Lee v Department of Education and Training
[2006] NSWWCCPD 179
•8 August 2006
WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:Lee v Department of Education and Training [2006] NSWWCCPD 179
APPELLANT: Lay Leng Lee
RESPONDENT: Department of Education and Training
INSURER:NSW Treasury Managed Fund
FILE NUMBER: WCC2458-05
DATE OF ARBITRATOR’S DECISION: 31 January 2006
DATE OF APPEAL DECISION: 8 August 2006
SUBJECT MATTER OF DECISION: Psychiatric injury; substantial contributing factor, and sections 9A and 11A of the Workers Compensation Act 1987
PRESIDENTIAL MEMBER: Acting Deputy President Bill Roche
HEARING:On the papers
REPRESENTATION: Appellant: In person
Respondent: Moray & Agnew
ORDERS MADE ON APPEAL: Paragraphs 1, 2 and 3 of the Arbitrator’s decision of 31 January 2006 are revoked and the following order made:
“The matter is remitted to a different Arbitrator to determine the Appellant Worker’s entitlements under the Workers Compensation Act 1987 in accordance with these reasons.”
The costs of the original Arbitration proceedings are to follow the outcome of the second Arbitration.
The Respondent Employer is to pay the costs of the appeal.
BACKGROUND TO THE APPEAL
On 24 February 2006 Lay Leng Lee (‘the Appellant Worker/Mrs Lee’) sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Workers Compensation Commission (‘the Commission’) against a decision, dated 31 January 2006.
The Respondent to the Appeal is Department of Education and Training (‘the Respondent Employer/the Department’).
Ms Lee was born in Malaysia on 10 February 1947 and is now 59 years old. She came to Australia at the age of 21 on a student visa and completed years 11 and 12 at Canterbury Girls High School before attending the University of Sydney where she obtained a Bachelor of Economics. She has also completed a Diploma of Education.
Her employment history is a little unclear but it includes work as a clerk and corporate investigator for four years with the Corporate Affairs Commission in Sydney, three years as a ‘systems analyst’ with Shaw Rentals and two periods with the Department, one for five years and the other for 12 years. Her first period of employment with the Department started in 1981.
At the time of the events giving rise to the current claim, Ms Lee was working as a social sciences teacher at Fairfield High School (‘Fairfield High’) having started at that school in February 2003.
On 29 March 2004 Ms Lee was given a letter signed by the school’s principal, Mr Dunne, advising that a meeting had been organised “to discuss difficulties you are experiencing with your teaching and to commence the implementation of the Procedures For Managing Teachers Experiencing Difficulties With Their Teaching Performance” (‘the Procedures’). After reading the letter Ms Lee was very upset and contacted the Teacher’s Federation and received certain advice. She responded in writing on the same day to Mr Dunne expressing her strong disagreement with the allegation that she was experiencing “difficulties with [her] teaching performance” though conceded that there were “inter personal issues at the Social Sciences Department”. She also advised Mr Dunne that his letter had caused her “extreme stress” and she was therefore taking leave.
On 30 March 2004 Mr Dunne again wrote to Ms Lee cancelling the proposed meeting and stating:
“The meeting was to examine issues that appear to have surfaced regarding your teaching, and particularly your rapport with students and staff. I was under the belief that these were ongoing and had been subject to a number of support programs prior to the letter dated 29 March 2004 being sent.
The fact that I did not sufficiently check previous detail is entirely my fault and again I offer my sincerest apology.
The following issues, however, have been raised with me and need to be examined and rectified.
·Victimizing individual students
·Discriminating against those that are not Asian
·Making derogatory comments re students abilities
·Verbally harassing students when they find the work difficult
·Isolating and picking on individual students and verbally labelling them as dumb
·Having an aggressive attitude to students and staff
·Teaching Asian students more than other cultural groups
·Using inappropriate language towards students e.g. you are stupid, you are only fit to empty garbage bins, you are hopeless, etc
·Offended staff members by your comments
·Reluctance to be a constructive member of the Social Science team
·Made no contribution to faculty administration
I have asked the Head Teacher to discuss this with you and provide you with the written details. I would then ask you to address the complaints. Again my apologies for any distress caused.”
On 30 March 2004 Ms Lee attended on her general practitioner, Dr Baigent, feeling worried and depressed. She attended again on 31 March 2004 complaining of lack of sleep and requesting a workers compensation claim. A certificate was provided stating she was unfit due to “acute anxiety reaction”. A referral was arranged to Sandra Dunn, psychologist, and sedatives were recommended.
On 8 April 2004 Ms Lee attended on Dr Webb at the same practice as Dr Baigent. She complained of insomnia and intermittent crying. Dr Webb felt that Ms Lee was fit for suitable duties as long as it did not involve any face to face teaching.
Ms Lee saw Sandra Dunn on 13April 2004 and gave a history of acute anxiety with loss of sleep, increased physiological arousal, tearfulness, behavioural avoidance and loss of confidence and trust in her employer’s capacity to effectively manage the situation (report Ms Dunn 19 November 2004).
The Appellant Worker’s claim for compensation was initially accepted but after an opinion from ‘Claims Intervention’ set out in a report dated 22 April 2004, the claim was denied in a letter addressed to Ms Lee on 27 April 2004. That letter stated:
“We have decided that we will cease paying your compensation benefits because [sic] section 11A – psychological injury caused by employer’s reasonable action re discipline.”
The Appellant Worker sought legal advice and ultimately filed an Application to Resolve a Dispute (‘the Application’) in the Commission on 18 February 2005 claiming compensation as a result of “work related stress, anxiety, depression, and the development of a psychological condition, caused and/or aggravated by the circumstances described herein”. The injury is alleged to have happened as a result of:
“The nature and conditions of employment involving, inter alia, the Applicant working long hours, the Respondent not providing the Applicant with sufficient assistance, and the Respondent not implementing its undertakings to the Applicant. The conduct of the employer in respect of an investigation of alleged complaints made by the Applicant.”
In its Reply to Application to Resolve a Dispute (‘Reply’) the Department disputed the Appellant Worker’s entitlement to compensation and denied any incapacity or disability “as a result of any alleged work injury”. The Reply added in paragraph four:
“4. The respondent claims that any psychological injury suffered by the worker was wholly or predominantly due to the reasonable action taken by the respondent in respect of performance appraisal and or discipline in accordance with s11A of the Act.”
The claim was the subject of a number of teleconferences, the first on 29 April 2005 when the matter wad referred to Approved Medical Specialist (‘AMS’) (Dr Parmegiani, psychiatrist) for assessment. As a result a Medical Assessment Certificate (‘MAC’) was issued on 12 August 2005 and further teleconferences were held on 14 September and 13 October 2005. A conciliation conference was held at the Commission’s rooms in Sydney on 11 November 2005. At the conciliation conference the Arbitrator indicated to the parties that he was “considering giving the AMS assessment considerable weight as evidence, but not necessarily conclusive evidence, in attempting to resolve these proceedings” (transcript page three line 36). The Appellant Worker objected to the Arbitrator giving the MAC any weight as she had not had the opportunity to respond to the AMS’s opinion. As a result of that objection the Arbitrator issued a Direction on 14 November 2005 as follows:
“1. That, under section 329 of the WIMWC Act 1998 this matter be referred for further assessment to Dr Parmegiani (AMS), together with the additional material set out below:
·Supplementary medical report of Sandra Dunn, Clinical Psychologist, dated 11 October 2005;
·Medical report of Dr Ishrat Ali, Consultant Psychiatrist, dated 26 April 2005.
2. The AMS assessor to consider all the evidence previously available to the assessor, plus the additional material set out above and comment if this causes him to amend his assessment certificate in any way.
3. That the response from Dr Parmegiani be distributed to all parties immediately upon receipt by the Commission.
4. That not later than 14 days from receipt of Dr Parmegiani’s response, the parties file and serve any brief written submissions they seek to rely upon in these proceedings.
5. That the matter be returned to a teleconference with the parties at the next suitable available date.”
In response to the above Direction, the AMS issued a further document on 6 December 2005 headed “Appeal Against Medical Assessment” (‘the supplementary MAC’) in which he refers to the reports of Ms Dunn of 11 November 2005 and Dr Ali of 19 November 2005 and then states that he “found no reason to amend [his] medical assessment certificate in any way”. In addition, the Appellant Worker’s solicitors prepared written submissions dated 11 January 2006.
A further teleconference was held on 30 January 2006 when the Arbitrator found in favour of the Department and made an award for the Respondent Employer on the basis of the opinions expressed by the AMS which he accepted.
The Appellant Worker seeks leave to appeal from that decision.
THE DECISION UNDER REVIEW
The ‘Certificate of Determination’, dated 31 January 2006 records the Arbitrator’s orders as follows:
“1.Award for the Respondent in respect of the Applicant’s claim for weekly payments of compensation.
2.Award for the Respondent in respect of the Applicant’s claim for expenses under section 60 of the Workers Compensation Act 1987.
3.No order as to costs.”
ISSUES IN DISPUTE
The issues in dispute in the appeal are whether the Arbitrator erred in:
(a)his application of the principles set out in Bhatia v State Rail Authority of NSW (1997) 14 NSWCCR 568 (‘Bhatia’);
(b)finding that the Appellant Worker had not suffered an injury within the meaning of that term in section 4 of the Workers Compensation Act 1987 (‘the 1987 Act’);
(c)finding that the Appellant Worker suffers from “long standing personality traits” rather than a psychiatric injury under the 1987 Act;
(d)accepting the opinion of the Approved Medical Specialist (‘AMS’), Dr Parmegiani, and
(e)declining to allow into evidence a report from Dr Teoh, psychiatrist;
In addition it is alleged that the Arbitrator was “biased, unfair and unethical” (Appellant Worker’s submissions page five point one).
LEAVE TO APPEAL
Before proceeding to deal with an appeal the Commission must determine whether the application meets the requirements of section 352 of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’).
The quantum in issue on the appeal is in excess of $5,000.00 and therefore the threshold in section 352(2)(a) of the 1998 Act is satisfied. No award of compensation has been made in this case but the Arbitrator’s finding would result in the Appellant Worker receiving no compensation and therefore the second limb of section 352(2) does not apply (see Mawson v Fletchers International Exports Pty Ltd [2002] NSWWCCPD 5).
The appeal was lodged within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act.
I grant leave to appeal.
PRELIMINARY MATTERS
Section 354(6) of the 1998 Act provides:
“(6)If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”
Having regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submissions by the parties that the appeal can proceed to be determined on the basis of these documents, I am satisfied that I have sufficient information to proceed ‘on the papers’, without holding any conference or formal hearing, and that this is the appropriate course in the circumstances.
FRESH EVIDENCE
In a letter dated 22 March 2006 the Appellant Worker has attached several documents that she believed were missing from the Commission’s file in this matter. I have carefully read the material in the relevant file and all of the documents listed by the Appellant Worker in her letter of 22 March 2006 are in the file. The Arbitrator refers to one of those documents, the statement from Catherine Duncan dated 16 May 2006.
Therefore, I have not had regard to the additional copies provided by the Appellant Worker in her letter of 22 March 2006 which are clearly not ‘fresh evidence’.
SUBMISSIONS AND FINDINGS
Injury
The Authorities
In Stewart v NSW Police Service (1998) 17 NSWCCR 202 (‘Stewart’) Judge Neilson considered at [6] what a the claimant must establish in a claim for a psychological or psychiatric injury:
“In psychological cases, it is important to realise what must be proved. In Kirby v Trustees of the Society of St Vincent de Paul (NSW), NSWCC, No. 20708/94, 11 April 1997, unreported, I set out at 4 what must be proved where an allegation of psychiatric injury is made. This analysis of the law, of course, was made when s 11A was not applicable. That summary of the law is this:
‘To succeed in this Court, the applicant must prove that the conduct complained of constituted ‘injury’ within the meaning of the Act. Where, as here, a psychiatric injury is alleged the applicant must prove either:
(i) that the nervous system was so affected that a physiological effect was induced, not a mere emotional impulse: Yates v South Kirkby Collieries Ltd [1910] 2 KB 538; Austin v Director-General of Education (1994) 10 NSWCCR 373; Thazine-Aye v WorkCover Authority (NSW) (1995) 12 NSWCCR 304; Zinc Corporation Ltd v Scarce (1995) 12 NSWCCR 566, or
(ii) the aggravation, acceleration, exacerbation or deterioration of a pre-existing psychiatric condition: Austin’s case.’
Frustration and emotional upset do not constitute injury: Thazine-Aye’s case; nor, semble, where a mere ‘anxiety state’: the Zinc Corporation case per Meagher JA at 575B. A ‘straight litigation neurosis’ is not compensable: Karathanos v Industrial Welding Co Ltd [1973] 47 WCR (NSW) 79 at 80. A misperception of actual events, due to the irrational thinking of the worker leading to a psychiatric illness is not compensable: Townsend v Commissioner of Police ( NSWCC, No. 8061/89, McGrath CJ, 17 February 1992, unreported).
It follows that subsequent rationalisation of earlier innocuous events, which rationalisation leads to psychiatric illness is also not compensable. Furthermore, once the applicant has established ‘injury’ she must prove that an incapacity for work resulted therefrom.”
There are two important additional requirements that must now be added to the above comments:
1.under section 9A of the 1987 Act a claimant for compensation for a psychological injury must now prove that his or her employment was a substantial contributing factor to the injury, and
2.he or she must not be prevented from receiving compensation by reason of the provisions of section 11A of the 1987 Act.
In Bhatia Judge Burke reviewed several authorities dealing with psychiatric injuries and considered what was needed in order to recover compensation. After referring to emotional responses to life events his Honour said at 578:
“Emotion is a fact of day-to-day life. If your daughter is ill, you can tend to be anxious; if she dies, you can tend to be depressed. Neither reaction is a physiological abnormality both being emotional reactions, or impulses, appropriate to the stimulus. This type of emotional impulse is the normal reaction of a human person or organism to a particular event. If that reaction becomes excessive in degree or duration, or is inappropriate to the stimulus, then there can be a physiological problem.
This approach is certainly consistent with the views expressed by Powell JA in Austin v. Director General of Education (1994) 10 NSWCCR 373 at 386-7. In his view, the symptoms of anxiety, mania and depression experienced by the worker were physiological effects manifesting the effects of injury. While his Honour has no need of my approbation, such an approach I would regard as impeccably correct. In my view if it be accepted that a worker has symptoms of this type and degree, then it is axiomatic that he has suffered an injury. A particular case then becomes a question of whether such arises out of or in the course of the employment--as in Zinc Corporation Ltd v. Scarce (1995) 12 NSWCCR 566--or whether it results from a relevant work cause--as in Anderson Meat Packing Co Pty Ltd v. Giacomantonio [1973] 47 WCR (NSW) 3.”
His Honour added at 579A:
“In my lexicon, a diagnosis of anxiety state of such degree and long duration would be axiomatically a physiological effect. I would not expect that any psychiatrist, unless specifically asked, would feel it necessary to so categorise such a reaction. It would be taken for granted. ‘Impulse’ has to me connotations of spontaneity and transience. The Macquarie dictionary suggests ‘sudden, involuntary inclination prompting to action’. Probably a common occurrence is in the term beloved of marketing people when they speak of impulse buying. It’s a spur of the moment affair. This concept fits quite well with the accepted emotional responses of people to particular stimuli--it comes, it lasts relatively briefly and it passes.”
His Honour concluded at 579F:
“All the Act is concerned with is injury to a worker. A worker is what he is. He is both mind and matter which function as one integrated, symbiotic entity--as a single organism. Whether it is either or both of the perceived elements that is injured is really immaterial. The ultimate question is, has the worker received injury? Has the human organism which is the worker become dysfunctional? Any condition as debilitating and long lasting as the effects of these relevant incidents on Mr Bhatia could hardly be conceived as anything but injury.”
Since Bhatia was decided the High Court has considered the recovery of damages for psychiatric injuries in Tame v New South Wales (2002) 211CLR 317 where Gummow and Kirby JJ (with Gaudron J agreeing) held at 447:
“It has been noted earlier in these reasons that the common law in many United States jurisdictions has developed differently. In Australia, as in England, Canada and New Zealand, a plaintiff who is unable affirmatively to establish the existence of a recognisable psychiatric illness is not entitled to recover [168]. Grief and sorrow are among the ‘ordinary and inevitable incidents of life’ [169]; the very universality of those emotions denies to them the character of compensable loss under the tort of negligence [170]. Fright, distress or embarrassment, without more, will not ground an action in negligence. Emotional harm of that nature may be evanescent or trivial.”
Whether, in the light of this authority, it is now sufficient to merely prove a ‘recognisable psychiatric illness’ in order to recover compensation under the 1987 Act is a moot point and one that I do not have to decide in the present case. The evidence before me is sufficient in my view to establish that the Appellant Worker has suffered a physiological effect arising out of her employment with the Department and not a mere emotional impulse.
The Arbitrator’s Decision
At page five line 56 of the transcript the Arbitrator said he was “placing some significant weight on” the reports prepared Dr Parmegiani because he had considered the “plethora of other medical evidence and documents that are before the Commission” (transcript page five line 58 and page six line one) as well as the later reports from Ms Dunn and Dr Ali.
After quoting extensively from the supplementary MAC the Arbitrator identifies his first task as being to “find whether there has been an injury and then whether that results as a result of a substantial - employment being a substantial contributing factor” (transcript page six line 49). Reference is then made to Bhatia and the distinction between “mere emotional reaction or impulse, on the one hand, to something more in the nature of symptoms of mania, anxiety and depression on the other” (transcript page seven line two). The Arbitrator concluded at page seven line eight:
“Now, in the applicant’s case, given the evidence that I’ve got from an independent assessor who has considered the previous reports, numerous as they are and conflicting as they are both from both sides of the fence, and given that the doctor is an independent doctor who’s trained and approved by the Commission to conduct these independent assessments, I am persuaded by the report, and even though the report is not binding, I am convinced and persuaded that particularly the worker suffers from personality traits, long standing personality traits rather than a psychiatric or a personal injury, an injury under the Act.
I should just point out that an injury under the Act includes a psychological injury, which is defined as an injury as defined in section 4, that is, psychological or psychiatric disorder. The term extends to include the psychological effect of such a disorder on the nervous system - in other words, some reference to physiological disorder.
Now, I’m not satisfied that the worker has suffered a personal injury and, therefore, a psychological injury under the Act, and even though there may be some argument to be raised in terms of the administrative actions taken by the employer, which I would normally consider under section 11A, I’m not in a position to consider those as the first task of the applicant is to satisfy that first hurdle, if you like, the first test, to satisfy that there has been a psychological injury or an injury under the Act, and that employment is a substantial contributing factor to that.”
The Arbitrator relied on the following passage from page eight of the MAC to support his conclusions:
“If she were to start teaching at other schools, similar problems are likely. This is however not attributable to a psychiatric injury. It is caused by her longstanding personality traits.”
This passage does not deal with whether the Appellant Worker suffered a physiological response or a recognised psychological condition. The AMS’s diagnosis was dealt with under ‘summary of injuries and diagnoses’ at page five of the MAC where he said:
“The disciplinary processes caused significant distress to Ms Lee, who developed an Adjustment Disorder With Depressed Mood. She became emotional, her sleep deteriorated, her concentration decreased and she avoided social contact. Ms Lee felt humiliated, and she believed that her reputation had been damaged by others, through no fault of her own.”
The AMS then reviews the medical evidence available to him. He did not agree with the conclusions of Ms Dunn that “Ms Lee’s employment is considered to be a substantial contributing factor to the psychological injuries identified”. He stated at page seven that:
“Ms Lee continued to deny any wrongdoing to date. Her reaction to students’ and teachers’ complaints would have been the same, no matter how gently these complaints were communicated to her.”
These comments are relevant to determining whether the Respondent Employer’s actions were reasonable pursuant to section 11A of the 1987 Act but do not determine the issue of injury. The AMS’s opinion quoted at [39] above recognises that the disciplinary process caused significant distress to Ms Lee. This part of the MAC was not referred to by the Arbitrator.
On the question of whether or not the Appellant Worker’s condition was caused or contributed to by the nature and conditions of employment from 1 January 2003 to 30 March 2004 or from other causes the AMS concluded at pages seven and eight:
“Ms Lay Leng Lee’s Adjustment Disorder was caused by longstanding maladaptive personality traits, and a communication style that caused conflict with colleagues and students. Attempts to address these issues with Ms Lee caused her significant distress, because she lacked insight. She perceived it to be an unjust attack on her reputation and professional standing.”
The AMS was not saying that the Appellant Worker did not suffer from a psychological condition or did not have a physiological response. He concluded that her condition had not resulted from the events that occurred at work but from her personality traits. That is a totally different issue and one that the Arbitrator did not consider because he concluded at page eight line five:
“…I’m not satisfied that I can make a finding of psychiatric or psychological injury because they’re more in terms of long standing personality traits which wouldn’t meet the definition of injury under the Act.”
The above analysis by the Arbitrator ignores the diagnosis made by the majority of the medical experts in this case that the Appellant Worker has an Adjustment Disorder with Depressed Mood and ignores the evidence of Dr Webb that she suffered from “sleep disturbance, increased physiological arousal, tearfulness, behavioural avoidance and loss of trust” (report Dr Webb 14 September 2004). That evidence supports a finding that Ms Lee has suffered a physiological response to the events that occurred at work in 2003 and 2004. It also ignores the opinion of Sarah Zavodnyik, clinical psychologist, retained by or on behalf of the Respondent Employer. In her report of 22 April 2004 Ms Zavodnyik’s opinion at page seven was:
“The information gathered from Ms Lee at the clinical interview would suggest that at the time of submitting her claim for workers compensation, she had been suffering from an identifiable psychological disorder. Specifically, Ms Lee appears to fulfil the diagnostic criteria for Adjustment Disorder with Anxiety, specified as Acute 309.24 (Diagnostic and Statistical Manual of Mental Disorders, Fourth Edition, Text Revision, 2000, American psychiatric Association: DSM-IV-TR). Ms Lee reported the development of symptoms of anxiety such as ruminating over work related situations, decreased appetite, increased agitation, disturbed sleep, and gastric problems in response to a perceived stressor.”
At page 11 Ms Zavodnyik stated:
“Therefore, in my opinion, it is ongoing performance issues with the threat of disciplinary action compounded with her pre existing personality condition that have culminated in Ms Lee’s current state of functioning.”
The performance issues identified by Ms Zavodnyik were all directly related to the Appellant Worker’s work with the Department. In deciding the issue of ‘causation’ the Arbitrator did not have regard to any of these matters because he believed that the Appellant Worker’s condition was not a ‘psychological injury’ under the Act.
On page 13 of Ms Zavodnyik’s report under ‘Conclusions Liability’, the following appears:
“Section 9A: On the basis of information identified from interview with Ms Lee. Employer Representatives and psychological assessment by Sarah Zavodnyik, it appears employment is a substantial contributing factor to the injury.”
It must be remembered that this report was prepared after a detailed assessment of the work situation including consideration of the ‘employer’s perspective’ (Claims Intervention report pages nine and ten).
The report adds the following comment about section 11A at page 13:
“Section 11A: Section 11A does appear applicable in this matter.
Ms Lee has had allegedly had a number of complaints from students and parents due to abusive behaviour towards students. Ms Lee has been instructed to participate in a Teachers Improvement Program.
The initial notification of performance issues has been the whole or predominant contributing factor to this claim.
The Employer appears to have acted reasonably in this regard.”
The Appellant Worker’s claim was denied by the Department on the basis of Ms Zavodnyik’s report which unequivocally accepted that Ms Lee had sustained a psychological injury and that her employment had been a substantial contributing factor to that injury. The reason for the denial of the claim was because of the potential issue under section 11A of the 1987 Act.
The AMS’s opinion that Ms Lee’s condition has been “caused by longstanding maladaptive personality traits and a communication style that caused conflict with colleagues and students” may well have merit but it ignores that crucial fact that until the letter of 29 March 2004 Ms Lee had been functioning reasonably, though certainly with significant issues in relation to her interpersonal skills. In the Annual Review of Teaching Performance (‘the Review’) prepared by Ms Duncan on 24 June 2003, Ms Lee was assessed as being ‘satisfactory’ in every aspect of the review. This Review is the last review in the papers before the Arbitrator before the letter of 29 March 2004. In these circumstances it is hardly surprising that Ms Lee reacted as she did to that letter. The fact that the letter was inappropriate is obvious when one considers the content and nature of Mr Dunne’s profuse apology in his letter of 30 March 2004. Neither the Arbitrator nor the AMS considered these matters.
The AMS does not refer to the conclusions by Ms Zavodnyik set out at paragraph [47] above. There is no suggestion here that the Appellant Worker has misunderstood innocuous events and that that misunderstanding has led to her condition, as occurred in Townsend v Commissioner of Police (1992) 25 NSWCCR 9. There is no evidence that Ms Lee had an Adjustment Disorder before the events that occurred at work in and about March 2004. To say, as the AMS has said, that the condition has been caused by the Appellant Worker’s “lack of insight” is to ignore the effect that the letter of 29 March 2004 had on her and to ignore the fact that she had been well until that letter. The AMS failed to distinguish between a pre existing personality trait on the one hand, and a DSM IV classified psychiatric illness, on the other. For these reasons the Arbitrator was wrong to accept the AMS’s opinion.
The Arbitrator incorrectly applied Bhatia by accepting one part of the opinion expressed by the AMS without properly considering all the evidence before him.
The passages I have quoted from Bhatia at [31 to 33] above are applicable to Ms Lee and her diagnosis. The evidence points to her having the condition of Adjustment Disorder with Anxiety and or Depression and to her having had a physiological response to that condition. Whether that condition was a compensable injury within the terms of the 1987 Act was not properly considered by the Arbitrator because he felt her condition was merely a manifestation of her personality traits rather than a psychiatric or personal injury under the Act. In my opinion the Arbitrator was in error in reaching that conclusion as it was contrary to the evidence.
I note the allegation that the Respondent Employer arranged for the Appellant Worker to be examined by Dr Boland on 18 April 2005 and that no report was served from that doctor. The Respondent Employer was not obliged to serve that report. However, in the absence of an explanation as to why that report was not served, I infer that the report did not advance the Respondent Employer’s case.
The Respondent Employer submits that the Arbitrator’s conclusion was that any injury suffered by the Appellant Worker did not arise out of her employment. The Arbitrator did not consider if Ms Lee’s condition could constitute an injury arising out of her employment under the 1987 Act because he concluded, wrongly in my view, that her condition was due to her ‘personality trait’ “which wouldn’t meet the definition of injury under the Act” (transcript page eight line eight).
The Respondent Employer makes the valid point that just because a person has suffered a diagnosable psychiatric condition does not mean they have suffered a compensable injury under the 1987 Act. It is correct to say that much more is required before compensation is payable.
I am satisfied that the Appellant Worker has sustained an injury in the nature of an Adjustment Disorder With Depressed Mood arising out of the nature and conditions of her employment with the Department from January 2003. That finding in itself does not establish a right to compensation (McMahon v Lagana & anor [2004] NSWCA 164) as it is also necessary to prove that employment was a substantial contributing factor to the injury under section 9A of the 1987 Act and that section 11A does not disentitle the Appellant Worker from receiving compensation.
Substantial Contributing Factor
The Appellant Worker worked as a teacher for many years without prior illness but with earlier conflicts with other staff members. I have already noted her satisfactory Review conducted in June 2003. At the start of 2004 she was functioning at a reasonable level but there were significant issues with regard to her behaviour both in and out of the classroom (see paragraph [7] above).
The medical evidence in this case overwhelmingly supports the view that Ms Lee’s condition has resulted from her employment with the Department. Apart from the personality traits mentioned by the AMS, no other cause has been identified.
Dr Webb in his report of 14 September 2004 concluded that:
“The events surrounding the complaints against Ms Lee and the methods used to resolve these complaints had substantial effect in precipitating her current psychological condition. Certainly all the symptoms she has been reporting seem to be focused on the events surrounding the complaints against her and her school.”
Ms Dunn stated at page six of her report of 19 November 2004 that:
“Whilst the above personality traits and maladaptive coping style place Ms Lee at increased risk of developing a work related psychological injury, I think it highly improbable that she would have developed a psychological injury at the time she did if she had not been working in her current employment. In other words, Ms Lee’s employment is considered to be a substantial contributing factor to the physiological injuries identified in this report.”
In her report of 11 October 2005 Ms Dunn deals with the AMS’s conclusion that Ms Lee’s problem has been caused by her personality traits. She notes at page one:
“Prior to the matter which is the subject of Ms Lee’s current workers compensation claim, I understand the claimant had worked as a High School teacher with NSW Department of Education – despite the presence of any pre existing or maladaptive personality traits – for more than five years. Ms Lee also reports no history of mental illness or psychological injury prior to 29.03.04. On 29.03.04 Ms Lee received written advice from her Principal that she was to be placed on a work improvement program.
In the week prior to 29.03.04, Ms Lee was informed (and understood) that she was to attend an informal meeting with Ms Duncan, to discuss the possibility that she may be placed on an improvement program pending the investigation of complaints made against the claimant. These complaints did not relate to Ms Lee’s work performance. Ms Lee did not take leave or become excessively distressed in response to being informed about the meeting with Ms Duncan. Ms Lee did, however, develop symptoms which constituted a psychological disorder and caused her to cease work until after she received a letter from her Principal on 29.03.04. I consider the receipt and contents of this letter – which was subsequently withdrawn with an apology by the Principal as it was inconsistent with the Departmental procedures – to be the predominant cause of the claimant’s Adjustment Disorder. It is worth noting that the claimant’s personality traits and maladaptive coping style were heightened by this action.”
In his report of 26 April 2005 Dr Ali stated that the “main diagnosis appears to be an adjustment disorder with depression, which appears to be directly related to the pressures at work” (page three).
The report from HealthQuest of 2 August 2005 is signed by Dr Dodwell but an examination was conducted by Terry Kohler, consultant psychologist, on 18 July 2005. The report concluded that Ms Lee “is suffering from intense psychological distress. This distress is due to her perceptions of injustice about the way she has been treated by her employer”. This comment raises an issue about whether the Department’s conduct was “reasonable action” under section 11A, but does not suggest anything, other than Ms Lee’s work, as a cause of her condition.
A further report was provided by HealthQuest on 19 October 2005 in which Dr Dodwell concluded:
“Ms Lee was assessed to be suffering from a chronic Adjustment Disorder with symptoms of anxiety and depression. The psychosocial stressor for the Adjustment Disorder is conflict in the workplace. Although it is noted that there are differing and inconsistent descriptions and perceptions of the workplace problems, it appears that these problems now have resulted in an irretrievable and permanent breakdown in employment relationships. It is unlikely that Ms Lee will ever be able to return to working in the school environment again.”(emphasis added)
I have already quoted extensively from Ms Zavodnyik’s report of 22 April 2004 and her conclusion that the Appellant Worker’s employment was a substantial contributing factor to the injury.
This leaves the AMS alone in concluding that the condition is not work related. His opinion is contrary to the weight of the evidence in the case and should not have been accepted.
In my view the Appellant Worker’s employment was a substantial contributing factor to her injury. I have had particular regard to the following:
(a)the time and place of injury (section 9A(2)(a)): Ms Lee’s condition developed almost immediately after receiving the letter of 29 March 2004 at work;
(b)the nature of the work performed (section 9A(2)(b)): the letter related directly to Ms Lee’s duties as a teacher;
(c)the duration of the employment (section 9A(2)(c)): Ms Lee had worked for the Department for several years without developing any psychological condition, albeit with several personality clashes;
(d)the probability that the injury or a similar injury would have happened anyway (section 9A(2)(c): this may be the view of the AMS, but it is a view not supported by the treating specialists nor from an analysis of the Appellant Worker’s work history;
(e)the worker’s state of health before the injury and the existence of any hereditary factors (section 9A(2)(e)): on the available evidence, Ms Lee’s health was satisfactory prior to 29 March 2004, and
(f)the worker’s lifestyle and activities outside the workplace (section 9A(2)(f)): there is no evidence that Ms Lee’s lifestyle created any relevant risks for her health.
Having regard to the terms of section 9A and to the evidence in the case, it is my view that Ms Lee’s employment was a substantial contributing factor to her injury.
Section 11A
Section 11A(1) of the 1987 Act provides:
“11A No compensation for psychological injury caused by reasonable actions of employer
(1) No compensation is payable under this Act in respect of an injury that is a psychological injury if the injury was wholly or predominantly caused by reasonable action taken or proposed to be taken by or on behalf of the employer with respect to transfer, demotion, promotion, performance appraisal, discipline, retrenchment or dismissal of workers or provision of employment benefits to workers.”
This issue has not been addressed by either party in the written submissions before me and was not dealt with by the Arbitrator as he found there had been no injury. As a result it will be necessary for this part of the claim to be remitted to a different Arbitrator for determination. In making that determination it will be necessary to have regard to the decision of Department of Education and Training v Sinclair [2005] NSWCA 465 (‘Sinclair’) where the Court of Appeal held at [96] and [97]:
“96 Furthermore, the case before Sheahan J primarily focused on the whole course of Departmental conduct as constituting the relevant ‘substantial contributing factor’ for purposes of s9A. His Honour appeared to approach the s11A issue on the same basis. This is an appropriate course to adopt in a context concerned, and concerned only, with psychological injury arising from matters such as ‘demotion, promotion, performance, appraisal, discipline, retrenchment or dismissal’. Such actions usually involve a series of steps which cumulatively can have psychological effects. More often than not it will not be possible to isolate the effect of a single step. In such a context the ‘whole or predominant cause’ is the entirety of the conduct with respect to, relevantly, discipline.
97 His Honour’s analysis, as that of the Arbitrator, appears to assume that any specific blemish in the disciplinary process, however material in a causative sense or not, was such as to deprive the whole course of conduct of the characterisation ‘reasonable action with respect to discipline’. In my opinion, a course of conduct may still be ‘reasonable action’, even if particular steps are not. If the ‘whole or predominant cause’ was the entirety of the disciplinary process, as much of the evidence suggested and his Honour appeared to assume, his Honour did not determine whether the whole process was, notwithstanding the blemishes, ‘reasonable action’. For this alternative reason the appeal should be allowed.”
The above authority makes it clear that it is ‘the whole process’ that must be considered. Therefore, it will be necessary to consider not only the letter of 29 March 2004 but also the steps taken both before and after 29 March 2004 to decide if the Department’s conduct was ‘reasonable’. Further submissions and, ideally, further evidence will be needed on this important issue.
It will be necessary to determine whether the action taken or proposed to be taken by Ms Duncan and Mr Dunne were steps in respect of performance appraisal and or discipline of Ms Lee. If they were, then the question is: were those steps, taking into account ‘the whole process’, ‘reasonable action’ within section 11A, and, has Ms Lee’s condition been ‘wholly or predominantly caused’ by that reasonable action?
In respect of the interaction between sections 9A and 11A the Chief Justice held in Sinclair at [58] that “it is necessary to understand s11A to mean that the employer is not liable where, to the extent that the employment contributed to the injury, that contribution was wholly or predominantly caused by reasonable action taken with respect to ... ‘discipline’”.
Bias
The Appellant Worker makes several complaints under this general heading. They are:
· the Arbitrator could have insisted on the report from Dr Boland being submitted: that is incorrect, the service or non service of a medical report from a doctor who is not a treating doctor is a matter for the party who obtained the report. Subject to any claim for privilege, a party may issue a Direction for Production of relevant documents but that will not automatically make the document admissible at the hearing;
· no statement was produced by the Respondent Employer from Mr Cooper (Ms Lee’s acting head teacher in 2003): it was open to the Appellant Worker to obtain a statement from Mr Cooper if she wished and there can be no criticism of the Respondent Employer for not tendering a statement from him;
· important reports were allegedly hidden: no reports are identified and this complaint has no merit;
· the Arbitrator disallowed the Appellant Worker’s report from Dr Teoh: that report was disallowed under regulation 43 of the Workers Compensation Regulation 2003 which provides that only one report in any particular specialty may be admitted on behalf of a party. As the Appellant Worker had already submitted a report from Dr Ali, the Arbitrator was correct to reject the report from Dr Teoh who was of the same specialty as Dr Ali, and
· at the Arbitration hearing the Arbitrator is alleged to have waived the AMS’s report in front of the parties and said that if Dr Parmegiani did not amend his opinion, then he would make his decision against the Appellant Worker: as there is no transcript of the conciliation proceedings it is impossible for me to assess this allegation. The Arbitrator’s Reasons concede that he said at the conciliation hearing on 11 November 2005 that he “considered giving the AMS assessment considerable weight as evidence but not necessarily conclusive evidence in attempting to resolve these proceedings” (transcript page three line 36). I consider that the Arbitrator did no more than indicate to the parties his preliminary view. He then allowed the Appellant Worker to submit further reports to the AMS for his consideration. Whilst that step indicates an effort to be fair to the Appellant Worker, it also indicates that the Arbitrator intended to give the MAC far greater weight than was appropriate in the circumstances of the case. That is confirmed when one considers that the Arbitrator did not refer to Ms Zavodnyik’s report on the question of injury or section 9A. It is important to note that the MAC issued by Dr Parmegiani was not ‘conclusively presumed to be correct’ and was merely one piece of evidence that had to be weighed with all the other evidence in the case before reaching a conclusion. Whilst the Arbitrator acknowledged that the MAC was not conclusive, his failure to consider all relevant evidence and his reference to the AMS having been “trained and approved by the Commission to conduct these independent assessments” indicates that he gave far too much importance to the MAC and too little weight to the totality of the evidence which overwhelmingly supported the Appellant Worker on the question of injury.
In addition it is alleged that the Arbitrator and the Respondent Employer’s solicitor “spent considerable time conferring in a separate room before coming to the meeting room” (Appellant Worker submissions page six point three). The Respondent Employer rejects any allegation of unethical conduct at the conciliation on 11 November 2005 but does not provide a detailed response to the specific allegation raised. In light of the allegations made by the Appellant Worker, the solicitor should have provided a detailed response. As a result of the findings I have made above, it is not necessary for me to make a determination on this point.
I should make the following brief observations about the Appellant Worker’s allegation of bias:
· if a party considers an Arbitrator is guilty of bias he or she must object to the Arbitrator continuing to hear the case (Vakauta v Kelly (1989) 167 CLR 568 at 572 (‘Vakauta’));
· a failure to object at the hearing may mean that the party has waived his or her right to object (Vakauta, and Lindon v The Commonwealth (1996) 70 ALJR 541 at 548B);
· at the time of the Arbitration hearing the Appellant Worker was represented by a solicitor and no objection was taken to the Arbitrator continuing to hear the case, therefore
· no objection can now be taken that the Arbitrator was biased or acted improperly in his conduct of the proceedings.
The test of whether a judicial officer is biased was stated by the High Court in Johnson v Johnson [2000] HCA 48 to be:
“It has been established by a series of decisions of this Court that the test to be applied in Australia in determining whether a judge is disqualified by reason of the appearance of bias (which, in the present case, was said to take the form of prejudgment) is whether a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial and unprejudiced mind to the resolution of the question the judge is required to decide [4].”
On the material before me I am not satisfied that any allegation of bias or unethical conduct has been made out.
OTHER MATTERS
I strongly urge the Appellant Worker to seek and retain legal representation for the next Arbitration hearing.
All transcript references in this decision are references to the transcript forwarded to the parties by the Registrar on 27 April 2006.
DECISION
Paragraphs 1, 2 and 3 of the Arbitrator’s decision of 31 January 2006 are revoked and the following order made:
“The matter is remitted to a different Arbitrator to determine the Appellant Worker’s entitlements under the Workers Compensation Act 1987 in accordance with these reasons.”
The costs of the original Arbitration proceedings are to follow the outcome of the second Arbitration.
COSTS
The Respondent Employer is to pay the Appellant Worker’s costs of the appeal.
Bill Roche
Acting Deputy President
8 August 2006
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF BILL ROCHE, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
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