Ledingham v The Glen Cotton Company Pty Limited
[2009] NSWWCCPD 15
•11 February 2009
| WORKERS COMPENSATION COMMISSION | |||||
| DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR | |||||
| CITATION: | Ledingham v The Glen Cotton Company Pty Limited [2009] NSWWCCPD 15 | ||||
| APPELLANT: | Glenn Clifford Ledingham | ||||
| RESPONDENT: | The Glen Cotton Company Pty Limited | ||||
| INSURER: | Gallagher Bassett Services | ||||
| FILE NUMBER: | A1- 5387/08 | ||||
| DATE OF ARBITRATOR’S DECISION: | 7 October 2008 | ||||
| DATE OF APPEAL DECISION: | 11 February 2009 | ||||
| SUBJECT MATTER OF DECISION: | Section 40 of the Workers Compensation Act 1987; calculation of probable earnings and ability to earn. | ||||
| PRESIDENTIAL MEMBER: | Acting Deputy President Deborah Moore | ||||
| HEARING: | On the papers | ||||
| REPRESENTATION: | Appellant: | McCabe Partners Lawyers | |||
| Respondent: | Moroney Lawyers | ||||
| ORDERS MADE ON APPEAL: | The decision of the Arbitrator, dated 7 October 2008, is revoked and the following decision is made in its place: 1.The Respondent is to pay to the Applicant weekly benefits pursuant to section 40 of the Workers Compensation Act 1987 for the following periods: | ||||
| · 28 October 2003 to 30 November 2003 at $ 100.00 per week; · 1 December 2003 to 26 February 2004 at $nil per week; · 27 February 2004 to 30 June 2004 at $100.00 per week; · 1 July 2004 to 6 August 2004 at $100.00 per week; · 7 August 2004 to 20 August 2004 at $ nil per week; · 21 August 2004 to 16 September 2004 at $100.00 per week; · 17 September 2004 to 25 September 2004 at $ nil per week; · 26 September 2004 to 2 October 2004 at $100.00 per week; · 3 October 2004 to 9 February 2005 at $ nil per week; · 10 February 2005 to 16 February 2005 at $100.00 per week; · 17 February 2005 to 30 June 2005 at $179.04 per week; · 1 July 2005 to 23 October 2006 at $145.06 per week, and · 24 October 2006 to date and continuing at $65.90 per week. 2. The Respondent is to pay the Applicant’s costs as agreed or assessed. 3. Credit to the Respondent for any payments made to date. The Respondent is to pay the Appellant’s costs of the appeal. | |||||
BACKGROUND TO THE APPEAL
On 4 November 2008, Glenn Clifford Ledingham (‘the Appellant / Mr Ledingham’) sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Workers Compensation Commission (‘the Commission’) against a decision dated 7 October 2008.
The Respondent to the Appeal is The Glen Cotton Company Pty Limited (‘the Respondent/ Employer’).
Mr Ledingham commenced employment with the Respondent as a cotton farm hand on 17 October 1999. His duties involved tractor driving, maintenance, shed and irrigation work.
On 7 February 2001, whilst carrying a drum of weed-killer up a ladder, he lost his balance and injured his back. He was off work for a period of time then resumed work on light duties before returning to his pre-injury duties full-time.
He eventually ceased work with the Respondent on 27 October 2003. He worked in a variety of jobs thereafter doing similar farm labouring work until February 2005, when he changed to more sedentary work. He remained in employment until July 2007, but has been unemployed since.
In 2004, Mr Ledingham brought proceedings in the Commission seeking lump sum compensation pursuant to the provisions of the Workers Compensation Act 1987 (‘the 1987 Act’). Those proceedings were settled in May 2005. Mr Ledingham received payment in respect of a 5% permanent impairment of his back, and a 6% loss of use of his sexual organs.
On 14 July 2008 he filed an ‘Application to Resolve a Dispute’ (‘the Application’) in the Commission seeking weekly benefits of compensation from 1 July 2001 to date and continuing (although Mr Ledingham remained at work with the Respondent until 27 October 2003).
The parties attended a conciliation/arbitration hearing on 24 September 2008. The Arbitrator found in favour of Mr Ledingham awarding him weekly benefits at various rates from 17 February 2005 to date and continuing.
It is from this decision that Mr Ledingham seeks leave to appeal.
THE DECISION UNDER REVIEW
The ‘Certificate of Determination’, dated 7 October 2008 records the Arbitrator’s orders as follows:
“1.That the Respondent pay the Applicant weekly benefits compensation pursuant to s40 of the Act:
a.For the period 17 February 2005 to 30 June 2005 the amount of $179.04 per week.
b.For the period 1 July 2005 to 23 October 2006 the amount of $145.06 per week.
c.For the period 24 October 2006 to date and continuing at the weekly amount of $65.90 per week.
2. That the Respondent pay the Applicant’s costs as agreed or assessed.”
ISSUES IN DISPUTE
The issues in dispute in the appeal identified by Mr Ledingham’s counsel are twofold: firstly, whether the Arbitrator erred in his calculation of Mr Ledingham’s probable earnings when determining the quantum of the award, and secondly, whether he erred in failing to award weekly benefits for the period between 28 October 2003 and 9 February 2005.
Discrepancies in Mr Ledingham’s evidence and his Wage Schedule make it difficult for me to determine the exact period challenged on appeal. The Arbitrator’s award commenced on 17 February 2005. Mr Ledingham said that he ceased a particular job on 16 February 2005 and commenced a new one on 17 February 2005. His Wage Schedule however discloses that he ceased the earlier job on 9 February 2005. Mr Ledingham’s solicitor also filed submissions with the appeal, which essentially repeated the submissions drafted by Counsel.
The Respondent submits that these amount to no more than a commentary without any evidentiary basis and should be ignored.
I have however considered those submissions, and in my view they simply reflect the issues raised by Counsel and do not advance the matters the subject of dispute. I should say however, that those submissions do not limit the challenge of the award to the period claimed by Counsel. Taking all the submissions as a whole, I understand that the challenge is primarily to the award during the period 28 October 2003 to 16 February 2005, and it is these dates I propose to consider on review.
There was no issue that Mr Ledingham suffered an injury within the meaning of section 4 of
the 1987 Act. Although the Respondent disputed that he had been partially incapacitated
since his injury, there was ample evidence before the Arbitrator for him to conclude that Mr
Ledingham “…has and continues to suffer from the affects of the injury…” (Statement of Reasons (‘Reasons’) at [19]).
ON THE PAPERS REVIEW
Section 354(6) of the Workplace Injury Management and Workers Compensation Act 1998 (‘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.”
LEAVE
Having regard to Practice Directions Numbers 1 and 6, the documents that are before me,
and the submissions by both parties that the appeal can proceed to be determined on the
basis of these documents, I am satisfied that I have sufficient information to proceed ‘on the
papers’, without holding any conference or formal hearing, and that this is the appropriate
course in the circumstancesBefore 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 lodged within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act and the monetary thresholds in section 352(2)(a) and (b) are met.
Leave to appeal is granted.
THE REVIEW PROCESS
The nature of the review process has been succinctly summarised by Deputy President Roche in a number of decisions, and recently in Universal Consultancy Services Pty Ltd v Datta [2008] NSWWCCPD 87 where he said as follows [16]-[18]:
“16. The Court of Appeal considered the nature of a ‘review’ under section 352 of the 1998 Act in Aluminium Louvres & Ceilings Pty Ltd v Zheng [2006] NSWCA 34 (2006) 4 DDCR 358 (‘Zheng’), where Bryson JA said at [38]:
‘A review is a different process to an appeal and the matters which may be considered and the manner in which they may be considered are somewhat wider. See Boston Clothing Co Pty Ltd v. Margaronis (1992) 27 NSWLR 580 at 584 (Kirby P). An attack, on review or otherwise, on an Arbitrator's discretionary decision in controlling procedure may be based on the test stated in House v. R (1936) 55 CLR 499 at 504 - 505; but that is not the only basis on which the Presidential member may act. The powers of a Presidential member on review are somewhat wider and extend to power to reopen consideration of a matter of which an Arbitrator has disposed; the manner in which the powers of the Presidential member are to be exercised is itself the subject of discretion of the Presidential member.’
17. McColl JA approved this passage in South Western Sydney Area Health Service v Edmonds (2007) 4 DDCR 421; [2007] NSWCA 16 at [134] (‘Edmonds’). To describe the relative weight and relevance of the expert evidence as “a discretionary decision which could only be disturbed on House v The King principles” was described by McColl JA as “an over-generalisation” (at [133]). Thus, on review, a Presidential member is not bound by an Arbitrator’s discretionary decision, but can reach his or her own conclusion.
18. The nature of a review was further considered by the Court of Appeal in State Transit Authority of New South Wales v Fritzi Chemler[2007] NSWCA 249; (2007) 5 DDCR 287 (‘Chemler’) where Spigelman CJ said at [28] and [30]:
‘28.The concept of a review on the merits is wider than the concept of an appeal in a judicial context. There is a well established line of authority on the use of the terminology of ‘review’ instead of ‘appeal’ with respect to the workers compensation system in this State which establishes the breadth of a review on the merits.
30.A Presidential member exercising a power to review a decision must decide whether the original decision is wrong or, as it is often put in the context of administrative appeals on merits, must decide what is the true and correct view. If s/he does so decide then s/he should substitute his or her own views, unless it is an appropriate case to remit. The power to remit is not constrained in the manner for which the Appellant contends.’”
These principles must be borne in mind in determining the appeal.
THE SUBMISSIONS
Mr Ledingham’s submissions
In addition to outlining the issues in dispute, Mr Ledingham submits:
a. Due to continuing symptoms and on the advice of his doctor, he ceased employment with the Respondent on 27 October 2003.
b. The Arbitrator found that this decision was reasonable.
c. Between 1 December 2003 and 9 February 2005 [sic-16 February 2005] he was employed in a series of labouring jobs.
d. After 17 February 2005 he no longer performed any labouring work.
e. An examination of his post-injury work history and wage records set out in an Amended Schedule of Earnings (pages 153-157 of the Application) reveals that the Arbitrator’s finding of probable earnings but for injury of $800.00 per week was incorrect.
f. That Schedule set out actual earnings at all times and the method by which they were calculated. There was no record available of his actual pay on a week-by-week basis. The calculation was made by reference to taxation and other records, and gross earnings were then divided by the number of weeks worked.
g. The Arbitrator’s failure to make an award during the period between 28 October 2003 and [16 February 2005] on the grounds that his income varied due to the availability of work, not his physical capacity, was incorrect.
h. The Arbitrator found that as at the date of injury he was earning $658.57 per week but found probable earnings were $800.00 per week, which were his post-injury earnings with the Respondent between 1 July 2003 and 27 October 2003.
i. The calculation of probable weekly earnings is a hypothetical exercise (see Australian Wire Industries Pty Limited v Nicholson (1985) 1 NSWCCR 50 per McHugh JA at 54 (‘Nicholson’)). In the present case, the application of a hypothetical figure was only necessary from 27 October 2003, since prior to that date, his earnings with the Respondent had not been diminished by reason of his physical incapacity.
j. The figure of $800.00 per week adopted by the Arbitrator as the probable weekly earnings was wrong for three reasons:
1.it was not reflective of his own economic performance in his job with the Respondent both pre-injury and post-injury;
2.no challenge was made by the Respondent to his Wage Schedule, and
3.no attempt was made by the Arbitrator to apply any index or increase to the $800.00 in the almost five years since October 2003.
k. As to the actual earnings during periods subsequent to his employment with the Respondent, because of the casual nature of much of that employment, his average earnings during the time he ceased with the Respondent (October 2003) and the time he commenced sedentary work (February 2005) were $492.32 per week.
l. The Arbitrator erred in determining that his income varied during this period, not because of his physical incapacity, but due to the availability of work.
m. The Arbitrator misapplied the principles in Arnott’s Snack Products Pty Limited v Yacob (1985) 155 CLR 171 (‘Yacob’) and Aitkin v Goodyear Tyre and Rubber Co(Aust) Ltd (1945) 62 WN (NSW) 233 (‘Aitkin’).
The Respondent’s Submissions
The Respondent submits that no errors were made by the Arbitrator and that his award should be confirmed. Specifically, the Respondent submits:
a.The Arbitrator’s determination was based upon Mr Ledingham’s own Wage Schedule, which clearly identified average weekly earnings in the period 1 July 2000 to 30 June 2001 as $658.57.
b.Mr Ledingham’s Counsel at the hearing made no contrary submissions.
c.This figure is irrelevant since the Arbitrator determined that it was not an accurate indication of probable earnings but for injury.
d.The Respondent did provide evidence of comparable and probable earnings in an ‘Application to Admit Late Documents’ filed on 17 September 2008, and admitted into the proceedings. Its figures were based on award rates since the Respondent ceased trading on 1 July 2004.
e.Mr Ledingham failed to adduce any evidence as to any restrictions in his working hours or conditions during the period October 2003 and February 2005.
f.The assessment of probable earnings of $800.00 per week was consistent with Mr Ledingham’s own Wage Schedule, which showed that at the time of his resignation from the Respondent in October 2003, he was earning an average of $800.00 per week. In the similar farm labouring work he performed between October 2003 and February 2005, he also earned approximately $800.00 per week.
g.This approach was consistent with that adopted by President Keating in Plumbers Supplies Cooperative Limited v Behnampirouz [2008] NSWWCCPD 47 (‘Behnampirouz’) where the facts were similar.
h.In circumstances where comparable earnings are not available on the basis that the Respondent has ceased trading, it is acceptable to rely on the available evidence. The determination of probable earnings of $800.00 per week was consistent with the available evidence.
i.Mr Ledingham’s Counsel did not oppose the Respondent’s submission before the Arbitrator that the most appropriate method was to assess his entire earnings with the Respondent to determine probable earnings, which resulted in the figure of $800.00 per week.
j.Mr Ledingham was certified fit to resume pre-injury duties in August 2001, and remained at those duties until he resigned in October 2003.
k.Mr Ledingham’s submissions on Nicholson appear to acknowledge that there was no loss prior to October 2003.
l.Mr Ledingham was able to earn at least $1028.46 per week post injury.
m.There is no justification to apply CPI increases as Mr Ledingham did in his Wage Schedule. See Whittaker v Abacus Security and Surveillance Pty Limited [2006] NSWWCCPD 86 (‘Whittaker’).
n.As to actual earnings post injury, in his statement of 2 June 2008, Mr Ledingham admitted that he could return to work earning $700.00 per week.
o.In the absence of any evidence that Mr Ledingham’s hours of work were restricted as a result of his physical incapacity it was open to the Arbitrator to find that earnings during this period varied due to the contractual nature of this work and its seasonal requirements.
DISCUSSION AND FINDINGS
The probable weekly earnings issue
According to the Wage Schedule filed by Mr Ledingham, at the time of his injury, he was earning $658.57 per week. That increased to $868.21 in the year 1 July 2001 to 30 June 2002. From 1 July 2002 to 13 May 2003, he earned $1028.46. His earnings dropped to $792.99 per week for the period 14 May 2003 to 30 June 2003, and thereafter he earned $800.00 per week until he resigned his employment with the Respondent.
In a statement dated16 May 2005, Mr Ledingham said that in December 2003 he commenced work with David Norris as a general farm labourer earning approximately $15.00 per hour .He said that he could not estimate an average weekly income as the hours and days worked fluctuated. He ceased that work in about July or August 2004. He then commenced similar work under a six month contract for Hugh Livingstone on his property at Moree. He ceased that work on 16 February 2005, and on 17 February 2005, he commenced work with Border Employment Service Training (‘BEST’) as an employment service officer. This was mainly a sedentary job, interviewing clients and assisting them with job placements. He earned $654.94 per week.
In a statement dated 2 June 2008, Mr Ledingham said that in about October 2006, he transferred to Network Employment and Disability Employment Consultants (‘Network’) performing similar work but with extra travelling. He said as a casual, he was paid an hourly rate of $23.00 per hour or $874.00 per week for a 38-hour week. A permanent employee, he said, would earn $722.00 gross per week
Mr Ledingham resigned from this position to take up a sales job in the Northern Territory. He earned an average of $400.00 per week but said that the horse flu outbreak severely impacted on his income, and he returned to Moree. He has been looking for work since. He also said that he could do the type of work he did at BEST and Network and earn “…somewhere in the vicinity of a gross income of $700.00 per week”
In his Wage Schedule, Mr Ledingham set out “actual earnings” and “probable earnings”. The latter amounts reflected a CPI increase. From 1 December 2003 to 16 February 2005, his income ranged from $251.64 per week to $1389.50 per week. Although under contract, it appears that the work was intermittent. Further particulars in the Wage Schedule show that during this period, Mr Ledingham also worked for “SJ Wedding” earning $710.38 per week. With Mr Norris his weekly earnings ranged from $261.81 to $1389.50. With Mr Livingstone he earned $885.95 per week.
The Arbitrator dealt with this issue at paragraphs [22] to [23] of his Reasons. He said:
“22. It is apparent that during the Applicant’s employment with the Respondent for most periods he was earning around $800.00 per week. There was one period from July 2002 to May 2003 when he was earning $1028.46 per week and, as this was the highest amount he was paid, the Applicant has sought to adopt this as the Applicant’s pre-injury earnings. However from 14 May 2003 until cessation of employment on 27 October 2003 he was earning $800.00 per week. At the date of the injury he was earning $658.57 per week. In his subsequent employment with Mr Norris…he was earning similar amounts on average for similar type of work.
23. Whilst I accept that the Applicant left his employment with the Respondent not only because of a change of Management but because he was frustrated by his level [of] pain there is still the fact that the Applicant then went to work in a similar type of employment for nearly 14 months. I do not consider it appropriate to adopt the earnings at the date of injury. The appropriate benchmark for calculating the earnings that the Applicant would have been earning but for the injury is to adopt the amount he was earning at the date of termination of employment with the Respondent and subsequently before he changed to the sedentary job; that is, the amount of $800.00 per week.”
Deputy President Roche considered this issue in Miller v A & R Pearson PtyLimited [2007] NSWWCCPD 111 (‘Miller’). In that case, the worker injured his back in February 2004. After a short period off work and on light duties, he returned to his pre-injury duties until the employer ceased trading in December 2005. He then commenced his own carpentry business. He suffered an increase in his back pain in May 2006 and thereafter had various periods of time off work. In considering probable earnings, Deputy President Roche said [20]:
“In determining probable earnings the following principles are applicable:
a) it must be assumed that the worker’s pre-injury job continued, even if that is not in fact the case (Nicholson at 54), applied in Singh v TAJ (Sydney) Pty Limited [2006] NSWCA 330. It is a hypothetical calculation;
b) a determination must be made of the worker’s probable earnings “as a worker” had he or she remained uninjured and remained employed in the “same or some comparable employment”, and
c) regard must be had to the whole of the evidence”
At [27] he said:
“In respect of Mr Miller’s argument on appeal that his earnings in 2005 are not relevant, it should be noted that after a short period on light duties after the February 2004 injury he was declared fit for his pre-injury duties from 25 May 2004 (medical certificate from Dr Fagg, 24 May 2004) and he continued to work for Pearson doing the full duties of a carpenter (see Mr Miller’s statement 13 July 2006, paragraph 24) until Pearson ceased trading in December 2005. Whilst Mr Miller’s earnings in the 2005 tax year did post date his injury, the evidence is clear that until May 2006 he had no incapacity in either a physical or economic sense. Therefore, the earnings in the 2005 tax return were an appropriate guide as to Mr Miller’s probable earnings and were in fact higher than in his 2004 tax return because for half of that year he was paid at the much lower rate applicable for an apprentice.”
A similar issue was considered by President Keating in Behnampirouz where he said at [93]:
“I accept that in the absence of comparable employee earnings the calculation of probable earnings for a worker is a more difficult task and must be made taking into account all of the available evidence relevant to the assessment in each particular case. In the absence of specific earnings details for comparable employees over the period claimed, arbitrators are often required to make assessments of workers’ probable earnings on the available evidence. An approach similar to that adopted by the Deputy President in Miller was clearly available to be adopted but was not considered by the Arbitrator in the instant case.”
In the present case, the Arbitrator’s determination of the issue of probable earnings was consistent with these decisions. There was no evidence that Mr Ledingham suffered any economic incapacity after being declared fit for pre-injury duties in August 2001 up until his resignation in October 2003. His earnings at the time of his resignation were an appropriate guide to establishing his probable earnings.
Therefore I am satisfied that no error has been made by the Arbitrator in his calculation of probable earnings.
The Weekly Benefits Claim for the Period 28 October 2003 to 16 February 2005
Mr Ledingham submits that, after ceasing work with the Respondent on 27 October 2003, he was employed in a number of casual positions. Some weeks he earned no income at all. On other occasions, he was able to earn $1389.50 per week. His gross income during the period the subject of review was $32,986.00. This is an average of $492.32 per week, over “approximately 67 weeks…” He submits, this would thus entitle him to an award during this period. The work he performed was similar to that with the Respondent. In his statement of 16 May 2005, he said that the work with Mr Norris was, on occasions, very heavy and aggravated his back pain. Mr Livingstone also ran a cotton farm and this work was also heavy and often involved him working twelve-hour shifts. It too, aggravated his back pain.
The Respondent submits that there was no evidence of any restrictions on Mr Ledingham’s working hours or conditions during this period. He had been certified fit to perform his pre-injury duties with the Respondent in August 2001, and remained on those duties until the date of his resignation. Whilst I accept that there was no medical evidence to support the Respondent’s submission, Mr Ledingham said that those duties involved “heavy, physical work.” He also stated that, although he continued to perform that work until October 2003, he had “extreme difficulties in coping.” Dr Stephen, orthopaedic surgeon to whom Mr Ledingham was referred for treatment, said in his report of 23 July 2001, that as at that date, he was, “…almost symptom free now and back at fairly heavy activities.” Dr Parkington, qualified by the Respondent, said in his report of 31 October 2002 that Mr Ledingham had “…made an excellent recovery. His back is now clinically normal. No further treatment is required and he is fit to continue in his present employment with no restrictions.” He also opined “The prognosis is good, but he is still at risk of experiencing intermittent episodes of low back pain after injudicious activities in the future.”
The Arbitrator dealt with the issue of ‘incapacity’ at [6] to [19] of his Reasons. He concluded at [19]:
“I accept that the Applicant has and continues to suffer from the effects of the
injury that he sustained in February 2001. The effects of that injury are that his
abilities to perform in a labour market that was accessible to him at the time of
injury is limited and reduced and he is not able to undertake the same tasks that he
was able to undertake before the injury without incurring increasing pain. This has
reduced his saleability in the labour market available to him and accordingly I find
that the Applicant has been partially incapacitated for his employment since the
day of injury and continues to be so.”
As to the issue of incapacity during the period under review, the Arbitrator said at [25] (which ought to read [24] because of the Arbitrator’s incorrect paragraph numbering in the Statement of Reasons):
“For the period the Applicant was working with Mr Norris and then subsequently with Mr Livingstone…he was undertaking similar work although of a lesser physical degree which caused him pain and discomfort until such time as he determined to go to more sedimentary (sic) work. Whilst the income has varied during that time it has not varied because of his physical incapacity to do it but whether or not work was available to him. There are periods where he was earning significantly more than his pre-injury earnings and times when he was earning about the same level or less and short periods of time when he had no income at all. This more probably reflects the seasonal and casual nature of the work than the Applicant’s ability to do it. Whilst, if a worker, post injury is actually in employment and earning…this normally fixes an amount under s40(2)(b) it has been held that if ‘it is proved that his actual earnings are not a proper test because there is some reason unconnected with his earning power which makes them lower than they should be, the other alternative ‘what he is able to earn’ must be adopted. This is so where…his actual earnings have been compulsorily reduced by something unconnected with his injury or general earning power.’ Per Jordan CJ in Aitkin v Goodyear Tyre and Rubber Co (Aust) Ltd (1945) 62 WN (NSW) 233.”
The Arbitrator concluded at [24] (noted as [24] but should read [26] on page 6 of his Reasons):
“I find that whilst there have been periods when the Applicant has not been earning as much as his pre-injury duties between 1 December 2003 and 16 February 2005 this has not been due to his inability to earn this amount arising from his partial incapacity but the normal fluctuations and seasonal nature of this employment. This is also reflected in the income during the time of employment with the Respondent.”
After ceasing work with the Respondent, Mr Ledingham said that he had “ a few weeks at home” before commencing with Mr Norris on 1 December 2003. He said that he finished this job in July or August 2004. He was paid an hourly rate but said that he could not estimate his “average weekly income” since he would often work a week or two then have three or four weeks off. He then commenced on a six-month contract with Mr Livingstone in August 2004. That contract he said ceased on 16 February 2005. Mr Ledingham’s statements are often at odds with his Wage Schedule and I will deal with these discrepancies more fully below.
There was clear evidence that Mr Ledingham had an incapacity on the open labour market. As Deputy President Roche noted in Ranvet Pty Ltd v Vasilevski [2008] NSWWCCPD 81 at [72]-[75]:
“72. The test for incapacity is conveniently summarised in the text Workers Compensation in New South Wales, second edition, by C P Mills, where the author said, at 285:
‘The question is whether the injury has left the worker in such a position that in the open labour market his earning capacity is less than it was before the injury (Williams v Metropolitan Coal Co Ltd (1948) 76 CLR 431 per Starke J), and it is not limited to the effect on his capacity for his former work (per Dixon J). In Ball v Hunt [1912] AC 496, Lord Loreburn had said that there is incapacity when a man has a physical defect which makes his labour unsaleable in any market reasonably accessible to him, and there is partial incapacity when such a defect makes his labour saleable for less than it would otherwise fetch: see Commissioner for Railways v Agalianos (1955) 92 CLR 390 per Dixon CJ.’(emphasis added)
73. In Alexander v Ashfield Municipal Council, CA 78/81, 27 October 1982, Hutley JA observed:
‘Capacity is diminished, even though in selected instances the worker can earn as much as he did before, if there are fields from which he is excluded, by reason of the injury, in which he laboured at the time of injury.’
74. The Court of Appeal quoted the above passages, with apparent approval, in Ric Developments t/as Lane Cove Poolmart v Muir [2008] NSWCA 155.
75. …When a worker is employed, his or her actual earnings will be prima facie evidence of ability to earn (Aitkin v Goodyear Tyre & Rubber Co (Aust) Ltd (1945) 46 SR (NSW) 20). However, once that employment ceases, the Commission is then required to determine what the worker is able to earn in suitable employment in the labour market which is reasonably accessible (Hamilton v Shelton Iron, Steel and Coal Co (1926) 96 LJKB 295 at 301, applied in Steggles Pty Ltd v Aguirre (1988) 12 NSWLR 693)...The Arbitrator was required to assess that figure having regard to all the evidence and the terms of section 43A of the 1987 Act…”
In Pira Pty Ltd t/as Langdon & Bartley v Tucker (1996) 14 NSWCCR 26 (‘Pira’) the Court of Appeal unanimously held:
“The appropriate amount to be applied under section 40(2)(b) in determining the rate of compensation to be awarded under section 40 is, prima facie, the person’s actual earnings after injury unless it is proved that the worker’s actual earnings are not a proper test, because there is some reason unconnected with the worker’s earning power which made them lower than they should be.”
Mr Ledingham’s Wage Schedule sets out precise details of his earnings on a weekly basis. That is prima facie evidence of his ability to earn. In broad terms, from December 2003 to February 2004, he earned an average of $710.00 per week. From February 2004 to June 2004, however, his average was $262.00 per week (not the $251.00 as set out in the Wage Schedule). In August 2004 he earned an average of $820.00 per week. In September 2004 he earned an average of $1389.00 for a little over one week’s work. From October 2004 to February 2005 his average earnings were $885.00 per week. Although his evidence suggests that the work, particularly with Mr Norris was ‘casual’, that would seem to be the nature of such ‘contract’ work in the cotton industry. There is nothing to suggest that Mr Ledingham’s intermittency of employment particularly with Mr Norris and Mr Livingstone reflected the state of the labour market in general, rather, it reflected the nature of that particular type of work.
I accept that this evidence did provide some support for the Arbitrator’s primary conclusion that Mr Ledingham’s earnings during this period were “about the same level” as his probable earnings. However, the Arbitrator’s statement at [25] of his Reasons that the intermittency of employment “more probably reflects the seasonal and casual nature of the work than the Applicant’s ability to do it”, was not supported by any evidence and his use of the word “probably” appears to suggest mere speculation on his part.
In my view, Mr Ledingham’s actual earnings during this period were in general, a proper test of his ability to earn, in the absence of any proof to the contrary, save for the period from February 2004 to June 2004, when he earned an average of $262.00 per week. Whilst it is true that the earnings are prima facie evidence of his ability to earn, regard must still be had to whether that amount is “proper” in all the circumstances. As the Court of Appeal said in Aitkin:
“As to the phrase ‘is earning’, it has been held that if the partially incapacitated worker is earning something, his actual earnings must prima facie be taken as the basis…If, however, it is proved that his actual earnings are not a proper test, because there is some reason unconnected with his earning power which makes them lower than they should be, the other alternative, ‘what he is able to earn’, must be adopted. This is so where it is shown that he is deliberately taking lower-paid work than he could get or is idling and on this account receiving less than he could be reasonably be expected to obtain, or where his actual earnings have been compulsorily reduced by something unconnected with his injury or general earning power.”
In the present case, there is no suggestion that Mr Ledingham was idling or not using his best endeavours to find suitable work. However, it is clear from his evidence that the work he did for Mr Norris in early 2004, was very similar to his previous job with the Respondent. There is no information about the nature of the work with S J Wedding that he did between December 2003 and February 2004, earning $710.00 per week.
As to the work with Mr Norris, Mr Ledingham said:
“David Norris would contract me to different farms to do general labouring work, tractor driving and cotton picker driving…I was contracted to a feed lot where I was required to work four days cleaning troughs…”
This appears to be a somewhat different contractual arrangement than with the other subsequent employers. For example, Mr Ledingham said that after he ceased with Mr Norris, he went to work for Mr Livingstone “on his property ‘Boolooroo’ in Moree. This was a contract for approximately six months…I was required to do general farm labouring work, fencing and irrigate the cotton…” He appears to have worked exclusively for Mr Livingstone during this period.
Thus, I am not persuaded that his earnings with Mr Norris between February 2004 and June 2004, were a proper test of his ability to earn. Those average weekly amounts were significantly less than his earnings with other employers performing similar duties, in particular, “general farm labouring work”, and appear to reflect the nature of the contract with Mr Norris where he was contracted out to other properties. I note also that for two short periods in August 2004 and September 2004 he earned $820.00 per week and $1389.50 respectively with Mr Norris.
The more difficult issue is to determine, in accordance with Nicholson, the probable earnings during the various periods of unemployment during the period under review.
Section 40(2)(b) of the 1987 Act requires the Commission to consider “ the average weekly amount which the worker is earning or would be able to earn in some suitable employment” (emphasis added). The use of the word “average”, Mr Ledingham submits, means that, during the period under review, his average weekly earnings would be $492.32 per week. The term “average”, in this context, means the average amount earned over a particular period. For example, in his Wage Schedule, Mr Ledingham stated:
“From 27 February 2004 to 30 June 2004 (123 days which equals 17.57 weeks), [he] worked on a casual basis with David Norris and earned a gross income of $4,600.00. Therefore on average [he] earned a gross weekly income of $261.81.
From 7 August 2004 to 20 August 2004, [he] worked for David Norris on a casual basis and earned a gross income of $1,600.00. Therefore on average [he] earned a gross weekly income of $820.00” (emphasis added)
This, in my view, is a proper application of the terms of section 40(2)(b). Mr Ledingham acknowledged in his statement of 16 May 2005, referred to in [26] above, that he was unable to provide details of his average weekly income because of the intermittency of the hours and weeks he worked.
In these circumstances, it is appropriate to look at his actual earnings during his periods of employment between 28 October 2003 and 9 February 2005.
Step 2 in Mitchellv Central West Area Health Service (1997) 14 NSWCCR 526 (‘Mitchell’) requires the determination of “the average weekly amount which the worker is earning, or would be able to earn in some suitable employment, from time to time after the injury” (section 40(2)(b)). In making that determination it is necessary to consider the matters in sections 40(3) and 43A of the 1987 Act. Section 40(3) provides:
“(3) Ability to earn in suitable employment
The determination of the amount that an injured worker would be able to earn in some suitable employment is subject to the following:
(a)the determination is to be based on the worker’s ability to earn in the general labour market reasonably accessible to the worker,
(b) the determination is to be made having regard to suitable employment for the worker within the meaning of section 43A.”
Section 43A(1) provides:
“43A Suitable employment
(1)For the purposes of sections 38, 38A and 40:
‘suitable employment’, in relation to a worker, means employment in work for which the worker is suited, having regard to the following:
(a)the nature of the worker’s incapacity and pre-injury employment,
(b) the worker’s age, education, skills and work experience,
(c) the worker’s place of residence,
(d) the details given in the medical certificate supplied by the worker,
(e) the provisions of any injury management plan for the worker,
(f) any suitable employment for which the worker has received rehabilitation training,
(g) the length of time the worker has been seeking suitable employment,
(h) any other relevant circumstances.”
There is no doubt that Mr Ledingham had, and retains, a significant residual earning capacity. The Arbitrator accepted Mr Ledingham’s evidence that he ceased employment with the Respondent not only because of a change in management but because of “increasing pain and frustration at the continuous pain…” That finding was entirely appropriate. Mr Ledingham appears to have made earnest efforts to find further employment and I accept his statement that the work he performed during the period under review continued to cause him pain and discomfort. I also accept his statement on 2 June 2008, that he remains unfit for the full duties of a labourer / farm hand. In that statement Mr Ledingham claimed that he would be able to do the work he performed with BEST and Network and could earn “in the vicinity of a gross income of $700.00 per week.” In his first job after ceasing with the Respondent, he earned approximately $700.00 per week. Thereafter his income fluctuated.
Having regard to all the factors set out above, I am of the view that that figure is the appropriate amount he would have been able to earn in suitable employment during the period under review.
The CPI Issue
Mr Ledingham submits that the Arbitrator erred in failing to apply any increase or index to the probable weekly earnings figure of $800.00 per week.
Deputy President Fleming in Whittaker considered this issue. She determined that it was an error for the Arbitrator to arbitrarily award such an increment in the absence of evidence or agreement. She specifically rejected a submission that such information fell into the category of ‘specialised knowledge’ on the part of an arbitrator, nor could it simply be assumed.
Deputy President Roche in Miller followed this approach. He confirmed that such an increment was inappropriate in the absence of agreement or evidence.
In the present case, there was clearly no agreement nor was there any evidence in support of the claim, and I reject it.
CONCLUSION
The Arbitrator’s determination as to probable earnings of $800.00 per week was correct and in line with the authorities to which I have referred. Mr Ledingham is also entitled to be compensated during the period under review for the reasons stated.
Accordingly, the award should be amended to include the period 28 October 2003 to 16 February 2005. Given the detailed particulars set out in the Wage Schedule, I am of the view that I have sufficient information to substitute my own award in line with my powers on review as set out in section 352 of the 1998 Act. Although Mr Ledingham has a partner, no claim for dependency is made.
DECISION
The decision of the Arbitrator dated 7 October 2008, is revoked and the following decision made in its place:
1. The Respondent is to pay to the Applicant weekly benefits pursuant to section 40 of the Workers Compensation Act 1987 for the following periods:
· 28 October 2003 to 30 November 2003 at $100.00 per week;
· 1 December 2003 to 26 February 2004 at $ nil per week;
· 27 February 2004 to 30 June 2004 at $100.00 per week;
· 1 July 2004 to 6 August 2004 at $100.00 per week;
· 7 August 2004 to 20 August 2004 at $nil per week;
· 21 August 2004 to 16 September 2004 at $100.00 per week;
· 17 September 2004 to 25 September 2004 at $nil per week;
· 26 September 2004 to 2 October 2004 at $100.00 per week;
· 3 October 2004 to 9 February 2005 at $ nil per week;
· 10 February 2005 to 16 February 2005 at $100.00 per week;
· 17 February 2005 to 30 June 2005 at $179.04 per week;
· 1 July 2005 to 23 October 2006 at $145.06 per week, and
· 24 October 2006 to date and continuing at $ 65.90 per week.
2.The Respondent is to pay the Applicant’s costs as agreed or assessed.
3.Credit to the Respondent for payments made to date.
COSTS
The Respondent is to pay the Appellant’s costs of the appeal.
Deborah Moore
Acting Deputy President 11 February 2009
I, MARIE JOHNS, CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF DEBORAH MOORE, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
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