Heycox v Colebrook and Sons Pty Ltd
[2008] NSWWCCPD 133
•11 November 2008
| WORKERS COMPENSATION COMMISSION | |||||
| DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR | |||||
| CITATION: | Heycox v Colebrook and Sons Pty Ltd [2008] NSWWCCPD 133 | ||||
| APPELLANT: | Tina Heycox | ||||
| RESPONDENT: | Colebrook and Sons Pty Ltd | ||||
| INSURER: | QBE Workers Compensation (NSW) Limited | ||||
| FILE NUMBER: | WCC976-08 | ||||
| DATE OF ARBITRATOR’S DECISION: | 9 May 2008 | ||||
| DATE OF APPEAL DECISION: | 11 November 2008 | ||||
| SUBJECT MATTER OF DECISION: | Death benefits claim; dependency; sections 25 and 26 of the Workers Compensation Act 1987; procedural fairness. | ||||
| PRESIDENTIAL MEMBER: | Acting Deputy President Deborah Moore | ||||
| HEARING: | On the papers | ||||
| REPRESENTATION: | Appellant: | Kennedy & Cooke Lawyers | |||
| Respondent: | Curwood Lawyers | ||||
| ORDERS MADE ON APPEAL: | 1. Paragraphs 1 and 2 of the decision of the Arbitrator dated 9 May 2008 are revoked 2. Paragraph 3 is confirmed 3. The matter is remitted to another Arbitrator for redetermination in accordance with these reasons. 4. The Respondent is to pay the Appellant’s costs of the appeal. | ||||
BACKGROUND TO THE APPEAL
On 4 June 2008 Tina Eileen Heycox (‘the Appellant/Mrs Heycox’) sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Workers Compensation Commission (‘the Commission’) against a decision dated 9 May 2008.
The Respondent to the Appeal is Colebrook and Sons Pty Ltd (‘the Respondent/ Colebrook’).
Mrs Heycox is the widow of Brett James Heycox (the deceased) who died in the course of his employment with Colebrook on 3 February 2005. There were no children of the marriage.
By her ‘Application to Resolve a Dispute’ (‘Application’) filed in the Commission on 12 February 2008, Mrs Heycox claimed that her dependency, although partial, was in excess of the maximum amount available, and sought lump sum compensation in the sum of $296,250.00 plus interest.
The parties attended a conciliation/arbitration hearing on 3 April 2008. The Arbitrator determined that Mrs Heycox was partially dependent on the deceased, and awarded her the sum of $149,000.00 on that basis.
It is from this decision that Mrs Heycox seeks leave to appeal.
THE DECISION UNDER REVIEW
The ‘Certificate of Determination’, dated 9 May 2008 records the Arbitrator’s orders as follows:
“1.The Respondent is to pay the Applicant, Mrs Tina Eileen Heycox, the sum of $149,000.00 pursuant to section 26 of the Workers Compensation Act 1987.
2. No interest is payable on the sum in Order (1) provided same is paid within 28 days of the date of the Notice of Charge and then interest is payable pursuant to section 109 of the Workplace Injury Management and Workers CompensationAct 1998.
3. The Respondent to pay the Applicant’s costs as agreed or assessed. The matter is certified complex and there is to be a 15%increase of costs otherwise available.”
ON THE PAPERS REVIEW
Section 354(6) of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’) provides:
“(6)If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”
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.
LEAVE
Before proceeding to deal with an appeal the Commission must determine whether the application meets the requirements of section 352 of the 1998 Act.
The appeal was lodged within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act, and the amount at issue satisfies the requirements of section 352(2).
Leave to appeal is granted.
THE REVIEW PROCESS
The nature of the review process has been succinctly summarised by Deputy President Roche in a number of decisions, and recently in Universal Consultancy Services Pty Ltd v Datta [2008] NSWWCCPD 87 where he said as follows [16-18]:
“16.The Court of Appeal considered the nature of a ‘review’ under section 352 of the 1998 Act in Aluminium Louvres & Ceilings Pty Limited v Zheng [2006] NSWCA 34; (2006) 4 DDCR 358 (‘Zheng’), where Bryson JA said at [38]:
‘A review is a different process to an appeal and the matters which may be considered and the manner in which they may be considered are somewhat wider. See Boston Clothing Co Pty Ltd v. Margaronis (1992) 27 NSWLR 580 at 584 (Kirby P). An attack, on review or otherwise, on an Arbitrator's discretionary decision in controlling procedure may be based on the test stated in House v. R (1936) 55 CLR 499 at 504 - 505; but that is not the only basis on which the Presidential member may act. The powers of a Presidential member on review are somewhat wider and extend to power to reopen consideration of a matter of which an Arbitrator has disposed; the manner in which the powers of the Presidential member are to be exercised is itself the subject of discretion of the Presidential member.’
17.McColl JA approved this passage in South Western Sydney Area Health Service v Edmonds (2007) 4 DDCR 421; [2007] NSWCA 16 at [134] (‘Edmonds’). To describe the relative weight and relevance of the expert evidence as “a discretionary decision which could only be disturbed on House v The King principles” was described by McColl JA as “an over-generalisation” (at [133]). Thus, on review, a Presidential member is not bound by an Arbitrator’s discretionary decision, but can reach his or her own conclusion.
18.The nature of a review was further considered by the Court of Appeal in State Transit Authority of New South Wales v Fritzi Chemler[2007] NSWCA 249; (2007) 5 DDCR 287 (‘Chemler’) where Spigelman CJ said at [28] and [30]:
‘28.The concept of a review on the merits is wider than the concept of an appeal in a judicial context. There is a well established line of authority on the use of the terminology of ‘review’ instead of ‘appeal’ with respect to the workers compensation system in this State which establishes the breadth of a review on the merits.
30.A Presidential member exercising a power to review a decision must decide whether the original decision is wrong or, as it is often put in the context of administrative appeals on merits, must decide what is the true and correct view. If s/he does so decide then s/he should substitute his or her own views, unless it is an appropriate case to remit. The power to remit is not constrained in the manner for which the Appellant contends.’”
Bearing these principles in mind, I turn now to the issues in dispute.
THE ISSUES IN DISPUTE
There was no dispute as to injury or death arising out of or in the course of employment with Colebrook. The only issue was the degree and extent of dependency of Mrs Heycox on the deceased, and the amount of her entitlement to compensation pursuant to either section 25 or 26 of the Workers Compensation Act 1987 (‘the 1987 Act’).
PRELIMINARY MATTERS
I was advised by the Commission on receipt of this appeal that the Arbitrator’s file had been mislaid. I received the appeal file together with the administrative file. There was some uncertainty as to whether all the evidence before the Arbitrator was contained in the administrative file. This was of considerable significance since one of the grounds of appeal related to the deceased’s earnings.
The Arbitrator referred to a document titled “Letter from the Respondent dated 2 January 2005.” It purportedly set out details of the deceased’s earnings with Colebrook. She could not locate it in her file despite it being referred to in Mrs Heycox’s Application. The letter was not attached to the Application in the administrative file.
I issued a direction in this matter on 24 September 2008 directing Mrs Heycox to forward a copy of the letter to the Commission and to Colebrook. The parties were asked to file any further submissions by 29 October 2008.
Neither party has elected to file further submissions.
The letter states that the deceased earned $800.00 net per week with Colebrook.
The Arbitrator found as a matter of fact that the deceased’s “… net weekly income at the time of injury and death…” was $448.06.
This finding, Mrs Heycox submits, was an error by the Arbitrator, and forms the basis of the appeal. I will turn now to consider the grounds of appeal.
THE GROUNDS OF APPEAL
Mrs Heycox submits that the Arbitrator erred in the following respects:
“(a)in finding that the deceased’s earnings at the date of death were $448.06 per week net
(b)in assessing the future dependence of the applicant over a period of 27 years.
(c)in failing to give reasons for rejecting the applicant’s assessment of the value of the deceased’s contribution towards home maintenance and yard work.
(d)in failing to take account of the applicant’s future loss of dependency on the deceased’s superannuation entitlement.
(e) in failing to award interest.”
Mrs Heycox also submits that:
“In the event that the [Application] did not contain the letter from [Colebrook] dated 2 January 2005, the Arbitrator denied the applicant procedural fairness in proceeding to a determination without seeking reference to a copy of that document.”
THE EVIDENCE AND SUBMISSIONS
The Deceased’s Earnings
In her statement dated 31 January 2008 Mrs Heycox claimed that the deceased was “…bringing home…” $800.00 per week. As I said earlier, the letter from Colebrook dated 2 January 2005 confirmed that claim.
In addition, the Transcript of the proceedings before the Arbitrator revealed this exchange at page 2:
“Arbitrator: …are there any agreed facts? …I think it was agreed that Mr Heycox’s net income was $800 a week?
Counsel for Colebrook: Well, Mrs Heycox has that in her statement. I’ve nothing to contradict that.”
A further exchange took place at page 16 as follows:
“Arbitrator: [Counsel for Mrs Heycox]…do you want to make any other submissions on the issue of the husband’s salary?
Counsel for Mrs Heycox: No, because it’s agreed that he was earning $800 a week.
Counsel for Colebrook: No, I didn’t agree. I agreed that it was in the statement.
Counsel for Mrs Heycox: It’s in the letter from the respondent. That’s what we rely on, that he was earning $800 a week
Counsel for Cole brook: Where’s that?
Counsel for Mrs Heycox: It’s attached to the application – ‘To whom it may concern’.
Counsel for Colebrook: Well, so he was getting $800 a week, but the money that the dependency is claimed on was going into the joint account.”
There was additional documentary evidence as to the deceased’s earnings such as taxation records and group certificates, but it is fair to say, as the Arbitrator noted, that these documents were not entirely satisfactory.
It is also fair to say that it is clear from the Arbitrator’s ‘Statement of Reasons’ (‘Reasons’) that she calculated the deceased’s earnings from this material alone.
As to the other evidence, the Arbitrator said at [23]-[24]:
“23. [Counsel for Mrs Heycox] referred to correspondence dated 2 January 2005 from the Deceased’s employer stating he earned $800 per week. He did not indicate if this was gross or net. Despite my best efforts I have not been able to identify this document attached to the Application nor did [Counsel for Colebrook] appear to be familiar with its existence. However, I note a passing reference to this document at paragraph 11 of [Mrs Heycox’s solicitor’s] letter to QBE dated 30 March 2006.
24. The Respondent submitted that it was unclear exactly what the Deceased’s income had been at the time of his injury and death and that the matter was muddied by Mrs Heycox’s claim… that both she and her late husband deposited all of their salaries into a joint…account. I agree with [Counsel for Colebrook] that the dearth of supporting evidence makes a factual finding difficult. There are no payslips to help clarify the matter and deposits made into the joint bank account for the period are inconsistent and generally unhelpful. The bank statements in evidence are not complete…”
The Arbitrator’s task was not made easy by this “dearth of supporting evidence”, or more particularly, by the apparent conflict in the evidence, nor I suspect by the gap of some five weeks between the hearing and her determination. Nonetheless, there was clear evidence from Colebrook both in the letter of 2 January 2005 and indeed from Counsel for Colebrook that the deceased’s net weekly earnings as at the date of death were $800.00.
I accept Ms Heycox’s submission that:
“The absence of this document [the letter of 2 January 2005] from the copy of the ARD in the possession of the Arbitrator was not a matter raised with the parties during the hearing of the arbitration or for that matter at any time thereafter. The fact that counsel for the respondent was not familiar with the existence of the document is, with respect, neither here nor there.
The failure of the Arbitrator to signal to the parties the absence of the document constituted a denial of procedural fairness…”
This is particularly so because Counsel for Colebrook, although not specifically stating that earnings of $800.00 per week were an “agreed fact” nonetheless did not demur from this assertion.
The Arbitrator’s calculation as to the degree of dependency of Mrs Heycox was based upon weekly earnings of the deceased of $448.06. Having made that finding, she then considered the earnings of Mrs Heycox. After applying the formula set out in Halvorsen vRobinson (1993) 31 NSWLR 1 and taking into account additional matters such as home maintenance, she arrived at a “financial dependence of $205.77 per week.” Applying the table of multipliers over a 27 year period, and discounting for “contingencies”, the award totalled $149,000.00.
Whilst there may have been some inconsistencies in the bank records and other documents as to the amount that may have been deposited by the deceased, the critical evidence was the income of the deceased at the time of death. There is no clearer evidence than that contained in the letter from Colebrook of 2 January 2005 addressed “to whom it may concern” and dated about one month prior to the date of death.
In these circumstances, it is somewhat disingenuous of Colebrook to submit that:
“The statement given by the Appellant and the…bank records are quite at odds and…the Arbitrator was obliged to accept that material that had been placed before her with respect to the monies made available to the Applicant by the deceased.”
The Arbitrator has erred in fact on this issue, and has also denied Mrs Heycox procedural fairness in failing to take steps to locate the letter from Colebrook dated 2 January 2005 of which she was aware, and which was clearly crucial to Mrs Heycox’s claim. Regrettably, it will require redetermination: given the issues raised, I do not consider that it is a matter in which it is appropriate to substitute my own award as is permitted by section 352(7) of the1998 Act.
The Other Grounds of Appeal
Having determined that the Arbitrator made an error of fact in relation to the deceased’s earnings, it is not necessary for me to review the other matters the subject of appeal. Nonetheless, given that the matter is to be redetermined, a few observations are appropriate.
I accept Mrs Heycox’s submission that there appears to be a mathematical error in the calculation of the years of ‘future dependence’. I also accept her submission that the Arbitrator failed to give any or any adequate reasons for rejecting Mrs Heycox’s assessment of the value of the deceased’s contribution to’ home maintenance.’ She had assessed this at $80.00 per week. Her assessment was not challenged, but the Arbitrator stated at [35]:
“Mrs Heycox now lives in a property she has since purchased and says she pays her nephew $20 per week to undertake some of these [maintenance and yard work] tasks but concludes that on the open labour market the fee for these services would more likely be $80 per week. I believe an additional dependency of $40 per week would be reasonable for the assistance provided in the home by the deceased.”
The awarding of interest is a discretionary matter. There is some merit in Mrs Heycox’s appeal on this issue. The Arbitrator stated at [41]:
“The Respondent did not delay the payment of compensation because it actively engaged in settlement negotiations for some time prior to the Application being filed in the Commission. The only issue was that the Applicant did not accept any of the offers made. I do not find any grounds exist for an award for interest up to this date.”
Nonetheless, it is clear that Mrs Heycox amended her claim on a number of occasions, apparently having some difficulty in nominating the correct amount prescribed for total dependency at the date of the deceased’s death. The discretion must be exercised fairly, and I am not persuaded that the Arbitrator’s approach based on a failure to accept an offer of settlement was appropriate in the circumstances.
CONCLUSION
The Arbitrator erred in a material respect in her findings as to the deceased’s earnings as at the date of death. This had a significant effect on her calculations as to Mrs Heycox’s entitlement. Her findings on this issue were against the weight of the evidence.
Her findings on other issues to which I have referred were also flawed, but because of the nature of the claim and the discretionary factors involved, I am of the view that the appropriate course is to remit the matter to another Arbitrator for redetermination in accordance with these reasons.
DECISION
1. Paragraphs 1 and 2 of the decision of the Arbitrator dated 9 May 2008 are revoked.
2.Paragraph 3 is confirmed.
3.The matter is remitted to another Arbitrator for redetermination in accordance with these reasons
COSTS
The Respondent is to pay the Appellant’s costs of the appeal.
Deborah Moore
Acting Deputy President
11 November 2008
I, MARIE JOHNS CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF DEBORAH MOORE ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
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