K-Mart Australia Limited v Duggan
[2006] NSWWCCPD 137
•3 July 2006
WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:K-Mart Australia Limited v Duggan [2006] NSWWCCPD 137
APPELLANT: K-Mart Australia Limited
RESPONDENT: Suzanne Margaret Duggan
INSURER:Coles Myer Limited
FILE NUMBER: WCC15890-04
DATE OF ARBITRATOR’S DECISION: 9 May 2005
DATE OF APPEAL DECISION: 3 July 2006
SUBJECT MATTER OF DECISION: Arbitrator’s decision as to weight of evidence; adequacy of reasons; section 9A of the Workers Compensation Act 1987
PRESIDENTIAL MEMBER: Acting Deputy President Robert Harrington
HEARING:On the papers
REPRESENTATION: Appellant: Leitch Hasson Dent
Respondent: Whiteley, Ironside & Shillington Solicitors & Attorneys
ORDERS MADE ON APPEAL: 1. Paragraph 1(a) of the Arbitrator’s decision dated 9 May 2005 is revoked and the following order is made:
1. That the Respondent pay the Applicant weekly compensation pursuant to sections 36 and 37 of the Workers Compensation Act 1987 as follows:
(a) From 12 November 2003 to 12 May 2004 at the rate of $847.20 per week.
2. Subparagraphs 1(b), (c), (d) and (e) together with paragraphs 2 and 3 of the Arbitrator’s decision of 9 May 2005 are confirmed.
3. The Appellant is to pay the Respondent’s costs of the appeal.
BACKGROUND TO APPEAL
On 6 June 2005 K-Mart Australia Limited (‘K-Mart’) sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Workers Compensation Commission (‘the Commission’) against a decision, dated 9 May 2005.
The Respondent to the Appeal is Suzanne Margaret Duggan (‘Mrs Duggan’).
Mrs Duggan was employed by K-Mart in February 1981. Mrs Duggan remained employed by K-Mart until 12 November 2003. Mrs Duggan stopped working on this day because of a psychiatric illness.
On 10 February 2004 Mrs Duggan lodged a claim with K-Mart for weekly benefits and medical expenses. Whilst it is not clear from the papers, it would seem that K-Mart accepted Mrs Duggan’s claim up until 21 June 2004 when they declined ongoing liability on the basis of section 11A of the Workers Compensation Act 1987 (‘the 1987 Act’).
On 5 October 2004, Mrs Duggan’s solicitor filed an ‘Application to Resolve a Dispute’ in the Commission. In that Application Mrs Duggan alleged that “as a result of stress of working including increased responsibility and long hours” she sustained a psychiatric injury that incapacitated her for work.
Mrs Duggan claimed workers compensation benefits by way of payments of weekly benefits and medical expenses.
On 15 April 2005, the dispute proceeded to conciliation and arbitration before a Commission Arbitrator. Mrs Duggan gave evidence before the Arbitrator and at the completion of the evidence the Arbitrator reserved his decision.
The Arbitrator’s decision in writing was given on 9 May 2005 and a ‘Certificate of Determination’ issued ordering K-Mart to pay Mrs Duggan continuing weekly compensation under sections 36 and 37 of the 1987 Act with such payments to commence on 12 November 2003.
It is against the determination of the Arbitrator dated 9 May 2005 that K-Mart now seeks leave to appeal.
Mrs Duggan submits that the decision of the Arbitrator should be confirmed and that she should be awarded the costs of the appeal.
THE DECISION UNDER REVIEW
The ‘Certificate of Determination’, dated 9 May 2005 records the Arbitrator’s orders as follows:
“1.That the Respondent pay the Applicant weekly compensation pursuant to Sections 36 and 37 of the Workers Compensation Act 1987 as follows:
(a)From 12 November 2003 to 12 May 2004 at the rate of $917.05 per week.
(b)From 13 May 2004 to 31 September 2004 at the rate of $544.20 per week.
(c)From 1 October 2004 to 31 March 2005 at the rate of $554.20 per week.
(d)From 1 April 2005 at the rate of $563.00 per week and continuing in accordance with the provisions of the Act.
(e) The Respondent is to be given credit for payments made to date.
2.That the Respondent pay the Applicant’s Section 60 of the Workers Compensation Act 1987 expenses on production of accounts or receipts.
3.That the Respondent pay the Applicant’s costs as agreed or assessed.”
ISSUES IN DISPUTE
The issues in dispute in the appeal are:
·Whether the Arbitrator erred in finding that Mrs Duggan suffered an ‘injury’ within the meaning of the 1987 Act.
·Whether the Arbitrator erred in that his findings were against the weight of the evidence.
·Whether the Arbitrator failed to take into account and properly apply section 9A and section 11A of the 1987 Act.
·Whether the Arbitrator erred in his finding that Mrs Duggan had three people dependant on her for support.
·Whether the Arbitrator failed to give sufficient reasons for his decision.
·Whether the award of $917.05 per week was an incorrect amount as calculated under section 42(1)(d) of the 1987 Act.
ON THE PAPERS REVIEW
Section 354(6) of the Workplace Injury Management and Workers Compensation Act 1998 (‘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.”
K-Mart’s legal advisors have submitted that they should be given the opportunity to put forward oral submissions. Having regard to Practice Directions Numbers 1 and 6; the documents that are before me; the submission by Mrs Duggan’s legal advisors that the appeal can proceed to be determined on the basis of these documents; the fact that I have before me very detailed written submissions from K-Mart’s legal advisors and in addition to these submissions I have the transcript of submissions of Mr Morgan, counsel (who appeared on behalf of K-Mart before the Arbitrator), 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.
LEAVE
Before proceeding to deal with an appeal the Commission must determine whether the application meets the requirements of section 352 of the 1998 Act.
The amount of compensation that is at issue on appeal in this matter exceeds $5,000.00 such that section 352(2)(a) is satisfied. Section 352(2)(b) is satisfied as the entire award is the subject of the appeal.
The appeal was lodged within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act as such I grant leave.
FRESH EVIDENCE APPLICATION
Section 352(6) of the 1998 Act provides that, in an appeal, leave is required for the admission of fresh evidence or evidence in addition to that which was before the Arbitrator. The requirements of this section are addressed in the President’s Practice Direction Number 6.
The ‘Application for Leave to Appeal’ filed by K-Mart seeks to rely on fresh evidence, namely Mrs Duggan’s wage material for the period January 2003 to July 2004. Mrs Duggan opposes the fresh evidence being admitted. In support of the application to admit fresh evidence, K-Mart submit that the evidence is necessary in order to properly ascertain Mrs Duggan’s weekly wage rate which is the purpose of section 36 of the 1987 Act. Additionally, K-Mart submit that the evidence was not available at the arbitration hearing.
The principles relevant to the exercise of the discretion in Commission proceedings were considered in Ross v Zurich Workers Compensation Insurance [2002] NSWWCCPD 7. The nature of the Commission’s proceedings, the conduct of the parties, whether or not the evidence could have been obtained and presented to the Arbitrator and the likely impact of the evidence on the outcome are relevant considerations to whether or not fresh evidence should be admitted on appeal. Ultimately it will be a matter to be determined according to the principles of substantial justice to both parties. The application to admit fresh evidence is dealt with later in the determination in the context of the relevant ground of appeal.
EVIDENCE AND SUBMISSIONS
Before the Arbitrator the following matters were not in dispute:
“1.Mrs Duggan was born on 1 April 1963 is married and has three children.
2.Mrs Duggan worked on a full time basis for K-Mart between February 1981 and 12 November 2003.
3.In 2001 Mrs Duggan was appointed ‘Apparel Manager’ of the K-Mart in Orange. Mrs Duggan continued in this position up until she went off work in November 2003.
4.Mrs Duggan is incapacitated for work because of her psychiatric illness. K-Mart firmly asserts that psychiatric illness is not a work related psychiatric illness.”
Mrs Duggan’s evidence consisted of her statement and she gave oral evidence before the Arbitrator. Mrs Duggan’s evidence was that she had to work long hours at the K-Mart store at Orange. The Arbitrator said in respect of her evidence at paragraphs [22-24] the following:
“Her work as Apparel Manager could commence as early as 5am and she would work through until 6pm in the evening. The position as Apparel Manager involved physical work as she was required to meet the supply trucks which arrived between 5am and 6am each morning and arrange for the apparel to be displayed before the store opened. The displaying of the apparel involved the unpacking and the hanging or setting out of the various quantities of apparel.
The extra hours of work were completed without any allowance for overtime. She states she had to work for as long as it took to get the job done. These duties did not affect her health until October 2003. On 12 November 2003 she went to see her general practitioner, Dr Bouffler who diagnosed depression.
Her husband states that in the period prior to October/November 2003 she had complained that she was physically very tired from the long hours at work. She further complained to her husband of staff shortages which made her work more difficult and necessitated her undertaking more physical work. She also complained to her husband about security problems at the store as occasionally there were no security guards on duty and she was abused by a customer who she approached in relation to shoplifting.”
Mrs Duggan also complained of problems with dealing with other members of her staff, staff shortages, problems with security at the K-Mart store at Orange and the physically demanding work that she had to do as an Apparel Manager. In respect of her evidence generally the Arbitrator said at paragraph [26]:
“My impression of the Applicant after observing her give oral evidence and be cross-examined is that she is a witness of credit who devoted herself to the position of Apparel Manager at the K-Mart Store at Orange. The combined affect of the long hours and the responsibilities that she undertook in her capacity as Apparel Manager culminated in her total breakdown and her total inability to return to work due to deep depression and paranoia delusions which were all configured to her work situation.”
K-Mart’s lay evidence
Before the Arbitrator were statements of:
1.Rodney David Cole, Store Manager, K-Mart Store at Orange.
2.Gina Maree Lawson, Retail Services Manager, K-Mart Store at Orange.
3.Lisa Anne Birks, Manager in Training, K-Mart Store at Orange.
4.Paul Alexander Williams, Home Manager, K-Mart Store at Orange.
5.Deborah Pamela Burney, Retail Services Manager, K-Mart Store at Orange.
The Arbitrator refers to K-Mart’s lay evidence and I have read the statements of the various witnesses. The statements of the K-Mart witnesses confirm that Mrs Duggan had a long work history with K-Mart, from their observation she was a competent and good manager, and that they did not notice any specific incident affecting Mrs Duggan. They do not, however, directly contradict any of Mrs Duggan’s evidence concerning the problems that she was having associated with her work at K-Mart.
The Arbitrator, having considered the whole of the lay evidence, said the following in respect of the conditions of work which he considered were relevant in the development of the psychiatric condition at paragraph [31]:
“I have looked at the facts in this matter and I have determined that the employment factors are as follows:
(a) Extended work hours
(b) Staff shortages
(c) Physical work required to complete the Apparel Manager’s job
(d) Security problems involving shoplifters at the K-Mart Store.I am of the view that these factors together with the views of the treating Medical Team are sufficient to determine that the employment with K-Mart was a substantial contributing factor to the Applicant’s injury.”
Medical evidence
There was no issue that Mrs Duggan was suffering from a major psychiatric condition. K-Mart’s medical evidence, before the Arbitrator, consisted of a report of Dr Klaas Akkerman psychiatrist who said this in respect of Mrs Duggan’s psychiatric condition:
“Diagnosis – this is a fairly difficult issue. I believe on balance though she suffers from a schizoaffective disorder.”
Mrs Duggan’s medical evidence consisted of a treating mental health nurse, John Crossman and Dr Nicholas Burns from the Mid Western Health Service and Dr A R Bouffler. Their opinions are consistent with Mrs Duggan suffering from a psychotic episode.
In respect of the medical evidence the Arbitrator said this at paragraph [26]:
“The combined affect of the long hours and the responsibility that she undertook in her capacity as Apparel Manger culminated in her total breakdown and her total inability to return to work due to deep depression and paranoia delusions which were all configured to her work situation.”
K-Mart’s legal advisor’s submissions
K-Mart submitted that:
1.The Arbitrator erred in finding that Mrs Duggan had received an injury arising out of or in the course of her employment.
2.The Arbitrator erred in finding that Mrs Duggan’s employment was a substantial contributing factor to her injury.
3.The Arbitrator erred in respect of his finding that Mrs Duggan was totally incapacitated for work as a result of her injuries.
4.The Arbitrator erred in respect of his finding that Mrs Duggan’s probable weekly earnings but for injury were $917.05 per week.
5.The Arbitrator erred in finding that the Applicant had three persons dependant upon her for support.
6.The Arbitrator’s findings were against the weight of the evidence and the Arbitrator ignored relevant evidence.
7.The Arbitrator failed to take into account and properly apply section 11A of the 1987 Act.
8.The Arbitrator failed to give sufficient reasons in respect of his determination.
Mrs Duggan’s legal adviser’s submissions
Mrs Duggan’s submissions respond to K-Mart’s submissions. Mrs Duggan submits that the Arbitrator’s decision was correct and K-Mart has not established any grounds to justify a review of the decision of the Arbitrator.
DISCUSSION AND FINDINGS
K-Mart’s submissions in respect of this appeal need to be considered within the context of the manner in which K-Mart’s legal advisors conducted the proceedings before the Arbitrator. Many of the submissions that K- Mart now rely upon were not argued before the Arbitrator.
After the Arbitrator had conducted the conciliation process, which had not resolved the matter, the Arbitrator stated the following (paragraph [25]):
“The parties have had some discussion this morning to clarify the issues, and there has been some agreement about some of the issues, but, unfortunately, all issues have not been resolved…”
At the end of the oral evidence the following exchange occurred between the Arbitrator and the parties, page [30] paragraphs [15-25]:
“ARBITRATOR: As Mr. Morgan [counsel for K-Mart] said at the start of our conference today, he relies mainly on Section 9A, and that’s the issue.
MR. IRONSIDE: [solicitor for the worker] substantial contributing factor.
ARBITRATOR: substantial contributing factor is the main issue, and you’ve addressed that in your submissions ---.”
Mr Morgan who appeared for K-Mart at the arbitration did not take issue in respect of this exchange. Mr Morgan in a lengthy address before the Arbitrator confined his submissions to matters that related to section 9A of the 1987 Act. It is implicit in the way the case was run and in Mr Morgan’s submissions, that K-Mart disputed that Mrs Duggan had suffered an injury arising out of or in the course of her employment.
The question as to whether a party should be allowed to raise issues, on appeal, which were not argued before the Arbitrator was considered by Deputy President Fleming in Department of Corrective Services v Evans [2005] NSWCCPD 58 (‘Evans’). The Deputy President said at paragraphs [23-24]:
“Secondly it would be unfair to allow a party to raise an issue on appeal, which was not argued before the Arbitrator. This is the legal principle applicable to proceedings in a court and, for essentially the same reasons, it is applicable in proceedings in the Commission. Review by a Presidential Member is not an opportunity for a party to re-litigate their case or to raise fresh arguments on appeal that were not raised at first instance (see Commissioner of Corrective Services v Aldridge (No. 2) [2002] NSWADTAP 6, where this principle was applied in a ‘tribunal’ appeal proceeding). In this matter there was no application to lodge fresh evidence in the appeal. By putting in dispute on the appeal the issue of whether the PTSD suffered by Mr Evans ‘arose out of or in the course of his employment’ GIO is effectively raising a fresh issue not in dispute before the Arbitrator (see Zamovisa Pty Ltd v Kavanagh [2004] NSW WCC PD 53). The High Court set out the principle in Metwally (No 2) v University of Wollongong (1985) 60 ALR 68 as follows:
‘It is elementary that a party is bound by the conduct of his case. Except in the most exceptional circumstances, it would be contrary to all principle to allow a party, after a case had been decided against him, to raise a new argument which, whether deliberately or by inadvertence, he failed to put during the hearing when he had an opportunity to do so.’
The principle was applied by the High Court in Coulton v Holcombe (1986) 162 CLR 1 in relation to an appeal by way of rehearing. The Court held (per Gibbs CJ, Wilson, Brennan, and Dawson JJ) that:
‘It is fundamental to the due administration of justice that the substantial issues between the parties are ordinarily settled at the trial. If it were not so the main arena for the settlement of disputes would move from the court of first instance to the appellate court, tending to reduce the proceedings in the former court to little more than a preliminary skirmish...’ ”
It is my view, consistent with the Deputy President’s decision in Evans, that K-Mart, in respect of this appeal, is restricted to the issues that were agitated by them before the Arbitrator. Those issues were restricted to section 9A of the 1987 Act and the occurrence of an ‘injury’ within the meaning of that Act.
I will now deal with K-Mart’s submissions.
The Arbitrator erred in finding that Mrs Duggan had received an injury arising out of or in the course of her employment
In Mayne Health Group t/as Nepean Private Hospital v Sarah Sandford [2002] NSWWCCPD 6 the Commission considered the nature of a review and held at paragraph [11]:
“A consideration of the nature of the hearing before the Arbitrator at first instance, of the broad powers, functions and discretions exercisable by the Arbitrator and of the express limitations on evidence before the ‘review’ under section 352, lend support to the view that the Commission has a specific and limited role on appeal (Coal & Allied Operations Pty Ltd v Australian Industrial Relations Commission [2000] HCA 47 31 August 2000). It is not an ‘appeal’ in the strict sense, as the Commission can receive further evidence. Similarly it is not a ‘rehearing’ of the matter where the Commission is re-exercising the power of the Arbitrator at first instance by hearing the matter ‘de novo’ and coming to a fresh decision based on all the evidence available at that later time (Coal & Allied Operations Pty Ltd v Australian Industrial Relations Commission [2000] HCA 47 31 August 2000; Builders Licensing Board v Sperway Constructions (Sydney) Pty Ltd (1976) 135 CLR 616). The ‘review’ is by way of rehearing where the powers of the Commission to confirm, revoke or substitute a new decision are exercisable only where it can be demonstrated that the original decision of the Arbitrator is affected by “... some legal, factual or discretionary error” (Allesh v Maunz [2000] HCA 40 (3 August 2000)).”
A ‘review’ is not intended to be a ‘full second hearing’ (see Christopher Michael McMahon v Anthony Lagana and Joseph Lavella t/as the Vessel “Nimble II” [2003] NSWWCCPD 22).
Extensive submissions have been made on behalf of K-Mart in general and specifically in relation to the issue as to whether Mrs Duggan sustained an injury arising out of or in the course of employment. K-Mart submits that the medical evidence did not establish that a psychiatric condition had anything to do with her work activity because:
· Dr Akkerman’s qualification was such that his opinion should have been accepted over Mrs Duggan’s experts’ opinions.
· Mrs Duggan’s experts did not unequivocally relate her psychiatric condition to the work activities.
K-Mart submits that the evidence of Dr Akkerman, being a WorkCover Approved Medical Specialist, should be preferred over Mrs Duggan’s experts’ evidence as they were not similarly qualified.
A WorkCover Approved Medical Specialist is a doctor who has been trained in the appropriate application of AMA5 as modified by the WorkCover Guidelines, in the assessment of whole person impairment resulting from a work injury and, in the present case, psychiatric injury. An Approved Medical Specialist has no greater qualifications in respect of the assessment of causation, prognosis or diagnosis than a doctor, who specialises in the same field, but does not have WorkCover training in respect of “whole person impairment” assessment. Dr Akkerman’s qualifications, on the evidence before the Arbitrator, were not superior to that of Mrs Duggan’s medical experts, Drs Burns and Bouffler. The only evidence touching upon their qualifications was that all three doctors were specialist psychiatrists. In any event Dr Burns and Dr Bouffler’s reports were tendered into evidence without objection and neither doctor was cross-examined. The submission that Dr Akkerman’s opinion should have been accepted by the Arbitrator, over the opinion of Mrs Duggan’s medical experts because of his greater expertise, should be rejected.
The second issue raised by K-Mart in respect of the medical evidence was that both Dr Burns and Dr Bouffler did not express their opinion in unequivocal terms. Contrary to the belief of many people, medical science is not a science that can be expressed in dogmatic terms. Dr Burns and Dr Bouffler were expressing their views in a way that a medical expert should when presenting expert evidence for the consideration of a tribunal. The doctors were merely saying, with respect, that absent other non work-related factors being established before the tribunal, the most likely cause of Mrs Duggan’s illness was work related stressors.
The issue as to what is sufficient proof in cases involving medical issues was considered by the Court of Appeal in State of New South Wales t/as New South Wales Department of Agriculture v Allan [2000] NSW CA 141 (‘Allan’). Priestly JA in Allan said in respect of this issue the following:
“The decision at first instance is a paradigm example of a feature of fact finding often found in cases involving medical issues. That feature is the major cleavage between proof of a fact in non criminal court cases to the satisfaction of the fact finding tribunal on the balance of probabilities and proof of a fact for scientific purposes to the satisfaction of those expert in the particular field of science. The latter kind of proof is much more rigorous and demanding than the former.
The two kinds of proof are quite different in their objects and methods, but are frequently the cause of confusion when medical issues are concerned. In many such cases, experts in the field of the relevant medical science give evidence of their expert opinion concerning the medical issue. Trained in the scientific method of proof, some such experts find difficulty in adjusting themselves, when giving evidence in court, to the lesser requirements of legal proof, which, looked at from their scientific standpoint, they regard as inferior and unreliable. An expert who gave evidence for a party in litigation where there has been an adverse result reached by application of the legal standard of proof is quite likely to advise the party that the result is an unscientific and unsound one. Hence, many appeals by the indignant losing party: the various trials and appeals in Hocking v Bell, (see the decision in the Privy Council (1947) 75 CLR 125), provide a classic example.”
The specialist medical evidence before the Arbitrator, consisted of Dr Burns and Dr Bouffler for Mrs Duggan and Dr Akkerman for K-Mart. The doctors were unanimous in their opinion that Mrs Duggan suffered from a major psychiatric illness that incapacitated her for work. The doctors did disagree, however, in respect of their opinion as to whether the psychiatric illness was caused or aggravated by Mrs Duggan’s work activities.
Dr Bouffler said the following in relation to the question of causation:
“It is not possible to say to what extent work stressors have contributed to her present condition, but they are certainly a major factor.”
Dr Burns said the following in relation to the issue of causation:
“Whilst it is difficult to say with any certainty what caused her illness, it is highly likely that work-related stress has been a contributing factor. Prior to the onset of illness, she had assumed a role with greater responsibility including responsibility for other staff. She was working increased hours, sometimes 7 days per week. She was finding it increasingly difficult to ‘switch off’ after work, and work-related themes became an anxious preoccupation. When her illness deteriorated into frank, psychosis, work-related themes were the only themes of her delusion and hallucinations. I have been unable to identify any other recent stressor or likely precipitants. She has a close and supportive family.”
Dr Bouffler’s opinion as to causation supports Mrs Duggan’s contention that her psychiatric illness was caused by work stressors and that the work stressors were a substantial factor in the development of the psychiatric illness.
Dr Burns, also supported the proposition that the works stressors were the cause of Mrs Duggan’s psychiatric illness provided other non work-related causes or stressors were not identified. At the Arbitration hearing Mrs Duggan gave evidence of the works stressors and she was cross-examined by K-Mart’s counsel. No other stressors or causes for her psychiatric illness were established at the Arbitration hearing. The Arbitrator accepted Mrs Duggan as a witness of truth. Once it was established and accepted by the Arbitrator that there were no other stressors other than the work stressors operating at the time of the onset of Mrs Duggan’s psychiatric illness, it follows that Dr Burns opinion is unequivocally supportive of Mrs Duggan’s contention that her psychiatric illness was caused by her work activities.
The acceptance or rejection of medical opinion is a matter for the Arbitrator. It is not uncommon for medical experts to disagree. When one takes into account the evidence of Mrs Duggan, both in her statement and at the arbitration hearing, together with the Arbitrator’s finding that she was a witness of credit it was, in my view, perfectly open to the Arbitrator to prefer the opinions of the worker’s medical specialists and other experts in coming to the decision that he did.
K-Mart also sought to attack the Arbitrator’s decision on the basis that the evidence was not sufficient to establish a causal connection between Mrs Duggan’s work and the psychiatric condition. K-Mart rely on the decisions of Tarry v Warringah Shire Council (1974) 48 WCR (NSW) 1 and Nunan v Cockatoo Docks and Engineering Company (1941) 41 NSWR 119. K-Mart, in order to advance this submission, relied upon the lay evidence they placed before the Arbitrator. As I have already stated the lay evidence relied upon by K-Mart did not, in any material way, contradict the evidence given by Mrs Duggan. The Arbitrator accepted Mrs Duggan as a witness of truth and, as with medical evidence, the acceptance or rejection of lay evidence was a matter for the Arbitrator.
There was clearly medical and lay evidence which establishes, if accepted, that Mrs Duggan suffered a psychiatric injury as a result of the work stressors as she perceived them. There is no evidence that her perception of the work stressors was an unrealistic or a psychotic perception.
I do not think that K-Mart has demonstrated any error of fact, law or discretion on the part of the Arbitrator in relation to his finding that Mrs Duggan suffered an injury arising out of or in the course of her employment.
The Arbitrator erred in finding that Mrs Duggan’s employment was a substantial contributing factor to her injury - the submissions and issues relating to section 9A of the 1987 Act
K-Mart submits that the Arbitrator did not deal, in particular, with the provisions of section 9A(2)(d) of the 1987 Act which provides that:
“The probability that the injury or a similar injury would have happened anyway at about the same time or at the same stage of the worker’s life, if he or she had not been at work or had not worked in that employment.”
The issues relating to section 9A of the 1987 Act overlap with the issue as to whether an injury arises out of or in the course of employment. I will not repeat the matters, which have already been dealt with in relation to this matter.
The Arbitrator had before him the evidence of Dr Akkerman whose opinion in respect of this issue was:
“I do not believe that her condition is work-related at all. The condition has a constitutional basis. She suffers from a psychotic disorder. Psychotic disorders generally have a constitutional basis.”
Dr Akkerman’s opinion, if accepted by the Arbitrator, would have established not only that the psychiatric injury did not result from her work activity but also (it follows) that Mrs Duggan’s work was not a substantial contributing factor to the psychiatric injury. The Arbitrator also had before him reports from Dr Burns, Dr Bouffler and a report of John Crossman, a registered nurse. Their opinions were that, absent other non work-related causative factors being established, Mrs Duggan’s psychiatric injury was caused by her work activities.
In the present case, the Arbitrator accepted Mrs Duggan’s evidence about the stressors she was subject to at work. At paragraph [31] of his decision the Arbitrator identified the employment factors causally related the injury as follows:
(a) Extended work hours;
(b) Staff shortages;
(c) Physical work required to complete the Apparel Manager’s job; and
(d) Security problems involving shoplifters and the K-Mart store.
The Arbitrator further accepted, impliedly, that there were no other factors that would have caused her psychiatric injury. The acceptance of the above matters, together with Mrs Duggan’s expert medical evidence would justify a finding that the work was not only a substantial contributing factor, but the only factor causing her psychiatric injury.
In Chubb Security Australia Pty Ltd v Trevarrow [2004] NSWCA 344, the Court of Appeal considered the issues raised by section 9A of the 1987 Act. Santow JA said the following in respect of section 9A, at paragraph [31]:
“In Mercer v ANZ Banking Group Ltd (supra), the Court of Appeal emphasised that s9A focuses upon ‘the work activity in which the worker was engaged at the time of the injury’ as the relevant avenue for inquiry (at 746). Mason P (with whom Meagher and Beazley JJA agreed) stated:
‘The ultimate question is whether that activity or task was a substantial contributing factor to the injury, bearing in mind that the concept of “a substantial contributing factor to an injury” is exegeted in subs (2) and (3) of s9A.’ ”
The acceptance or rejection, as I have already said, of the medical and lay evidence is a matter for the Arbitrator. It is not uncommon for medical experts to disagree and for there to be conflicting lay evidence. There was evidence, in my opinion, from which the Arbitrator could accept, both from a lay point of view and a medical point of view, that work activities, identified by him, were a significant contributing factor to Mrs Duggan’s psychiatric injury. As such, I do not think that K-Mart has demonstrated any error of fact, law or discretion on the part of the Arbitrator in finding that the Mrs Duggan’s work activities were a substantial contributing factor to her psychiatric injury.
The Arbitrator erred in finding that Mrs Duggan was totally incapacitated for work as a result of her injuries
At the end of the submissions by K-Mart’s counsel (Mr Morgan) the following exchange between the Arbitrator, Mrs Duggan’s solicitor (Mr Ironside) and K-Mart’s counsel occurred [page 45, paragraph 15 of the transcript]:
“ARBITRATOR: ‘With three dependants”.
MR IRONSIDE: ‘With three dependants’.
MR MORGAN: ‘She fits within that. I can’t submit to you she’s capable of
doing any work at the moment so if you find in her favour she’d be entitled to the maximum’.”
The concession made by Mr Morgan at the arbitration hearing was a proper concession. The medical evidence on behalf of K-Mart only challenged Mrs Duggan’s case in relation to causation. Dr Akkerman was of the opinion that Mrs Duggan suffered from a major psychiatric condition that resulted in her total incapacity.
K-Mart’s attack on the Arbitrator’s finding that Mrs Duggan was totally unfit for work must be rejected because of the concession by Mr Morgan and K-Mart’s expert medical evidence that Mrs Duggan was totally incapacitated.
The Arbitrator erred in finding that Mrs Duggan had three persons dependant upon her for support
Mrs Duggan’s statement commences as follows:
“1.I was born on 1 April 1963 and I am married with three children as follows;
Steven John Penrose (date of birth 17 December 1981);
Clinton Robert Penrose (date of birth 15 October 1988); and
Samantha Kathleen May Penrose (date of birth 8 September 1994).
2.Both Clinton and Samantha are dependant on me for support.”
Kevin Leslie Duggan, (her husband) in his statement said that he had not worked since 1993, and that he was the ‘homemaker’.
I have already set out at paragraph 60 the exchange between the Arbitrator and the counsel who appeared for K-Mart at the arbitration hearing where the Arbitrator referred to the fact that Mrs Duggan had three persons dependant upon her for support. Mrs Duggan’s assertion that she had three persons dependant upon her was never challenged and was in fact accepted by K-Mart’s counsel at the arbitration. As such K-Mart’s attack on the Arbitrator’s finding in this regard must be rejected.
The Arbitrator’s findings were against the weight of the evidence and the Arbitrator ignored relevant evidence
To a large extent this submission by K-Mart has been already answered. K-Mart submits that the Arbitrator did not give sufficient weight to Dr Akkerman’s report and this submission has already been dealt with. K-Mart further submits that the Arbitrator did not have sufficient regard to the witnesses’ statements that were before him and that the Arbitrator’s decision did not deal in any detail with the witnesses’ statements. There was, in my opinion, no need to refer in detail to K-Mart’s witnesses’ statements as they did not in respect of any major issue, contradict the evidence that Mrs Duggan had given. The witnesses’ statements in general dealt with the fact that Mrs Duggan was a well respected worker, that they had not noticed that Mrs Duggan was suffering from a stress condition prior to leaving K-Mart, and that the person now doing Mrs Duggan’s job was not finding the job excessively stressful. The Arbitrator’s decision established that he clearly took these matters into account in coming to his decision. His decision in this regard does not demonstrate any error of fact, law or discretionary judgment.
The Arbitrator failed to take into account and properly apply section 11A of the 1987 Act
This issue, correctly in my view, was never raised by K-Mart’s counsel before the Arbitrator. There was no evidence that Mrs Duggan’s psychiatric injury resulted from the reasonable actions of her employer in respect to promotion or transfer. K-Mart’s submissions focus on the act of transfer per se, that is Mrs Duggan’s work activities after she was transferred/ promoted rather than the actions of the employer in relation to the transfer/promotion. Section 11A has no relevance, where the injury results from the activities carried out by the worker after the promotion/transfer (see Court of Appeal in Manly Pacific International Hotel Pty Ltd v Doyle (1999) 19 NSWCCR 181.)
Therefore, K-Mart has not established that the Arbitrator was in error.
The Arbitrator failed to give sufficient reasons in respect of his determination
The Arbitrator’s reasons dealt adequately with all of the issues that were before him at the arbitration. His decision does not disclose any deficiency in the reasoning process.
I adopt what Deputy President Fleming has said in Mayne Health Group t/as Nepean Private Hospital v Sandford [2002] NSWWCCPD 6 and M & S Shipman Pty Limited v Matters [2003] NSWWCCPD 19. As the Deputy President said in the latter case (at [84]) relying on the decision of the Court of Appeal in YG & GG v Minister for Community Services [2002] NSWCA 247):
“To succeed on the ground of ‘inadequate reasons’ it will be necessary for the Appellant to demonstrate not only that the reasons are inadequate but that the inadequacy sufficiently demonstrates that the Arbitrator has failed to exercise his or her statutory duty to fairly and lawfully determine the application.”
The Arbitrator erred in finding Mrs Duggan’s current weekly wage rate, as calculated in accordance with section 42 of the 1987 Act, to be $917.05 per week.
K-Mart did not dispute that Mrs Duggan’s earnings were $917.05 per week. K-Mart, however, submits that the appropriate weekly rate to be paid to Mrs Duggan, pursuant to section 36(1) of the 1987 Act for the first 26 weeks is the amount as determined under section 42(1)(d) of the 1987 Act that is, $733.64 per week, namely 80% of $917.05 per week.
The amount of weekly compensation for the first 26 weeks of total incapacity is governed by section 36 of the 1987 Act which provides as follows:
“(1)The weekly payment of compensation to an injured worker in respect of any period of total incapacity for work during the first 26 weeks of incapacity shall be the amount of the worker’s current weekly wage rate.
(2)In this section:
“current weekly wage rate”, in relation to a worker, means the worker’s current weekly wage rate determined from time to time in accordance with section 42.”
The Arbitrator’s decision does not disclose whether he complied with sections 36 and 42 of the 1987 Act when considering the currently weekly wage rate for the first 26 weeks.
However, I note that K-Mart did not raise this issue at the arbitration hearing. Additionally, the interchange between the Arbitrator and K-Mart’s counsel could easily be taken as a concession that the appropriate amount was $917.05.
The current weekly wage rate for Mrs Duggan, as determined in accordance with section 42 1987 Act, is $917.05 per week, if that is her award rate of pay, or, alternatively 80% of $917.05, if she is paid this amount pursuant to a salary contract.
The papers do not directly address whether Mrs Duggan’s remuneration is based on a salary contract or industrial award. Her evidence was that she was promoted to a manager. She was not paid for the long hours that she worked and in the ‘Respondent’s Reply’ the investigator’s report indicates that she was given a $3,000.00 performance bonus. All of these factors would indicate that she is on a salary rather than being paid on the basis of an industrial award. I have reached my determination that Mrs Duggan was paid a salary rather than paid under an industrial award from the evidence that was before the Arbitrator. The Arbitrator’s orders reflect a determination that Mrs Duggan’s currently weekly wage rate for the first 26 weeks was $917.05. Given that Ms Duggan was paid pursuant to a salary contract, the correct amount should have been 80% of $971.05. Therefore, the Arbitrator has erred with the result that the award of weekly benefits for this period should be adjusted.
K-Mart has sought leave to adduce new evidence. The new evidence is Mrs Duggan’s wage material for the period January 2003 to July 2004.
I intend to allow this new material into evidence. It is my opinion that in order to determine what weekly amount represents the appropriate level of compensation Mrs Duggan should receive during the first 26 weeks incapacity, on the ‘true merits and justice’, the new evidence is required.
The material confirms that Mrs Duggan was a salaried employee and as such the appropriate calculation for her current weekly wage rate is 80% of her average weekly earning (see section 42 of the 1987 Act).
The calculation of average weekly earnings is governed by section 43 of the 1987 Act which reads as follows:
“(1)For the purposes of the provisions of this Act relating to ‘earnings’ and ‘average weekly earnings’ of a worker, the following rules shall be observed:
(a)Average weekly earnings shall be computed in such manner as is best calculated to give the rate per week at which the worker was being remunerated, except that if, because of the shortness of the time during which the worker has been in the employment of the employer or the terms of the employment, it is impracticable at the date of the injury to compute the rate of remuneration, regard may be had to the average weekly amount which, during the 12 months previous to the injury, was being earned”
The fresh evidence provided by K-Mart establishes that in the financial year prior to Mrs Duggan’s incapacity her earnings were $18,006.04 for the 17 week period; 1 July 2003 to the 31 October 2003. Applying section 43 of the 1987 Act, Mrs Duggan’s average weekly earnings were $1,059 per week. The appropriate rate of weekly compensation for the first 26 weeks as calculated under section 42 of the 1987 Act is therefore $847.20 (80% of $1,059). I therefore will revoke paragraph 1(a) of the Arbitrator’s decision to reflect this figure.
DECISION
Paragraph 1 (a) of the Arbitrator’s decision dated 9 May 2005 is revoked and the following order is made:
1.That the Respondent pay the Applicant weekly compensation pursuant to Section 36 and 37 of the Workers Compensation Act 1987 as follows:
(a)From 12 November 2003 to 12 May 2004 at the rate of $847.20 per week.
Subparagraphs 1(b), (c), (d) and (e) together with paragraphs 2 and 3 of the Arbitrator’s decision of 9 May 2005 are confirmed.
COSTS
The Appellant is to pay the Respondent’s costs of the appeal
Robert Harrington
Acting Deputy President
3 July 2006
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF ROBERT HARRINGTON, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
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