Howlader v FRF Holdings Pty Ltd - [2019] NSWWCCPD 55

DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:	Howlader v FRF Holdings Pty Ltd [2019] NSWWCCPD 55
APPELLANT:	Muhammad Imtiaz Hossain Howlader
RESPONDENT:	FRF Holdings Pty Ltd
INSURER:	Employers Mutual NSW Limited
FILE NUMBER:	A1-6756/18
ARBITRATOR:	Mr J Harris
DATE OF ARBITRATOR’S DECISION:	17 April 2019
DATE OF APPEAL DECISION:	30 October 2019
SUBJECT MATTER OF DECISION:	Whether the amount at issue on appeal satisfies the percentage threshold requirement to appeal – s 352(3)(b) of the Workplace Injury Management and Workers Compensation Act 1998; Olympic Fencing (NSW) Pty Ltd v Crossley [2007] NSWWCCPD 121, Popovic v Liverpool City Council [2017] NSWWCCPD 49, Sheridan v Coles Supermarkets Australia Pty Limited [2003] NSWWCCPD 3 applied
PRESIDENTIAL MEMBER:	Deputy President Elizabeth Wood
HEARING:	On the papers
REPRESENTATION:	Counsel:
Mr P Perry (Appellant)
Mr R Hanrahan (Respondent)
Solicitors:
Turner Freeman Lawyers (Appellant)
Gair Legal (Respondent)
ORDERS MADE ON APPEAL:	1. The name of the respondent wherever it appears in the appeal and in the proceedings below is amended where necessary to read “FRF Holdings Pty Ltd”. 2. The threshold percentage in s 352(3)(b) of the Workplace Injury Management and Workers Compensation Act 1998 is not satisfied, and there is no right of appeal.

INTRODUCTION AND BACKGROUND

Mr Muhammad Imtiaz Hossain Howlader (the appellant) was employed by FRF Holdings Pty Ltd (the respondent) as a truck driver. On 13 October 2016, the appellant suffered an injury to his back in the course of his employment while attempting to remove a pallet jack which was stuck under a heavy pallet. As a result of that injury, he also suffered a secondary psychological condition.
The respondent accepted that the appellant suffered a work-related injury in the nature of a musculo-ligamentous strain to his lumbar spine, and paid weekly compensation until 28 June 2017. The respondent thereafter denied liability for ongoing weekly payments and also treatment expenses.
The appellant commenced proceedings in the Commission, claiming weekly payments of compensation on an ongoing basis, past treatment expenses quantified at $54,409.36 plus any amount specified in a Medicare Notice of Charge. The past treatment expenses were said to be incurred in relation to consultations with a general practitioner, physiotherapy and hydrotherapy treatment, and pain medication. He claimed future treatment expenses estimated at $29,628.21, plus anaesthetist’s fees, in respect of the expenses of, and associated with, a proposed laminectomy at the L4/5 and L5/S1 levels of the spine.
The appellant underwent the proposed surgery on 20 December 2018 at St George Hospital at the hands of Dr Peter Khong, neurosurgeon.
On 12 March 2019, the appellant lodged an Application to Admit Late Documents (AALD) dated 11 March 2019. Annexed was an updated schedule of treatment expenses claimed pursuant to s 60 of the Workers Compensation Act 1987 (1987 Act), claiming a total of $68,011.83.
The matter proceeded to arbitration on 26 March 2019. The Arbitrator issued a Certificate of Determination (COD) on 17 April 2019, with a written statement of reasons attached. He awarded the appellant weekly payments of compensation pursuant to s 37 of the 1987 Act at the rate of $716.81 per week from 29 June 2017 to date and continuing. The Arbitrator further ordered the respondent to pay the appellant’s treatment expenses pursuant to s 60 of the 1987 Act, expressed as a “general order” and without quantification. The Arbitrator found that the back surgery undertaken on 20 December 2018 did not result from the compensable injury.
The appellant appeals the Arbitrator’s decision in respect of his finding that the back surgery undertaken on 20 December 2018 did not result from the injury.

ON THE PAPERS

Section 354(6) of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act) provides:
“(6) If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”
Both parties have indicated that they are content for the appeal to be determined on the papers
I have had regard to Practice Directions Nos 1 and 6; the documents that are before me, and the submissions by the parties that the appeal can proceed to be determined on the basis of these documents. I am satisfied that I have sufficient information to proceed ‘on the papers’ without holding any conference or formal hearing and that this is the appropriate course in the circumstances.

PRELIMINARY MATTER

In both the appeal and the proceedings below, the respondent has been variously referred to as “FRF Holdings Pty Ltd” and “FRS Holdings Pty Ltd”. The Presidential Unit of the Commission sought confirmation from the parties as to the correct name of the respondent and the parties confirmed that the correct name of the entity was “FRF Holdings Pty Ltd”.
Accordingly, the name of the respondent wherever it appears in the appeal papers and in the proceedings below is amended where necessary to read “FRF Holdings Pty Ltd”.

THRESHOLD MATTERS

The appellant asserted that the threshold requirements as to quantum and time pursuant to ss 352(3) and 352(4) of the 1998 Act have been met. In its Notice of Opposition to Appeal Against Decision of Arbitrator (Opposition), the respondent contended that the appeal did not satisfy the threshold requirement set out in s 352(3)(b) that the amount of compensation at issue on appeal must be at least 20% of the amount of awarded in the decision appealed against.
Section 352(3) provides:
“There is no appeal under this section unless the amount of compensation at issue on the appeal is both:
(a)at least $5,000 (or such other amount as may be prescribed by the regulations), and
(b) at least 20% of the amount awarded in the decision appealed against.”
The respondent made substantive submissions as to why the necessary threshold requirement pursuant to s 352(3)(b) had not been met. The appellant, despite having the opportunity to file a reply to the respondent’s Opposition, failed to address those submissions in any form. The appellant’s failure to respond to the submissions by way of reply was unsatisfactory. In order to address this failure and ensure the matter was properly prepared for a Presidential determination, a Delegate of the Registrar issued a Direction to the appellant to provide appropriate submissions addressing the assertions made by the respondent.

The respondent’s threshold submissions

The respondent notes that the appeal is limited to the Arbitrator’s finding that the surgery performed on 20 December 2018 did not result from the work-related injury.
The respondent says that the amount ultimately claimed at the arbitration in respect of the treatment expenses was $68,011.83. The respondent asserts that if the figure of $61,012.66 is deducted from that amount, the result is $6,999.17, which is capable of being regarded as the “amount awarded”. The respondent does not explain the origin of the figure of $61,012.66 deducted or this reasoning process.
The respondent submits that the total of the award of weekly payments from 29 June 2017 to 17 April 2017 was $67,380.14, and that the amount of $6,999.17 it says is at issue is approximately 10% of each of the amounts awarded in respect of weekly payments and in respect of the total treatment expenses claimed.
The respondent contends that the appellant has adduced no evidence to show that the cost of the surgery performed by Dr Khong [wrongly referred to by the respondent as being performed at Royal North Shore Hospital] exceeded the 20% threshold.
The respondent points out that it is not clear exactly what amount (if any) is at issue on the appeal, or whether or not those expenses which remain to be paid were reasonably necessary as a result of the injury. Further, the respondent says that on the basis of the amended schedule of s 60 expenses, it is clear that the appellant has not paid the amount in the schedule or that it has been paid by Medicare.
The respondent points to an invoice printed on 22 November 2018 but dated 21 June 2017, relating to treatment at Royal North Shore Hospital in 2017 totalling $50,910.16. That account clearly did not relate to back surgery performed in December 2018.
The respondent submits that the amount payable to Dr Khong in respect of the surgery performed by him is $10,102.50, which is less than 20% of the amount of weekly payments awarded.
The respondent observes that it may be in the minds of the appellant’s legal representatives that the Arbitrator’s determination that the surgery did not result from the compensable injury will have an effect on the appellant’s entitlement to a claim pursuant to s 66 of the 1987 Act in respect of his whole person impairment, but submits that such a challenge does not involve any amount awarded in the decision appealed against.

The appellant’s threshold submissions

The appellant submits that the amount of $29,628.21 plus the cost of anaesthetist fees in respect of future treatment care or related expenses was claimed in the Application to Resolve a Dispute (ARD) at Part 5.3. The appellant says that the future treatment was described as “Laminectomy to the L4/5 and L5/S1, surgery related expenses, hospital expenses and post surgery related expenses.”[1] The appellant adds that this treatment was sought by the appellant, but rejected by the respondent.
[1] Appellant’s submissions in Reply to the threshold issue, [5].
The appellant refers to a quote from Sydney Adventist Hospital dated 22 November 2018, which was attached to the ARD,[2] and amounted to $18,309.56. The appellant further refers to Dr Khong’s report dated 9 March 2019, which was annexed to the AALD dated 11 March 2019,[3] and submits that the report makes it clear that the appellant attended Dr Khong for follow up after the surgery.
[2] ARD, p 326.
[3] AALD dated 11 March 2019, p 4.
The appellant also refers to an account attached to the AALD dated 11 March 2019,[4] which is for an extended consultation and report by Dr Khong on 4 December 2018 in the amount of $458.00, and says that amount should be included. The appellant further asserts that the consultations with various practitioners that follow that entry clearly relate to post-operative expenses, and total $1,812.60.[5]
[4] AALD dated 11 March 2019, p 23.
[5] AALD dated 11 March 2019, pp 23–24.
On the basis of the above, the appellant submits that the amount of treatment expenses the respondent would have been obliged to pay but for the alleged erroneous decision of the Arbitrator would have been no less than $20,580.16. The appellant calculates the weekly payments up to the date of the award as totalling $67,380.14, and that the amount in issue exceeds 20% of the amount awarded.
The appellant adds that the Arbitrator found that the appellant had no work capacity, and that there is a very real potential that an entitlement in respect of a whole person impairment resulting from the injury would be directly affected by the Arbitrator’s erroneous finding. The appellant points out that if the surgery was not related to the injury, a deduction will be made from the appellant’s whole person impairment, and there is a real prospect that the appellant will fall below the 11% threshold to claim a lump sum pursuant to s 66 of the 1987 Act. The appellant contends that if the converse finding had been made, there is a very real prospect that the appellant would be assessed as suffering 20% whole person impairment, which would result in lump sum compensation in the order of $51,650. The appellant submits that this entitlement is placed at a real risk if the decision is not challenged, and on that basis the threshold requirement contained in s 352(3)(b) has been met.

DISCUSSION

The Certificate of Determination issued on 17 April 2019 records:
“The Commission determines:
Findings
1.     The applicant sustained a discal injury to L5/S1 with annular tear and muscular/ ligamentous strain.
2.     The applicant did not sustain injury to the spinal canal and did not aggravate his pre-existing epidural lipomatosis.
3.     The applicant sustained a secondary psychological condition by reason of the work injury.
4.     The back surgery undertaken in December 2018 was not as a result of injury.
5. The applicant had no current work capacity within the meaning of s 32A of the Workers Compensation Act 1987 from 29 June 2017 to date and continuing.
Orders
6. The Respondent pay the Applicant weekly compensation pursuant to s 37 of the Workers Compensation Act 1987 at $716.81 per week from 29 June 2017 to date and continuing.
7. The respondent pay the applicant’s s 60 expenses on the basis of a general order.”
It is well settled that s 60 of the 1987 Act is an indemnity provision.[6] That is, liability to pay treatment expenses does not arise until the cost of the treatment is presented to the insurer and it is determined that the cost is payable.
[6] NSW Sugar Milling Co-Operative Ltd v Manning [1998] NSWCC 33; 44 NSWLR 442; 16 NSWCCR 606.
In Olympic Fencing (NSW) Pty Ltd v Crossley,[7] the then Acting Deputy President Snell noted that a general order for section 60 expenses will never be for a specific sum. The Acting Deputy President considered the application of s 352(2)(a) (which was in identical terms to the current s 352(3)). He concluded that the test for the purpose of establishing the amount in issue on appeal was whether the Presidential member could be satisfied on the evidence that the medical expenses recoverable pursuant to a general order would exceed the threshold of $5,000.00. The Acting Deputy President said (citations omitted):
“A general order for section 60 expenses will never be for a specific sum. It has been the practice, in other Presidential decisions, to enquire into the sums of which recovery will be sought, pursuant to such general order, for the purpose of considering whether section 352(2)(a) is satisfied. Thus, notwithstanding the non-specific nature of such a general order, where the material before the Presidential member indicated the expenses involved were less than $5,000, leave was refused: Georgandas v Qantas Flight Catering, Miller v Anglican Retirement Village. Where the material indicated expenses recoverable pursuant to the general order would exceed $5,000, section 352(2)(a) was satisfied, and leave was granted: Lilly v Tomago Aluminium Company Pty Limited. I propose adopting the same practice.”[8]
[7] [2007] NSWWCCPD 121 (Crossley).
[8] Crossley, [24].
The appellant argued that the calculation of the amount in issue in the appeal should include the estimated future treatment expenses in the sum of $29,628.21 plus anaesthetist’s fees, as pleaded at Part 5.3 of the ARD. It is not sufficient to rely on the pleadings alone in order to determine the amount in issue. In Popovic v Liverpool City Council,[9] Keating J made the following observations:
“Mrs Popovic submits that the threshold issue should be decided in her favour because of the way in which the case was pleaded. Namely, that an amount of $5,000 was pleaded in the Application as the amount sought in compensation. I do not accept that submission. It is apparent that Mrs Popovicabandoned that claim on the first day of the hearing. The matter proceeded before the Arbitrator on the basis that only a general order was sought in respect of medical and hospital expenses. There was no particularisation of the extent of the medical expenses sought to be recovered.
Cases are decided on the evidence tendered and arguments presented, not on the pleadings. This is especially so in the Commission, which has a statutory obligation to act according to the substantial merits of the case.”[10]
[9] [2017] NSWWCCPD 49, (Popovic).
[10] Popovic, [25]–[26].
Further the amount estimated for the future surgery cannot be included because the surgery had in fact occurred by the time of the arbitration, and the expenses were, by then, known, so that the estimate was no longer valid.
Section 352(3) of the 1998 Act is expressed in clear terms. It provides that there is no appeal under this section unless the amount of compensation at issue on the appeal exceeds $5,000 and is at least 20% of the amount awarded in the decision appealed against. There is no discretion vested in the Commission to dispense with the threshold requirements and if either subss 352(3)(a) or (b) are not met, then the appeal cannot proceed.
Both Crossley and Popovic were decisions about the calculation of the amount of the claim for the purposes of the monetary threshold of $5,000.00 pursuant to s 352(3)(a) of the 1998 Act, that is the amount at issue on the appeal. The reasoning in both those authorities is equally applicable in determining the amount at issue on appeal for the purpose of s 352(3)(b).
The respondent does not take issue with respect to the amount at issue on the appeal exceeding $5,000.00. In order to pass the percentage threshold test in section 352(3)(b), however, the appeal must also affect an “amount of compensation at issue on the appeal”. The decision must have a real capacity to put the amount of compensation in issue in the appeal, determined by reference to either the decision or, if no amount is awarded, the claim.[11]
[11] Sheridan v Coles Supermarkets Australia Pty Limited [2003] NSWWCCPD 3 (Sheridan).
The parties agree that the amount awarded in respect of weekly payments up to the date of the award totaled $67,380.14. The Arbitrator did not award a particular sum in respect of the claim for treatment expenses pursuant to s 60 so that no amount was awarded for those expenses.
Where no sum was awarded, the amount of compensation in issue is the amount claimed in the proceedings. In this case, the appellant, in addition to claiming weekly payments, claimed a total amount of $68,011.83 in respect of treatment already provided, supported by invoices indicating those expenses had already been incurred. Included in that sum was an amount of $10,102.50, supported by an invoice from Dr Khong, in respect of the surgery performed by him on 20 December 2018.
The appellant argued that the quote from Sydney Adventist Hospital dated 22 November 2018 in respect of the proposed surgery ought to be included in the amount claimed. I reject that submission. By the time the matter came to arbitration, the appellant had in fact undergone the surgery, not at a private hospital but at a public hospital, where he was admitted as a public patient, and the admission form recorded that there would be no charge for the admission.[12]
[12] AALD dated 18 March 2019, p 17.
The only evidence presented in respect of the cost of the surgery is the invoice from Dr Khong for $10,102.50.
The appellant submits that a further expense dated 4 December 2018 in the amount of $458.00 should be included in the amount claimed, which was in respect of an extended consultation with Dr Khong and the preparation by Dr Khong of a report. A medical report fee is not a s 60 expense.
The appellant also contends that all of the treatment expenses that followed the consultation with Dr Khong on 4 December 2018 clearly relate to the surgery performed. The appellant attended those service providers regularly since his injury and prior to the surgery. I do not accept that it is probable that the consultations provided after 4 December 2018, said by the appellant to total $1812.60, were all as a result of the surgery. Even if the appellant’s submission is accepted, and the report and consultation fee dated 4 December 2018 is also included, the total of the amount at issue on the appeal is $12,373.10.

The approach taken by both parties in the appeal in determining the amount awarded was that the s 60 expenses itemised in the schedule of expenses filed in the AALD dated 11 March 2018 should be included in that calculation.
Neither party put forward a case that because the Arbitrator made a general order for s 60 expenses, there was no sum awarded for treatment expenses, so that the only amount awarded for the purposes of s 352(3)(b) was the amount ordered in respect of weekly payments of compensation. The Commission has previously held that a “general order” for the payment of s 60 expenses is of “limited efficacy”[13] because the costs are not payable until a specific sum is sought and a determination is made that it is payable. That potential argument was not raised, so I have not given it consideration. Even if it had been raised before me, on the calculation of the amount in issue in the appeal, that amount falls below 20% of the agreed total $67,380.14 awarded for weekly payments up to the date of the order, so that the threshold requirment would fail in any event.
[13] Sydney South West Area Health Service v Avery [2007] NSWWCCPD 213, [55].
The amount of $12,373.10 at issue in the appeal falls short of being at least 20% of the weekly award ordered by the Arbitrator, and well short of 20% of the total award if an assessment of the value of the general order is included.
The appellant submits that his potential entitlements pursuant to s 66 of the 1987 Act and other compensation entitlements that may flow from an assessment of his WPI will be affected by the Arbitrator’s decision that the appellant’s spinal surgery did not result from the injury. This is because there would be a deduction from the appellant’s percentage WPI to account for that non-work related component. The appellant asserts that the value of those entitlements, particularly if the appellant is assessed as suffering a 20% WPI for the purposes of s 66, ought to be included in the amount in issue in the appeal.
The appellant cannot rely on his potential s 66 entitlements, or further entitlements in respect of compensation flowing from a future assessment of his WPI, in the calculation of the amount in issue in the appeal. There was no such amount claimed in these proceedings.
In Sheridan, the injured worker claimed weekly payments and treatment expenses, quantified by the Arbitrator as a total amount of $3,736.46. The worker had also been assessed by Dr Alan Hopcroft, orthopaedic surgeon, as suffering from 10% permanent impairment pursuant to s 66 of the 1987 Act. Dr Hopcroft’s report was in evidence, but a lump sum was not claimed in the proceedings before the Arbitrator. The appellant worker submitted that the amount in issue was $9,736.00, which included the amount of $6,000.00 in respect of the 10% permanent impairment. Deputy President Fleming observed as follows:
“The amount of compensation at issue on the appeal must be determined by reference to the amount of compensation at issue in the proceedings before the Arbitrator at first instance. The Application to Resolve a Dispute does not identify an amount of $6000.00 for a 10% permanent impairment of the Applicant’s back as being in dispute. On any reading of the Arbitrator’s statement of reasons for decision it is clear that he was not considering any such claim.”[14]
[14] Sheridan, [16].
It follows that the appellant has failed to satisfy the threshold requirement in s 352(3)(b) of the 1998 Act, and so he has no right of appeal.

DECISION

The name of the respondent wherever it appears in the appeal and in the proceedings below is amended where necessary to read “FRF Holdings Pty Ltd”.
The threshold percentage in s 352(3)(b) of the Workplace Injury Management and Workers Compensation Act 1998 is not satisfied, and there is no right of appeal.

Elizabeth Wood

DEPUTY PRESIDENT

30 October 2019