JM & DL McGregor Constructions Pty Limited v Hughes
[2006] NSWWCCPD 197
•23 August 2006
WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:JM & DL McGregor Constructions Pty Limited v Hughes [2006] NSWWCCPD 197
APPELLANT: JM & DL McGregor Constructions Pty Limited
RESPONDENT: Ian Bruce Hughes
INSURER:QBE Workers Compensation (NSW) Ltd
FILE NUMBER: WCC8091-05
DATE OF ARBITRATOR’S DECISION: 31 October 2005
DATE OF APPEAL DECISION: 23 August 2006
SUBJECT MATTER OF DECISION: Entitlement to two awards; deemed date of injury; sections 15 and 16 Workers Compensation Act 1987
PRESIDENTIAL MEMBER: Acting Deputy President Bill Roche
HEARING:On the papers
REPRESENTATION: Appellant: Mulchay Lawyers
Respondent: Lee Sames Egan
ORDERS MADE ON APPEAL: Paragraphs 1, 2, and 3 of the Arbitrator’s decision made on 31 October 2005 are revoked and the following order made:
“1. The Respondent is to pay the Applicant pursuant to section 40 of the Workers Compensation Act 1987 in the sum of $317.20 per week from 2 February 2004 to 31 March 2004 and thereafter in the sum of $323.00 per week from 1 April 2004 to date and continuing.”
Paragraphs 4, B and C of the Arbitrator’s decision made on 31 October 2005 are confirmed.
The Appellant Employer is to pay the Respondent Worker’s costs of the appeal.
BACKGROUND TO THE APPEAL
On 28 November 2005 JM & DL McGregor Constructions Pty Limited (‘the Appellant Employer/McGregor Constructions’) sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Workers Compensation Commission (‘the Commission’) against a decision, dated 31 October 2005.
The Respondent to the Appeal is Ian Bruce Hughes (‘the Respondent Worker/Mr Hughes’).
From 1992 until 12 December 2001 Mr Hughes worked for the McGregor Constructions as a carpenter. His duties required him to lift and carry equipment and materials, bend and squat, climb ladders, and use a wide range of hand tools. In about 1996 he noticed pain in his right elbow in the course of his normal duties but was able to continue working. In about May/June 1998 he injured his back while attempting to move a stack of timber at work. This injury put him off work for about five and a half months and resulted in a claim for weekly compensation and medical expenses being made in 1998. Those claims were paid by the insurer. Mr Hughes returned to work in late 1998 and continued his normal duties without restriction. He had no further time off work because of his back injury but still had back discomfort.
Mr Hughes ceased work for McGregor Constructions on 12 December 2001 because of an increase in his right elbow pain. A claim for weekly compensation was made and accepted. In 2004, while in receipt of voluntary compensation payments in respect of his right elbow claim, Mr Hughes filed an Application to Resolve a Dispute (‘the First Application’) in the Commission claiming lump sum compensation as a result of the following injuries (see Respondent Worker’s submissions paragraph 3.9):
“Hearing loss claim 1992 – 12/12/01 – Nature and Conditions of Employment
Orthopaedic Claim 1992 – 12/12/01 – Nature and Conditions of Employment
In about November 1996 – right elbow pain
May/June 1998 – back injury”
The First Application was settled on 19 May 2005 and an Application for Registration of Agreement Under S66A (‘the Settlement’) was filed on 6 June 2005. The Settlement set out an agreed date of injury of 12 December 2001 and provided for the payment of compensation in respect of the following:
1.18% permanent impairment of the back;
2.5% loss of use of the left leg at or above the knee;
3.5% loss of use of the right leg at or above the knee;
4.16% loss of use of the right arm at or above the elbow, and
5.5% loss of use of the left arm at or above the elbow.
In addition to the filing of the Settlement, a Certificate of Determination was issued by the Commission on 19 May 2005 which provided:
“1.That the Respondent pay the Applicant’s costs as agreed or assessed.
2.The matter is discontinued.
3.That the requirement to file a Notice of Discontinuance pursuant to rule 6(2) is dispensed with.
The following is not a determination of the Commission, however, I note that the parties have agreed the following:
The Respondent pay the Applicant, to settle the Applicant’s claims under s66, the following – For 18% loss of use [sic] of the back $10,800, for 5% right leg at or above the knee $3,750, for 5% left leg at or above the knee $3,750, for 16% right arm at or above the elbow $12,800, for 5% left arm at or above the elbow $3,750 and for s67 the sum of $15,150. The parties agree the relevant date of injury for the claims under s66 and s67 is December 2001. The parties will file a s66A Agreement within 21 days to finalise the Applicant’s Claim.” (emphasis added)
On 2 February 2004 the insurer reduced the Respondent Worker’s weekly compensation from the maximum statutory rate for a single person to $68.74 per week (later changed to $164.19 per week). On 27 May 2005 the Appellant Worker filed a second Application to Resolve a Dispute (‘the Second Application’) in the Commission alleging the following in Part 3:
“Hearing loss claim 1992 0 12/12/01 – Nature and Conditions of Employment
Orthopaedic Claim 1992 – 12/12/01 – Nature and Conditions of Employment
In about November 1997 – right elbow pain
May/June 1998 – back injury”
Under “Injury Description” the following appears: “Injury to back, right and left legs at or above the knee and bi lateral hearing loss”. The hearing loss claim was abandoned and is not relevant to this appeal.
The Second Application sought weekly compensation from 12 December 2001 to date and continuing in accordance with an attached wage schedule. The wage schedule was in two parts, “A” and “B”. In part “A” the following appears:
“1.In respect of the injury to the Applicant’s back on or about May/June 1998, the Applicant claims an amount pursuant to s40, as capped by s37. No weekly payments for this period in respect of this injury have been paid.
2. In respect of the injury to the Applicant’s arms, the Applicant claims pursuant to s40 and s37 the statutory weekly rate payable since the reduction of weekly entitlements by the insurer as from the 02.02.2004. In that regard, the Applicant relies on the Schedule of earnings marked “Schedule B” herein.”
By its Reply filed on 20 June 2005 the Appellant Employer identified the following issues as being in dispute:
1.that the Respondent Worker was able to earn $558.51 per week as assessed in a section 40 Assessment Report of Interact Injury Management dated 12 September 2003;
2.therefore, as the Respondent Worker’s probable earnings but for injury were $722.70 per week, the entitlement under section 40 was $164.19 (ie $722.70 less $558.51), and
3.the Respondent Worker had not filed any WorkCover Medical Certificates beyond 9 February 2004.
The Appellant Employer did not appreciate that the Respondent Worker was seeking two awards of weekly compensation until a teleconference on 22 August 2005. At that time the Appellant Employer sought an adjournment to seek legal advice.
The Second Application was heard in an Arbitration hearing on 2 September 2005. In a reserved decision delivered on 31 October 2005 the Arbitrator made two awards in favour of the Respondent Worker at the maximum statutory rates of compensation under section 40 of the Workers Compensation Act 1987 (‘the 1987 Act’) from 12 December 2001 to date and continuing.
The Appellant Employer now seeks leave to appeal that decision.
LEAVE TO APPEAL
Monetary Threshold
Before proceeding to deal with an appeal the Commission must determine whether the application meets the requirements of section 352 of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’).
The quantum in issue on the appeal is in excess of $5,000.00 and therefore the threshold in section 352(2)(a) of the 1998 Act is satisfied. At least 20% of the amount of compensation awarded is at issue in the appeal, therefore the threshold in section 352 (2)(b) is also satisfied.
Time
The appeal was lodged within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act.
Leave to appeal is granted.
PRELIMINARY MATTERS
Section 354(6) of the 1998 Act provides:
“(6)If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”
Having regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submission by the parties that the appeal can proceed to be determined on the basis of these documents, I am satisfied that I have sufficient information to proceed ‘on the papers’, without holding any conference or formal hearing, and that this is the appropriate course in the circumstances.
THE DECISION UNDER REVIEW
The ‘Certificate of Determination’, dated 31 October 2005 records the Arbitrator’s orders as follows:
“A.The Respondent pay the Applicant weekly compensation as follows:
Back
1.At the maximum statutory rate for a person with no spouse and no dependant child from 12 December 2001 to date and continuing pursuant to section 40 of the 1987 Act.
Right Elbow
2.At the maximum statutory rate for a person with no spouse and no dependant child from 12 December 2001 to date and continuing pursuant to section 40 of the 1987 Act.
3.Both awards are capped to a maximum of $722.70 per week.
4.Credit is given to the Respondent for payments made to date.
B. The Respondent to pay the Applicant’s section 60 expenses in accordance with the 1987 Act upon production of accounts and receipts.
C.The Respondent pay the Applicant’s costs as agreed or as assessed.”
ISSUES IN DISPUTE
The issues in dispute in the appeal are whether the Arbitrator erred in:
(a)deciding that the Respondent Worker was not estopped by the Settlement of 19 May 2005 from arguing two different dates of injury;
(b)deciding that the Respondent Worker was not estopped by the Settlement of 19 May 2005 from recovering two awards of compensation, one in respect of his right elbow injury and one in respect of his back injury;
(c)finding that the Respondent Worker was entitled to two awards for partial incapacity from 12 December 2001 to date and continuing;
(d)not accepting the assessment of the Functional Capacity Evaluation and section 40 Assessment, and
(e)finding that the Respondent Worker was entitled to an award for weekly compensation in relation to any condition other than the right arm condition for the period from 12 December 2001 up to 22 December 2004, the date of the Respondent Worker’s statement.
SUBMISSIONS AND FINDINGS
Estoppel
It is submitted by the Appellant Employer that the First Application was resolved on the basis that the Respondent Worker’s claim for all body parts would be settled “as a nature and conditions claim with the date of injury being the last date of employment” (Appellant Employer submissions paragraph 3.6). Therefore, the Respondent Worker is estopped from arguing that he sustained a separate injury to his back in 1998 which entitles him to a separate award of weekly compensation. The Respondent Worker submits that the Settlement was not an agreement that there was a “single injury and it remains beyond dispute, however, that the Respondent Worker suffered injury to his back resulting [in] five and a half months off work in May/June 1998” (Respondent Worker’s submissions paragraph 3.11).
The Appellant Employer contends in its submissions at paragraph 3.10 that the Respondent Worker represented to it that he was willing to settle his lump sum claim on the basis that any impairment or loss from which he suffered resulted from the nature and conditions of his employment up to 12 December 2001 and not from any frank injury and, as a result of that representation, it was induced to settle on the basis set out in paragraph [6] above (Walton Stores (Interstate) Ltd v Maher (1988) 164 CLR 387; Commonwealth of Australia v Verwayen (1990) 170 CLR 397).
It is further alleged that the Appellant Employer made it clear to the Respondent Worker that it was not willing to settle the lump sum claim on any basis other than that set out above. There was no evidence before the Arbitrator on this issue and the Respondent Worker contends that he never “represented or conceded that there [was] a single injury and that his claims arise out of a single injury” (Respondent Worker’s submissions paragraph 4.4).
Therefore, so it is argued, the Respondent Worker is now estopped from arguing separate “dates of injury or for separate awards” (Appellant Employer’s submissions paragraph 3.13).
I see a number of difficulties with this argument. First, the Respondent Worker does not concede that any representation of the kind now alleged was in fact made. Second, there is no evidence of any such representation being made. Third, if it is accepted that the representation was made, there is no evidence that the Appellant Employer acted to its detriment. Fourth, if a party wishes to rely on an estoppel, it must be pleaded. This last point is not necessarily fatal in the current proceedings as the Commission is not a court and the parties are not bound by strict pleadings. However, in an appeal where no application has been made to rely on fresh evidence, the first three points mean that the estoppel point, in so far as it seeks to rely on any alleged representation by the Respondent Worker, must fail.
Nevertheless, this still leaves the Settlement and the evidence to be interpreted on its merits. The Respondent Worker’s argument is that the “allocation of a deemed date of injury” of the 12 December 2001 for the purpose of the section 66 entitlements was “arbitrary and does not reflect the strict application of the legislation” (Respondent Worker submissions paragraph 5.6). For the reasons set out below I do not agree that the “strict application of the legislation” leads to the conclusion argued for by the Respondent Worker. In light of the Court of Appeal decision of Rail Services Australia v Dimovski & anor [2004] NSWCA 267 (‘Dimovski’) the parties were, on one view, wrong to agree to the terms of the Settlement when the evidence suggested that the Respondent Worker had suffered a frank injury to his back in May/June 1998. However, on reading the medical evidence it is easy to see why the parties adopted the terms in the form they did. Having regard to that evidence, and the factual findings that flow from it, I do not believe the terms of the Settlement are inconsistent with the principles set out in Dimovski.
Medical Evidence
A CT scan done on 23 June 1998 showed:
“There is very mild diffuse disc annulus bulge at L3/L4 and L4/L5 disc levels of doubtful significance. No focal disc protrusion identified at any level. The spinal canal is of satisfactory calibre throughout with no osseous lesion identified. There are tiny osteophytes projecting from lumbosacral facet articulations. Paravertebral soft tissues are of normal appearances and existing nerve roots are clear at all levels.”
A second CT scan done by a different radiologist on 1 July 1998, after worsening lower lumbar pain, showed:
“No significant vertebral or disc abnormality identified, the appearances being similar to those noted on the previous study. Minor bulging of the disc annulus at L3-4 and L4-5 is again noted but this again is not considered of radiological significance. Minor osteophytosis arising from the lumbosacral apophyseal joints bilaterally is noted.”
On referral from his general practitioner (Dr Mouncey) Mr Hughes saw Dr Poulgrain, neurological surgeon, in late 1998. In his report of 2 November 1998 Dr Poulgrain noted the following on examination:
“…he is a fit looking young man in no distress. He is not overweight. He can stand and walk on his toes and heels. He has a normal lumbar lordosis and no spinal tilt. The straight leg raising tests are negative. Both knee and ankle reflexes are present equal and normal. Plantar responses are downgoing. Power in the lower limbs is normal and there is no sensory loss.”
Dr Poulgrain also examined the two CT scans referred to above and stated that they were normal. His conclusions were that Mr Hughes had sustained a muscular ligamentous injury to his back and that he should be put on a graduated return to normal duties with muscle building exercises. Shortly after that examination, Mr Hughes did return to his normal work with the Appellant Employer. He continued that work without time off (because of his back) and without restriction until he ceased work in December 2001 because of his right elbow problem.
The Respondent Worker’s medical case is based on reports from Dr Searle dated 27 March 2004, 12 April 2004 and 16 May 2004. In his April 2004 report Dr Searle stated:
“The condition in his lumbar spine is variously known as degenerative disc disease and/or degenerative joint disease, and the conditions in his knees are also known as degenerative joint disease. It is apparent therefore that the problems in his back and at least some of the problems in his legs are caused by a disease of gradual process which was contributed to by the nature and conditions of his work.”
Dr Ashwell, orthopaedic surgeon, examined and reported on Mr Hughes at the request of the insurer on 13 September 2004. In his opinion Mr Hughes suffered a soft tissue ligamentous injury to his lumbosacral spine as a result of the May 1998 injury and that the effects of that injury settled after five and a half months when he returned to “full work activities” (report, Dr Ashwell 13 September 2004, page five). The doctor thought that Mr Hughes’ continuing back symptoms were due to age related degenerative changes. He also noted that Mr Hughes had not had any further treatment or investigations for his back symptoms since 1998.
Other evidence dealing with the Respondent Worker’s back problem is from Dr Schutz in his report to QBE Workers Compensation (NSW) Ltd (‘QBE’) dated 8 October 2003 and from Dr MacMahon in a report of 29 August 2002. Dr MacMahon’s report records a history of a back injury in 1997 while pushing timber from which Mr Hughes made a full recovery. This history is denied by Mr Hughes. In any event Dr MacMahon did not examine or comment on Mr Hughes’ back condition and his report is of no assistance.
Dr Schutz examined Mr Hughes on 2 October 2003. On examination Mr Hughes indicated no discomfort until performing rotation movements when he indicated discomfort across the lower lumbar region. There was no muscle spasm and no discomfort on palpation. Straight leg raising was normal and there were no neurological problems. Movements of the thoraco-lumbar spine were normal except for rotation to the left which was reduced by 10 degrees compared to normal.
In light of the above evidence, Dr Searle’s opinion that the 1998 injury “caused the protrusion of the L5-S1 disc” (Dr Searle’s report 27 March 2004, page four) cannot be accepted. At best the 1998 incident caused a muscular ligamentous injury from which Mr Hughes made a substantial recovery with no continuing economic incapacity. The evidence is that the activities involved in Mr Hughes’ work from 1992 until 12 December 2001 caused an aggravation of degenerative changes in his back. The payment of lump sum compensation in respect of an 18% permanent impairment of the back with an agreed date of injury of 12 December 2001 indicates an acceptance by both parties that the injury to Mr Hughes’ spine came under the disease provisions (sections 4(b), 15 and/or 16) of the 1987 Act. That settlement was consistent with Dr Searle’s evidence and, in light of Dr Ashwell’s evidence, was particularly generous to the Respondent Worker. On the available evidence it could not have seriously been argued that the Respondent Worker’s back impairment had resulted from the 1998 frank injury. Whilst Dimovski has held that the disease provisions should only apply to disease cases, the evidence in the present case does not support a conclusion that either the Respondent Worker’s impairment of his back or his incapacity for work has resulted from anything other than the aggravation of a disease. Neither party has referred to Dimovski but, as it may be relevant to the 1998 frank injury, I will return to it below at paragraph [53].
The Disease Provisions
The Respondent Worker submits that the disease provisions allow for “more than one date of injury in respect of the same injury” (Respondent Worker’s submissions, paragraph 5.7). The authorities cited are Alto Ford Pty Ltd v Antaw (1999) 18 NSWCCR 246 (‘Antaw’) and GIOWorkers Compensation (NSW) Limited v GIO General Limited (1995) 12 NSWCCR 187 (‘GIO’).
In GIO the worker was exposed to sunlight in the course of his employment over 19 years. As a result he developed a melanoma on his right cheek. The melanoma was removed in 1983 which resulted in a short period of incapacity. He subsequently developed a number of metastases of the melanoma. In 1993 he died from a brain tumour which was a metastatic melanoma which had resulted from his original melanoma in 1983. His widow claimed compensation under the 1987 Act and succeeded. The insurer on risk in 1993 appealed. It argued that as the operation on the melanoma in 1983 had caused a period of incapacity and, as the worker’s death had resulted from the 1983 melanoma and there was no evidence that exposure to sunlight since 1983 had played any role in the worker’s death, section 15(1) deemed the injury to have happened at the time of the incapacity in 1983. Sheller JA (with Priestley and Clarke JJA agreeing) held at 196 that “for the purpose of the widow’s claim, the worker’s injury is deemed to have happened at the time of death”. His Honour added that:
“In the case of the worker’s claim, the injury, being a disease of such a nature as to be contracted by a gradual process, is deemed to have happened at the time of incapacity. I have no doubt that is a reference to the incapacity for which compensation is claimed. Section 15(1)(b) provided that ‘compensation is payable by the employer in whose employment the worker is or who last employed the worker’. That means the employer in whose employment the worker is at the time the injury is deemed to have happened, or who last employed the worker before the injury is deemed to have happened; Fisher v Hebburn (1961) 105 CLR 177 at 196 and 199.” (emphasis added)
His Honour also referred to Crisp v Chapman (1994) 10 NSWCCR 493 (‘Crisp’) where Mahoney A-P said at 495:
“It is, I think, a confusion to treat section 15 or section 16 of the 1987 Act as, in the sense here relevant, creating liability for compensation. In general, each section assumes that an injury has occurred and each provides the means of determining when the injury is deemed to have happened, by whom the compensation is payable, and other ancillary matters. In principle, it remains for the worker to prove that the injury has occurred and accordingly that section 9(1) has been satisfied. To prove that, it is necessary for the worker to prove the ‘happening’ of an injury within section 4.” (emphasis added)
In Antaw the worker was a motor mechanic who was injured in 1976 when a metallic particle struck his left eye. He settled his claim under section 16 of the Workers Compensation Act 1926 (‘the 1926 Act’) for a 10% loss of sight in the left eye. The worker moved to different employers and in 1992 he had further surgery to his eye. In April 1996 he ceased full time work as a mechanic because of his loss of vision. He claimed weekly and lump sum compensation on 29 July 1996 and was awarded weekly compensation from 10 August 1993 (incapacity having arisen in January 1992 when he had time off work for surgery and was paid voluntary compensation) and lump sum compensation in respect of a further 40% loss of sight in his left eye calculated on a deemed date of injury of 29 July 1996. The employer appealed arguing that the injury should be deemed to have happened on or before 30 June 1987 and lump sum compensation should have been calculated under section 16 of the 1926 Act. Counsel for the appellant argued that no practical purpose was to be served by applying section 15 of the 1987 Act where the worker had suffered a frank traumatic injury and there was no difficulty in identifying the date of the injury from which the incapacity arose. It was also argued that the evidence established a deemed date of injury under section 15 before 30 June 1987 because the worker had been incapacitated for work in 1976 and when he first stopped work because of his vision in 1985. The Court of Appeal held that the injury was deemed to have happened at the time of incapacity. That is, when the worker was unable to do work as a motor mechanic. It was open to the trial judge to find that that incapacity occurred in 1992. By 1996 the worker had sustained a further 40% loss of vision. The worker’s incapacity had not resulted from that additional loss of vision and the appropriate date to determine the lump sum entitlements was the time when the worker made his claim for compensation for that compensation. There was no ‘separate injury’ in 1992. That was merely the deemed date of injury in order to determine which of several employers was liable to pay the claimed weekly compensation.
In P & O Berkeley Challenge Pty Ltd v Alfonso (2000) 49 NSWLR 487 (‘Alfonso’) the worker developed pain in her arms and neck in the early 1990’s. In 1993 she was put off work (the first incapacity) by her doctor and was paid compensation. She moved to the second employer where her symptoms worsened and she again had time off work in 1995 (the second incapacity) and was paid compensation. She worked for three weeks in 1996 but ceased work again (the incapacity ‘for which compensation was claimed’) and did not return. She claimed weekly and lump sum compensation from both employers. The Court of Appeal held that ‘incapacity’ in section 16 of the 1987 Act means “incapacity falling within the period during which a worker has become entitled to weekly payments of compensation for incapacity” (per Priestely JA at 486). In other words, consistent with the decision in Crisp, the relevant deemed date of injury was not the first incapacity but was the date of the incapacity for which compensation was claimed.
Both Alfonso and Antaw were considered by the Court of Appeal in Stone v StannardBrothers Launch Services Pty Ltd [2004] NSWCA 277 (‘Stone’). In that case there was no claim for weekly compensation and the injury was deemed to have occurred when the claim for lump sum compensation was made. Hodgson JA said at [37]:
“37 Berkeley Challenge shows that, if the claim under consideration is for weekly compensation based on incapacity, the relevant incapacity for the purposes of s.16(1)(a)(i) is incapacity giving rise to entitlement to weekly compensation. Thus, in such a case, incapacity first occurs when the physical incapacity results in some loss of wages, even if there had previously been incapacity in the Arnotts sense, not resulting in any loss of wages.”
Applying the above authorities to the present case it is clear that you can have different ‘deemed dates’ of injury, but that does not mean that each date gives rise to a separate or new ‘injury’. The ‘injury’ is established under section 4 of the 1987 Act which provides:
“4 Definition of ‘injury’
(a) means personal injury arising out of or in the course of employment,
(b) includes:(i) a disease which is contracted by a worker in the course of employment and to which the employment was a contributing factor, and
(ii) the aggravation, acceleration, exacerbation or deterioration of any disease, where the employment was a contributing factor to the aggravation, acceleration, exacerbation or deterioration,…”
Neither sections 15 nor section 16 create a liability to pay compensation. Each section assumes that an injury within the meaning of section 4 has occurred (Crisp). If an injury is a disease that was contracted in the course of employment and to which the employment was a contributing factor, or, is an aggravation, exacerbation or deterioration of a disease, section 15 or 16 of the 1987 Act will apply, as appropriate, to determine the deemed date of injury so as to ascertain which of two or more employers will be liable to pay compensation.
Therefore, the Respondent Worker’s submission that you can have two deemed dates of injury, is not relevant in the present case as there was only one injury. On the basis of the Settlement reached by the parties in the First Application and the evidence of Dr Searle, that injury can only be an aggravation of a disease under section 4(b)(ii). Therefore, I reject the Respondent Worker’s argument that he is entitled to a second award as a result of a ‘deemed date of injury’ in May /June 1998. The correct application of the disease provisions to the Settlement affected by the parties is that there is one injury only, namely, an injury in the nature of an aggravation of degenerative changes in Mr Hughes’ back, knees and elbows. That injury has resulted from the general nature and conditions of his employment which required him to lift and carry equipment, bend and squat, climb ladders, and use a wide range of hand tools.
Nature and Conditions
The Respondent Worker also argues that he has sustained separate and discrete injuries to different parts of his body as a result of the different aspects of the nature and conditions of his work placing different stresses on different areas of his body and causing separate and discrete incapacities (Respondent Worker submissions paragraphs 7.2, 7.3 and 7.4).
The resolution of this issue requires further consideration of the term ‘injury’. The definition set out above is of limited assistance. In Lyons v Master Builders Association of NSW (2003) 25 NSWCCR 423 (‘Lyons’) Judge Neilson held that ‘injury’ means both the ‘injurious event’ (the work event or incident) and the ‘pathology’ arising from that event. I agree with that statement. Therefore, the determination of the issue of ‘injury’ requires not only an assessment of whether the ‘injurious event’ occurred in compensable circumstances but also whether the pathology found to exist (if any) has been caused by the work event. In the present case the ‘work event’ is alleged to be the “nature and conditions of employment” from 1992 until 12 December 2001 plus the “May/June 1998” back injury. The ‘nature and conditions’ claim was never properly particularised. The expression ‘nature and conditions’ is not defined in either the 1987 Act or the 1998 Act and its use has been widely criticised as being a “meaningless concept” (Mirkovic v Davids Holdings Pty Ltd (1995) 11 NSWCCR 656 at 667).
The meaning of the term nature and conditions in Mr Hughes’ claim must be gleaned from the evidence presented. In Dr Searle’s report of 27 March 2004 he states under ‘opinion’:
“The injury at work on 15/8/98 [sic] caused the protrusion of the L5-S1 disc, but the general nature and conditions and obligations of his employment over the years had caused repetitive stresses on the lumbar spine leading to gradual bulging of the lower three discs probably before the incident in June 1998. Subsequently the nature and conditions of his employment aggravated his lumbar problems.
Also the general nature and conditions and obligations of his employment have caused bilateral carpal tunnel syndrome, early arthritic changes in each knee, and right lateral epicondylitis. It should be noted that although he did not mention the symptoms in his left elbow it is common when one limb is painful and tends to be suppressed that similar symptoms develop in the opposite limb.” (emphasis added)
I have already dealt with Dr Searle’s conclusion that the Respondent Worker suffered a disc prolapse. In respect of the nature and conditions claim, Dr Searle does not, in his conclusion, attribute Mr Hughes’ individual conditions to specific activities at work so as to provide a basis for a finding that Mr Hughes sustained separate injuries from different aspects of his work. Consistent with the general allegation in the Second Application, Dr Searle talks about “the general nature and conditions and obligations of his employment”. For there to be a finding of two awards there must be a finding of completely separate and distinct injurious events and separate incapacities resulting from those injurious events. In the present case the evidence talks about “nature and conditions” in general. That is, the alleged injurious event included all of the duties performed by Mr Hughes as a carpenter. The evidence makes no effort to distinguish between activities which might have caused an injury to his right elbow and those which might have caused injury to his back or knees. Lifting heavy weights might well aggravate degenerative changes in a persons back and, at the same time, cause or aggravate lateral epicondylitis or arthritis in the knees. In that situation, there is only one ‘injury’ because the ‘injurious event’ is the general nature and conditions of employment rather than some specific aspect of the employment. Therefore, I reject the Respondent Worker’s submission that he has suffered separate injuries because some parts of his work affected his back and other parts affected his arms.
The Respondent Worker’s submissions also seek to support the claim for a second award not only on the basis of the May 1998 back injury but also on the basis of the condition of Mr Hughes’ knees. The evidence is that Mr Hughes has degenerative changes in his knees and that his employment either caused or aggravated that condition (Dr Searle 27 March 2004). As with Mr Hughes’s back and elbow conditions, there is no evidence suggesting that there was a separate injurious event that caused the knee condition. It merely forms part of the general ‘nature and conditions’ allegation. Therefore, it is my opinion that that condition should be assessed as one injury along with the back and elbows.
Conclusion
In my opinion, given the way the Respondent Worker’s claim was presented in the Second Application, and given the evidence tendered to support it, it was not open to the Arbitrator to find that Mr Hughes sustained separate injuries causing separate incapacities giving rise to an entitlement to two awards of compensation. This conclusion is reinforced when on looks at the Settlement and its terms. If it was seriously being alleged that Mr Hughes had sustained two separate and distinct injuries then he would have been entitled to receive two awards of compensation under section 67, one for his back injury and one for his right elbow injury. That was never claimed and, in my opinion, could not have been claimed on the facts of this case.
In addition, even if it is thought the Respondent Worker has sustained two separate and distinct injuries, it is my opinion that he has not, on the evidence, suffered from two separate and distinct incapacities. His incapacity is an incapacity to engage in all the physical aspects of his work as a carpenter. That has resulted from all of his disabilities.
If I am wrong in this conclusion I have expressed at [51] above and it is thought that the 1998 back injury is a separate and distinct injurious event (consistent with Dimovski) then, in my opinion, the medical evidence does not support a finding that the 1998 back injury on its own was sufficient to establish an entitlement to weekly compensation. On the evidence of Dr Poulgrain, that injury was a “muscular ligamentous injury”. On 27 November 1998 Mr Hughes was cleared to return to work on full duties which he did. For his first four weeks back at work his progress was monitored by a rehabilitation consultant/physiotherapist (Jill Tibbey) who reported on 23 December 1998 that he complained of intermittent low levels of back pain but he was able to manage with his work. Mr Hughes had no further time off work because of back pain and when he ceased work on 12 December 2001 it is not disputed that it was as a result of his right elbow injury. After attending on this general practitioner on a number of occasions for back pain in 1998, Mr Hughes did not attend again for treatment for his back. Medical certificates from December 2001 declare him to de unfit because of his right elbow and make no reference to his back.
Whilst Mr Hughes says in his statement of 22 December 2004 that his back has never been 100% since the 1998 injury, the fact that he continued his normal work without restriction or time off indicates that that injury was not causing any actual or potential economic incapacity. Whilst it is accepted that some aspects of his work aggravated his condition between 1998 and December 2001, the evidence does not support a conclusion that his incapacity in December 2001 resulted from the 1998 back injury. At page eight of his statement Mr Hughes states unequivocally that his incapacity was caused by his elbow problems. The force and importance of that statement is not diminished by the next sentence in his statement in which he says “my present condition is a combination of all these things”. That is, a combination of his back, knees, hands and elbow.
A vocational assessment report prepared by Helen Murphy on 14 October 2002 refers to a functional assessment by Ms Cartwright where there is a reference to a previous low back injury “causing occasional aching”. Ms Cartwright’s report is not in the papers before me.
I am not satisfied that the 1998 back injury has resulted in any reduction in the Respondent Worker’s earning capacity in or after December 2001.
Arbitrator’s Reasons
In his Statement of Reasons for Decision (‘Reasons’) the Arbitrator accepted the submissions made by the Respondent Worker that “there can be more than one date of injury in respect of the same injury” (Reasons paragraph 56). As I have noted, this fails to acknowledge that ‘injury’ is not determined by section 15 or section 16 of the 1987 Act. The fact that there can be different deemed dates of injury for different claims to which sections 15 and 16 apply does not mean that there is a new or separate injury giving rise to an entitlement to a separate and additional award of weekly compensation for each deemed date of injury. The Arbitrator failed to consider the effect of sections 15 and 16 or the definition of injury in section 4 of the 1987 Act. Therefore, the Arbitrator’s findings are based on an incorrect approach to the issue of injury and the effect of sections 15 and 16. As a result the award/s cannot stand and must be set aside.
In addition, the Arbitrator’s section 40 analysis calculated the Respondent Worker’s rights by first considering his entitlements as a result of the back injury. He determined that the Respondent Worker’s ability to earn in some suitable employment on the open labour market was “less than $350.00 per week” (Reasons paragraph 72). As comparable earnings were agreed at $722.70 per week and the Arbitrator saw no reason to reduce the mathematical difference in the exercise of his discretion, he therefore awarded the maximum rate applicable for a worker with no dependants from 12 December 2001 to date and continuing. In doing so the Arbitrator failed to have regard to the fact that the Respondent Worker had been paid his currently weekly wage rate (his award rate) of $666.06 per week from 13 December 2001 until 12 June 2002. Therefore, a second award at the maximum statutory rate for that period would mean the Respondent Worker would receive more than he earned uninjured, something that is not permissible (Alcan Australia Ltd v Jordan (1995) 11 NSWCCR 475 (‘Jordan’) at 482). For this reason alone the award/s cannot stand.
In respect of the second award (for the right elbow injury) the Arbitrator stated at the Appellant Employer agreed that probable earnings if Mr Hughes had remained uninjured were $722.70 per week. It is my understanding of the evidence that this agreement was on the basis that the Respondent Worker was entitled to one award. The Arbitrator found, without out any evidence, that after the effects of the back injury were taken into account, the Respondent Worker’s ability to earn but for his elbow injury was $550.00 per week. This analysis is inconsistent with the findings the Arbitrator had already made in respect of the back claim. If the Respondent Worker’s ability to earn as a result of the back injury was “less then $350.00 per week” then his ability to earn after the back injury and but for the elbow injury (probable earning but for the elbow injury) must also have been less than $350.00 per week. In assessing the Respondent Worker’s ability to earn in some suitable employment having regard to the elbow injury the Arbitrator seems to have assessed incapacity on the basis of the “cumulative effect of both partial incapacities” (Reasons paragraph 85) and found an ability to earn of “around $150.00 per week”. The Arbitrator then deducted $150.00 from $550.00 and awarded the Respondent Worker a second award at the maximum rate for a single worker. The approach taken by the Arbitrator was incorrect. The Respondent Worker’s ability to earn after the back injury, but before the effect of the elbow injury, had to be his found residual earning capacity of “less than $350.00 per week”. Once that was determined it was necessary to assess whether his ability to earn that figure had been diminished as a result of his elbow injury. That was not done.
In addition, the aggregate of the two awards at the maximum statutory rate plus a residual earning capacity of $150.00 exceeds the Respondent Worker’s average weekly earnings of $722.70. As already noted, that is not permissible as it leaves the Respondent Worker in a better position than if he’d never been injured.
CONCLUSION
It follows from the reasons I have set out above that the Respondent Worker’s entitlement to an award under section 40 of the 1987 Act must be recalculated on the basis that he is entitled to one award of weekly compensation in respect of his conceded disabilities. That is, in respect of his back, elbows (accepting that the left elbow problem has resulted from the injury to the right elbow) and both knees. Those disabilities have resulted from an injury under section 4(b)(ii), being an injury in the nature of an aggravation of a disease in the Respondent Worker’s back, knees, and elbows.
As no credit issues were raised at the Arbitration, I am in as good a position as the Arbitrator to redetermine the Respondent Worker’s entitlements under section 40.
Mr Hughes is 51 years of age (DOB 15 April 1955). He completed his school certificate in 1971. His best subject was said to be technical drawing. He trained as a carpenter at TAFE in 1973 and has worked as a carpenter in the building industry from than until 12 December 2001 when he stopped because of his elbow pain.
As part of his rehabilitation he started a work trial for 40 hours per week at Home Hardware on 23 June 2003 which he completed on 18 July 2003. The only restriction placed on him in that work trial was that he was not to lift greater than five kilograms. In progress reports from Interact Injury Management (‘Interact’) Mr Hughes reported that the work trial went well but he did not like working indoors. Whilst his right arm was almost symptom free he experienced “a bit of back trouble extending to his legs” (rehabilitation progress report 8 June 2003 to 8 July 2003). Mr Hughes felt that work as a general maintenance person or in parks and gardens would be preferable to retail sales. There is no evidence that any of Mr Hughes’ disabilities would have prevented him from continuing the work at Home Hardware if it was available to him.
On 9 September 2003 Mr Hughes underwent a Functional Capacity Evaluation (‘the Functional Evaluation’) by Cate McHugh, occupational therapist with Interact. Ms McHugh took a history of Mr Hughes’ elbow problems and noted that he had cortisone injections in his right elbow while still at work in 2001 but was forced to cease work in December 2001 “due to restrictions with his symptoms and his inability to continue working in the carpentry industry” (report Ms McHugh, 15 September 2003). The reference to “his symptoms” is a reference to Mr Hughes’ right elbow symptoms. She noted that he underwent surgery on his right elbow in March 2002. She was also given a history of Mr Hughes’ suffering osteoarthritis in his knees which had deteriorated over the years. The back injury of 1998 was also recorded and the fact that Mr Hughes was able to “return to full pre injury duties following this injury”.
Under ‘pain issues’ Ms McHugh recorded that Mr Hughes still gets discomfort over his right elbow, discomfort over the top of his knee caps and on the outside of both knees, and discomfort in his lower back during most activities where he is bending forward. He advised that anything seemed to aggravate his elbow. For example, it ached after mowing the lawn and he had difficulty holding the trigger on power tools. His back is exacerbated by digging and tasks such as concreting.
The Functional Evaluation assessed Mr Hughes to be capable of lifting 16 kilograms in both hands. His standing tolerance was not specifically tested but he did not demonstrate any problems with standing during the test overall. In conclusion Ms McHugh assessed that Mr Hughes should avoid activities which involve:
“1.working with arms overhead
2.working in positions where he is leaning forward
3.lifting or carrying greater than the above amounts
4.repetitive stair climbing
5.static squatting”
Ms McHugh thought that Mr Hughes was fit to complete full time work of a light physical category as defined in the Dictionary of Occupational Titles.
On the question of incapacity, Dr Searle said at page five of his 27 March 2004 report:
“Because of these work related injuries he is permanently unfit for activities, including work, which require prolonged sitting or prolonged standing, lifting or repeated bending or twisting movements of the trunk, strong or rapid or repetitive movements of the hands or arms, going up or down steps or stairs or slopes, kneeling or squatting, carrying weights, or having even average agility.”
Medical certificates prepared by Dr Mouncey initially declared Mr Hughes to be totally unfit because of his right elbow. In September 2002 he declared Mr Hughes fit for suitable duties lifting up to 10 kilograms for 8 hours per day. This restriction only deals with the Respondent Worker’s right elbow.
Dr Ashwell concluded in his report of13 September 2004 that Mr Hughes was not fit for “heavy work, involving heavy lifting of weights more than 20 kg, but he would be fit for lighter work”.
The insurer also arranged a Section 40 Assessment Report which was prepared by Ian Stansfield, psychologist, on 12 September 2003. The report noted the Respondent Worker’s complaint of back pain with prolonged standing at his recent work trial. After noting the findings in the Functional Evaluation, Mr Hughes’ education and work history, Mr Stansfield stated that he thought the positions of meter reader and handyman were positions that were appropriate for Mr Hughes. The labour market of the position of meter reader was considered to be poor but was fair for handyman positions.
By letter dated 22 December 2003 Mr Hughes’ weekly compensation was reduced to $68.74 per week on the basis that he is able to earn in some suitable employment $558.51 per week and his pre injury award wage was $622.25. It was later conceded that that calculation was incorrect and the proper figure for earnings but for injury under section 40(2)(a) is $722.70 per week. The Appellant Employer now submits that the Respondent Worker’s section 40 entitlement is $164.19 per week.
I do not agree that the Respondent Worker is capable of earning $558.51 per week in some suitable employment. Whilst work as a handyman may well be suitable for him I have to take into account the availability of that work and the fact that work of that nature is often irregular. Taking into account all of the Respondent Worker’s disabilities, his education and training, I find that his ability to earn in some suitable employment is $400.00 per week.
Deducting this sum for his agreed probable earnings of $722.70 gives a loss of $323.00 per week (after rounding up to the nearest whole dollar). There are no factors which would influence me to reduce that sum in the exercise of my discretion under section 40(1). Therefore, the Respondent Worker is entitled to weekly compensation under section 40 in the sum of $317.20 per week from 2 February 2004 to 31 March 2004 and thereafter in the sum of $323.00 per week to date and continuing.
DECISION
Paragraphs 1, 2, and 3 of the Arbitrator’s decision made on 31 October 2005 are revoked and the following order made:
“1. The Respondent is to pay the Applicant pursuant to section 40 of the Workers Compensation Act 1987 in the sum of $317.20 per week from 2 February 2004 to 31 March 2004 and thereafter in the sum of $323.00 per week from 1 April 2004 to date and continuing.”
Paragraphs 4, B and C of the Arbitrator’s decision made on 31 October 2005 are confirmed.
COSTS
The Appellant Employer has lost on its main ground of appeal (estoppel) and lost in its argument that the section 40 award should be $164.19 per week. Therefore, it is appropriate that it pay the Respondent Worker’s costs of the appeal
The Appellant Employer is to pay the Respondent Worker’s costs of the appeal.
Bill Roche
Acting Deputy President
23 August 2006
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF BILL ROCHE, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
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