Hunter New England Local Health District v James - [2014] NSWWCCPD 38

WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:	Hunter New England Local Health District v James [2014] NSWWCCPD 38
APPELLANT:	Hunter New England Local Health District
RESPONDENT:	Simon John James
INSURER:	QBE Insurance (Australia) Ltd
FILE NUMBER:	A1-11909/12
ARBITRATOR:	Mr R Caddies
DATE OF ARBITRATOR’S DECISION:	26 February 2014
DATE OF APPEAL DECISION:	24 June 2014
SUBJECT MATTER OF DECISION:	Review under s 55 of the Workers Compensation Act 1987; alleged failure to give reasons; weight of evidence; s 40 of the Workers Compensation Act 1987 (as it stood prior to the introduction of the amendments in the Workers Compensation Legislation Amendment Act 2012); exercise of discretion in s 40(1) of the Workers Compensation Act 1987
PRESIDENTIAL MEMBER:	Acting President Bill Roche
HEARING:	On the papers
REPRESENTATION:	Appellant:	Hicksons
Respondent:	Everingham Solomons
ORDERS MADE ON APPEAL:	1. The Arbitrator’s determination of 26 February 2014 is confirmed. 2. The appellant employer is to pay the respondent worker’s costs of the appeal, as agreed or assessed.

INTRODUCTION

This appeal concerns a review of an award of weekly compensation under s 55 of the Workers Compensation Act 1987 (the 1987 Act). Though that section was repealed by the Workers Compensation Legislation Amendment Act 2012, as the worker was an existing recipient of weekly compensation immediately before 1 October 2012, the section continues to apply in the circumstances of this case (see cl 6 of Pt 19H of Sch 6 to the 1987 Act).

BACKGROUND

The respondent worker, Simon James, worked for the appellant employer, New England Hunter Local Health District, as a laundry assistant. On 9 September 1993, he was crushed between two large industrial dryers and injured his head, neck, torso, low back and legs, and was later diagnosed with a consequential psychological condition. He was hospitalised for one week and off work for about three months.
Mr James returned to work on suitable duties, which he continued until 31 October 1997 when those duties were no longer available and the appellant terminated his employment. In order to obtain alternative employment, at his own expense, Mr James completed a number of courses in electronics, security work and first aid.
On 19 March 1998, Mr James settled a claim for lump sum compensation for permanent impairment as a result of his injuries. Terms of Settlement filed in the former Compensation Court of NSW (the Compensation Court) provided for the following awards:
(a)     $5,168 in respect of 10 per cent permanent impairment of his neck;
(b)     $7,752 in respect of 10 per cent permanent impairment of the back;
(c)     $9,690 in respect of 10 per cent loss of use of his right leg at or above the knee;
(d)     $2,422.50 in respect of 2.5 per cent loss of use of his left leg at or above the knee, and
(e)     $12,930 for pain and suffering.
In October 2000, Mr James obtained work as a security guard with Pembo Security. In the same year, he commenced proceedings in the Compensation Court claiming weekly compensation of $470.50 from 9 December 1999 to date and continuing. In 2002, Pembo Security ceased operations and Mr James worked at the same premises doing the same duties with JCB Security.
After a hearing on 30 January 2002, Hughes CCJ determined that claim in favour of Mr James, making an award of $100 per week from 9 December 1999 and continuing. The award was based on the difference between Mr James’ actual earnings as a security guard and probable earnings had he not been injured, which appears to have been about $127 per week. However, rather than awarding that amount, the judge said that $100 “seem[ed] to be reasonable in that for quite a period Mr James was capable of working as a security guard”.
Though the work with JCB Security was lighter than Mr James’ pre-injury employment, due to prolonged standing and exposure to the elements at night, he found it difficult and he resigned in August 2005. Mr James gave evidence that he resigned because of his injuries. Other evidence suggested that Mr James resigned because of a proposal that he change to day shifts and because he had decided to become a full-time homemaker.
On 5 June 2009, Mr James obtained work at the Wests Diggers Club, Tamworth, as a part-time receptionist, working between 20 and 25 hours per week. He continued this work until he resigned on 23 July 2011 because new management was not as accommodating of his continuing disabilities. While working at the Club, he earned $443.65 per week between 5 June 2009 and 30 June 2010, and $335.60 per week between 1 July 2010 and 23 July 2011.
Between 8 August 2011 and 18 December 2011, Mr James worked as a bus driver with Tamworth BusLines, where he earned $610.90 per week. He has not worked since that time, but has remained in receipt of the award made by Hughes CCJ.
In September 2012, Mr James filed an Application to Resolve a Dispute (the Application) in the Commission seeking a review, under s 55 of the 1987 Act, of the award made by Hughes CCJ because of a change in circumstances since that award. He initially sought an increase in the weekly compensation payable from 31 January 2002 to date and continuing, but only pressed his claim from 8 August 2005.
The Arbitrator found that there had been a relevant change in circumstances, which would warrant a review of the award of Hughes CCJ, from 1 April 2008 when Mr James was again seeking full-time employment ([74]). This finding has not been challenged on appeal.
After reviewing the relevant medical evidence, the Arbitrator found that, at all material times, Mr James remained partially incapacitated for work and that, by reason of his physical disabilities, he would be “significantly disadvantaged” ([87]) in securing suitable employment and that his labour “would be less saleable by reason of his physical disability, even if he were fit physically to perform them in accordance with his restrictions, as against persons without such restrictions”.
For the period of the claim, the Arbitrator assessed Mr James’ probable earnings but for the injury, step one in the five step process dictated by Mitchell v Central West Health Service (1997) 14 NSWCCR 526 (Mitchell), to be between $667.80 and $786.90 per week, and his ability to earn, step two in Mitchell, to be $500 per week. The figure of $500 per week was calculated on the basis that Mr James could work, in some suitable employment, 25 hours per week earning $20 per hour. Where this amount exceeded Mr James’ actual earnings, the Arbitrator accepted, consistent with Aitkin v Goodyear Tyre & Rubber Co (Aust) Ltd (1945) 46 SR (NSW) 20 (Aitkin), the actual earnings as the proper figure for Mr James’ ability to earn. In respect of the periods when Mr James was not working, the Arbitrator, in the exercise of his discretion, reduced the difference between step one and step two of Mitchell “in accordance with Judge Hughes[’] decision” ([89(4)]).
The Commission issued a Certificate of Determination on 26 February 2014 in the following terms:
“The Commission determines:
1.     That the name of the respondent is amended by consent to Hunter New England Local Health District.
2.     The Application to Resolve a Dispute is amended by consent in Part 5.2 by deleting ‘27/7/01’ and substituting ‘31/1/02’.
3. Award in favour of the applicant pursuant to section 40 of the Workers Compensation Act 1987 (as in force prior to the weekly payments amendments made by the Workers Compensation Legislation Amendment Act 2012), pursuant to a review under the former section 55 of the Workers Compensation Act 1987, as follows:
(a)     at the rate of $135 per week from 1 April 2008 to 30 June 2008;
(b)     at the rate of $160 per week from 1 July 2008 to 4 June 2009;
(c)     at the rate of $250.15 per week from 5 June 2009 to 30 June 2009;
(d)     at the rate of $286.25 per week from 1 July 2009 to 30 June 2010;
(e)     at the rate of $413.40 per week from 1 July 2010 to 30 June 2011;
(f)     at the rate of $432.10 from 1 July 2011 to 23 July 2011;
(g)     at the rate of $267.70 per week from 24 July 2011 to 7 August 2011;
(h)     at the rate of $156.80 per week from 8 August 2011 to 18 December 2011;
(i)     at the rate of $215 per week from 19 December 2011 to 30 June 2012;
(j)     at the rate of $235 per week from 19 December 2012 to date and continuing or on the expiration of a period of 3 months after the insurer first conducts a work capacity decision whichever first occurs.
4.     Credit is to be given to the respondent for payments made during the period of the award.
5.     Order that the respondent pay the applicant’s section 60 expenses in relation to psychological treatment.
6.     The decision of His Honour Judge Hughes of 30 January 2002 in matter No 32605 of 2000 is otherwise confirmed.
7.     Order that the respondent pay the applicant’s costs as agreed or assessed.
8.     Having regard to the significant and unusual issues of law, fact, medicine and earnings history raised, I certify the matter is complex and order the costs payable, in respect of both parties, are to be subject to an uplift of 30 per cent.
9.     Liberty to apply.”
The appellant has challenged the Arbitrator’s findings on incapacity and the calculation of the award of weekly compensation. For the reasons explained below, the appeal is unsuccessful.

ON THE PAPERS

Section 354(6) of the Workplace Injury Management and Workers Compensation Act 1998 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 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.

ISSUES IN DISPUTE

The issues in dispute in the appeal appear to be whether the Arbitrator erred in:
(a) failing to give adequate reasons in determining that Mr James’ ability to earn, when not employed, was only $500 per week, which finding was contrary to the weight of the evidence (reasons and weight of evidence);
(b) failing to determine Mr James’ ability to earn in the period from 24 July 2011 to 7 August 2011 (when he was not working) by reference to his ability as a bus driver, a job in which he earned $610.90 per week from 8 August 2011 to 18 December 2011, rather than by reference to $500 per week (the period from 24 July 2011 to 7 August 2011), and
(c) not clearly explaining the manner in which he applied the discretion in s 40 at step four of his calculations (the discretion).

REASONS AND WEIGHT OF EVIDENCE

Submissions at the arbitration

Counsel for Mr James, Mr John Harris, took the Arbitrator to the decision by Hughes CCJ and his Honour’s observation that Mr James was an “impressive person who tried to get on with things” (T11.27). As to Mr James’ ability to earn while employed, Mr Harris relied on the principle in Aitkin, which states that if a worker is in employment, the income from that employment is prima facie evidence of the worker’s ability to earn, unless the worker is idling or deliberately taking lower paid work.
Mr Harris said that one started with the concept that there is a permanent impairment affecting the injured body parts and that Mr James gave evidence that he has symptoms in those body parts. He also referred to the report from Dr Bornstein, orthopaedic surgeon qualified by the insurer, dated 17 November 2005, who diagnosed Mr James to have right knee pathology (due to the 1993 injury), which required surgery.
Mr Harris referred to the evidence from Mr James to the effect that he had resigned from his security job in 2005 because of his injuries and because he could not cope with the work. He conceded that Mr James was fit for the kind of work he did at Wests Diggers Club, that is, work for 20 hours per week as a receptionist where he could sit or stand, and that he was able to do the bus driving work he did for 25 hours per week with Tamworth BusLines, which ceased on 18 December 2011 because there was no more work available. (I note that this work was driving a school bus and that the work ceased at the end of the school term.)
Dealing with Mr James’ incapacity on the open labour market (and I note that that market was in Tamworth in rural NSW), Mr Harris took the Arbitrator to the evidence from Dr Hopcroft, orthopaedic surgeon, qualified by Mr James’ solicitors, in his report dated 15 December 2009. Dr Hopcroft said that Mr James was fit to continue his employment with Wests Diggers Club as a receptionist for 20 hours per week. Dr Hopcroft essentially repeated that view in his report of 22 September 2010, but added that it would be wise for Mr James to stay away from security work, which would aggravate his developing spondylitic problems. He added that a return to heavier manual work, which involved full-time work of a physically arduous nature with long shifts, would trigger a deterioration of Mr James’ symptom complex.
Mr Harris also took the Arbitrator to WorkCover medical certificates from Dr Manners upon which Mr Pardy has relied on appeal, but made no particular submission about them. In respect of the psychiatric evidence, Mr Harris said that the disability was “two fold” (T18.10) and referred to Mr James’ “ability to concentrate and the like at work” (T18.10) and difficulties in reacting to “bosses and authorities” (T18.12).
Referring to the evidence from the appellant’s qualified psychiatrist, Dr Ahmed, who seemed to accept Mr James’ complaints, Mr Harris submitted that there was “some degree of incapacity from his [psychological] condition” (T18.31), acknowledging that Dr Ahmed did not accept that Mr James’ condition amounted to a psychiatric diagnosis under DSM IV and that he thought it was difficult to make any link between the 1993 injury and Mr James’ current psychological symptoms. Dr Ahmed felt Mr James would be suitable for a range of employment provided it minimised the conflict with other members of staff or clients.
Mr Harris also took the Arbitrator to a report from Ms Debra Dunstan, clinical psychologist, who prepared a pain management report on 19 December 2005 for the appellant’s insurer. He referred (at T19.11) to Ms Dunstan’s opinion that:
“Mr James also presents with cognitive features of Chronic Pain which limit his functional abilities. These include a tendency to engage in worst case scenario thinking; irritable and depressed mood; and, Panic Attacks.”
Mr Harris submitted that that condition was linked with the work injuries, specifically “the ongoing claim of lower back and the neck” (T19.15).
Mr Harris took the Arbitrator to the report of 27 February 2009 from Interact Injury Management, which set out Mr James’ work functional abilities and functional work restrictions. Mr Harris said it was difficult to make a finding about the loss (of capacity to earn), but it was greater than the $100 (awarded by Hughes CCJ).
Counsel for the appellant, Mr Levick, argued that since the decision of Hughes CCJ, there had been no relevant change in Mr James’ circumstances. Mr Levick said that the medical certificates to which Mr Harris had taken the Arbitrator did no more than restate the fact that Mr James had a limitation with heavy lifting and it was not suggested that Mr James’ work in the security industry involved heavy lifting (T22.16). He argued that the medical certificates did not support the proposition that Mr James’ incapacity “at that time had increased” (T22.20). He said that the medical evidence supported the submission that Mr James was “at all times fit to continue to be a security guard” (T23.3) and that that job paid in excess of his pre-injury duties.
Mr Levick took the Arbitrator to the evidence from Ms Dunstan that Mr James had ceased his security guard job because it was proposed that his work change from night shift to day shift and that did not suit his family arrangements.
Mr Levick contended that Mr James had a greater ability to earn than he had exercised and there was no better example of that than the bus driving work Mr James did in 2011, which paid him $610.90 per week. Deducting that figure from probable earnings but for the injury at that time ($767.70) gave a difference of $157, which Mr Levick submitted was not “far different from the $127 a week that was found by Judge Hughes” (T29.15) in 2002.
The thrust of Mr Levick’s submission was that, because he could do security work, Mr James’ ability to earn “could well be more than his pre-injury” (T29.29) ability. If the Arbitrator was against that proposition, Mr Levick submitted that Mr James could earn $610 per week. He then dealt with the discretion, which I discuss below.

The Arbitrator’s decision

The Arbitrator was satisfied that there had been a relevant change in circumstances, which justified a review of the award of Hughes CCJ, from 1 April 2008. While the correctness of the decision to select that date may be open to doubt, and it is arguable that the correct date should have been when Mr James resigned from his security job in August 2005, it has not been challenged on appeal. If the Arbitrator erred in selecting 1 April 2008 as the date of a change in circumstances that justified a review of the previous award, it is an error that favours the appellant. As Mr James has not challenged any part of the Arbitrator’s determination, it is not open to me to deal with it.
After reviewing the psychiatric evidence, the Arbitrator found (at [71]) that Mr James’ psychological problems were “interwoven with his inability to work, his pain from injury in 2003 [sic, 1993] and alcohol abuse from time to time”. He answered in the affirmative the question of whether Mr James had suffered a psychiatric injury or symptoms secondary to a frank injury to entitle him to receive s 60 expenses. The appellant has not challenged these findings.
The Arbitrator noted that Hughes CCJ had been impressed with Mr James and with his efforts “with employment in 2002” ([73]). The Arbitrator was also impressed with Mr James’ “pursuit of qualifications” and his obtaining the bus driving work shortly after leaving the Wests Diggers Club.
Dealing with Dr Bornstein’s evidence, the Arbitrator noted (at [75]) the doctor’s opinion that Mr James had a torn medial meniscus in his right knee as a result of the 1993 injury, having earlier recorded (at [51]) Dr Bornstein’s evidence that Mr James would be fit for work, especially if his right knee were attended to.
The Arbitrator then (at [76]) considered the evidence from Dr Hopcroft in 2009 to the effect that Mr James was troubled by neck and back pains and had had trouble in both knees since the crush injury in 1993. Dr Hopcroft considered that Mr James had developed a major post-traumatic stress disorder consequent upon the accident and required counselling with a major problem of behavioural disturbance, social and family disruption that led him to be significantly alcoholic. Dr Hopcroft thought that Mr James was fit to continue 20 hours a week as a receptionist.
The Arbitrator noted the permanent impairments suffered by Mr James as a result of his injuries, and that he had been out of work since 18 December 2011.
Dealing with Mr James’ work at Wests Diggers Club, the Arbitrator said, at [81]:
“81. He gained trial work with the Diggers Club in early 2009. He then gained work on a permanent part time basis working 20-25 hours per week from June 2009 and he remained so employed until 23 July 2011. This cessation was because of a change in management who were not as accommodating to [Mr James] with his injuries and his difficulties in coping with drunk patrons.”

After referring to various authorities dealing with incapacity (Lawarra Nominees Pty Ltd v Wilson (1996) 25 NSWCCR 206 (Lawarra Nominees), Moran Health Care Services v Woods [1997] NSWSC 147; 14 NSWCCR 499 (Woods), and Ball v William Hunt & Sons, Limited [1912] AC 496 (Ball)), the Arbitrator said, at [87]–[88]:
“87.In my view by reason of his physical disability, [Mr James] would be significantly disadvantaged in securing those possibly suitable employments, and his labour would be less saleable by reason of his physical disability, even if he were fit physically to perform them in accordance with his restrictions, as against persons without such restrictions.
88.I am prepared to take the approach that by reason of his injuries his labour is less saleable than otherwise and I find that that his capacity as injured is 25 hours per week. I assess his ability to earn at $20 per hour.”
The Arbitrator then applied the five steps in Mitchell. Dealing with step one (Mr James’ probable earnings but for the injury), the Arbitrator accepted the figures in the appellant’s amended Reply, which set out the following:
“1 April 2008 to 30 June 2008  $667.80
1 July 2008 to 30 June 2009  $693.80
1 July 2009 to 30 June 2010  $720.90
1 July 2010 to 30 June 2011  $749.10
1 July 2011 to 30 June 2012  $767.70
1 July 2012 to date  $786.90”
These findings have not been challenged.
Dealing with step two (Mr James’ ability to earn), the Arbitrator determined Mr James’ ability to earn, when employed, to be his actual earnings and, when not employed, to be $500 per week. Specifically, he said, at [89(2)]:
“(2)Determine in accordance with section 40(2)(b) the weekly amount that [Mr James] is earning or would be able to earn in suitable employment. I have already determined that that figure is $500 per week as his capacity to earn when not in employment.
Where [Mr James] has been in suitable duties:
(a)between 5 June 2009 and 30 June 2010, I accept his earnings as being $443.65 per week with the Diggers Club.
(b)between 1 July 2010 and 30 June 2011, I accept his earnings as being $335.60 per week with the Diggers Club.
(c)between 1 July 2011 and 23 July 2011, I accept his earnings as being $335.60 per week with the Diggers Club.
(d)Between 8 August 2011 and 18 December 2011, I accept his earnings as being $610.90 per week with the Tamworth BusLines.”

Submissions on appeal

Though experienced counsel appeared at the arbitration, the appellant’s solicitor, Mr William Pardy, has prepared the submissions on appeal. Mr Pardy submitted that the Arbitrator’s findings (as to Mr James’ ability to earn) were contrary to the following evidence:
(a)     Mr James’ demonstrated history of a capacity for employment as a security guard between 2001 and 2004;
(b)     contemporaneous medical evidence from the nominated treating doctor, Dr Manners, which certified Mr James as fit for full normal hours at all times prior to a certificate issued on 16 June 2010;
(c)     WorkCover medical certificates dated 30 April 2007, 7 August 2008, and 16 June 2010;
(d)     Dr Manners’ report of 20 August 2009, which included no reference to any restrictions in hours Mr James could work;
(e)     Dr Manners’ notations on the facsimile from Interact dated 25 February 2009, which included no reference to any restrictions in hours with respect to Mr James’ capacity for work;
(f)      Dr Manners’ notations on the facsimile from GIO dated 11 February 2010, which again included no reference to any restrictions in hours with respect to Mr James’ capacity for work, despite a specific invitation to comment on that issue;
(g)     an extract from an independent rehabilitation provider, CRS, dated 15 September 2009, that Mr James had a capacity for employment for “30+ hours per week”, and
(h)     the vocational assessment report from Interact dated 25 February 2009 and a functional assessment report from the same organisation, dated 27 February 2009, neither of which included a reference to any restrictions in hours with respect to Mr James’ capacity for work.
Mr Pardy argued that the Arbitrator’s conclusions at [88] and [89(2)] were contrary to the weight of the medical evidence, especially given the Arbitrator’s statement at [87], which makes it clear that the basis of the finding of fitness for 25 hours per week was Mr James’ physical restrictions, as opposed to any psychological restrictions. It was therefore incumbent upon the Arbitrator to clearly explain the basis of his conclusion that the worker was only fit for work for 25 hours per week from 1 April 2008. Mr Pardy contended that the reasons do not allow the appellant to understand the basis of the conclusions at [88] and [89(2)] and the Arbitrator erred in law.
Mr Pardy said that, given that the application was a review of a prior award, it was for the worker to demonstrate the extent of any incapacity for work as at 1 April 2008 up to the date of the hearing.
In light of the above, Mr Pardy said that the Arbitrator could not have been satisfied that Mr James was fit for work for only 25 hours per week from 1 April 2008, as there was no evidence in Mr James’ case to support an incapacity to work full-time, until the certificate of Dr Manners on 16 June 2010, which certified him fit for work for 21 hours per week.
Mr Pardy criticised the evidence from Dr Hopcroft, which certified Mr James fit for only 20 hours per week in a report dated 15 December 2009, because Dr Hopcroft was merely agreeing with Mr James’ self-report of his restrictions and commenting on psychiatric issues though he was an orthopaedic surgeon.
Dealing with the psychiatric evidence, Mr Pardy said the evidence from Dr Prior, psychiatrist qualified by Mr James’ solicitors, was that any psychiatric condition suffered by Mr James would not prevent him from working in any role other than his pre-injury employment with the appellant.
Mr Pardy complained that the Arbitrator’s recitation of principles derived from case law at [83]–[86] did not explain how he applied those principles to the facts and the evidence in the case, leaving a bald conclusion at [88] and [89(2)] as to his findings.
Last, Mr Pardy said that, having shown error in the decision, the conclusions at [88] and [89] as a whole, ought to be “reviewed” by the Presidential member (who hears the appeal).
Though experienced counsel appeared for Mr James at the arbitration, his solicitor, Mr Mark Grady, prepared the submissions on appeal. Mr Grady submitted that the fact that the number of hours the Arbitrator found Mr James could work is not in accordance with WorkCover certificates, and other documents, is not relevant. He said the Arbitrator considered all the evidence and preferred Mr James’ evidence, as set out at [81] of the decision, as well as the evidence of Dr Hopcroft and Dr Manners.
With regard to Mr James’ “psychological limitations”, Mr Grady submitted that the Arbitrator had previously found (at [72]) that the psychiatric injury or symptoms were secondary to the physical injury suffered in 1993.

Discussion and findings

It is difficult to see the relevance of the submission that Mr James demonstrated a capacity for employment as a security guard. First, that work was several years prior to 1 April 2008, the date on which the Arbitrator varied the award.
Second, Mr James gave evidence that the security work required him to spend 10 hours on his feet, without scheduled breaks or rest periods, and that caused his knees and back, which he injured in 1993, to “become painful and agitated”. Given Dr Bornstein’s evidence of the difficulties with Mr James’ right knee, it is difficult to see how security work, which involved periods of prolonged standing, could be considered suitable employment for him. Clearly, it was not.
Third, being aware of Mr James’ history of work as a security guard, Dr Hopcroft said that he would “be wise to remain away from security guard work” and continue in the more sedentary role of receptionist. Though the Arbitrator did not expressly refer to this part of Dr Hopcroft’s evidence, he referred to, and clearly accepted, the doctor’s evidence that Mr James was fit to continue 20 hours a week as a receptionist. This involved a clear rejection of the assertion that Mr James was fit to work as a security guard, either full-time or part time.
Last, the WorkCover medical certificates from Dr Manners do not assist the appellant. It is correct that Dr Manners said in his certificates of 7 August 2008 and 1 December 2008 that Mr James was fit for suitable duties for normal hours and normal days per week. However, though both Mr Harris and Mr Levick made passing references to these certificates, neither made any detailed submissions about them. In these circumstances, it is hardly surprising that the Arbitrator did not refer to them.
Moreover, the certificate of 7 August 2008 includes the following restrictions:
(a)     lifting up to waist height 10 kg;
(b)     sitting up to one hour;
(c)     standing up to half an hour;
(d)     travelling up to two hours;
(e)     keying up to half an hour, and
(f)      under “other”, “needs to keep moving”. (emphasis added)
The first thing to note about these restrictions is that, contrary to Mr Levick’s submission (at T22.16) at the arbitration, they are much more extensive than merely limiting the weights that Mr James can lift. They involved extensive restrictions that would clearly affect his ability to obtain and retain employment in the labour market accessible to him and, in particular, his ability to work in any job that requires prolonged standing, such as work as a security guard. Thus, the Arbitrator’s failure to refer to these certificates is of no consequence.
The Arbitrator was required to consider the availability of suitable duties for Mr James, in the labour market accessible to him, having regard to all the evidence, including the lay evidence (Guthrie v Spence [2009] NSWCA 369; 78 NSWLR 225 at [194]–[199] and [203]). The Arbitrator noted (at [59]) that Mr James had sought a “range of jobs in the period when he was at home”, but more particularly from early 2008, until he gained employment with Wests Diggers Club, which was procured with the assistance from Vocational Rehabilitation Services. The Arbitrator was satisfied that Mr James’ job applications were genuine.
It was in light of this history that the Arbitrator had to assess Mr James’ ability to earn in the open labour market. That assessment is, as the Arbitrator acknowledged, a “practical exercise” that involves “the assessment of a ‘capacity for work’, having regard to the realities of the labour market in which he is to be engaged” (per Mahoney P (Handley and Powell JJA agreeing) in Lawarra Nominees at 213).
It is clear from the Arbitrator’s reference to Lawarra Nominees, Woods and Ball that he adopted that approach when he assessed Mr James’ capacity for work. That approach is consistent with Ric Developments Pty Ltd t/as Lane Cove Poolmart v Muir [2008] NSWCA 155; 6 DDCR 339; 71 NSWLR 593 (Muir), where Campbell JA (Basten JA and Rein J agreeing) held (at [50]) that the practical realities of the worker actually getting and keeping a job, in his injured condition, are required to be assessed. In other words, it is not a theoretical exercise.
Turning to Dr Manners’ report of 20 August 2009, I note that Mr Harris referred to this report, but Mr Levick did not. It is correct, as Mr Pardy submitted, that the report did not refer to any restrictions in the hours Mr James could work. However, as Mr Levick made no submission about this report, nor about the other documents relied on by Mr Pardy on appeal, save for a passing reference to medical certificates, it is hardly surprising that the Arbitrator did not refer to those documents.
In any event, the report is strongly supportive of Mr James, noting that his injuries have resulted in him having “significant ongoing problems with headaches”. Dr Manners also noted the “psychological impact of being trapped for such a period of time”, which “affected him significantly” with “certainly some adjustment disorder, if not post traumatic stress associated with this injury”, which had been partially dealt with over the years with counselling.
Turning to the facsimile of 25 February 2009 from Interact, the observations by Samuels JA (Hope A-JA and Clarke JA agreeing) in Mifsud v Campbell (1991) 21 NSWLR 725 at 728 are relevant. His Honour said that the extent of the duty to record the evidence given and the findings made depends on the circumstances of the case. His Honour added that it is plainly unnecessary for a judge (or, I would add, an Arbitrator) to refer to all the evidence led in proceedings or to indicate which of it is accepted or rejected.
In the present case, neither counsel referred to the facsimile of 25 February 2009. In a case where the evidence comprised over 690 pages (482 pages in the Application and 208 pages in the Reply, plus additional material attached to an Application to Admit Late Documents filed on 8 March 2013) it is not open to argue on appeal that an Arbitrator erred in failing to consider a particular piece of evidence to which neither counsel referred. Save for the medical certificates, this comment is applicable to all of the documents relied on by Mr Pardy in his submissions on appeal.
Moreover, the facsimile stated that Interact had assessed Mr James to have the functional abilities and transferrable skills to gain employment as a sales assistant, bar attendant and service station attendant. It asked Dr Manners to “sign below” indicating his approval of these recommendations. Dr Manners did that. However, also included on the document is a hand written note, presumably made by Dr Manners, stating, “these will need trialling”. This heavy qualification, ignored by Mr Pardy, rendered the document of limited weight. In addition, the document did not seek an opinion on the hours Mr James could work. Considering these matters, the facsimile provides no support for the appellant’s position.
It is correct that, in the facsimile from GIO dated 11 February 2010, Dr Manners was asked to state what restrictions he would place on Mr James resuming employment and to express that in terms of days per week and hours per day, and that Dr Manners merely wrote “admin work/reception”. However, as neither counsel relied on this document at the arbitration, the observations I have made above are applicable.
More importantly, however, as at February 2010, Mr James was working part-time as a receptionist for Wests Diggers Club. In the absence of evidence that Mr James was idling or deliberately taking lower paid work, which has not been suggested, his earnings with the Club were prima facie evidence of his ability to earn (Aitkin) and the doctor’s opinion as to whether, at that time, he was fit for full-time or part-time work was of limited relevance.
Neither counsel referred to the extract from CRS dated 15 September 2009. In these circumstances, for the reasons outlined above, it is not open to allege error by the Arbitrator in failing to refer to it. Moreover, at the time of this report, Mr James was working for the Wests Diggers Club and the extract is therefore of extremely limited probative value. It does not establish error by the Arbitrator.
Turning to the vocational assessment report of 25 February 2009 from Interact, Mr Harris referred to this document (at T19.18) and acknowledged that it talked about Mr James being capable of doing bar attendant work and work at a service station. He submitted (correctly) that the Arbitrator would look at “the general labour market rather than specific jobs”, but conceded that Mr James had a capacity to do “that line of work” (T19.25). The Arbitrator essentially adopted that approach. In the absence of any submission from Mr Levick about this report, the Arbitrator did not err in not referring to it. In any event, the report’s failure to refer to the number of hours Mr James could work renders it of extremely limited probative value.
Moreover, on 27 February 2009, Interact noted that Mr James’ work “abilities” included, among other things, “[s]itting and standing up to 30 minutes”, in other words, as Dr Manners had noted, he had a significant restriction with prolonged sitting and standing. He also had restrictions on lifting weights in excess of 20 kg and with static work postures.
In addition, the vocational assessment report of 25 February 2009 expressly noted that Mr James was participating in work experience as a bar attendant and “reported being able to perform four hours of duties per day before his condition becomes aggravated”. Given that observation, it is surprising, to say the least, that neither the vocational assessment report, nor the report of 27 February 2009, placed no restrictions on the number of hours Mr James was fit for suitable duties, but it probably explains why Mr Levick (sensibly) made no submissions along the lines now pressed on appeal. In these circumstances, the Arbitrator did not err in not referring to the Interact reports. On proper analysis, those reports do not advance the appellant’s position.
As previously noted, the Arbitrator’s task was to assess Mr James’ ability to earn in the open labour market. As Mahony P observed in Lawarra Nominees, when speaking of the former Compensation Court, the court will ordinarily not be concerned to determine an artificial or theoretical situation that a worker could do, if work were available that allowed the worker to stand for a time, sit for a time, cease when the pain becomes unacceptable, and generally work as he or she would wish to work. Consistent with this statement, the Arbitrator undertook a practical approach to the assessment of Mr James’ ability to earn. That disclosed no error.
The evidence in support of the Arbitrator’s conclusion, and to which he made express reference, was:
(a)     the evidence of Mr James’ pursuit of qualifications and, following leaving the Wests Diggers Club, his obtaining of another job as a bus driver within two weeks ([73]);
(b)     the evidence from Dr Bornstein that Mr James has a torn meniscus in his right knee and a five per cent loss of use of his right leg at or above the knee as a result of the 1993 injury ([75]);
(c)     the evidence from Dr Hopcroft ([76]);
(d)     the evidence of Mr James’ agreed impairments and losses ([77]), and
(e)     the evidence of Mr James’ work at the Wests Diggers Club ([81]).
In light of these matters, the submission that the Arbitrator failed to provide adequate reasons to allow the appellant to understand the basis for the conclusions at [88] and [89(2)] is unsustainable. Each of the above matters was relevant to the issue in dispute and was a matter the Arbitrator was entitled to consider in his assessment of the claim. They explained the basis for the Arbitrator’s conclusions on Mr James’ ability to earn and that was sufficient to discharge his duty to give reasons.
With regard to each of the points noted at [73] above, I make the following observations.
The first point was particularly important in the assessment of the claim overall and in assessing whether Mr James was genuine in his attempts to find suitable employment. The Arbitrator expressly noted, as had Hughes CCJ, that he was “impressed” ([73]) with Mr James’ pursuit of qualifications and alternative employment. This observation was consistent with the evidence and disclosed no error. It was against this background that the Arbitrator assessed Mr James’ ability to earn. That was a proper approach to take.
Dr Bornstein’s evidence strongly supported Mr James’ complaints of problems with his right knee, which the doctor felt were due to a torn meniscus, which appears to have been accepted as being related to the 1993 injury. This finding alone, which the appellant has not challenged, would have been enough to support the Arbitrator’s findings on incapacity, because of the effect it had on Mr James’ ability to stand for prolonged periods.

Dr Hopcroft’s evidence was strongly supportive of the claim and was evidence the Arbitrator was entitled to accept and did accept. Dr Hopcroft noted that Mr James continued to complain of neck and back pain and problems with his knees. He also noted that Mr James had developed a major post-traumatic stress syndrome, which was a major sequelae from the accident that was causing a major problem of behavioural disturbance, social and family disruption. He felt that Mr James was fit to continue his receptionist work with Wests Diggers Club for 20 hours per week. Regardless of Dr Hopcroft’s reference to Mr James’ psychiatric problems, it was open to the Arbitrator to accept that evidence of Mr James’ capacity to work and, clearly, he did.
It is not open, on appeal, to attack Dr Hopcroft’s opinion on the ground that the doctor merely agreed with Mr James’ self-reporting of his restrictions. That submission was not made at the arbitration and, if it had been made, could have been met by calling further evidence. Parties are bound by the conduct of their case at first instance (University of Wollongong v Metwally (No 2) [1985] HCA 28; 59 ALJR 481 at 483).
In any event, that submission is without merit and is rejected. Dr Hopcroft provided his opinion as a qualified orthopaedic surgeon. He based that opinion on the history he took, his findings on examination and the radiological investigations. That provided a sound basis for the acceptance of his opinion (Hancock v East Coast Timber Products Pty Ltd [2011] NSWCA 11; 80 NSWLR 43).
The Arbitrator’s reference to Mr James’ agreed impairments and losses was not determinative and the Arbitrator did not suggest that it was. His reference to it disclosed no error.
The Arbitrator’s reference to Mr James’ work at the Wests Diggers Club, which work the Arbitrator noted was obtained with the assistance of the vocational rehabilitation services, was important because it demonstrated the kind of work available to Mr James in the open labour market accessible to him (that is, in Tamworth). That work permitted Mr James to regularly alternate between sitting and standing. Mr James particularly noted that he was provided with a chair and that he would not have been able to do the work if that had not been the case.
There being no suggestion that, in taking the job at the Wests Diggers Club, Mr James was deliberately avoiding work, it provided prima facie evidence of Mr James’ ability to earn. While working at the Club, Mr James’ hours fluctuated between 21 and 25 per week. His wage fluctuated between $443.65 per week from June 2009 and June 2010 and $335.60 per week from July 2010 until the worked stopped on 23 July 2011. This evidence provided a sound guide as to the kind of work available to a worker with Mr James’ disabilities and restrictions and was evidence the Arbitrator was entitled to take into account, and clearly did take into account, in his ultimate assessment, though he did not expressly say so. It is not an error to omit to state expressly a finding that is clear on a fair reading of the decision-maker’s decision (Polglaze v Veterinary Practitioners Board (NSW) [2009] NSWSC 347 at [46] and [55]–[56]).
I do not accept Mr Pardy’s submission that the Arbitrator could not be satisfied that Mr James was only fit for suitable duties for 25 hours per week from 1 April 2008. In the absence of any evidence that Mr James’ condition had altered significantly between April 2008 and December 2009, the date of Dr Hopcroft’s first report, the submission that there was no evidence to support the finding that Mr James was only fit for 25 hours per week from April 2008 is untenable. It is tolerably clear that Mr James suffered the same restrictions in 2008 as Dr Hopcroft identified in 2009. Evidence of this fact is found in the restrictions in Dr Manners’ WorkCover certificates dated 7 August 2008 and 1 December 2008, which are substantially identical. Moreover, as explained above, it is not the number of hours that Dr Manners certified Mr James fit to perform that is critical. It is Mr James’ ability to earn in the labour market accessible to him, having regard to his accepted restrictions.
The relevance of Mr Pardy’s submission about Dr Prior’s evidence is unclear. As Mr Pardy submitted, it seems that the Arbitrator based his conclusion about Mr James’ ability to earn on Mr James’ physical injuries and not on his psychological condition. Arguably, the Arbitrator erred in not having regard to Mr James’ psychological condition, when assessing his ability to earn, especially in circumstances where the Arbitrator said (at [71]) that the psychological problems were “interwoven with [Mr James’] inability to work” and his pain from the injuries. However, as Mr James has not challenged that part of the decision it is not necessary for me to deal with it.
The Arbitrator did not have to spell out, in any greater detail than he did, the significance of the principles in Lawarra Nominees, Woods and Ball. As explained earlier in this decision, it is patently obvious that, in assessing Mr James’ ability to earn, the Arbitrator had regard to the practical realities of the labour market. That approach was consistent with longstanding authority and disclosed no error.
Finally, though the Arbitrator did not refer to it, the certificate from Dr Manners dated 10 June 2010 certified Mr James fit for suitable duties for a maximum of seven hours per day three days per week in “admin/reception”. This evidence was consistent with a capacity to work slightly lower than that found by the Arbitrator and was consistent with Mr James having a significant restriction on the open labour market. In the absence of any evidence of a significant change in Mr James’ condition between April 2008 and June 2010, and there is none, it provided further support for the Arbitrator’s conclusions.
It follows that I do not accept Mr Pardy’s submission that the Arbitrator’s conclusion as to Mr James’ ability to earn was contrary to the weight of the evidence or that the Arbitrator failed to give adequate reasons for his conclusions. It is prudent to remember that, when considering a challenge to the adequacy of reasons, the decision must be read as a whole and that “reasons need not be lengthy or elaborate” (Beale v Government Insurance Office (NSW) (1997) 48 NSWLR 430 at 443–444). The Arbitrator exposed his reasoning on the critical issue in dispute (the extent of Mr James’ incapacity) and articulated the essential grounds on which he based his decision (Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 per McHugh JA at 280). His reasons were adequate in the circumstances.

THE PERIOD FROM 24 JULY 2011 TO 7 AUGUST 2011

Submissions

Mr Pardy submitted that there was no proper reason why the award in this period should not reflect Mr James’ demonstrated capacity to earn in the period from 8 August 2011 to 18 December 2011. He added that there was no reason why the awards for the period before 8 August 2011 and after 18 December 2011 should not also reflect Mr James’ capacity to earn as a bus driver.
Mr Grady submitted that the Arbitrator found (at [81]) that the change in Mr James’ employment in July 2011 (when the work with Wests Diggers Club finished) was due to a change in the circumstances of the employment and not a change in Mr James’ capacity.

Discussion and findings

I do not accept Mr Pardy’s submissions. The work as a school bus driver was short term and ceased in December 2011, when the school term ended. There is no evidence as to why it was not renewed in 2012.
The issue that arises where, for short periods, a worker earns more than his general capacity to earn, or more than his pre-injury earnings, was considered in Muir v Ric Developments Pty Ltd t/as Lane Cove Poolmart [2007] NSWWCCPD 161 where the following observations were made, at [86]–[93]:
“86. In Alexander v Ashfield Municipal Council, CA 78/81, 27 October 1982, Hutley JA observed:
‘Capacity is diminished, even though in selected instances the worker can earn as much as he did before, if there are fields from which he is excluded, by reason of the injury, in which he laboured at the time of injury.’
87. The case of Summerson v Alcan Australia Ltd [1994] NSWCC 24; (1994) 10 NSWCCR 571 is also instructive. In that case the worker suffered a repetitive strain injury to her left dominant arm whilst working for Alcan as a switchboard operator/telephonist. After being retrenched by Alcan and undergoing treatment the worker obtained employment as a telephonist with George Patterson & Co earning more than she earned with Alcan. The later employment ended because of a reason unrelated to her injury. In her claim for weekly compensation Alcan argued that the worker had no entitlement to compensation because she had a proven capacity to earn more than her pre injury earnings and, therefore, there was no economic loss as a result of her injury. The medical evidence established and the judge accepted that the worker had a continuing problem with her left arm as a result of her injury with Alcan and that that problem prevented her from doing rapid or repetitive work with her left arm. Prima facie, that finding indicated the worker had an incapacity on the open labour market.
88. In quantifying that incapacity the judge held, at 577F:
‘...the appropriate way of looking at the case is that the applicant’s ability to get jobs such as the one she got with George Patterson & Co, is reduced. For example, she could not work where no headset was provided to her, where she would have to hold the telephone appliance in her dominant left hand. Nor would she be able to work with computerised switchboards which would require keying duties with her dominant left hand and which she has said she could not do and which I accept she could not do.
Therefore, the number of jobs which she could hold down has been reduced. That reduction means that if the applicant finds herself unemployed, it is harder and would take longer to obtain suitable employment - that is, employment suitable to a lady with her disability in her dominant left arm.’
89. The judge ultimately made an award in favour of the worker on a continuing basis in the sum of $83.00 per week.
90. A similar factual situation arose in Akawa Australia Pty Ltd v Cassells (2003) 25 NSWCCR 385 (Cassells). In that case the worker suffered an injury to his left foot that left him with a permanent restriction. He returned to work with Akawa in a light duties capacity but ceased when it relocated. He subsequently obtained employment at a wage higher than his pre injury earnings. He ceased that work partly because of his foot and partly because of poor relations with the staff. In his claim for weekly compensation the employer argued that the worker had a proven capacity to earn more than he did in his pre injury job and, therefore, he had no entitlement to compensation. The trial judge rejected that argument. On appeal the Court of Appeal held that once the trial judge found a partial incapacity he was entitled to quantify it and there was no error in the approach adopted. The headnote to the case states at 385 that ‘partial incapacity due to injury will ordinarily be reflected in reduced earning capacity even though a worker may in some post-injury employment earn as much if not more than pre-injury’.
91. In Mangion v Visy Board Pty Ltd [1991] NSWCC 1; (1992) 8 NSWCCR 175 (Mangion) a Commissioner of the former Compensation Court of NSW (the Court) found an injured worker to be partially incapacitated but did not award any weekly compensation on the ground that the worker was able to earn more as a security guard (suitable light duties) than he had in his pre-injury job. On appeal to a judge of the Court it was held by Judge Burke that the Commissioner had fallen into error in his approach to calculating compensation under section 40 of the 1987 Act. His Honour said at 180:
‘When assessing a capacity to earn under section 40(2), it is not sufficient to merely identify a particular potential avenue of employment and attribute the income from such a job as a man’s capacity to earn. Allowance must be made for the availability of work – availability, not so much in the sense of a presently depressed labour market but in the sense of the general availability in any labour market. A rarely available niche in the labour market which carries, perhaps, substantial remuneration, does not serve as a sole criterion of capacity to earn.’
92. His Honour added:
‘When one assesses an ability to earn under section 40(2), one is really arriving at a weighted average. Wage rates for jobs within capacity that are rarely available, though perhaps highly paid, rate poorly in such an assessment. Conversely, the income derivable from more readily available work rates highly.’
93. The Court of Appeal in Cowra Shire Council v Quinn (1996) 13 NSWCCR 175 expressly approved the approach by Burke J in Mangion.”
On appeal, Campbell JA (Basten JA and Stein J agreeing) expressly endorsed the above approach (Muir at [50]). That approach is applicable in the present matter.
Thus, even in situations where, post-injury, a worker has (briefly) earned more than his or her pre-injury earnings, that does not prevent a finding of a partial incapacity and does not mean that the income in that short term post-injury employment is the proper measure of the worker’s ability to earn under s 40(2)(b).
The same principle applies in the present matter with regard to Mr James’ work as a bus driver. One must always assess the prospects of a worker obtaining and retaining the relevant suitable employment. For the reasons explained above, Mr James’ prospects in that regard were and are, because of his injuries, substantially reduced. It was therefore open to the Arbitrator to assess his ability to earn at $500 per week.
The figure of $500 per week was consistent with the evidence from Mr James and Dr Hopcroft, which the Arbitrator accepted. It was slightly higher than Mr James’ wage with Wests Diggers Club, but slightly lower than his wage as a bus driver. It may been seen therefore, though the Arbitrator did not express it this way, that the Arbitrator adopted the kind of “weighted average” approach referred to by Burke CCJ in Mangion v Visy Board Pty Ltd [1991] NSWCC 1; 8 NSWCCR 175 and approved by the Court of Appeal in Cowra Shire Council v Quinn [1996] NSWSC 143; 13 NSWCCR 175.
It follows that the Arbitrator did not err in not finding that Mr James’ ability to earn was the sum of $610.90 he earned for the few months he worked for Tamworth BusLines. Given that the solicitors representing the employer in Muir are the same solicitors representing the appellant in the present matter, Mr Pardy’s submissions were surprising, to say the least.

THE DISCRETION

Submissions

Mr Pardy submitted that the Arbitrator erred in the exercise of the discretion in s 40(1), step four in the Mitchell analysis. He said that the Arbitrator was satisfied there should be a discretionary reduction in the matter and that, in fact, he reduced the step three figure by approximately $30 per week from 1 April 2008 to 4 June 2009 and by approximately $50 per week for the periods after 18 December 2011.
Mr Pardy said that Mr James had previously demonstrated a “significant capacity to earn between 2001 and 2004”. Further, the Arbitrator accepted that Mr James chose to cease work as a security guard at least partly for reasons other than the effects of his injuries. Having determined that a discretionary reduction was appropriate, Mr Pardy submitted that the Arbitrator applied a reduction that was “quite minimal (representing the equivalent of only 1.5 – 2.5 hours per week, at $20 per hour)”.
Mr Pardy contended that, given that Mr James had, on his own medical evidence, a capacity for full-time work between 1 April 2008 and 4 June 2009, and was able to earn in excess of $610 per week between 8 August 2011 and 18 December 2011, the discretionary reduction by the Arbitrator was inadequate.
Mr Grady referred to Mr Levick’s submission at T30.5 of the arbitration where he said that, as the Arbitrator found, there was an ability to earn above what Mr James was actually earning, it was not appropriate for the discretion to be exercised. Further, he said that the evidentiary burden shifted to the employer to lead evidence as to why the step three figure should be reduced and the appellant had not put forward any evidence to support a reduction.

Discussion and findings

The Arbitrator dealt with the discretion at [89(4)] where he decided:
“… in accordance with section 40(1) whether and to what extent the reduction so calculated appears proper in the circumstance of the case and exercise that discretion accordingly. There have been various circumstances in the matter which create some reservation in my mind. In all the circumstances I propose to discount the reduction in accordance with Judge Hughes[’] decision.”
To understand this statement, it is necessary to return to the decision of Hughes CCJ. His Honour’s reasons were particularly brief and were expressed in only one page and four lines. His Honour accepted:
(a)     Mr James to be an impressive witness;
(b)     the evidence from Mr James that he relieved his pain by taking analgesics;
(c)     that Mr James had to knock back work that was available to him because his symptoms were “too much for him” or he suffered from a “meltdown”;
(d)     the pre-injury work with the appellant was hard and repetitive, requiring bending and lifting and pushing heavy wet clothing and hospital linen;
(e)     that Mr James was no longer fit for his pre-injury job, and
(f)      that Mr James had, to his great credit, sought other arrangements to earn an income, including doing a TAFE course.

His Honour then said, at [3]:
“In all those circumstances I make an award pursuant to the difference that Mr Wood urged me to take [sic] of [$]127. I think, doing the best I can, that $100 seems to be reasonable in that for quite a period Mr James was capable of working as a security guard. The mathematical difference probably is a bit higher and I am satisfied that $100 a week is the proper figure.”
His Honour then made an award under s 40 for $100 per week from 9 December 1999 to date and continuing. The reduction in the exercise of the discretion appears to have been $27 per week. However, his Honour did not explain why he made that deduction. The schedule of earnings filed in the Compensation Court showed the difference between Mr James’ probable earnings and his actual earnings between November 2000 and April 2001 to be $101.01 per week. Thus, even when working as a security guard, Mr James’ loss was $101.01 per week. His loss between December 1999 and October 2000 was between $470.50 and $483.30 per week. The explanation may be that the parties agreed on different wage figures at the hearing. Nevertheless, there is no explanation in the judgment for the exercise of the discretion.
It follows that exactly what the Arbitrator meant when he said that he proposed to discount the reduction in accordance with decision of Hughes CCJ is also unclear. In these circumstances, one would have thought that, if the Arbitrator erred in the exercise of the discretion, the error was (arguably) against Mr James’ interests. However, he has not challenged the award.
The submission that Mr James demonstrated a “significant capacity” to earn between 2001 and 2004 was unsupported by any reference to the evidence and was unhelpful. The schedule of earnings filed in the Compensation Court revealed that Mr James’ earnings as a security guard as at April 2001 were $467.76 per week. The schedule of wages in the current Application alleged that Mr James’ actual earnings between 31 January 2002 and 30 June 2002 were $404.50 per week. Both these figures were and are lower than the Arbitrator’s finding that Mr James was capable of earning $500 per week and provide no basis for the exercise of the discretion.

In a letter dated 2 September 2010 from Mr Grady to Hicksons, it was asserted that Mr James worked full-time as a security guard between 1 July 2002 to 30 June 2004 and suffered no loss of income in that period. However, whether Mr James was fit to work full-time as a security guard once he left JCB Security was an issue to be considered when assessing his ability to earn at step two (see Mitchell at 534). I have rejected the appellant’s challenge to the Arbitrator’s finding (at step two) that Mr James was and is only able to earn $500 per week. In doing so, I had full regard to the argument that Mr James could work full-time as a security guard and it is therefore not open to re-introduce that argument at step four.
If Mr Pardy’s argument is that Mr James could and should have stayed at JCB Security, and that the discretion should be used because he left “at least partly for reasons other than the effects of his injuries”, the Arbitrator appears to have taken that into account by not varying the award until April 2008, nearly three years after Mr James left JCB Security. Arguably, that was an error because, on one (very arguable) view of the evidence, Mr James was not fit for the static security guard work of the kind he did with JCB Security in 2005. However, as that finding has adversely affected Mr James, and not the appellant, and as Mr James has not challenged the award, it is not necessary for me to deal with it.
The discretion in s 40(1) is a broad one (Mitchell at 534F) and appellate intervention will be warranted only upon the principles stated in House v The King [1936] HCA 40; 55 CLR 499 at 505. Mr Pardy has not come close to establishing the kind of error envisaged in that decision. His main complaint appears to be that the Arbitrator did not reduce the step three figures by a sufficient amount. Other than the submission about the work as a security guard, which I have rejected, it is unclear why that it so.
Mr Pardy’s next submission under this heading – that Mr James has a capacity to work full-time – attempts to re-open the question of Mr James’ ability to earn. That issue has been fully canvassed and determined when considering the challenge to the Arbitrator’s finding at step two. It is not a matter that can be re-introduced at step four. Mr Levick acknowledged this in his submissions at the arbitration where he asked the Arbitrator to make a finding of Mr James’ ability to earn “reflective of what [Mr James] could earn if he chose to work” (T30.9). If the Arbitrator did that, and he did, Mr Levick conceded that it was not appropriate to exercise the discretion. Given this (appropriate) concession by Mr Levick, it is surprising that the appellant has sought to challenge this part of the decision.
Mr Pardy has not demonstrated any error by the Arbitrator in his approach to the discretion. If the Arbitrator erred on this issue, he erred in saying that he proposed to “discount the reduction in accordance with Judge Hughes[’] decision” in circumstances where it is unclear how his Honour exercised the discretion. It was arguable that the discretion did not apply and there should have been no reduction at step four. However, as Mr James has not challenged the award the Arbitrator’s decision stands.

OTHER MATTERS

Mr Pardy made a number of “general submissions”, presumably on the basis that the matter should be “reviewed”. Section 352 appeals are not “reviews”. They are restricted to the identification and correction of error. In the event that error is established, the matter may be re-determined by a Presidential member or remitted for re-determination by the same Arbitrator or a different Arbitrator. Mr Pardy has not established any relevant error and it is not appropriate for the Arbitrator’s decision to be re-determined.
However, Mr Pardy has made a submission under his “general submissions” that requires comment. He said that the Arbitrator accepted that Mr James suffered secondary psychological symptoms, but there was “no acceptable medical evidence before the Commission to support any alleged incapacity for work in the period from 1 April 2008 to date based on psychological restrictions”. That submission was wrong.
As noted at [25] above, Ms Dunstan said in her report of 19 December 2005 that Mr James presented with cognitive features of chronic pain that limited his functional abilities. Those features included a tendency to engage in worst-case scenario thinking, irritability, depressed mood and panic attacks.
That these problems continued beyond 2005 is confirmed by Dr Manners’ report of 20 August 2009, where he said that Mr James suffered a psychological impact from the work accident that “affected him significantly” and left him with some adjustment disorder, if not post-traumatic stress, that had only partially been dealt with by counselling. Mr James gave detailed evidence of the psychological impact the accident and his chronic pain has had on him. All of these matters have clearly played a part in limiting Mr James’ ability to earn in the open labour market.
It was arguable that, to the detriment of Mr James, the Arbitrator erred in failing to give any or any proper weight to these matters when he assessed Mr James’ ability to earn. However, as Mr James has not challenged the Arbitrator’s decision it is not open to me to deal with them.
Last, this case graphically illustrates, yet again, the counterproductive and unhelpful practice of having counsel conduct the arbitration and having inexperienced solicitors conduct the appeal.

CONCLUSION

This appeal was completely without merit and should not have been filed. It ignored relevant and binding authority on the correct approach to the assessment of a worker’s ability to earn (Muir), sought to rely on evidence not referred to at the arbitration, and sought to argue points properly conceded by counsel at the arbitration. That was unsatisfactory.
Though the Arbitrator may have erred in his finding that there was a relevant change in circumstances in April 2008, when it was arguable that the change occurred when Mr James stopped work for JCB Security in 2005, and that he erred in making any deduction under the discretion, if he did err on those matters, the errors were in favour of the appellant and against Mr James.

DECISION

The Arbitrator’s determination of 26 February 2014 is confirmed.

COSTS

The appellant employer is to pay the respondent worker’s costs of the appeal, as agreed or assessed.

Bill Roche
Acting President

24 June 2014

I, JACQUELINE HAGGER, CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF BILL ROCHE, ACTING PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.

ASSOCIATE