Litigation Lending Management Pty Limited v Powell - [2010] NSWWCCPD 70

WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:		Litigation Lending Management Pty Limited v Powell [2010] NSWWCCPD 70
APPELLANT:		Litigation Lending Management Pty Limited
RESPONDENT:		Robyn Kim Powell
INSURER:		CGU Workers Compensation (NSW) Limited
FILE NUMBER:		A1-8856/09
ARBITRATOR:	Ms C D’Souza
DATE OF ARBITRATOR’S DECISION:		10 March 2010
DATE OF APPEAL DECISION:		30 June 2010
SUBJECT MATTER OF DECISION:		Section 40 of the Workers Compensation Act 1987; probable earnings but for injury; ability to earn.
PRESIDENTIAL MEMBER:		Deputy President Kevin O’Grady
HEARING:		On the papers
REPRESENTATION:		Appellant:	Sparke Helmore
Respondent:	Beilby Poulden Costello
ORDERS MADE ON APPEAL:		1. Paragraph 1 of the Arbitrator’s determination dated 10 March 2010 is revoked and the following order made in its place: “1. Award for the Applicant pursuant to section 40 of the Workers Compensation Act 1987 at the rate of $354.00 per week from 23 August 2009 to date and continuing.” 2. Paragraph 2 of the Arbitrator’s decision is confirmed. 3. The appellant to pay the respondent’s costs of the appeal.

BACKGROUND TO THE APPEAL

Ms Robyn Kim Powell commenced employment with Litigation Lending Management Pty Limited (‘the appellant’) in 1999. Her position with the appellant, a firm of solicitors, was described as “secretarial and personal assistant”. Ms Powell was engaged on a full time basis. In May 2001 her work load increased significantly when she was required to perform work generated by an extra solicitor. The change in her duties resulted in a significant increase in keyboarding activity. At sometime towards the end of June 2001 Ms Powell developed symptoms of paraesthesia including pins and needles with associated pain along the back of both forearms as well as pain in her neck and around both shoulders which radiated through to the upper limbs.
By reason of her symptoms Ms Powell ceased work and sought medical treatment. After a short absence from her duties she returned to work and continued receiving treatment. By reason of ongoing symptoms Ms Powell ceased work on 16 July 2001. She has not resumed employment with the appellant since that time.
It seems that Ms Powell made a claim for compensation benefits and payments were made by the appellant’s insurer until 23 August 2009. Payment up to that date had been made pursuant to section 40 of the Workers Compensation Act 1987 (‘the 1987 Act’). Termination of those payments had been effected by service of a Notice pursuant to section 54 of the 1987 Act by letter dated 8 July 2009.

A dispute arose between the parties concerning Ms Powell’s entitlement to continuing weekly compensation and an Application to Resolve a Dispute (‘application’) was filed on her behalf with the Commission on 30 October 2009. The application came before an Arbitrator for conciliation/arbitration on 4 February 2010. The matter proceeded to arbitration and the Arbitrator reserved her decision. On 10 March 2010 a Certificate of Determination was issued together with a Statement of Reasons (‘Reasons’).

THE DECISION UNDER REVIEW

The ‘Certificate of Determination’, dated 10 March 2010 records the Arbitrator’s orders as follows:

“The Commission determines:

1.That Respondent pay the Applicant weekly compensation pursuant to section 40 of the Workers Compensation Act 1987 at the following rates:
·$389.10 from 23 August 2009 to 30 September 2009
·$396.10 from 1 October 2009 to date and continuing in accordance with the provisions of the Act.

2.Respondent to pay the Applicant’s costs as agreed for assessed.

A brief statement is attached to this determination setting out the Commission’s reasons for the determination.”

An Appeal Against Decision of Arbitrator was filed with the Commission on 7 April 2010.

ISSUES IN DISPUTE

The issues in dispute in the appeal are whether the Arbitrator erred in the following respects:

(i) the manner of calculation of Ms Powell’s probable earnings but for injury within the meaning of section 40 (2)(a) of the 1987 Act;
(ii) the manner of determining Ms Powell’s ability to earn in some suitable employment within the meaning of section 40 (2)(b) of the 1987 Act, and

(iii) the manner in which Ms Powell’s actual earnings had been taken into account for the purpose of determining the quantum of her entitlement to compensation pursuant to section 40 of the 1987 Act.

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.”

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.

LEAVE

There is no dispute between the parties concerning threshold requirements as prescribed by section 352 of the 1998 Act.

The appeal having been lodged within the time prescribed by that section and the fact that the monetary threshold prescribed by that section has been met, together with a consideration of the arguments raised on appeal, lead me to conclude that it is appropriate that leave be granted to proceed with the appeal and I so order.

EVIDENCE

The documentary evidence which was before the Arbitrator is summarised at [8] of Reasons. No oral evidence was adduced before the Arbitrator. The proceedings before the Arbitrator were recorded and a transcript has been produced and a copy made available to each party.

Ms Powell’s evidence

There is a written statement made by Ms Powell dated 23 October 2009 in evidence. Ms Powell, who is presently 55 years of age, states that she was injured on or about 26 June 2001 in the course of her employment with the appellant. She was at that time employed on a full time basis in a secretarial and personal assistant position earning $47,500.00 gross per annum. Ms Powell describes a significant increase in her workload occurring in about June 2001 which caused her to experience pain in her neck and both forearms whilst working. She was initially treated by Dr Yvonne Amos and was referred to Dr Kandiah, rheumatologist. Treatment also included physiotherapy, osteopathy and acupuncture.

Ms Powell ceased work by reason of her symptoms and was paid compensation benefits. Payments for weekly compensation continued until liability was declined by the insurer in July 2009 at which time a Notice pursuant to section 54 of the 1987 Act was served upon her. Weekly payments ceased on 23 August 2009.

A claim for lump sum compensation had been made by Ms Powell in 2005. A Medical Assessment Certificate (MAC) was issued by Dr James Bodel, orthopaedic surgeon and Approved Medical Specialist, following examination and assessment conducted on 11 August 2005. Dr Bodel certified that Ms Powell had sustained an 8 per cent permanent impairment of her neck, a 5 per cent loss of efficient use of her left arm at or above the elbow and a 5 per cent permanent loss of efficient use of her right arm at or above the elbow as a result of the subject work injury.
Ms Powell states that since September 2002 she has been certified by her medical advisors as being fit to undertake light work on a part time basis not involving repetitive use of her hands or arms. Ms Powell obtained work with the Paddington Child Care Centre which work involved keyboarding. That employment was discontinued because of “some aggravation” of her symptoms.
On 4 March 2003 Ms Powell commenced work with Harbord Homeopathic Clinic and has retained that position to the present time. Her duties are that of receptionist and clerical worker. Ms Powell states that she is “employed on a contract basis working up to two days per week performing these duties”. The work is in fact spread out over three days and her work routine is between 14 to 16 hours per week. In addition to that work, when not on duty, she undertakes any homeopathic consultations that may become available. That work is conducted at the Clinic premises and is a business which has only recently been pursued by Ms Powell. She is attempting to build up her client base and states that in a slow week she will conduct two consultations and on a busy week will conduct six such consultations. The arrangement made between Ms Powell and the Clinic results in her being at the Clinic during four days per week but it is stated “I am not always working as I do not have the clients”.
Ms Powell states that the receptionist/clerical work she presently performs does cause her some discomfort and pain but she manages to spread out the workload. On occasions Ms Powell has relieved a fellow receptionist who has been absent. On those occasions that extra work has caused her considerable pain. Ms Powell is of the view that she is not able to do the receptionist/clerical work for longer hours than she currently performs and she states that she certainly could not perform such work on a full time basis.
Ms Powell states that she is paid $22 per hour for the receptionist/clerical work and that she is paid $70 per homeopathic consultation. She continues to receive treatment including massage and osteopathic treatment and she undertakes a course in Pilates.
A number of medical reports are attached to Ms Powell’s application. They include a report on a CT Study of the cervical spine by Doctor Steinberg dated 8 October 2002, a report from Dr Amos dated 22 September 2004, a report of Dr Albert Bencsik dated 1 November 2004, a report of Dr John Davis dated 23 July 2009, a report of Dr Gregory Carr dated 10 September 2009 and a report from Dr Karen Tattersall dated 13 October 2009. Those reports detail Ms Powell’s history, investigations and treatment and views are expressed concerning diagnosis and work capacity. Detail of that evidence where relevant to issues raised on this appeal appears below.
Also attached to the application is a copy of notice issued pursuant to section 54 of the 1987 Act addressed to Ms Powell dated 8 July 2009. That notice acknowledges that any entitlement to weekly benefits Ms Powell may have is pursuant to section 40 of the 1987 Act. It is asserted in that notice that Ms Powell’s probable earnings but for the injury are in the sum of $961.50 per week. It is further asserted that Ms Powell’s ability to earn is in the sum of $1,067.47 per week. Upon the basis of those figures it is asserted that Ms Powell has no ongoing entitlement to weekly benefits. Notice of termination as from 23 August 2009 was given. A number of documents including an Earning Capacity Assessment dated 29 June 2009 signed by Ms Geraldine Nelson, a report from Dr Ian Smith dated 19 June 2009 and a copy of facsimile dated 25 June 2009 received by the insurer from Ms Powell’s treating doctor, Dr Tattersall, were enclosed. Dr Tattersall certifies that Ms Powell is fit for full time work as an office manager or receptionist.
A number of documents which appear to be printouts from the internet advertising available positions in the field of work conducted by a legal secretary are attached to the application. There is also a copy of a graph concerning such earnings between 2008 and 2009 which has been obtained from the website MYCAREER.
Ms Powell relies upon a document apparently prepared by Harbord Homeopathic Clinic which summarises what is described as gross earnings including superannuation received by her from that organisation between the weeks ending 7 January 2009 and 28 August 2009. Detail of that document appears below.
The Arbitrator granted Ms Powell leave to rely upon documents attached to two separate applications to admit late documents filed on her behalf. Those documents comprise copies of income tax returns for the years 2007, 2008 and 2009.Those returns record income received from the workers compensation insurer, some modest sums received by way of dividend and interest as well as Ms Powell’s income from a business described as Harbord Homeopathic Childrens Clinic. Detailed are income and expenses concerning that business which have, apparently, been accepted by the Australian Tax Office for purposes of assessement. These returns are addressed below.

The appellant’s evidence

The appellant relied upon a report prepared by Dr Ian J Smith, Injury Management Consultant, which had been prepared following an assessment of Ms Powell which occurred on 19 June 2009. Dr Smith incorrectly records that Ms Powell commenced employment with the Appellant in 1989. He did record that Ms Powell had “a history of neck and arm pain related to increased typing and usage of both arms in both 1985 and 1987”. Dr Smith recorded the onset of symptoms in the neck, mid-thoracic spine and arms in the course of her work with the Appellant in June 2001. It was noted in that report that Ms Powell is “presently at work on reduced hours”. Dr Smith notes that Ms Powell’s hours are somewhat varied. It is noted that Ms Powell works all day Wednesday and one half day on Monday and that on Saturday she does the accounts for a few hours. At other times Ms Powell provides homeopathic services but Dr Smith noted that the number of clients attended is “highly variable”. It is noted that Ms Powell has completed a course in homeopathy.
In his report Dr Smith records Ms Powell’s agreement that, should restrictions concerning work activities as appears in her then current medical certificate be followed, she could manage full-time duties. It is also noted that the more repetitious work performed by Ms Powell gives rise to more symptoms. Dr Smith proceeded to express the view that Ms Powell is fit to work full time provided repetitious use of her arms is restricted.
A short letter from Dr Smith addressed to Dr Tattersall, Ms Powell’s general practitioner, which is undated but which was apparently sent in June 2009 is attached to the Appellant’s Reply. The subject of that correspondence was the then current return to work goals which had been put in place by the insurer. It is stated by Dr Smith “on discussing the matter with [Ms Powell] it seems that the issue is that the nominated return to work goals are too repetitive to enable full time work”.
The appellant relies upon a report of Dr Tattersall dated 17 March 2008. That report is addressed to the insurer and includes a diagnosis being “cervical tenosynovitis, fibrosis and neuropathic pain”. Dr Tattersall’s view at that time concerning Ms Powell’s fitness for work was that she was capable of performing office work, filing, phone, general assistance in the workplace and limited computer work. No repetitive work is to be performed and she was capable of performing two and a half to three days per week.
A report dated 29 June 2009 prepared by Intervene Assessment Services Pty Ltd was relied upon by the Appellant. That report addresses the question of Ms Powell’s earning capacity. The author of that report was Ms Geraldine Nelson, rehabilitation counsellor. At page five of that report, Ms Powell’s qualifications are noted as including a Diploma in Business (Valuation); Diploma of Homeopathy and Herbalism; Real Estate Valuation; and Certificate in Touch Typing. It is stated by Ms Nelson that, following assessment and liaison with Dr Tattersall, Ms Powell “possesses skills, qualifications and experience to work as a Receptionist and Office Manager on a full time basis as outlined in the report.”
It is stated by Ms Nelson in the course of her report that she had been advised by the Appellant’s accountant that an employee performing a similar role to that performed by Ms Powell pre-injury is “currently receiving $50,000.00 (gross) per annum”. Later in the report (at page 10) Ms Nelson distinguishes between the position of office manager and receptionist. The report contains what is described as a “labour market analysis”. The report records that average earnings for a receptionist is $908.97 per week. Average earnings in the open labour market are said by Ms Nelson to be in the sum of $1,225.96 per week in the case of an office manager. The assumption is made that both positions are performed full time.
The appellant relied upon a copy of a facsimile transmission forwarded by Ms Tomney, the appellant’s accountant, addressed to a representative of the appellant’s insurer. That document, dated 24 April 2009, states in part “we have an employee in a similar (but not the same capacity) and they are earning $50,000.00 plus super per annum. If you need any further information please let me know.”
The appellant relies upon a document prepared by Harbord Homeopathic Clinic which relates to payments made to Ms Powell between the week ending 7 January 2008 and the week ending 3 December 2008. That document indicates that in addition to “earnings” Ms Powell is paid a sum in respect of superannuation. Detail of these documents and those relied upon by Ms Powell are addressed below.
A number of further documents are attached to the Reply filed on behalf of the appellant which are not directly relevant to the issues raised on this appeal.
The Arbitrator granted the appellant leave to rely on a number of documents which were attached to two Applications to Admit Late Documents. Included are certain copies of tax records apparently relating to Ms Powell’s income. Those documents are not described in the schedule to the Application however the three pages appear to be fragments of tax records relating to the financial years ending June 2006 and June 2007.
Included among the documents admitted by the Arbitrator is a summary of earnings, presumably of Ms Powell, which has been prepared by Harbord Homeopathic Clinic. Also listed is a summary of rent paid, again presumably by Ms Powell. The period addressed is between 5 July 2008 and 30 June 2009. Detail of this document is addressed hereunder.
A copy of correspondence between Dr Tattersall and Dr Gregory Carr dated 31 July 2009 was admitted as a late document by the Arbitrator. That was a letter of referral which outlined Ms Powell’s history, diagnosis and treatment. The observation is made by Dr Tattersall in that letter that Ms Powell “has been working part time with insurance company supplementing her income but recently it has been determined that she is fit for full time hours as long as the conditions are met.” Dr Tattersall noted the recent development of olecranon bursitis and sought Dr Carr’s views as to how such diagnosis may fit into her history and whether there is a suggestion that Ms Powell is “not ready for more working hours”.
The Arbitrator allowed the tender of clinical records produced by Dr Tattersall, Dr Carr and Dr Lee as late documents. The notes of Dr Tattersall include a copy of a facsimile transmission signed by her dated 29 May 2009 which was sent to Ms Nelson. The form of that document is similar but not identical to the facsimile referred to in [21] above. That document contains certification by Dr Tattersall that Ms Powell was fit for employment as an office manager, receptionist or enquiry clerk on a part time basis. There is also a letter addressed to Dr Tattersall from Dr Gregory Carr dated 6 August 2009 among the clinical notes. Dr Carr confirmed the diagnosis of olecranon bursitis of the right elbow which he suggested may be related to direct trauma although there was no obvious history of injury. His prognosis was that the condition should resolve in a matter of weeks without treatment. Dr Carr suggested further investigations in relation to Ms Powell’s work related disability.

A further report of Dr Carr dated 10 September 2009 is among those documents forming Dr Tattersall’s clinical notes. Dr Carr confirms that Ms Powell’s nerve conduction study is consistent with a mild right ulnar neuropathy at the elbow. Dr Carr notes the congenital fusion of the C5/6 vertebra and further notes that Ms Powell had recently fractured her foot in a non work related incident. It is Dr Carr’s view that Ms Powell needs to ergonomically organise herself to use the left hand to answer telephones and to avoid aggravation of the symptoms by typing and mouse operation. He placed a load limit of three kilograms in respect of the right hand. The balance of the documents including those produced by Drs Carr and Lee are of no direct relevance to the issues raised on this appeal.

SUBMISSIONS
Submissions before the Arbitrator

It was put on behalf of Ms Powell that, there being no issue as to injury, the Commission was concerned with the proper manner of determining any entitlement she may have pursuant to section 40 of the 1987 Act. Such requires application of those matters enunciated in the decision of Mitchell v Central West Health Service (1997) 14 NSWCCR 526 (‘Mitchell’). It was put that the appropriate calculation firstly requires a determination of Ms Powell’s probable earnings but for injury. It was submitted that the evidence relied upon by the appellant, as found in Ms Tomney’s fax dated 24 April 2009, should be rejected and that Ms Powell’s evidence as to comparable earnings in the field of work performed by secretaries/personal assistants in the legal profession should be preferred. The primary submission was that annual probable earnings in the sum of $60,000.00 should be found as being Ms Powell’s probable earnings for the purpose of determining any entitlement to weekly compensation.
Ms Powell proceeded to argue that the Commission was required to determine what she is earning or is able to earn. It was put that the evidence establishes with precision that which she is earning and that such figure is, prima facie, the “yardstick” for the purpose of calculation of entitlement. It was noted in the course of submissions that nothing had been put on behalf of the appellant to suggest that Ms Powell’s actual earnings were not the “proper yardstick”. Reference was made to the contents of Ms Powell’s 2009 tax return and it was argued that her ability to earn should be determined having regard to the net business income demonstrated in that document. If that argument be accepted, Ms Powell’s ability to earn for the purposes of calculation of entitlement was $344.00 per week. In support of the analysis of Ms Powell’s business earnings, reliance was placed largely upon the decision of Office of the Director of Public Prosecutions v Olsen [2009] NSWWCCPD 26 (‘Olsen’). Ms Powell’s ultimate submission was that there should be a finding that her actual earnings at relevant times were in the sum of $350.00 per week. Acceptance of that argument, it was put, would entitle Ms Olsen to an award pursuant to section 40 at the maximum statutory rate.
It was suggested, by way of an alternative submission, that the Commission may have regard to the terms of section 40, in particular that which appears in section 40(2)(b). It was put that a determination may need to be made as to Ms Powell’s ability to earn in some suitable employment in terms of that subsection. Attention was given in the course of argument to the medical evidence concerning the extent of Ms Powell’s incapacity. It was argued that the Commission should reject the evidence of Ms Nelson concerning the suitability of the work as described in her report dated 29 June 2009. The argument was advanced that Ms Powell’s capacity for work is the performance of her current duties for two or three days per week at the rate of $22.00 per hour. Again it was put that, upon acceptance of that argument, her entitlement would be to the maximum statutory weekly rate.
The appellant relied upon the evidence of Ms Tomney, its accountant, as found in the copy facsimile transmission attached to Ms Nelson’s report concerning the question of probable earnings but for injury. It was Ms Tomney’s evidence that such earnings are $50,000.00 per annum. Such evidence would be preferred to that which was presented by Ms Powell, it was argued, and it was noted that the advertisements relied upon by her appeared to relate to “packages” which included a sum in respect of superannuation allowances. An argument was also advanced that those advertisements appeared to relate to positions with large firms whereas the appellant “is a small firm” and that “the bigger firms pay higher salaries”. It was thus the argument put on behalf of the appellant that probable earnings but for injury would be in the sum of $961.50 per week.
The appellant placed reliance upon the contents of Ms Nelson’s report concerning the issue of Ms Powell’s ability to earn in terms of section 40(2)(b). It was noted that Ms Powell had advised Ms Nelson that she had been earning $520.00 per week as office manager at Harbord Homeopathic Clinic. Upon the basis of that notation the appellant argued that the hourly rate payable for such work is to be calculated as being $32.50. Attention was then given in the course of addresses to the availability of variable amounts of work providing homeopathic advice. Attention was then drawn to the summary of payments made by Harbord Homeopathic Clinic to Ms Powell between July 2008 and June 2009 as appears in the summary referred to in [35] above. The argument was advanced that the figures which appear in that schedule demonstrate that Ms Powell has an ability to earn which exceeds the probable earnings but for injury. Particular attention was drawn to the copy facsimile signed by Dr Tattersall which is in evidence stating that Ms Powell is fit for full time work as a receptionist or office manager.
The appellant submitted, by way of an alternative argument, that Ms Powell’s evidence at its highest would support an award pursuant to section 40 for no more than $210.00 per week.

THE ARBITRATOR’S REASONS

The Arbitrator noted (at [9] of Reasons) that there was no dispute between the parties that Ms Powell had suffered injuries to her neck and arms in the course of her employment with the Appellant. The medical evidence which was before the Commission was thoroughly summarised by the Arbitrator between [15] and [24] of Reasons. Following that summary the Arbitrator found that “the weight of the medical evidence supports the position that [Ms Powell] is presently working at her maximum capacity in receptionist/secretarial/office manager type work”. In the course of so finding the Arbitrator stated that the evidence of Dr Tattersall contained in the facsimile transmission dated 25 June 2009 had been given “little weight”. The Arbitrator proceeded to outline the steps, as enunciated in Mitchell, which are required to be taken to determine Ms Powell’s entitlement in respect of partial incapacity.
The conflicting evidence concerning probable earnings was addressed by the Arbitrator between [28] and [31] of Reasons. The conclusion reached by the Arbitrator was that Ms Powell would probably have earned $1,153.85 per week if not for injury. In so concluding the Arbitrator has accepted Ms Powell’s argument concerning this particular matter.
The Arbitrator considered the evidence relevant to Ms Powell’s actual earnings and/or ability to earn post injury between [32] and [37] of Reasons. The competing arguments raised in the course of submissions were addressed and the conclusion was reached by the Arbitrator that Ms Powell’s “actual earnings are the appropriate amount for the purposes of section 40(2)(b)”. The Arbitrator proceeded to find that the weekly amount Ms Powell was earning was $334.00. It may be seen that, again, the Arbitrator has accepted the argument as advanced on behalf of Ms Powell. An award was entered in Ms Powell’s favour.

SUBMISSIONS ON THIS APPEAL

The appellant suggests error on the part of the Arbitrator in concluding that Ms Powell’s probable earnings, but for injury, are in the sum of $1,153.85 per week. The evidence as found in the advertisements concerning the availability of administration/legal secretary positions specified a “gross” sum which included superannuation. It is suggested that the Arbitrator has failed to take that factor into account when determining the question of probable earnings. The appellant asserts in the course of submissions that “the higher salary packages advertised relate to specialised legal secretaries in certain areas of the law and therefore are not applicable to [Ms Powell] as she was involved in general administration and secretarial work”. The Arbitrator’s finding that Ms Powell “had a steadily improving career path up to the time of her injury” is criticised in the course of submissions upon the basis that there was no evidence that Ms Powell would have specialised in a particular area of law thereby gaining progression in her career to senior legal secretary. It is put that her pre-injury duties were “more administrative rather than legal”.
The appellant makes reference in the course of submissions to the evidence that Ms Powell had experienced symptoms in her neck and arms on occasions earlier than the subject injury and that her “current injuries” are “a recurrence of her previous injury”. It is not made clear in these submissions as to the relevance of the suggested “recurrence” of symptoms to the question of Ms Powell’s probable earnings but for injury.
The submissions proceed to deal with the subject of capacity to earn. It is reasonably clear that the appellant seeks to address the question of Ms Powell’s ability to earn following her injury. Particular reference is made to the evidence of Dr Tattersall who certified in July 2009 that Ms Powell was “fit for full time hours”. It is suggested in those submissions that correspondence received by Dr Tattersall from Ms Powell, which had been produced with the clinical notes admitted by the Arbitrator, supports the suggestion that an effort was made to coerce Dr Tattersall “to change her certification to support [the] claim for partial incapacity”.
The evidence relevant to the hours of work performed by Ms Powell and the medical opinion concerning her capacity to perform her present duties is summarised in the course of submissions. It is then asserted that “there is no evidence to support the Arbitrator’s determination [Ms Powell] was fit to work a maximum of 16 hours per week in a clerical capacity”. It is put that the evidence adduced by Ms Powell suggests that she is able to work on a part-time basis between 20 and 25 hours per week.
A complaint is made in the course of submissions that the Arbitrator failed to take into consideration Ms Powell’s foot injury which she received in September 2009 and the bursitis which she experienced in July 2009. There is no submission which clarifies the relevance of the alleged failure to take those matters into consideration.

The submissions proceed to address the question of Ms Powell’s actual earnings post injury. Reference is made to the decision of Olsen which authority, it is suggested, sets forth “three possible methods of working out potential earnings pursuant to section 40 where a worker is engaged in his or her own business”. There follows a detailed analysis of the economic evidence however the argument advanced lacks precision. The appellant points to inconsistencies in the evidence concerning economic matters which, it is said, had not been taken into account by the Arbitrator when reaching her concluded views concerning Ms Powell’s actual earnings. It is suggested that the financial records concerning payment by Harbord Homeopathic Clinic do not “correlate” to the evidence given by Ms Powell. It is suggested that that lack of “correlation” gives rise to “credit issues” which have not been taken into account by the Arbitrator.
Reliance is placed upon the evidence of “gross wages” paid to Ms Powell which exceed $1,400 per week. It is submitted that such sum is “more than her pre-injury earnings and it is not fair or just for the appellant to supplement [Ms Powell’s] income at the maximum rate without consideration of same”.
It is suggested in submissions that Ms Powell’s business is expanding and it is suggested that her income will continue to increase. It is argued that such has not been taken into consideration by the Arbitrator when considering exercise of her discretion granted by the provisions of section 40.
Ms Powell in submissions on this appeal seeks to support the Arbitrator’s rejection of the appellant’s evidence concerning probable earnings but for injury. It is noted that she was earning $47,500 as a legal secretary immediately pre-injury. It is argued that the Arbitrator’s approach to this question is supported by the evidence of Ms Nelson in her report which included reference to the likely earnings of an office manager as being $1,225.96 per week. It is put that the Arbitrator, who may inform herself as a member of a specialist tribunal concerning earnings based upon experience and knowledge of the labour market and wage levels, was entitled to conclude that Ms Powell’s probable earnings but for injury would be $60,000 per annum.
The submissions opposing the appeal summarised the evidence before the Commission and it is put that the evidence establishes that Ms Powell worked, pre-injury, for two days per week spread over three days and in addition undertook between two to six homeopathic consultations.
The appellant’s suggestion that Ms Powell had attempted to coerce Dr Tattersall is rejected in the course of these submissions. It is put that the only evidence which would suggest that Ms Powell could work full time is to be found in the short facsimile transmission sent by Dr Tattersall. It is emphasised in submissions that the balance of Dr Tattersall’s evidence including her most recent report and that of other medical practitioners, including Dr Davis, contradicts those matters which appear in Dr Tattersall’s fax.
It is argued that the Arbitrator, when making her findings required by the provisions of section 40(2)(b), correctly applied the decision of Aitkin v Goodyear Tyre and Rubber Company (Aust)Ltd [1945] 46 SR (NSW) 20 (Aitkin). It is argued that the Arbitrator’s conclusions were in accordance with the evidence and that no error had been demonstrated.
The appellant, under cover of the letter dated 4 June 2010 addressed to the Registrar, has provided submissions in reply to Ms Powell’s submissions. It is put that if it be accepted that Ms Powell’s actual earnings are $344 per week, the circumstances of this matter are such that those earnings “are not a proper test”. Attention is drawn is to Ms Tattersall’s evidence concerning the development of her business and it is put that she is “capable of earning more, should she have the clients”.
The appellant develops an argument that the earnings of $344 per week as found do not provide a proper test of ability to earn. It is put that, having regard to what was stated in Aitkin and Olsen, the task before the Arbitrator required a calculation of the value of Ms Powell’s labour to the business. A number of arithmetic calculations based upon the evidence are set forth in those submissions and it is put that, upon acceptance of this alternative argument, Ms Powell’s entitlement pursuant to section 40 is in the sum of $189.50 per week.

DISCUSSION AND FINDINGS

The dispute before the Arbitrator concerned the question of entitlement to weekly compensation that Ms Powell may have by reason of the consequences of the admitted injury. As noted at [45] above the Arbitrator found that Ms Powell was “working at her maximum capacity”. Whilst the Arbitrator made no express finding that as a consequence of the subject injury Ms Powell had become partially incapacitated, it is clear that such conclusion was reached having regard to the reasoning expressed and orders made. There is abundant evidence before the Commission to support a finding of partial incapacity and, on this review, I so find.
The manner in which argument has been advanced by each party has given rise to some confusion concerning the relevance of that evidence which relates to Ms Powell’s “earnings” derived by way of conduct of a business since the onset of her partial incapacity. That evidence is of fundamental relevance to a determination of the second step as propounded in Mitchell, being the amount that Ms Powell is earning, or would be able to earn in some suitable employment from time to time after the injury, in terms of section 40. That dispute is one of two contested issues which have been determined by the Arbitrator. The other concerns the Arbitrator’s calculation of Ms Powell’s probable earnings but for injury. It is appropriate to deal with the question of probable earnings before turning to the somewhat vexed question raised concerning post injury earnings and/or ability to earn in terms of the sub section.

Probable Earnings

I have attempted to summarise the appellant’s arguments concerning the Arbitrator’s findings as to probable earnings but for injury at [48] and [49] above. The Arbitrator rejected the appellant’s evidence concerning probable earnings as found in Ms Tomney’s fax. It was Ms Tomney’s statement that the appellant have “an employee in a similar (but not the same capacity) and they (sic) are earning $50,000 plus super per annum”. Evidence of earnings in an occupational position which is similar to that held by Ms Powell pre injury but which is not of the “same capacity” cannot in my view be relevant and is thus not probative as to probable earnings but for injury. I respectfully agree with the Arbitrator’s rejection of that evidence.

The appellant has failed to demonstrate the relevance of Ms Powell’s experience of disabling symptoms pre-injury and that submission must be disregarded. The balance of the evidence concerning probable earnings is that material which has been presented on behalf of Ms Powell. The economic evidence relied upon related to the positions of administration/legal secretary; intermediate/senior insurance legal secretary; legal secretary-Corporate; senior employment law legal secretary; commercial property legal secretary; litigation secretary – employment; and legal secretary – personal injury (x2). The salary packages which were said to be relevant to those positions as advertised ranged between $54,500 and $70,000 per annum. I accept the appellant’s submission that it appears that the Arbitrator has disregarded the fact that such packages include the prospective employee’s entitlement to superannuation payments. I also accept the appellant’s submission that the Arbitrator does not appear to have taken into account that a number of the positions described in the advertisements are highly specialised in areas for which Ms Powell has no experience. Whilst that fact may have been over looked by the Arbitrator it is relevant, in my view, to assume, when determining this hypothetical figure as required by the terms of the section, that with the passage of time since injury in 2001, Ms Powell would have accumulated very considerable experience and in all probability would have specialised in a particular field of legal practice.
The appellant does not dispute the evidence presented by Ms Powell that pre-injury she was receiving a gross annual income of $47,500. The Commission, as a specialist tribunal, may draw on its general knowledge of the labour market in this State which leads inevitably to the conclusion that wage rates have steadily risen since the date Ms Powell first became incapacitated. The question remains as to what, on the evidence, would her probable earnings but for injury be on and beyond the date of commencement of this claim, namely 23 August 2009.
The Arbitrator has, in the course of reasons, made reference to the evidence found in the report of Ms Nelson concerning the income available to an office manager. Whilst it is correct that such position is one which is said by the appellant to be within the capacity of Ms Powell at present, I do not consider that evidence concerning the earnings of an office manager addresses the issue in dispute. Having considered the evidence as a whole it is probable that Ms Powell, had she not been injured, would as at August 2009 and thereafter probably have earnt a “package” of $60,000 per annum. Such figure includes superannuation which must be deducted for the purpose of calculating the relevant hypothetical figure. Making an adjustment with respect to superannuation entitlement reveals that the annual gross income is $55,045; that, rounded out, represents a weekly income of $1,058.00. It may be seen that I have concluded that the Arbitrator has erred in her calculation of this hypothetical figure. On this review I find that, but for injury, Ms Powell’s probable earnings since August 2009 would be $1,058.00 per week.

Actual earnings/ability to earn

Before addressing the question as to the proper method of determining that figure which falls within the terms of section 40(2)(b) it is necessary to examine those factual matters concerning Ms Powell’s work activities since receipt of injury. The taxation returns which have been tendered on her behalf reveal that she has, it seems since 2003, conducted a business. The name of that business as it appears in the 2009 return is “Harbord Homeopathic Childrens Clinic”. It appears that Ms Powell is the sole proprietor of that business. The earnings of the business include payments made by an organisation known, confusingly, as “Harbord Homeopathic Clinic”. Monies received also includes payment in respect of homeopathic consultations conducted by Ms Powell. The work performed is that of office manager and it is Ms Powell’s evidence that the business is paid $22.00 in respect of each hour performed by her as office manager. The work is done at the premises of the business known as Harbord Homeopathic Clinic which is at 110/20 Dale Street Brookvale NSW. The evidence reveals that the ABN number of that business is xxxxxxxxx55. There is no evidence before the Commission as to who the proprietors of that business are. I note in passing that the ABN number of Ms Powell’s business, Harbord Homeopathic Childrens Clinic, is recorded in the 2009 tax return as being xxxxxxxxx46.

The Arbitrator has rejected the evidence of Ms Nelson, rehabilitation counsellor, that Ms Powell was able to work as a receptionist or office manager on a full time basis. That is a conclusion with which I respectfully agree. The weight of the medical evidence establishes that she is fit for the work of an office manager performing those duties which have been required of her at the Harbord Homeopathic Clinic on a part-time basis and that such work to be performed should be within the limitations as described by Dr Carr which I have summarised at [38] above. It is Ms Powell’s evidence, which has been accepted by the Arbitrator, that such work has occupied her for a period of up to sixteen hours per week and that, together with her attendance at the premises for the purpose of doing those homeopathic consultations which may become available, she is in attendance at that place of work during four days of each week. The Arbitrator’s acceptance, expressed at [36] of Reasons, that Ms Powell is working at her maximum capacity is a conclusion with which I respectfully agree. The appellant challenges the Arbitrator’s finding as expressed at [36] of Reasons where it was said “I accept that her actual earnings are the appropriate amount for the purposes of section 40(2)(b) and find that the weekly amount she is earning is $334.”

The weekly sum of $334.00 as found by the Arbitrator is taken from the 2009 tax return. That return reveals that Ms Powell, as proprietor of the business Harbord Homeopathic Childrens Clinic, received the sum of $32,936. The return reveals that business expenses including rent, motor vehicle and sundry matters totalled $15,044. It may be seen that the Arbitrator has accepted Ms Powell’s argument that the net return to the business, namely $15,044 in the year 2009, represents the average weekly amount which the worker is earning within the meaning of the sub section.
It was stated by the High Court in Arnott’s Snack Products Pty Ltd v Yacob (1984-1985) 155 CLR 171 when addressing the terms of section 11(1) of the now repealed Workers Compensation Act 1926 (‘the former Act’) which is in terms similar to section 40 of the 1987 Act, that a worker’s entitlement to compensation pursuant to that section will depend on his loss of earning power. On the present facts the question is whether the Arbitrator was correct, when determining such loss, to make reference to the net earnings of the business.
Ms Powell was correct in her submission that the weekly amount addressed by the sub section is, prima facie, the worker’s actual earnings: Aitkin v Goodyear Tyre and Rubber Co (Aust) Ltd (1945) 46 SR (NSW) 20. I have reached the view that Ms Powell’s argument with respect to this matter overlooks the need to determine the quantum of her earnings or ability to earn as a worker: Cage Developments v Schubert (1991) 2 NSWLR 227 per Glass JA at 230 (‘Cage Developments’).
In circumstances where an incapacitated worker is conducting a business it is clear from the authorities that there are various approaches which may be taken to determine that weekly amount which is addressed in the sub section. Those approaches are summarised by Glass JA in Cage Developments, which views were subsequently confirmed on appeal to the High Court. His Honour’s summary appears at 230 and is as follows:
“1. The section directs the ascertainment of the difference between the applicant’s hypothetical earnings as a worker, assuming no injury, and the actual earnings received by or accessible to him in his injured condition, Australian Iron & Steel Pty Ltd v Elliott (1996) 67 SR (NSW) 87; 84 WN (Pt 2) 45.
2.    The first figure is normally limited to earnings as a worker but the second includes not only earnings as a worker but also earnings as a self-employed person in his own business: Hill v Bryant [1974] 2 NSWLR 423. The first figure will also include the earnings of a self-employed person where he is deemed to be a worker in another man’s business (Windeyer J, at p 643).
3.    Whether relevant to the second figure, or both figures, earnings in the business are limited to earnings as a worker in the business (Barwick CJ, at p 632; Windeyer J, at p 643; Gibbs J, at p 652). With great respect to Barwick CJ who speaks only of physical labour it would include the value to the business of any exertions whether physical or mental.
4.    The difference between the two figures can be ascertained without any process of subtraction by accepting evidence directed in terms to the difference in earnings (Gibbs J, pp 652, 653).
5.    Normally, however, the difference is ascertained by determining both the hypothetical and factual earning figures and then subtracting the latter from the former. Where one or both figures involve the earnings of a self-employed person, there are two means of ascertaining the value of his work to the business.
6.    The first method is to determine the nett remuneration being received for his labour by examining the business accounts and making all proper allowances for overhead expenses, costs of materials and other labour, maintenance and depreciation of plant, return on capital invested and the like (Gibbs J, at p 652; Windeyer J, at p 643).
7.    The second method is to calculate without reference to the business accounts the worth to the business of his labour. In assessing the worth of an unimpaired earning capacity, as with a deemed worker before injury, industry rates will provide a measure. But if the work capacity is impaired another choice in method of proof is available. A direct determination may be made of the cost to the business of employing someone to do the reduced work of which the applicant is capable. Alternatively, it may be determined by deducting from the cost of employing someone whose work capacity is unimpaired the cost of supplementing the reduced efforts of the applicant so as to produce for the business the services of one fully capable worker (Barwick CJ, at pp 631-632).”

Having regard to the circumstances of this matter I accept the appellant’s argument that the Arbitrator has erred in her determination of the weekly amount which is specified in section 40(2)(b). The weekly sum of $344.00 represents net earnings of the business following deduction of expenses which are not explained and in some cases not identified (motor vehicle expenses and sundry expenses). It cannot be said that the sum of $344.00 per week represents Ms Powell’s ability to earn as a worker given the Arbitrator’s finding, with which I have agreed, that she is effectively in attendance at the business premises four days per week. A proper determination of the worth to the business of that labour would require, in my view, a calculation which takes into account a fair and proper hourly rate for such work. It is Ms Powell’s evidence that she is paid $22.00 per hour in respect of that clerical work. I acknowledge that the appellant challenges that evidence however, it is clear following an examination of the economic evidence, in particular the document headed “gross wages 08-09” relied upon by Ms Powell that, on the probabilities, the sum of $22.00 per hour is the rate for such work and that the Arbitrator’s acceptance of Ms Powell’s evidence was correct. Whilst I am mindful that some of the payments made to Ms Powell are in respect of homeopathic consultations it appears that the availability of such work fluctuates. In those circumstances it is appropriate, in my view, to ascribe an hourly rate to the period during which Ms Powell is in attendance. Upon the basis of an eight hour day, four days per week at $22.00 per hour such work would yield the sum of $704.00 per week.

I am fortified in my view that an appropriate means of valuing Ms Powell’s labour is to choose the rate of $22.00 per hour having regard to the content of Ms Nelson’s report, in particular the notation at page 18 that the casual rate payable in respect of an Office Manager is $22.13 per hour. The difference between that figure determined as being Ms Powell’s ability to earn and her probable earnings, but for injury, as determined at [67] above is $354.00. That sum represents Ms Powell’s prime facie entitlement to weekly compensation pursuant to section 40, and I note that there has been no relevant argument advanced that there are any grounds upon which the Commission’s discretion should be exercised to reduce such entitlement.

It may be seen that I have reached a conclusion different to that of the Arbitrator and in the circumstances the order made with respect to weekly payments requires revocation and substitution with the order that appears below.

DECISION

Paragraph 1 of the Arbitrator’s determination dated 10 March 2010 is revoked and the following order made in its place:
“1. Award for the Applicant pursuant to section 40 of the Workers Compensation Act 1987 at the rate of $354.00 per week from 23 August 2009 to date and continuing.”

Paragraph 2 of that decision is confirmed.

COSTS

The appellant has succeeded in securing an order which reduces Ms Powell’s entitlement to weekly compensation. However the award which has been entered on this appeal is in respect of a substantial entitlement with respect to her partial incapacity as found. In the circumstances I consider it appropriate that the appellant pay the respondent’s costs of the appeal.

Kevin O’Grady
Deputy President
30 June 2010

I, MARIE JOHNS, CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF DEPUTY PRESIDENT O’GRADY OF THE WORKERS COMPENSATION COMMISSION.

ASSOCIATE