Howe v Dell-Bak Imports (wholesale) Pty Ltd

[2007] NSWWCCPD 103

WORKERS COMPENSATION COMMISSION

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

CITATION:Howe v Dell-Bak Imports (wholesale) Pty Ltd [2007] NSWWCCPD 103

APPELLANT:  Robert Gordon Howe

RESPONDENT:  Dell-Bak Imports (wholesale) Pty Ltd

INSURER:Employers Mutual Indemnity (Workers Compensation) Ltd

FILE NUMBER:  WCC7437-05

DATE OF ARBITRATOR’S DECISION:          14 February 2006

DATE OF APPEAL DECISION:  1 May 2007

SUBJECT MATTER OF DECISION: Section 40 of the Workers Compensation Act 1987

PRESIDENTIAL MEMBER:  Acting Deputy President Robert Harrington

HEARING:On the Papers

REPRESENTATION:  Appellant:      Jones Staff and Co

Respondent:   Edwards Michael Moroney lawyers

ORDERS MADE ON APPEAL:  Paragraph 1 of the Arbitrator’s decision dated 14 February 2006 in respect of weekly compensation payments is revoked and the following order is made in its place:

1. The Respondent (Dell-Bak Imports (wholesale) Pty Ltd) pay the Applicant (Mr Howe) weekly compensation benefits under section 40 of the Workers Compensation Act 1987

(i)at the rate of $141 per week from 9 November 2004 to 11 May 2005, and

(ii)at the rate of $103.67 per week from 12 May 2005 to date and continuing under section 40 of the Workers Compensation Act 1987.

2. The Respondent (Dell-Bak Imports (wholesale) Pty Ltd) to pay the Appellant’s (Mr Howe’s) costs.

BACKGROUND TO THE APPEAL

1On 20 May 2005 Robert Howe (‘Mr Howe’) sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Workers Compensation Commission (‘the Commission’) against a decision, dated 14 February 2005.

2.The Respondent to the Appeal is Dell-Bak Imports (wholesale) Pty Ltd (‘Dell-Bak Imports’).

3.Mr Howe was born on 2 August 1956.  He is 50 years of age.

4.Mr Howe was employed by Dell-Bak Imports from 14 August 2001 to approximately 30 January 2004.

5.On 12 March 2003 Mr Howe injured his left knee when a refrigerator fell onto his left knee.

At the time of the injury Mr Howe was pulling the refrigerator, which was attached to a trolley, up a set of stairs.

6.Mr Howe was unable to work, following his injury. He made a claim for compensation.  Liability was accepted and he received weekly compensation payments.  Following his injury, Mr Howe underwent two operations at the hands of Dr Frank Machart (orthopaedic surgeon).  The first operation was undertaken on 27 March 2003, the second operation was undertaken on 11 September 2003. Liability in respect of the operations was accepted by Dell-Bak Imports.

7.In or about April 2004 Mr Howe obtained employment with Press-Rite Ironing Services.  His job was to deliver dry-cleaning and ironing. Mr Howe is earning less in his current employment than he would have earned if he had continued to work for Dell-Bak Imports.

8.Dell-Bak Imports continued to pay Mr Howe weekly compensation payments until 8 November 2004.  The basis on which Dell-Bak Imports declined liability to pay ongoing compensation was: “Section 33 (Workers Compensation Action [sic] 1987) - Employment no longer the substantial contributing factor to injury.”

9.On 20 May 2005 Mr Howe’s solicitors filed in the Commission an ‘Application to Resolve a Dispute’ claiming; ongoing weekly compensation payments, such payments to commence from 9 November 2004, medical, hospital or related expenses together with lump sum compensation under section 66 and 67 of the Workers Compensation Act 1987 (‘the 1987 Act’)

10.Mr Howe’s claim for lump sum compensation was referred to an Approved Medical Specialist (‘AMS’) who issued a Medical Assessment Certificate (‘MAC’) certifying that Mr Howe’s injury had caused permanent impairment of his left leg equivalent to 11% Whole Person Impairment (‘WPI’).

11.The MAC is conclusive as to the extent of the impairment which results from injury. Dell-Bak Imports paid Mr Howe lump sum compensation in respect of section 66 of the 1987 Act, prior to the Arbitration hearing. His entitlement to lump sum compensation under section 67 of the 1987 Act, for pain and suffering, was still in issue at the time of the Arbitration hearing.

12.Mr Howe’s claim was heard before a Commission Arbitrator on 10 February 2006. Mr Howe did not give evidence at the hearing nor was he cross-examined. The Arbitrator awarded Mr Howe $12,000 pursuant to section 67 of the 1987 Act. In respect of Mr Howe’s claim for weekly compensation the Arbitrator awarded a closed period of weekly compensation payments from 9 November 2004 to 5 May 2005.

13.Mr Howe seeks leave to appeal the Arbitrator’s decision that he was not entitled to ongoing weekly compensation payments after 5 May 2005.

THE DECISION UNDER REVIEW

14.The ‘Certificate of Determination’, dated 11 February 2006 records the Arbitrator’s orders as follows:

“1.The respondent to pay the applicant weekly benefits pursuant to section 40 of $141 per week from 9.11.04 to 5.5.05.

2.The respondent to pay the applicant the sum of $12,000 pursuant to section 67.

3.The respondent is liable to pay the applicant’s reasonably incurred section 60 benefits to date.

4.The respondent to pay the applicant’s cost as agreed or assessed.”

THE ISSUES IN DISPUTE

15.The issues in dispute in the appeal are:

·     whether the Arbitrator erred in respect of her finding; that Mr Howe was not entitled to weekly compensation after 5 May 2005, and

·     whether it was open to the Arbitrator on the evidence to find that Mr Howe was not entitled to weekly compensation payments after 5 May 2005.

ON THE PAPERS REVIEW

16.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.”

17.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

18.Before proceeding to deal with an appeal the Commission must determine whether the application meets the requirements of section 352 of the1998 Act.

19.The amount of compensation that is at issue on appeal in this matter exceeds $5,000 such that section 352(2)(a) is satisfied.  Section 352(2)(b) is satisfied as the appeal concerns Mr. Howe’s ongoing entitlement to weekly compensation payments.

20.The appeal was lodged within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998. I grant leave to appeal.

EVIDENCE AND SUBMISSIONS

21.Mr Howe’s submissions on appeal can be distilled as follows:

·     the Arbitrator’s finding that Mr Howe was not entitled to compensation after 5 May 2005 amounts to an error of law;

·     the Arbitrator’s finding that Mr Howe was not entitled to compensation after 5 May 2005 should be revoked because it was affected by factual or discretionary error; and

·     the Arbitrator failed to give adequate reasons in respect of her finding that Mr Howe had no entitlement to compensation after 5 May 2005.

22.Dell-Bak Imports’ submissions on appeal can be distilled as follows:

·     the Arbitrator’s decision was not vitiated by any error of fact, discretion or law;

·     even accepting that the Arbitrator’s decision was against the weight of the evidence the decision is not reviewable, as an error of this type does not amount to an error of law under the ‘Azzoparti principles’; and

·     Mr Howe’s reliance on the Purkiss v Crittenden (1965) CLR 164 (‘Purkiss’) principle was misconceived, as Mr Howe had the ultimate onus of establishing that the current incapacity is a consequence of the injury in question.

23.In order to determine this appeal it is necessary to closely examine the lay and medical evidence before the Arbitrator.

Lay Evidence

24.The lay evidence before the Arbitrator consisted of statements from Mr Howe.  Mr Howe was not cross-examined.  The Arbitrator found that Mr Howe was a truthful witness.

25.Relevantly, Mr Howe’s uncontradicted evidence establishes the following:

26.Mr Howe commenced working for Dell-Bak Imports on 14 August 2001.  His work duties concerned the delivery of white goods such as refrigerators and washing machines, to customers. Mr Howe mainly worked by himself. He was often required to manhandle the white goods upstairs when delivering the goods to customers.  The uncontested evidence established that the work was heavy and would place significant strain on his joints, particularly his knees.

27.Approximately 20 years before his work injury he underwent an operation on his left knee to remove a ‘loose body’.  Following that operation he had no problem with his knee until the work injury on 12 March 2003.  Dr Frank Machart, his treating orthopaedic surgeon, recorded a slightly different history: “He had been recently symptom-free until two months prior to my first consultation (24/3/03) when he noted, some medial pain, but this did not preclude him from working.” A similar history was recorded by other doctors and the Arbitrator, correctly I believe; found he had some symptomatology in the left knee prior to the work injury.  I do not believe in respect of the issues in this appeal anything turns on this inconsistent history.

28.Mr Howe described his injury as follows:

“12/0/2003-The injury occurred whilst I was removing a large (old) 450 litre fridge.  I had it strapped to the three wheeled trolley and was attempting to pull it up a flight of stairs (which were wooden louvered type).  I had a helper this day (Sam an 18 year old salesperson) from the Narrabeen Store who when trying to help went too hard and fast, consequently, I stepped backwards with the fridge and trolley coming down on top of my left knee.
I immediately felt something give and tremendous pain in my left knee.
The next day, I could hardly move and rang work to advise them I wouldn’t be in that day, and that I was going to see a doctor the following day.”

29.Mr Howe consulted his general practitioner, Dr Jennifer Wines, who referred him to Dr Frank Machart.

30.Dr Frank Machart carried out an operation on Mr Howe’s left knee (arthroscopy) on 27 March 2003 at Delmar Hospital.

31.In May 2003 Mr Howell was certified fit for suitable duties.  He returned to work as a salesperson, however, could not continue with duties after two and half days because of pain and swelling in the knee.  He was referred for further physiotherapy and when he was subsequently certified fit for suitable duties, Dell-Bak Imports had none available for him.

32.Because of continuing pain Dr Machart carried out a second operation on 11 September 2003 which consisted of high tibial osteotomy with bone grafting. Dell-Bak Imports paid for this operation.

33.Although Mr Howe’s statement does not contain a clear assertion that, as a result of the injury to his knee he is incapacitated for his pre-injury employment duties, it is clear from his evidence as to the extent of his ongoing disability, that he considers himself unfit for his pre-injury duties.  The medical evidence that he could not perform his pre-injury duties of manhandling white goods because of the pathology in his knee, is unanimous.  At the Arbitration hearing, counsel appearing for Dell-Bak Imports, correctly in my opinion, did not dispute that Mr Howe was incapacitated for his pre-injury duties.

34.Mr Howe’s evidence establishes that at least from January 2004 he was fit to, and prepared to perform suitable duties, however, Dell-Bak Imports was unable to provide suitable work.

35.On or about April 2004 Mr Howe obtained employment with Press-Rite Ironing Services picking up and delivering dry-cleaning and ironing. Mr Howe’s evidence, contained in his statement of 16 December 2005, is that he is doing as much work as he is physically able to do.

Medical Evidence

36.The AMS’s, Dr Drew Dixon (Surgeon), opinion, was that the work injury caused “significant post-traumatic stiffness of his left knee, following his workplace injury, 14% whole person impairment.” It is clear from the AMS’s report that he considered the work injury caused a tear of the medial meniscus and aggravation of medial compartment osteoarthritis.  The AMS was of the opinion that 25% of the permanent impairment of his left knee was caused by the pre-existing condition, which left Mr Howe with a WPI of 11%.  This percentage is of course binding on parties in respect of the degree of permanent impairment resulting from injury.

37.In respect of Mr Howe’s capacity for work, relevantly, the AMS recorded (under summary):

“He is able to work part-time as a delivery driver for a dry cleaning firm and is currently doing three days a week.  He does not feel he has the capacity to do four or five days a week due to ongoing pain in his knee.  He needs these three days off work between his stints of driving which he regards as essentially
 light delivery work compared with his previous employ. He delivers drying cleaning and laundry mainly into houses and there are not many stairs or steps to negotiate.  He can drive his auto van for some two hours, and does have persisting antero-medial pain in his left knee with retro-patellar crepitus.”

The doctor later in his report confirms that he considers that Mr Howe’s “presentation is consistent.” It is clear from the acceptance, by the doctor, of Mr Howe’s history and symptoms that it is the doctor’s opinion that Mr Howell’s inability to work normal hours is consistent with his injury and the pathology in his knee.

38.Dr Frank Machart in his report of 16 March 2005 said the following in respect of the effects of the work injury:

“I wish to reiterate that my opinion is that this gentleman’s employment was a substantial contributory factor to his injury of the left knee as a result of substantial aggravation and acceleration of the degenerative disease process and the aggravation is continuing.  This assessment is based on the history of injury and particularly the condition of his knee in terms of symptom levels before and after injury.  Specifically, his pain level had dramatically increased subsequent to injury dated 12/3/03, and this indicates substantial ongoing aggravation.”

Although the doctor does not deal directly with the issue of incapacity, it is clear the doctor accepts the level of complaints made by Mr Howe and that there has been a dramatic increase in his pain level since the work injury.

39.Dr Jennifer Wines, Mr Howe’s general practitioner, obtained a history from Mr Howe that: “He has been working as a driver for several months, gradually increasing his hours up to 32 hours per week, but is not doing any lifting above 30 kg and no squats.” In a report dated 1 march 2005 the doctor provides the following opinion in respect of the work injury:

“The accident in March 2003 changed his ability to lift heavy goods forever. The pre-existing degenerative changes may lead eventually to problems with the knee, which may require treatment, however the deterioration in the function of the knee was greatly accelerated by the accident in March 2003.That this accident has led to his current situation and current limitations respect to work.” (emphasis added)

The doctor provides a clear medical opinion that Mr Howe’s need to work restricted hours, is as a result of his work injury.

40.Dr James Bodel (orthopaedic surgeon) in his report of 29 August 2003 said the following in respect of the work injury:

“The need for surgery was inevitable prior to the injury on 12.3.2003 but that injury has caused some additional structural damage and has brought forward the timing of the need for surgery.”

The doctor’s report predates Mr Howe’s return to suitable duties, however, the doctor expresses the following view in relation to his capacity:

“He is currently fit for alternative duties that are done predominantly in a sedentary position, and do not require prolonged standing, kneeling, squatting or climbing.”

The doctor places significant limitations on Mr Howe’s post injury work ability.

41.Dr Michael Lim (occupational physician), in his report of 23 August 2004, express the opinion that Mr Howe’s knee pathology consisted of advanced degenerative changes, which was temporarily aggravated by the work injury.  Further he was of the opinion that the mechanism of the injury was unlikely to cause a tear of the medial meniscus.  In dealing with capacity to work the doctor recorded that Mr Howe was working 30 hours a week, driving a van and transporting clothing. The doctor provided the following opinion, in relation to Mr Howe’s capacity for work:

“Mr Howe will not be able to resume his pre- injury duties with Dell-Bak in the foreseeable future.  He will not be able to work as a furniture removals or builders labourer in the foreseeable future.  He is fit to work in his current employment as a delivery man for a dry cleaner.  He is fit to work as a bus driver, particularly if the bus is fitted with automatic transmissions, as are most modern buses.”

In addition to the above restrictions as to work capacity, the doctor was of the opinion that the following permanent restrictions should apply to Mr Howe:

·        “To avoid prolonged or frequent repetitive bending of his left knee.

·        No squatting.

·        Not to kneel on his left knee.

·        To avoid excessive use of stairs and ladders.

·        To avoid traversing uneven ground in a hurried manner.

·        No running.

·Ideally he should not be on his feet (standing and walking).  For more than 30 minutes at a time continuously, and he should not be on his feet for more than 50% of the shift.

·        No heavy lifting; as a general guide is not to lift objects heavier than 15 kg.”

Although the doctor does not relate the work restrictions to the work injury the doctor places significant restrictions on Mr Howe’s work ability and further provides, in my opinion, medical support, for the contention that the work duties and the restricted hours Mr Howe was engaged in at the time of the consultation were consistent with his residual ability given the pathology in his knee.

42.Dr Kalev Wilding (orthopaedic surgeon) in his report of 14 February 2005 expressed the following opinion in respect of the work incident:

“In my opinion, whilst his employment injury precipitated symptoms in the left knee it was not the most significant contributing factor to his current presentation. I base this opinion on the fact that he was already experiencing symptoms due to osteoarthritis in his left knee prior to the incident at work on 12/3/2003.  The osteoarthritic process would inevitably have progressed and ultimately he would have still required a high tibial osteotomy although it is debatable whether he would have required an arthroscopic debridement if the incident at work had not occurred. The incident on 12/3/03 however did accelerate the progression of the osteoarthritic process.” 

The doctor went on to express the opinion that the aggravation due to the work injury had ceased by the time of his examination.  With regard to incapacity the doctor took a history that Mr Howe was employed as a delivery driver delivering dry-cleaning.  He drove an automatic van.  He said, he managed his work and was working 30 hours the week.  In respect of his work capacity, the doctor said:

“The current job that he is doing is appropriate work for him.  In particular, it is suitable because he does not have to operate a clutch in the van.”

The doctor, in my opinion, provides further medical support for the contention that Mr Howe’s restricted work duties and limited hours are consistent with the level of pathology in his left knee.

DISCUSSION AND FINDINGS

The Arbitrator’s Decision

43.The Arbitrator’s decision can be dissected into three parts.

44.The first part is an analysis of the pathology in Mr Howe’s left knee and its relationship to the work injury.  As I understand the Arbitrator’s decision, in respect of this issue, the Arbitrator found that as a result of Mr Howe’s work injury he sustained a tear of his medial meniscus and, additionally, sustained an aggravation of disease process which was the underlying degenerative changes in Mr Howe’s knee.  The evidence on which the Arbitrator placed most weight in coming to her decision, was the Medical Assessment Certificate of Dr Dixon, which conclusively determined the extent of permanent impairment resulting from the work injury. Although the Arbitrator did not expressly state, it follows from her determination, that she rejected the contention expressed by doctors Lim and Wilding that the effects of the work aggravation on the underlying disease process had ceased. Neither party has challenged the first part of her decision.

45.The second part of the decision is an assessment of Mr Howe’s entitlement under section 67 of the 1987 Act. The Arbitrator awarded Mr Howe $12,000 in respect of pain and suffering under section 67. Neither party has sought to disturb this finding.

46.The third and contentious part of the decision is the determination in respect to Mr Howe’s entitlement to weekly compensation under section 40 of the 1987 Act. In determining Mr Howe’s entitlement under section 40 the Arbitrator said the following [transcript 42.10]:

“The arguments put forward for the contention by the respondent that there should be no ongoing weekly payments is two-fold. Any ongoing incapacity for pre-injury duties is not a result of the injury - section 33 - and, secondly, there is no medical evidence that Mr Howe could not work a full, say, 38-hour week, in which case he would earn the equivalent of his probable earnings.  It is undisputed that he earns $546 for a 30.5–hour week worked over four days, being two, I think, nine-and-a- half days and two six-hour days.”

47.The Arbitrator, having recorded Dell-Bak Imports’ submissions in respect of the section 40 assessment continued [transcript 42.22]:

“It is agreed that Mr Howe cannot return to the heavy duty work he did previously because of his knee, both because of the injury and probably because of his degenerative condition. He was already experiencing symptoms doing his work before the injury. I except that he would not have been able to continue that work at some time, even if injury had not occurred.  What that particular time would have been is unclear. The injury occurred in March 2003, by which time symptoms were being experienced, as I said, variously reported as a couple of weeks to a couple of months before the injury.  It is probable that by this time, being February 2006, being three years after he first experienced these symptoms he would not be able to do that heavy work.”

48.It is not clear what, if any, effect that these findings had on the Arbitrator’s ultimate decision in respect to Mr Howe’s section 40 entitlement. It would seem from her decision the finding that Mr Howe probably would have been unable to perform heavy work by February 2006, because of the underlying condition of his knee, was a passing observation and not relevant to her ultimate decision. To the extent that this finding has some bearing on her ultimate determination, in my opinion, the finding is erroneous for the following reasons:

·although there was medical evidence of pre-existing pathology in Mr Howe’s left knee there was no medical evidence on which the Arbitrator could have made a determination that the underlying pathology in Mr Howe’s left knee would have advanced, independently of injury, to a level which would have prevented him from carrying out his pre-injury by February 2006;

·     the Arbitrator’s conclusion is not supported by adequate reasons, and

·the medical evidence combined with the heavy nature of Mr Howe’s employment would lead to the conclusion, in my opinion, that if the pathology in Mr Howe’s knee had advanced, independently of the work injury, to render him incapacitated by February 2006 his heavy work duties would have been a substantial contributing factor to the aggravation of the disease process and the resulting incapacity.

49.The Arbitrator then went on to give the following reasons as to why she considered Mr Howe’s entitlement to weekly compensation under section 40 of the 1987 Act should not extend past 5 May 2005 [transcript 42.36]:

“The respondent argues there’s no medical evidence that Mr Howe could not work another six–hour day, which would net him $108 a week. Added to the $546 he now earns, that would bring him up to $654, being pretty much the same as his probable earnings. Mr Howe says that he is unable to do this and needs the additional day away from work per week, and he attests to this in his various statements. On Mr Howe’s behalf, it is said Dr Dixon in his report, accepts what Mr Howe says about this. My reading, however, of Dr Dixon’s report is that he simply reiterates what Mr Howe says without evaluative comment, save to say that he did find him consistent in his reporting of symptoms. However, without medical evidence I am not able to make an award in Mr Howe’s favour in relation to the weekly benefits. I accept the respondent’s argument that there is no medical evidence of a time restriction on Mr Howe. His restrictions relate, as I understand it, to lifting and standing for particular periods. His current work does not appear [sic] to him going beyond these restrictions and is substantially, though not entirely, sedentary. That’s not so [sic] say that Mr Howe is not being a truthful witness, and I accept that, indeed, he is, but his perception that he cannot do an additional six hours per week is simply not backed up by medical evidence. If there were medical evidence, then the results might have been substantially different. I, therefore do not make an order in relation to ongoing section 40s. Costs…”

50.Mr Howe’s solicitor then informed the Arbitrator, that she had not actually made an order in respect to “section 40s.”  In response, the Arbitrator continued [transcript 43.15]:

“Yes. Let’s have a look at those dates, then. I am prepared to – up until – I will make an order for section 40s up-oh, I’ve got them in a window too-up until 5/5/05, when he started his current 30 hours. How many hours was he working up until 5/5/05.”

51.There was then the further interchange between the parties and the Arbitrator concluded [transcript 43.25]:

“Okay. Look, I take the fact that he found at the time – I think which was submitted by Mr Wardell – the fact that he was able to increase his hours and that he was seeking increased hours, which I think it is what was said in the section 40 assessment, as being some acknowledgement that he could, in fact, increase the hours, I am prepared to make a section 40 payment up until 5/5/05, from 9^th of the 11^th to 5/5/05.  How many weeks is that?”

52.I am of the view that the Arbitrator’s decision contains both legal and factual errors which vitiate her ultimate decision in respect to Mr Howe’s entitlement to ongoing compensation payments.

Factual errors

53.Before dealing with the factual errors, consideration must be given to the extent to which a Presidential Member can interfere with factual findings of an Arbitrator. The extent of a Presidential Member’s powers to review an Arbitrator’s decision was considered in Aluminium  Louvres & Ceilings Pty Limited v Xue Qin Zheng [2006] NSWCA 34.In that decision Bryson JA defined the extent of that power as follows:

“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. I see no ground upon which it could be doubted that the Deputy President acted within her discretionary powers in disposing of the matter as she did. No rule of law required the Arbitrator not to limit cross-examination, and the view that there was no want of procedural fairness was a view which the Deputy President could reasonably reach without any error of law.”

54.The powers of a Presidential Member on review are wide; however, the review is not a hearing de novo, error must be demonstrated. The Arbitrator’s decision focused on the lack of a medical certificate or report, dealing specifically with the number of hours Mr Howe was fit to work. The Arbitrator, in my opinion, in focusing solely on this perceived ‘lack of evidence’ misdirected herself in respect of the question of fact to be answered in making a determination under section 40. This misdirection amounts not only to an error of fact but probably an error of law. In Novello v Zinc Corporation Ltd (1988) 14 NSWLR 25 Kirby A-CJ considered the circumstances in which an error of fact finding may result in an error of law and he stated at page [26G]:

“One exception to the immunity from review, acknowledged by the holding in Azzopardi, is where the trial judge has misdirected himself or herself, that is has defined otherwise than in accordance with law, the question of fact which is to be answered: see also Hope v Bathurst City Council (1980) 144 CLR 1 at 10 Australian Gas Light Company v Valuer-General (1940) 40 SR (NSW) 126 at 138...”

55.Although it would be of assistance to have medical evidence dealing specifically with the number of hours Mr Howe was able to work in his incapacitated state, it is not determinative. The question of fact which has to be answered in a section 40 assessment is whether there is evidence, when all of the lay and medical evidence is considered, to establish entitlement to compensation under section 40. There was an abundance of evidence supporting Mr Howe’s contention that he was only able to work limited hours and I will deal with this evidence in paragraph 57 of this judgment. Independently of this evidence an analysis of the other lay and medical evidence touching upon the issue of Mr Howe’s incapacity, establishes the incorrect approach to section 40 taken by the Arbitrator. The lay evidence consisted of Mr Howe’s uncontradicted evidence which can be relevantly summarised as follows:

·Mr Howe’s pre-injury employment was heavy and placed significant stress on his knee;

·as a result of his injury Mr Howe is no longer able to perform his pre-injury duties;

·as a result of his injury Mr Howe has undergone two operative procedures;

·Dell-Bak Imports at all material times has been unable to provide Mr Howe with suitable employment;

·Mr Howe has independently obtained suitable employment following his second major operation. He has demonstrated motivation to rehabilitate himself and a desire to mitigate his loss; and

·     Mr Howe has a significant problem with his knee, the symptoms are aggravated by the work that he is doing. Mr Howe’s evidence is that after four days work (Monday, Tuesday Wednesday and Thursday) he needs to rest his knee in order to be able to maintain his employment in suitable duties.

56.The medical evidence corroborates the significant problems Mr Howe has with his left knee. All the medical evidence supports the contention that Mr Howe as a result of the pathology in his left knee, is left with significant work restrictions particularly given his work history (he has limited experience outside labouring type occupations). Notwithstanding these significant work restrictions, Mr Howe has managed to rehabilitate himself back into the workforce albeit with restricted hours. The work restrictions, established by the medical evidence, are much more extensive than the Arbitrator’s finding that they were: “limited to lifting and bending for particular periods.” Without providing an exhaustive list, the evidence establishes restrictions in respect to: repetitive bending of the knee, squatting, kneeling, excessive climbing stairs and ladders, traversing uneven ground, running, standing limited to less than 30 minutes, and in ability to drive a manual car, truck or bus. Although Mr Howe carries the onus of establishing his section 40 entitlement, the lay and medical evidence before the Arbitrator overwhelmingly discharged this onus. If Dell-Bak Imports seriously wished to dispute Mr Howe’s entitlement, the evidentiary onus had shifted to them. Dell-Bak Imports needed to cross-examined Mr Howe or adduce other medical or lay evidence which contradicted Mr Howe assertion of incapacity. I am of the view therefore that the Arbitrator’s finding that Mr Howe is not entitled to ongoing weekly compensation payments after 5 May 2005 is contrary to the evidence and should be revoked.

57.The Arbitrator’s finding that “there is no medical evidence of a time restriction on Mr Howe” is not supported by the evidence.  His general practitioner Dr Jennifer Wines report directly supports the limitation of work hours and its relationship to his work injury.  Moreover doctors Dixon and Wilding record a history in their reports that Mr Howe is working limited hours because of his injury.  Both doctors accept Mr Howe’s history and complaints.  It is clear, in my opinion, on a reading of the whole the doctors’ reports that they both accept the restricted hours are the reasonable consequences of the pathology in Mr Howe’s left knee.  Dr Wilding of course does not accept the pathology is related to the work injury.

58.The Arbitrator failed, in my opinion, to give adequate reasons in respect of her decision. It is not necessary to deal in detail with this error as I’ve already found factual error. It is, my opinion that had the Arbitrator given adequate reasons she would have dealt with the overwhelming lay and medical evidence establishing Mr Howe’s ongoing incapacity for work, and entitlement to compensation under section 40 of the 1987 Act.

Legal error

59.Before considering the legal error it is necessary to set out the statutory framework, that is sections 33, 40 and 43A of the 1987 Act.

“Section 33: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.”

“Section 40: (1)          Entitlement. The weekly payment of compensation to an injured worker in respect of any period of partial incapacity for work is to be an amount not exceeding the reduction in the worker’s weekly earnings, but is to bear such relation to the amount of that reduction as may appear proper in the circumstances of the case.

(2)          Calculation of reduction in earnings of worker – general. The reduction in the worker’s weekly earnings is (except as provided by this section) the difference between:

(a)The weekly amount which the worker would probably have been earning as a worker but for the injury and had the worker continued to be employed in the same or some comparable employment (but not exceeding $1,000);

(b)The average weekly amount which the worker is earning or would be able to earn in some suitable employment from time to time after the injury (but not exceeding $1,000).

(2A)…

(2B)….

(3)Ability to earn in suitable employment.  The determination of the amount that an injured worker would be able to earn in suitable employment is subject to the following:

(a)The determination is to be based on the worker’s ability to earn in the general labour market reasonable accessible to the worker,

(b)The determination is to be made having regarded to suitable employment for the worker within the meaning of section 43(A).”

“Section 43A:  Suitable employment

(1)For the purposes of sections 38, 38A and 40:

“Suitable employment”, in relation to a worker, means employment in work for which the worker is suited, having regard to the following:

(a)The nature of the worker’s incapacity and pre-injury employment,

(b)The worker’s age, education, skills and work experience,

(c)The worker’s place of residence,

(d)The details given in the medical certificate supplied by the worker,

(e)The provisions of any injury management plan for the worker,

(f)Any suitable employment for which the worker has received rehabilitation training,

(g)The length of time the worker has been seeking suitable employment,

(h)Any other relevant circumstances.”

60.To determine Mr Howe’s entitlement under section 40 the Arbitrator is required to embark on a three stage process. The first stage is to determine the weekly amount which the worker probably would have earned had the worker not been injured and had he or she continued in the same or similar employment. The second stage is to ascertain the average weekly amount which the worker is earning, or is able to earn in suitable work after injury. If the worker is earning, normally that will be enough to determine the second stage. There was no evidence before the Arbitrator that Mr Howe was deliberately underutilising his capacity or the amount paid to him by Press-Rite Ironing Services was an underestimate of his economic capacity. Nor was it put to Mr Howe that he was underutilising his residual capacity. In those circumstances the actual earnings as a matter of law is the amount to be used in stage two of the section 40 calculation. See Novello v Zinc Corporation Ltd (1988) 14 NSWLR 25; Aitkin v Goodyear Tyre & Rubber Company (Australia) Limited (1945) 46 SR 20 at 22.and more recently; Pira Pty t/as Langdon & Bartley v Tucker (1996), 14 NSWCCR 26 where Beazley JA said the following (in a case of remarkably similar facts to the present appeal):

“I agree with the presiding judge and with Abadee AJA but would also add one short comment. In Aitkin, Jordan CJ held that the test to be applied in determining the rate of compensation to be awarded under section 11 for partial incapacity was, prima facie, the person's actual earnings unless it is proved that the worker's actual earnings are not a proper test, because there is some reason unconnected with the worker's earning power which made them lower than they should be.

Jordan CJ stated at 22 that that will occur where a worker is ‘deliberately taking lower paid work than he could reasonably be expected to get, or is idling… or his actual earnings are compulsorily reduced for a reason unconnected with his injury or general earning power’. These are instances, or examples, only and do not represent an exhaustive list of the circumstances in which it will be inappropriate to apply the ‘prima facie’ test.”

61.It is clear from these decisions that an injured worker’s actual earnings, prima facie, should be accepted as the amount to be adopted in the second stage of a section 40 assessment. The assessor can only move from the prima facie position, if the evidence establishes that the actual earnings are not, in the circumstances of the case, a proper test. In the present case there was no evidence before the Arbitrator that his actual earnings were other than a proper test of his earning capacity. I am of the view, therefore that the Arbitrator applied an incorrect legal test in respect to her assessment of the appropriate amount to be applied in the second stage of the section 40 calculations.

62.It is for these reasons that the Arbitrator’s decision in respect to Mr Howe’s entitlements under section 40 of the 1987 Act should be revoked.

Assessments of entitlement under section 40 of the 1987 Act

63.A Presidential Member where possible should, consistent with the objectives of the Act, determine the matter fully unless there is some factual or legal reason that the matter should be remitted to an Arbitrator for determination. In the present case there was no oral evidence given before the Arbitrator. The matter was decided on the papers at first instance and I have wages and medical material to determine Mr Howe’s section 40 entitlement.

64.The first stage of the section 40 calculation is to determine the weekly amount which the worker probably would have been earning as such, had the worker not been injured and had he or she continued in the same or similar employment. Mr Howe’s evidence was that his average earnings in the period prior to his injury were $621.70 per week. Applying the CPI increases Mr Howe’s solicitor had indexed this amount to approximately $650.00 per week at the time of the Arbitration hearing. The Arbitrator in making her determination, in respect to the closed period of weekly compensation, accepted this amount, that is $650.00 per week, as the appropriate figure for the stage one calculation of the section 40. It would seem appropriate, therefore, to adopt this figure of $650.00 per week as the appropriate amount for stage one of the section 40 calculation and I do so.

65.As I have determined Mr Howe’s actual earnings, since his injury, are the appropriate amounts to be applied in the second stage of the section 40 calculation. Mr Howe’s evidence was that from 10 November 2004 to 5 May 2005 his average weekly earnings were $509.04 per week and from the 11 May 2005 his average weekly earnings have been $546.33 per week. There being no evidence as to his average weekly earnings between 5 May 2005 and 11 May 2005 I will apply the higher actual earnings during this period.

66.The third stage is to determine whether there is any reason to exercise the ‘section 40 discretion’ to reduce the mathematical difference between the amount calculated in stages one and two. At the Arbitration hearing, counsel for Dell-Bak Imports, did not submit that there was any basis to exercise the discretion to reduce the mathematical difference. In the present case I can see no basis on which the mathematical difference should be reduced. Mr Howe’s entitlement under section 40 is therefore, the mathematical difference between stage one and two.

67.Mr Howe is therefore entitled to an award of weekly compensation under section 40 of the 1987 Act at the rate of (the Arbitrator rounded the amount up to $141 this is not challenged by the parties and as such I will accept this amount) $141per week from 9 November 2004 to 11 May 2005 and from 12 May 2005 to date and continuing at the rate of $103.67 per week.

DECISION

68.Paragraph 1 of the Arbitrator’s decision dated 14 February 2006 in respect of weekly compensation payments is revoked and the following order is made in its place:

1.The Respondent (Dell-Bak Imports (wholesale) Pty Ltd) pay the Applicant Mr Howe weekly compensation benefits under section 40 of the Workers Compensation Act 1987:

(i)at the rate of $141 per week from 9 November 2004 to 11 May 2005, and

(ii)at the rate of $103.67 per week from 12 May 2005 to date and continuing under section 40 of the Workers Compensation Act 1987.

Certificate of determination

69.It follows from this decision that the ‘certificate of determination’ dated 14 February 2006 as amended by this decision reads as follows:

1.The Respondent (Dell-Bak Imports (wholesale) Pty Ltd) pay the Applicant Mr Howe weekly compensation benefits under section 40 of the Workers Compensation Act 1987:

(i)at the rate of $141 per week from 9 November 2004 to 11 May 2005; and

(ii)at the rate of $103.67 per week from 12 May 2005 to date and continuing under section 40 of the Workers Compensation Act 1987.

2.The Respondent to pay the applicant the sum of $12,000 pursuant to section 67.

3.   The Respondent is liable to pay the applicant’s reasonably incurred section 60 benefits to date.

4.The Respondent to pay the applicant’s cost as agreed or assessed.

COSTS

70.The Appeal having been successful I order the Respondent (Dell-Bak Imports (wholesale) Pty Ltd) to pay the Appellant’s (Mr. Howe’s) costs.

Robert Harrington

Acting Deputy President  

1 May 2007

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

ASSOCIATE