Inghams Enterprises Pty Ltd v Belokoski
[2016] NSWWCCPD 31
•7 June 2016
| WORKERS COMPENSATION COMMISSION | ||
| DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR | ||
| CITATION: | Inghams Enterprises Pty Ltd v Belokoski [2016] NSWWCCPD 31 | |
| APPELLANT: | Inghams Enterprises Pty Ltd | |
| RESPONDENT: | Dejan Belokoski | |
| INSURER: | Self-insured | |
| FILE NUMBER: | A1-4346/15 | |
| ARBITRATOR: | Ms C McDonald | |
| DATE OF ARBITRATOR’S DECISION: | 23 December 2015 | |
| DATE OF APPEAL HEARING: | 8 April 2016 | |
| DATE OF APPEAL DECISION: | 7 June 2016 | |
| SUBJECT MATTER OF DECISION: | Interlocutory decision; procedural fairness; drawing inferences from issues not raised at hearing; whether voluntary payments of compensation can constitute binding admissions; defective s 74 notice; application of principles discussed in Stead v State Government Insurance Commission [1986] HCA 54; 161 CLR 141 | |
| PRESIDENTIAL MEMBER: | President Judge Keating | |
| HEARING: | Oral | |
| REPRESENTATION: | Appellant: | Mr Stockley instructed by Leigh Virtue & Associates |
| Respondent: | Mr Tanner instructed by Carroll & O’Dea | |
| ORDERS MADE ON APPEAL: | 1. The Senior Arbitrator’s determination dated 23 December 2015 is revoked and the matter is remitted to a different Arbitrator for re-determination. | |
INTRODUCTION
This appeal concerns alleged denials of procedural fairness. The first allegation is that the Senior Arbitrator drew an adverse inference from the appellant’s failure to rely on or explain the absence of a treating doctor’s reports: Jones v Dunkel [1959] HCA 8; 101 CLR 298 (Jones v Dunkel). The second allegation concerns the finding that voluntary payments of compensation, in the circumstances of this case, constituted a binding admission of injury.
In both instances, as the issues had not been the subject of evidence or submissions, it is alleged that the Senior Arbitrator denied the appellant procedural fairness by failing to indicate her intention to make such findings and afford the appellant the opportunity to address them. For the reasons which follow, the appeal is successful.
PROCEDURAL BACKGROUND
The respondent worker, Dejan Belokoski, worked for the appellant employer, Inghams Enterprises Pty Ltd, as a process worker. His case was and is that, on 25 March 2009, he injured his neck and left shoulder while carrying a 25 kg bag of marinade. He also alleged that, as a result of the injury to his neck, he suffered a consequential condition in his right shoulder.
The appellant accepted liability, paid compensation benefits, and provided Mr Belokoski with light duties for just over three years. Radiological investigations showed disc pathology at three levels in Mr Belokoski’s cervical spine at C3/4, C4/5 and C5/6, for which Mr Belokoski underwent surgery in September 2012 and April 2013.
The appellant later disputed liability in a written notice dated 7 June 2012. It asserted that, based on a report from Dr Stephen Potter, rheumatologist, Mr Belokoski had “sustained a simple strain” on 25 March 2009 and that he had recovered from it. In a second s 74 notice, prepared by the appellant’s solicitor on 28 April 2015, it was asserted, among other things, that Mr Belokoski had “not sustained injury”.
In an Application to Resolve a Dispute (the Application) registered in the Commission on 30 July 2015, amended at the arbitration to delete the claim for weekly compensation, Mr Belokoski claimed compensation for hospital and medical expenses and for permanent impairment compensation for a 33 per cent whole person impairment as a result of his injuries. The appellant’s Reply, filed on 7 August 2015, relied on the s 74 notices attached to the Application.
In an arbitration that proceeded over two days, both sides made lengthy submissions, but neither sought leave to adduce any oral evidence. Essentially, the appellant’s case was that:
(a) Mr Belokoski had only suffered a strain to his left trapezius muscle on 25 March 2009, from which he had recovered, but he did not injure his neck on that day;
(b) the contemporaneous medical records, and Mr Belokoski’s claim form, referred only to symptoms in the left trapezius muscle and there were no documented complaints of neck symptoms until much later, on 8 May 2009, to Dr Chester;
(c) Mr Belokoski had not disclosed the fact that he had neck symptoms in 2006 and 2007, or that he had an x-ray of his cervical spine on 24 July 2006, which showed degenerative changes at C5/6, and
(d) a number of the medical experts upon which Mr Belokoski relied either had incorrect histories of when the neck symptoms commenced and/or assumed (wrongly) that he injured his neck on 25 March 2009.
In a reserved decision, delivered on 23 December 2015, the Senior Arbitrator identified the issue between the parties to be “whether Mr Belokoski suffered an injury to his neck and/or left shoulder in the course of his employment on [25 March 2009] and a consequential condition in his right shoulder” ([4]).
After a detailed and concise review of the evidence, the Senior Arbitrator found that Mr Belokoski injured his neck and left shoulder on 25 March 2009, that he suffered disc protrusions at C4/5 or C5/6, which were caused or substantially contributed to by the injury on 25 March 2009, that Mr Belokoski suffered a disc lesion at C3/4, which was “consequential on surgery to the lower levels” ([115]), and that, as a result of his injury, Mr Belokoski suffered a consequential right shoulder condition.
Consistent with the Senior Arbitrator’s reasons, the Commission issued a Certificate of Determination on 23 December 2015 in the following terms:
“1.The Applicant discontinues the claim for weekly payments of compensation and I dispense with the need to file an Election to Discontinue.
2.I remit the matter to the Registrar for referral to an Approved Medical Specialist to assess the Applicant’s permanent impairment arising from injury to his cervical spine and left upper extremity (shoulder) and a consequential condition in his right upper extremity (shoulder.)
3. I order the Respondent to pay the Applicant’s s60 expenses.”
The employer has appealed the whole of the determination.
An oral hearing of the appeal was conducted before Deputy President Roche. However, shortly after the hearing Deputy President Roche commenced a period of unplanned leave. Consequently the parties were notified that the matter had been reassigned to me. The parties were advised that, absent any objection, the appeal would be decided by me on the basis of the written and oral submissions already before the Commission. Neither party took objection to that course.
Interlocutory
The Commission is not to grant leave to appeal an interlocutory decision unless of the opinion that determining the appeal is necessary or desirable for the proper and effective determination of the dispute (s 352(3A) of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act); Shams v Venue Services Group Pty Ltd [2013] NSWWCCPD 57).
The Senior Arbitrator’s order remitting the matter to the Registrar, for referral to an Approved Medical Specialist (AMS) to assess the degree of permanent impairment that has resulted from the injury, has not finally determined the parties’ rights and is therefore interlocutory (Licul v Corney [1976] HCA 6; 180 CLR 213 at 225). That is because the Commission has made no final order for the payment of compensation.
Currently, the Senior Arbitrator’s order requires the Registrar to remit to an AMS the assessment of whole person impairment as a result of injury to Mr Belokoski’s neck and both shoulders. If the appeal succeeds the matter will need to be re-determined before a different Arbitrator. If following that re-determination it is found that Mr Belokoski did not injure his neck it will not be appropriate to refer the matter to an AMS to assess the degree of whole person impairment as a result of the condition of the neck and right shoulder.
It follows that, to avoid unnecessary medical assessments by AMSs, it is necessary and desirable for the proper and effective determination of the dispute that I grant leave to appeal and I do so.
THE EVIDENCE
In July 2006, Mr Belokoski saw Dr Chester, his general practitioner, for neck and left shoulder pain. A cervical spine x-ray dated 24 July 2006 records that it was undertaken because of a history of “[l]eft trapezius shoulder pain”. It revealed mild degenerative disc disease at C5/6 “seen as disc space narrowing and end plate spurring”. Mr Belokoski said that he was provided with physiotherapy and exercises.
Dr Chester’s notes for 22 July 2006 record that Mr Belokoski had recurrent severe left trapezius pain from his neck with no obvious precipitant. Dr Chester treated Mr Belokoski for cervical and thoracic pain until November 2006. Mr Belokoski said that he understood that the records revealed that he also saw Dr Chester in about September 2007 because of similar symptoms. He said the symptoms he had at that time “felt like a muscular ache and pain”. He added that they “were very different from the symptoms that [he] experienced on and from 25 March 2009”.
Mr Belokoski remained on his normal duties, without time off or complaint of neck or shoulder symptoms until the incident the subject of the current claim on 25 March 2009. In his statement of 23 August 2012, Mr Belokoski gave the following evidence about that incident:
“On 25 March 2009 at approximately 6:30am I was carrying a 25 kg [bag] of marinades. There is a foot wash that blocks an entrance way and this means we are unable to use a trolley to push the bags. This means the bags have to be carried manually. I was carrying the bag on my left shoulder. I lifted the bag from a table on to my left shoulder and I was in the process of placing the bag onto another table when I sustained an injury. This is when I felt the sharp pain in my neck and shoulder area. The injury cause was that I was walking with a 25 kg bag on my shoulder for a long distance and then throw [sic] the bag from my shoulder down on to the table. When I bent to leave the bag on the table I felt a sharp neck pain.”
Mr Belokoski said that the pain increased during the day and that he notified his supervisor at approximately 1.30 pm. His left shoulder was swollen and he had no sleep that night. He was in a great deal of pain. He saw the appellant’s preferred medical officer, Dr Lieng, the following day, 26 March 2009. Mr Belokoski said that Dr Lieng “did not appear to have any interest in me at all and I subsequently changed to Dr Chester”, his usual family doctor, on 11 April 2009. Mr Belokoski was given Voltaren tablets and cream and was using painkillers for his pain. Dr Lieng placed Mr Belokoski on his pre-injury duties, which included overtime, though he was still in a “great amount of pain”. Mr Belokoski asked for (holiday) leave so he could rest, as his pain was worsening.
In addition to Mr Belokoski’s formal statements, there is also in evidence hand written notes prepared by Mr Belokoski, which I will refer to as the “diary records”. The diary record for 26 March 2009 records that Mr Belokoski explained to Dr Lieng that he had severe pain “in [the] neck area to the left side” and that, contrary to Mr Belokoski’s statement, Dr Lieng put him on light duties with a five-kilogram restriction.
In an email to the appellant on 26 March 2009, Dr Lieng said that Mr Belokoski presented with pain in his left shoulder after carrying a bag of flour for about a minute on the previous day. There was spasm of the trapezius muscle, but shoulder movement was normal and pain-free. Neck movement was painful because of the tense trapezius muscle, but Dr Lieng did not believe Mr Belokoski had “sustained a neck injury because he didn’t move his neck at the time”. Consistent with Mr Belokoski’s diary record, Dr Lieng felt that he could return to work on light duties with a five-kilogram lifting restriction. He anticipated that “the problem should last for a few days”.
Dr Lieng reviewed Mr Belokoski on 30 March 2009. He recorded, in an email to the appellant of the same date, that Mr Belokoski reported improvement of his pain but “still reported lots of muscle spasm and restricted neck movement”. Examination showed “significant trapezius muscle spasm”. Dr Lieng felt that Mr Belokoski would benefit from physiotherapy and that he “should be OK in a week regardless”. However, Mr Belokoski continued to experience pain and Dr Lieng issued several Workcover medical certificates, the last of which certified Mr Belokoski fit for pre-injury duties from 8 April 2009.
On 11 April 2009, Dr Chester issued his first WorkCover certificate certifying Mr Belokoski to be fit for suitable duties from 11 April 2009. Apart from a period on annual leave, Mr Belokoski remained on selected duties throughout April and May 2009.
On 4 June 2009, Mr Belokoski saw Dr Al-Khawaja, neurosurgeon, on referral from Dr Chester. In his report to Dr Chester of that date, Dr Al-Khawaja recorded a history of left shoulder pain and injury to the neck and shoulder on 23 March [sic, 25 March] after lifting heavy objects at work. On examination, Mr Belokoski had “significant limitation of neck movements to both sides”, but no limitation of shoulder movements. An MRI scan, dated 26 June 2009, showed evidence of disc herniation at C4/5 and C5/6 levels, the C5/6 herniation being worse than C4/5.
On 16 July 2009, Dr Lieng saw Mr Belokoski, this time as an injury management consultant, because suitable duties had not progressed. Under “Assessment”, Dr Lieng said: “Mr Belokoski presented with a delayed recovery of cervical pain secondary to a significant cervical pathology at C4/5 and C5/6 levels”. Dr Lieng thought that Mr Belokoski was fit for lighter duties that avoided pushing or pulling trolleys.
Mr Belokoski saw Dr Al-Khawaja on 22 October 2009, complaining that his condition was getting worse. He saw Dr Al-Khawaja again on 22 March 2010. Dr Al-Khawaja recorded that Mr Belokoski’s condition was deteriorating and considered that he required a C4/5 and C5/6 anterior cervical discectomy and fusion.
On 17 May 2010, Dr Lieng conducted a further injury management consultation because suitable duties had not progressed. In a report to the appellant of the same date, Dr Lieng recorded that Mr Belokoski presented with ongoing neck pain from “C4/5 and C5/6 discs protrusion with neuralgic pain in the left hand”. Since Dr Lieng last saw him, Mr Belokoski’s condition had deteriorated.
Dr Lieng noted that a Dr Davis, an independent medical specialist, had suggested that a nerve block be tried before surgery was contemplated. The reference to Dr Davis was clearly an error and should have been Dr Davies. That follows from the fact that Dr Lieng included in his report a list of documents sent to him. That list included a report from a Dr Davies, but made no mention of a Dr Davis. Dr Potter also referred to reports from a Dr Davies and Dr Al-Khawaja referred to a Dr Davies having recommended a medial branch block. The absence of any reports from Dr Davies is discussed below at [66]–[76].
Mr Belokoski attended on Dr Chester on several occasions between 2010 and 2011, during which time Mr Belokoski remained on light duties. Many of these attendances referred to Mr Belokoski experiencing neck symptoms. In May and June 2010, Mr Belokoski had a number of injections for his neck symptoms.
On 2 May 2011, Dr Al-Khawaja recorded that Mr Belokoski was doing well and that his condition was under control, but he was still having a few episodes of right sided neck pain and shoulder pain.
On 16 May 2012, Dr Potter examined Mr Belokoski at the request of the appellant. He said that the MRI scan showed pre-existing moderately severe C4/5 and C5/6 disc protrusion and degeneration. He said that the narrowing at C5/6, as revealed in the 28 April 2009 x-ray, indicated a longstanding complaint. He recorded that “[t]here was then a work incident [on] 25/3/2009 which I am assuming gave rise to a simple strain pattern and left sided neck and arm pain”. Dr Potter thought that Mr Belokoski was “appropriately fit for permanent modified duties”, to avoid any potential aggravation of his underlying neck problem. Mr Belokoski was likely to have “some degree of neck pain ongoing”.
Mr Belokoski underwent a second MRI scan on 12 June 2012. Dr Al-Khawaja reported on 14 June 2012 that it showed “more extension of the injury to [the] C3/4 levels” where there was “a big disc herniation”.
On 13 June 2012, the appellant gave Mr Belokoski four weeks’ notice of its intention to terminate his employment due to him being unable to perform the inherent requirements of his position.
On 19 July 2012, Mr Belokoski saw Dr Brian Hsu, adult and paediatric spine surgeon. In a report dated 26 July 2012, Dr Hsu felt that Mr Belokoski demonstrated significant disc bulging at C4-5 and C5-6. There was minor bulging at C3-4, though it appeared significant that his symptomatology was more likely related to the C4-5 and C5-6 levels. After discussing the options, Mr Belokoski was keen to proceed with “a more permanent solution”, that is, surgery. On 27 September 2012, Dr Hsu performed a C5/6 anterior cervical decompression and fusion on Mr Belokoski.
On review on 1 November 2012, Dr Hsu noted that Mr Belokoski was progressing well and had “almost complete resolution of his neck and upper limb symptoms”. Dr Hsu reported similar progress at review on 18 December 2012 and 28 February 2013, with only a mild degree of neck pain remaining.
In a medicolegal report to Mr Belokoski’s solicitors dated 13 March 2013, Dr Hsu recorded that Mr Belokoski sustained a work related injury on 25 March 2009 from lifting heavy bags repetitively and is suffering from neck and arm pain as a result. He added, Mr Belokoski’s current disability is related to the incident referred to above but that further investigations will provide a clear diagnosis of the right trapezius shoulder pain.
On 15 November 2012, Dr ALG Smith, orthopaedic surgeon, examined Mr Belokoski at the request of the appellant. Dr Smith said that Mr Belokoski gave a history that would “suggest he has a collection of symptoms that I would have thought could have been referred to the neck”. However, he thought that the pathology demonstrated on the MRI scans was not post-traumatic but was degenerative, and that Mr Belokoski’s employment was not a substantial contributing factor to the neck pathology.
After the surgery to his cervical spine, Mr Belokoski’s right shoulder worsened and Dr Hsu referred him to Dr Trantalis, orthopaedic surgeon. Dr Trantalis reported on 27 March 2013 that an MRI showed rotator cuff tendinosis and an anterior labral tear. He felt that Mr Belokoski had “clearly developed secondary shoulder pain because of the previous injuries to his neck”.
On 1 May 2013, Dr Hsu responded to a question from Mr Belokoski’s solicitors about whether any part of Mr Belokoski’s disability was due to congenital or non-work related sources. His view was that Mr Belokoski’s “present disability is totally attributed to the incident on 25 March 2009” and that he had not identified any pre-existing conditions.
On 19 July 2013, in a report addressed to Mr Belokoski’s solicitors, Dr Chester diagnosed right shoulder adhesive capsulitis secondary to Mr Belokoski’s neck pain and consequent on over reliance on his right shoulder. In his opinion, the symptoms in the right shoulder were attributable to the neck injury sustained in the course of Mr Belokoski’s employment.
On 15 October 2013, Dr Darwish, neurosurgeon and spinal surgeon, examined Mr Belokoski at the request of Carroll and O’Dea. In his report of 18 October 2013, Dr Darwish commented that he believed that Mr Belokoski’s “line of employment and injury on 25 March 2009 [were] the cause of his current symptoms and disabilities”, noting that his work involved lifting heavy objects over almost ten years. Dr Darwish disagreed with Dr Potter that the findings on MRI scan were pre-existing, adding that there was no way to be sure whether the disc protrusions were degenerative or traumatic in nature.
A CT scan in December 2013 revealed a solid fusion at C4/5 and C5/6 with moderate bulging at C3/4. Dr Hsu recommended a C3/4 anterior cervical decompression and fusion, which was performed on 4 April 2013.
On 19 December 2014, Dr Bodel, orthopaedic surgeon, examined Mr Belokoski at the request of Mr Belokoski’s solicitors. In his report of 7 January 2015, he said that Mr Belokoski has “disc pathology in the cervical spine and mild rotator cuff pathology in both shoulders caused by work”. On the relationship between the condition found on examination and the injuries sustained in the accident, Dr Bodel said “[t]he direct causal link between his episode of injury at work and his ongoing complaints in the neck and upper extremities”. (I infer that this sentence contained a typographical error and that Dr Bodel intended to convey the opinion that there was a direct causal link between the injury at work and Mr Belokoski’s ongoing complaints in the neck and upper extremities.) Dr Bodel added that “[t]he nature and conditions of this gentleman’s work and in particular the episode of injury that occurred on 25 March 2009 is a substantial contributing factor to his ongoing complaints”.
Dr Bodel prepared a supplementary report on 25 February 2015, in which he commented on the 24 July 2006 x-ray of the cervical spine. He said that the x-ray reported some minor degenerative change at the C5/6 level with end plate spurring and some narrowing of the C5/6 disc space. Noting that Mr Belokoski was 40 at the time of his examination in December 2014, Dr Bodel thought that the abnormalities at the C5/6 level were not inconsistent in a person of that age. It was therefore probable that the 2006 x-ray, with no other reference to complaints or treatment, was an incidental abnormality “which is not really contributing to his overall level of impairment”.
On 20 April 2015, Mr Belokoski saw Dr Edwards at the request of the appellant. Dr Edwards did “not see that carrying a 20kg bag on his left shoulder would be likely to cause any acceleration or exacerbation of Mr Belokoski’s underlying cervical spondylosis”.
THE SENIOR ARBITRATOR’S REASONS IN BRIEF
The Senior Arbitrator’s findings and reasons were divided into four sections: whether Mr Belokoski suffered a neck injury, what was the nature of the (neck) injury, whether Mr Belokoski suffered a consequential condition in his right shoulder, and s 60 expenses.
Dealing with whether Mr Belokoski suffered a neck injury, the Senior Arbitrator noted that the appellant relied on a lack of complaint of a neck injury to the treating doctors, and that its case was that Mr Belokoski did not injure his neck on 25 March 2009. The Senior Arbitrator referred to Winter v New South Wales Police Force [2010] NSWWCCPD 121, where it was noted (at [183]) that clinical notes are rarely (if ever) a complete record of the exchange between a patient and a busy general practitioner.
The Senior Arbitrator accepted that there were “limited references to neck symptoms in Mr Belokoski’s early complaints” ([83]). However, Dr Lieng’s specific statement that he did not consider a neck injury had been suffered suggested that the complaint “may have been made to him” ([83]). She also noted Mr Belokoski’s evidence that Dr Lieng did not appear interested in him and his evidence in his “diary note” for 26 March 2009 recorded “explained to him [Dr Lieng] that I have severe pain in the neck” ([84]).
The Senior Arbitrator said (at [85]) that Dr Lieng’s reports in July 2009 and May 2010 support the connection between the alleged injury, the ongoing complaints of neck pain and the provision of selected duties. He did not refer to the notes of his first consultation.
The Senior Arbitrator noted (at [86]) that Dr Chester treated Mr Belokoski for neck pain.
She recorded that the appellant referred Mr Belokoski to Dr Davies, a neurosurgeon, who saw him on several occasions and recommended treatment (injections), which was undertaken and provided some relief. Noting that cl 49 of the Workers Compensation Regulation 2010 would not have precluded the admission of a report from Dr Davies, the Senior Arbitrator concluded that his evidence would not have assisted the appellant (Jones v Dunkel).
Though there was no list of payments in evidence, noting that the appellant provided Mr Belokoski with selected duties until mid-2012, it appeared clear to the Senior Arbitrator that some payments (of compensation) were made and that treatment expenses were paid. She correctly recorded that the first s 74 notice, dated 7 June 2012, put the “nature of the injury in issue” ([90]) but did not deny that Mr Belokoski suffered an injury. Relying on Dr Potter’s report, the notice said that Mr Belokoski suffered a “simple strain”.
In her view, the medical evidence did not permit the appellant to deny that Mr Belokoski suffered an injury to his neck and left shoulder on 25 March 2009. The Senior Arbitrator added (at [92]–[93]):
“In addition, a careful review of the evidence shows that the injury was accepted as work related until mid-2012. Selected duties were provided and medical expenses paid.
I am satisfied that such payments constitute an admission that Mr Belokoski suffered a neck and left shoulder injury on 25 March 2009.”
After quoting from Department of Education & Training v Sinclair [2005] NSWCA 465; 4 DDCR 206 (Sinclair) [88]–[93] and Chhong Heng Taing t/as The Arcade Pharmacy v Gauci (No 2) [2011] NSWWCCPD 74 (Gauci), the Senior Arbitrator said (at [96]–[97]):
“The determination of whether or not Mr Belokoski suffered injury involves a simple question of fact. I consider that the voluntary payment of compensation, including treatment expenses for the neck, and provision of selected duties over a long period is an admission by the [appellant] that Mr Belokoski suffered an injury to his neck on 25 March 2009 which binds it in these proceedings.
The s 74 notice issued by the [appellant’s] solicitor on 28 April 2015 merely refers to previous notices. It disputes injury, which is untenable in light of the admission made by the [appellant] through the provision of three years of treatment and selected duties. I also note that it does not comply with the requirements of a s 74 notice set out in decisions such as Mateus v Zodune Pty Limited [2007] NSWWCCPD 27 [sic, 227].”
Dealing with the nature of the injury, the Senior Arbitrator said that the 2006 x-ray was relevant to this issue. It showed mild degenerative disease at C5/6, but the other disc spaces were otherwise preserved. The history in Dr Chester’s notes was that Mr Belokoski had recurrent severe left trapezius pain for one month, with tenderness to the neck with no obvious precipitant.
There was no record of any relationship to work or any certificates for time off work. The condition recurred in September 2007, but again there was no reference to time off work. There were no other entries in Dr Chester’s notes (about neck symptoms) before the incident in March 2009. Mr Belokoski’s evidence was that the pain he suffered in 2006 and 2007 was very different to that experienced after 2009. He confirmed that he did not lose time from work in 2006.
In these circumstances, the Senior Arbitrator said that she did not draw any adverse impression from Mr Belokoski’s failure to report previous problems (with his neck) to the doctors who examined him for the appellant.
The Senior Arbitrator said that Dr Bodel was the only doctor to offer an opinion with respect to the 2006 x-ray. He considered the appearances in that x-ray, which were of mild degeneration, were consistent with a person of Mr Belokoski’s age and likely to be an incidental abnormality.
The Senior Arbitrator noted that Mr Belokoski’s case was that he carried heavy sacks daily and that he noted neck pain on 25 March 2009 when he threw a sack onto a table. From that time, he has complained consistently of neck and left shoulder pain. The x-ray of 28 April 2009 showed an intervertebral disc lesion at C5/6 with osteophytic encroachment on the intervertebral foramina bilaterally.
Dr Al-Khawaja obtained a history that Mr Belokoski suffered injury lifting heavy objects on a dated recorded as 23 March 2009. He reviewed the April 2009 x-ray and ordered an MRI scan, which showed disc herniation at C4/5 and C5/6. The Senior Arbitrator said (at [107]) that the “tenor of his reports is that he accepted that a significant injury had occurred”.
Noting the appellant’s submission that Mr Belokoski relied on one event as causing his injury and did not rely on the nature and conditions of his employment, the Senior Arbitrator said, at [109]–[115]:
“While the language used by some of the practitioners is imprecise, I am satisfied that the injury was caused by the event on 25 March 2009 and not as a result of the nature of his employment over the preceding period. Drs Darwish and Bodel refer to the nature of Mr Belokoski’s work over the preceding period but, in particular to the incident on 25 March 2009.
Dr Hsu attributes the condition to the incident on 25 March 2009.
Dr Potter accepts that a strain injury occurred on 25 March 2009. He considered that the findings on the MRI scan were pre-existing but does not explain why. It may be that the opinion is based on the appearances on the April 2009 x-ray which he said showed C5/6 narrowing indicating longstanding prior complaint but that is not clear. In the absence of an explanation which would permit me to understand why his opinion is different to Mr Belokoski’s doctors, I do not accept his opinion.
Dr Smith considered that the cause of Mr Belokoski’s condition was the natural degenerative process. He also fails to explain why that is so, particularly as Mr Belokoski was only 35 at the date of the injury.
Dr Edwards’ opinion is inconclusive and it seems that he may not have been provided with Dr Hsu’s notes.
I accept that Mr Belokoski suffered disc protrusions at C4/5 or C5/6 which were caused or substantially contributed to by the injury on 25 March 2009.
Dr Hsu’s opinion is that the C3/4 lesion was consequential on surgery to the lower levels. There is no medical opinion to counter that and Dr Darwish agrees.”
Dealing with whether Mr Belokoski suffered a consequential condition in his right shoulder, the Senior Arbitrator said he started to suffer right shoulder pain in 2011. On 27 March 2012, Dr Trantalis diagnosed secondary (right) shoulder pain as a result of the neck injury. On 17 November 2014, Dr Trantalis considered that Mr Belokoski was suffering right shoulder pain because of the wasting of muscles secondary to his neck problems, leading to subacromial bursitis and impingement.
The Senior Arbitrator was satisfied that there was an unbroken chain of complaint from the time of the injury in 2009 which led to the consequential condition in the right shoulder.
ISSUES IN DISPUTE
The issues in dispute in the appeal are whether the Senior Arbitrator erred in:
(a) denying the appellant procedural fairness by drawing a Jones v Dunkel inference against the appellant in respect of evidence from Dr Davies when neither party made submissions about this document and the Senior Arbitrator did not raise this issue during the arbitration;
(b) denying the appellant procedural fairness in finding that the s 74 notice dated 28 April 2015 was in some manner defective when neither party made submissions about the adequacy of the notice and the Senior Arbitrator did not raise this issue during the arbitration;
(c) finding that voluntary payments of compensation made by the appellant to Mr Belokoski “constitute an admission that Mr Belokoski suffered a neck and left shoulder injury on 25 March 2009” ([93]) and that such admission “binds [the appellant] in these proceedings” ([96]);
(d) finding that, in disputing injury, the s 74 notice was “untenable in the light of the admission made by the [appellant] through the provision of three years of treatment and selected duties” ([97]);
(e) finding that Mr Belokoski’s disc protrusions at C4/5 or C5/6 “were caused or substantially contributed to by the injury on 25 March 2009” ([114]);
(f) finding that the nature and conditions of Mr Belokoski’s employment was causative or contributory to Mr Belokoski’s disc protrusions at C4/5 or C5/6;
(g) not drawing any adverse inference against Mr Belokoski “from the failure to report previous problems to the doctors who examined him on behalf of the [appellant]” ([103]), and
(h) failing to consider the appellant’s submissions concerning Mr Belokoski’s failure to report his previous neck and left shoulder problems to his own doctors and the appellant’s doctors, and failing to give proper weight to the failure to disclose these problems and the effect of such non-disclosure when having regard to the opinions of these doctors.
THE JONES V DUNKEL INFERENCE
The Senior Arbitrator referred to Dr Davies at [87]–[88], when she said:
“In 2010, Mr Belokoski was referred to Dr Davies by the [appellant]. According to contemporaneous medical reports, Dr Davies recommended treatment which was undertaken and provided some relief.
Dr Davies is a neurosurgeon and his report would not have been precluded by clause 49 of the Workers Compensation Regulation 2010. Relying on the principle in Jones v Dunkel, (1959) 101 CLR 298, I draw the conclusion that Dr Davies’ evidence would not have assisted the [appellant]. I cannot draw that inference without adequate reason, (see Gaskell v Denkas Building Services Pty Limited [2008] NSWCA 35) but the fact that Dr Davies saw Mr Belokoski on several occasions and recommended treatment which was undertaken permits me to do so.”
Submissions
The appellant submits that neither party submitted on the absence of a report from Dr Davies. The appellant further submits that the Senior Arbitrator did not raise the issue of Dr Davies’ evidence or any potential Jones v Dunkel inference with them. Therefore, the appellant submits that the Senior Arbitrator denied it the opportunity to make submissions on this evidence and to, for example, make:
(a) inquiries whether Dr Davies had, in fact, provided any reports to the appellant and what was contained in those reports;
(b) attempts to obtain any such reports, and
(c) a forensic decision whether to rely on and tender any such reports.
In oral argument the appellant pressed only point (c). That was unsurprising because Dr Potter’s reports demonstrate that the respondent employer was in possession of Dr Davies’ reports and made them available to Dr Potter for his consideration. It follows that points (a) and (b) were untenable.
The appellant submits that the Senior Arbitrator’s remarks at [88] indicate that its failure to tender the reports of Dr Davies must have informed her decision otherwise she would not have made specific reference to it. The worker made no complaint concerning Dr Davies’ evidence and the Senior Arbitrator did not raise it as an issue with counsel during the arbitration hearing.
The appellant submits that, had the matter been raised by the Senior Arbitrator, counsel for the appellant would have been in a position to make a forensic decision regarding the tender of the reports. At the very least, counsel was deprived of the opportunity to make submissions as to what inferences ought to be drawn by the Senior Arbitrator, regarding Dr Davies’ reports.
Mr Belokoski submitted that it was open to the Senior Arbitrator to infer that the evidence of Dr Davies would not have assisted the appellant, stating that her reasoning was in accordance with Jones v Dunkel.
In the alternative, Mr Belokoski contended that it was apparent, from a review of the decision as a whole, that the Senior Arbitrator did not regard the absence of Dr Davies’ reports as a basis for suggesting that a determination could be made that assisted the worker and therefore the issue was “essentially neutral”.
Mr Belokoski submitted that the inference drawn by the Senior Arbitrator did not have a material bearing on the finding of injury. Therefore, any error would be inconsequential and would not affect the ultimate determination of liability.
Discussion and findings
I accept that the parties did not address on the lack of evidence from Dr Davies, and that the Senior Arbitrator did not raise that issue with them. I also accept that it is a breach of the rules of procedural fairness for an Arbitrator to determine a case on a basis not argued (Workers Compensation Nominal Insurer v Al Othmani [2012] NSWCA 45 at [75] (Al Othmani)).
I reject the submission that the Jones v Dunkel inference the Senior Arbitrator drew, regarding the absence of Dr Davies’ reports, was a neutral finding that made no difference to the result. It must also be accepted that, in finding that Mr Belokoski injured his neck on 25 March 2009, the Senior Arbitrator relied on, among other things, the Jones v Dunkel inference she drew that Dr Davies’ evidence would not have assisted the appellant. This follows from the fact that the inference was one of the reasons the Senior Arbitrator gave for the conclusions she reached.
The submission that it was open to the Senior Arbitrator to draw a Jones v Dunkel inference misses the point. The issue is that the Senior Arbitrator decided the case on a basis that the parties had no opportunity to address. I am satisfied that by doing so the Senior Arbitrator denied the appellant procedural fairness (Seltsam Pty Ltd v Ghaleb [2005] NSWCA 208; 3 DDCR 1 (Seltsam). What, if anything, turns on this denial of procedural fairness is another matter I shall come to in due course.
INJURY AND THE SECTION 74 NOTICE
The Senior Arbitrator dealt with the s 74 notice (at [97]) where she said:
“The s 74 notice issued by the [appellant’s] solicitor on 28 April 2015 merely refers to previous notices. It disputes injury, which is untenable in light of the admission made by the [appellant] through the provision of three years of treatment and selected duties. I also note that it does not comply with the requirements of a s 74 notice set out in decisions such as Mateus v Zodune Pty Limited [2007] NSWWCCPD 27 [sic, 227].”
Submissions
The appellant submits this was not an issue on which the parties made submissions and not an issue the Senior Arbitrator drew to the parties’ attention.
The appellant submits that the Senior Arbitrator failed to explain the basis of the criticism raised with respect to the s 74 notice. It submits that the Senior Arbitrator’s approach to this issue and the other alleged procedural breaches affected the way in which she approached and dealt with the dispute about whether Mr Belokoski injured his neck on 25 March 2009. In failing to raise these issues with the appellant during the course of the arbitration hearing, the appellant submits that it was denied procedural fairness amounting to an error of law.
Mr Belokoski submits that the Senior Arbitrator’s remarks (at [97]), regarding the s 74 notice issued on 28 April 2015, followed her finding at [96] that the worker had suffered an injury to his neck on 25 March 2009.
Mr Belokoski submits therefore that the Senior Arbitrator’s remarks concerning the adequacy of the s 74 notice played no role in the process of reasoning resulting in the finding that the worker suffered an injury to his neck on 25 March 2009.
In any event, the status of the s 74 notice was irrelevant as the case was run and determined on the issue of whether Mr Belokoski suffered an injury to his neck within the meaning of s 4 of the Workers Compensation Act 1987 (the 1987 Act) as pleaded.
Discussion and findings
I accept Mr Belokoski’s submissions.
The Commission has said on numerous occasions that a s 74 notice must state in plain language in the body of the document reasons for disputing liability and the issues relevant to the decision: Mateus v Zodune Pty Ltd t/as Tempo Cleaning Services [2007] NSWWCCPD 227; 6 DDCR 488; Irvin v LA Logistics Pty Ltd and anor [2010] NSWWCCPD 40 at [50]. The s 74 notice of 28 April 2015 did not come close to conforming with those requirements. It merely identified a range of issues in general and referred to multiple sections of the 1987 Act and 1998 Act without making any attempt to identify what the real issues for disputing liability were.
The first s 74 notice issued on 7 June 2012 identified the dispute not as one of injury per se but a dispute in relation to the nature of the injuries sustained. Given that background, the second s 74 notice denying any injury, among a morass of other issues, would have been largely incomprehensible to the worker.
I accept Mr Belokoski’s submissions that the Senior Arbitrator’s remarks regarding the s 74 notice were made following her findings on whether Mr Belokoski injured his neck on 25 March 2009 and therefore played no part in the decision making process. However, her remarks with respect to the s 74 notice were valid and warranted.
It follows that the Senior Arbitrator’s observations in relation to the s 74 notice did not amount to a breach of procedural fairness.
VOLUNTARY PAYMENTS AND ADMISSIONS
The Senior Arbitrator dealt with the effect of the payment of compensation and treatment expenses (at [96]) where she said:
“The determination of whether or not Mr Belokoski suffered injury involves a simple question of fact. I consider that the voluntary payment of compensation, including treatment expenses for the neck, and provision of selected duties over a long period is an admission by the [appellant] that Mr Belokoski suffered an injury to his neck on 25 March 2009 which binds it in these proceedings.”
Submissions
The appellant submits that the Senior Arbitrator’s statement above amounted to an error of law. It submits that the Senior Arbitrator relied on Sinclair to support her finding that voluntary payments of compensation “constitute an admission that [Mr Belokoski] suffered neck and left shoulder injury on 25.03.09”.
In Sinclair Spigelman CJ (Hodgson and Bryson JJA agreeing) held (at [91]–[92]) that it “might be appropriate to attach some small weight to an admission” and that “only the slightest weight” should be given to an admission once medical reports are tendered.
The appellant also submits there is no authority for the proposition that an employer is bound by an admission that may arise from the payment of voluntary compensation. Given the “small” or “slightest” weight that could be attached to such an admission by an employer, such admissions should be easily overcome or withdrawn in a variety of circumstances, once evidence comes to hand and an employer is advised by its lawyers.
Even if the voluntary payment of compensation did amount to some sort of admission in the present case, such an admission would be in respect to the injury to the left shoulder on 25 March 2009, but would not be an admission that the respondent injured his neck in that injury.
In line with its statutory obligations, the appellant made some voluntary payments of compensation after receiving Mr Belokoski’s claim form in June 2009. The injury described in the claim form was “strained left trapezius muscle”. The claim form did not mention any injury to the neck.
The appellant submits that as the “plethora” of medical evidence and clinical notes emerged, the issue of whether Mr Belokoski suffered an injury to his neck (and the nature of such injury) on 25 March 2009 was hotly in dispute. By elevating the voluntary payments of compensation and any small weight to any admission that might flow from such payments, to an admission that “binds” the appellant in these proceedings, constituted an error in law.
The s 74 notice filed by the appellant disputed the alleged injury to the neck alleging that it was a simple strain which recovered. The Senior Arbitrator found that the injury to the neck on 25 March 2009 was in the nature of protrusions at the C4/5:C5/6 levels. The voluntary payment of compensation says nothing of that dispute.
The appellant submits that the Senior Arbitrator did not foreshadow her proposed reliance on the voluntary payments of compensation as constituting a binding admission. It submits that had this issue been raised at the arbitration hearing it may have been something that would have been the subject of enquiry, discussion or evidence. However, as it was not raised it was not a matter at large between the parties or in their contemplation at the time the submissions were made.
Mr Belokoski accepted that voluntary compensation does not, of itself, found a basis in every case for a finding that there has been an admission of liability. Determination of whether an employer can be considered to have admitted liability requires an examination of the relevant circumstances at the time of the commencement of the voluntary payments, and during the course of the subsequent payments. Regard must also be had to questions of fact with which the employer was confronted when it decided to initially make and maintain voluntary payments: Begnell v Super Start Batteries Pty Ltd [2009] NSWWCCPD 19 (Begnell).
In that context, Mr Belokoski’s counsel, Mr Tanner, accepted (at T35.17) that the Senior Arbitrator “overstepped the mark” by elevating the voluntary payments of compensation to a binding admission. Mr Tanner added at T37.14:
“I’ve addressed you regarding the effect of the voluntary payments and have conceded that the [Senior] arbitrator should not have concluded that the appellant was bound by the admission in that respect.”
Discussion and findings
I accept the appellant’s submissions. I also accept that Mr Tanner’s concession was correctly made. For the reasons which follow, I find that the Senior Arbitrator’s finding that the voluntary payment of compensation, in the circumstances of this case, constituted a binding admission was an error of law and constituted a denial of procedural fairness.
The fact that provisional acceptance of liability is expressly stated in the 1998 Act not to constitute an admission of liability, is a powerful reason for not elevating the acceptance of liability under s 274 to something more than it has always been, namely, an admission (Begnell at [84]).
The authorities the Senior Arbitrator relied upon, namely Sinclair Gauci, do not support the finding that the payment of voluntary compensation, even for an extended period, can amount to a binding admission.
In Sinclair, Spigelman CJ (Hodgson and Bryson JJA agreeing) held (at [89]–[92]):
“These is some authority for the proposition that payment of compensation is prima facie evidence of a compensable injury: see Vergis v Brownbuilt Ltd(1973) 5 SASR 591; Christiansen v JW Simpson & Co Pty Ltd[1971] SASR 412; Nizich v Royal Prince Alfred Hospital [1973] WCR 291; Way v Penrikyber Navigation Colliery Co Ltd [1940] 1 KB 517.
Nevertheless, in my view, this submission should be rejected.
First, it would involve a substantial stretch to apply these principles to the present circumstances that involve the complex interaction of statutory tests. While it might be appropriate to attach some small weight to such an admission in cases involving simple questions of fact (e.g. whether there was an employment injury), it would not be appropriate to develop that principle to cases of this complexity. In particular, it would be inappropriate to see such action as an admission that the statutory ‘whole or predominant test’ is established.
Secondly, any weight that could be attached to such an admission must be of the slightest weight given that medical reports have been tendered.”
In Gauci the payment of compensation was treated as an admission, however, it was not determinative. The admission was weighed with all other evidence which strongly supported the Senior Arbitrator’s conclusion.
The Senior Arbitrator was entitled to give some “small” or “slight” weight to the payment of compensation as an admission of injury on 25 March 2009, which was claimed to be a “strained left trapezius muscle.” However, the issue before the Senior Arbitrator was whether Mr Belokoski also injured his neck at that time. Therefore, the admission could not speak to that issue which was hotly contested and was the subject of conflicting medical evidence. In the circumstances, as Mr Tanner has conceded, the Senior Arbitrator erred in law in elevating any such admission to a binding admission.
Noting that Mr Belokoski had not relied on the voluntary payment of compensation as an admission in his favour, the Senior Arbitrator’s error was compounded by her reliance on the purported admission without having ventilated her intention to do so at the arbitration hearing.
It has long been accepted that where a court, or in this case the Commission, determines a matter on a basis that was not in issue or argued in the proceedings there will have been a denial of procedural fairness: Stead v State Government Insurance Commission [1986] HCA 54; 161 CLR 141 (at [10–[11]) (Stead).
In circumstances where an Arbitrator seeks to decide a case on a basis not argued, he or she must inform the parties before doing so. In Seltsam, Ipp JA (Mason P agreeing) held at [78]:
“These cases illustrate the general principle that although the basis on which the parties conduct a trial does not bind the judge, if the judge contemplates determining the case on a different basis he or she must inform the parties of this prospect so that they have an opportunity to address any new or changed issues that may arise.”
Seltsam was applied in Al Othmani where Bathurst CJ, McColl JA agreeing, held (at [75]):
“A decision or award based on a point not raised by the parties or by the Commission would constitute a denial of procedural fairness and be susceptible to challenge under s 353.”
I accept the appellant’s submission that had the issue been raised at the arbitration hearing it may have been something that would have been the subject of enquiry, discussion or evidence. The appellant was clearly denied that opportunity.
In the circumstances, I find that the Senior Arbitrator denied the appellant procedural fairness by making findings regarding the nature of any admission arising from the payment of voluntary compensation, without foreshadowing her intention to do so or affording the parties an opportunity to address that issue.
THE EFFECT OF THE DENIAL OF PROCEDURAL FAIRNESS
When a breach of procedural fairness occurs, the question that must be asked is a practical one, namely, whether the opportunity to make submissions could have made “no possible difference to the result”. The plurality in Stead at [16] said:
“Alternatively, if the Full Court is properly to be understood as saying no more than that a new trial would probably make no difference to the result, their Honours failed to apply the correct criterion. All that the appellant needed to show was that the denial of natural justice deprived him of the possibility of a successful outcome. In order to negate that possibility, it was, as we have said, necessary for the Full Court to find that a properly conducted trial could not possibly have produced a different result.”
In the context of the Commission, this decision was applied in Toll Pty Ltd v Morrissey [2008] NSWCA 197; 6 DDCR 561, where Beazley JA (as her Honour then was) (Handley AJA and McDougall J agreeing) said at [10]:
“The Deputy President found, correctly, that the arbitrator erred in refusing to give a Direction for Production of the documents. The Deputy President then stated that notwithstanding the arbitrator’s error, he was not satisfied that the error would have affected the outcome of the matter. That finding was, however, erroneous. By stating the test that way, the Deputy President, in effect, reversed the onus. The correct test was that he should allow the appeal from the arbitrator, unless the error of the arbitrator could not possibly have affected the result: see Stead v State Government Insurance Commission [1986] HCA 54; (1986) 161 CLR 141 at 147.”
In Boral Besser Masonry Limited v Jabarkhill[1999] NSWCA 476; 19 NSWCCR 227 Priestley JA (Mason P agreeing) at [12], dealing with the consequences of error, said:
“To succeed in setting aside a judgment on the natural justice ground it will not always be sufficient for an appellant to show a denial of natural justice. Occasionally it may appear that it was highly likely that the same judgment should have been arrived at in any event, so that it would be pointless to order a new trial. When that appears sufficiently clearly the court may refuse to uphold the appeal; but that position would have to [be] very clear before the court would withhold relief.”
Mr Tanner sought to distinguish Toll and Stead on the basis that the denials of procedural fairness in those matters concerned decisions that precluded evidence from being introduced. He argued that irrespective of the evidence the subject of the allegations of procedural fairness, on the evidence that was properly before the Senior Arbitrator, it was open to her to reach the factual conclusions she did. I do not accept that submission. The issue is not whether the findings were open, but whether absent the procedural fairness issues the result could not possibly have been different. That is a much more onerous test, one which in my view has not been satisfied.
The parts of the Senior Arbitrator’s decision challenged under these grounds relate to her findings under the sub-heading “Did Mr Belokoski suffer a neck injury?” on 25 March 2009. She concluded, for reasons given, that he had.
The Senior Arbitrator’s reasons include a careful and thorough analysis of all the evidence. However, notwithstanding the considerable evidence to support her finding in favour of Mr Belokoski, the Senior Arbitrator’s analysis was founded, at least in part, on the Jones v Dunkel inference concerning Dr Davies’ reports, which for the reasons I have given involved a failure to accord procedural fairness. Therefore, it is not possible to conclude that the Senior Arbitrator would have reached the same conclusion on the injury issue had that issue not been taken into consideration.
The Senior Arbitrator provided additional reasons which supported her findings, which included her conclusion that the appellant was bound by an admission of injury by reason of the voluntary payments of compensation. As I have found, that finding also involved an error of law and a breach of procedural fairness.
Given the cumulative effect of the errors found, upon which the Senior Arbitrator’s decision depended, I am not satisfied that the errors could not have possibly affected the result.
It follows that the appeal must be allowed and the Senior Arbitrator’s decision must be revoked. In the circumstances it is unnecessary to consider the remaining grounds of appeal.
I accept the appellant’s submission that, in instances of a denial of procedural fairness, the appearance of justice dictates that it is preferable that the matter be remitted and reheard (Escobar v Spindaleri (1986) 7 NSWLR 5 per Kirby P (as his Honour then was) at 58).
DECISION
The Senior Arbitrator’s determination dated 23 December 2015 is revoked and the matter is remitted to a different Arbitrator for re-determination.
Judge Keating
President
7 June 2016
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