Grasa v Roads & Maritime Services - [2013] NSWWCCPD 30

WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:	Grasa v Roads & Maritime Services [2013] NSWWCCPD 30
APPELLANT:	Marion Grasa
RESPONDENT:	Roads & Maritime Services
INSURER:	QBE Workers Compensation (NSW) Ltd
FILE NUMBER:	A1-8300/12
ARBITRATOR:	Ms M Dalley
DATE OF ARBITRATOR’S DECISION:	25 February 2013
DATE OF APPEAL DECISION:	27 May 2013
SUBJECT MATTER OF DECISION:	Psychological injury; relevance and effect of consent orders; application of principles in Rail Services Australia v Dimovski [2004] NSWCA 267; 1 DDCR 648; failure to consider relevant medical evidence; findings based on information not in evidence; application of principles in Strinic v Singh [2009] NSWCA 15; 74 NSWLR 419; alleged bullying and harassment; perception of real events; application of principles in State Transit Authority (NSW) v Chemler [2007] NSWCA 249; 5 DDCR 286 and Attorney General’s Department v K [2010] NSWWCCPD 76
PRESIDENTIAL MEMBER:	Deputy President Bill Roche
HEARING:	On the papers
REPRESENTATION:	Appellant:	Hennikers Solicitors
Respondent:	Moray & Agnew
ORDERS MADE ON APPEAL:	1. The Arbitrator’s determination of 25 February 2013 is revoked and the matter is remitted to a different Arbitrator for re-determination. 2. The respondent employer is to pay the appellant worker’s costs of the appeal, assessed at $2,530 plus GST. Costs of the first arbitration, and of the second arbitration, are to follow the outcome of the second arbitration.

BACKGROUND

Because of various events at work between 2007 and 2009, the appellant worker, Marion Grasa, alleged that he suffered an Adjustment Disorder and Depressed Mood. He stopped work because of his condition on 27 November 2009 and claimed compensation against the respondent employer, Roads & Maritime Services. The respondent’s insurer disputed liability for Mr Grasa’s condition and he commenced proceedings in the Commission seeking weekly and other compensation.
The Commission listed his claim for conciliation and arbitration on 24 August 2011. On that day, the parties agreed to settle the claim on condition that Mr Grasa discontinue his claim and the respondent pay his costs. The settlement provided for the following consent orders, which are dated 25 August 2011:
“1. The respondent is to re-credit leave taken in the period 1 July 2010 to 18 March 2011 on a voluntary basis.
2. The applicant otherwise agrees and admits that he has no other entitlement to weekly compensation to date as a result of the injury pleaded in the ARD
3. The respondent is to meet section 60 expenses incurred to date in respect of the injury pleaded on a voluntary basis on production of accounts, receipts or Medicare charge.
4. The applicant is to recommence employment with the respondent on 12 September 2011 as a mechanic at the Bomaderry depot on the terms agreed between the parties set out in a document marked “Annexure A” to the agreed orders signed by all parties and included in the Commission file, in consultation with John Dinan and on the basis that garaging shall occur at Lake Illawarra South.”
The attached correspondence referred to in order 4 of the consent orders (“Annexure A”) was a letter from John Dinan, the respondent’s manager of fleet services, to Wayne Phillips of the Australian Workers Union, dated 23 February 2010, setting out the conditions on which Mr Grasa was to return to work at the respondent’s Russell Vale Workshop at Bomaderry.
As per the settlement, Mr Grasa returned to work as a mechanic at Bomaderry at 6.30 am on 12 September 2011. He has alleged that, on his return to work, he was bullied, harassed and isolated and, as a result, suffered an “aggravation of the earlier injury” (T6.19), which caused him to cease work at 1.30 pm the same day. His general practitioner, Dr Pather, who he saw on the same day, certified him unfit for work from 12 September 2011 because of an Adjustment Disorder. Mr Grasa has not returned to work since that date and he has claimed weekly compensation from 12 September 2011 to date and continuing, together with medical and related expenses.
The respondent’s insurer disputed liability on the following grounds:
(a) Mr Grasa had not suffered an injury arising out of or in the course of his employment under s 4 of the Workers Compensation Act 1987 (the 1987 Act);
(b)     if he suffered an injury, his employment was not a substantial contributing factor to that injury;
(c)     Mr Grasa was not incapacitated as alleged or at all;
(d)     Mr Grasa’s medical expenses were not “reasonably necessary and as a consequence of a work-related injury” with the respondent;
(e)     if Mr Grasa suffered a psychological injury, it was wholly or predominantly caused by reasonable action taken or proposed to be taken by the respondent with respect to transfer, performance appraisal, discipline and/or the provision of employment benefits under s 11A of the 1987 Act;
(f)      Mr Grasa was not entitled to further compensation “on the basis of the agreement and orders” made on 25 August 2011;
(g) Mr Grasa had no entitlement to weekly compensation from 12 September 2011 because, under s 40(2A) of the 1987 Act, he unreasonably rejected suitable employment, and
(h)     Mr Grasa had no entitlement to weekly compensation because he had not made all reasonable efforts to return to work with the respondent.
The Commission listed the second claim for conciliation and arbitration on 31 January 2013. On that day, Mr Epstein, barrister, appeared for Mr Grasa and Mr Morgan, barrister, appeared for the respondent. Mr Grasa gave brief oral evidence and, by leave, was cross-examined by Mr Morgan.
The Arbitrator identified the issues to be:
(a)     Did Mr Grasa suffer an aggravation of a psychological injury on 12 September 2012?
(b)     If there was an aggravation of a psychological injury, was work a substantial contributing factor to the injury?
(c)     If so, was the injury wholly or predominantly caused by reasonable action by the respondent in regard to transfer?
(d)     Was Mr Grasa wholly or partially incapacitated for employment?
(e)     Did Mr Grasa unreasonably reject suitable employment?
The above summary was not an accurate statement of the issues identified in the s 74 notice, or by Mr Morgan at the arbitration. Mr Morgan made it clear (at T10.9) that the respondent disputed that Mr Grasa had suffered any injury, that is, any “psychological condition giving rise to an incapacity for employment”. It did not merely dispute that he had suffered an aggravation injury on 12 September 2011. Mr Morgan also relied on defences under s 11A and s 40(2A).
In a reserved decision delivered on 25 February 2013, the Arbitrator found (at [15]) that Mr Grasa had recovered from “any original injury” and the consent orders confirmed that he acknowledged that he had no further entitlement to compensation. She said there were no instances of bullying and harassment by Mr Grasa’s superiors or co-workers at work. She said (at [40]) that Mr Grasa’s (medical) reports did not explain the mechanism of the injury or its progression.
If Mr Grasa suffered an aggravation of his psychological condition, the Arbitrator could find no evidence that his work was a substantial contributing factor to his distress or impairment, which appeared to be “due to his own inner conflicts, attitudes and unreasonable expectations rather than the effect of any external workplace incidents or factors” ([68]).
The Commission issued a Certificate of Determination on 25 February 2013 in the following terms:
“The Commission determines:

1. An award for the respondent in respect of the applicant’s claim for weekly compensation.

2. An award for the respondent in respect of the applicant’s claim for section 60 of the Workers Compensation Act 1987 expenses.”

Mr Grasa has appealed the Arbitrator’s determination.

ON THE PAPERS

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.”
Having regard to Practice Directions Nos 1 and 6; the documents that are before me, and the submissions 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.

ISSUES IN DISPUTE

The issues in dispute in the appeal are whether the Arbitrator erred in:
(a)     misinterpreting the consent orders made on 25 August 2011 (the consent orders);
(b)     finding that Mr Grasa had recovered from his original injury by 25 August 2011 (whether Mr Grasa had recovered from his original injury);
(c)     considering the evidence from Mr Orme (Mr Orme’s evidence);
(d)     failing to base her findings on the evidence (findings not based on evidence);
(e)     failing to properly consider the evidence (failing to consider the evidence), and
(f)      applying the incorrect legal test in determining whether isolation, harassment and bullying occurred at work on 12 September 2011 (incorrect legal test).

THE CONSENT ORDERS

The Arbitrator’s reasons

The Arbitrator said (at [12]) that the consent orders “conceded that [Mr Grasa] was at that time fit to return to his previous employment duties as a maintenance mechanic”. She added (at [14]) that the agreement for the return to work was “predicated on the basis that Mr Grasa had suffered an Adjustment Disorder but was now was [sic] fit to return to work”. She said (at [15]) that the consent orders confirmed that Mr Grasa had “recovered from any original injury” and that he had “acknowledged the he had no further entitlements to compensation”.

Submissions

Mr Epstein submitted that the Arbitrator erred in her interpretation of the consent orders. He said that the consent orders stated that Mr Grasa agreed and admitted that he had “no other entitlement to weekly compensation to date as a result of the injury pleaded in the ARD”, but there was no agreement that Mr Grasa was fit to return to his previous employment and the issue of whether Mr Grasa had received all his entitlement to workers compensation was not the same as whether he was fully fit.
Mr Morgan submitted that the consent orders provided a basis upon which the Arbitrator could make a finding of fact that, as at 25 August 2011, Mr Grasa had conceded that he was fit to return to his previous employment. In any event, the Arbitrator had regard to the notes of the treating psychologist, Dr Dragutinovich, and observed that prescribed medication had been discontinued at or near that time.

Discussion and findings

Mr Epstein’s submissions are correct, but must be read with his submissions before the Arbitrator, where he said that Mr Grasa’s evidence was that he could not return to work with the people he had worked with before. He therefore agreed to return to work at Bomaderry (a different location to where he had worked prior to ceasing work in November 2009) because he had worked there previously, could remain a tradesman, and take his truck home (T35.11).
The consent orders provided for Mr Grasa to return to his pre-injury duties as a mechanic but, significantly in a psychological injury case, at a different location. There was therefore no concession that Mr Grasa was fit to resume his “previous employment” with everything that that entailed and the Arbitrator erred in making that statement.
The Arbitrator’s statement that the agreement for the return to work was “predicated” on the basis that Mr Grasa had suffered an Adjustment Disorder but was now fit to return to work was also incorrect. The respondent never conceded that Mr Grasa had suffered an Adjustment Disorder.
The consent orders did not confirm that Mr Grasa had recovered from his “original injury”, but merely provided for a return to work at a different location. The acknowledgment in the consent orders that Mr Grasa had no other entitlement to weekly compensation up to 25 August 2011 was only relevant to his entitlements up to that date and, contrary to the Arbitrator’s statement, did not indicate a full recovery from his previous condition.
Exactly what weight the Arbitrator placed on her finding that Mr Grasa had recovered from his original injury is unclear. However, as the case was based on an aggravation of a pre-existing condition, it seems reasonable to conclude that it played some role in her final determination, because it would not have been possible to establish an aggravation injury if there was no pre-existing condition to aggravate. Therefore, if she erred in her understanding of the consent orders, as I believe she did, and if that was a factor in her finding that Mr Grasa had recovered by 25 August 2011, it has affected the outcome.

WHETHER MR GRASA HAD RECOVERED FROM HIS ORIGINAL INJURY

The Arbitrator’s reasons

In addition to noting the matters referred to at [16] above, the Arbitrator said that orders made by consent may create an estoppel (Habib v Radio 2UE Sydney Pty Ltd [2009] NSWCA 231), but did not identify the estoppel said to arise from the orders in this case.
The Arbitrator purported to rely on other evidence in support of her finding that Mr Grasa had recovered from his earlier condition. She said, based on Dr Dragutinovich’s notes, that Mr Grasa was not on any medication (presumably on 25 August 2011), had received a great deal of counselling, and had been off work due to his Adjustment Disorder and Depressed Mood since November 2009.
She added (at [15]) that none of Mr Grasa’s specialists “class[ed] Mr Grasa’s depression as severe” and the whole person impairment (seven per cent) was below the assessable threshold, with no impairment to his concentration. She noted that Mr Grasa had been able to regularly travel long distances to his Myola property, fish, maintain his boat, trailer and holiday house, work on renovations and engage in community activities, such as building the extension to the local Coastal Patrol headquarters and rebuilding their tractor.
The Arbitrator therefore concluded, as already noted above, that Mr Grasa had recovered from any original injury and said that the consent orders confirmed that, in that Mr Grasa acknowledged, in the consent orders, that he had no further entitlement to compensation. She said the question to be decided was whether he suffered an aggravation of his condition or a re-injury due to his return to work at the Bomaderry depot.

Submissions

Mr Epstein has submitted that none of the contemporaneous medical evidence, as at 25 August 2011, suggested that Mr Grasa had recovered from his original injury and that Mr Grasa’s statement of 31 May 2012 suggested that he was not fit to return to work in August/September 2011. He referred to notes from Dr Aly, general practitioner, on 19 July 2011 that recorded “[s]tates he is unfit to work due to depression etc on Cipramil” and on 22 August 2011 that recorded “[a]djustment disorder causing anxiety and depression”.
He also relied on notes from Dr Dragutinovich dated 26 July 2011, which recorded:
“Ceased Cipramil owing to intolerance to … side effects.
Matter to be heard in WC Commission on 24/8/11 as teleconference failed to resolve anything as RTA came unprepared.
Dr Davies suggested in his report that patient was self righteous.
Continue CBT relapse management.”
On the effect of the consent orders, Mr Epstein referred to Rail Services Australia v Dimovski [2004] NSWCA 267; 1 DDCR 648 (Dimovski).
Mr Morgan has not addressed the issue raised under this heading, namely, whether, by 25 August 2011, Mr Grasa had recovered from his previous condition. He directed his submissions to the issue of whether Mr Grasa suffered an aggravation injury on 12 September 2011 and submitted that, on the material available, and the opinion of Mr Orme, the Arbitrator was not prepared to accept Mr Grasa’s case.

Discussion and findings

Mr Epstein’s submissions are correct.
Even if the consent orders provided support for the Arbitrator’s finding that Mr Grasa had recovered by 25 August 2011, which, for the reasons explained above, I do not accept, they do not support a finding that he was in the same condition on 12 September 2011. An issue estoppel (if there be one) only speaks at the date of the order made and only binds the parties as to the issues actually determined; it does not bind them on different issues, such as fitness at a later date (Dimovski at [57]).
More importantly, the Arbitrator’s finding that Mr Grasa had recovered by 25 August 2011 was inconsistent with the weight of the evidence. Moreover, by determining that Mr Grasa had recovered by 25 August 2011, the Arbitrator determined an issue never argued by the respondent. Its case was that Mr Grasa had never suffered an injury at any time, not that he had recovered from a previous injury. Nevertheless, given the Arbitrator’s findings and the way the appeal has been presented, I will deal with the Arbitrator’s finding.
Dr Aly’s notes on 19 July 2011 and 22 August 2011 are consistent with Mr Grasa’s evidence, namely, that he was still suffering an Adjustment Disorder with anxiety and depression at the time of the first arbitration on 24 August 2011.
Dr Dragutinovich’s notes do not support a conclusion that Mr Grasa had recovered. They recorded, on 26 July 2011, that Mr Grasa had ceased Cipramil because of intolerance to the side effects, not because he had recovered, and that Mr Grasa was to continue “CBT [cognitive behaviour therapy] relapse management”. These entries are strongly against the Arbitrator’s conclusion that Mr Grasa had made a full recovery from his previous condition.
The fact that Mr Grasa had “received a great deal of counselling and had been off work due to his Adjustment Disorder and Depressed Mood since November 2009” was hardly determinative of whether he had made a full recovery by 25 August 2011. That is especially so when Mr Grasa was still having treatment in late July 2011.
In the absence of appropriate expert evidence, and Mr Morgan has referred to none that deals with this period, whether Mr Grasa’s specialists classed his depression as “severe” was of limited relevance in determining if he had recovered by 25 August 2011. Similarly, in the absence of expert evidence, it is difficult to see the relevance of the level of Mr Grasa’s whole person impairment.
The fact that Mr Grasa had been able to travel regularly to his Myola property and do the other things listed by the Arbitrator at [15] may well have been relevant to the level of his incapacity, but did not provide a sound basis for concluding that he had made a full recovery.
It follows that the Arbitrator erred on this issue.

MR ORME’S EVIDENCE

The Arbitrator’s reasons

When referring to the evidence from Mr Orme, consulting psychologist qualified by the respondent, the Arbitrator said (at [37]) he reported that Mr Grasa “does have a maladaptive emotional or behavioural reaction to any stressor, as found by Dr Roberts”.

Submissions

Mr Epstein submitted that Mr Orme did not make the statement the Arbitrator attributed to him. Mr Morgan did not address this issue but merely relied on the submissions he made dealing with ground two.

Discussion and findings

Mr Epstein’s submission is correct.
In his report of 28 February 2012, Mr Orme took a limited history, but said nothing like the passage attributed to him by the Arbitrator. In fact, Mr Orme’s evidence supports Mr Grasa on causation, diagnosis and incapacity. He said that it “was apparent that Mr Grasa was unwell and suffering from a considerable loss of wellbeing”. He concurred with the diagnosis of Adjustment Disorder and added:
“The implications of Adjustment Disorder and anxiety and depression, relates to the workplace in that it may manifest itself through very low if not unmanageable thresholds for distress, agitation, and anger. The requirement for Mr Grasa to work with others, provide quality assurance approaches, and also undertake some direction and performance management of others, means that against a background of this psychological condition, that these requirements (barriers) may not be achievable. Mr Grasa’s current psychological condition must preclude the completion of certain aspects of the role as described in each of the position descriptions.”

After referring to Mr Orme’s evidence (at [37]), the Arbitrator said (at [38]) that she found it difficult to accept that Mr Grasa’s condition was an Adjustment Disorder because of its longevity and the apparent increase after leaving work. This conclusion was inconsistent with Mr Orme’s evidence and appears to have been based (in part) on an incorrect reading of his evidence.

FINDINGS NOT BASED ON EVIDENCE

The Arbitrator’s reasons

After referring (at [24]) to the evidence from Dr Gertler, Mr Grasa’s qualified psychiatrist, and stating that he did not explain why his definition of adjustment disorder differed from that of Dr Roberts, the Arbitrator said:
“Adjustment Disorder is generally defined as a maladaptive emotional or behavioural reaction to a stressor. Symptoms usually involve feeling of overwhelming sadness, hopelessness, sometimes physical reactions such as twitching or crying, stress and significant impairment in functioning. Most definitions include the proviso that the symptoms do not persist for more than six months after the stressor has ended. As such an alternative name often used is Situational Depression. Mr Grasa’s affect seems to be primarily one of anger directed at his former employer and fellow workers which is increasing as he is removed from the stressor.”
At [40], she said she preferred the evidence of Dr Roberts, that Mr Grasa was suffering a personality disorder, as that better explained Mr Grasa’s maladaptive reactions, increasing anger and continuing conflict with his employer and fellow workers.

Submissions

Mr Epstein has submitted that, in making the statement reproduced at [46] above, the Arbitrator based her opinion that Mr Grasa had not suffered an aggravation of an Adjustment Disorder on her own interpretation of what constitutes an Adjustment Disorder and not on the evidence. Relying on Strinic v Singh [2009] NSWCA 15; 74 NSWLR 419 (Strinic), he said that the Arbitrator’s “underlying fact finding has been compromised and [Mr Grasa] has been denied procedural fairness”.
While the Arbitrator purported to base her conclusion on the evidence of Dr Roberts, he had based his opinion on three things: first, that Mr Grasa did not suffer from a psychiatric illness, but from a personality disorder; second, that there were inconsistencies in his presentation, and; third, he had a malingered mental illness. The Arbitrator’s conclusion (at [40]) was that Mr Grasa was displaying maladaptive reactions, increasing anger and continuing conflict with his employer and fellow workers.
The Arbitrator appears to have rejected Dr Gertler’s view that an Adjustment Disorder may be a permanent psychological condition, because of her view (expressed at [24]) that “[m]ost definitions include the proviso that the symptoms do not persist for more than six months after the stressor has ended”.
The Arbitrator appears to have (in part) rejected Dr Dragutinovich’s opinion because he had not explained why Mr Grasa’s symptoms had not been alleviated by his lengthy treatment (from February 2010 to July 2011 and from September 2011 to date) and by separation from the stressor. The rejection of Dr Dragutinovich’s evidence appears to have been based on the Arbitrator’s personal opinion as to the duration of an Adjustment Disorder rather than on the evidence.
The Arbitrator’s opinion (at [38], reproduced at [45] above) was based on her definition of an Adjustment Disorder (expressed at [24]) rather than on the medical evidence, even that of Dr Roberts, who provided no definition of an Adjustment Disorder that was similar to that proffered by the Arbitrator.
Mr Morgan submitted that the Arbitrator was presented with two competing medical cases and accepted the evidence of Dr Roberts. Based on the evidence from Dr Roberts, it was open to the Arbitrator to accept that Mr Grasa had displayed maladaptive reactions, increasing anger and had continuing conflict with his employer and fellow workers. He said it was open to the Arbitrator to accept the histories in medical reports as evidence as to a state of affairs because evidence of a history may be received as evidence of the fact (Paper Coaters v Jessop [2009] NSWCA 1 (Jessop) at [42]).

Discussion and findings

Mr Epstein’s submissions are correct.
There is no evidence that the symptoms of an Adjustment Disorder do not “persist for more than six months after the stressor has ended”, as the Arbitrator stated. To the extent that she used that statement as a reason for rejecting Mr Grasa’s medical case, she erred. Her approach was inconsistent with the principles stated by Beazley JA (Ipp and Basten JJA agreeing) in Strinic, where her Honour said (at [60]) that the fundamental judicial obligation to make findings of fact on proved evidence (not being matters of common knowledge or judicial knowledge) had been emphasised in a variety of different circumstances.
Her Honour added (at [64]) that, even if a judge is experienced in adjudicating medical cases, “that does not replace the requirement to base findings on the evidence”. For a judge to base a decision on his or her personal knowledge involves an error of law. Her Honour explained that underlying that error is a fundamental breach of procedural fairness where the judge makes findings based on that judge’s own purported knowledge or understanding of matters that do not form part of the evidence.
Subject to two exceptions, these principles apply to proceedings in the Commission.
The first exception is that the Commission is not bound by the rules of evidence but may inform itself on any matter in such manner as it thinks appropriate (s 354(2) of the 1998 Act). When informing itself, however, the Commission must comply with the rules of procedural fairness and with Pt 15 r 15.2 of the Workers Compensation Commission Rules 2011 (the Rules).
Part 15 r 15.2 of the Rules provides:
“Principles of procedure
When informing itself on any matter, the Commission is to bear in mind the following principles:
(a) evidence should be logical and probative,
(b) evidence should be relevant to the facts in issue and the issues in dispute,
(c) evidence based on speculation or unsubstantiated assumptions is unacceptable,
(d) unqualified opinions are unacceptable.”
The Arbitrator’s statement that “[m]ost definitions [of Adjustment Disorder] include the proviso that the symptoms do not persist for more than six months after the stressor has ended” was not in the evidence before her. It was an unsubstantiated assumption and an unqualified opinion. She should not have relied on it without, at the least, bringing it to the attention of the parties, identifying the source of the opinion, and giving them a reasonable opportunity to call evidence responding to it. She did not do that.
The second exception is that, as a specialist tribunal, the Commission’s members (like the judges of the Compensation Court before it) have experience enabling them to draw inferences from facts which an ordinary tribunal may not (MMI Workers Compensation (NSW) v Kennedy [1993] NSWCC 26; 9 NSWCCR 482) and are entitled to rely upon general knowledge acquired in that capacity in certain circumstances (ICI Australia Operations Pty Ltd v WorkCover Authority of New South Wales [2004] NSWCA 55; 60 NSWLR 18).
However, the circumstances in which the Commission’s members may rely on general knowledge acquired in their capacity as members of the Commission are quite limited and do not extend to determining issues of “injury” and “causation” in the absence of appropriate expert evidence (Combined Civil Pty Ltd v Rikaloski [2007] NSWWCCPD 181 at [32]). In Hevi Lift (PNG) Ltd v Etherington [2005] NSWCA 42; 2 DDCR 271 (Hevi Lift), it was held that a judge of the Compensation Court was not entitled to rely upon general knowledge of back impairments derived from his experience in the Compensation Court to infer how, in the absence of any identified factual basis, a specialist formed his opinion so as to conclude the Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305; 52 NSWLR 705 test was satisfied.
It follows that the Arbitrator erred in relying on her own opinion about Adjustment Disorders. I note also, though it is not necessary for the determination of the appeal, that the weight of the medical evidence is to the effect that Mr Grasa’s condition is not merely an Adjustment Disorder, but is an Adjustment Disorder and Depressed Mood. This further undermines the Arbitrator’s reliance on her own opinion about Adjustment Disorders.
That her error affected the outcome is clear from the fact that, as Mr Epstein submitted, she used her opinion as one of the reasons for rejecting the evidence of Dr Gertler. At [23], the Arbitrator said that Dr Gertler seemed to suggest that an Adjustment Disorder may be a permanent psychological condition which could resolve only over an unspecified period, if at all.
She then said (at [24]), among other things, that Dr Gertler had not explained why his definition of Adjustment Disorder differed from that of Dr Roberts. She said that an Adjustment Disorder “is generally defined as a maladaptive emotional or behavioural reaction to a stressor” and, as previously noted, that most definitions include the proviso that the symptoms do not persist for more than six months after the stressor has ended. She concluded (at [38]) that, because of the longevity of the symptoms and their apparent increase after Mr Grasa left work, it was difficult to accept that Mr Grasa’s condition was an Adjustment Disorder. That conclusion was clearly based on the Arbitrator’s own view, which was not supported by the evidence.
Similarly, one reason for the Arbitrator not accepting Dr Dragutinovich’s evidence was that he had not explained why Mr Grasa’s symptoms had not been alleviated by his lengthy treatment and separation from the stressor. This was clearly a reference to the Arbitrator’s own opinion that symptoms from an Adjustment Disorder do not persist for more than six months after the stressor has ended. As already noted, that was not the evidence.
While it is correct, as Mr Morgan has submitted, that the Arbitrator was presented with two competing medical cases, it was not open to her to reject Mr Grasa’s medical case because of her own opinion.
I accept that evidence in a medical history is evidence of the fact (Jessop). However, that does not address the present issue and does not advance the respondent’s position.
The Arbitrator’s approach involved a breach of the rules of procedural fairness and, though she gave other reasons for rejecting Mr Grasa’s medical case, I cannot be satisfied that her error made “no possible difference to the result” (Stead v State Government Insurance Commission [1986] HCA 54; 161 CLR 141 at 146).

FAILING TO CONSIDER THE EVIDENCE

Submissions

Mr Epstein submitted that the Arbitrator made no reference to a report from Dr Abeya, consultant psychiatrist, who examined and reported on Mr Grasa on behalf of the respondent on 4 July 2012.
Mr Morgan submitted, “[a]bsent a compelling argument that a further report dealing with matters and histories taken weel [sic, well] after the critical time frame in question, this ground must fail”.

Discussion and findings

The report from Dr Abeya included a detailed history of Mr Grasa’s conflicts at work with the respondent, starting in 2009, and included the “difficult day” on 12 September 2011 when he “felt harassed all over again”. He had no one to turn to for support and realised that anger and anxiety were building up in him, and he left at 1.30 pm.
Dr Abeya diagnosed Mr Grasa to have an Adjustment Disorder with mixed anxiety and depressive symptoms. She said that, in his mind, it appeared that his workplace stresses had been central to the genesis of his symptoms. She said:
chronic adjustment disorder with mixed anxiety and depressive symptoms“Given the emergence of emotional and behavioural symptoms in response to a stressor over a long period of time, his diagnosis would be of a within the DSM-IV classification system.” (emphasis included in original)
Dr Abeya agreed with Dr Dragutinovich that Mr Grasa did not appear in a fit state to consider returning to work with his previous employer. She anticipated that there would “certainly be a worsening of his current anxiety and depressive symptoms if he were placed in the same environment”. She did not feel he would ever be in a position to return to his previous employer.
Though Dr Abeya did not expressly deal with causation, her history and conclusion strongly suggest that Mr Grasa’s condition has been caused by his work with the respondent in 2009 and the events on 12 September 2011.
While an Arbitrator does not have to refer to every piece of evidence (Hevi Lift at [100]), he or she is required to refer to all relevant evidence. What evidence is relevant will depend on the circumstances of the case (Mifsud v Campbell (1991) 21 NSWLR 725 Samuels JA at 728D).
In Beale v Government Insurance Office (NSW) (1997) 48 NSWLR 430, Meagher JA observed at 443:
“No mechanical formula can be given in determining what reasons are required. However, there are three fundamental elements of a statement of reasons, which it is useful to consider. First, a judge should refer to relevant evidence. There is no need to refer to the relevant evidence in detail, especially in circumstances where it is clear that the evidence has been considered. However, where certain evidence is important or critical to the proper determination of the matter and it is not referred to by the trial judge, an appellate court may infer that the trial judge overlooked the evidence or failed to give consideration to it: North Sydney Council v Ligon 302 Pty Ltd (1995) 87 LGERA 435. Where conflicting evidence of a significant nature is given, the existence of both sets of evidence should be referred to.”
In a claim for compensation for a psychological injury where the Arbitrator had some doubt about the validity of the diagnosis given by Mr Grasa’s medical experts, one would have thought that the opinion from Dr Abeya, which strongly supports Mr Grasa and is completely inconsistent with the opinion from Dr Roberts, would have been given careful consideration.
Failing to refer to such an important and supportive report, after Mr Epstein referred to it at length at the arbitration (see T49–50), was an error that demonstrated that the Arbitrator failed to properly consider the evidence and failed to exercise her statutory duty to fairly and lawfully determine the application (YG & GG v Minister for Community Services [2002] NSWCA 247; Absolon v NSW TAFE [1999] NSWCA 311).

INCORRECT LEGAL TEST

The Arbitrator’s reasons

In looking at whether employment was a substantial contributing factor to the injury, the Arbitrator analysed the factual circumstances said to have amounted to isolation, bullying and harassment on 12 September 2011 and said, in summary:
(a)     in the few hours Mr Grasa was at work (on 12 September 2012), and even prior to his return to work, he had difficulties with every person he dealt with ([55]);
(b)     Mr Grasa had not been isolated, but had been invited to smoko ([57]);
(c)     the fact that Mr Grasa had lunch alone did not constitute isolation by fellow workers ([58]);
(d)     Mr Paulisson (a co-worker at Bomaderry) did seem to stay out of Mr Grasa’s way, but that did not amount to bullying, harassment or isolation of Mr Grasa ([63]);
(e)     the dispute over the forced opening of Mr Paulisson’s toolbox (by Mr Grasa) did not constitute bullying or harassment of Mr Grasa. Mr Grasa knew that it was Mr Paulisson’s toolbox and there was no explanation of why he could not have asked Mr Paulisson for the torch he needed rather than try to force open Mr Paulisson’s toolbox. Even if Mr Paulisson did slap the torch down, as alleged by Mr Grasa (and denied by Mr Paulisson), that did not amount to bullying or harassment. Mr Paulisson had supplied all tools and parts Mr Grasa asked for up to that stage, had moved his truck outside (at Mr Grasa’s request), and had generally cooperated with Mr Grasa. There was no explanation of why Mr Grasa did not try to use his own tools in his truck, which had been delivered at about 10.45 am and which he told Mr Millar he had inspected before lunch. Mr Grasa seemed to pretend he did not know the tools were there because Mr Hansen did not tell him they were ([64]);
(f)      in the second incident over the toolbox, while it may have been better for Mr Paulisson to have not relocked his toolbox, there was no reason why Mr Grasa could not have asked Mr Paulisson for the tool he needed or used the tools in his own truck ([65]);
(g)     Mr Grasa was angry, inflexible and suspicious even before he returned to the workplace. He insisted on strict compliance with all details in regard to the behaviour of those around him even before his return to work, appeared to have an obstructive attitude to his employer, and was complaining to human resources and his union representative even before he set foot in the depot. He continued to make frequent complaints while at work to his union representative, but made no attempt to take any positive steps to resolve any problems or disputes himself ([66]), and
(h)     it was difficult to find any positive moves by Mr Grasa in his interactions with his fellow workers and supervisors. It was difficult to find any incident which was not in some way provoked by Mr Grasa. He was misleading in his statement about his knowledge of the availability of his tools from the truck and aggressive in his attitude to the others. He was concerned with raising alleged slights which happened three years before and reporting on new alleged slights to his union representative. His attitude and actions were such that it was difficult to conclude he had any intention of remaining at the workplace or forming any working relationship with his fellow workers. He appeared to be seeking to provoke a conflict in every action and interaction he undertook ([67]).

Submissions

Mr Epstein submitted that the Arbitrator failed to apply the correct principles in determining whether what occurred on 12 September 2011 constituted bullying, isolation or harassment and whether it caused an injury (Attorney General’s Department v K [2010] NSWWCCPD 76 (Attorney General v K).
He said that she erred because she found that, in her view, Mr Grasa’s reaction to the events was not rational and reasonable and, accordingly, no bullying had occurred and there was no injury. Mr Epstein argued that Mr Grasa reacted to real events and that the Arbitrator failed to take into account his reaction to those events, but instead found (at [67]) that he had “provoked” all the incidents.
He contended that Mr Grasa reacted to real events and that the Arbitrator failed to take into account Mr Grasa’s reaction to those events, which was corroborated by evidence from Les Millar, the union representative, and by evidence from Mr Grasa’s wife. Essentially, he argued that the Arbitrator failed to take into account that, in considering Mr Grasa’s reaction to the events on 12 September 2009, the respondent had to take Mr Grasa as they found him (State Transit Authority (NSW) v Chemler [2007] NSWCA 249; 5 DDCR 286 (Chemler).
Mr Morgan submitted that the Arbitrator accepted a certain factual scenario and that was open to her. Once accepted, those facts provided the framework for the Arbitrator’s decision that was properly made.
He said that the reference to Attorney General v K was misguided because the respondent’s case was that the events described by Mr Grasa did not occur as alleged. It was not sufficient for Mr Grasa to assert on appeal that events, which were ordinary and “run of the mill”, established a causal relationship by what was said to be a perception of unreasonable conduct on the part of fellow employees and that that perception in turn gave rise to psychological decompensation, injury and incapacity. More is needed than simply reliance on Attorney General v K and Chemler (Gibbs v Trustees of the Roman Catholic Church of the Diocese of Lismore [2012] NSWWCCPD 30 (Gibbs).

Discussion and findings

Mr Epstein’s submissions are correct.
The Arbitrator seems to have approached the events on 12 September 2011 as if it was necessary to determine who caused the obvious friction at work on that day. This follows from her statement at [67] that it was “difficult to find any incident which was not in some way provoked by Mr Grasa”. Even if that were so, and I make no finding on that issue, that would not prevent a finding that employment was a substantial contributing factor to the injury alleged.
The issue before the Arbitrator required an objective assessment of the evidence to determine if real events occurred (either in the course of or arising out of the employment) that Mr Grasa perceived as creating a hostile environment, even if his view of those events was not rational and reasonable. Employers take their employees as they find them (Chemler).
The evidence established that the following events occurred on 12 September 2011, and that they caused Mr Grasa distress:
(a)     he had been asked to change the return to work date from 12 September to 13 September;
(b)     Mr Grasa was not happy with the documentation presented by John Dinan, the respondent’s manager of fleet services, or the fact that Mr Dinan did not go through the entire documents;
(c)     Mr Grasa initiated conversation at the smoko regarding the weather;
(d)     Mr Grasa had lunch alone;
(e)     from 9.30 am, Mr Grasa had no supervisor, as Mark White had left, and he was alone with Mr Paulisson;
(f)      Mr Grasa was alone at work from between 8.00 am and 9.00 am, and again from 11.00 am until 12.00 midday;
(g)     Mr Grasa’s truck was dropped off without any explanation as to whether his tools were there or could be used;
(h)     there was an incident between Mr Grasa and Mr Paulisson about emptying an oil drum, and
(i)      there were two incidents between Mr Grasa and Mr Paulisson concerning the locked toolbox.
The evidence from Mr White and Mr Paulisson confirms that the above events were real events that happened at work over work matters. Mr Grasa’s perception was that, because of those events, he was being isolated, bullied and harassed. While viewing the matter objectively, it would not be accurate to describe these events in that way, nevertheless they were events that happened at work and caused Mr Grasa to perceive that his work environment was hostile. The test is not whether these events could be objectively described as isolation, bullying and harassment, but whether, based on these events, Mr Grasa perceived that he had been treated in that way.
That he reacted to the events in the way that he claimed is confirmed by evidence from Mr Millar, who said that he received numerous phone calls from Mr Grasa on 12 September 2011 in relation to his treatment by Mr Paulisson. He confirmed that Mr Grasa complained that, when he requested tools, Mr Paulisson had spoken to him in an abrupt manner. Mr Millar also confirmed that Mr Grasa was “very agitated” when he last rang, that he felt “threatened” by Mr Paulisson, and that he could not work under those conditions.
Mr Millar also confirmed that Mr Paulisson had locked his toolbox, something Mr Grasa (wrongly) believed had been done to stop him using the tools. It is irrelevant that there was no explanation as to why Mr Grasa did not use the tools in his own truck, though I note Mr Millar’s evidence that tools were missing from the worker’s truck. It is also irrelevant that Mr Grasa could have asked Mr Paulisson for the tools he needed.
Mr Grasa may well have been angry, inflexible and suspicious before he returned to work on 12 September 2011 (though I make no finding to that effect), but that is not determinative of whether he suffered an aggravation injury on that day. In analysing the matter in that way, the Arbitrator was wrongly attempting to attribute blame rather than determining causation in a no-fault system.
Though it is not strictly relevant to the appeal, I note in passing that Mr Grasa had been off work for a lengthy period because of a psychological condition. One would have thought that, in those circumstances, the respondent would have taken steps to provide a gradual return to work with appropriate support and assistance. Not only did that not happen, he was left with no supervision from 9.30 am on 12 September 2011. Mr Lou Muller, the workshop supervisor at Bellambi, expressed similar concerns (about the need for Mr Grasa to have support on his first day back) in a conversation with Mr Millar on 13 September 2011. Mr Muller had requested that he attend at Bomaderry on Mr Grasa’s return to work, but that request was refused.
It was not necessary for the Arbitrator to find “positive moves” by Mr Grasa in his interactions with his fellow workers and supervisors. In approaching that matter in that way, she focused on the reasonableness of the conduct involved, rather than on whether Mr Grasa reacted to real events in the workplace.
The Arbitrator’s conclusion that, though Mr Paulisson did seem to stay out of Mr Grasa’s way, that did not “constitute isolation” appears to have been made on the basis of some kind of objective test of isolation. The correct test is whether Mr Grasa perceived, on the basis of real events, that he had been isolated or treated unfairly. The fact that Mr Paulisson stayed out of his way and Mr Grasa had lunch on his own provided sound basis for Mr Grasa’s perception that he had been isolated.
Nothing in Gibbs, which turned on its own facts, supports the respondent’s position. In that case, the worker failed because the Arbitrator was not satisfied that her undoubted psychological condition, which included significant psychotic features, had been caused by her employment. It was not accepted that the contemporaneous evidence supported the worker’s perception that her employment was such that she was under attack or that she reacted to real events in the workplace.
In the present case, the contemporaneous evidence (from Mr Millar and others) strongly supports Mr Grasa’s complaints that real events occurred at work on 12 September 2011 that he perceived as creating a hostile environment and were capable of supporting a finding that he received a psychological injury on that day.
In addition, in Gibbs there was no persuasive contemporaneous medical evidence that the events at work with the respondent caused the increase in the worker’s symptoms. In contrast, in the present case, Mr Grasa saw his general practitioner on 12 September 2011 and was certified unfit due to an Adjustment Disorder. His medical case thereafter is consistent with that condition (plus depression) having been caused or aggravated by his employment with the respondent.

CONCLUSION

Mr Grasa has succeeded on all of his grounds of appeal and the Arbitrator’s determination must be revoked. Regrettably, as the parties have not made submissions on all issues in dispute, the matter must be re-determined by another Arbitrator.

DECISION

The Arbitrator’s determination of 25 February 2013 is revoked and the matter is remitted to a different Arbitrator for re-determination.

COSTS

The respondent employer is to pay the appellant worker’s costs of the appeal, assessed at $2,530 plus GST. Costs of the first arbitration, and of the second arbitration, are to follow the outcome of the second arbitration.

Bill Roche
Deputy President

27 May 2013

I, KATHRYN CAMP, CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF BILL ROCHE, DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.

ASSOCIATE