Mather v BHP Billiton Limited
[2009] NSWWCCPD 129
•13 October 2009
| WORKERS COMPENSATION COMMISSION | ||||||||
| DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR | ||||||||
| CITATION: | Mather v BHP Billiton Limited [2009] NSWWCCPD 129 | |||||||
| APPELLANT: | Maurice Craig Mather | |||||||
| RESPONDENT: | BHP Billiton Limited | |||||||
| INSURER: | Self Insurer | |||||||
| FILE NUMBER: | A1-1826/09 | |||||||
| ARBITRATOR: | Mr J Wynyard | |||||||
| DATE OF ARBITRATOR’S DECISION: | 16 June 2009 | |||||||
| DATE OF APPEAL DECISION: | 13 October 2009 | |||||||
| SUBJECT MATTER OF DECISION: | Application for an increase in an award; adequacy of evidence; whether the inference drawn that the worker had ‘retired’ was appropriate; exercise of discretion. | |||||||
| PRESIDENTIAL MEMBER: | Acting Deputy President Deborah Moore | |||||||
| HEARING: | On the papers | |||||||
| REPRESENTATION: | Appellant: | Whitelaw McDonald | ||||||
| Respondent: | Rankin & Nathan | |||||||
| ORDERS MADE ON APPEAL: | 1. Paragraph 1 of the decision of the Arbitrator dated 16 June 2009 is revoked and the following decision is made in its place: | |||||||
| (1) The Award of O’Meally CCJ in Matter Number 54681 of 1999 is amended from 30 June 2005 as follows: | ||||||||
| i. $400.27 per week from 30 June 2005 to 24 August 2005; | ||||||||
| ii. $434.78 per week from 25 August 2005 to 30 June 2006; | ||||||||
| iii. $384.78 per week from 1 July 2006 to 24 August 2006; | ||||||||
| iv. $420.32 per week from 25 August 2006 to 30 June 2007; | ||||||||
| v. $370.32 per week from 1 July 2007 to 24 August 2007; | ||||||||
| vi. $406.93 per week from 25 August 2007 to 1 April 2008; | ||||||||
| vii. $444.64 per week from 2 April 2008 to date and continuing. | ||||||||
| Credit to the Respondent for any payments made from 30 June 2005 to date. | ||||||||
| 2. Paragraphs 2 and 3 are confirmed. | ||||||||
| 3. The Respondent is to pay the Appellant’s costs of the appeal. | ||||||||
BACKGROUND TO THE APPEAL
Maurice Mather, (‘the Appellant’) injured his back on 18 June 1992 when he slipped whilst alighting from a crane in the course of his employment with the Respondent. Liability was initially accepted by the Respondent and compensation paid up to June 1999.
By an Award made by O’Meally CCJ in the former Compensation Court on 24 August 2000 in matter number 54681 of 1999, Mr Mather was awarded weekly benefits in the sum of $272.00 per week from 22 June 1999 to date and continuing pursuant to section 40 of the Workers Compensation Act 1987 (‘the 1987 Act’). Comparable earnings were found to be $1,022.00 per week, and Mr Mather’s ability to earn was assessed at $750.00 per week.
Prior to that decision, in proceedings number 4521 of 1997, Mr Mather received lump sum compensation in respect of 20% permanent impairment of his back, 10% loss of efficient use of his left leg at or above the knee, 10% permanent loss of efficient use of his right leg at or above the knee, and compensation for pain and suffering.
Proceedings brought in the Commission in 2004 (WCC14656 – 04) resulted in the registration of a section 66A Agreement by which the Respondent agreed to pay Mr Mather further lump sum compensation in respect of an additional 5% loss of each named body part.
By an ‘Application to Resolve a Dispute’ (‘the Application’) registered in the Commission on 10 March 2009, Mr Mather sought an increase in weekly benefits to the maximum statutory rate for a worker with two dependants from 30 June 2005.
The parties attended an arbitration hearing in Bega on 18 May 2009, which was completed in Sydney on 28 May 2009. No oral evidence was given, and the parties’ submissions are recorded in the transcript of 28 May 2009.
In a reserved decision delivered on 16 June 2009, the Arbitrator accepted that Mr Mather’s circumstances had changed, and that his condition had deteriorated such that he had suffered a diminution in earning capacity. After assessing comparable earnings and Mr Mather’s ability to earn, the resultant award ranged from $400.27 to $444.64 per week over the relevant period. This was then reduced by him to $300.00 per week on the grounds that Mr Mather had effectively retired from the workforce.
The Commission issued a Certificate of Determination on 16 June 2009 in the following terms:
“1. I amend the award of O’Meally J of 24 August 2000 to increase it as from 30 June 2005 to date and continuing to the sum of $300.00 per week.
2. There will be an award in favour of the Respondent in relation to the claim for s.60 expenses.
3. The Respondent will pay the Applicant’s costs as agreed or assessed. I certify this matter as complex and order an uplift of 30% applicable to both parties.”
It is from this decision that the Appellant seeks leave to appeal.
ISSUES IN DISPUTE
The only issue in dispute in the appeal is the decision by the Arbitrator to reduce the award. Mr Mather submits that decision was wrong in two respects: firstly, because whether a worker is or is not looking for work is not a relevant factor to be taken into account in the exercise of the discretion permitted by section 40(1) of the 1987 Act, and secondly; because there was no evidence upon which the Arbitrator could find that Mr Mather had ‘retired’.
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 appeal was lodged within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act. The amount at issue on appeal satisfies the threshold requirements of section 352(2).
Leave to appeal is granted.
THE ARBITRATOR’S FINDINGS AND REASONS
After setting out the background to the claim, the Arbitrator noted at [14] that the parties had agreed that there had been a change in comparable earnings since the time of the Award in August 2000, and that constituted a change of circumstances within the meaning of section 55 of the 1987 Act.
The Arbitrator then considered the question as to whether there had been any alteration in Mr Mather’s capacity for work. He summarised the various statements made by Mr Mather wherein he claimed that his condition had deteriorated since 2000, before summarising the medical evidence, principally a series of reports from Dr Edwards for the Respondent, and a report from Dr Conrad dated 14 October 2008 for Mr Mather.
The Arbitrator concluded at [53] that the medical evidence supported a deterioration in Mr Mather’s condition since 2000, and that he had suffered a diminution in earning capacity.
The Arbitrator then turned to consider at [55] “…what employment the applicant is now capable of, bearing in mind that he now resides on the South Coast near Narooma.” He continued as follows:
“55. The general labour market reasonably accessible to the applicant is a factor that must be taken into account (s.40(3)), but, as will be seen, no evidence has been presented as to why the applicant changed his domicile from the central coast, where he resided at the time of O’Meally J’s determination…
56. The applicant’s credit has not been directly challenged, the WorkCover certificates confirm a 5kg tolerance, the MRI scans demonstrate a pathological change, and both specialists accept that a deterioration may have occurred, if the applicant were to be accepted.
57. The applicant’s evidence as to his ability to earn is limited, to say the least. His three statements do not point to any attempts the applicant has been making to find work, if any, nor as to what rehabilitation he has undergone, if any. The searches undertaken by the investigators…revealed that the applicant owns three properties in the area…The applicant resided at the time of the investigations at another address…”
The Arbitrator then summarised the surveillance reports, which generally showed Mr Mather walking about, driving, attending a junior football match for over two hours and watching a band at a local festival. The Arbitrator observed at [62] that Mr Mather’s activities “…do not bespeak any obvious incapacity.” He continued as follows:
“63. Moreover, the observations of the applicant over the few days he was sighted suggest that he has properties in the area, and has chosen to live in the area, I infer, to be near them. There being no evidence before me as to what efforts the applicant has made to find work, I must take into account all the circumstances of the case. Whilst the medical evidence supports a decrease in earning ability, there is no evidence to support the application for an increase in the applicant’s award in the form of lay evidence as to what the applicant has been doing in the past nine years…The applicant has not sought work since, it would seem, 1999.”
The Arbitrator noted that Mr Mather had refused an offer of rehabilitation from the Respondent in his evidence before O’Meally CCJ and that although he had registered with a number of employment agencies back in 1999, he had not approached any employer himself. The Arbitrator continued:
“66. There is no evidence from the applicant in any of his statements as to whether he has sought any work since that time, and the restrictions placed on the applicant’s capacity for work by the medical practitioners must therefore be somewhat speculative, it now being nine years later.
67. Doing the best with the material that I can, I find that the applicant’s ability to earn has diminished, but not to the extent submitted by his counsel. The assessment is somewhat arbitrary because of the dearth of evidence as to any practical application of the alleged restrictions.”
After setting out in a table the comparable earnings since 2000, arrived at by applying a 3% index, the Arbitrator again referred to the absence of any evidence from Mr Mather as to his capacity for employment before concluding as follows:
“70. It is for the applicant to prove his case. I infer that the applicant has taken no steps to obtain work since 1999, because he has in fact retired from the work place. There being no evidence before me as to the reason for the move to the South Coast, the move supports the inference that he has decided to retire. There is nothing in the material before me to suggest that he has any intention to find work, but rather that he prefers now to look after his properties and raise his children. I infer further that his partner continues to work, which may be another factor in the apparent decision of the applicant to retire to the South Coast.”
The Arbitrator then repeated the observation that Mr Mather owns three properties in the Narooma area, had failed to provide a reason for his move there from the Central Coast/Newcastle area, and that that area provided a labour market reasonably accessible to him. He concluded at [71]:
“In all the circumstances I therefore have drawn the inference from this change of address referred to above. I regard this move as being a ‘relevant circumstance’ within the context of s.43A of the 1987 Act, as it is unexplained by the applicant, who bears the onus of proving his case.”
The Arbitrator determined at [73] that Mr Mather’s ability to earn from 30 June 2005 to 30 June 2006 was $750.00 per week; from 1 July 2006 to 30 June 2007 was $800.00 per week and from 1 July 2007 to date and continuing was $850.00 per week. After setting out the mathematical calculations being the difference between the probable earnings and ability to earn, which ranged from $400.27 per week in the 2005 year to $444.64 per week from April 2008, the Arbitrator continued as follows:
“This case is one which, however, calls for the exercise of my discretion as to whether the reduction is proper in the circumstances of the case. The fact that a worker has retired is a relevant consideration in the decision as to whether the reduction is proper in all the circumstances as required in s.40(1) [of the] 1987 Act…”
After setting out extracts from the decision of Deputy President Roche in Daly SmithCorporation Pty Ltd t/as DSC Personnel v Scherf [2008] NSWWCCPD 74 (‘Scherf’) where reference was made to various factual circumstances where the discretion had been applied, the Arbitrator concluded:
“77. I am satisfied on the evidence that the applicant has to all intents and purposes retired from the work place, for the reasons set out above. In my discretion therefore I vary the reduction to $300 per week for the entire period sought, and continuing…”
Mr Mather had sought payment of some apparently unpaid section 60 expenses. This claim was dealt with by the Arbitrator at [78] and was dismissed. Since it is not the subject of appeal, I do not propose to comment further upon that aspect of his determination.
DISCUSSION AND FINDINGS
Mr Mather’s submissions are correct for the reasons set out below.
The ‘Retirement’ Issue
I am not satisfied that the inference drawn by the Arbitrator that Mr Mather had “retired from the work place” [70] was correct nor supported by the evidence.
Mr Mather is presently 40 years old, and was only 23 at the time of his injury. He resides in Narooma with his defacto wife and two dependant children. He was certainly not even approaching compulsory retirement age unlike the situation in Australian Iron & Steel Pty Ltd v Elliott (1966) 67 SR (NSW) 87. Nor was there any evidence to suggest that he had indicated that he was in fact retired, or intended to retire.
The Respondent’s submissions before the Arbitrator focussed on its contention that there had not been any change in circumstances since the award of O’Meally CCJ in August 2000, on various mathematical calculations as to probable earnings and Mr Mather’s ability to earn, and his apparent failure to seek suitable employment. At [T17], the Arbitrator asked Counsel for the Respondent if anything arose from the surveillance material to which he replied:
“Well, there was nothing that came from the investigation that I could direct your attention to that would militate in favour of a change in circumstances for a diminution in the award.”
No submission was made for any diminution of any award on the grounds set out by the Arbitrator.
Although Mr Mather submits that “It is quite clear from the evidence that the plaintiff’s (sic) wife has a business in the local area” there is in fact no evidence of this. There is certainly evidence that Mr Mather and his partner own several properties in the area, but this fact in my view is insufficient for an inference to be drawn that he has in fact “retired.”
It seems to me that this was nothing more than a guess on the part of the Arbitrator. The concept of actual ‘retirement’ may be a relevant factor in the exercise of discretion for the reasons discussed, but should not be confused with a failure to actively seek employment.
In any event, even if such an inference could be drawn, or, to put it another way, that the evidence suggested that Mr Mather was not actively looking for work, it is simply not a relevant consideration in the exercise of the discretion permitted by section 40(1) of the 1987 Act for reasons I shall discuss below.
The ‘Discretion’ Issue
The Court of Appeal in Mitchell v Central West Health Service (1997) 14 NSWCCR 527 (‘Mitchell’) set out the five step process that must be undertaken in making a primary award under section 40. After calculating probable earnings, then deducting the worker’s actual earnings or ability to earn, the figure arrived at must then be subject to consideration as to whether that figure appears proper in the circumstances of the case. That requires the exercise of discretion.
As Mr Mather rightly points out, actual retirement can be a relevant factor. Other relevant factors were summarised by Deputy President Roche in Scherf referred to above. In that case, the worker suffered a serious injury to his left arm and, as a consequence of a nerve graft, his left leg. Voluntary payments of compensation were reduced by the employer following a “section 40 Assessment.” The Arbitrator found his ability to earn was greatly diminished, and awarded him the maximum statutory rate. The employer appealed on the grounds that the Arbitrator failed to have proper regard to the discretionary power contained in section 40 (1). In dismissing the appeal, Deputy President Roche observed at [76]:
“76. The fact that Mr Scherf does not hold a driver’s licence is not an appropriate basis on which to exercise the section 40 discretion. Mr Scherf has never held a driver’s licence and that fact did not adversely impact on his ability to earn before his injury because he used public transport or got a family member to drive him (Ms Staats’ report, page four). In assessing his ability to earn after his injury, DSC must take Mr Scherf as he is: a man with limited education and work experience (other than heavy physical jobs for which he is now unfit) who does not have a driver’s licence.
77. As was observed in Mitchell (at 534F) “The discretion is a broad one”. The courts have considered the exercise of the discretion in many cases in recent years and have applied it in the following situations:
o(a) where the worker has retired or suffered some supervening illness or injury (Australian Wire Industries v Nicholson (1985) 1 NSWCCR 50 at 55 (‘Nicholson’), and Australia Iron & Steel Pty Ltd v Elliott (1966) 67 SR (NSW) 87);
o(b) where the worker had been retired for two years before the injury which occurred during a short period of work which was a one-off job (Pratt v Claydon (1996) 14 NSWCCR 86);
o(c) where the worker was imprisoned during a period of partial incapacity (Stranlund v Mid Coast Meat Co Pty Ltd (1999) 19 NSWCCR 91);
o(d) where, since the injury, the worker has been dismissed because of a criminal conviction (Morgan v Commissioner for Railways [1972] WCR 33);
o(e) where, before the injury, the worker chose to work for only limited periods each year (Moy);
o(f) where the worker was pregnant (Wrigley Co Pty Ltd v Holland (2002) NSWCCR 463), and
o(g) where a worker sustained injury while working two jobs and the court had regard to the practical impossibility of continuing two full-time jobs over any lengthy period (Erisir v Kellogg (Australia) Pty Ltd [1987] NSWCC 4; (1987) 3 NSWCCR 92).
The discretion exists to cover the sorts of circumstances set out above. In the absence of any evidence that Mr Mather had in fact retired, or was of retirement age, the Arbitrator’s exercise of discretion to reduce the award was inappropriate.
A failure to seek suitable employment may be a factor to consider in assessing a worker’s ability to earn, or if actual earnings are a proper measure of that ability, but is not relevant to the section 40 discretion. A workers’ ability to earn may be determined by factors such as the nature and extent of the injury, the workers’ skills, and the labour market. In the present case, Mr Mather was found to have a fairly significant ability to earn: whether he was looking for work or not, his ability to earn remained the same such that he was entitled to the difference between the probable earnings and his ability to earn in the absence of any other factors of the type set out in Scherf.
I should note at this point that there was evidence that Mr Mather suffered from bilateral epicondylitis. That condition was specifically found by O’Meally CCJ to be unrelated to his employment with the Respondent. Although Dr Conrad referred to it in his report of 14 October 2008 as “ongoing,” and suggested that “he should not do heavy repetitive work with either arm,” there was no clear evidence that the condition was particularly incapacitating. Mr Mather made no reference to it in his various statements, and it was not the subject of submissions by either party that it was relevant to the section 40 discretion. The Arbitrator merely stated at [45]:
“In view of O’Meally J’s findings that the epicondylitis was not work related I put to one side Dr Conrad’s opinion regarding any incapacity arising from that.”
There may also have been grounds to exercise the discretion in section 40(1) if there was evidence that Mr Mather had voluntarily removed himself, for reasons unrelated to his injury, to an unfavourable labour market. There is simply no evidence to conclude that the labour market on the south coast is any more or less favourable than that on the central coast. In short, I have been unable to identify any factors relevant to the exercise of discretion under section 40 (1).
Similar issues to those the subject of appeal in this case were recently considered by Deputy President Roche in Pikus Pty Ltd t/asBanjo’s Bakery v Bradica [2009] NSWWCCPD 120. That case also involved an application for a review of weekly benefits pursuant to section 55 of the 1987 Act. One of the employer’s submissions on appeal was that once it was accepted that the worker had a partial incapacity for work, the Arbitrator was then obliged “to apply a discretionary reduction” to allow for the fact that the worker had given up seeking work. Although the appeal was determined on the basis of other matters, Deputy President Roche made the following pertinent remarks commencing at [67]:
“67. These submissions seem to suggest that a failure to seek suitable employment must be taken into account in assessing a worker’s ability to earn (step two in Mitchell – section 40(2)(b)) and in the exercise of the section 40 discretion (step four in Mitchell…) The first point may have relevance in certain limited circumstances (not applicable in this case), but the second point is incorrect.
68. In Mitchell, the Court held (at 534) that “self-induced diminution of earning capacity lies squarely within the exercise required to be carried out at what we have identified as the second stage.” Whilst a failure to seek employment may in certain circumstances be relevant in determining if a worker’s actual earnings are a proper measure of his or her ability to earn (see Aitkin v Goodyear Tyre & Rubber Co (Aust) Ltd (1945) 62 WN (NSW) 233), that issue does not arise in the present case because the application for a variation of the previous award seeks a variation from 11 August 2007 to date and continuing. At no stage since 11 August 2007 has Mr Bradica been employed and, therefore, his ability to earn must be determined according to the application of the established legal principles for a worker who is not earning (see Mangion v Visy Board Pty Ltd [1991] NSWCC 1; (1992) 8 NSWCCR 175 (‘Mangion’); Cowra Shire Council v Quinn [1996] NSWWC 143; (1996) 13 NSWCCR 175 (‘Quinn’); Ric Developments Pty Ltd t/as Lane Cove Poolmart v Muir [2008] NSWCA 155, (2008) 71 NSWLR 593 (‘Muir’)). In such a situation a worker’s ability to earn is determined on the basis of the authorities noted above and the matters listed in section 43A of the 1987 Act. Whether the worker is looking for work or not, his ability to earn, if the worker is out of work, is the same. If it is determined that a worker is fit for suitable duties, and that those duties are readily available in the labour market reasonably accessible to the worker, then, subject to the principles discussed in Mangion, Quinn and Muir, the wage for those duties will represent the worker’s ability to earn under section 40(2)(b) of the 1987 Act. That is so regardless of whether the worker is actively seeking that work or not. If a worker chooses not to exercise his or her found ability to earn, the employer is no worse off (see Gregson v L & MR Dimasi Pty Ltd [2000] NSWCC 47; (2000) 20 NSWCCR 520).
69. The submission that the failure to seek employment should be used in the exercise of the discretion under section 40 is incorrect. In Mitchell, the Court held unequivocally that there is “no justification” for taking into account at the discretionary phase a failure to seek suitable employment. Both the Commission and the Compensation Court before it have consistently applied this principle for several years. The employer’s submission is fundamentally wrong.”
CONCLUSION
Having conducted a “review on the merits” (per Spigelman CJ in State Transit Authority of New South Wales v Fritzi Chemler [2007] NSWCA 249,) I conclude, for the reasons stated in this decision, that the Arbitrator’s determination was incorrect, and that Mr Mather is entitled to an award at the rates set out by the Arbitrator at [75] of his Reasons.
DECISION
Paragraph 1 of the decision of the Arbitrator dated 16 June 2009 is revoked, and the following decision made in its place:
1. The Award of O’Meally CCJ in Matter Number 54681 of 1999 is amended from 30 June 2005 as follows:
i. $400.27 per week from 30 June 2005 to 24 August 2005;
ii. $434.78 per week from 25 August 2005 to 30 June 2006;
iii. $384.78 per week from 1 July 2006 to 24 August 2006;
iv. $420.32 per week from 25 August 2006 to 30 June 2007;
v. $370.32 per week from 1 July 2007 to 24 August 2007;
vi. $406.93 per week from 25 August 2007 to 1 April 2008;
vii. $444.64 per week from 2 April 2008 to date and continuing.
Credit to the Respondent for any payments made from 30 June 2005 to date.
Paragraphs 2 and 3 are confirmed.
COSTS
The Respondent is to pay the Appellant’s costs of the appeal.
Deborah Moore
Acting Deputy President
13 October 2009
I, MARIE JOHNS, CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF DEBORAH MOORE, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
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