HPM Industries Pty Ltd v Awad
[2006] NSWWCCPD 60
•11 April 2006
WORKERS COMPENSATION COMMISSION
APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:HPM Industries Pty Limited v Awad [2006] NSWWCCPD 60
APPELLANT: HPM Industries Pty Limited
RESPONDENT: Ann Awad
INSURER:Allianz Australia Workers Compensation (NSW) Limited
FILE NUMBER: WCC14176-04
DATE OF ARBITRATOR’S DECISION: 11 February 2005
DATE OF APPEAL DECISION: 11 April 2006
SUBJECT MATTER OF DECISION: Adequacy of reasons and procedural fairness.
PRESIDENTIAL MEMBER: Acting Deputy President Deborah Moore
HEARING:On the papers
REPRESENTATION: Appellant: Hicksons Lawyers
Respondent: Keddies Litigation Lawyers
ORDERS MADE ON APPEAL: 1. The decision of the Arbitrator dated 11
February 2005 is revoked.
2.The matter is remitted to the Registrar for referral to another Arbitrator for rehearing and re-determination of all issues.
3.No order as to costs of the appeal.
BACKGROUND TO THE APPEAL
Ann Awad (‘Mrs Awad’) was employed by HPM Industries Pty Limited (‘HPM’) as a process worker from approximately 1994 to January 2003.
She claims that as a result of the nature and conditions of her employment she suffered injuries to her neck, back, both arms and her left leg.
Mrs Awad gave notice of her injury to HPM on 22 October 2002 and completed a claim for compensation on the same date.
She then ceased work and appears to have remained off work until 25 November 2002 when she resumed selected duties with HPM. She ceased these on 24 January 2003. Her employment was ultimately terminated on 22 May 2003.
She was paid weekly payments of compensation by HPM’s insurer, Allianz Australia Workers Compensation (NSW) Limited (‘Allianz’) between 23 October 2002 and 20 December 2002.
On 14 September 2004, Mrs Awad filed an ‘Application to Resolve a Dispute’ in the Commission seeking weekly benefits compensation, medical, hospital or related expenses, and permanent impairment/pain and suffering pursuant to the provisions of the Workers Compensation Act 1987 (‘the 1987 Act’).
A ‘Reply’ was filed by HPM on 25 October 2004 which disputed all Mrs Awad’s entitlements as claimed.
Following a teleconference on 25 November 2004, the Arbitrator completed a ‘Request for Medical Assessment by Approved Medical Specialist’ for the purposes of both Permanent Impairment Dispute and General Medical Dispute. With reference to the General Medical Dispute, specific questions were put to the Approved Medical Specialist as follows:
·“Was work a substantial contributing factor?
·What is fitness for pre-injury duties?
·Is worker totally unfit?
·Is worker fit for alternative duties, if so, what?”
There are no notes from the Arbitrator as to the outcome of the teleconference, but HPM claims that, despite the questions put to the AMS referred to in the preceding paragraph, the Arbitrator nonetheless listed the claim for weekly compensation for arbitration hearing on 10 December 2004. The AMS appointment with Dr Lewis Pierides was scheduled for 1 February 2005. A medical assessment certificate subsequently issued on that same day.
At the hearing on 10 December 2004, brief oral evidence was given by Mrs Awad and the Arbitrator proceeded to give an ex tempore decision, but the transcript records that the Arbitrator agreed to provide written reasons.
On 11 February 2005, a ‘Certificate of Determination’ issued wherein the Arbitrator made the following orders:
“1. That the Respondent pay the Applicant weekly compensation at the rate of $130.00 from 22.12.02 to 01.01.03; at the rate of $137.00 from 02.01.03 to 24.01.03; at the rate of $456.00 from 25.01.03 to 22.05.03; at the rate of $326.90 from 23.05.03 to 01.04.04 and $333.80 from 02.04.04 under s40 of the Workers Compensation Act 1987. Such weekly payments to continue in accordance with the provisions of the Act.”
On 11 March 2005, HPM sought to appeal the decision of the Arbitration. No formal application was filed however, a document headed “Respondent’s Submissions” was filed and served on Mrs Awad’s solicitors on that date. Briefly, HPM submits that the Arbitrator erred in her calculation of Mrs Awad’s section 40 entitlements and failed to provide adequate reasons for her determination. HPM further submits, although somewhat obliquely, that the decision of the Arbitrator to list the claim for weekly benefits prior to obtaining the AMS Certificate was procedurally unfair.
No Notice of Opposition or submissions have been filed by Mrs Awad’solicitors.
LEAVE TO APPEAL
The amount at issue on appeal satisfies the requirements of section 352(2) of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’). The appeal was filed in time together with a Certificate of Service on Mrs Awad’s solicitors. Leave to appeal is granted.
ON THE PAPERS
No submissions have been made by either party on this issue. Having carefully read the transcript, including the Arbitrator’s reasons contained therein, and all the evidence before her, together with HPM’s submissions on appeal, I am satisfied that I have sufficient information within the meaning of section 354 of the 1998 Act and in accordance with Practice Direction 1 to proceed ‘on the papers’, and that this is the appropriate course in the circumstances.
THE ARBITRATOR’S DETERMINATION
The Section 40 Error
HPM submits that the Arbitrator erred in her calculation of Mrs Awad’s section 40 entitlement. HPM cites the provisions of sections 36, 37 and 40 of the 1987 Act, and claims that the Arbitrator’s award under section 40 exceeded the weekly payment that would have been payable to Mrs Awad if she were totally incapacitated for employment. That amount, HPM claims, is $235.20 per week.
This submission is misconceived. HPM has overlooked the ‘adjustment’ or ‘indexation’ provisions contained in sections 79 to 82 of the 1987 Act. The current “formula ceiling” under section 40 from 1 October 2005 is $1449.50. Accordingly, there has been no mathematical error in the Arbitrator’s calculation of the award.
The Adequacy of Reasons Error
HPM submits that the Arbitrator’s reasons in respect of her award of weekly compensation were inadequate. Reference is made to Rule 73 of the Workers Compensation Commission Rules 2003 (‘the Rules’) which provides as follows:
“1.A statement of the Commission’s reasons referred to in section 294(2) of the 1998 Act is to include:
(a) the findings on material questions of fact, referring to the evidence or other material on which those findings were based, and
(b) the Commission’s understanding of the applicable law, and
(c) the reasoning processes that lead the Commission to the conclusions it made.
2. Without limiting subrule (1), the reasons set out in a statement referred to in subrule (1) are to be stated sufficiently (in the opinion of the Commission) to make the parties aware of the Commission’s view of the case made by each of them.”
It is clear law that:
“… it is not necessary for an Arbitrator to give lengthy reasons for their decision. Provided that Rule 73 is complied with, the reasons will be adequate notwithstanding they do not set out statutory provisions at length, nor specify and examine all relevant and judicial authority on the matters decided.” (See Snow Confectionary Pty Limited v Askin [2004] NSWWCC PD56 at 45).
Nevertheless, Commission Arbitrators have a statutory obligation to provide adequate reasons for a decision. The reasons must be capable of unveiling clearly to the parties the grounds upon which a determination was made (see Mindgrove Pty Limited v Hentunen (2005) NSWWCC PD 118 at 57).
The failure to give adequate reasons constitutes an error of law.
In the present case, at page 1 of the transcript, the Arbitrator sets out the medical reports and vocational assessment reports relied upon by each party. She also notes that she has “… a wage schedule that I have just been handed, and the respondent had no objection to that.” The transcript then records submissions by both parties.
At page 7 of the transcript, the Arbitrator notes “we haven’t sworn the Applicant and we do have a statement from the Applicant. As you know, in this jurisdiction, cross examination is incredibly [sic] – is very limited.” HPM’s representative sought to ask Mrs Awad some questions in relation to a vocational assessment report. The Arbitrator then said, “[s]urely you have the assessment here. What could questions of the Applicant add to what you already have? … we have Ms Awad’s statement.”
The second page of Mrs Awad’s statement in her Application is missing. Other copies of the Application I have located are similarly missing page 2 which may or may not be of relevance. No comment is made by either party or the Arbitrator as to this defect.
Notwithstanding the Arbitrator’s statement, and without swearing in Mrs Awad, the Arbitrator then said at page 9 of the transcript “… this is an inquisitorial process, and there are a few questions I would like to ask Ms Awad.” There follows a series of questions from the Arbitrator as to Mrs Awad’s capacity for employment. Mrs Awad’s replies are at times inaudible and not always responsive.
At page 11 of the transcript, the Arbitrator asked her “what do you think is stopping you going back to work at the moment, from your perspective and how you’re feeling and what you’re doing?” Mrs Awad replied, “The pain I get sometimes I can’t sleep at night time… I have my knee and my back, and I suffer a lot …”
When asked by the Arbitrator “Is there anything you think you could do?” Mrs Awad replied “That’s what I thought, like, I give the kids, eight, nine years, they come after school and I just need to get them a drink or something.”
The Arbitrator then asked her, “The insurer is saying that they think you could work as a car park attendant. Do you think you could do that kind of work?” Mrs Awad replied, “I don’t think so.” The Arbitrator asked “Why not?” to which Mrs Awad responded “That needs to be standing up most of the time or nearly all day and I cannot do that.”
In response to a question from the Arbitrator that she might be able to be a cashier, Mrs Awad said at page 12 of the transcript “I don’t think so… because in that I need to use my arms, and my arms, its really sore in my shoulders, …”
No questions were asked of Mrs Awad by her legal representative, and she was not cross-examined by HPM’S legal representative. Thereafter, the transcript consists of discussions between the parties and the Arbitrator commences her decision at page 13 of the transcript.
The Arbitrator sets out brief summaries of the various medical reports and vocational assessments relied upon by Mrs Awad. The Arbitrator said:
“Dr Mahoney [Mrs Awad’s treating doctor] … said that the worker had worked for the employer for nine years after having previously worked for another company doing process work and had during the period 1980 – 84 developed similar problems to those she has now. His opinion was that Mrs Awad suffers from a cervical strain. Dr Guirgis, who gave a report in August ’02, said that Mrs Awad had a regional pain syndrome and said that she needed to rest five minutes every half an hour when working”.
In the next paragraph, the Arbitrator refers to the report of Dr Stening who saw Mrs Awad in February 2003 at the request of her solicitors. No diagnosis was made by Dr Stening. The Arbitrator then notes that Dr Malik, Mrs Awad’s General Practitioner “has provided Mrs Awad with medical certificates that she is unfit for work.” She then refers to a ‘vocational assessment’ prepared by Ms Messer, psychologist, on 7 December 2004 noting that “Mrs Awad at that time, had an assessment from her doctor that she was unfit for work … There was talk in the assessment about her transferable skills and that she had difficulties with written skills and a suggestion that suitable work as a library assistant or a parking lot attendant might be open to her …”
Similar summaries are made in relation to the reports of Doctors Hassall and Potter, dated 11 December 2002 and 6 December 2002 respectively, relied upon by HPM. At page 14 of the transcript, the Arbitrator then notes, “There was a report from an assessment company called Recovre. In that, it does note that Mrs Awad had said that she would love to return to work but it did note that she had only sought one job, looking after children.”
As to Dr Hassall, the Arbitrator said “… the doctor says that there is a regional pain syndrome and notes that this kind of syndrome often develops where work is stressful, repetitive and boring.” As to Dr Potter, the Arbitrator said “Dr Potter found no physical or organic pathology … he thought that she had a chronic widespread pain disorder, sometimes called a regional pain disorder …”
No reference is made by the Arbitrator to the ‘Functional Capability Assessment Report’ dated 9 December 2004 by Paul Gan, physiotherapist, on behalf of HPM to which the Arbitrator had referred on page 1 of the transcript nor indeed to the various “suitable employment options” listed in the vocational report of Recovre also dated 9 December 2004.
In the next paragraph, on page 14 of the transcript, the Arbitrator says:
“What do I find from these materials and the submissions made to me? I find that there is an injury which may be described in several ways, as it has been in the reports, either as a chronic widespread pain syndrome or a cervical strain or regional pain syndrome.”
That is not by any means an accurate interpretation of the medical evidence nor indeed an adequate finding of ‘injury’. Both Doctors Hassall and Potter pointed out that a ‘condition’ variously described as ‘chronic pain syndrome’ or ‘regional pain syndrome’ was not an injury per se. As Doctor Potter put it in his report dated 6 December 2002 “the patient has a pattern of pain, not injury.”
If the Arbitrator’s determination was that Mrs Awad had suffered an injury by way of a “cervical strain” as suggested by Dr Mahoney, it is difficult to place any weight on Mrs Awad’s assertion, in response to the Arbitrator’s question, that what was preventing her from returning to work was pain in “… my knee and my back …” Dr Mahoney’s report of 21 October 2002 makes no comment on Mrs Awad’s capacity for work.
The question of incapacity for employment must be consequent upon the injury found. At page 15 of the transcript, the Arbitrator stated:
“… I think that the Applicant’s case should be accepted that she has an injury caused through this repetitive work she has been doing. I accept that the present condition may have been an aggravation of previous work but I think that … the employment with the respondent was a substantial contributing factor to her present injury.”
In the next paragraph, the Arbitrator stated:
“Therefore, what is the incapacity? Motivation was talked of, and a highly motivated worker may have been able to overcome some of these problems. But looking at this particular worker, there are barriers that have been indicated. English is her second language, her written skills are not that good, and she’s had little training in skills other than that of a process worker.”
No reference is made by the Arbitrator to any of the medical, radiological or vocational reports relied on by both parties as to Mrs Awad’s capacity for employment. The issues identified by the Arbitrator such as poor written English skills and a lack of training in areas other than process work were identified by the vocational assessors, but notwithstanding those ‘barriers’, a number of employment options were recommended by them.
The ‘incapacity’ is identified only in terms of “barriers” without reference to any employment options or indeed to the ‘injury’ as found by the Arbitrator, such that she has failed in her task, in terms of Rule 73 of the Rules, either to adequately identify material questions of fact by reference to the evidence or to identify the reasoning processes that led to her ‘conclusion’.
At page 15 of the transcript, following her statement as to ‘incapacity’, the Arbitrator then said:
“I have had thoughts of the leading case in this area of Mitchell [Mitchell v Central West Area Health Service (1997) 14 NSWCCR 526] which asks me to look at what the worker was earning, what she could now earn, what the difference might be and whether I wish to exercise any form of discretion.
I have before me a Wage Schedule … which showed that the worker could earn some $487.00 per week … with her present condition and the barriers to employment, I think most of those jobs seem to be a little beyond what she might do … I think perhaps she could earn some $100.00 per week. However, seeing the barriers to her employment, I am going to exercise the discretion and say that I think perhaps the more realistic figure would be $50.00 per week.”
In response to a question from HPM’s representative as to “what are your findings?” the Arbitrator simply said that “… the $50.00 a week … is a discretionary figure that’s emerged.” The Arbitrator then attempts to formulate an award by reference to Mrs Awad’s Wage Schedule offering HPM’s representative “… a photocopy of the Wage Schedule.” When asked by HPM’s representatives as to what the sums calculated by reference to the Wage Schedule represented, the Arbitrator said: “They represent s40 findings, section 40 payments.”
HPM’s representative then said: “And you’ll have your written reasons?” to which the Arbitrator replied “I will write it out and you’ll get them.”
Nothing further has been provided by the Arbitrator other than the Certificate of Determination and Statement of Reasons – Ex Tempore Orders referred to previously.
Whilst noting her obligations by reference to Mitchell’s case referred to above, again the Arbitrator has failed to identify any evidence upon which she concluded that Mrs Awad could earn $100.00 per week, let alone the evidentiary basis for the exercise of her discretion to reduce that figure to $50.00 per week.
If the Arbitrator was accepting particular evidence or rejecting other evidence, she should have said so, and her reasons why. Merely averting to “barriers” is insufficient particularly in the context of the vocational assessments as to the various employment options regarded by the authors of those assessments as suitable.
This issue was considered by Hodgson JA in NSW Ambulance Service v Daniel (2000) 19 NSWCCR 697 at 718. He said:
“The judgment of the trial Judge made no reference to the material in [the doctor’s] report which could support the finding, nor did it indicate any reliance on the knowledge of the Compensation Court as a specialist tribunal. In my opinion, having regard to the absence of any mention in the judgment of the possibly relevant expert evidence to which I have referred, and the absence of mention of the Court’s knowledge as a specialist tribunal, the matters actually referred to by the trial Judge do not amount to evidence capable of supporting the finding. The trial Judge may have taken into account the matters which he did not refer to, but this Court is left to speculate whether or not he did, and if so, how he took them into account.
In my opinion, if a Judge’s reasons show that he or she made a finding of fact relying exclusively on material that could not as a matter of law support that finding, then although the reasons may be adequate, they will disclose an error of law.”
In the present case, the Arbitrator has failed to refer to the material in various medical reports not only in support of a finding of ‘injury’, but also has failed to refer to that evidence, and/or the vocational assessment evidence, in making her finding as to ‘incapacity’, and in so doing has erred in law.
As to the Arbitrator’s exercise of her discretion, as Deane J as he then was said in AustralianBroadcasting Tribunal v Bond (1990) 170 CLR 321:
“If a statutory tribunal is required to act judicially, it must act rationally and reasonably. Of its nature, a duty to act judicially (or in accordance with the requirements of procedural fairness or natural justice) excludes the right to decide arbitrarily, irrationally or unreasonably … breach of a duty to act judicially constitutes an error of law which will vitiate the decision.”
Again, there is no evidentiary basis disclosed for the Arbitrator’s purported exercise of her ‘discretion’ such that it cannot be said that it was made rationally and reasonably, and as such, constitutes an error of law.
The Procedural Unfairness Error
The Arbitrator’s decision to proceed with the Arbitration hearing on the issue of capacity for employment, in circumstances where the parties and indeed the Commission had specifically requested the opinion of Dr Pierides, the AMS, on this issue, again reflects an arbitrary and irrational exercise of the Arbitrator’s statutory obligation to fairly and lawfully determine the application.
As I have said, there are no notes as to the outcome of the teleconference on 25 November 2004. HPM submits that, on that occasion, the Arbitrator “… set the issue of weekly compensation down for Arbitration and would not entertain hearing both issues at the time with the benefit on an AMS assessment of the Applicant’s capacity for work.”
Such conduct by the Arbitrator amounts to a denial of procedural fairness. As Deputy President Fleming said in Seymour v Western Sydney Area Health Service [2004] NSWWCCPD 18 (page 4): “… The Commission is bound by general law principles of procedural fairness and by the statutory provisions governing its procedure …” Further, at page 5 she said:
“The parties were entitled to rely upon the Arbitrator’s directions in relation to the ongoing conduct of this matter … there has been a denial of procedural fairness in the determination of the substantive matter by the Arbitrator. A denial of procedural fairness is an error of law and a ground upon which a decision may be revoked.”
In the present case, the parties were entitled to rely upon the Arbitrator’s referral to an AMS of questions relevant to a substantive issue in the proceedings, namely Mrs Awad’s entitlement to weekly payments of compensation. Although clearly not conclusive, the Arbitrator’s referral of questions going to the issue of incapacity assumes a request for an independent assessment to assist in her determination of Mrs Awad’s claim for weekly compensation. To proceed in its absence, after such a request, and without reason, constitutes a denial of procedural fairness.
CONCLUSION
The Arbitrator’s reasons and reasoning processes are inadequate and fail to unveil clearly to the parties the grounds upon which her determination was made, such that she is in breach of her obligations pursuant to Rule 73 of the Rules and she has failed to exercise her statutory duty to fairly and lawfully determine the application.
DECISION
(1) The decision of the Arbitrator dated 11 February 2005 is revoked.
(2)The matter is remitted to the Registrar for referral to another Arbitrator for rehearing and re-determination of all issues.
COSTS
No order as to costs of the appeal.
Deborah Moore
Acting Deputy President
11 April 2006
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF DEBORAH MOORE, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
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