Lower North Shore Community Transport Inc v Grass
[2007] NSWWCCPD 106
•2 May 2007
WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:Lower North Shore Community Transport Inc v Grass [2007] NSWWCCPD 106
APPELLANT: Lower North Shore Community Transport Inc
RESPONDENT: John Grass
INSURER:QBE Workers Compensation (NSW) Limited
FILE NUMBER: WCC15404-05
DATE OF ARBITRATOR’S DECISION: 26 April 2006
DATE OF APPEAL DECISION: 2 May 2007
SUBJECT MATTER OF DECISION: Weekly payments of compensation; earnings of self-employed worker.
PRESIDENTIAL MEMBER: Acting Deputy President Anthony Candy
HEARING:On the papers
REPRESENTATION: Appellant: McCulloch & Buggy
Respondent: Turner Freeman
ORDERS MADE ON APPEAL: The decision of the Arbitrator dated 26 April 2006 is revoked and the matter is remitted to another arbitrator for determination afresh in accordance with these reasons.
Each party is to pay his or its own costs of the appeal.
BACKGROUND TO THE APPEAL
John Grass (‘the worker’) was employed by Lower North Shore Community Transport Inc (‘the employer’) as a casual driver from 1997 onwards to transport disabled persons from place to place.
On 24 July 2001 he suffered an injury to his neck while going to the assistance of one of his passengers. He made a claim for compensation on 20 September 2001 and this was referred to the employer’s workers compensation insurer, QBE Workers Compensation (NSW) Limited (‘QBE’). Payments of compensation were duly made however a dispute arose as to what was the proper measure of the worker’s entitlement to weekly compensation based on his pre-injury earnings.
A claim for lump sum compensation was made on 2 February 2005 relying on reports of Dr Berry, an orthopaedic surgeon, dated 6 December 2004. Agreement was not reached as to the worker’s entitlement to such compensation. Accordingly, an Application to Resolve a Dispute was registered with the Workers Compensation Commission (‘the Commission’) on 14 September 2005 which claimed weekly compensation from 30 August 2004 at the statutory rate as adjusted and also claimed lump sum compensation in respect of impairment of the worker’s neck and loss of efficient use of his right and left arms, together with a sum under section 67 of the Workers Compensation Act 1987 (‘the 1987 Act’) for pain and suffering.
The question of the worker’s impairment and loss of efficient use was referred to an Approved Medical Specialist (‘AMS’), Dr Breit, who gave a Medical Assessment Certificate (‘MAC’) dated 22 February 2006. He assessed the impairment of the neck as 10% less 3% for pre-existing injury, abnormality or condition. The assessment of loss of use of the right arm was 10% and of the left arm 2%, and from those assessments there was no deduction. There was a conciliation/arbitration hearing before a Commission Arbitrator on 19 April 2006 at the conclusion of which the Arbitrator reserved his decision which was given on 26 April 2006. The Arbitrator made an award for weekly compensation and also assessed the appropriate section 67 compensation in the sum of $8,000.00. The parties on 3 July 2006 signed consent orders as to the lump sum compensation as assessed by the AMS and as awarded by the Arbitrator. However, the employer being dissatisfied with the award of weekly compensation now seeks leave to appeal from that determination by Application to Appeal Against a Decision of an Arbitrator lodged on 23 May 2006.
THE DECISION UNDER REVIEW
The ‘Certificate of Determination’, dated 26 April 2006 records the Arbitrator’s orders as follows:
“1.That the Respondent pay the Applicant weekly compensation at the rate of $145.00 from 30 August 2004 to 31 May 2005, and at the rate of $235.00 from 1 June 2005 to date and continuing under section 40 of the Workers Compensation Act 1987.
2.That the Respondent pay the Applicant, as lump sum compensation under section 67 of the Workers Compensation Act 1987, $8,000.00 in respect of pain and suffering.
3. That the Respondent pay the Applicant costs as agreed or assessed.”
ISSUES IN DISPUTE
The issues in dispute in the appeal are:
·Whether the Arbitrator failed to give adequate reasons for his decision.
·Whether the Arbitrator failed to deal with issues raised regarding the worker’s credit.
·Whether the Arbitrator failed to have regard to the weight of the evidence.
·Whether the Arbitrator failed to have regard to the employer’s submissions insofar as the claim for weekly payments of compensation are concerned.
·Whether the Arbitrator erred in not properly assessing the worker’s capacity to earn as required by section 40 of the Workers Compensation Act 1987.
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 employer 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. The worker makes no submission as to whether the matter may be determined on the papers or not, nor does the worker make any submissions as to why a hearing is necessary.
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 at issue on the appeal is in excess of $5,000.00 and the appeal concerns the whole amount of the weekly compensation awarded. Accordingly, section 352(2) of the 1998 Act is satisfied.
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 accordingly granted.
FRESH EVIDENCE
‘Fresh evidence’ on appeal is governed by section 352(6) of the 1998 Act, which provides as follows:
“(6) Evidence that is fresh evidence or evidence in addition to or in substitution for the evidence received in relation to the decision appealed against may not be given on an appeal to the Commission except with the leave of the Commission.”
Practice Direction No.6 sets out the process for seeking leave of the Commission to give ‘new evidence’ on appeal. It provides as follows:
“New Evidence
Where a party seeks leave to give new evidence in relation to the decision appealed against, that party must serve a copy of the new evidence on the other parties to the dispute when serving the Application or Opposition.
In general, the Commission will allow new evidence to be introduced only where it can be demonstrated that the new evidence could not reasonably have been obtained by the party and tendered in proceedings before the Arbitrator and that failure to allow the new evidence would cause a substantial injustice in the circumstances of the individual case.”
Practice Direction No.6 also provides that if new evidence is sought to be relied upon, the Application or Opposition to the Appeal must contain:
“ -a schedule of the new evidence,
-a copy of the new evidence,
-a brief outline of the new evidence and the reasons why it was not given in the
proceedings before the Arbitrator, and
-submissions why the new evidence should be admitted.”The worker on 19 June 2006 sought to rely on no fewer than 16 documents or groups of documents as fresh evidence. It is not necessary, I think to list all of those documents here. Some have been described as fresh evidence although already in evidence before the Arbitrator. There is, however, a further statement of the worker, written reasons given by the worker to reject the employer’s section 40 assessment, some employment documents from Disabled Alternative Road Travel Service (‘DARTS’) and various other correspondence to the worker much of which is extensively annotated by him. Of particular interest is a copy of a log book in respect of a Mitsubishi Sigma vehicle for the period 30 August 2000 to 30 June 2001. This is said to be the basis for the worker’s assessment of supplementary income for that financial year.
The worker submits that the documents ought be admitted in order to respond to the employer’s submissions on the appeal. They go, I assume, to the worker’s probable earnings but for injury. No reason is given as to why this evidence was not given in the proceedings before the Arbitrator. The worker suggests that the employer did not, until the hearing, dispute the worker’s pre-injury earnings. This is clearly incorrect.
The principles relevant to the admission of fresh evidence were considered by Deputy President Fleming in McMahon v Anthony Lagana and Joseph Lavella t/as The Vessel “Nimble II” [2003] NSWWCCPD 22 (‘McMahon’) as follows:
“11. Principles relevant to the exercise of the discretion to admit new evidence in relation to proceedings before the Commission were discussed in the matters of Ross v Zurich Workers Compensation Insurance [2002] NSW WCCPD 7, and Shipman Pty Ltd v Matters [2003] NSW WCC PD 19. Factors weighing in favour of the exercise of discretion to admit fresh evidence in an appeal against the decision of an Arbitrator in the Commission include that:
(i)if the request is refused, a substantial injustice will result to the party who seeks to have the evidence admitted, Radnedge v Government Insurance of New South Wales (1987) 9 NSWLR 235,
(ii)the evidence could not have been discovered, with reasonable diligence, at the time of the original proceedings, Radnedge v Government Insurance of New South Wales (1987) 9 NSWLR 235; Glover v Australian Ultra Concrete Floors Pty Ltd [2003] NSWCA 80, and
(iii)the evidence is of such a probative value that there is a high degree of probability that it would lead to a different outcome in the case, Greater Wollongong City Council v Cowan (1955) 93 CLR 435, Warr v Santos [1973] 1 NSWLR 432, Harrison v Schipp (2002) 54 NSWLR 738;: Atkins v National Australia Bank (1994) 34 NSWLR 155.
12. Factors weighing against the exercise of the discretion to admit fresh evidence in the appeal include:
(iv)the interest in the finality of litigation and the importance of the ability of the successful party to rely on the outcome of the proceedings, Litynski v Albion Steel Pty Ltd (1994) 10 NSWCCR 287,
(v)the prejudice, if any, that may result to the other party, particularly if the fresh evidence raises new arguments in the appeal, and
(vi)the intention of the legislative scheme in relation to the nature of the proceedings.”
I am conscious of the warning of the same Deputy President in Ross v Zurich Workers Compensation Insurance [2002] NSWWCCPD 7 at [19] that appeals pursuant to section 352 of the 1998 Act should not be allowed to become hearings de novo of the original dispute. The nature of appeal contemplated in the legislation is limited and while the review provided for is by way of re-hearing, it is necessary to demonstrate that the original decision was affected by some legal, factual or discretionary error. I do not consider that, having regard to the considerations enumerated by the Deputy President in McMahon that the fresh evidence should be admitted. To do so I think would necessitate further cross-examination of the worker and may require the employer to itself seek to rely on further evidence. In view however of the conclusion to which I have come to the disposition of the appeal, my refusal to allow the worker to rely on fresh evidence will not work any substantial injustice to him.
EVIDENCE
The Worker’s Evidence
The report of injury completed by the worker on 20 September 2001 relevantly states that his normal working hours for the employer were 15 hours per week at $17.00 per hour pursuant to the Omnibus Drivers Award. Under the heading “other current employers”, the worker has set out that he was self-employed for 13 hours per week at $20.00 per hour and worked 10 hours per week for Community Transport at $17.00 per hour. This amounts, on my calculations, to a claimed total weekly income of $685.00.
On 29 October 2001 the worker signed his tax return in respect of the financial year ended 30 June 2001. Also relied on by the worker are tax returns for four succeeding years. In the tax return for 2001 the worker’s income was said to be $28,260.00 made up of $5,760.00 from the employer and $22,500.00 being the amount transferred from total supplementary section income. Regrettably the tax return appears to be incomplete and the page at which that supplementary income is set out appears to be lacking. It should be noted that for that year a number of deductions were claimed of which $3,809.00 was in respect of work-related car expenses and the sum of $3,661.00 in respect of stationery, computer depreciation and equipment, telephone calls, reference books and equipment/tools.
It is convenient to deal with all of the tax returns at this stage and I set them out in the following table:
Year
ended30 June
Employer/
Workers Compensation InsurerSalary/
Wages/
Workers
Compen-sation
PaymentsSupplementary
income/
personal services
incomeWork-related car expenses
Other business expenses
2001
Lower North Shore Community Transport Inc (‘LNSCT’)
$5,760
$22,500
$3,809
$3,661
2002
LNSCT
QBE
$5,233
$14,300
$2,500
$3,575
$2,639
2003
LNSCT
QBE
$3,717
$18,681
$416
$3,834
$1,619
2004
QBE
$18,054
$0
$2,366
$1,734
2005
QBE
LNSCT
Austudy
$5,947
$2,336
$4,066
$260
$2,600
$1,125
There are three payroll advices from the employer in respect of the worker for the weeks ended 31 October, 8 November and the fortnight ended 22 November 2001. The weekly advices relate to 12 hours of employment at $17.70 per hour, $212.40, while the fortnightly advice also refers to 12 hours employment at the same rate.
Two statements of the worker were relied on. The first is dated 25 September 2005. The relevant part of this states that he was employed as a casual employee and worked approximately two days a week, four and a half hours per day, approximately, for the employer. On the odd occasion he would do an hour or an hour and a half extra as required. He was paid $17.70 per hour which was the pre-July 2001 award rate. He said he always had some secondary employment and at the time of his injury such employment was with Northaven Retirement Village (‘Northaven’) and DARTS. He also had clients for whom he did work as a subcontractor. The worker had been treated by his general practitioner, Dr Ross Unwin. At the time of making his statement he said that he was fit for suitable duties with a capacity of 20 hours per week, being four hours per day, five days per week. In December 2002 his employment with the employer was terminated on the basis that there were no suitable duties available to him although he said he could have worked with the employer at his pre-injury hours. He had been earning approximately $300.00 per week since July 2005 as a subcontract driver. As a result of his injury he was unsuccessful in his application for a permanent casual position at DARTS as they required a driver three days per week and he could not carry out the job requirements because of his restrictions. He had been paid $90.00 per week in compensation from August 2004 until May 2005 and had received no payments of compensation since May 2005. Continual sitting aggravated the pain in his neck and upper back which made his job very uncomfortable when he was behind a wheel driving for four hours as he was on some days.
There was a further statement of the worker of 12 December 2005. In that statement he said that between 30 August 2004 and 31 May 2005 he was employed as a driver at Northaven Retirement Village, later renamed Wesley Gardens Aged Care, working between three and four hours per week. During that period he had no other earnings or employment. On average he earned $54.84 per week. He received some benefits from Austudy when he undertook a basic computing course in an attempt to retrain himself. His pre-injury earnings were at least $543.46 per week which he had calculated by averaging the income disclosed in his tax return for the year immediately preceding his injury (2001). He said that prior to his injury private clients had paid him in cash and at the end of each year he would disclose that income to his tax agent to be included in his tax return. Those funds were listed as personal services income. At the end of May 2005 he was able to secure employment with the Department of Health as a transport driver working 21 hours per week. He said he found that working 21 hours per week exacerbated his neck symptoms which caused an increase in the pain in the back of his shoulders and numbness in each arm. He concluded that he would not be able to do two jobs and ceased work with Northaven. He said that liability had been declined by QBE on 21 March 2005 and payments had been received up to 1 May 2005. His weekly earnings with the Department of Health had increased from $378.66 to $393.81 from 14 July 2005.
The worker was cross-examined at the hearing on 19 April and it is convenient to deal with that cross-examination and re-examination now. The worker said that he worked on Tuesdays and Fridays with the employer. He also worked for a particular nursing home for quite a few years. He worked with Northaven and Hornsby Ku-ring-gai Community Transport, although he was not working for the latter at the time of his injury. He said that prior to his injury his work was pretty much like a courier or taxi driver. He would do work for people he had met in the course of his work. Like a taxi driver, he said, he would take someone to a hospital appointment. He agreed that his earnings with the employer for the year ended 30 June 2001 meant that he was working less than seven hours a week for that employer. He also agreed that, so far as Northaven was concern, from May 1988 he worked three hours a week whenever its day therapy centre was open at the rate of $20.00 per hour.
The worker said that he had applied for work with DARTS prior to his injury and started work with that body in approximately August/September 2001 but was only able to do one day because of his injury. That work had been on offer, he said, since June/July of that year. He was offered work and was working for DARTS prior to his claim being processed in September 2001. After some evasion the worker conceded that he had not done any work for DARTS prior to being injured.
The worker was then asked about the letter he wrote on 31 May 2004 to the employer. The particular part of the letter which was relied in cross-examination was the worker’s statement that since 1997 he had worked two days a week on Tuesdays and Fridays. Occasionally he had been offered work on other days and on most occasions would decline that work because of other work and family carer commitments. The worker said he had a friend who had a disabled son and the worker helped support his friend where he could. He was not paid for this nor did he receive any pension. He had not been giving that care in recent times. It was suggested that the worker was at the time of his injury working about 10 hours a week for the employer and Northaven combined which was the extent of the work he did as a bus driver. The worker claimed however that he used his own car to pick up different clients and take them to appointments. That was the reason why he said he was able to claim for his car expenses in respect of certain aspects of his work. He had assessed the income for which he did not have invoices or group certificates. The worker did however say that the documentation which he had was sent to WorkCover. These were bank account statements and deposits of income going into his bank account. There were other things like group certificates and invoices which he had already sent to QBE. He did not issue individual clients with receipts, nor did he keep a record in a ledger or on a computer of the amounts he had earned. He had to estimate what those earnings were in addition to what was demonstrated in group certificates and other records. The worker said he had attempted to increase his hours but could not because his symptoms would gradually get worse.
In re-examination the worker was asked about the figure of $22,500.00 appearing in his tax return for the 2001 year. This was said to be a combination of all of the worker’s other income. He was asked how he came to this figure and said that he had to “just assess approximately what I was charge” [sic]. Occasionally he would do work for clients and would not charge them anything depending on their circumstances. He said he would normally charge the going rate for community transport which was between $18.00 and $20.00 an hour if the client could afford it. He was asked whether he provided his accountant with bank statements and he replied that he just provided his tax agent with an assessment and some statements at the time, whatever he had. He had invoices for Northaven but the rest was assessed based on how many hours he might have done over a period over each month.
A number of medical certificates from Dr Unwin from June 2004 to July 2005 are relied on by the worker. The certificates refer in the most part to a cervical disc lesion at C6-7 and certify the worker fit for suitable duties four hours a day, five days a week with varying restrictions on lifting and a restriction that he should not drive heavy buses or large vehicles.
The employer also relied on a large number of certificates from Dr Unwin and it is convenient to deal with those here also. The earliest certificate is dated 28 September 2001. The diagnosis was as I have earlier set out and the worker was certified fit for suitable duties from 29 September to 12 October 2001 with the restriction that he should not drive large buses. Dr Unwin continued to certify the worker fit for suitable duties much as he later did in 2004 and 2005, however, in April 2002 he certified him fit for 5 hours a day, 5 days a week. This however continued only until 17 June 2002 when the doctor reverted to certifying the worker fit for work on 4 hours a day, 5 days a week. There is no report in evidence from Dr Unwin.
Dr Berry saw the worker at the request of his then solicitors on 3 December 2004. The worker told the doctor that following his injury in July 2001 he attended his general practitioner and over the following two weeks had the occasional day off. The pain persisted and he was sent for X-rays. He was put off work for two weeks. He returned to his suitable duties which consisted of restricted hours and the avoidance of lifting patients as much as possible. Physiotherapy did not help. His employment was terminated in December 2002. Since that time he had been doing similar duties for another company on a casual part-time basis on average 6 to 14 hours a week. He felt he could work 15 to 20 hours a week but that amount of work was not available. Dr Berry noted a plain X-ray which he said showed C5/6 degenerative changes. Dr Berry thought that the worker was permanently unfit for work requiring driving for prolonged periods, lifting heavy disabled people and also manoeuvring wheel chairs in tight confined spaces. In a separate report Dr Berry assessed permanent impairment of the neck and loss of use of the left and right arm.
Dr Berry again wrote to the worker’s solicitors on 11 April 2005 having reviewed an enclosed report which is described as long and complex but which, unfortunately, is not identified. It appears to be the report to which I will later refer in [57] and [58]. Dr Berry expressed the view that the worker was unfit on a permanent basis to drive heavy vehicles, especially if there was any element of having to lift and assist disabled patients. He did think however that the worker would be able to carry out the duties of a clerk or in general administration as long as he was not required to do heavy lifting or to maintain a sitting or standing posture for a prolonged period without relief. He thought that he was fit also to work as a disability support worker providing he did not breach heavy lifting and prolonged posture maintenance rules. He did however consider that the general practitioner’s restriction of 20 hours a week was “probably reasonable”. He thought that the worker should be able to do a standard week’s work. [It is difficult to know what Dr Berry means by the reference to standard week in this context.]
There is a report of a plain X-ray by Dr D. Collis dated 10 September 2001 on referral from Dr Unwin. The relevant part of the report is as follows:
“The neck is held in left lateral flexion. The alignment appears normal on the lateral projection.
There is narrowing of the C6/7 disc space. The disc space and bony structures appear otherwise normal. The neural exit formina [sic] appear patent bilaterally. The uncovertebral [sic] joints and apophyseal joints appear normal. No cervical ribs were seen.”
At the later stage the worker sought to rely on two reports of Dr Drew Dixon, an orthopaedic surgeon, dated 5 September 2005. He told that doctor that he was currently working part-time 20 hours a week on a subcontract basis. He told that doctor that he was working a normal 40 hour week at the time of his injury as a community transport driver but required three weeks off work before attempting to return to work full-time. He found he was unable to continue full-time duties and could only work a maximum of 20 hours a week as a subcontracting driver. That doctor reviewed a CT scan of the cervical spine of 10 September 2001 which was said to show minor lipping at C3/4 with slight narrowing of the neural exit canals. There was a C4/5 central disc protrusion with slight displacement of the dural sac. At C5/6 and C6/7 there was very mild broad based posterior disc bulging in contact with the dural sac and early lipping of the vertebral endplates which abut onto the sac and displace along the upper margin of C6. The left C5/6 neural exit foramen was narrowed. Both C6/7 neural exit foramina were narrowed. There was no gross central canal stenosis and facet joints appeared normal. The doctor considered that the worker had aggravated cervical spondylosis in July 2001 and had residual bilateral shoulder pain more marked on the right.
The worker relied on pay slips from NSW Health Department which were for pay periods ended 1 June 2005 to 19 October 2005. The pay rate was $378.66 up to the pay period of 13 July 2005 and $393.81 thereafter.
A Wage Schedule was filed with the Application to Resolve A Dispute. In that the claim is as follows:
30/08/2004 to 30/9/2004 - $323.00 per week
01/10/2004 to 31/03/2005 - $328.90 per week
01/04/2005 to date and continuing - $334.10 per week
[These rates represent the maximum compensation payable a worker without dependants at the relevant times and are unhelpful]
On 13 December 2005 the worker sought to rely on an Amended Wage Schedule which is as follows:
Period From/To
Gross Earnings
($)Earnings but
for Injury
($)Difference claimed pursuant to s40
($)30/08/2004 to 31/05/2004 $54.85 (Northaven Retirement Village) $543.46
Statutory rate as adjusted for a single worker. 01/06/2005 to
13/07/2005$378.66 (NSW Health Dept) $543.46 $164.80 14/07/2005 to
date$393.81 $543.46 $141.65
Employer’s Evidence
The employer relied on its Report of Injury dated 6 September 2001. That document described the work done by the worker as being “driving: assisting clients on and off bus: general client assistance”. The normal working hours were said to be “casual as needed” and there is a statement that the number of hours worked by the worker in the preceding financial year were 317. The hourly rate being paid to the worker was said to be $17.70 under the Motor Bus Drivers & Conductors (State) Award.
There are two group certificates in respect of the financial years ended 30 June 1997 and 1998. The earlier of these shows that the worker was employed from 13 April 1997 to 30 June 1997 and earned a total of $1,686.00. For the following year the worker’s earnings with the employer were $4,905.00. There is a payment summary for the financial year ended 30 June 2004 in respect of the employer in which the amount earned was $78.00.
On 19 October 2001 QBE received an undated statutory declaration from the worker advising that he had been working for the employer 15 hours per week, $17.00 per hour with five years service. In addition he had worked and continued to work for a number of other community transport private organisations and individual clients as a community transport driver. These were listed as:
Hornsby Ku-ring-gai Community Transport (Manager C. Ryan);
Turramurra/Northaven Retirement Village (P. Kennedy), Turramurra, and
DARTS (Disabled Alternative Road Travel Service) Manager J. Bray, Chatswood total 34 hours per week.
He said he was already losing clients because of his lost time with injury and was reluctant to inform other employers of his circumstances for the same reason.
On 24 October 2001 in response to a request from QBE the worker faxed a document to it in relation to his employment details. These were as follows:
“Employer: Lower North Shore Community Transport (indistinct) $17.00 per hour
Hornsby Ku-ring-gai CT/Northaven Retirement Village 6 hours p.w. $17.00 p.h.
DARTS (Disabled Alternative Road Travel Service) 16 hours p.w. $17.00 p.h.”
On 26 November 2001 the worker advised that he had not been able to obtain suitable duties of more than a half to two hours per week from other employers since 29 September 2001.
On 15 February 2002 the worker faxed to QBE an advice which was as follows:
“Commencing 14/2/02 employed 3 hours per week with Northaven Retirement Village for the near future any variation in hours will be supplied.”
A similar advice apparently in the form of a Statutory Declaration was faxed to QBE on 15 March 2002 advising that he would be working each Thursday at Northaven as of 31 [sic]February 2002 until further notice. The worker describes his occupation in this document as “vocational trainer/community transport driver”.
It is convenient at this point to deal with the details of employment supplied by the various bodies for which the worker had worked.
Hornsby Ku-ring-gai Community Aged/Disabled Transport Service Inc advised that the worker was employed as a casual driver on 3 December 1997 and was required to drive a 22-seater bus to transport frail and aged clients. He was a casual who worked on average seven hours per week, being paid $16.40 per hour and receiving an allowance of $5.00. The total weekly wage was $119.80. He ceased work in the week ending 4 May 1998.
DARTS advised that the worker had been employed for one day in the week ending 2 November 2001. For this work the worker received $165.60. A casual driver for one or two full days per week was required as the service only operated full day shifts. It was not possible to offer work for less than 7 hours per day.
Northaven on 16 May 2003 advised that the worker had been employed since 7 May 1998 and continued in employment. He worked three hours per week whenever the Day Therapy Centre was open but not in January. The rate of pay was $20.00 per hour. The worker was said not to have lost any time due to injury. On 8 February 2005 Northaven advised in a document headed “To Whom It May Concern” that the worker was employed to drive its bus on Thursdays and his monthly earnings were for varying sums between $180.00 and $300.00 for the period February 2002 to March 2003. There was one additional payment for $240.00 in March 2004. The information supplied by letter of 18 October 2005 to the employer’s solicitors, however, was considerably different. Northaven advised that the worker was not an employee of Northaven but a contractor. There were no timesheets, wage sheets, tax stamps, group certificates or the like. However a spreadsheet of payments was enclosed. This shows payments on a monthly basis from 1997 to 2005 with annual totals. These may be summarised as follows:
97/98 $ 255.00
98/99 $2705.00
99/00 $3,080.00
00/01 $2,750.00
00/02[sic] $2,810.00
02/03 $2,670.00
03/04 $1,450.00
04/05 $2,340.00For the months August 2003 to January 2004 no payments are shown and the word “overseas” has been stamped over that period.
The differences between the information conveyed in the letter of 8 February 2005 and that in the later letter is that in the former there is no reference to the worker’s earnings for the months April to July 2003 or from February 2004 onwards with the exception of March 2004.
There are a number of invoice details from Wesley Gardens Aged Care which is also described at Ku-ring-gai Region Aged Care. As with Northaven, the legend “Uniting Care” appears on the documents however the address is 2b Morgan Road, Belrose. There are four payments recorded for the stated dates and amounts as follows:
30/09/2004 $ 240.00
28/10/2004 $ 240.00
30/11/2004 $ 240.00
16/12/2004 $ 120.00The months and amounts are identical to those shown in the spreadsheet of payments provided by Northaven.
The employer relies on a report of a CT scan dated 13 September 2001 of the worker’s cervical spine under the hand of Dr Mudbidri. This is as follows:
“Angled scans from C2 to T1 were reviewed in both the soft tissue and bony windows. No definite disc hernation [sic] could be seen. The spinal canal appeared adequate with no signs of canal stenosis. No cord or nerve root compression could be seen. The neural exiting foraminae and exiting nerves seen are normal.
In the bony window display no bony abnormality could be seen.”
Dr Kafataris, who is a corporate medical consultant/injury management consultant, saw the worker at the request of QBE and reported on 9 April 2002. He told that doctor that, although he had “improved somewhat”, he had not been able to return to his pre-injury duties. He was angry at the nursing home for reducing the number of staff present at pickup and drop off. He said that he was a second carer for the disabled son of a friend. He told the doctor that he was working for several community transport groups at one time as well as his registered employer (Lower North Shore Community Transport). The doctor noted that the patient appeared to work 30 to 40 hours per week with at least five or six different employers. The doctor was advised by the employer that the worker had returned to work at his pre-injury duties however, just prior to the accident happening, one of the two shifts of four hours which he worked had been cancelled. Dr Kafataris discussed the worker with Dr Unwin who considered that the worker could increase his hours of work. Dr Kafataris’ impression was that the worker should be able to increase his hours from 20 hours per week to at least 25-30 hours per week in two stages and then to 40 hours per week. The doctor considered that the worker had sustained an injury to his right interscapular muscles during the injury in question.
Dr Jeni Saunders, a sports physician/injury management consultant, also saw the worker at the request of QBE on 25 or 26 February 2003. The worker was currently working suitable duties and felt that he was coping with them. The worker told the doctor he had been working as a community transport officer for six years. He predominantly drove a coaster bus but could drive a smaller bus. The worker told Dr Saunders that a CT scan had confirmed a discal injury and accordingly the diagnosis the doctor reached was of a C6/7 cervical discal injury. That doctor also contacted Dr Unwin to discuss the worker’s condition. Both doctors regarded the worker’s restrictions as to work as permanent. However, she also noted that he would be fit for full-time hours in a job that could provide duties that would fit his restrictions. Dr Unwin was to review the worker shortly and to modify his certificates to reflect this. This did not however occur.
The worker was seen by Dr David Bray, an orthopaedic surgeon, on 2 March 2004 at the request of QBE. He told that doctor also that X-rays had shown damage at the C6/7 levels. At that time he said he was more or less self-employed but was really doing casual work. He was only managing one Thursday which was six hours work in two shifts. The doctor saw no X-rays, however, he noted what Dr Saunders had said as to the X-rays of 10 September 2001 and thought that the changes shown on X-ray were pre-existing since they were present within two months of injury. To fully assess the worker he thought he would need to see more recent X-rays of his cervical spine. Dr Bray thought that the worker was best suited for work that allowed him to move around and did not require prolonged sitting or standing. He would need to exercise care in lifting and bending but would be able to perform many normal activities in his work and leisure.
Dr David Johnson, a consultant surgeon, saw the worker on 7 March 2005. He told that doctor that he had worked for 30 years looking after people with disabilities, mostly as a driver. He had been working with the employer for 15 hours a week but also worked with a number of contractors doing similar work at the same time. As with Dr Bray, Dr Johnson saw no X-rays however he noted the reports elsewhere of an X-ray of the cervical spine and CT scan of September 2001. At that time the worker was employed at Northaven Retirement Village, Turramurra as a bus driver for 3 or 4 hours a week. He said he had lost all his other work when it was found that he had a disability. Dr Johnson considered that the worker was fit for his pre-injury duties.
An assessment under section 40 of the 1987 Act was done by an occupational therapist, Meaghan Gill, of Keystone Professionals (report 20 April 2004). The worker told Ms Gill that he felt he was able to work full-time in a clerical/administrative job as that was what he had been doing in the preceding year while liaising with all parties in relation to his workers compensation claim. He did say, however, that the assessment done on that occasion was not a true and accurate record of his current functional capacity as he did not have to do the assessment tasks “for his job”. Ms Gill considered that the worker would be able to perform the duties of a clerk and disability support worker in a full-time capacity. As a motor bus driver he would be able to earn, she thought, $601.60 per week or as a motor bus conductor, $469.50 per week. As a clerical and administrative employee, depending on grade, the worker would be able to earn between $508.50 and $542.20 per week. In respect of a disability support worker, the rates of pay were between $511.70 and $558.70 depending upon grade and, as a social and community services employee, he would be able to earn between $470.35 and $543.23 per week. Although the worker was certified fit for suitable duties for four hours a day five days a week, the worker believed that he may be able to perform more hours of suitable work, however, he had not tried this because he had not been offered this by his pre-injury employer. Ms Gill recorded that the worker’s attendance for assessment was over a period since a number of appointments were cancelled. When he did attend he attended late and did not complete all aspects of the assessment tasks requested. The worker said that he lived with his mother aged in her late 70s and his de facto partner. He also said that he assisted with the care of his “stepson” who had an acquired brain injury and who lived in Castle Hill.
A vocational assessment was carried out by Jennie Quintana, a rehabilitation councillor, also employed by Keystone Professionals. She obtained a history of the worker’s prior employment which had been as a clerk in the Public Works Department between 1968 to 1971, a clerk in a real estate agency from 1971 to 1972, a title register clerk at the Registrar General’s Department from 1973 to 1975, a driver-owner doing bread deliveries from 1975 to 1978, a cleaner/driver/vacation carer from 1977 to 1978, a driver for the Spastic Centre from 1979 to 1982, a driver support worker employed by Challenge New South Wales Activity Centre from 1982 to 1986, a clerk in the Department of Housing from 1987 to 1990, a part-time carer and part-time community transport driver from 1990 to 1995 and a community transport driver employed by the employer among other bodies from 1995 to the present time. The worker told Ms Quintana that his partner assisted him in caring for his mother and in completing household chores. He had arranged a network of community services to assist in caring for his elderly mother. He had also been a carer for a son of a previous partner/friend but was not now as involved in care giving but was available if required. The functional assessment carried out indicated, Ms Quintana said, the worker had the capacity to work full-time, within the functional capacities assessed, as a clerk or disability support worker (able-bodied clients) in a full-time capacity.
Following the section 40 assessment, QBE wrote to the worker on 30 April 2004 advising that suitable positions for him were as described in the section 40 assessment with remuneration between $535.55 and $521.94 per week. It was noted that Dr Unwin had agreed that he was only capable of performing those positions for 4 hours a day 5 days a week. However, QBE advised that the new section 40 rate from 14 June 2004 was $6.28, being the difference between weekly earnings if fully fit ($532.00) and his ability to earn ($525.72). It is not clear how these figures were arrived at.
On 10 August 2004 QBE again wrote to the worker care of his then solicitors advising that payments made to him, pursuant to section 38 of the 1987 Act, had reached 52 weeks. The worker had been paid under section 38 as there was no proof of earnings. Reportedly the worker had refused to allow QBE to contact his other employers. On this occasion QBE advised that there was to be a reduction in weekly benefits from 30 August 2005 to $89.74, being the difference between weekly earnings if fully fit ($532.00) and what the worker was capable of earning ($442.26).
Between 20 October 2004 and March 2005 QBE wrote to the worker on numerous occasions regarding proof of his earnings, authority to contact his employers, his failure to attend medical examinations, suspension of payments, the names and addresses of his employers at the time of his injury and finally advising him that payments would cease from 30 January 2005. The worker contacted WorkCover and, following its representations, QBE resumed payments. It is not, I think, necessary to set out that correspondence in detail.
On 21 March 2005 QBE wrote to the worker advising that liability was denied on the basis of Dr Johnson’s opinion that he was fit to perform his pre-injury duties. Compensation was however to be paid until 1 May 2005 pursuant to section 54 of the 1987 Act.
On 6 June 2005 the employer’s solicitors wrote to the worker’s solicitors enclosing a copy of reports of Dr Bray of 6 March 2004. Particulars were requested of the claim made and income tax records for the two year period from 1 July 1999 were sought. An undertaking was given to meet the applicant’s expenses in obtaining those documents. Particulars were supplied by letter of 25 August 2005. The worker’s solicitors also advised that attached to the draft Application to Resolve a Dispute were copies of all group certificates and tax returns in their possession. Apart from those, the solicitors had no further information at that time.
On 5 May 2004 the employer faxed to the worker details of two jobs allocated to him for that month on 7 and 12 May. He was asked to advise if he could not do either of them. The worker replied on 31 May 2004 that he had been working for the employer regularly, two days a week, since 1997 on Tuesdays and Fridays. He said occasionally he would be offered work on other days and on most occasions he would decline that work due to work and family care commitments. He went on to say that since there were suitable duties available with the employer on all days, including work previously performed by him with Chatswood High School on Fridays, he expected this work and other suitable duties on Tuesdays and Fridays would be offered on a weekly basis as he had previously worked and not the regular intermittent work he was being offered.
The employer wrote to the worker on 3 June 2004 advising that the work being done on Tuesdays had ceased when the organisation for which transport was being provided cancelled the services in July 2001. The last time the worker was said to have worked on a Tuesday for the employer was in August 2001 when he did his First Aid Certificate. As to work on Friday afternoons, the employer required a staff member who was able to work at least six hours a day while the worker’s medical certificate stated that he could only work four hours per day. Therefore the work currently available on Fridays was not appropriate for him.
On 16 June 2004 the employer again wrote to the worker referring to work rostered to him in May and June of that year in respect of which he had failed to attend and not provided any reason for non-attendance. In view of this, the employer advised that more reliable drivers would be rostered in the first instance and he would be rostered only if no other suitable drivers were available.
Submissions before the Arbitrator
On behalf of the worker it was submitted that his probable earnings were $611.00 per week as of 1 July 2005 based on the earnings shown in his tax return for the year ended 30 June 2001 and increased by 3% per year to take account of CPI increases. His actual earnings were said to be $393.00 per week.
On behalf of the employer it was submitted that the worker had been deliberately vague about his earnings in September 2005 saying he was earning about $300.00 a week when his actual earnings were $393.80. Reference was also made to the absence of any reference in the worker’s tax returns to his work with Northaven. It was pointed out quite correctly that at the time of his injury the worker had not worked for DARTS at all. It was submitted that the worker had not suffered a significant earning loss and any entitlement under section 40 of the 1987 Act would be small indeed.
In relation to the worker’s earnings for 2001, it was pointed out that there were deductions from his earnings of in excess of $6,000.00 on account of car and other work-related expenses which ought be deducted from his earnings in any event.
Written submissions were also made on behalf of the employer, which were brought to the Arbitrator’s attention. The submissions highlighted the inaccuracies in the worker’s estimates of his earnings at the date of injury. The 317 hours per week which the worker had worked for the employer in the year preceding his injury were calculated to average out at 6 hours per week [the actual figure is slightly higher]. In relation to Hornsby Ku-ring-gai Community Transport it was pointed out that advice from that body was that the worker ceased his employment on 4 May 1988 and so far as DARTS was concerned he worked one day there in the week ended 2 November 2001. The worker’s pre-injury earnings were said to be $110.77 per week from the employer in accordance with the amount shown in the worker’s 2001 Group Certificate and $60.00 per week from Northaven. These two amounts total $170.77 per week.
So far as the “personal services income” is concerned, it was submitted that no invoices, receipts or statements from an accountant had been served. It was said that regard could not be had to this in assessing the worker’s pre-injury earnings in the light of the inconsistencies in the applicant’s statements, correspondence and statutory declarations.
The Arbitrator’s Reasons for Decision
The Arbitrator stated the main issue in dispute was the determination of the worker’s probable earnings but for injury. The Arbitrator relied on the tax return for the 2000-2001 financial year showing a weekly income of $543.00 per week. That sum is arrived at by dividing the worker’s stated gross income for the year of $28,260.00 by 52. The employer was said not to dispute the submission made in relation to probable earnings. Probable earnings were said to be $611.00 per week from 30 August 2004 to 13 July 2005 and $629.00 per week thereafter. From 30 August 2004 to 31 May 2005 the worker was said to be earning approximately $54.00 a week and receiving weekly benefits of $89.74 per week. From 1 June 2005 to 13 July 2005 the worker earned $378.66 per week and from 14 July 2005 to date $393.81. The worker was said to be entitled to weekly payments for partial incapacity of $235.00 per week from 30 August 2004. Since he had been paid compensation at $89.74 per week up until 31 May 2005, the consequent award was $145.00 per week from 30 August 2004 to 31 May 2005 and $235.00 per week from 1 June 2005 to date and continuing.
DISCUSSION AND FINDINGS
There are five grounds of appeal which are referred to in [6]. It may not ultimately be necessary to deal with all of them and I will take them in the order which I think appropriate.
Failure to have regard to the employer’s submissions as to the claim for weekly compensation
It is submitted that the Arbitrator failed to properly deal with the issues raised in the employer’s submissions. It is said that the Arbitrator did not refer to the fact that the documentary evidence supported the worker actually only working for the employer and Northaven at the time of his injury. Nor did the Arbitrator acknowledge that the worker misrepresented the number of concurrent employers he had as well as the number of hours he was working at that time.
It is submitted on behalf of the worker that the employer did not produce a wage schedule until a few days prior to the arbitration, nor did the employer issue a direction to produce documents upon the worker. It is pointed out that the Arbitrator at page 4 of his reasons noted that the employer’s counsel did not dispute the worker’s submission.
The Arbitrator dealt with the matter of the worker’s probable earnings as follows at [17]:
“The main issue in dispute in this matter, is the determination of the Applicant’s probable earnings, but for the injury. The Applicant has filed a copy of his income tax return for the 2000-2001 financial year in which he disclosed a weekly income of $543.00 which alleges was earned solely as a community transport driver arising out of his employment with the Respondent and with concurrent employers.
Counsel for the Respondent had the opportunity to cross-examine the Applicant at length about this aspect of the claim and the suggestion in the Respondent’s written submissions that the Applicant’s income at the time of injury amounted to only $170.77. The respondent has not been able to satisfy me that there is sufficient evidence to support his contention.
Counsel for the Applicant has argued that while there is no evidence of comparable earnings because of the nature of the Applicant’s employment, the amounts paid in the Awards referred to by the Applicant are similar to the rates in fact paid to the Applicant. He has submitted that these should be increased by approximately 3% per annum, which has the effect of increasing the probable earnings to $611.00 per week for the period 30 August 2004 to 13 July 2005 and to $629.00 per week thereafter.
Counsel for the Respondent did not dispute this submission, and I agree with it.”
In the transcript the relevant passage appears to be as follows:
“Mr Austin [the worker’s counsel]: Now, my submission will be that his probable earnings but for the injury are in excess of $543.00, as disclosed in his wage schedule. Indeed, currently, if one were to increase those – I withdraw that. That $543.00 per week figure disclosed in the wage schedule is based upon his 2000-2001 income tax return.
Arbitrator: Is that in evidence?
Mr Austin: That is part of – it forms part of the application, yes.
Mr Marsh [the employer’s counsel]: We do not object to any of that.
Mr Austin: Yes.
Arbitrator: Sorry?
Mr Marsh: Its not objected to in any event.”
Having regard to these submissions which were subsequently made by the employer’s counsel, it is quite clear in my view that he did not agree that the worker’s probable earnings were to be calculated by reference to the figure of $543.00 in the worker’s 2000-2001 tax return.
It is also clear in my view that the Arbitrator was in error in taking the worker’s stated gross earnings for the 2000-2001 financial year as being the appropriate starting point for the calculation of probable earnings. The Arbitrator took no account of the expenses which the worker claimed in any part of such income. It is quite clear on the authorities that regard must be had to the value of the labour which the worker contributes to the business carried on by him and not simply the gross income. See J & H Timbers Pty Ltd v Nelson (1971) 126 CLR 625 and Australian Wheat Board v Pantaleo [1984] 3 NSWLR 530.
There is no doubt that the statements made by the worker in his claim for compensation and subsequently were factually incorrect. I am mindful of the fact that a relatively large amount was shown in the tax return for the 2000-2001 year for supplementary income, which is not shown in subsequent tax returns, no doubt, it is said because of the worker’s injury. Where the worker has, as appears the case here, a complete discretion as to the disclosure of such supplementary income I think that such assessment, for that was that all he said it was, must be regarded as unreliable. I am also mindful of the fact that the worker subsequently sought to rely upon a motor vehicle log book which was said to substantiate his claimed supplementary income. Without log books for preceding years in my view such a document would have to be regarded as unreliable also. I have in the event declined to admit it.
The five years of tax returns which I have set out in summary form at [22] show a puzzling disparity. Whereas in the year 2001 the work-related car expenses totalled $3,809.00 for a supplementary income of $22,500.00, the following year the work-related car expenses were $3,575.00 for a supplementary income of $2,500.00. For the 2003 financial year the work-related car expenses were $3,834.00 for a supplementary income of $416.00. It is similarly not clear what the other business expenses claimed related to since the worker said he did not keep a computer record of his earnings from other sources. I have earlier expressed the view that I am not satisfied that complete copies of the taxation returns were provided so as to give an accurate picture of the worker’s earnings. I note also that the tax returns for two years prior to 2001 were requested but not forthcoming.
I have come to the conclusion that in this matter there ought be a fresh hearing before another arbitrator. I could have re-determined the matter myself by adjusting the worker’s probable earnings to take account of the work-related deductions for the year 2001 but I do not think that that is the appropriate course in this case. I am not satisfied that the tax return in question accurately reflected the worker’s earnings for that year. The worker ought, in my view, be given an opportunity to explain the inconsistencies in his tax returns. Further evidence including oral evidence is, I think, required particularly as to the worker’s earnings for the three years preceding the date of injury.
In view of the decision to which I have come as to the outcome of the appeal, it is not necessary, I think, to deal with the additional grounds of appeal relied on.
DECISION
The decision of the Arbitrator dated 26 April 2006 is revoked and the matter is remitted to another arbitrator for determination afresh in accordance with these reasons.
COSTS
Although the employer has been successful on appeal, I do not consider this is a matter in which a costs order should be made against the worker. Accordingly, I make no order as to costs.
Anthony Candy
Acting Deputy President
2 May 2007
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF ANTHONY CANDY, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
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