Lavorato v Vasan Nominees Pty Ltd

[2005] NSWWCCPD 122

WORKERS COMPENSATION COMMISSION

APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR

CITATION:Lavorato v Vasan Nominees Pty Ltd [2005] NSWWCCPD 122

APPELLANT:  Rosa Lavorato

RESPONDENT:  Vasan Nominees Pty Ltd

INSURER:Allianz Australia Workers’ Compensation (NSW) Ltd

FILE NUMBER:  WCC 7510-03

DATE OF ARBITRATOR’S DECISION:          11 October 2004

DATE OF APPEAL DECISION:  26 October 2005

SUBJECT MATTER OF DECISION:                Adequacy of reasons

PRESIDENTIAL MEMBER:  Acting Deputy President Robin Handley

HEARING:On the papers

REPRESENTATION:  Appellant: Beilby Poulden Costello, Lawyers

Respondent: Goldbergs, Solicitors

ORDERS MADE ON APPEAL:  The decision of the Arbitrator dated 11 October 2004 is revoked and the matter is remitted to the Registrar for referral to a different arbitrator for determination of outstanding issues between the parties.

The Respondent, Vasan Nominees Pty Ltd, is to pay the Appellant, Mrs Lavorato’s costs in this appeal as agreed or assessed.

BACKGROUND TO THE APPEAL

1. On 22 October 2004, Rosa Lavorato sought leave in the Workers Compensation Commission (‘the Commission’) to bring an appeal against the decision of an arbitrator dated 11 October 2004. Mrs Lavorato, who was born on 3 February 1960 and is aged 45, is married with three children.

1. The Respondent to the appeal is Vasan Nominees Pty Ltd, the company under which Drs M Srinivasan and S Zaman conduct their medical practice. Mrs Lavorato has been employed in this practice as a part-time secretary/practice manager and medical receptionist from about 1985. In about 1998/1999, she began experiencing pain and discomfort in her right wrist and elbow when performing heavier tasks at work. Dr Srinivasan referred her for further investigation and treatment in June 1999 and, from August 1999, she was certified unfit for work at various times and also worked reduced hours. The treatment Mrs Lavorato received included physiotherapy and also counselling from a clinical psychologist.

1. In August 1999, Mrs Lavorato lodged a compensation claim nominating June 1999 as the date of injury. Initially, the workers compensation insurer accepted liability and Mrs Lavorato received weekly benefits and medical expenses. However, by letter dated 3 May 2002, the then insurer, Allianz Australia Workers’ Compensation (NSW) Ltd (‘Allianz’), notified Mrs Lavorato that liability in respect of a muscular strain injury would cease on 3 May 2002 because her present condition was not related to her work injury. By letter dated 8 August 2002, her solicitors sought further weekly benefits from Allianz. Mrs Lavorato continued to work in the medical practice on a reduced part-time basis. On 5 March 2003, her solicitors lodged an ‘Application to Resolve a Dispute’ with the Commission in respect of her claim for weekly benefits (matter number WCC 7510-03).

1. By letter dated 18 November 2002, Mrs Lavorato’s solicitors had also notified her employer of her intention to claim lump sum benefits under the Workers Compensation Act 1987 (‘the 1987 Act’). On 23 January 2003, her solicitors lodged an ‘Application to Resolve a Dispute’ with the Commission in respect of her claim for lump sum compensation (matter number WCC 6074-03).

1. On 19 May 2003, following a teleconference with the parties, an arbitrator directed that the two matters be consolidated and referred Mrs Lavorato to an Approved Medical Specialist (‘AMS’) for medical assessment. However, Mrs Lavorato underwent surgery shortly afterwards and her solicitors sought a further teleconference which was conducted on 4 August 2003. The arbitrator revoked his referral to an AMS until such time as Mrs Lavorato’s condition had stabilised. A further teleconference was conducted by the arbitrator on 7 October 2003 when he referred Mrs Lavorato for AMS assessment by an orthopaedic specialist. On 21 April 2004, Mrs Lavorato was examined by Dr Ian Barrett. His Medical Assessment Certificate was issued on 16 July 2004 assessing Mrs Lavorato’s degree of permanent impairment at 0%. In relation to Mrs Lavorato’s claim for lump sum compensation, ppursuant to section 326(1) of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’), the degree of permanent impairment of the worker specified in the Certificate is “conclusively presumed to be correct”.

1. A different Arbitrator conducted a teleconference with the parties on 11 August 2004 in relation to her claim for weekly benefits. On 31 August 2004, conciliation having proved unsuccessful, the Arbitrator conducted an arbitration hearing, following which, on 11 October 2004, she made the determination set out below.

THE DECISION UNDER REVIEW

1. The Certificate of Determination, dated 11 October 2004, records the Arbitrator’s orders as follows:

“1. Award for the Respondent.
2. No order as to costs.”

1. In her ‘Statement of Reasons for Decision’, the Arbitrator stated:

“It initially appeared that the Applicant might be suffering from carpal tunnel syndrome in her right wrist. A successful endoscopic carpal tunnel release was carried out. However rather than improve, it appears that the Applicant’s symptoms multiplied, became more widespread and got worse. The pain is of indeterminate cause. The Applicant has been unable to show that any pain she is suffering is related to her work.”

1. The Arbitrator concluded that Mrs Lavorato did not receive an injury arising out of or in the course of her employment with Drs Srinivasan and Zaman and that her employment was not a substantial contributing factor to her injury.

1. I note there is no transcript of the hearing, during which Mrs Lavorato gave unsworn oral evidence (paragraph 8 of the Statement of Reasons), and reports of Dr Srinivasan dated 21 March 2003 and 13 August 2004, referred to by the Arbitrator in her Statement of Reasons as being in evidence before the Commission (paragraph 9 of the Statement of Reasons), are missing from the file and could not be located by Mrs Lavorato’s solicitors in answer to a Direction issued by the Commission.

ISSUES IN DISPUTE

1. The issues in dispute identified by the Arbitrator were, first, whether Mrs Lavorato suffered an injury arising out of or in the course of her employment by Vasan Nominees, second, whether her employment was a substantial contributing factor to any such injury, third, whether she was totally or partially incapacitated for work as a result of that injury, fourth, for what periods was she incapacitated for work, and fifth, what was her entitlement to weekly compensation, if any, in respect of any periods of incapacity.

ON THE PAPERS REVIEW

1. 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.”

1. I have had regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submissions by the parties. Mrs Lavorato’s solicitors submit that many of the grounds of appeal involve complex questions of law and it is appropriate for there to be oral submissions by the parties for the assistance of the Commission. Vasan Nominees submits the matter can quite adequately be determined ‘on the papers’.

1. Having considered these submissions, 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

1. 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 appeal was first lodged within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act. With regard to section 352(2), the amount of weekly compensation at issue exceeds $5,000, and comprises 100% of the amount claimed, the Arbitrator having made an award in favour of Vasan Nominees in the decision appealed against. Accordingly, I am satisfied that the section 352 threshold has been met, and I grant leave to appeal.

FRESH EVIDENCE

1. Fresh evidence on appeal is governed by section 352(6) of the 1998 Act, which states:

“(6)     Evidence that is fresh evidence or evidence in addition to or in substitution for the evidence received in relation to the decision appealed against may not be given on an appeal to the Commission except with the leave of the Commission.”

1. Practice Direction No.6 sets out the process for seeking leave of the Commission to give ‘new evidence’ on appeal. It provides as follows:

“New Evidence

Where a party seeks leave to give new evidence in relation to the decision appealed against, that party must serve a copy of the new evidence on the other parties to the dispute when serving the Application or Opposition.

In general, the Commission will allow new evidence to be introduced only where it can be demonstrated that the new evidence could not reasonably have been obtained by the party and tendered in proceedings before the Arbitrator and that failure to allow the new evidence would cause a substantial injustice in the circumstances of the individual case.”

1. Practice Direction No.6 also provides that if new evidence is sought to be relied upon, the Application or Opposition to the Appeal must contain:

“ -a schedule of the new evidence,
  -a copy of the new evidence,
  -a brief outline of the new evidence and the reasons why it was not given in the
   proceedings before the Arbitrator, and
  -submissions why the new evidence should be admitted.”

1. Mrs Lavorato’s solicitors seek leave to tender a copy of her claim form for workers compensation dated 18 August 1999. No explanation has been provided either for the leave sought or as to why the claim was not tendered in the proceedings before the Arbitrator. There is also no evidence to suggest that failure to allow the new evidence would cause a substantial injustice to Mrs Lavorato. Indeed, other documentation verifies that Mrs Lavorato nominated a date of injury of 27 June 1999 (for example, Allianz’s letter dated 3 May 2002 notifying Mrs Lavorato of the cessation of liability). Thus, I deny leave to tender the claim form.

SUBMISSIONS

1. Mrs Lavorato’s solicitors submit that Vasan Nominees is estopped from denying Mrs Lavorato received an injury arising out of or in the course of her employment by reason of the payments of compensation made in the period prior to notification of the cessation of liability from 3 May 2002. Alternatively, they submit Vasan Nominees’ acceptance of liability for a period exceeding one year raises a strong presumption that Mrs Lavorato did receive such an injury. Mrs Lavorato’s solicitors submit further that the Arbitrator erred in finding that Mrs Lavorato did not suffer an injury arising out of or in the course of her employment by Vasan Nominees and that her employment was not a substantial contributing factor to her injury when those matters were not in issue in the proceedings. They also submit that the Arbitrator failed to have regard to the AMS, Dr Barrett’s comments in relation to Mrs Lavorato’s incapacity for work and, more generally, they submit that the Arbitrator failed to give adequate reasons for her decision and thereby made an error of law.

1. Vasan Nominees submits that the Arbitrator did not err in her findings and had proper regard to Dr Barrett’s medical opinion. While Vasan Nominees initially accepted liability in respect of Mrs Lavorato’s condition, “liability was formally declined outright on 3 May 2002 on the basis that there was no ongoing work related condition”. Thus, the Arbitrator did not err in her decision and the appeal should fail.

EVIDENCE

1. Mrs Lavorato provided a statement dated 20 December 2002. She stated that she worked six half days a week as secretary/practice manager and medical telephonist for Dr Srinivasan and Dr Zaman, sharing this position with another lady who performed the same tasks during the remaining hours when the surgery was open. Mrs Lavorato said she first experienced a burning sensation on the outside of her right elbow in 1998 when performing heavy tasks at work and, in 1999, also began to experience pain in her right wrist. Although she had previously told Dr Srinivasan of the pain in her elbow, in June 1999 she formally consulted him and he referred her for nerve conduction studies and physiotherapy. From 10 August 1999, Dr Srinivasan certified her as unfit for work at various times and, from 30 August 1999, Mrs Lavorato began to work reduced hours. Her hours varied from time to time according to her condition. She continued to have treatment for her condition including physiotherapy, and also had treatment and medication for depression.

1. Mrs Lavorato said she continues to work 15 hours a week (five hours a day on three days) in her position. She occasionally suffers “paraesthesia in the wrist and right fingers of her right arm” but also suffers constantly “from a dull pain” in her neck, shoulder, upper arm and forearm which is aggravated by any manual activity. She feels frustrated and depressed because of the pain and its effect on her life.

1. Dr Lionel Chang, Surgeon, provided a report to Dr Srinivasan dated 2 June 2003. He performed a “bilateral endoscopic carpal tunnel release” on Mrs Lavorato on 29 May 2003. While initial indications suggested that typical carpal tunnel syndrome symptoms were relieved following surgery, the longer term prognosis remained uncertain.

1. Dr Richard Evans, Physician, provided reports dated 6 November 2002 and 21 August 2003. In the earlier report, he found permanent impairment of Mrs Lavorato’s neck (12%) and loss of efficient use of the right arm (12%) and, in the later report, he also found loss of efficient use of the left arm (9%), all the assessments “expressed as a percentage of ‘a most extreme case’”. He attributed the neck and right arm disabilities to the nature and conditions of her work between 1999 and the time of his report of 21 August 2003, and the left arm disability he attributed to the nature and conditions of her work over the year prior to the 21 August 2003 report. In his later report, Dr Evans found the endoscopic carpal tunnel release procedures had corrected the numbness and tingling in Mrs Lavorato’s wrists but had provided little other benefit. He said the assessment was “a very difficult one, because of the now very widespread symptoms, the lack of much corroborative evidence of damage, and the evidence of overaction”, and found her fit for light work with restrictions.

1. Dr Srinivasan, in a report dated 1 September 2003, stated that Mrs Lavorato’s paraesthesia had improved since carpal tunnel release but she was still complaining of pain in her neck, both shoulders, both elbows and both wrists. He doubted there would be any improvement in her condition and was of the opinion that she would not be able to extend her working hours due to consistent pain. He considered her prognosis to be poor.

1. The other specialist medical reports predate Mrs Lavorato’s carpal tunnel release. Dr Paul Teychenne, Neurologist, in a report dated 21 March 2003, recommended treatment of her bilateral carpal tunnel syndrome. Dr Philip Haynes, Occupational Physician, who examined Mrs Lavorato at the request of Vasan Nominees, in a report dated 27 February 2002, found no evidence of any genuine medical condition and considered her fit for pre-injury duties on a full-time basis. Dr James Bodel, Orthopaedic Surgeon, who also examined Mrs Lavorato for Vasan Nominees, and prepared two reports dated 17 February 2003, while finding “no objective sign of any ongoing impairment of function in the neck”, found:

“an 8% overall permanent loss of efficient use of the right arm at or above the elbow, incorporating a permanent loss of efficient use of the right arm below the elbow including the hand. Clinically, three eighths of this is due to localised pathology in the right elbow and five eighths due to localised pathology in the right shoulder. Clinically, this has arisen as a result of the nature and conditions of the patient’s work at Vasan Nominees Pty Limited.”

1. As mentioned above, the AMS, Dr Barrett assessed Mrs Lavorato’s degree of permanent impairment at 0%. However, Dr Barrett gave the following answers to specific questions posed:

“• Is the applicant incapacitated for work? If so, from what date?

From the information available, Mrs Lavorato began to experience symptoms of right lateral epicondylitis in 1999. Her symptoms worsened to the extent that she was unable to continue certain aspects of her previous work as a practice manager. She found it difficult to carry out repetitive filing and Medicare card swiping duties. Her hours of duty were decreased in August 2000 to allow her to avoid the repetitive work. In my opinion, this is a reasonable reflection of her clinical situation at that stage. At the present time, she is working for five hours a day, three days a week. She avoids repetitive filing and Medicare swiping duties as much as possible, however, this is an integral part of her job.

• Is the applicant incapacitated for work in the future?

The applicant is partially incapacitated for work in the future as the result of continuing right arm pain. She is fit to continue working for five hours a day, three days a week rather than her previous hours of approximately twenty-four hours a week. The reason that she is unable to continue her full hours is as a result of her inability to carry out the Medicare card swiping work and the repetitive filing work. If her work was purely as a telephonist or receptionist without these duties, she would be able to work for twenty-four hours a week.”

DISCUSSION AND FINDINGS

1. The role of the Presidential Member on appeal is to review the Arbitrator’s decision as a whole. The review is not a rehearing. In this case, Ms Lavorato must demonstrate that the decision of the Arbitrator is affected by some legal, factual or discretionary error (Allesch v Maunz (2000) 203 CLR 172; The King Island Company Limited v Deery [2005] NSW WCC PD 1) in order to enliven the Presidential Member’s power to interfere with the Arbitrator’s decision pursuant to section 352(7) of the 1998 Act.

1. Whether or not Mrs Lavorato suffered an injury arising out of or in the course of her employment (and thus within the section 4 definition of ‘injury’) is not clear to me on the evidence reviewed. While Dr Haynes stated unequivocally that there was no evidence of any genuine medical condition, the evidence of the other doctors who examined Mrs Lavorato suggests that she may have suffered an injury to her right wrist and elbow arising out of or in the course of her employment by Vasan Nominees. For example, both Dr Evans and Dr Bodel (who examined Mrs Lavorato at the request of Vasan Nominees) found the loss of efficient use of her right arm to be due to the nature and conditions of her employment. The AMS, Dr Barrett, although expressing the opinion that the pain in her arms was of “indeterminate cause” and that “there is no objective evidence of organic pathology”, nevertheless described the difficulty Mrs Lavorato experiences in performing certain aspects of her work, particularly Medicare card swiping work and repetitive filing work.

1. I note Mrs Lavorato’s solicitors’ submission that Vasan Nominees’ acceptance of liability for a significant period from after the accident in June 1999 until 3 May 2002 raises a strong presumption that she did receive such an injury. Vasan Nominees acknowledge that liability was initially accepted, but submit that “liability was formally declined outright on 3 May 2002 on the basis that there was no ongoing work related condition”. In my view, whether Mrs Lavorato suffered an injury arising out of or in the course of her employment (within the definition of ‘injury’ in section 4 of the 1987 Act) must be reconsidered. So too must the issue of whether her employment was “a substantial contributing factor to the injury” (as required by section 9A of the 1987 Act). If the answer to those questions favours Mrs Lavorato, then an important issue is whether at the time of cessation of liability on 3 May 2002, she had any ongoing injury arising out of the nature and conditions of her employment and whether she was incapacitated for work as a result. This was not something considered by the Arbitrator because of her finding that Mrs Lavorato “did not receive an injury arising out of or in the course of her employment”.

1. One of the difficulties in this case is that a number of the medical reports pre-date the “bilateral endoscopic carpal tunnel release” surgery performed on Mrs Lavorato on 29 May 2003. Another is the lack of a transcript of the hearing and the missing reports of Dr Srinivasan referred to in paragraph 10 above. Finally, there is the inadequacy of the Arbitrator’s Statement of Reasons in terms of the discussion of the medical evidence and the basis for her finding that Mrs Lavorato “has been unable to show that any pain she is suffering is related to her work”. For example, as Mrs Lavorato’s solicitors point out, the Arbitrator fails to mention Dr Barrett’s comments in relation to Mrs Lavorato’s capacity for work quoted in paragraph 28 above.

1. Generally as to the adequacy of reasons required for such a decision, I am guided by the decision of Deputy President Fleming in Mayne Health Group t/as Nepean Private Hospital v Sarah Sandford [2002] NSW WCC PD 6 (‘Mayne’), at paragraphs 45 to 48. The Deputy President said Arbitrators have a statutory obligation to provide adequate reasons for decisions and that failure to do so constitutes an error of law. She stated, at paragraph 46:

   “The standard by which the ‘adequacy’ of reasons is determined is relative to the nature and context of the decision made and the decision-maker.”

However (paragraph 48), to succeed on the ground of inadequate reasons requires:

“that the inadequacy sufficiently demonstrates that the Arbitrator has failed to exercise his or her duty to fairly and lawfully determine the application.”

(See YG & GG v Minister for Community Services [2002] NSWCA 247.)

1. The Arbitrator’s statutory duty, pursuant to section 294(2) of the 1998 Act, is to attach a brief statement to the Certificate of Determination setting out the Commission’s reasons for the determination. Rule 73 of the Workers Compensation Commission Rules 2003 requires that a statement of reasons is to include:

“(a) the findings on material questions of fact, referring to the evidence or other material on which those findings were based, and
(b) the Commission’s understanding of the applicable law, and
(c) the reasoning processes that lead the Commission to the conclusions it made.”

1. In my view, the Arbitrator’s Statement of Reasons for her decision was inadequate and did not comply with Rule 73 in so far as the Statement did not include a proper discussion of the evidence or of the reasoning processes that lead the Arbitrator to her conclusion. She failed to exercise her duty to fairly and lawfully determine the application and thereby made an error of law.

DECISION

1. The appropriate course is for me to exercise the Commission’s powers under section 352(7) of the 1998 Act to revoke the Arbitrator’s decision and remit the matter to the Registrar for referral to a different arbitrator for determination of outstanding issues between the parties.

COSTS

1. The Respondent, Vasan Nominees Pty Ltd, is to pay the Appellant, Mrs Lavorato’s costs in this appeal as agreed or assessed.

Robin Handley

Acting Deputy President  

26 October 2005

I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF ROBIN HANDLEY, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.

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