr therefore arranged for an MRI scan, which confirmed the presence of Scheuermann’s disease, but found no evidence of a disc protrusion. In his report of 23 March 2004, Dr Carr concluded that Mr Galea’s Scheuermann’s disease would account for his ongoing pain, and, as a result, his ability to “load up his spine is impaired”. The doctor thought it was still conceivable that Mr Galea may have had a small internal tear in one of his mid thoracic discs at the level of the Scheuermann’s disease and that that continues to worry him, causing pain and a “click” on movement. He thought that Mr Galea was going to have difficulty lifting weights in front of his body and above shoulder height and he would have to be “repositioned” in the workforce. He doubted that Mr Galea was feigning his symptoms and he suggested a lifting limit of 10 kilograms. He added in his report of 10 June 2004, that Mr Galea’s spinal problems and pain were “substantially due to his pre-existing condition of Scheuermann’s disease rather than his work”.
Dr Herlihy examined Mr Galea on 1 March 2004. Mr Galea complained of clicking in his lower thoracic spine and of pain around the right side of the thorax to the lower sternum. His right shoulder felt much better, but he got pain there if he did overhead lifting. Dr Herlihy felt that Mr Galea’s presentation was “rather unconvincing of any significant injury”. Though Mr Galea may have suffered soft tissue strains to his upper back and right shoulder, such an injury should have resolved in weeks. The doctor found no objective evidence of any injury.
The employer also relies on a report of Dr Bodel, dated 18 December 2007. Mr Galea complained of pain in the interscapular region of his thoracic spine, which was aggravated by all activities, particularly bending, twisting and lifting. The only abnormality Dr Bodel found on examination was “a slight restriction of lateral bending and rotation of the thoracic spine”. He concluded that Mr Galea sustained a musculo-ligamentous strain to the interscapular region of the thoracic spine on 1 May 2003, but there was no “absolute clinical evidence of any firm pathological diagnosis”. Based on Mr Galea’s clinical presentation, Dr Bodel felt he should be fit for his pre-injury employment, but noted that he should be redeployed into something lighter because of his body build.
Ms Rhean Suggett, Rehabilitation Case Manger with Rehabilitation Injury Management (Aust) Pty Ltd (‘RIM’), assessed Mr Galea on 28 February 2008 and provided a Vocational Initial Assessment report on 25 March 2008. Ms Suggett noted that Mr Galea reported restrictions, namely, that he could only lift up to 10 kilograms, maintaining a straight posture, he could push and pull while bracing his ribs and maintaining a straight posture, he had no difficulty reaching up to shoulder height, but had difficulty reaching and lifting above shoulder height, he could grasp with his right hand but had a loss of strength and confidence with the right hand and arm. She also noted Dr Bodel’s conclusion that there was no clinical evidence of any firm pathological diagnosis.
At the time of the Vocational Assessment, Mr Galea described himself as self-employed on a part time basis (up to 20 hours per week) mowing lawns and doing general handyman work around domestic residences under the business name JG Mowing and Maintenance, an activity he had undertaken since 2005. He also undertook volunteer work, which included gardening and assisting with furniture removal. He had poor computing and word processing skills. He advised that he had a birth defect in his spine that resulted in a weak lower back.
In his pre-injury employment with Galaxy, Mr Galea operated machinery, loaded fibreglass sheets, drove a forklift, a delivery truck and used an overhead crane. Ms Suggett identified four “vocational goals” for Mr Galea: mowing/maintenance, forklift driving, truck driving and equipment hire. She described his “earning potential” in these jobs as $724.00 per week in lawn mowing, $973.00 per week in truck driving, $759.00 per week as a forklift driver and $844.00 per week working in equipment hire.
The AMS, Dr Pillemer, assessed Mr Galea to have a whole person impairment of 5% as a result of his injury. Dr Pillemer recorded that Mr Galea has had ongoing problems with his back ever since his injury in 2003 and that he experienced acute attacks of pain that were sometimes so bad that he had difficulty even moving. Mr Galea was sometimes able to “click his back” to relieve the pain. During these attacks he had difficulty controlling his right arm and difficulty with his breathing. The frequency of these attacks was diminishing over time because his was aware of his limitations and he tended to work with his arms close to his body. He avoided leaning out and stretching for things.
Dr Pillemer concluded that Mr Galea’s history was suggestive of a mechanical thoracic problem of either the costo-transverse or costo-vertebral joint, and it sounded like he had “intermittent subluxation of the joint which he was often able to reduce himself but occasionally he got a chiropractor to reduce” (MAC, page four). He also had symptoms of intermittent non-verifiable radicular complaints with pain radiating around his chest wall in approximately the T8 distribution.
Dr Pillemer found Mr Galea to be entirely straightforward and open with a consistent presentation.
In addition to the medical evidence summarised above, the employer relies on a surveillance report from Verifact dated 11 March 2008 and the film taken by the investigator on 10 March 2008. An investigator followed Mr Galea on 28 and 29 February 2008 and on 3, 4, 8 and 10 March 2008. On 28 February and for four and a quarter hours on 29 February 2008, the investigator conducted surveillance at the wrong address. He observed no relevant activities over several hours of surveillance on 3, 4 or 8 March 2008.
On Monday, 10 March 2008, the investigator recorded about 88 minutes of film, which I have viewed. The film demonstrates Mr Galea performing the following activities:
(a)using a whipper snipper with his right arm and hand to trim edges and lawn for 51 minutes;
(b)moving several large pot plants with his right hand as he dragged them about one to one and a half metres across the lawn;
(c)removing a lawn mower from the back of his station wagon by first lowering the rear of the mower to the ground while the front was still supported by the car, and then lowering the front of the mower. He then bent from the waist to unfold and secure the mower’s handle bars;
(d)using his right arm to start the lawn mower;
(e)cutting the lawn with the mower;
(f)bending freely from the waist on several occasions to remove and empty the catcher once it had filled with grass, and
(g)returning the mower to his car by bending from the waist to fold the mower’s handle bars and then lifting the front wheels onto the lip of the car’s loading bay and then lifting the rear of the mower into the car.
THE ARBITRATOR’ S REASONS
The matter proceeded as a “section 40 case” (T2.9) with the issue being whether Mr Galea has any incapacity and, if so, whether that incapacity entitles him to an award of weekly compensation. After reviewing the medical evidence, the Arbitrator noted and found in his Statement of Reasons for Decision (‘Reasons’):
(a)Mr Galea has a partial incapacity for employment as he is restricted in the type of work he can do (Reasons, paragraph 17);
(b)it was agreed that probable earnings but for the injury (section 40(2)(a) of the 1987 Act) were $500.00 per week for the period July 2004 to July 2005, $520.00 per week from July 2005 to July 2006, $540.00 per week from July 2006 to July 2007, and $560 per week from July 2007 to date and continuing (Reasons, paragraph 19);
(c)there was no medical evidence that Mr Galea could not perform the activities shown in the Verifact surveillance report. Mr Galea had been in the mowing business since 2005 and the Arbitrator did not accept the submission from his counsel that he was unable to mow lawns full-time (Reasons, paragraph 26);
(d)it was inconceivable that Mr Galea would have an ABN and incur the cost and time of completing GST returns for incidental work earning only $35.00 to $50.00 per week, as he claimed (Reasons, paragraph 27);
(e)the RIM report assessed Mr Galea’s earning potential to be between $724.00 per week for mowing work full-time to $973.00 per week as a truck driver (Reasons, paragraph 28);
(f)Dr Bodel saw no impediment to Mr Galea working full-time and Dr Rivett placed no restriction on the hours Mr Galea could work, but restricted him to weights above 10 kilograms (Reasons, paragraph 29);
(g)Mr Galea was capable of working full-time and of undertaking lawn mowing and garden maintenance activities. He did not comply with a Direction to Produce his tax returns or other financial statements relating to his earnings in his lawn mowing business (Reasons, paragraph 32);
(h)Mr Galea has the capacity to work at least 30 hours per week, which means (at $25.00 per hour) he has an earning capacity of $750.00 per week. There was no evidence that Mr Galea could not earn the figures set out in the RIM report (Reasons, paragraph 33);
(i)as Mr Galea had a capacity to earn more than his pre-injury earnings there was no entitlement to weekly compensation (Reasons, paragraph 34), and
(j)the respondent was to pay Mr Galea’s section 60 expenses, which were not in dispute at the hearing.
ISSUES IN DISPUTE AND SUBMISSIONS
Mr Galea’s submissions and grounds of appeal are essentially the same. His solicitor has prepared two separate and inconsistent documents, one filed on 22 September 2008 and the other on 23 October 2008. Doing the best I can, the issues in dispute in the appeal are whether an award should be made in favour of Mr Galea because:
(a)the Arbitrator found Mr Galea to have a capacity to earn $750.00 per week (working 30 hours per week at $25 per hour) and, as that amount exceeded comparable earnings in his pre-injury employment, that he had no entitlement to compensation. However, there is no guarantee that Mr Galea would have continued to work in his old job and the Arbitrator should have found comparable earnings to be $950 per week (working 38 hours per week at $25 per hour), giving an entitlement to compensation of $200.00 per week (see Mr Galea’s submissions filed 22 September 2008);
(b)he is suffering a disability, is not fit for full duties and there is no evidence as to what he was earning in his lawn mowing business. Therefore, given his inability to work, he is “at least entitled to a nominal award” (Hirst v Illawarra Area Health Service (2000) 21 NSWCCR 82 (‘Hirst’);
(c)his true ability to earn is “2 lawns per day being $350 per week”;
(d)he is unable to work 30 hours per week;
(e)while he was under surveillance, he only did one job over two days and that job took one and a half hours, not including preparation and travelling between jobs;
(f)no business records (relating to his lawn mowing business) are in existence because of the small returns from the business, and
(g)comparable earnings are at least $560.00 per week. Deducting an ability to earn of $350 per week, gives a difference of $210.00 per week (see “Further Grounds for Appeal” filed on 23 October 2008). There are no reasons to reduce that amount in the exercise of the section 40(1) discretion.
Galaxy submits:
(a)Mr Galea is only entitled to weekly compensation if he can prove that his injury resulted in him suffering a wage loss;
(b)the Arbitrator’s finding as to Mr Galea’s creditworthiness should stand;
(c)the Arbitrator made no error of law in his assessment;
(d)the medical evidence supports a finding that Mr Galea is able to work 30 hours per week;
(e)there is no evidence that Mr Galea would have “graduated from his pre-injury employment as a labourer”, and
(f)the Arbitrator correctly found that Mr Galea’s probable earnings but for his injury were $560.00 per week and that his ability to earn exceeds that amount and, as a result, he has no entitlement to weekly compensation.
DISCUSSION AND FINDINGS
The figures accepted by the Arbitrator as being the probable earnings but for injury under section 40(2)(a) of the 1987 Act (‘probable earnings’), were agreed at the arbitration by Mr Galea’s counsel (T17.40). He made no submission that Mr Galea was likely to move to more highly paid employment, as has been submitted on appeal. That submission is unsupported by any evidence and I reject it.
I also reject the submission that the Arbitrator should have found probable earnings but for the injury to be $950 per week. I assume that this submission is based on an assumption that if Mr Galea worked 38 hours per week at $25 per hour in his current lawn mowing business he would earn $950.00 per week, but he is unable to work 38 hours per week because of his injury. The figures for probable earnings were agreed at the arbitration (see [42(b)] above and T2.33 and T17.33) and Mr Galea has advanced no reason why he should be permitted to renege on that agreement and advance a different case on appeal. In any event, the job of lawn mowing is not “the same or some comparable employment” to the work Mr Galea performed with Galaxy where he was a machine operator. The argument that probable earnings should be assessed at $950.00 per week is misguided, contrary to authority and unsupported by any evidence.
Though it has not been pressed (either on appeal or before the Arbitrator), I do not accept Mr Galea’s evidence, based on a conversation he allegedly had with a Galaxy worker 12 to 18 months prior to Mr Galea’s June 2008 statement, that his job with Galaxy now pays $720.00 per week. This assertion is contrary to the documentary evidence tendered by Galaxy and contrary to the probable earnings accepted by Mr Galea’s counsel at the arbitration.
The decision of Hirst does not stand for the proposition advanced by Mr Galea. In that case, Neilson CCJ held that pregnancy and subsequent motherhood did not of themselves disentitle a worker to compensation for partial incapacity. Whilst those matters were relevant to the exercise of the discretion under section 40(1) of the 1987 Act, the worker was still entitled to an award but only at a nominal amount (Kesen v Luke Singer Pty Ltd (1989) 5 NSWCCR 298). His Honour did not hold, and it is not correct, that a worker is automatically entitled to an award upon proof that he or she has an impairment (Ric Developments t/as Lane Cove Poolmart v Muir [2008] NSWCA 155 (‘Muir’) at [47]). Whilst an incapacity for work means a physical incapacity for actually doing work in the labour market in which the worker was working or might be expected to work, compensation is awarded for that incapacity only where it reduces the worker’s ability to sell his or her labour in the reasonably accessible labour market (Arnott’s Snack Products Pty Ltd v Yacob [1985] HCA 2; (1985) 155 CLR 171 (‘Yacob’) at 176 – 178). In other words, before a worker is entitled to an award under section 40, the incapacity must in fact reduce his or her “earning capacity” (Muir at [48]) or “earning power” (Yacob at 178).
It is accepted that Mr Galea injured his thoracic spine and his right shoulder at work for Galaxy on or about 1 May 2003. The nature and extent of that injury is the subject of conflicting evidence and is disputed. Though Dr Bodel acknowledged that Mr Galea had non-specific mechanical backache, he concluded that he suffered no more than a strain to the interscapular region of the thoracic spine and he implied that, because he found no clinical evidence of “any firm pathological diagnosis”, the effect of the strain had resolved. This conclusion is consistent with his finding that Mr Galea should be capable of his pre-injury work and has no whole person impairment as a result of his injury.
Dr Bodel’s conclusion is contrary to the assessment and certification by Dr Pillemer that Mr Galea’s history was suggestive of a mechanical thoracic problem of either the costo-transverse or costo-vertebral joint with intermittent subluxation. Given Mr Galea’s consistent history of symptoms and restrictions since his injury, I prefer the evidence of Dr Pillemer, supported by Dr Rivett, and I accept that the effects of Mr Galea’s thoracic spine injury are continuing, have resulted in a 5% whole person impairment and occasionally cause symptoms (weakness) in his right shoulder. I do not accept that Mr Galea has any symptoms in his neck as a result of his injury.
However, Mr Galea’s resulting disability is only mild, as is demonstrated by the film taken on 10 March 2008, in which Mr Galea was seen to bend freely from the waist on numerous occasions without any apparent restriction. The film also showed Mr Galea cautiously lifting a lawn mower by first placing the front wheels on the car and then lifting the rear section of the mower. The way he lifted the mower, which was not commented upon by the investigators in their report of 11 March 2008, demonstrated that he obviously exercises care when lifting. That is consistent with the medical evidence from Dr Rivett, which I accept, that he is restricted to lifting weights below 10 kilograms and that he is unfit for his pre-injury employment.
Assessment of Mr Galea’s entitlement under section 40 requires the application of the five steps set out in Mitchell v Central West Area Health Service (1997) 14 NSWCCR 526 (‘Mitchell’).
The parties agreed on the first step, namely, probable earnings. The agreed amounts are: $500.00 per week for the period July 2004 to July 2005, $520.00 per week from July 2005 to July 2006, $540.00 per week from July 2006 to July 2007, and $560 per week from July 2007 to date and continuing.
The second step, the average weekly amount that Mr Galea is earning or would be able to earn in some suitable employment (‘ability to earn’) (section 40(2)(b) of the 1987 Act), is more contentious. The Arbitrator assessed Mr Galea’s ability to be $750.00 per week calculated by allowing $25 per hour for 30 hours per week in lawn mowing. For the reasons set out below, I believe this assessment was erroneous.
The evidence is that Mr Galea charged $30 - $35 per lawn. The RIM report suggests that a person employed in full-time “lawn mowing/maintenance” would earn $724.00 per week or $19.00 per hour (rounding down to the nearest whole dollar) for a 38-hour week. It is therefore argued that allowing $19.00 per hour for 30 hours per week (the number of hours the Arbitrator assessed Mr Galea to be fit to work), Mr Galea’s ability to earn is $570.00 per week, however, a true reflection of his ability to earn is two lawns per day at $35.00 per lawn for five days per week giving a figure of $350 per week. Deducting this sum from $560.00 per week gives a difference of $210.00 per week.
It is also argued that the Arbitrator erred in finding Mr Galea fit to mow lawns for 30 hours per week because in his pre-injury duties he only worked 30 to 38 hours per week and “on all the evidence he could not have done his old hours”. I do not accept that submission. The evidence is that in his pre-injury duties Mr Galea worked full-time for 38 hours per week (see Workplace Injury Management Services Pty Ltd (‘WIMS’) report 12 August 2003). Mr Galea’s assertion in his statement of 12 September 2007 that he was hopeful that he could increase his hours of work to 20 per week in accordance with his doctors certificate does not fit with the evidence in Dr Ferraro’s last certificate that declared Mr Galea fit for suitable duties for eight hours per day five days per week. It is also inconsistent with the evidence from WIMS that as at November 2003 Mr Galea was working on suitable duties for Galaxy for eight hours per day five days per week (see WIMS report 19 November 2003).
Given the evidence in the film, it is obvious that Mr Galea is capable of performing lawn-mowing duties and that he has performed those duties in his own business since about 2005. The proper measure of a worker’s ability to earn when he or she is self-employed is to determine the commercial value of his labour (Hill v Bryant [1974] 2 NSWLR 423 at 428). That determination can be made by either calculating the worth of his or her work to the business, or by calculating what it would cost the business to employ someone else to do his or her work (J & H Timbers Pty Ltd v Nelson [1972] HCA 12; (1972) 126 CLR 625 at 631 and Cage Developments Pty Ltd t/as Monaro Mix Specified Concrete v Schubert (1983) 151 CLR 584). Given the casual nature of Mr Galea’s business and the fact that its only income came from his labour, the appropriate course in the present matter is to consider the value of his labour by reference to the rate he charged for his services and the rate paid for workers employed in that industry.
The evidence as to Mr Galea’s post injury earnings is particularly scant. Mr Galea did not give evidence of an hourly rate for his lawn mowing services, but said he did one lawn per week “on average at a cost of $35.00 per job”. The Arbitrator was left to speculate as to how long an average job would take. Precisely why Mr Galea only does one lawn per week was not adequately explained in his evidence and, whilst Dr Pillemer took a history that Mr Galea was “restricted because of his symptoms”, I do not accept that that estimate represents his true capacity to work. Dr Pillemer also took a history that Mr Galea did up to three lawns a week in summer, but only one or two a week in winter (MAC, page three).
Mr Galea’s submissions on appeal concede that he is capable of mowing two lawns per day and, at $35.00 per job, his weekly income should be assessed at $350.00. I do not accept this submission, as it involves an assumption that Mr Galea is only fit for work mowing lawns for about three hours (or less) per day, or about 15 hours per week. The evidence does not support such a significant restriction on his physical capacity.
I accept that Mr Galea’s symptoms fluctuate, as recorded by Dr Pillemer, and that at times he gets acute attacks of pain that restrict him. I do not, however, accept that his present lawn mowing “business” is a genuine attempt to operate a profit making enterprise or that his income from that activity fairly represents his ability to earn. In addition to his limited lawn mowing activities, Mr Galea also works one day per week at the Buddhist temple cleaning vegetables. In the absence of evidence of how many hours he works on that day, I assume that he works for eight hours.
The evidence from RIM is of limited assistance in determining Mr Galea’s ability to earn, as it merely identified “vocational goals” and “rehabilitation objectives” for Mr Galea. Of the “vocational options discussed” with Mr Galea, the option of “mowing/maintenance” seems to be the only one that might be viable, though even that activity is difficult to assess as Ms Suggett did not identify what was involved in the “maintenance”. I do not accept that the other “options” are currently realistic alternative employment avenues for Mr Galea. First, he does not have a forklift licence or a truck driver’s licence. Second, no vocational assessment has been conducted to assess Mr Galea’s fitness for work as either a forklift driver or a truck driver. Ms Suggett’s report states that she holds a Bachelor of Health Science (Rehabilitation Counselling) and is therefore not qualified to determine Mr Galea’s physical fitness for the jobs she listed. Third, the option of “equipment hire” is vague and non-specific. I assume it involves work as a sales assistant at an equipment hire business. There is no evidence that Mr Galea has the appropriate knowledge and skills for such a position and, given that he has only ever worked in unskilled labouring type jobs, I do not believe it is a suitable position.
Having regard to the specific matters in section 43A(1) of the 1987 Act, I note:
(a)Mr Galea is unfit for lifting weights above 10 kilograms or, in respect of lifts above head height, above 5 kilograms. As a result, he is unfit for his pre-injury employment;
(b)he left school at the end of year 10 and is currently 34 years of age. He holds no formal tertiary qualifications or skills and has always been employed in unskilled labouring jobs;
(c)he lives at Fairfield Heights in Sydney’s west;
(d)the latest medical certificate in evidence is some years out of date, but it certified Mr Galea fit for full-time suitable duties with lifting up to 7.5 kilograms and avoiding repetitive thoracic spine movements;
(e)there is no current injury management plan in place for Mr Galea, but his return to work plan with WIMS was unsuccessful in returning him to his pre-injury employment and noted in its closure report of 6 May 2004 that he was certified fit for permanent modified duties;
(f)Mr Galea has received no rehabilitation training;
(g)he has been seeking suitable employment for about four years without success, and
(h)other relevant circumstances have been referred to in the body of this decision.
Having regard to the whole of the evidence, I find that Mr Galea’s injury has reduced his ability to earn but only by a modest amount. Whilst he has experience in lawn mowing he has not been able to work full-time in that activity. In light of this fact, the seasonal nature of that activity (see the MAC at page three), the nature of Mr Galea’s injury, his unsuccessful attempts at securing alternative employment since 2004, and the difficulty he will have in obtaining and retaining suitable employment, I assess his ability to earn in such employment to be $475.00 per week. This figure allows an ability to earn $19.00 per hour (the hourly rate for an employed lawn mower/maintenance person) for 25 hours per week and reflects the difficulty Mr Galea has had, and will continue to have, in obtaining and securing such employment as a result of his injury.
Whilst there may well be periods when his ability to earn exceeds this amount there will also be periods, when he has “acute attacks of pain” (per the MAC at page two), when he will be unable to earn that amount. The figure therefore represents a “weighted average” (Mangion v Visy Board Pty Ltd (1992) 8 NSWCCR 175 at 180 (‘Mangion’)) taking into account Mr Galea’s injury and disability and the “the practical realities of the Worker actually getting and keeping a job, in his injured condition” (per Campbell JA (Rein J agreeing) at [50] in Muir). On the available evidence, I am not satisfied that Mr Galea’s ability to earn has varied to any appreciable extent in the period since 2004.
The figure of $19.00 per hour is lower than the $25.00 per hour allowed by the Arbitrator. The figure of $25.00 per hour did not come from the evidence, but from a submission by Galaxy’s counsel (T7.44). Even if $25.00 per hour is an appropriate hourly rate for an independent lawn-mowing operator, allowance must be made for operating expenses and travelling time between jobs. On the available evidence, the figure of $19.00 per hour makes an appropriate allowance for those matters and properly reflects the value of Mr Galea’s labour.
Consistent with the authorities of Mangion and Muir, an alternative approach to the assessment of Mr Galea’s ability to earn would be to assess him to be fit for work in lawn mowing and maintenance work, but reduce his anticipated wage for that position ($724.00 per week) by an appropriate percentage (say 35%) to reflect the limited availability of that work (see Ms Suggett’s report of 25 March 2008) and the demonstrated difficulty Mr Galea will have in obtaining and retaining that employment (especially when his symptoms are acute), or some other suitable employment, because of his injury and disability. Either approach is open. They both reflect the fact that, as a result of his work injury, Mr Galea has a mild restriction that has impaired his ability to earn in the labour market reasonably accessible to him. In view of Mr Galea’s work record since leaving Galaxy, it is arguable that the reduction should be much greater than 35%, however, in view of Mr Galea’s demonstrated capacity in the video and the mild nature of his restrictions, I do not accept that a greater reduction is warranted in this case.
Whilst the Arbitrator did form an adverse view of Mr Galea’s credit (because of his failure to produce any financial records), Mr Galea did not give oral evidence and the Arbitrator did not base that view on any aspect of his demeanour. Therefore, I am in as good a position as the Arbitrator to form a view on this issue on review (Warren v Coombes [1979] HCA 9; (1979) 142 CLR 531 at 551) and I am required to conduct a “real review” of the arbitration (Fox v Percy (2003) 214 CLR 118 at 127-128 [25]). Further, unlike the Arbitrator, I have the benefit of Mr Galea’s statement of 30 June 2008. In these circumstances it is not only open to me to form an independent view on this issue, I am obliged to do so.
I have carefully considered the validity of Mr Galea’s claim that he has no financial records for his lawn mowing activities. Whilst it seems unlikely that he would have taken the trouble to register a business name, acquire the necessary equipment with the apparent intention of working in that business and then not bother to keep any records of his income, his evidence in his second statement explains why he started the business, that it had never been a full-time activity and that he had always disclosed his modest income from it to Centrelink. In view of the very small amounts involved, I accept Mr Galea’s explanation in his further statement as to why he has no financial records.
Deducting the figure arrived at in step two ($475.00 per week) from the agreed probable earnings in step one, the resulting figures are:
9 September 2004 to 30 June 2005 $25.00 per week;
1 July 2005 to 30 June 2006 $45.00 per week;
1 July 2006 to 30 June 2007 $65.00 per week, and
1 July 2007 to date $85.00 per week.
The above figures represent the appropriate reduction in Mr Galea’s earning capacity and are proper in the circumstances of the case. There are no reasons to reduce these figures in the exercise of the discretion under section 40(1) of the 1987 Act.
It follows that Mr Galea is entitled to an award in the amounts set out at paragraph [69] above.
OTHER MATTERS
Though it has not been raised on appeal, the Arbitrator made no order in respect of Mr Galea’s claim for lump sum compensation. The AMS assessed that claim and issued a binding MAC under section 325 of the 1998 Act. That MAC has not been appealed and, under section 326 of the 1998 Act, is conclusively presumed to be correct. However, a MAC does not act as an order of the Commission and, as Mr Galea’s entitlement to lump sum compensation was initially disputed, the Arbitrator was required to make orders disposing of that issue. Whilst the parties have not made submissions on this point, it is clear from the conduct of the arbitration that Mr Galea’s entitlement to lump sum compensation is no longer in issue. Consistent with the findings I have made on injury (see [50] above), I intend to make orders as per the terms of the MAC. As Mr Galea has not met the threshold to recover compensation under section 67 for pain and suffering, there will be an award for Galaxy in respect of that part of the claim.
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 am of the view, for the reasons given in this decision, that the Arbitrator reached an erroneous conclusion when he made an award in favour of Galaxy in respect of Mr Galea’s claim for weekly compensation. Having re-determined the matter, there will be an award in favour of Mr Galea in the terms set out below.
DECISION
Paragraphs one and three of the Arbitrator’s determination of 26 August 2008 are revoked and the follow orders made:
“1.Award for the applicant worker under section 40 of the Workers Compensation Act 1987 (‘the 1987 Act’) in the following amounts:
(a) $25.00 per week from 9 September 2004 to 30 June 2005;
(b) $45.00 per week from 1 July 2005 to 30 June 2006;
(c) $65.00 per week from 1 July 2006 to 30 June 2007, and
(d) $85.00 per week from 1 July 2007 to date and continuing.
3.The respondent employer is to pay the applicant worker’s costs of the arbitration, as assessed or agreed.
4.Award for the applicant worker in the sum of $6,250 in respect of a 5% whole person impairment as a result of injury to his thoracic spine on 1 May 2003.
5.Award for the respondent employer in respect of the claim for compensation under section 67 of the 1987 Act.”
Paragraph two of the Arbitrator’s determination of 26 August 2008 is confirmed.
COSTS
The Respondent Employer is to pay the Appellant Worker’s costs of the appeal.
Bill Roche
Acting President
7 January 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
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