L F Harris Partnership v Gillard
[2007] NSWWCCPD 68
•28 February 2007
WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:L F Harris Partnership v Gillard [2007] NSWWCCPD 68
APPELLANT: L F Harris Partnership
RESPONDENT: Michael Gillard
INSURER:QBE Workers Compensation (NSW) Limited
FILE NUMBER: WCC21848-05
DATE OF ARBITRATOR’S DECISION: 12 April 2006
DATE OF APPEAL DECISION: 28 February 2007
SUBJECT MATTER OF DECISION: Incapacity: Lawarra Nominees Pty Ltd v Wilson (1996) 25 NSWCCR 206; weekly compensation; adequacy of reasons; section 60(2) of the Workers Compensation Act 1987: travel expenses
PRESIDENTIAL MEMBER: Acting Deputy President Anthony Candy
HEARING:7 February 2007
REPRESENTATION: Appellant: Moray & Agnew, Solicitors
Respondent: Firths-The Compensation Lawyers
ORDERS MADE ON APPEAL: 1. Paragraphs 1, 2 and 3 of the decision of the Arbitrator dated 12 April 2006 are confirmed
2. Paragraphs 4 and 5 of the decision of the Arbitrator dated 12 April 2006 are revoked and the following paragraphs are inserted in their place:
“4. There will be an award in favour of the applicant pursuant to section 37 of the Workers Compensation Act 1987 for a worker with a dependent wife and two dependent children as follows:
15 July 2005 to 30 September 2005 - $563.00 per week;
1 October 2005 to 31 March 2006 - $574.50 per week;
1 April 2006 to 1 October 2006 - $586.20 per week, and
1 October 2006 to date and continuing - $597.10 per week as adjusted.
5. The respondent is to pay the worker’s travel expenses as particularised in document ‘R’ in the sum of $17,925.60 pursuant to section 60 of the Workers Compensation Act 1987.
6. The respondent is to pay the applicant’s costs as agreed or assessed.”
3.The appellant employer is to pay the respondent worker’s costs of the appeal.
BACKGROUND TO THE APPEAL
Michael Gillard (‘the worker’) had been a shearer for most of his working life. He was employed by L F Harris Partnership (‘the employer’) on 29 and 30 April 2002 doing crutching. This was the last shearing work which he did apart from a later trial of employment, the details of which are sketchy. It was not disputed that the employer was liable to pay compensation. The precise legal status of the employer is unclear however no point has been taken as to this.
For some years prior to 30 April 2002 the worker had suffered from backache but had attempted to persevere with shearing work by taking strong pain relievers with the result that he had become addicted to them and had been put on a Methadone program.
On 6 November 2002 the worker made a claim on the employer as his last employer. This claim was referred by the employer to its insurer, QBE Workers Compensation (NSW) Limited (‘QBE’), which on 18 March 2003 wrote to the worker advising that liability had been accepted and that payment would be made at the rate of $872.70 per week, being 80% of his average weekly earnings if he were not covered by an award. Although it is not stated, this is a reference to section 42(1)(d) of the Workers Compensation Act 1987 (‘the 1987 Act’). The employer’s Report of Injury dated 14 November 2002 stated that the worker was employed under the “Shearers Award” of which details were unavailable. However, the worker was paid piecework according to the number of sheep shorn.
The worker at the time resided at Stuart Town which is a township approximately midway between Molong and Wellington in western New South Wales but off the Mitchell Highway which joins those towns.
QBE had the worker seen on 15 May 2003 by Dr John Grant, a consultant neurosurgeon who found evidence of significant disc prolapse at the L4/5 level on the right-hand side. Dr Grant thought that the worker would be unable to ever return to his former work and would be fit only for a sedentary occupation.
Dr David McDowell, a neurosurgeon, saw the worker at the request of his general practitioner, Dr Guerin of Molong, on 18 June 2003. That doctor obtained a history that the worker had developed right sciatica in April 2002 which had persisted since. Dr McDowell had regard to an MRI study which had been performed on 7 January 2003. This was said to show dehydration and loss of disc height at L4/5 and L5/S1. There was a central and right posterolateral annular tear at the L4/5 level. There was posterolateral disc bulging in contact with the emerging L5 root. Dr McDowell proposed surgical decompression of the right L5 root as well as laminectomy at L4 and L5. It appears that surgery was performed after admission to a private hospital on 29 July 2003 when disc material compressing the L5 nerve root was removed.
QBE arranged for a vocational assessment to be performed by Ms Melissa Brennan of Konekt on 8 November 2004. At the same time a functional assessment was done by an occupational therapist, Ms Vicky Holden. Reports dated 17 November and 10 November 2004 were prepared. I will deal with those reports later. On 2 December 2004 QBE wrote to the worker advising that, following the vocational and section 40 assessment of 8 November 2004, it had been assessed that the worker could earn in suitable employment $507.42. His weekly earnings if fully fit were said to be $500.00 and, accordingly, he was advised that his new rate of compensation was minus $7.42 to take effect from 14 January 2005.
The worker’s solicitors wrote on 24 December 2004 to QBE seeking a copy of the vocational assessment and functional capacity reports, together with medical reports forwarded to those persons who prepared the reports referred to. By letter of 20 January 2004 (? 2005) QBE advised that it had decided “not to apply the section 40” and it was reinstating the correct weekly payment for the worker.
Notwithstanding the earlier correspondence, QBE again wrote to the worker care of his solicitors on 2 June 2005 advising of a reduction in benefits payable to the worker in terms virtually identical to the letter of 2 December 2004. Once again, the worker was advised that his new rate was minus $7.42 but it was to have effect from 14 July 2005. That letter contains the statement which was lacking from the earlier letter that the worker’s treating doctor, Dr Guerin, had given approval for the worker to undertake the section 40 assessment and therefore, in accordance with WorkCover advice, QBE was allowed to apply that assessment.
On 23 March 2005 the worker had lodged an Application to Resolve a Dispute (WCC4549-05) in the Workers Compensation Commission (‘the Commission’) claiming compensation under sections 66 and 67 of the 1987 Act for whole person impairment. There were two respondents: the first being the employer; the second, Neville Bartimote who employed the worker as a shearer from 2 October 2001 to 1 November 2001. The Arbitrator who determined that application noted that the major issue in dispute was in relation to the proper level of section 67 compensation. The second respondent who was also insured by QBE did not file a reply in the proceedings. The Arbitrator determined that the relevant date of injury in accordance with either section 15 or 16 of the 1987 Act was 6 November 2002, the date on which the claim was made.
The extent of whole person impairment had been assessed by an Approved Medical Specialist (‘AMS’) as 11%. The Arbitrator entered an award in the sum of $14,000.00 under section 66 as well as $15,000.00 in section 67 compensation against the first respondent as last employer of the worker.
Following the cessation of weekly payments from 14 July 2005, the worker’s solicitors on 22 December 2005 lodged an Application to Resolve a Dispute claiming weekly payments of compensation in the sum of $500.00 per week from 14 July 2005 onwards. The date of injury was stated to be “nature and conditions of employment 2001/2002 (ten days)”. The date of notice of injury was stated to have been 6 November 2002 as was the date of the compensation claim. The place of injury was said to be Stuart Town and the injury description was as follows: “Injury to back. Disease of a gradual onset due to the nature and conditions of his employment.” The injury was described as having occurred as follows: “Shearing and crutching sheep.”
In addition to weekly payments of compensation, medical, hospital or related expenses were claimed over $5,000.00 which were said to be in accordance with a letter of 20 October 2005 to QBE, namely neurological re-assessment, pain management specialist, physiotherapy and rehabilitation training. In addition there is a claim for travel expenses to obtain Methadone.
The employer lodged a reply on 25 January 2005. The issues in dispute were stated to be:
“1. That the applicant’s actual earnings are not as alleged.
2. That the worker’s ability to earn is not as alleged.
3.The applicant is not entitled to costs in these proceedings as the issue in dispute should have been linked to proceedings on foot in 2005 (WCC4549 of 2005).”
There was a teleconference on 13 March 2006 at which a conciliation and arbitration hearing was fixed for 7 April 2006. At that hearing, at the conclusion of brief evidence from the worker and submissions by the representatives of the parties, the Arbitrator gave an ex tempore decision. In short, he found in favour of the worker as is set out hereunder. It is against this determination that the employer now seeks leave to appeal.
THE DECISION UNDER REVIEW
The ‘Certificate of Determination’, dated 12 April 2006 records the Arbitrator’s orders as follows:
“1.I find that the Applicant was injured by the aggravation of a disease whilst in the employ of the Respondent in accordance with the decision of Arbitrator Gurr given on 9 November 2005.
2.I find that the Applicant has been totally incapacitated thereby.
3.The Applicant was paid compensation up until 14 July 2005.
4.There will be an award in favour of the Applicant pursuant to section 36 of the 1987 Act at the statutory rate for a worker with a dependant wife and two dependant children from 15 July 2005 to date and continuing as particularised in document ‘R’ in the sum of $17,925.60.
5.The Respondent is to pay the Applicant’s costs as agreed or assessed.”
There are two clear errors in paragraph 4 of the Certificate of Determination to which I will refer later.
ISSUES IN DISPUTE
The issues in dispute in the appeal are:
· whether the Arbitrator gave adequate reasons;
· whether the Arbitrator erred in finding total incapacity, and
·whether the Arbitrator erred in making an order for payment of travel expenses.
HEARING
In the Application to Appeal the employer advised that it was seeking the transcript in these proceedings and also in the earlier matter and wished to be able to amend its grounds of appeal upon review of this transcript. Such amendment was not done nor were further submissions made and accordingly I gave the parties leave to make oral submissions at a teleconference which was arranged for 7 February 2007. On that day submissions were made by the parties’ representatives.
LEAVE
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 amount of compensation at issue on the appeal is more than $5,000.00 and that entire amount is at issue on the appeal. Section 352(2) of the 1998 Act is thus satisfied.
The appeal was lodged within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act.
Accordingly, leave to appeal is granted.
EVIDENCE, SUBMISSIONS, DISCUSSION AND FINDINGS
Adequacy of Reasons
It was submitted that the claim had been made on the basis of partial incapacity only and, in submissions to the Arbitrator and in the earlier part of the Arbitrator’s reasons, the matter was dealt with by him as though it were a case of partial incapacity. Reliance was placed by the employer on what the Arbitrator said in response to submissions as well as what was said in the reasons for decision. In addition to criticisms made as to the adequacy of reasons in relation to incapacity, the main thrust of the employer’s argument was that it is impossible to discern from the reasons given by the Arbitrator how a section 40 case had changed into one of total incapacity. In addition it is said that the Arbitrator confused sections 15 and 16 of the 1987 Act.
As was observed by Deputy President Fleming in M & S Shipman Pty Ltd v Larry John Matters [2003] NSWWCCPD 19 (‘Matters’) at [80], Commission Arbitrators have a common law and statutory obligation to provide adequate reasons for decision. The relevant rule was Rule 73 of the Workers Compensation Commission Rules 2003. The current rule is Rule 15.6 of the Workers Compensation Commission Rules 2006. As Deputy President Fleming said in Matters at [81]:
“The standard by which adequacy of reasons must be determined is relative to the nature of the decision itself and the decision-maker (see discussion in Mayne Health Group Limited t/as Nepean Private Hospital v Sandford [2002] NSWWCCPD 6). The Commission is not a court and proceedings are conducted with as little formality and technicality as the proper consideration of the matter permits. This approach is equally applicable to the preparation of statements of reason. At the same time, the reasons must be capable of adequately conveying to the parties the basis upon which the Arbitrator came to his or her decision….”
The Deputy President continued at [84]:
“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 Court of Appeal in YG v Minister for Community Services [2002] NSWCA 247 (26 July 2002) (‘YG’), per Hodgson JA, said
… Inadequate reasons do not without more show that the decision involved error: the inadequacy must be such as to warrant the inference that the Tribunal has not exercised its jurisdiction in accordance with law; see Absolon v NSW TAFE [1999] NSWCA 311.
… In my opinion, a question whether there is a deficiency of reasons, and whether that deficiency warrants an inference that a tribunal has not exercised its jurisdiction in accordance with law, is a matter for judgment, and in borderline cases, minds may reasonably differ.’ at [37]-[38]).”
The question of adequacy of reasons was considered by the Court of Appeal in Ambulance Service of New South Wales v Daniel & Anor (2000) 19 NSWCCR 697. Beazley JA said the following at 699:
“3. The obligation of a judicial officer to give reasons for decisions is well established: see Housing Commission of New South Wales v Tatmar Pastoral Co Pty Ltd [1993] 3 NSWLR 378 at 385-386 (‘Tatmar’); Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 (‘Soulemezis’). The rationale behind the obligation to give reasons was identified by the court in Pettitt v Dunkley [1971] 1 NSWLR 376 at 388:
[A]n obligation, concerning the giving of reasons, lies upon any court, including the intermediate court of appeal, so far as it is necessary to enable the case properly and sufficiently to be laid before the higher appellate court.
4. There are also authoritative judicial statements as to the extent of the obligation. However, as this case demonstrates, judicial minds can differ as to whether a particular judgment satisfies the requirements to give reasons.
5. The extent of the obligation to give reasons was identified by Mahoney JA in Tatmar at 386:
… the basis of the decision of a trial Judge or of an intermediate court of appeal should be made apparent. This does not mean that the reasons given need be elaborate: an elaborate argument may not require an elaborate answer. Reasons need to be given only so far as is necessary to indicate to the parties why the decision was made and to allow them to exercise such rights as may be available to them in respect of it.
6. Mahoney JA returned to the question of what will constitute adequate reasons in Soulemezis. He stated at 273:
There is, I think, no formula the application of which to the instant case will indicate what, in that case, a judge must do. Where, in the decision of an ordinary dispute, reasons are necessary, they are necessary because of the expectation that, being a judicial decision, a sufficient explanation will be given of why the order was made. And, in my opinion, it will ordinarily be sufficient if – to adapt the formula used in a different part of the law: see R v Associated Northern Collieries (1910) 11 CLR 738 at 740 – by his reasons the judge appraises the parties of the broad outline and constituent facts of the reasoning on which he has acted.
7. McHugh JA added at 280:
If an obligation to give reasons for a decision exists, its discharge does not require lengthy or elaborate reasons: Ex parte Powter; Re Powter (1945) 46 SR (NSW) 1 at 5; 63 WN 34 at 36. But it is necessary that the essential ground or grounds upon which the decision rests should be articulated. In may cases the reasons for preferring one conclusion to another may need to be given: Wright v Australia Broadcasting Commission (at 701, 713). In Iveagh (Earl) v Minister for Housing and Local Government [1964] 1 QB 395, Lord Denning MR, speaking of a Minister’s duty under the Tribunal and Inquiries Act 1958 (UK) to furnish ‘reasons for the decision’, declared (at 410) that;
‘… The whole purpose of the enactment is to enable the parties and the courts to see what matters he has taken into consideration and what view he has reached on the points of fact and law which arise.’
8. However, the courts have been astute to point out, (per Mahoney JA in Soulemezis at 271) that:
… the law does not require that a judge make an express finding in respect of every fact leading to, or relevant to, his final conclusion of fact; nor is it necessary that he reason, and be seen to reason from one fact to the next along the chain of reasoning to that conclusion.”
The employer relied specifically upon the Court of Appeal decision in McIlvain v Council of the Shire of Gunnedah CA 40555/97 [1998] NSWSC 447 (2 October 1998). The relevant passage appears in the judgment of Sheller JA at 5:
“The failure by the trial judge to give reasons for holding that the appellant was not a deemed worker is an error or law; Pettitt v Dunkley [1971] 1 NSWLR 376. As McHugh JA said in Soulemezis v Dudley (Holdings) Pty Limited [1987] 10 NSWLR 247 at 280 a superior court, considering the decision of an inferior tribunal, should not be left to speculate from collateral observations as to the basis of a particular finding. It is necessary that the essential ground or grounds upon which the decision rests should be articulated and the reasons given for preferring one conclusion to another. In the present case that judicial function has not been performed.”
The reasons given by the Arbitrator in this matter are at page 34 and following. The Arbitrator firstly noted that the township in which the worker resides was in a rural area with no industry except perhaps a Post Office. The Arbitrator then dealt with the question of dependency. The Arbitrator referred to the Medical Assessment Certificate recording a history that the worker had experienced intermittent low back pain since approximately 1997 and 1998. At one stage the pain had been such that he had to take one year off work. The Arbitrator found that the worker was shearing on 30 April 2002 with the employer when he suddenly developed severe low back pain. Since that time he had not been able to work except for one attempt with a Des Sullivan at Molong. The Arbitrator then dealt briefly with the treatment received by the worker. He noted that the treating surgeon, Dr McDowell, in December 2003 had suggested that the worker should try to get back to work. The Arbitrator noted that although surgery may have released the radicular symptoms which the worker had, those symptoms appeared to have returned. He noted the opinion of Dr Guerin, the worker’s general practitioner, that there had been no full post-operative improvement at all and further surgery was required.
The Arbitrator referred to the opinions of employer’s doctors, particularly Dr Matheson as being supportive of the case put on behalf of the worker. Dr Matheson on 5 April 2004 expressed the view that the worker’s problems were social in many ways in that he was without education and of modest intelligence with no ability to resume physical work because of his back. Dr Matheson thought he had no ability to resume other types of work because of intellect and education. He thought that if he were in the city it might be possible to find him a job as a car park attendant or console operator but this was very difficult in the country. Although the worker’s back was a degenerative disorder it would be impossible to divorce it from the nature and conditions of his work.
The Arbitrator made a finding that the worker was totally incapacitated and that the labour market reasonably accessible to him under section 40(3) was very limited, relying on what was said by Dr Matheson. The Arbitrator then turned to the ‘Mitchell’ formula under section 40 of the 1987 Act ( Mitchell v Central West Health Service (1997) 14 NSWCCR 526). He noted the employer’s submission that it was impossible to find a comparable rate in view of the Arbitrator’s decision as to deemed date of injury. He referred to the previous finding that the deemed date of injury for the lump sum claim was 6 November 2002 and after discussion of possible reconsideration held that that should be deemed to be the date of the injury and the date of the incapacity. The worker had what was classically known as a “shearer’s back” which had been deteriorating since 1997. The Arbitrator considered that the worker’s condition was properly labelled a disease of gradual onset [section 15] but had earlier referred to section 16 in relation to deemed date of injury. The Arbitrator then referred to the pleadings, said to be “nature and conditions of employment 2001-2002”. [The precise injury description to which I have earlier referred was in fact: “Injury to back. Disease of a gradual onset due to the nature and conditions of his employment”.]
The Arbitrator then turned to what he said was the first stage of section 40 and noted what had been said on behalf of the employer in relation to section 43(1)(e) and (f) of the 1987 Act. [These subsections relate to the computation of average weekly earnings in the case of a casual worker.]
It was common ground between the parties that the relevant award was the Federal Pastoral Award which is described as “the Shearer’s Award” from which the figure of $732.00 per week was obtained. Alternatively, taking records in relation to other shearers, it was possible to arrive at an average figure of $840.00 by multiplying their average weekly earnings by 32 weeks, being the lower of the two figures given by the worker for the total time that he would spend shearing in a year, then dividing it by 52. The Arbitrator found that comparable earnings were $800.00 per week. The Arbitrator then noted that he has been talking about section 40 which has no application because of the finding of total incapacity. He then indicates that the worker was entitled to the statutory rate for a worker with two dependent children and a dependent wife.
Turning to the claim for travel expenses, the Arbitrator said that he was satisfied that the method and treatment which the worker was undergoing was reasonable and necessary and therefore the travelling expenses incurred were payable by the employer.
The errors made in the Certificate of Determination dated 12 April 2006 are in my view firstly that the award was expressed to be pursuant to section 36 rather than section 37 of the 1987 Act, being in respect of a period of total incapacity after the first 26 weeks, and secondly that the figure of $17,925.60 was said to be the arrears of weekly compensation rather than the travel expenses as had been found by the Arbitrator. I will correct these in due course.
As I have earlier said the Arbitrator gave his reasons for decision ex tempore. It is unrealistic to expect that these will have the same precision as a reserved decision however the reasons should be logical and consistent. It is obvious from what I have set out in relation to the reasons given by the Arbitrator that there has been an element of confusion in the expression of the findings which he made and intended to make. In my opinion the reasons given are inadequate but that, of itself, is not sufficient to permit the employer to succeed. It is necessary in accordance with what was said by Hodgson JA in YG to enquire whether the decision involved error, that is, had the Commission exercised its jurisdiction in accordance with law. As Deputy President Fleming said in Matters, it is necessary to demonstrate the Arbitrator has failed to exercise his or her statutory duty to fairly and lawfully determine the application. Although I have said that in my opinion the reasons given by the Arbitrator are inadequate, if I were to determine the matter myself I would come to the same conclusions as did the Arbitrator and I will shortly set out hereunder how it is that I have come to that view.
Incapacity
Much was made by the employer at the hearing before the Arbitrator of the failure to make a claim for total incapacity. I have had regard to the documents lodged and the submissions made and I am unable to say that there is any substance in that submission. It has not, in my view, been pleaded as a case of partial incapacity. The figure of $500.00 initially claimed on a weekly basis is somewhat misleading. I was told by the worker’s solicitor that this was a nominal figure pending the obtaining of wage information. I have already referred to what was said by Dr Matheson. Dr Burgess, who saw the worker at the request of his solicitor, initially in July 2004 was of opinion that the worker could no longer work as a shearer and may benefit from involvement in a re-training program thus equipping him for a job more suitable to his disability.
When Dr Burgess saw the worker again in December 2005 he was told by the worker that his condition had worsened since Easter 2005 when he had noticed an increase in back pain and right sciatica. He was of the view that at the time he saw the worker he was totally incapacitated for employment and he went on to say: “Taking into account his education, training and experience I do in fact consider him to be essentially ‘unemployable’ and that his prognosis is somewhat gloomy”.
The employer relied on a functional assessment report of Ms Holden dated 10 November 2004 and a vocational assessment report of Ms Brennan dated 17 November 2004. As I have earlier indicated, both assessments took place on 8 November 2004. Ms Holden noted the ability of the worker to perform certain physical activities and the times for which he was able to do them. Ms Brennan obtained a history that the worker had completed Year 9 at Windsor High School in 1977 and had not obtained any subsequent qualifications. The worker was reportedly pessimistic about his chances of obtaining alternative employment. Ms Brennan expressed the view that the worker would not make a competitive candidate in the present labour market in view of his previous work experience, his transferable skills, interest and his interpersonal skills. However, with the successful completion of certain recommended programs she thought there may be suitable job options for the worker which were set out. These were:
· service station attendant/console operator;
· ticket seller;
· customer service/sales, and
· stock and station agent.
Ms Brennan noted the worker’s absence of motivation to locate alternative work. The worker was said to believe that he would be unable to return to work as it may exacerbate his back injury. Ms Brennan expressed the view that the worker had deficient literacy and numeracy skills, which would deem [sic] him uncompetitive in the external labour market, even for unskilled positions. The worker was allegedly unwilling to seek employment in Orange or Wellington.
The question of what is and what is not total incapacity has been considered by the Court of Appeal on a number of occasions. In Lawarra Nominees Pty Ltd v Wilson (1996) 25 NSWCCR 206, Mahoney P gave a decision upholding the finding of total incapacity by the trial judge and Handley and Powell JJA agreed with the President. His Honour relevantly observed at 213:
“28.The incapacity for work upon which the right to compensation depends is a physical incapacity for doing work in the labour market in which the employee was working or might reasonably be expected to work: see Arnotts Snack Products Pty Ltd v Yacob (1985) 155 CLR 171 at 177. That principle has been applied frequently by this court: see e.g. Holden v Toll Chadwick Transport Ltd (1987) 8 NSWLR 222 at 226-229. As the Arnott’s case illustrates, partial incapacity involves the physical incapacity for doing some but not all of such work.
29.Normally, a court in determining whether a worker is totally or partially incapacitated will, in a practical sense, ordinarily consider two questions: what is the relevant labour market, i.e. what work was the worker doing or could he reasonably be expected to do; and of that kind of work, what is he physically able to do.
30.In considering the second of these, it is necessary to bear in mind that what is in question is capacity or incapacity ‘for work’. The legislation is not concerned merely in the abstract with work or work capacities as such. It is concerned with the capacity to do work of a particular kind or kinds and in a context which will produce income. I do not wish by what I say to narrow the scope of the enquiry to be undertaken in the assessment of capacity or compensation. But in assessing whether a worker is wholly or partially incapacitated and to what extent, the Court will ordinarily not be concerned, for example, to determine in an artificial or theoretical situation what he could do if the work available to him would allow him to stand for a time, sit for a time, cease when the pain he suffers becomes unacceptable, and generally work as, in his condition, he would fairly wish to work. The Court does not, as it were, spell out according to the periods of time which could be spent at work in such a way and what he could do during those periods, the extent of his capacity for work. The exercise is, in my opinion, a more practical exercise. It involves the assessment of a capacity ‘for work’ having regard to the realities of the labour market in which he is to be engaged…”
The Court of Appeal returned to the question in Moran Health Care Services v Woods (1997) 14 NSWCCR 499. The decision of the Court was given by Mason P with whom Beazley JA and Grove A-JA agreed. The reasoning of Mahoney P in Lawarra was adopted in that case. However, the President dealt with the matter himself as follows (at 502):
“The expression [‘total incapacity’] is not defined in the Act. However, an authoritative point of reference is Ball v William Hunt & Sons Limited [1912] AC 496. There Lord Loreburn LC said (at 499):
‘In the ordinary and popular meaning which we are to attach to the language of this statute I think there is incapacity for work when a man has a physical defect which makes his labour unsaleable in any market reasonably accessible to him, and there is a partial incapacity for work when such defect makes his labour saleable for less than it would otherwise fetch.’
Lord Macnaghten described incapacity for work (at 501) as:
‘inability to earn wages or full wages as the case may be at the work in which the injured workman was employed at the time of the accident.’
These passages have been frequently cited with approval: see e.g. Thompson v Armstrong and Royse Pty Ltd (1950) 81 CLR 585 at 602; McGale v Glad (1981) 36 ALR 81 at 90; A J Bartlett Pty Ltd v Drenkovski (1982) 64 FLR 328 at 331.
In Arnotts Snack Products Pty Ltd v Yacob (1985) 155 CLR 171 at 177, Mason, Wilson, Deane and Dawson JJ said that: ‘incapacity for work’:
‘means a physical incapacity for actually doing work, resulting from injury (or disease) and that, subject to section 11 and section 13, compensation is awarded for that incapacity where it reduces the employee’s ability to sell his labour in the open market …’”
Handley JA in Cowra Shire Council v Quinn (1996) 13 NSWCCR 175 referred with approval to what had been said by Burke J in Mangion v Visy Board Pty Ltd (1992) 8 NSWCCR 175 at 180, namely:
“When assessing a capacity to earn under section 40(2) it is not sufficient to merely identify a particular potential avenue of employment and attribute the income from such a job as a man’s capacity to earn. Allowance must be made for the availability of work- availability not so much in the sense of a presently depressed labour market, but in the sense of the general availability in any labour market. A rarely available niche in the labour market which carries, perhaps, substantial remuneration, does not serve as a sole criterion of capacity to earn. A good proportion of the workforce are engaged in clerical or sales type occupations. They are avenues of employment with higher than average availability as far as the less physical types of work are concerned. To someone in Brewarrina or Mungindi there is little point in considering jobs such as console operator in a self-service garage or a lift-driver in a department store. Whether the man has the capacity to do such a job or not, it doesn’t constitute any part of his accessible labour market. One always seeks to assess the capacity to earn of this particular worker in his particular circumstances.”
In this case the worker has in my opinion no more than a capacity for work in the abstract. In order for him to be able to exercise this capacity he would require re-training and almost certainly relocation to a less remote place. As the Court of Appeal emphasised in the cases cited, the test is a practical test rather than a theoretical one. Accordingly, I am unable to accept that the Arbitrator erred in finding the worker totally incapacitated.
Date of Injury
The Arbitrator in this case accepted what had been found by Arbitrator Gurr in respect of the section 66 and 67 claims, that is, date of injury of 6 November 2002. The Arbitrator on the latter occasion appeared to be unaware that there can be a different date of injury for a claim for weekly payments and for a claim for lump sum compensation (Alto Ford Pty Ltd v Antaw (1999) 18 NSWCCR 246). The Arbitrator who determined the section 66 and 67 claims referred to the decision of the Court of Appeal in Stone v Stannard Bros Launch Services Pty Ltd [2004] NSWCCA 277. With due respect to that Arbitrator, in my view, the Court of Appeal in that case held that the relevant date of injury for a section 66 or 67 claim may be when such claim is made. This did not happen, in this case, until 19 October 2004. Nonetheless, it is clear, in my view, that there can be a different deemed date of injury in respect of a claim for weekly payments and, in this case, the relevant date is the last day on which the worker performed shearing work, namely 30 April 2002. Nothing in my view turns on this, apart from, perhaps, the question of section 60 expenses to which I will turn in due course.
Weekly Compensation
The Arbitrator in this matter, despite finding total incapacity, made no specific reference to the provision of section 37 of the 1987 Act. That section makes it necessary to determine both the worker’s average weekly earnings and current weekly wage rate. This was not done. The Arbitrator did, however, make a finding as to what the worker’s comparable earnings were, namely $800.00 per week. Section 37 provides that the weekly payment shall be 90% of the worker’s average weekly earnings, subject to the statutory maximum, and in addition payments in respect of a dependent wife and dependent children. These statutory amounts are generally varied twice yearly. However, the total weekly payment is not to exceed the current weekly wage rate determined in accordance with section 42. It may be that the Arbitrator mentally did the calculations referred to and determined that the statutory entitlement to compensation would not exceed the current weekly wage rate, however, it is difficult to say whether this happened or not.
In determining the current weekly wage rate in respect of a shearer, reference may be had to section 42(1)(c) of the 1987 Act and clause 10 of the Workers Compensation Regulation 2003. That clause makes specific reference to shearers bound by the Pastoral Industry Award 1965 under the Federal Act. A formula is prescribed by clause 10 for the purpose of section 42(1)(c), namely five times the daily rate in the award. The daily rate identified by the employer in its amended Wage Schedule is $146.50 and multiplying that by five gives the resultant figure of $732.50 which is the amount referred to by the Arbitrator as being the amount under the Shearers Award.
Section 43 of the 1987 Act deals with the computation of average weekly earnings. A number of rules are prescribed and, as I have earlier indicated, special provision is made for the calculation of average weekly earnings in respect of casual workers. These subsections were not relied on by the worker but were referred to by the employer. Section 43(1)(a) provides for the situation where there is a short period of employment so it is impracticable at the date of injury to compute the rate of remuneration. Regard may then be had to the average weekly amount during the twelve months previous to the injury which was being earned by a person in the same grade, employed at the same work, by the same employer or, a person in the same grade, employed in the same class of employment and in the same district. It will obviously be difficult in the case of this worker to calculate his average weekly earnings since it may be inferred that the amounts earned by him in the years preceding the injury would have been reduced by reason of increasing incapacity. The worker’s tax returns for the financial years ended June 1997, June 1998 and June 1999 showed earnings which average $240.36, $492.33 and $393.71 per week respectively.
The High Court in Fisher v Hebburn Limited (1960) 105 CLR acknowledged the impossibility of calculating weekly payments in the case of a compensable disease where there was a deemed date of injury many years after the worker had ceased work by reason of a non-compensable disease. Kitto and Menzies JJ held that the trial judge was entitled to take into account the amount of average weekly earnings during the last twelve months of actual employment. I think by analogy it is permissible to take account of what the worker would have been earning uninjured even if that amount relates to a period prior to employment by the employer in this case.
From the various records produced by the employer it is possible to make a number of calculations. The worker was employed for periods in 2001 during which over 18 days he earned a total sum of $3,799.73. This gives a daily average of $211.00 approx. or $1,055 per week.
In respect of other shearers employed, Messrs Skelly, Carney and Mascord, they earned various sums in the period 5 to 7 July 2004 and 16 to 13 September 2004. The daily average in respect of those shearers is, I calculate, $204.00 or $1,020 per week.
Based on the calculations contained in a letter from the employer’s then solicitors dated 28 June 2005, there were four shearers employed by the employer between 1 July 2004 and 30 September 2004 for a total of nine working days. The total wages paid to them were $6,749.86. On my calculations this gives a daily rate per shearer of $187.49. If the worker’s evidence be accepted that he would work on average work 32 weeks a year (and this is the lower of the two estimates which he made), on my calculations this gives an average over 52 weeks of $576.89 per week.
A calculation was done by counsel appearing on behalf of the worker which took the worker’s evidence of shearing 140 sheep per day at the rate of $195.95 per hundred, giving a daily rate of $274.00 or $1,370 per week. If this is multiplied by 32 and divided by 52, this gives a figure of $844.00 per week which was the figure submitted to the Arbitrator. The Arbitrator took a figure of $800.00 as being that of comparable earners or the amount which the worker would have been able to earn uninjured. I am not persuaded that he erred in doing so and I think that that figure may be regarded as the worker’s average weekly earnings.
I turn now to the actual weekly compensation awarded to the worker for the periods involved. This may be expressed as follows:
Period
Worker
Dependent Wife Two Dependent Children Total
15/07/05-30/09/05 $334.10 $ 88.10 $140.80 $ 563.00 01/10/05-31/03/06 $340.90 $ 89.90 $143.70 $ 574.50 01/04/06-30/09/06 $347.90 $ 91.70 $146.60 $ 586.20 01/10/06- to date $354.40 $ 93.40 $149.30 $ 597.10
Section 37, as I have earlier said, provides for the amount of weekly payments during a period of total incapacity for work after the first twenty-six weeks of incapacity. The amount payable in respect of the worker is 90% of the worker’s average weekly earnings but not exceeding the statutory amount. Ninety percent of the average weekly earnings as found at $800.00 per week or indeed of any of the alternative calculations done by me is more than the statutory amount and, accordingly, the amounts payable in respect of the worker himself are as set out in the column above. The total weekly payment is not to exceed the worker’s current weekly wage rate which I have found to be $732.50. (Section 37(2)) The total payment does not at any time exceed the current weekly wage rate and accordingly, in my view, the award should be as I have specified.
Travel Expenses
On 23 February 2006 the worker’s solicitors applied to admit late documents being, among other things, a schedule of travel expenses and a copy of a log book completed by the worker. The claim made was from 28 June 2002 to 13 March 2006. It related to the worker travelling regularly from Stuart Town to Wellington in order to receive Methadone medication. The distance involved was said to be 84 kilometres return. At the hearing before the Arbitrator it was submitted by the employer that the treatment was reasonably necessary for a pre-existing condition but not following the injury found by the Arbitrator on the section 66 and 67 claims. The Arbitrator in this case was satisfied that the Methadone treatment was reasonable and necessary and that the travelling expenses incurred were payable by the employer. This is, in my opinion, a perfectly correct statement given the somewhat artificial operation of the disease provisions in the 1987 Act. The object of the legislation is to provide certainty and to avoid disputes between successive employers in the case of disease (see Grate Lace Pty Ltd t/as Grate Lace Bricklaying Co v Theiss Watkins White (Constructions) Pty Ltd & Ors (1995) 12 NSWCCR 365 (‘Grate Lace’)). Kirby P expressed the objects of section 15 in the 1987 Act to be (at 368):
“- to avoid unnecessary litigation;
- to simplify the assignment of liability;
- to remove the highly disputatious debate about “true” causation, and
-to fix the last relevant employer with the primary liability (subject to the limited contribution right provided in section 15(2)).”
His Honour said that it was an error on the part of the trial judge to endeavour to return to the assignment of liability according to the notion of true causation. I am not persuaded that the Arbitrator erred in ordering the employer in this case to pay the travel expenses. In my opinion, the relevant date of injury was, as I have earlier said, the date when the worker last performed shearing work, namely 30 April 2002.
On appeal it was sought to be argued that the question of travel expenses had been determined in the prior proceedings and could not be the subject of an award in these proceedings. This point had not been raised in the reply filed or in submissions before the Arbitrator. The Statement of Reasons of the Arbitrator who determined the section 66 and 67 claims contains this statement (at [24] ):
“I do not accept on the evidence before me that his Methadone addiction arises from his loss or impairment arising out of the injury. Medical evidence relating to his entry into that program, which was prior to the claimed date of injury, could have been available but was not brought and, in the absence of that evidence, I am unable to find this a significant factor.”
I enquired of the parties to the appeal whether the travel expenses had been claimed in the former proceedings and was advised by the worker’s solicitor that, to the best of his recollection, there was no such claim made and the comment of the Arbitrator related to the appropriate figure under section 67 of the 1987 Act only. In Cubic Interiors Pty Ltd v Basic [2006] NSWWCCPD 293, Acting Deputy President Snell dealt with a similar situation and there cited some relevant authorities, namely University of Wollongong v Metwally (No. 2) (1985) 60 ALR 68 (‘Metwally‘) and Department of Corrective Services v Evans [2005] NSWWCCPD 58. As the High Court said in Metwally (at 71):
“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 has 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.”
There is an exception to the principle in the case of a point, usually of law, that could not possibly have been met by further evidence. This is not such a case. If it was intended by the employer to rely on this argument then, in my view, it ought to have been pleaded and appropriate submissions made to the Arbitrator. This was not done. In the circumstances, I do not think that this case is so exceptional that leave should now be granted to raise this matter. In any event, I am not satisfied that in the prior proceedings there was a claim made for travel expenses. If the employer wished to prove that this was the case, steps should have been taken to put evidence in support of this before the Arbitrator.
DECISION
Paragraphs 1, 2 and 3 of the decision of the Arbitrator dated 12 April 2006 are confirmed.
Paragraphs 4 and 5 of the decision of the Arbitrator dated 12 April 2006 are revoked and the following paragraphs are inserted in their place:
“4.There will be an award in favour of the applicant pursuant to section 37 of the Workers Compensation Act 1987 for a worker with a dependent wife and two dependent children as follows:
15 July 2005 to 30 September 2005 - $563.00 per week;
1 October 2005 to 31 March 2006 - $574.50 per week;
1 April 2006 to 1 October 2006 - $586.20 per week, and
1 October 2006 to date and continuing - $597.10 per week as adjusted.
5.The respondent is to pay the worker’s travel expenses as particularised in document ‘R’ in the sum of $17,925.60 pursuant to section 60 of the Workers Compensation Act 1987.
6.The respondent is to pay the applicant’s costs as agreed or assessed.”
COSTS
The appellant employer has been unsuccessful in the appeal and, accordingly, it is to pay the respondent worker’s costs of the appeal.
Anthony Candy
Acting Deputy President
28 February 2007
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF ANTHONY CANDY, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
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