McCloy v API Manufacturing Pty Ltd

[2006] NSWWCCPD 196

WORKERS COMPENSATION COMMISSION

DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR

CITATION:McCloy v API Manufacturing Pty Ltd [2006] NSWWCCPD 196

APPELLANT:  James Robert McCloy

RESPONDENT:  API Manufacturing Pty Ltd

INSURER:QBE Workers Compensation (NSW) Ltd

FILE NUMBER:  WCC 9421-05

DATE OF ARBITRATOR’S DECISION:          14 October 2005

DATE OF APPEAL DECISION:  23 August 2006

SUBJECT MATTER OF DECISION: Probable earnings but for the injury in the same or some comparable employment; section 40(2)(a) of the Workers Compensation Act 1987

PRESIDENTIAL MEMBER:  Acting Deputy President Robin Handley

HEARING:On the papers

REPRESENTATION:  Appellant: Stacks/Forster

Respondent: McCulloch & Buggy Solicitors

ORDERS MADE ON APPEAL:  The decision of the Arbitrator is confirmed.

There is no order as to the costs of this appeal. 

BACKGROUND TO THE APPEAL

1. On 13 October 2005, James Robert McCloy sought leave in the Workers Compensation Commission (‘the Commission’) to bring an appeal against the decision of an arbitrator dated 14 October 2005. The Respondent to the appeal is API Manufacturing Pty Ltd (‘API’). API’s workers compensation insurer is QBE Workers Compensation (NSW) Ltd (‘QBE’).

1. Mr McCloy was born on 12 May 1965 and is aged 41. He was employed by API as a welder in Taree, making safes. On 16 March 2001, Mr McCloy injured his left thumb in the course of his employment and lodged a claim for compensation. He subsequently claimed compensation for an injury to his left hand caused by the nature and conditions of his employment from about 9 July 1996 to 14 January 2002 “including constant and repetitive heavy manual labour including constant use of angle grinders”. On 5 April 2004, the Commission issued a Certificate of Determination, by consent of the parties, including an order that API pay Mr McCloy weekly compensation of $487.98 from 12 March 2004.

1. On 10 January 2005, Mr McCloy obtained employment with Godwin Windows Pty Ltd.

1. QBE subsequently sought a variation of the Commission order for payment of weekly compensation. On 20 June 2005, the Commission registered QBE’s ‘Application to Resolve a Dispute’ in respect of the payment of weekly compensation of $487.98 per week from 10 January 2005 to date and continuing. Mr McCloy’s solicitors’ ‘Reply’ was filed on 1 July 2005. On 29 August 2005, the Arbitrator conducted a teleconference with the parties. On 16 September 2005, conciliation having proved unsuccessful, the Arbitrator conducted an arbitration hearing. He gave his decision orally at the conclusion of the hearing.

THE DECISION UNDER REVIEW

1. The Certificate of Determination, dated 14 October 2005, records the Arbitrator’s orders as follows:

“1. That the Respondent pay to the Applicant weekly benefits under section 40 of $192.48 per week.
2. That the Respondent pay the costs of the Applicant as agreed or assessed.”

1. In his Statement of Reasons given orally at the conclusion of the hearing, the Arbitrator noted that the parties accept that Mr McCloy’s present entitlement to weekly compensation is under section 40 of the Workers Compensation Act 1987 (‘the 1987 Act’), and that Mr McCloy accepts there was a change of circumstances as at 10 January 2005 when he obtained employment with Godwin Windows (section 55(1) of the 1987 Act). The parties also agreed that Mr McCloy’s earnings from that employment were $628.52 per week and there was no dispute that he has a significant disability of his left hand that would preclude him from doing heavy welding work. The issue, therefore, was the weekly amount Mr McCloy would probably have been earning but for the injury and had he continued to be employed in the same or some comparable employment (section 40(2)(a)).

1. The Arbitrator commented on the lack of information as to comparable wages for a welder, and said that he was not satisfied by evidence from United Goninan Ltd’s (‘Goninans’) division in Taree, as to what Mr McCloy would have earned had he been employed there. Goninans’ Taree division manufactures train carriages and truck bodies, and Mr McCloy worked there as a welder from 1995 until 1997, when he was laid off as a result of a downturn in business at the division. The Arbitrator found, based on figures supplied by API, that the average weekly earnings of a welder “in that sort of employment” were $820 per week (transcript page 16).

1. The Arbitrator found the parties accepted that Mr McCloy was “exercising his present capacity to its fullest” (transcript page 17). Pursuant to section 40, the Arbitrator therefore subtracted Mr McCloy’s current weekly earnings of $628.52 from the $820.00 found in relation to section 40(2)(a), to give the figure of $192.48 per week, and varied the award to reflect that figure.

ISSUE IN DISPUTE

1. The issue in dispute before the Arbitrator was the weekly amount Mr McCloy would probably have been earning but for the injury and had he continued to be employed in the same or some comparable employment (section 40(2)(a)). In the appeal, Mr McCloy’s solicitors submit the Arbitrator erred by failing to take into account evidence of higher comparable earnings at Goninans’ Taree division in assessing the amount of weekly compensation to which Mr McCloy was entitled under section 40. The parties’ submissions are discussed below.

ON THE PAPERS REVIEW

1. Section 354(6) of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’) states:

“(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.”

1. I have had regard to Practice Directions Numbers 1 and 6, and the documents before me. Mr McCloy’s solicitors submit that the matter requires an oral hearing for the issue of whether new evidence should be admitted to be considered and to enable Mr McCloy’s case to be put fully. QBE submit that the matter can be decided ‘on the papers’. Having considered these submissions, 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

1. 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. With regard to section 352(2), I am satisfied that the weekly compensation at issue exceeds $5,000 and is at least 20% of the amount awarded in the decision appealed against. I therefore grant leave to appeal.

FRESH EVIDENCE

1. Fresh evidence on appeal is governed by section 352(6) of the 1998 Act, which states:

“(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.”

1. 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.”

1. 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.”

1. Mr McCloy’s solicitors seek leave to introduce new evidence, namely (1) a faxed letter from Goninans to Mr McCloy’s solicitors, dated 16 September 2005, regarding the weekly rate of pay that Mr McCloy might receive if he were re-employed by them as a welder, (2) a fax from Mr McCloy’s solicitors to Goninans, dated 11 October 2005, seeking clarification, and (3) a fax from Goninans to Mr McCloy’s solicitors, dated 12 October 2005, clarifying the amount of comparable earnings on the afternoon shift.

1. Mr McCloy’s solicitors submit this further evidence should be admitted because it is probative and relevant to the issue to be determined, and would assist in overcoming the error made by the Arbitrator and in reaching a just determination in this matter. They note that nothing turns on the difference between these figures and those in the earlier letter from Goninans adduced into evidence at the hearing, because of the statutory cap imposed by section 40(5). The solicitors state that the evidence was not obtained previously because it was thought the earlier letter from Goninans, dated 2 September 2005, would be sufficient when read in conjunction with Mr McCloy’s statement. I note this letter stated that the base rate of pay for a person employed “as a Level 6 under our site award” would be $817.80 for a 38 hour week. However, “average Level 6 earnings with overtime are in the area of $1149.00 for day shift” and the afternoon shift carries an additional 15% loading, with the casual loading at 20%. When Mr McCloy had worked for Goninans previously he worked on the afternoon shift. In his statement dated 2 September 2005, he said (at paragraph 11):

“It is my understanding that all new employees taken on by Goninans are hired as casuals, so I would most probably be on casual wage rates if I had been able to go back to working at Goninans.”

1. QBE objects to the admission of the new material and submits it was open to the worker to have such documentation available prior to the arbitration. For example, the Arbitrator noted during the course of the arbitration (transcript page 12) that a Direction for Production could have been issued to Goninans to clarify the issue of comparable earnings. Further, no application for an adjournment was made by the worker to obtain further evidence. Thus, in the interests of procedural fairness, the new evidence should be rejected.

DISCUSSION

1. The evidence before the Arbitrator as to the earnings of comparable employees was, he said, “less than perfect” (transcript page 15). He preferred not to rely on the faxed letter from Goninans to Mr McCloy’s solicitors, dated 2 September 2005, because there was no evidence as to what was a level 6 award, mentioned in the letter. The Arbitrator also commented that the letter “certainly does not prove that Mr McCloy would have been offered a job at Goninans if he’d applied” (transcript page 16). The Arbitrator preferred to rely on figures provided by API, attached to a fax dated 4 March 2005, for two comparable employees whose average weekly earnings the Arbitrator calculated to be in the vicinity of $820 per week.

1. Section 40(2)(a) of the 1987 Act required the Arbitrator to make a finding as to the weekly amount Mr McCloy “would probably have been earning as a worker but for the injury and had the worker continued to be employed in the same or some comparable employment”. The approach adopted by the courts and the Commission in calculating a worker’s probable weekly earnings but for the injury is to assume the worker would have continued in the same employment as that at the time of the injury and to make a finding based on evidence of a worker’s earnings in such employment: Australian Wire Industries Pty Ltd v Nicholson (1985) 1 NSWCCR 50 (NSW Court of Appeal); Harding v Transfield Pty Ltd (2003) 25 NSWCCR 86, at 44 (Armitage J).

2. Reference will usually only be made to comparable employment if evidence of earnings in the same employment is unavailable or where it is appropriate to do so because of the special circumstances of the case: NSW Harness Racing Club Ltd v Forrest (1995) 12 NSWCCR 217; Lloyd v Northern Rivers Charity Racing Association (2001) 22 NSWCCR 577. However, the NSW Court of Appeal has recognised that where a worker expressed an intention to engage in other work before the injury occurred, and did in fact perform such additional casual work on one occasion before the injury occurred, that was sufficient for the Court at first instance to have taken the additional casual work into account in calculating the worker’s probable earnings but for the injury: Department of School Education v Boyd (1996) 13 NSWCCR 289 (‘Boyd’).

1. In my view, the facts in Mr McCloy’s case can be distinguished from those in Boyd. On the evidence available to the Arbitrator, it was reasonable to assume that Mr McCloy’s probable weekly earnings had he continued in the same employment with API, in which he was working at his chosen trade as a welder, would have been in the vicinity of $820. For the purpose of making a finding in relation to section 40(2)(a), the Arbitator, given what he considered to be the imperfect evidence as to comparable earnings for a welder with Goninans, and his finding that there was no evidence Mr McCloy would be offered a job by Goninans if he applied for one, was, in my view, justified in relying on Mr McCloy’s probable weekly earnings but for the injury in the same employment with API. I am not satisfied that there were special circumstances that required the Arbitrator to take account of a worker’s earnings in comparable employment. Thus, the Arbitrator did not err in making his finding under section 40(2)(a).

1. The fact that the evidence admitted on behalf of Mr McCloy was “less than perfect”, does not permit his solicitors, as QBE submits, to reopen the matter by seeking to introduce new evidence to address the flaws in the evidence at the hearing because they are dissatisfied with the result. In my view, even if the new evidence were admitted, it would make no difference to the outcome and, therefore, the failure to allow the new evidence would not cause a substantial injustice to Mr McCloy. I therefore refuse Mr McCloy’s solicitors leave to admit the proposed new evidence.

CONCLUSION

1. In the course of discussing whether the proposed new evidence should be admitted, it was necessary for me to address the question whether the Arbitrator made any error in making a finding as to Mr McCloy’s section 40(2)(a) probable earnings based on earnings for a welder in the same employment with API. Mr McCloy’s solicitors submit that those probable earnings should have been based on the higher earnings for a welder employed by Goninans because Mr McCloy gave evidence that, “It was always my intention to go back to Goninans as soon as work was available there” (statement, dated 2 September 2005, paragraph 7). His evidence was that such work did become available after his injury, that “most” of his fellow workers at API had moved to Goninans for the higher paying work, and that he also would have done so and would probably have been working the more lucrative afternoon shift. Mr McCloy’s solicitors submit that the Arbitrator erred by failing to take into account the higher comparable earnings at Goninans.

1. QBE submit that Mr McCloy’s solicitors are seeking “simply to re-litigate the issues which were traversed before, and dealt with by, the Arbitrator”. The key issue is the finding made by the Arbitrator that there was no evidence that Goninans would have offered Mr McCloy a job even if he had applied for one. Without such evidence, the Arbitrator properly rejected the suggestion that regard had to be had to what welders were earning at Goninans. Even the new evidence that Mr McCloy’s solicitors seek to rely on does not address the probability of Mr McCloy being employed by Goninans. There is no evidence that Mr McCloy would have gained employment with Goninans but for the injury. Thus, the Arbitrator made the correct decision by making a section 40(2)(a) finding of probable earnings based on evidence of earnings with API.

1. I have already stated that I am not satisfied that the Arbitrator made any error in making a finding under section 40(2)(a). He was entitled to rely on evidence of earnings for a welder in the same employment with API, and the evidence did not establish special circumstances that required him to look to comparable earnings for welders with Goninans. No error having been made by the Arbitrator, his decision must be confirmed.

DECISION

1. The decision of the Arbitrator is confirmed.

COSTS

1. There is no order as to the costs of this appeal.

Robin Handley

Acting Deputy President  

23 August 2006

I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF ROBIN HANDLEY, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.

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