Ljubicic v Akora Holdings Pty Limited
[2006] NSWWCCPD 291
•3 November 2006
WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:Ljubicic v Akora Holdings Pty Limited [2006] NSWWCCPD 291
APPELLANT: Franjo Ljubicic
RESPONDENT: Akora Holdings Pty Limited
INSURER:QBE Workers Compensation (NSW) Limited
FILE NUMBER: WCC16544-04
DATE OF ARBITRATOR’S DECISION: 21 October 2005
DATE OF APPEAL DECISION: 3 November 2006
SUBJECT MATTER OF DECISION: Section 55 of the Workers Compensation Act 1987; adequacy of reasons.
PRESIDENTIAL MEMBER: Acting Deputy President Tydd
HEARING:On the papers
REPRESENTATION: Appellant: Leitch Hasson Dent
Respondent: McCulloch & Buggy Solicitors
ORDERS MADE ON APPEAL: 1. Order number one of the Arbitrator’s decision dated 21 October 2005 is revoked and the following order is made in its place:
“The matter is remitted to a different Arbitrator under section 352(7) of the Workplace Injury Management and Workers Compensation Act 1998 for redetermination in accordance with the reasons set out in this decision.”
2. Orders numbered two and three of the Arbitrator's decision of 21 October 2005 are confirmed.
3. The Respondent is to pay the Appellant the cost of the appeal.
BACKGROUND TO THE APPEAL
Prior proceedings and injuries
Mr Franjo Ljubicic (‘Mr Ljubicic’) was born in Yugoslavia where he attended school and studied biology at university. In 1982 he came to Australia and worked as a chef. He was employed as a pastry chef by Akora Holdings Pty Limited (‘Akora’) between 1993 and 11 September 1997 when his employment ceased. On 9 September 1997 Mr Ljubicic sustained an injury to his back when he lifted a cartoon of cheese weighing approximately 25 kilograms.
On 15 February 2000 Mr Ljubicic commenced proceedings against Akora in the Compensation Court of NSW (‘the Court’) seeking weekly compensation payments from 5 September 1994 to date and continuing; medical and related expenses, and compensation for permanent impairment and pain and suffering in accordance with the Workers Compensation Act 1987 (‘the 1987 Act’). Mr Ljubicic claimed that his injuries arose as a result of the nature and conditions of his employment with Akora and the frank injury he sustained on 9 September 1997. Pursuant to section 66 of the 1987 Act Mr Ljubicic claimed the following: 9% permanent impairment of his neck; 10% permanent loss of efficient use of his right arm at or above the elbow; 20% permanent loss of efficient use of the left arm at or above the elbow; 22.5% permanent impairment of his back, and 10% permanent loss of efficient use of his right leg at or above the knee. Mr Ljubicic claimed $25,000.00 pursuant to section 67.
On 30 October 2001 the Court made an award in favour of Mr Ljubicic for medical and related expenses and costs together with the following awards pursuant to section 66 of the 1987 Act: $4,000.00 in respect of 10% permanent impairment of the neck; $7,500.00 in respect of 10% loss of use of the non-dominant left arm at or above the elbow; $10,800 in respect of 18% permanent impairment of the back (following a deduction of 2% pursuant to section 68A of the 1987 Act); $3,375.00 in respect of 4.5% loss of use of the left leg at or above the knee (following a deduction of 10% pursuant to section 68A); $3,375.00 in respect of 4.5% loss of use of the right leg at or above the knee (following a deduction of 10% pursuant to section 68A), and $16,667.00 pursuant to section 67. In respect of the claim for weekly compensation the Court found:
“that as a result of the nature and conditions of his employment with the Respondent from 1 January 1996 to 11 September 1997 the Applicant suffered injuries to his neck, his left shoulder and both of his hands or wrists in the form of carpal tunnel syndrome. As a result of the injury on 9 September 1997 the Applicant suffered injury to his back and the applicant was from 9 September to 30 November 1997 totally incapacitated thereby and from 1 December 1997 to date partially incapacitated…..the probably earnings uninjured from 12 September 1997 to date, $680 per week… his ability to earn from 1 December 1997 to 27 April 2001 to be $300 a week and from 28 April 2001 to date, $400 per week.”
The Court found no basis to exercise its discretion to reduce the mathematical difference between the probable earnings and the ability to earn and therefore Mr Ljubicic was in receipt of $280.00 per week from 28 April 2001 pursuant to section 40 of the 1987 Act. Notwithstanding a Direction for Production of the Compensation Court’s file, exhibits, transcript and other documents the only record of proceedings before the Court is contained in the Courts orders and a single page of the transcript of proceedings which sets out Her Honour Judge Quirk’s findings and extempore judgement. The findings do not refer to any of the evidence before the Court and the parties have not identified the medical evidence relied upon in proceedings before the Court.
Application to Resolve a Dispute
On 14 October 2004 Akora lodged an ‘Application to Resolve a Dispute’ in the Commission (matter number WCC 16544-04) seeking to vary the order of the Court in respect of Mr Ljubicic’s weekly compensation payments. Akora claimed that Mr Ljubicic was fit for his usual work as a chef.
In a Late Reply dated 10 May 2005 Mr Ljubicic disputed the claim on the basis that Akora had failed to provide sufficient evidence of change of circumstance and submitted that he continued to be fit for “only very light duties in accordance with the findings of Judge Quirk”.
Proceedings before the Arbitrator
On 13 December 2004 a teleconference was conducted before a Commission Arbitrator (‘the Arbitrator’) at which time the Late Reply was admitted and ‘Directions for Production’ were made. The matter was set down for conciliation/arbitration on 13 January 2005. On that day Mr Ljubicic was not represented and the matter was adjourned and referred to an Approved Medical Specialist (‘AMS’) as a general medical dispute. A conference was conducted on 14 June 2005 at which time Mr Ljubicic was legally represented and it was determined that the referral to the AMS should not proceed. Further Directions were made including that Mr Ljubicic “comply with the Direction that he produce copies of his financial and earnings records for the period 1999 to date, within 14 days.”
As a result of Mr Ljubicic’s failure to comply with the Direction of the Arbitrator made on 14 June 2005 Akora requested the issuing of Directions for Production upon Mr Ljubicic for all financial records on 23 August 2005. This request was refused by the Arbitrator on 30 August 2005. However at the hearing conducted on 15 September 2005 the Arbitrator directed Mr Ljubicic to produce all financial and earnings records, including pay slips, wage records, bank statements etc. for the period 1999 to date on or before 29 September 2005. Contrary to this direction Mr Ljubicic did not produce this evidence and it was on 6 October 2005 that he produced taxation returns and bank statements only. On 10 October 2005 Akora requested an adjournment of the hearing scheduled for 19 0ctober 2005 and Directions for Production of all financial records as a result of Mr Ljubicic’s failure to produce in accordance with the Arbitrator’s direction. These requests were refused by the Arbitrator and the hearing proceeded. The Arbitrator delivered an ex tempore decision at the hearing and issued a ‘Statement of Reasons – Extempore Orders’ dated 21 October 2005
Lodgement of the appeal
On 15 November 2005 Mr Ljubicic sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Commission against a decision, of the Arbitrator dated “15/11/2005” [sic].
The Respondent to the Appeal is Akora and on 20 December 2005 Akora filed its ‘Notice of Opposition to the Appeal Against Decision of Arbitrator’. Akora’s insurer is QBE Workers Compensation (NSW) Limited.
THE DECISION UNDER REVIEW
The ‘Statement of Reasons – Extempore Orders’, dated 21 October 2005 records the Arbitrator’s orders as follows:
“In respect of Weekly Compensation:
1. The Respondent/Workers [sic] award of weekly compensation made by the Workers Compensation Court on 30 October 2001 was reviewed pursuant to s 55 and s 40 of the Workers Compensation Act 1987. As a result of that review of the Respondent’s circumstances, his weekly benefits are terminated as from 20/10/05.
In respect of Costs:
2. I determine that this matter, which went directly to arbitration, was a complex matter as provided by Regulation 129 of the Workers Compensation (General) Amendment (Costs) Regulation 2001. The determination of the matters in dispute required more than one day of arbitration and each day is to be regarded as a separate event for the purposes of the costs regulations.3. There is no other order as to costs.”
ISSUES IN DISPUTE
The issues in dispute in the appeal are:
·Whether the Arbitrator erred in his application of section 55 of the 1987 Act.
·Whether the Arbitrator provided adequate reasons for his decision.
·Whether the Arbitrator erred in his application of 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 submission 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
Before proceeding to deal with an appeal the Commission must determine whether the application meets the requirements of section 352 of the 1998 Act. The amount of compensation at issue on the appeal is determined by reference to the amount of any monetary award made by the Arbitrator or, where no monetary award is made, the amount of the claim as particularised by the Applicant (Grimson v Integral Energy [2003] NSWWCCPD 29; see also Mawson v Fletcher International Exports Pty Limited [2002] NSWWCCPD 5). In this case no monetary award was made by the Arbitrator and accordingly I consider the amount claimed. The claim was for weekly compensation of $280.00 per week and continuing. I am satisfied that the amount of compensation at issue on appeal is at least $5,000.00. The Arbitrator varied the orders of the Court and terminated the weekly compensation awarded. Mr Ljubicic disputes the Arbitrator’s decision and claims that an award should be entered in his favour. Therefore I am also satisfied that the amount of compensation at issue is at least 20% of the amount awarded in the decision appealed against. I am satisfied that the requirements of Section 352(2) of the 1998 Act have been met.
The appeal was lodged within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act.
Leave to appeal is granted.
EVIDENCE AND SUBMISSIONS
Mr Ljubicic’s submissions on appeal
Mr Ljubicic submits that section 350 of the 1998 Act should be read in conjunction with section 55 of the 1987 Act in order to clearly understand and to uphold the “intention of parliament to ensure finality to disputes and in turn respect the primacy of original decisions, such that awards of weekly compensation might only be reviewed if there was a change in circumstances which justifies a review and in consequence a variation of the award.” It is submitted that a review of an award pursuant to section 55 of the 1987 Act requires a “change of circumstance” and then consideration of whether that change justifies a review and the starting point for the exercise must be the unqualified acceptance of the original decision maker’s findings (George Weston Foods Ltd t/as Tip Top Bakeries v Goldsmith (1998) 17 NSWCCR 253 (‘George Weston’)). Mr Ljubicic submits that there was no evidence to justify a finding that there was a change in circumstances and by virtue of section 353(2) [sic] of the 1998 Act it is appropriate to enter an award for Mr Ljubicic rather than remit the matter to the Arbitrator for determination (Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247).
Mr Ljubicic also submits that the Arbitrator’s decision demonstrates error in the application of section 55 of the 1987 Act as:
·“there was no evidence before the Arbitrator as to why or how Her Honour came to [her] ultimate findings”;
·“Her Honour’s reasons for judgement were not before the Arbitrator”;
·the Arbitrator did not know, identify and/or find what medical reports were before Her Honour;
·the Arbitrator was aware that Dr McEwin, whose evidence he accepted did not provide evidence in the proceedings before the Court, and
·the Arbitrator made a finding that he was still partially incapacitated as a consequence he was obliged to identify the primary circumstances upon which the finding in relation to the entitlements pursuant to section 40 of the 1987 Act were made.
Mr Ljubicic further submits that the Arbitrator erred in his application of section 40 of the 1987 Act in that the Arbitrator “seemed to find that the evidence before him demonstrated that [Mr Ljubicic] was currently earning approximately $320 per week. He seemed to accept that this amount represented [Mr Ljubicic’s] prima facie ability to earn.” It is submitted that although the Arbitrator correctly identified the five steps set out in the case of Mitchell v Central West Health Service (1997) 14 NSWCCR 527 (‘Mitchell’) the Arbitrator failed to consider step two and instead “expressly decided to skip this part” and go to step four, the exercise of discretion. In applying step four the Arbitrator found that Mr Ljubicic had an ability to earn not less than his probable earnings. In doing so the Arbitrator exercised his discretion unlawfully to achieve “a forbidden purpose”. Additionally the Arbitrator gave “no proper or adequate reasons why he chose to exercise his discretion to such an extent.”
Akora’s submissions on appeal
Akora submits that the Arbitrator did not err in applying section 55 of the 1987 Act as he properly considered the “threshold question” and the authority of Worthington v Alexander [2005] NSWWCCPD 12 (‘Worthington’) in finding that a wide range of circumstances including medical, financial, marital, age retirement and the open labour market can be considered in applying section 55. Akora submits that:
·the Arbitrator identified the passage in Worthington relevant to the facts at hand which required him to consider a change of circumstances in the absence of written reasons for the findings made by the prior decision maker;
·the fact that “every piece of evidence that was before Her Honour Judge Quirk was not before the Arbitrator is not, in any way fatal to [Akora’s] case;
·the change in circumstances occurs at any time after the original decision and having the benefit of the Court’s file does not alter the way in which an arbitrator determines whether there has been a change in circumstances, and
·the Arbitrator “noted that [Mr Ljubicic] had been engaged in some form of work at various times since the date of the prior Compensation Court judgement” and “the change of circumstances can also be seen from the Arbitrator’s acceptance of the medical report of Dr McEwin who confirmed that the [Mr Ljubicic] was fit to return to pre-injury duties.”
Akora also submits that the Arbitrator properly applied section 40 of the 1987 Act in assessing Mr Ljubicic’s probable earnings, actual earnings and ability to earn and properly exercised his discretion and “found no loss”. Akora submits that it was agreed that Mr Ljubicic’s probable earnings but for the injury were $750.00 per week. However Mr Ljubicic’s assertion that the Arbitrator found that his current weekly earnings were $320.00 is not correct. Rather as a result of Mr Ljubicic’s failure to “lodge business tax returns, a full and accurate assessment of his earnings could not be ascertained”. Akora submits that:
· Mr Ljubicic’s personal income tax return did not declare any income from his contract cleaning business and his actions were “deliberately deceitful in relation to his earnings”;
· Mr Ljubicic’s actions in this regard limited Akora’s and the Arbitrator’s ability to calculate his actual earnings and the Arbitrator specifically referred to this issue at page 121 of the transcript and noted “…I pick up the point that Mr Marsh made, namely, that I should accept the applicant’s [sic] evidence with great caution….”;
· having “reviewed the submissions on actual/ability to earn the Arbitrator identified the real issue as being the exercise of his discretion” and following his review of the medical evidence the Arbitrator found that the exercise of his discretion was warranted;
· “the Arbitrator stated that, whether he adopted the assessment of actual earnings put forth” by either party he “would still have found that [Mr Ljubicic] had an ability to earn of at least $750.00 per week which equated to…” his agreed probable earnings, and
· “As such, the award was terminated pursuant to section 40.”
In response to Mr Ljubicic’s submission that the Arbitrator failed to provide adequate reasons Akora submits that the transcript reveals that the Arbitrator “went to great lengths to clarify his thinking and decision making”. Akora submits that the Arbitrator gave adequate reasons in relation to: his finding of a change in circumstances pursuant to section 55 of the 1987 Act; his assessment pursuant to section 40, and the exercise of his discretion pursuant to section 40.
Akora’s evidence
Akora relied upon the medical report of Dr R McEwin, physician dated 3 May 2004 in support of its claim that Mr Ljubicic was no longer incapacitated for his usual work as a chef. Dr McEwin opined that Mr Ljubicic’s “history was difficult to take” as he is quietly spoken, provided short answers and Dr McEwin found it difficult to understand Mr Ljubicic. Accordingly Dr McEwin requested the assistance of Mr Ljubicic’s wife to elicit a history and assist with the physician examination. Dr McEwin reported that:
·Mr Ljubicic had injured his back at work on 9 September 1997 whilst lifting a carton of creamed cheese that weight approximately 25 kilograms;
·Dr Mahony, orthopaedic surgeon had suggested massage and analgesia and assessed him as unfit for work;
·Mr Ljubicic thinks that his back pain has improved although he continues to take Panadeine Forte (“a large amount”), Panadol and Voltaren and “does exercises for his back muscles every day” as advised by a physiotherapist;
·Mr Ljubicic reported that his back pain “from the low back goes through the left buttock to the back of the left thigh and calf and to the left foot.”; he has “great difficulties walking and sometimes cannot walk at all.”, and has “reduced feeling over the sole of the left foot.”;
·Mr Ljubicic had been referred to a general surgeon Dr Kourtesis and Dr Kim Ong as a result of his complaints of pain in his left hand;
·Dr Lopez, general practitioner diagnoses that Mr Ljubicic’s back pain was “most likely soft tissue in origin”;
·on examination Mr Ljubicic’s movements were guarded and his neck movements were restricted; “there was no abnormality of the upper limbs except a very small loss of muscle in the left thenar eminence. Neurology in the upper limbs was normal.”;
·Mr Ljubicic’s lumbar sacral spine examination revealed that he could not squat or straight leg raise when tested on the couch or extend his knee fully; his hip movements appeared to be full and he complained of reduced sensation of the whole left leg which did “not fit with any anatomical consideration of the area served by the various nerves which might have been involved in his back injury.”, and
·“except for the stated reduced sensation in the left leg examination of the lower limbs showed no abnormality.”
Dr McEwin reviewed the radiological evidence of Mr Ljubicic’s back and opined that whilst these tests revealed a small degree of bulge of the annulas at L5/S1 and a disc bulge at L4/5 these abnormalities were not significant and could not be “the cause of his present pain.” In summary Dr McEwin concluded that:
·Mr Ljubicic’s diagnosis is most probably “soft tissue (musculoligamentous) injury to the lower lumbar spine.” and these injuries usually recover within weeks or a few months but there are occasions when they persist. It is very unusual to have these conditions persist for years as is suggested by the history given in this case.”;
·“I could not account for the symptoms he stated he had here today or for the reduced movement evident in the physical examination. At this stage I should add that the difficulty with the history made me uncertain whether I had obtained a full history or not.”;
·“I could not find a reason to indicate that he was unfit for his usual work as a chef. He may have had a period of unfitness for this work after he injured his back but one normally expects these soft tissue injuries to recover usually within weeks and sometimes within a few months.”, and
·“Rehabilitation is needed. He needs the attention of his family doctor ….to encourage him to widen the activities he does physically in comparison with the history given today…”
Akora also relied upon the evidence of Mr Ljubicic’s earnings produced under Direction including a record of business registration (ABN 71 002 272 938) for the family partnership registered in the names of D Ljubicic and F Ljubicic on 15 June 2002 which was produced by Mr Ljubicic at the hearing. In summary the documents reveal evidence of the following earnings:
·in the year ending 30 June 2005 Mr Ljubicic’s PAYG Payment Summary records his gross payments as $14,560.00;
·in the year ending 30 June 2004 Mr Ljubicic’s PAYG Payment Summary records his gross payments as $14,560.00;
·in the year ending 30 June 2003 Mr Ljubicic’s PAYG Payment Summary records his gross payments as $14,000.00;
·in the year ending 30 June 2002 Mr Ljubicic’s PAYG Payment Summary records his gross payments as $15,400.00;
·in the year ending 30 June 2001 Mr Ljubicic’s Individual Tax Return records his total income as $16,766.00, and
·statements of a joint account in the names of Mrs D and Mr F Ljubicic from 1 June 2002 to 30 January 2004 reveal regular income from Pierlite Pty Limited and Corporate Clean commencing on 5 January 2002. The income from Corporate Clean totalled approximately $3,800.00 per month
Mr Ljubicic’s evidence
Mr Ljubicic relied upon the medical reports of Dr Lopez, general practitioner; Dr Collins, physician and Dr Mahony, orthopaedic surgeon.
Dr R Lopez, general practitioner provided reports dated 18 November 1997 and 15 May 2001. In his earlier report Dr Lopez noted that he first say Mr Ljubicic on 5 August 1997 when he presented for assessment of his cervical pain and again on 13 September 1997 when he presented with symptoms of a “compressive median nerve neuropathy especially in the left hand.” Additionally on 18 September 1997 Mr Ljubicic presented with lower back pain which he reported as having occurred on 9 September 1997. Dr Lopez outlined the treatment and investigations performed in respect of these conditions including thoroco-lumbar spine x-rays which revealed “mild scoliosis”, “early marginal spondylitic bony growth”; a lumbar CT scan which revealed no abnormality, and x-rays of the left wrist which were reported as normal. In respect of his lower back condition Dr Lopez opined that it “is most likely soft tissue in origin.” and “the problems described ie the lower back pain, the cervical pain and the Carpal Tunnel Syndrome are all consistent with the type of work the patient is involved in.”
In his later report Dr Lopez noted that Mr Ljubicic’s Carpal Tunnel Syndrome problem has improved “approximately 60% in terms of symptoms”. However his cervical pain and lumbo/sacral pain remained problematic with the back pain being the most significant problem impeding his return “to gainful employment”. Mr Ljubicic had tried to return to the “the workforce. In December 2000, the patient was offered part-time work in a restaurant but lasted for only ½ an hour there. Since then he has been offered a part time position as a pastry chef elsewhere.” Dr Lopez concluded that Mr Ljubicic’s problems “have taken a chronic course with little improvement seen with cervical and lumbo-sacral pain.”
Dr Collins provided a report and assessment dated 15 February 2000 in which he noted Mr Ljubicic’s development of pain in his left forearm and the front of his left wrist in approximately August 1996 and later developed the same problem in his right hand but not to the same degree as the left. However the pain had improved at the time of consultation. Dr Collins reported that Mr Ljubicic “takes pain killers but only when he has to. He has an occasional Panadine Forte when he needs it.”
Dr Collins concluded that:
·Mr Ljubicic sustained an injury to disc L4-5 and experienced sciatic pain in both legs worse on the left than on the right;
·“He also has chronic musculoligamentous strain of the neck, probable tendonitis of the left shoulder, and bilateral carpel tunnel syndrome;
·the condition of “his back and legs is … the direct result of the accident…” described by him;
·“the condition of his neck and left shoulder and also the carpel tunnel syndrome left and right, is a result of the nature and conditions of his work with the head bent and with considerable use of the wrists and hands mixing ingredients and handling the products.”;
·“he will always have pain in the back and sciatic pain in both legs worse on the left than on the right. I believe he will always have discomfort in the neck and left shoulder and in both hands though to a lesser degree.”;
·“He is unfit ... for any manual work requiring bending and lifting or repetitive work using his upper limbs. He is unfit in my opinion for his trade as a pastry cook and he will need to find non-manual work. I feel that the best future for him would be for him to become involved in a business.”;
·he may need carpal tunnel decompression in the future, and
·he was assessed as having a 10% permanent impairment of the neck; 14% permanent loss of efficient use of the left arm at or above the elbow; an 8% permanent loss of efficient use of the right arm at or above the elbow; 20% permanent impairment of the back; 10% permanent loss of efficient use of the right leg at and above the knee including below the knee, and 15% permanent loss of efficient use of the left leg at and above the knee including below the knee.
In his report dated 27 April 2001 Dr Collins noted that Mr Ljubicic continued to have pain in his lower back and neck although not in the legs and “has to use a lot of pain killers”; his shoulder pain was intermittent. Dr Collins opined that Mr Ljubicic is “not fit for his pre-injury employment or any occupation in which he would be required to bend his back or lift heavy articles. In my opinion he is fit only for non manual employment such as some form of business” and Mr Ljubicic’s “main incapacity is because of his back.” Dr Collins stated that Mr Ljubicic’s back pain “may settle but he will always suffer from some discomfort and his back would deteriorate if he reengaged in any manual occupation”. Dr Collins concluded that Mr Ljubicic’s neck and left shoulder would “probably not alter very much” and if his shoulder did deteriorate he should undergo an ultrasound as he probably has some degeneration of the rotator cuff. In this later report Dr Collins confirmed his assessment in respect of Mr Ljubicic’s left arm, back and neck. However he revised his assessment of the left and right leg to 8% permanent loss of efficient use of each leg and did not provide an assessment of Mr Ljubicic’s left arm.
Dr Mahoney’s reports and correspondence dated 7 June 1999; 12 July 1999; 14 August 1999; 28 September 1999; 17 November 1999; 4 January 2000; 21 February 2000; 13 April 2000; 7 June 2000; 11 August 2000; 4 October 2000; 17 November 2000; 17 January 2001; 20 March 2001; 11 May 2001; 26 June 2001; 5 September 2001; 19 October 2001; 25 October 2001; 18 December 2001; 18 February 2002, and 30 April 2002 were in evidence. The reports dated 12 July 1999 and 11 May 2001 provide comprehensive assessments. Whilst the report dated 11 May 2001 provides considerably higher assessments of impairment, the contents of the later report do not differ in any significant way from the report of 12 July 1999. The report dated 11 May 2001 and can be summarised as follows:
·Mr Ljubicic was reviewed on 12 occasions between 9 August 1999 and 12 March 2001 and was considered unfit for work on each occasion and was not working;
·“Mr Ljubicic has symptoms referable to a cervical strain with nerve root irritation affecting the upper limbs, particularly the left C7 nerve root, a capsulitis of his left shoulder, bilateral carpal tunnel syndrome as well as a low lumbar back strain in association with degenerate changes with nerve root irritation affecting the lower limbs, particularly the left lower limb and there is evidence of discogenic lesions at the L4/5 and lumbo scracral levels.”;
·“[he] is considered unfit for work” and “restrict his future activities to activities not involving significant bending or lifting or moderate to excessive use of the upper limbs.”, and
·Mr Ljubicic was assessed as having a 17.5% permanent impairment of the neck; 27.5% permanent loss of efficient use of the left upper limb at or above the elbow to include below the elbow; an 15% permanent loss of efficient use of the right upper limb at or above the elbow to include below the elbow; 25% permanent impairment of the back; 10% permanent loss of efficient use of the right lower limb at and above the knee including below the knee, and 15% permanent loss of efficient use of the left lower limb at and above the knee including below the knee.
A report dated 1 August 2005 was also provided by Dr Mahoney. Dr Mahoney concluded that:
· he had last seen Mr Ljubicic on 1 August 2005 and at that time Mr Ljubicic stated that was not working;
· Mr Ljubicic continued to complain of pain in the back, occipital area; shoulders; hands; feet and legs;
· on examination he displayed guarding and rotation was restricted;
· Mr Ljubicic would benefit from intermittent physiotherapy and remedial massage;
· Mr Ljubicic is considered unfit for work, and
· he was considered “permanently unfit for work as a professional cook or pastry chef.”
Dr Mahoney did not alter the previous diagnosis set out in his earlier report. However Dr Mahoney lessened the restriction he applied to Mr Ljubicic’s activities in that he opined that Mr Ljubicic should avoid “significant bending or lifting.” As opposed to the restriction contained in his earlier report of “… not involving significant bending or lifting or moderate to excessive use of the upper limbs.”
Mr Ljubicic’s statement and oral evidence
In his statement dated 26 August 2005 Mr Ljubicic outlined his employment with Akora and provided a history of his injury and treatment. Mr Ljubicic’s statement can be summarised as follows: since the award of the Court his injury “has continued to restrict [him] significantly.”; he continues to have pain in the back, shoulders, feet and hands; his domestic duties are restricted; he is no longer able to undertake “most physical work”, and he has not partaken in sport since the injury.
Mr Ljubicic gave oral evidence at the hearing with the assistance of an interpreter at hearing. The transcript reveals that Mr Ljubicic did not provide direct responses to a number of questions. His evidence can be summarised as follows:
·since October 2001 if presented with the opportunity for work in response to advertisements in the newspaper, his son’s sporting club affiliations or friends he “just takes a couple of hours work” and this has not extended beyond a day;
·he sometimes cooks at home;
·he was consulting a psychologist for “everything”, back pain and working situation but this treatment has ceased;
·he was involved in mail order work using his home computer although he cannot sit for “more than half an hour on a chair” and he denied earning any income from sending emails;
·his condition is not improving but worsening;
·he had repaid monies paid into his joint account by social security;
·his wife was employed by Pierlite Pty Limited;
·in May/June 2002 he purchased a contract to undertake work and together with his wife he commenced a cleaning business;
·in order to finance the business he extended his mortgage by $25,000.00;
·he worked in this business which is more “about security than about cleaning” from 5:30 pm to approximately 8:30 pm Monday to Friday with his wife and son;
·on occasions his mother in law and sister in law assist in undertaking the work particularly when he is not physically able to assist;
·cheques were deposited into his joint account with his wife from Corporate Clean each fortnight in the sum of approximately $3,700.00 per month as payment for the work they undertook;
·the expenses incurred in this business amount to approximately $2,240.00 per month including the expenses of petrol and paying his son approximately $300.00 per week; plus the cost of minor equipment such as a vacuum cleaner, and
·essentially the business “breaks even”.
Submissions made at the arbitral hearing
As a result of Mr Ljubicic’s late production of financial records and documents and in order to gain a comprehensive understanding of the issues raised on appeal it is necessary to briefly summarise the submissions of the parties in relation to Mr Ljubicic’s current financial and employment situation.
Akora’s submissions can be briefly summarised as follows:
·Quirk J assessed Mr Ljubicic’s “on going incapacity – on going loss of $300.00 per week [transcript page 104 lines 12-13]” from 28 April 2001 and continuing;
· Dr Collins certified in his reports that Mr Ljubicic was unfit for any manual work and in his later report dated 27 April 2001 Dr Collins confirmed that Mr Ljubicic was not working at that time and “He has not done any work since the back injury.” Likewise Dr Mahoney reported that he understood that Mr Ljubicic was not working;
· in evidence Mr Ljubicic stated that he was not working in October 2001;
· there is now evidence that he is working which is sufficient to demonstrate a change of circumstance;
· Mr Ljubicic is being paid approximately $4,000.00 per month for cleaning and this amount must be representative of more than 10 hours work per week and the evidence does not support a finding that Mr Ljubicic’s wife undertakes half of this work as she has a full time job and has not been called to corroborate Mr Ljubicic’s evidence;
· Mr Ljubicic was paid into a joint account yet in evidence he stated that he had not declared these earnings, and
· Mr Ljubicic’s earnings from the business he established in 2002 demonstrate that he has an ability to earn $968.00 per week and his actual earnings at a conservative estimate are $750.00 per week and in applying the discretion pursuant to section 40(1) of the 1987 Act the Arbitrator should find that the award is “essentially nil”.
Mr Ljubicic’s submissions can be briefly summarised as follows:
·Quirk J found that Mr Ljubicic had an ability to earn of $400.00 per week from 28 April 2001 but the basis of her finding regarding incapacity, seeking employment, language and educational skills and various other factors is not clear and there was no evidence such as a wage schedule to assist in determining if at the time of the award Mr Ljubicic was working in some form and earning some money such as a wages schedule;
·Mr Ljubicic’s current earnings are derived from a partnership with his wife and generally speaking there is not less than two people doing the cleaning work including Mr Ljubicic and the earnings from this venture are divided between his wife and himself. Following deductions for expenses the income to Mr Ljubicic is approximately $304.00 per week. There is no evidence to demonstrate that the $304.00 per week Mr Ljubicic is currently earning is any more or less than the earnings considered by Quirk J.
ARBITRATOR’S DECISION
The Arbitrator’s reasons for decision in relation to Section 55 of the 1987 Act
The Arbitrator stated at page 115 line 35 of the transcript that he would deliver an ex tempore judgement. At page 117 the Arbitrator referred to the authority provided in Worthington. The Arbitrator quoted from paragraph 28 of that decision and stated:
“In the absence of any authority on the precise meaning to be afforded to the phrase ‘change of circumstance’ it should, in my view, be given it's ordinary meaning . . . Its ordinary meaning must be understood within the context of the 1987 Act. The ‘change of circumstances’ must have relevance –
The Arbitrator considered the Court’s record of proceedings and findings in making the award which was the subject of his review as the starting point for his determination in relation to section 55 of the 1987 Act and opined at page 119 of the transcript:
“In any event, that is my view now, that the very fact that we don't have a fulsome record provided from the District Court --
MR AUSTIN: Compensation Court.
ARBITRATOR: -- Compensation Court when the matter was dealt with last time should not, therefore, preclude an Arbitrator in attempting to determine whether there has been any change in circumstances.
I think the evidence we've heard today of the applicant [sic] embarking on a business venture in June 2002, purchasing or, firstly, getting a loan on the basis of extending his mortgage, investing that money to buy the rights to this cleaning contract, investing in equipment, mobilising himself and his family and undertaking that activity for the past three years, must, in my view, indicate that there's been a significant change in the applicant's [sic] circumstances such that he's been able to engage in employment which, from the medical evidence, it would appear (emphasis added) he would not have been able to do.
So, in answer to the threshold question that I'm required to deal with posed by section 55 subsection (1), that a payment of weekly compensation be reviewable because of a change in circumstances, I find that there has been a change in circumstances from that found by her Honour Justice Quirk in 2001”.
Immediately following this finding the Arbitrator then went on to consider the application of section 40 of the 1987 Act and observed that:
“The next issue for me then is to deal with this matter as a review of the applicant's [sic] weekly payments. Just proceeding further in section 55, section 55, subsection (2), then imposes this view that:
On any such review:
(a) the weekly payment may be ended, reduced or increased . . . and
(b)the amount of the weekly payment (if any) shall, in default of agreement, be determined by the Commission.”
The Arbitrator’s reasons demonstrate that he found that the necessary change of circumstances was Mr Ljubicic’s business venture and undertaking activities associated with that venture “such that he's been able to engage in employment which, from the medical evidence, it would appear he would not have been able to do.” The Arbitrator also found that, “on the medical evidence” Mr Ljubicic would not have been able to engage in this employment and employment related activities.
The Arbitrator then when on to determine the award pursuant to section 40 of the 1987 Act and the transcript reveals that his reasons for determining the award pursuant to section 40 of the 1987 Act were as follows:
“Whether I were to adopt the figures as suggested by Mr Austin and step 2 or that suggested by Mr Marsh in step 2 and, thereby come up with a sum in step 3, whatever I do in either of those two, I believe that that amount is subject to the discretion I exercise in step 4.
On the basis of the material that's been provided in an evolutionary way over the various hearings we've had in this matter, my view is that the applicant [sic] is able to undertake work currently to the value of $750 per week.
I believe the applicant [sic] would be well advised to be free of the difficulties that somehow were occasioned him by having a workers compensation payment which he's had to disguise, avoid, receive but carry on his normal - his business ventures in a fashion which hasn't allowed him to or has meant that he hasn't declared his income, apparently - that being his evidence - that he would be well free of his workers compensation contribution so that he could engage in cleaning and other business activities, which apparently he is engaging in now, to the benefit and betterment of his family and himself and also of our Commonwealth in that he would then be making a contribution from his earnings, which he apparently is not doing now.
I would find that on the evidence before me in the medical reports of Dr McEwan that the applicant is well able to resume full-time work and in undertaking that work either as a cleaner or in his previous employment as a pastrychef, he will be able to earn in excess of the probable earnings as agreed between the parties.
My decision is, therefore, that the applicant's [sic] payment of weekly compensation should be reduced to zero.”
DISCUSSION AND FINDINGS
Analysis of section 55 of the 1987 Act
The application of section 55 of the 1987 Act has been considered in a number of decisions and the onus of proof rests with the party asserting a change in circumstance (Atlas v Bulli Spinners Pty Ltd (1993) 9 NSWCCR 378 (‘Atlas’); George Weston; Sergi v Jurcevic (1999) 18 NSWCCR 229 (‘Sergi’); Rooney v Australian Iron & Steel Pty Ltd (1993) 9 NSWCCR 372; NSW TAFE Commission - North Sydney Institute v Zuk [2006] NSWWCCPD 148 (‘Zuk’), and Worthington). Following this line of authority it is also accepted that a change in circumstances is not restricted to a change in the worker’s medical condition or capacity for work (Worthington). A review will occur only where it is established that circumstances that were before the original decision maker at the time of the award of weekly benefits and upon which the findings in relation to a statutory entitlement were made have changed (Weston, Zuk). The discretion conferred on the decision maker in accordance with section 55(1) must be exercised judicially (Sergi) and if a change of circumstance is established the decision maker must determine whether that change justifies an alteration in weekly payments of compensation (George Weston).
Atlas provides guidance as to the necessary findings of fact which must be made following the decision makers assessment of the circumstances leading to the findings made in the prior award. Atlas concerned an appeal from O’Toole CCJ in respect of an application by an employer pursuant to section 55 of the 1997 Act. Kirby P (as he then was) found:
“Having, therefore, before her an application for review, which required proof of a change in circumstances, O’Toole CCJ should have taken the following steps. She should have determined first whether the requisite change of circumstances had been shown by the employer to warrant the exercise of the power of review. If, by reason of differing evidence about the extent of the worker’s incapacity she was convinced that an applicable ‘change of circumstance’ was shown justifying review, Her Honour would then be obliged to exercise the powers conferred upon the Compensation Court by section 55(2) of the 1987 Act…”
George Weston provides further guidance regarding the necessity for the decision maker to demonstrate consideration of the findings made in the earlier award as the commencement point of any review conducted in accordance with section 55 of the 1987 Act. In that case the Court of Appeal found [at 259] that the Commissioner had erroneously applied section 55 and held:
“Commissioner Turner did not refer to s 55 nor did he refer in express terms to the question of whether there had been a change of circumstances since Judge Davidson made his award. Instead, Commissioner Turner directed his attention to the question of what Judge Davidson’s attitude may have been if he had seen the video film, taken after he had determined the matter, and heard the views expressed by three doctors after they had seen the film, and said he would be surprised if those matters did not impact on the Judge’s attitude to the case.”
The Court clearly defined the correct commencement point for the application of section 55 of the 1987 Act at page 260 as:
“The starting point was an unqualified acceptance of Judge Davidson’s findings about the capacity of the Respondent at the time he gave his decision, followed by consideration of whether at the time the Commissioner was dealing with the matter the evidence showed that the circumstances, in this case the respondent’s incapacity had changed.”
George Weston also provides authority in respect of the requirement for the change of circumstance to justify a review. The Court held at page 259 paragraph 11 that:
“The matter for the Commissioner was the straight forward one of whether there had been any change in those circumstances and, if there had, whether that change justified a review of the weekly payment of compensation.”
The issues raised on appeal also require consideration of the authority provided in Worthington which dealt with an appeal from the decision of a Commission Arbitrator in respect of section 55 of the 1987 Act where the employer relied upon facts other than a change in the medical condition in support of the application for review. In that case the Deputy President was required to consider the appeal in the absence of written reasons for the earlier award of the Court. The Deputy President held at paragraphs 29 and 30:
“Where compensation is payable over many years there may also, for example, be changes in the labour market relative to a workers’ ability to obtain suitable employment. The Employer’s legal representatives provide a further example; the worker may complete a course of study and/or obtain employment, which impact on his or her ability to earn, relative to pre-injury earnings. In my view the Employer is right to suggest that the Arbitrator erred in applying a narrow test to the meaning “change of circumstances” in section 55 of the 1987 Act.
30. If there were written reasons given for the decision of Egan J in 1993 to award Mr Alexander weekly compensation, they are not before me. This presents some difficulty in knowing exactly upon what “circumstances” he made relevant findings to found the award….”
Notwithstanding the absence of reasons for decision the Deputy President considered the Respondent worker’s circumstances at the time of the prior award with reference to the medical and factual evidence, particularly the evidence in relation to the worker’s employment situation and earnings. The Deputy President found that the evidence established that the worker was engaged in suitable employment for 18 hours per day, six days per week and there was also was medical evidence to suggest that his ulnar nerve neuritis had resolved. In the Deputy President’s view that evidence was sufficient to demonstrate a change in circumstance from those before the Court which demonstrated that he was unable to find suitable employment in Cootamundra where he lived and that he suffered from ulnar nerve neuritis requiring surgery. The Deputy President noted that these factors were significant in establishing a ‘change of circumstance’ and accordingly justified her ultimate finding of ‘change in circumstance’.
Following my assessment of the authorities I am of the opinion that the exercise required of the decision maker in accordance with section 55 of the 1987 Act necessitates firstly a discussion and acknowledgement of the of the prior findings. Secondly the decision maker is required to consider the current evidence of ‘change of circumstance’. Following these two steps the decision maker will then be able to contrast the circumstances in existence at the time of the prior award with those he or she accepts on the evidence of ‘change of circumstance’. It is this analysis which enables the decision maker to undertake the fourth step in the process, that of identifying what, if any, circumstances have changed sufficient to warrant or justify the review.
Did the Arbitrator err in his application of section 55 of the 1987 Act?
In the present case reasons for the Court’s finding of partial incapacity were limited. However as distinct from the approach of the Deputy President in Worthington the Arbitrator did not refer to the circumstances which existed at the time of the prior award or the findings of the Court. The only reference to the findings of the Court contained in the ex tempore reasons is found at lines 44 to 46 of page 119 where following his finding that Mr Ljubicic was engaged in a business venture the Arbitrator noted that it was this business venture which demonstrated a change from the circumstances in existence at the time of the prior award. The Arbitrator stated that the business venture demonstrated a significant change in “circumstances such that he's been able to engage in employment which, from the medical evidence, it would appear (emphasis added) he would not have been able to do.”
In my view the Arbitrator’s reasons demonstrate that he failed to properly undertake the exercise required in accordance with section 55 of the 1987. The Arbitrator did not start the exercise at the correct commencement point which is clearly described in Atlas and George Weston as the “unqualified acceptance” of the findings of the Court. In the present case the Court found that Mr Ljubicic was ‘partially incapacitated’ and the Arbitrator failed, in my view to consider this finding with reference to the medical or lay evidence dealing with the restrictions on Mr Ljubicic’s capacity for work at the time of the prior award. Further, in my view the Arbitrator failed to then consider the current medical evidence with reference to any limitations imposed upon the type of work he could undertake and the number of hours he was able to work. These omissions are highlighted by the Arbitrator’s failure to identify any particular medical evidence upon which he relied for his finding that Mr Ljubicic’s condition had changed from that which existed at the time of the prior award. The Arbitrator simply stated that “from the medical evidence, it would appear...”. Further the Arbitrator’s use of the word “appear” is ambiguous and cannot in my view substantiate a finding of ‘change of circumstance’ as required by section 55.
Additionally, the Arbitrator did not consider whether Mr Ljubicic’s commencement and continuation of a business venture was sufficient to warrant or justify the review he then undertook in accordance with section 40 of the 1987 Act. In the present circumstances it is unnecessary for me to deal with the Arbitrator’s application of section 40 of the 1987 Act except to note, in passing that at page 125 lines 30 to 50 of the transcript the Arbitrator commenced the process set out in Mitchell at step four, being the exercise of discretion pursuant to section 40(1) of the Act. This approach is contrary to the authority provided by Mitchell.
If I am wrong in my assessment of the legislative requirements I turn to the adequacy of the Arbitrator’s reasons. In my view the Arbitrator’s reasons are inadequate to convey to the parties who were familiar with the case that he: had regard to the circumstances before the Court; considered the evidence; indicated the evidence he preferred; provided reasons for his acceptance of that evidence; made findings which were based upon the preferred evidence, and considered whether that change of circumstance justified the review he proceeded to undertake and this inadequacy sufficiently demonstrates that he failed to exercise his statutory duty to fairly and lawfully determine the application (see Cargill Meat Processors Pty Limited v Clark[2005] NSWWCCPD 7). Accordingly I find that the Arbitrator erred in law in failing to provide adequate reasons.
Redetermination of the Application
Having found error sufficient to revoke the decision I will now proceed to redetermine the application.
I have set out Her Honour Quirk J’s findings at paragraphs three and four and I see no reason to repeat them again here. As distinct from the facts in Worthington where the prior award was made by consent, the award in the present case was based upon the findings of Quick J. These findings were based on the medical and lay evidence before the Court. The medical evidence in support of the findings by the Court has not been referred to or identified by the parties. Accordingly this absence of evidence restricts my capacity to conduct the review with reference to the medical evidence that was before the Court and I am limited to the medical evidence contained in reports which were provided at the time of the Courts award.
Notwithstanding this limitation in the medical evidence I will consider the contemporaneous medical evidence at the time the Court made the award with reference to Akora’s submission of a change to Mr Ljubicic’s employment situation. The contemporaneous evidence reveals that at the time of the prior award Mr Ljubicic’s circumstances, relevant to the payment of weekly compensation were:
·Mr Ljubicic’s injuries gave raise to a partial incapacity from 1 December 1997 which prevented him from working as a chef and he would be better suited to become involved in a business;
·on the evidence of Dr Mahoney he was unfit for work and his work restrictions were to activities not involving significant bending or lifting or moderate to excessive use of the upper limbs;
·Mr Ljubicic’s wife worked and accordingly he could not receive social security payments;
·Mr Ljubicic had not developed carpal tunnel syndrome. However he did have a permanent impairment of his back and neck; a permanent loss of efficient use of his left arm at or above the elbow, and his left and right legs at or above the knee (as found by Quirk J), and
·he had tried to return to the workforce undertaking part-time work in a restaurant but not been able to manage this work.
The evidence of Mr Ljubicic’s current circumstances relevant to the award before the Arbitrator and before me on appeal is as follows:
·on the evidence of Drs Mahoney and Collins, Mr Ljubicic’s injuries gave rise to an incapacity which prevented him from working as a chef;
·Dr McEwen’s report concluded that he “could not find evidence to suggest that [Mr Ljubicic] is unfit for his usual work as a chef and he should be fit for other similar work of a medium or light nature.”;
·Mr Ljubicic is restricted in that he should not engage in activities involving “significant bending or lifting” (Dr Mahoney);
·Mr Ljubicic is involved in a business venture with his wife which commenced in May/June 2002 and continues;
·the joint gross income for this venture is approximately $3,800.00 per month;
·Mr Ljubicic is engaged in this venture for approximately 3 hours per day Monday to Friday, and
·Mr Ljubicic had also undertaken short periods of work as a chef for periods not exceeding one day, and he undertook some computer work using his home computer.
On Mr Ljubicic’s own evidence and as demonstrated in the bank statements produced in the joint names of Mr and Mrs Ljubicic, Mr Ljubicic is engaged in an activity, being the joint business venture with his wife which is not an activity in which he was engaged at the time of the proceedings before the Court. In my view, this activity may be sufficient to demonstrate a change in circumstances justifying a review of the award.
However, in the present circumstances I am unable to determine on the evidence before me the precise activities undertaken by Mr Ljubicic in conducting this business venture in conjunction with his wife and assisted by his son to assist in my consideration of whether these activities demonstrate a change in circumstance justifying a review of the award. Likewise I am unable on the evidence before me to make a finding as to Mr Ljubicic’s current earnings which would further assist in my consideration of the change in circumstances. In the present circumstances I am satisfied that Mr Ljubicic’s late production of documents in relation to his earnings and financial situation since the prior award has restricted the proper ventilation and consideration of this issue.
Given that further and current evidence and additional submissions from the parties is required to address the issues raised it is appropriate that the matter be remitted to an Arbitrator for redetermination. As this redetermination necessitates consideration of the change of circumstance and if a change of circumstances is found whether the change in circumstance justifies a review of the award in my view the only course of action that is both fair and proper in the circumstances is to remit this matter to a different Arbitrator for determination in accordance with the findings contained in this decision (see discussion in Aretica Pty Ltd v Fradelakis [2006] NSWWCCPD 102).
Conclusion
I therefore conclude that the Arbitrator was in error in his application of section 55 of the 1987 Act and in failing to provide proper reasons for his decision.
DECISION
Order number one of the Arbitrator’s decision dated 21 October 2005 is revoked and the following order is made in its place:
“The matter is remitted to a different Arbitrator under section 352(7) of the Workplace Injury Management and Workers Compensation Act 1998 for redetermination in accordance with the reasons set out in this decision.”
Orders numbered two and three of the Arbitrator's decision of 21 October 2005 are confirmed.
COSTS
The Appeal having been successful I order the Respondent to pay the Appellant’s costs.
Elizabeth Tydd
Acting Deputy President
3 November 2006
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF E TYDD ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPLICATION FOR RECONSIDERATION OF A DECISION OF THE COMMISSION CONSTITUTED BY A PRESIDENTIAL MEMBER
CITATION:Ljubicic v Akora Holdings Pty Limited [2006] NSWWCCPD 291R
APPELLANT: Franjo Ljubicic
RESPONDENT: Akora Holdings Pty Limited
APPLICANT FOR RECONSIDERATION: Appellant
INSURER:QBE Workers Compensation (NSW) Limited
FILE NUMBER: WCC16544-04
DATE OF ARBITRATOR’S DECISION: 21 October 2005
DATE OF APPEAL DECISION: 3 November 2006
DATE OF RECONSIDERATION DECISION: 2 March 2007
SUBJECT MATTER OF DECISION: Reconsideration; section 350 of the Workplace Injury Management and Workers Compensation Act 1998.
PRESIDENTIAL MEMBER: Acting Deputy President Tydd
HEARING:On the papers
REPRESENTATION: Appellant: Leitch Hasson Dent Solicitors
Respondent: McCulloch & Buggy Solicitors
ORDERS MADE ON APPEAL: The following orders are made:
1. Reconsideration of Orders one and two made on 3 November 2006 is refused.
2. No order as to costs of the reconsideration application.
RECONSIDERATION OF ORDER
On 3 November 2006 I issued the following determination in the appeal:
“1. Order number one of the Arbitrator’s decision dated 21 October 2005 is revoked and the following order is made in its place:
‘The matter is remitted to a different Arbitrator under section 352(7) of the Workplace Injury Management and Workers Compensation Act 1998 for redetermination in accordance with the reasons set out in this decision.’
2. Orders numbered two and three of the Arbitrator's decision of 21 October 2005 are confirmed.
3. The Respondent is to pay the Appellant the cost of the appeal.”
On 15 November 2006 the Appellant, Franjo Ljubicic lodged an Application for Reconsideration of the Decision made on Appeal. On 15 December 2006 the Respondent employer Akora Holdings Pty Limited made submissions in reply.
The Appellant seeks reconsideration of Orders one and two of my decision dated 3 November 2006.
I am satisfied that I have sufficient information to proceed with this matter ‘on the papers’, without holding any conference or formal hearing, and that this is the appropriate course in the circumstance.
SUBMISSIONS, DISCUSSION AND FINDINGS
Submissions
The Appellant submits that Order one and Order two of the decision should be reconsidered. In relation to Order one the Appellant submits that as the matter was remitted for redetermination I should make an express order that Judge Quirk’s decision remains in force.
The decision of the Commission Arbitrator determining the application at first instance (‘the First Arbitrator’) was revoked in accordance with Order one and the matter was remitted for determination by a different Arbitrator. No express order was required to confirm Judge Quirk’s award. Following the revocation of the decision of the First Arbitrator dated 21 October 2005 the order of Judge Quirk remained effective until its termination by the Arbitrator who redetermined the Application to vary or terminate the award. Order one took immediate effect and the Arbitrator who redetermined the application made an order as set out in his ‘Certificate of Determination’ dated 8 February 2007 that the award of Judge Quirk of 31 October 2001 be terminated from 6 October 2004. In my view, the Appellant’s submissions as they relate to a request for an “express order” that the Respondent continue to pay the Appellant weekly compensation until the matter is redetermined are otiose. As determined by the Commission in De Witte v Tawnay Pty Limited trading as Country Coast Real Estate [2006] NSWWCCPD 106 (‘De Witte’) “there must be some basis to justify exercise of the reconsideration power” and in the present case I am not satisfied that a proper basis has been put forward which would justify the exercise of the reconsideration power. Accordingly I reject this ground of the application for reconsideration.
In relation to the application as it relates to Order two, the Appellant submits that I did not hear submissions from the parties in making the order and I failed to provide adequate reasons for my confirmation of the First Arbitrator’s order that there be “[n]o other order as to costs”. The Appellant submits that the appropriate order is ‘costs should be costs in the cause’ of the proceedings before the First Arbitrator. It is submitted that this order is required to avoid ambiguity in respect of any order as to the payment of costs which might be made by the Arbitrator redetermining the application. The Respondent submits that the proper determination of the matter was frustrated by the Appellant’s failure and refusal to produce relevant documents and the ultimate decision on costs should be left to the Arbitrator redetermining the Application. The Respondent also submits that the costs in the initial arbitration should be costs in the cause.
The relevant legislation
Section 350 of the Workers Compensation and Workplace Injury Management Act 1998 (‘the 1998 Act’) provides the Commission with the power to reconsider a decision.
Section 350 is set out as follows:
“350 Decisions of Commission
(1) Except as otherwise provided by this Act, a decision of the Commission under the Workers Compensation Acts is final and binding on the parties and is not subject to appeal or review.
(2) A decision of or proceeding before the Commission is not:
(a) to be vitiated because of any informality or want of form, or
(b) liable to be challenged, appealed against, reviewed, quashed or called into question by any court.
(3) The Commission may reconsider any matter that has been dealt with by the Commission and rescind, alter or amend any decision previously made or given by the Commission.”
The application of section 350 of the 1998 Act has been considered by the Commission in a number of recent decisions (see discussion in Samuel v Sebel Furniture Limited [2006] NSWWCCPD 141 (‘Samuel’); De Witte and, Nan v Country Road Freight Services Pty Limited [2006] NSWWCCPD 160) and need not be canvassed against in this decision.
At paragraph 58 of the decision in Samuel, the Acting Deputy President considered the relevant authorities and set out the principles applicable to reconsideration applications under section 350(3) of the 1998 Act as follows:
“Having regard to the above authorities and the provisions and objectives of the 1998 Act I believe that the following principles are applicable to reconsideration applications under section 350(3) of the 1998 Act:
1.the section gives the Commission a wide discretion to reconsider its previous decisions (‘Hardaker’);
2.whilst the word ‘decision’ is not defined in section 350, it is defined for the purposes of section 352 to include “an award, order, determination, ruling and direction”. In my view ‘decision’ in section 350(3) includes, but is not necessarily limited to, any award, order or determination of the Commission;
3. whilst the discretion is a wide one it must be exercised fairly with due regard to relevant considerations including the reason for and extent of any delay in bringing the application for reconsideration (‘Schipp’);
4. one of the factors to be weighed in deciding whether to exercise the discretion in favour of the moving party is the public interest that litigation should not proceed indefinitely (‘Hilliger’);
5. reconsideration may be allowed if new evidence that could not with reasonable diligence have been obtained at the first Arbitration is later obtained and that new evidence, if it had been put before an Arbitrator in the first hearing, would have been likely to lead to a different result (‘Maksoudian’);
6. given the broad power of ‘review’ in section 352 (which was not universally available in the Compensation Court of NSW) the reconsideration provision in section 350(3) will not usually be the preferred provision to be used to correct errors of fact, law or discretion made by Arbitrators;
7. depending on the facts of the particular case the principles enunciated by the High Court in Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 (‘Anshun’) may prevent a party from pursuing a claim or defence in later reconsideration proceedings if it unreasonably refrained from pursuing that claim or defence in the original proceedings (‘Anshun’);
8. a mistake or oversight by a legal adviser will not give rise to a ground for reconsideration (‘Hurst’), and
9. the Commission has a duty to due justice between the parties according to the substantial merits of the case (‘Hilliger’ and section 354(3) of the 1998 Act).”
I apply the reasoning set out in Samuels in determining whether to exercise my discretion to reconsider Order two in which I confirmed the First Arbitrator’s order that “There is no other order as to costs.” In my view there is no public interest to be served by reconsidering my decision in circumstances where the First Arbitrator made an order in favour of the Respondent employer and on redetermination another Arbitrator also made an award in favour of the Respondent. Contrary to the Appellant’s submissions, costs in the Commission do not ‘follow the event’ but are at the discretion of the Commission (see discussion in Connor v Trustees of the Roman Catholic Church for the Archdiocese of Sydney [2006] NSWWCCPD 124 and RTA v Warden [2004] NSWWCCPD 55).
Further as distinct from the facts before the Commission in Samuels there is no new evidence before me which would lead to a different result. Additionally, following my consideration of the submissions I am not persuaded that my refusal to reconsider Order two, would cause an injustice between the parties; particularly in circumstances where the Appellant confirmed that the appeal could be determined ‘on the papers’ and the Appellant, whilst provided with the opportunity to do so, failed to make express submissions in relation to the costs of the proceedings before the First Arbitrator.
Accordingly I am satisfied that both parties were provided with an opportunity to make submissions in respect of the costs of proceedings and no injustice can be said to arise in my determination to confirm the First Arbitrator’s costs order.
If I am wrong in my application of the legislation, I am not persuaded by the Appellant’s submission that the proper order should be “costs in the cause” (see discussion at paragraph 12) and I refuse to exercise my discretion to make such an order. In any event the application has been redetermined and the Respondent employer who was the Applicant in the substantive proceedings has been successful. Accordingly the Appellant’s submissions, if designed to obtain an order for costs if successful on redetermination, are again otiose.
DECISION
Following my consideration of the application for reconsideration and the relevant authorities I have determined not to exercise my discretion to reconsider Orders one and two of the orders made on appeal and dated 3 November 2006. The appropriate order is therefore:
1. Reconsideration of Orders one and two made on 3 November 2006 is refused.
I make no order as to the costs of the application for reconsideration.
Elizabeth Tydd
Acting Deputy President
2 March 2007
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF ELIZABETH TYDD, ACTING DEPUTY PRESDIENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
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