Homecare Service of New South Wales v Vryenhoek
[2010] NSWWCCPD 6
•18 January 2010
| WORKERS COMPENSATION COMMISSION | ||||||
| DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR | ||||||
| CITATION: | Homecare Service of New South Wales v Vryenhoek [2010] NSWWCCPD 6 | |||||
| APPELLANT: | Homecare Service of New South Wales | |||||
| RESPONDENT: | Kelly Ann Vryenhoek | |||||
| INSURER: | Treasury Managed Fund, Allianz Australia Insurance Limited | |||||
| FILE NUMBER: | A1-2967/09 | |||||
| ARBITRATOR: | Mr R Foggo | |||||
| DATE OF ARBITRATOR’S DECISION: | 7 September 2009 | |||||
| DATE OF APPEAL DECISION: | 18 January 2010 | |||||
| SUBJECT MATTER OF DECISION: | Procedural fairness; entitlement of a party to be heard; adequacy of notice as required by section 74 of the Workplace Injury Management and Workers Compensation Act 1998. | |||||
| PRESIDENTIAL MEMBER: | Deputy President Kevin O’Grady | |||||
| HEARING: | On the papers | |||||
| REPRESENTATION: | Appellant: | Smuts McKenzie Lawyers | ||||
| Respondent: | Somerville Laundry Lomax | |||||
| ORDERS MADE ON APPEAL: | 1. Orders one and two made by the Arbitrator in his decision dated 7 September 2009 are revoked and the following order and direction is made: “The matter is to be remitted to the Arbitrator for determination in accordance with this decision and the following direction: The Arbitrator is directed to adjudicate any application made by either party to adduce additional evidence and to seek from each of the parties and to consider any supplementary submissions either written or oral the parties may elect to put. Both the question of additional evidence and submissions is to be dealt with by the Arbitrator in accordance with a timetable determined by him before proceeding to determine the Application.” 2. Orders three, four and five of the Arbitrator’s decision dated 7 September 2009 are confirmed. | |||||
BACKGROUND TO THE APPEAL
Kelly Ann Vryenhoek (the worker), who is 35 years of age, commenced employment with Homecare Service of NSW in November 2004 as a carer. The worker was engaged on a part time basis and her duties included the personal care of members of the community suffering disability. In addition to such personal care the worker was required to perform domestic duties including basic housework such as vacuuming, mopping, washing, cleaning and attending to shopping.
The duties performed by the worker, particularly those concerning personal care of her clients, were often physically demanding. Approximately six months after her commencement of employment she experienced significant low back pain and right sided sciatica. As time passed the pain experienced by the worker increased in severity and became more regular whilst she was engaged in those duties requiring heavy lifting.
The worker, by reason of her painful symptoms, was absent from her work for a period of two weeks in September 2005. She sought medical treatment and returned to her normal duties however painful symptoms recurred causing intermittent absences from work. The worker claimed sick leave during absences and continued to perform her work until July 2007. At that time her duties were altered following a request put to her supervisor for a reduction in working hours and a reduction of the frequency to attend to the needs of a particularly heavy client from five to three days per week.
The worker, by reason of her continuing painful symptoms, ceased work on 24 August 2007 and has not resumed since. A claim in respect of compensation benefits was made by the worker and weekly payments were made until 31 December 2007.
The worker’s weekly payments were terminated following service upon her of a notice of denial of liability. That notice was dated 17 December 2007 and a copy, excluding documents which were said to have been enclosed, is in evidence.
On 17 September 2008 the worker, through her solicitors, made a claim against the respondent for compensation benefits including lump sums in respect of whole person impairment pursuant to section 66 and 67 of the 1987 Act. The respondent denied liability following which the worker filed an Application to Resolve a Dispute (‘ARD’) in the Workers Compensation Commission (‘the Commission’) on 21 April 2009. That application sought orders in respect of weekly payments, medical and associated expenses and lump sums.
The matter came before an Arbitrator for conciliation/arbitration on 17 August 2009 at which time each party was represented by counsel. The Arbitrator reserved his decision and a Certificate of Determination was issued on 7 September 2009 accompanied by a Statement of Reasons for Decision.
THE DECISION UNDER REVIEW
The ‘Certificate of Determination’ dated 7 September 2009 records the Arbitrator’s orders as follows:
“The Commission determines:
1.The Respondent is to pay the Applicant’s weekly payments of compensation from 1st January 2008 to date and continuing at the rate of $500.00 per week in accordance with the provisions of the Act.
2.The parties have agreed that the Applicant has been paid 18 weeks workers compensation and accordingly is entitled to a further 8 weeks payments pursuant to Section 36.
3.The degree of permanent impairment in respect of the Applicant’s lumbar spine is remitted to the Registrar for referral to an Approved Medical Specialist for assessment in accordance with the WorkCover Guide to the Evaluation of Permanent Impairment with a date of injury of 1st May 2005.
4.The documents to be sent to the AMS are those accepted in to these proceedings, namely
·Application to Resolve a Dispute and attached documents
·Reply and attached documents
·Further unsigned statement of the Applicant
·Manual handling Policy of the Department
·Email from Joanne Mason to Lynette Hayman of 27th May 2009, but not the document on the reverse of that email
·Statement of Maria Zorzo of 29th May 2009, but not the statement of Lyn Hayman on the reverse of that document
·Report of Dr Bookallil of 14th December 2007
·Clinical records produced by Prema House Medical Centre
·Clinical notes produced by King Street Medical Centre/Dr Mouncey
5.The Applicant’s claim pursuant to costs and Section 67 are reserved.
A brief statement is attached to this determination setting out the Commission’s reasons for the determination.”
An application seeking leave to appeal against the decision of the Arbitrator was filed on behalf of the Appellant on 29 September 2009.
ISSUES IN DISPUTE
The issues in dispute in the appeal are whether the Arbitrator erred in the following respects:
(i)determining that the Appellant had failed to give notice of a matter in dispute, namely “incapacity”, as required by section 74 of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’), and
(ii)determining that the worker was entitled to an award of weekly compensation at the rate of $500.00 per week from 1 January 2008 to date and continuing.
The issues as summarised above have been taken from the written submissions provided by the Appellant in support of its application for leave to appeal.
ON THE PAPERS REVIEW
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 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.
LEAVE
There is no dispute between the parties concerning threshold requirements as prescribed by section 352 of the 1998 Act.
The appeal having been lodged within the time prescribed by that section and the fact that the monetary threshold prescribed by that section has been met, together with a consideration of the arguments raised on appeal, lead me to conclude that it is appropriate that leave be granted to proceed with the appeal and I so order.
PRELIMINARY MATTERS
The dispute between the parties was conducted before the Arbitrator with particular emphasis, given both in the parties’ evidence and submissions, upon the question of causal nexus between work and an abnormality suffered by the worker in her lumbar spine which was incapacitating. The medical evidence before the Arbitrator established that the worker had suffered from a lumbar disc lesion at the L5/S1 level with herniation of the disc on the right side. At the hearing the Appellant relied upon the evidence of Dr Peter Holman, orthopaedic surgeon, and Dr Anthony Bookallil, consultant neurosurgeon, in support of submissions that any disabling symptoms experienced by the worker in her lumbar spine and right leg were not caused by any relevant work injury. There was evidence before the Arbitrator which suggested that the worker had received a low back injury at a time prior to her commencement of employment with the Appellant and there was documentary evidence which was relied upon to found an argument that back and leg symptoms had been experienced by the worker, for which she sought treatment, in circumstances which were not work related. These arguments concerning causation were rejected by the Arbitrator and it was found (at [46] of Reasons):
“Accordingly I am comfortably persuaded that the Applicant’s employment with the Respondent aggravated, accelerated, exacerbated or deteriorated her lumbar condition and that the Applicant’s employment with the Respondent was a substantial contributing factor to the aggravation, acceleration, exacerbation or deterioration of her lumbar condition.”
That finding by the Arbitrator is not the subject of dispute on this appeal and, in those circumstances, it is unnecessary to embark upon a detailed examination of the medical evidence concerning aetiology of the worker’s condition nor of those clinical notes and other documents which are contemporaneous records of complaint made by her and treatment received in respect of disability from time to time.
EVIDENCE
Worker’s evidence
The evidence adduced before the Arbitrator is summarised by him at [11] of Reasons. No oral evidence was given at the hearing. The proceedings were recorded and a transcript is available (‘Transcript’). Each party was represented by counsel at that hearing and submissions put on their behalf have been recorded and transcribed.
A statement made by the worker dated 15 April 2009 was in evidence before the Arbitrator. The worker describes the duties which she was required to perform in the course of work with the Appellant and it is noted that the physical requirements of attending to the personal needs of her clients required very heavy work involving pulling and lifting people into wheelchairs, lifting clients into shower chairs, attending to personal hygiene of the client including drying and dressing. It is stated that the worker was engaged “an average of 20-25 hours per week at the rate of $17.42 per hour.”
The symptoms suffered by the worker are described by her in that statement at page three. In addition to back pain the worker suffers spasms and pain in the right leg to the level of her foot, numbness at the back of her leg, a tingling sensation and numbness in the right foot, tightness and cramping in her right leg. It seems that the worker last attended work on Thursday 23 August 2007. The matters I have summarised from the statement are the only matters which are directly relevant to the issues raised on this appeal.
The worker relied upon the evidence of Dr John R. S. Ashwell, orthopaedic surgeon, as it appears in four reports provided for the purposes of this litigation. It was Dr Ashwell’s view expressed in the last of those reports dated 12 August 2008 that, as a result of heavy lifting in the course of her work, the worker had suffered an aggravation of a disc protrusion and that, on examination, there was demonstrated evidence of true radiculopathy, there being right calf wasting, diminished sensation in the S1 nerve root distribution and a reduced right ankle reflex. With respect to capacity for work Dr Ashwell stated:
“She is presently not fit for her pre-injury work duties in that she should avoid lifting weights more than 10 kg and avoid repetitive bending. She is however, fit for suitable duties at full work hours with these restrictions.”
The worker tendered in evidence a letter dated 17 December 2007 which she had received from the Treasury Managed Fund, Allianz Australia Insurance Limited (‘the insurer’). That correspondence gave notice that liability had been denied with respect to her claim for compensation benefits. The letter included the sentence – “This decision is made under Section 9A, 33, 59, 60 of the Workers Compensation Act 1987.” The letter proceeds to state that the “reasons and evidence to support [the] decision” were outlined in “the following Section 74 Notice.” I note that no Notice fitting that description was included among documents relied upon by the worker.
A copy of correspondence dated 31 December 2008 from the insurer addressed to the worker was in evidence. This letter refers to the report of Dr Peter Holman dated 26 November 2008. A copy of that report is said to be enclosed and it is stated “we decline to make any offer of settlement.”
The worker tendered a number of pay slips and her PAYG payment summary for the years 2006, 2007 and 2008.
For the reasons stated in [17] above it is unnecessary to attempt a summary of the balance of the material adduced in evidence on behalf of the worker.
Appellant’s evidence
As earlier noted the Appellant relied upon the opinions of Dr Holman and Dr Bookallil whose reports had been provided for the purposes of this litigation. Dr Peter Holman in his report of 26 November 2008 expresses the view that the worker had suffered a temporary aggravation of a back disability, being an intervertebral disc lesion at the L5/S1 level. He appears to accept that she is unable to “get back to her previous occupation”(at page 7).
Dr Bookallil expressed the view in his report that the condition of the worker’s lumbar spine, that being a protrusion of her “previously degenerate L5/S1 disc”, was a spontaneous progression and he expressed the view that the Appellant has no liability with respect to the claim. That opinion appears in his report of 4 December 2007 where he expressed the further view that the worker “could not perform pre-injury duties at the present time because she has too much pain and I would not stress her back.”
The Appellant tendered in evidence a copy of correspondence dated 17 December 2007 which is, on the face of the document, addressed to the worker. The text of this copy correspondence is in a form different to that document bearing the same date which is relied upon by the worker (referred to at [22] above). The copy correspondence relied upon by the Appellant makes reference to provision of notice of termination of weekly payments as required by section 54 of the 1987 Act. A document headed “Notice under section 54 of the Workers Compensation Act 1987” is also in evidence. That document makes reference to “information, reports and documents” said to be attached however there are no further documents fitting such description in evidence before the Commission. A pro forma document with the worker’s name endorsed upon it together with a claim number headed “Application for review by insurer” forms part of the documentation relied upon by the Appellant.
The Appellant relied upon a copy of correspondence dated 31 December 2008 addressed to the worker’s solicitors. That document appears to be identical to that which is relied upon by the worker.
The balance of the documentary evidence relied upon by the Appellant is not directly relevant to the issues raised on this appeal.
SUBMISSION DISCUSSION AND FINDINGS
The Appellant in submissions on this appeal asserts error on the part of the Arbitrator with respect to his determination that the Appellant had failed to give notice to the worker that a dispute existed with respect to the issue of incapacity. Such an obligation exists given the provisions of section 74 of the 1998 Act which relevantly provides:
“74 Insurers to give notice and reasons when liability disputed
(cf former s 94A)
(1) If an insurer disputes liability in respect of a claim or any aspect of a
claim, the insurer must give notice of the dispute to the claimant.
(2) The notice must contain the following:
(a) a statement of the reason the insurer disputes liability and of the issues relevant to the decision,
(a1) a statement to the effect that the worker can request a review of the
claim by the insurer,
(b) unless paragraph (c) applies, a statement to the effect that the
worker can refer the dispute for determination by the Commission,
(c) if the insurer has referred or proposes to refer the dispute for
determination by the Commission, a statement to that effect
specifying the date of referral or proposed referral,
(c1) a statement to the effect that the matters that may be referred to the
Commission are limited to matters notified in the notice, or in a
notice after a further review or in correspondence prior to any such
referral concerning an offer of settlement or in a request for a
further review,
(d) a statement to the effect that the worker can also seek advice or
assistance from the worker’s trade union organisation or from a
lawyer,
(e) such other information as the regulations may prescribe or, subject
to the regulations, as the Authority may from time to time approve
and notify to insurers and self-insurers.
(2A) In the case of a claim for compensation under this Act, a statement of
reasons in a notice under this section is to indicate the provision of the workers compensation legislation on which the insurer relies to dispute liability.
(2B) A notice under this section must be expressed in plain language.
(3) The regulations may make provision for the form of and for other
information to be included in or to accompany a notice under this section.
The regulations may require an insurer to give a copy of a notice under this section to the claimant’s employer.
…
(4) Notice is not required to be given under this section with respect to a
dispute if notice has been given under section 54 of the 1987 Act with respect to the dispute and that notice contained the statements and information that a notice under this section is required to contain.
(5) Before giving a notice under this section, an insurer must carry out an internal review of the decision to dispute liability in respect of the claim or an aspect of the claim.”
It must be stated at the outset that the evidence, such as it is, concerning notice given by the Appellant to the worker concerning disputed liability and the insurer’s intention to discontinue weekly payments is in a most unsatisfactory state. The evidence adduced by the worker concerning notice includes copy correspondence dated 17 December 2007 which, in important respects, is different in form to the document bearing the same date relied upon by the Appellant. The worker’s evidence is that the correspondence received specified denial of liability upon the basis as noted in [22] above and reference was made to reasons and evidence as outlined “in the following section 74 notice”. As noted above there were no further documents adduced on behalf of the worker and it is open to inference that the correspondence had no enclosures.
Notice requirements concerning termination of payments of weekly compensation are prescribed by Section 54 of the Workers Compensation Act 1987 (‘the 1987 Act) which relevantly provides:
“54 Notice required before termination or reduction of payment of weekly compensation
(cf former s 54A)
(1) If a worker:
(a) has received weekly payments of compensation for a continuous period of at least 12 weeks, and
(b) has provided the worker’s employer, or the employer’s insurer, with a certificate by a medical practitioner specifying the expected duration of the worker’s incapacity,
the person paying the compensation shall not discontinue payment, or reduce the amount, of the compensation during the period of incapacity so specified without giving the worker the prescribed period of notice of intention to discontinue payment of the compensation or to reduce the amount of the compensation.
Maximum penalty: 50 penalty units.
(2) If the payment of compensation to a worker is discontinued, or the amount of compensation is reduced, by a person in circumstances involving the commission by that person of an offence under subsection (1), the worker may, whether or not that person has been prosecuted for the offence, recover from the person an amount of compensation that:
(a) if no period of notice has been given—is equal to the amount of compensation, or additional compensation, that would have been payable during the prescribed period of notice if payment of the compensation had not been discontinued or if the amount of compensation had not been reduced, or
(b) if less than the prescribed period of notice has been given—is equal to the amount of compensation that would have been payable during the balance of the prescribed period of notice if payment of the compensation had not been discontinued or if the amount of the compensation had not been reduced.
The prescribed period of notice referred to in this section is:
(a) if the worker has been receiving weekly payments of compensation for a continuous period of at least 12 weeks but less than 1 year—2 weeks, or
(b) if the worker has been receiving weekly payments of compensation for a continuous period of 1 year or more—6 weeks.
(4) The notice referred to in this section shall:
(a) be given to the worker personally or by post, and
(b) if the regulations so require, be in such form (or contain such information) as may be prescribed by the regulations…”
If it be accepted, and I make no finding on the matter, that notice concerning the intention to discontinue weekly payments and that concerning disputed liability took the form of those documents relied upon by the worker, it could not be argued that there has been compliance by the insurer with the notice requirements of the Acts.
The documentary evidence concerning notice relied upon by the insurer is in significantly different form to the notice said by the worker to have been received by her. The copy correspondence attached to the Appellant’s Reply makes express reference to the provisions of section 54 of the 1987 Act and proceeds to specify “a further two weeks notice for weekly compensation benefits”. Such period of notice complies with the relevant provision. The document proceeds to make reference to “reasons and evidence” that are “outlined in the following Section 54 Notice.” The material relied upon includes a separate document headed “Notice under Section 54 of the Workers Compensation Act 1987” which, on the face of the document, appears to address those matters, that is statements and information, that are required by the provisions of section 74 of the 1998 Act. If it be accepted that these documents truly represent the form of notice given to the worker as required by the Acts it may be arguable that the form of notice requirements have been met notwithstanding that a deficiency exists in that there were no copies of relevant information, reports and documents enclosed as referred to in paragraph five of the notice. That is, of course, a different question as to whether notice of the issue of incapacity has been given.
Compliance by a person paying compensation with the notice requirements also requires compliance with clauses 15 and 37 of the Workers Compensation Regulation 2003 (‘the Regulation’). Clause 34 provides that failure to comply with section 74 of the 1998 Act constitutes an offence.
Accepting for the present that the insurer has not here given notice as required concerning the issue of incapacity, consideration must be given to the provisions of section 289A of the 1998 Act which provides:
“289A Further restrictions as to when a dispute can be referred to Commission
(1) A dispute cannot be referred for determination by the Commission unless it concerns only matters previously notified as disputed.
(2) A matter is taken to have been previously notified as disputed if:
(a) it was notified in a notice of dispute under this Act or the 1987 Act after a claim was made or a claim was reviewed, or
(b) it concerns matters, raised in writing between the parties before the dispute is referred to the Registrar for determination by the Commission, concerning an offer of settlement of a claim for lump sum compensation.
(3) The Commission may not hear or otherwise deal with any dispute if this section provides that the dispute cannot be referred for determination by the Commission. However, the Commission may hear or otherwise deal with a matter subsequently arising out of such a dispute.
(4) Despite subsection (3), a dispute relating to previously unnotified matters may be heard or otherwise dealt with by the Commission if the Commission is of the opinion that it is in the interests of justice to do so.”
The Arbitrator has made no reference to the provisions of section 289A of the 1998 Act in the course of his reasons, however it may reasonably be inferred that his finding that incapacity had not been previously notified prevented the referral for determination of such matter; section 289A(1).
It is put on behalf of the Appellant (at [29] of submissions) that “the section 74 notice does in fact raise incapacity as an issue in the claim, noting that the notice specifically refers to section 33 of the Act in declining the claim”. The submissions proceed to narrate the terms of section 33 of the 1987 Act which provide:
“33 Weekly compensation during total or partial incapacity for work
(cf former s 9 (1))
If total or partial incapacity for work results from an injury, the compensation payable by the employer under this Act to the injured worker shall include a weekly payment during the incapacity.”
It is the Appellant’s assertion that reference to the provisions of section 33 “is sufficient to put the worker on notice as at December 2007, the issue of her incapacity for employment, both total or partial, was in issue” (submission at [31]).
The worker in her submissions opposing this appeal disputes the Appellant’s assertion that reference to section 33 was sufficient to constitute notice as required. The worker submits that section 33 “is an enabling section solely going to causation. The sections which should have been relied upon by the Appellant were ss.36, 37, 38 and 40”. The worker, at [5] of submissions draws the Commissions notice to the fact that the Reply filed on behalf of the Appellant contained no statement as to the relevant issues in dispute at Part 3 of that document.
It has been stated by Burke J in Watts Peterson Automotive Pty Ltd v Peterson (1994) 10 NSWCCR 653 at 661 that:
“Section 33 vests a right to compensation where a worker suffers incapacity as a result of injury. Section 4 defines the various categories of injury which might relevantly afflict a worker. Depending on which category of injury in section 4(b) is involved, sections 15 and 16 prescribe some of the formalities relevant to the liability arising under section 33. The latter sections do not provide the worker with a right to compensation but facilitate the implementation of the right arising from section 33”.
I respectfully agree with the observations of Burke J as above quoted concerning characterisation of the provisions of section 33 as being a “vesting provision”. In my opinion fleeting reference to section 33, as appears in each of the subject letters, does not constitute adequate notice as required by the Acts that the issue of incapacity is relevant to the insurer’s decision. (see discussion by Roche DP in Mateus v Zodune Pty Limited t/as Tempo Cleaning Services [2007] NSWWCCPD 227 and by Snell ADP in Seaib v Hays Personnel Services (Aust) Pty Ltd [2008] NSWWCCPD 36).
The conclusion which I have reached concerning the inadequacy of notice concerning that issue is founded upon a consideration of the content of those documents relating to suggested notice which are in evidence. That conclusion is reached without the need to decide as to which of the two conflicting forms of notice in evidence had been conveyed to the worker by the insurer. No determination with respect to the conflict of that evidence is made on this review given, as I have earlier noted, that neither party has raised the issue in the course of submissions. I am, however, able to reach this conclusion given that each of the conflicting documents contains a similar fleeting reference to the provisions of section 33 and otherwise nothing relevant to incapacity.
It follows that the Appellant’s suggestion of error on the part of the Arbitrator concerning the finding of failure to give notice of “incapacity” must be rejected. Notwithstanding my rejection of that argument it remains to be considered whether the Arbitrator erred, as suggested by the Appellant at [34] of submissions, in failing to afford the Appellant an opportunity to make submissions regarding the issue of notice. Consideration of that matter requires an examination of the manner in which the proceedings were conducted by the parties and attention must be given to the Arbitrator’s conduct.
Conduct of the Hearing before the Arbitrator
The Arbitrator, at [8] of Reasons, stated:
“The parties agree that the issues for determination are those contained in the Respondent’s Section 54 Notice of 17th December 2007, namely;
· That the Applicant is not suffering from a work related condition”
It is recorded (transcript page10) that the Appellant’s counsel stated “causation is the issue” in the context of his reference to and reliance upon the contents of particular clinical records which had been produced concerning the worker’s relevant history. Apart from that observation by counsel, limited to that context, there is no record of any express agreement of the issues as refined by the Arbitrator at [8] of his Reasons. It is recorded (transcript page 5) that the Appellant’s counsel made reference to the opinion of Dr Ashwell concerning work capacity, which he paraphrased as “full-time light duties”. As a rejoinder to that observation, the worker’s counsel noted that “both Bookallil and Holman say that she is unfit to do her previous job”. Later, in the course of his submissions, counsel for the Appellant made reference to the “Mitchell test” (transcript page 15) and argued that proper application of that test would lead to a determination that the worker had “an ability to earn that’s not insignificant”. Such submission clearly goes to the issue of incapacity.
The transcript proceeds to record what can only be described as an extraordinary exchange between counsel. That exchange is clearly out of context and I am confident that, for whatever reason, there has been a mistake in transcription. What is of importance is that nowhere in the transcript is there a record of any objection taken by the worker to argument being raised in respect of the issue of incapacity. It should also be noted that there is no record of any debate between the parties, nor any issue being raised by the Arbitrator, concerning the form of the notices as discussed above. Of particular significance is that there is no record as to any ruling by the Arbitrator at the hearing with respect to the Appellant’s entitlement to raise the issue of incapacity. The transcript does record (transcript page 16) that counsel appearing on behalf of the worker addressed the subject of incapacity with particular attention given to the question of the worker’s residual earning capacity.
At the conclusion of submissions of counsel the Arbitrator made the following statement (transcript page 23):
“All right. So in the event that the applicant is successful, then we’re looking at the weekly payments, section 60 expenses would just follow that event, and the lump sum claim would be remitted to the Registrar for referral to an AMS with a date of injury of I think it's 1 May ‘05.”
The Arbitrator then reserved his decision which, as noted, was delivered on 7 September 2009. In the course of reasons the Arbitrator, when dealing with the Appellant’s submission concerning incapacity stated (at [26] of Reasons) “I reject this last submission. The issue of capacity was not raised in the Section 74 Notice nor was it sought to be raised in Part 3 of the Reply.” The Arbitrator proceeded to state at [27] “raising this issue in the last minutes of the Respondent’s Counsel’s address at the Arbitration hearing forces the Applicant to meet an unnotified issue during submissions in reply”.
It is the Appellant’s complaint that the Arbitrator’s rejection of its submissions concerning incapacity had occurred without there having been an opportunity afforded at the hearing to address the question. Whilst not expressly stated it is plain that the Appellant suggests that it has been denied procedural fairness in that the ruling fatal to its argument had been made without it having been heard.
Whilst not raised on behalf of the Appellant it is important, in my view, to bear in mind when considering this complaint that section 289A(4) of the 1998 Act grants to the Commission a discretion to permit a dispute relating to previously unnotified matters being dealt with in circumstances where such is in the interest of justice. In the circumstances the Appellant has not only been denied the opportunity to argue the merits concerning notice but has also been denied an opportunity to seek exercise of the discretionary power of the Commission as granted by the last mentioned subsection.
Denial of procedural fairness
That the Commission in conduct of proceedings is bound by the rules of natural justice cannot be doubted. Those rules and principles demand that the parties be afforded procedural fairness. Such obligation requires that the Commission affords the parties “a reasonable opportunity to present or meet a case” (see discussion by Mason P (Ipp JA agreeing) in Seltsam Pty Ltd vGhaleb [2005] NSWCA 208 (‘Seltsam’)).
The matter of Seltsam concerned the conduct of a Judge at first instance determining a case on a basis different to that put forward by the parties during conduct of a trial. No notice of the Judge’s intention to do so had been given to the parties. That conduct was found, on appeal, to constitute of denial of procedural fairness. In the course of his judgment in that matter Ipp JA (with whom Mason P agreed) summarised relevant authority concerning the obligation to afford procedural fairness (at [69]-[77]) and proceeded to state:
“78These cases illustrate the general principle that although the basis on which the parties conduct a trial does not bind the judge, if the judge contemplates determining the case on a different basis he or she must inform the parties of this prospect so that they have an opportunity to address any new or changed issues that may arise.
79 A failure so to inform the parties will ordinarily result in a denial of procedural fairness. A new trial will be ordered if a party is not afforded a fair trial in circumstances where a properly conducted trial might possibly have produced a different result. It will not ordinarily be necessary to lead evidence to prove that the denial of procedural fairness had the potential to affect the outcome; in most cases the facts will speak for themselves.”
In the present matter argument concerning the issue of incapacity was advanced on behalf of the Appellant before the Arbitrator. No objection is recorded as having been taken to presentation of such an argument. The worker through her counsel responded to such argument in the course of submissions. The Arbitrator at no time gave an indication to the parties of his apparent view, revealed later upon publication of his reserved determination, that the Appellant was precluded from raising the issue of incapacity by reason of failure to give notice. I accept the Appellant’s argument concerning the Arbitrator’s failure to afford an opportunity to argue the point in question and conclude that such conduct on his part constitutes a denial of procedural fairness. Such conclusion entitles a party to a new trial, subject to the qualification that such a fresh hearing is not to be granted if such would be futile (see Stead v State Government Insurance Commission (1986) 161 CLR 141 at 145).
The Appellant has been denied not only the opportunity to argue the issue of notice, but has been denied an opportunity to seek the exercise of discretion granted the Commission by the provisions of section 289A(4). Should a fresh hearing be ordered on this appeal it may be anticipated that such application would then be made on behalf of the Appellant. Given all the circumstance of the present case, including the unsatisfactory state of the evidence concerning the form of notice, I am unable to conclude that a properly conducted hearing would be futile in that it would have the same result as occurred before the Arbitrator. I am of this view notwithstanding my finding noted at [43] above. In the circumstances, and in particular having regard to the matters which I address hereunder, it is my view that appropriate orders on this appeal would include provision for a rehearing.
Quantum of the Arbitrator’s award
The Appellant has challenged the Arbitrator’s quantification of the worker’s entitlement to weekly compensation. It is firstly argued that the Arbitrator had erred in failing to determine such entitlement upon the basis of a finding of partial incapacity. In the alternative the Appellant argues that the quantum of the weekly award, being $500.00, exceeds the maximum statutory rate to which the worker would be entitled if totally incapacitated.
The worker, in her submissions on this appeal (at [10]) seeks to support the Arbitrator’s finding as being one with respect to total incapacity, and it is suggested that the language used by the Arbitrator implies that entitlement “must then revert to either s.38 or s.40 as there was no issue raised by the Respondent that she was not entitled to her weekly benefits at the maximum statutory rate.” Having put that argument it is conceded by the worker that the matter needs to be remitted to the Arbitrator for “reconsideration”. It seems that the reconsideration suggested by the worker would be limited to quantification of entitlement following the expiration of the first 26 weeks of total incapacity.
The Arbitrator’s entry of an award at the rate of $500.00 per week in favour of the worker has been made without any express finding as to the degree of incapacity whether total or partial. The Arbitrator’s refusal to consider submissions concerning partial incapacity might imply that his finding is one of total incapacity. Such a finding is certainly implied by his reference (at [48] of Reasons) to section 36 of the 1987 Act.
I conclude that the Appellant’s complaints concerning quantification of the weekly award are well founded and, having regard to the worker’s concession of the need for some correction, the award requires review. In the circumstances, given the denial of procedural fairness and the need for review of the weekly award, this appeal should be upheld. The Court of Appeal in Chubb Security Australia Pty Limited v Trevarrow [2004] NSWCA 344 has expressed the view that should an appeal be upheld, it is preferable, if possible, that the Presidential Member finally determine the matter (per Santow JA at [28] and [29]).
I have found earlier in these reasons that, whichever notice is found to have been served upon the worker, such notice was inadequate with respect to the matter of incapacity. An opportunity, as I have found, should have been afforded the Appellant to argue that matter. I have also reached the view that the Appellant should be afforded an opportunity, should it so wish, to seek appropriate orders following the Commission’s exercise of discretion pursuant to section 289A(4). Those circumstances are such as to make it inappropriate that a redetermination be made on this appeal.
The quantum of the worker’s undoubted entitlement to weekly compensation cannot be determined until such time as the issues identified immediately above have been resolved. That fact is yet another matter which precludes redetermination on this appeal.
In the circumstances I consider it appropriate that an order be made remitting the matter to the Arbitrator for rehearing which should be restricted to those matters addressed above being the form of notice given and the consequences, if any, of inadequacy of notice concerning “incapacity”; the adjudication of any application the employer may wish to bring pursuant to section 289A(4) of the 1998 Act and, if appropriate, determination of the questions of incapacity and weekly entitlement. It may be that the parties, following advice, may wish to adduce additional evidence. I make this observation given the unsatisfactory state of the evidence concerning the notice.
Following a review on the merits I conclude that the Arbitrator’s orders made with respect to weekly compensation require revocation. The balance of the Arbitrator’s orders stand and I note that the assessment of permanent impairment as ordered by the Arbitrator has been conducted by the nominated Approved Medical Specialist. It is apparent that the Arbitrator has reserved the question of costs. Such matter, including whether an uplift is appropriate, may be addressed upon the rehearing in addition to those matters noted at [63] above.
DECISION
Orders one and two made by the Arbitrator in his decision of 7 September 2009 are revoked and the following order and direction are made:
“The matter is to be remitted to the Arbitrator for determination in accordance with this decision and the following direction:
The Arbitrator is directed to adjudicate any application made by either party to adduce additional evidence and to seek from each of the parties and to consider any supplementary submissions either written or oral the parties may elect to put. Both the question of additional evidence and submissions is to be dealt with by the Arbitrator in accordance with a timetable determined by him before proceeding to determine the Application.”
Orders three, four and five of the Arbitrator’s decision are confirmed.
COSTS
The Appellant on this appeal has secured a rehearing with respect to those matters enumerated at [63] above. The need for such rehearing has, in part, been occasioned by reason of the state of the evidence concerning notice and the need to re-argue that matter. Section 112 of the 1998 Act grants the Commission a wide discretion with respect to the making of costs orders. Having regard to all the circumstances of the present case, and bearing in mind that the worker has successfully made out her case generally with respect to the occurrence of injury and her entitlement to lump sums, I am of the view that it is appropriate that the Appellant pay the worker’s cost of this appeal.
Kevin O’Grady
Deputy President
18 January 2010
I, EMMA LETHBRIDE-GILL CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF KEVIN O’GRADY, DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
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