McGowan v Secretary, Department of Education and Communities

WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:	McGowan v Secretary, Department of Education and Communities [2014] NSWWCCPD 51
APPELLANT:	James Ian McGowan
RESPONDENT:	Secretary, Department of Education and Communities
INSURER:	Allianz Australia Insurance Ltd
FILE NUMBER:	A1-11327/12
ARBITRATORS:	Mr D Nolan and Ms A Farrell
DATE OF ARBITRATORS’ DECISIONS:	23 December 2013 and 26 March 2014
DATE OF APPEAL DECISION:	6 August 2014
SUBJECT MATTER OF DECISION:	Boilermaker’s deafness; claim for lump sum compensation for binaural hearing loss; dispute as to the nature and extent of the hearing loss; role of Commission and Approved Medical Specialists in such a dispute; consequence of finding that employment was employment to the nature of which the injury of boilermaker’s deafness was due; terms of referral to Approved Medical Specialist; effect of invalid Medical Assessment Certificate; need for further medical assessment; s 17 of the Workers Compensation Act 1987; ss 293, 319, 321, 326 and 329 of the Workplace Injury Management and Workers Compensation Act 1998; whether orders made were interlocutory or final; extension of time to appeal; Pt 16 r 16.2(12) of the Workers Compensation Commission Rules 2011
PRESIDENTIAL MEMBER:	Deputy President Bill Roche
HEARING:	On the papers
REPRESENTATION:	Appellant:	Turner Freeman
Respondent:	Bartier Perry
ORDERS MADE ON APPEAL:	1. The name of the respondent is amended to be Secretary, Department of Education and Communities. 2. Time to appeal the Certificate of Determination dated 23 December 2013 is extended until 17 April 2014. 3. Save for the orders in paragraphs 1, 8, 10, and 11, which are confirmed, all other orders made by the Arbitrator in the Certificate of Determination dated 23 December 2013 are revoked and the following orders are made in their place: “2. The applicant worker’s employment with the respondent employer was employment to the nature of which the injury of boilermaker’s deafness is due. 3. The deemed date of injury is the date of claim, 8 June 2012. 4. The assessment of the applicant worker’s binaural hearing loss, and the need for hearing aids, is referred to Dr Henley Harrison, Approved Medical Specialist, for a further assessment under s 329(1)(b) of the Workplace Injury Management and Workers Compensation Act 1998. Such assessment to be conducted in accordance with the reasons in this decision. 5. The applicant’s claim for reimbursement of the cost of hearing aids is remitted to a different Arbitrator to be re-determined after the further assessment by Dr Henley Harrison.” 4. Save for the costs order in paragraph 4, all orders made in the Certificate of Determination dated 26 March 2014 are revoked and the matter is remitted to a different Arbitrator for re-determination after the further assessment under s 329(1)(b) by Dr Henley Harrison. 5. The respondent employer is to pay the appellant worker’s costs of the appeal, assessed at $2,530 plus GST.

INTRODUCTION

This appeal concerns the correct approach to the determination of a claim for lump sum compensation and hearing aids for boilermaker’s deafness in circumstances where the worker suffers a much higher loss of hearing in the right ear (82.6 per cent) compared to his left ear (15.6 per cent) and the employer contends that none of the loss in the right ear is employment related.
The worker suffers from asymmetrical bilateral sensorineural hearing loss: the loss of hearing in his right ear being substantially greater than in his left ear. He claimed lump sum compensation for binaural hearing loss, and the cost of hearing aids, on the basis that his employment with the respondent was employment that had the tendencies, incidents and characteristics that could give rise to a loss of hearing of such a nature as to be caused by a gradual process.
The employer disputed liability on the basis that the worker’s employment was not employment to the nature of which the injury was due. That is, it disputed that its employment was noisy. It also asserted that a deduction should be made for a pre-existing hearing loss that had not been caused by exposure to noise.
The Arbitrator found that the worker’s employment with the respondent was employment to the nature of which the injury was due. However, inconsistent with that finding, he also found that the worker suffered no injury to his right ear. The Arbitrator referred to an Approved Medical Specialist (AMS) the assessment of any whole person impairment, but only in respect of loss of hearing in the worker’s left ear. He ordered the employer to reimburse the worker for the cost of a hearing aid, but only for the left ear.
The AMS assessed the worker’s hearing loss in the manner directed by the Arbitrator and, because of that method of assessment, issued a Medical Assessment Certificate (MAC) in which he assessed the worker to have a nil whole person impairment due to his loss of hearing in his left ear and that, based on that method of assessment, hearing aids were not reasonably necessary.
Consistent with the MAC, the Deputy Registrar, acting as an Arbitrator, issued a second Certificate of Determination ordering, among other things, that the worker had no entitlement to lump sum compensation and making an award for the employer in respect of the claim for medical expenses (hearing aids).
The worker has challenged the Arbitrator’s finding that he suffered no injury to his right ear, the terms of the referral to the AMS, and the orders in the second Certificate of Determination. For reasons explained below, the Arbitrator’s finding that the worker suffered no injury to his right ear was incorrect. As a result, the referral to the AMS was invalid and the MAC issued on the basis of that referral was also invalid.

FACTUAL AND PROCEDURAL BACKGROUND

The appellant worker, James McGowan, has worked for the respondent employer since 1994 as a technical assistant/storeman at two of the respondent’s TAFE training workshops: first at St George, from 1994 to 2002, and then at Gymea, from 2002 and continuing. This work exposed him to workshop noise from grinding, power drills, hammering, a guillotine for tinplate, and a bending machine.
On 8 June 2012, the deemed date of injury, Mr McGowan claimed from the respondent lump sum compensation of $8,250 in respect of 12.1 per cent binaural hearing loss, which equates to six per cent whole person impairment, plus the cost of hearing aids. The basis of Mr McGowan’s claim was that his employment with the respondent was employment to the nature of which his injury was due. The injury was alleged to be a loss of hearing of such a nature as to be caused by a gradual process, that is, boilermaker’s deafness or deafness of a similar origin (also referred to as industrial deafness) (s 17(1) and (2) of the Workers Compensation Act 1987 (the 1987 Act)).
As Mr McGowan made his claim before 19 June 2012, the claim for lump sum compensation is not caught by the amendments introduced by the Workers Compensation Legislation Amendment Act 2012 (cl 15 of Pt 19H of Sch 6 to the 1987 Act). As a result, s 69A continues to apply. That section provides that in assessing a claim for permanent impairment compensation as a result of loss of hearing due to boilermaker’s deafness, regard must not be had to any hearing loss due to boilermaker’s deafness unless the worker’s total hearing loss due to boilermaker’s deafness is at least six per cent (s 69A(1)). For the purposes of determining the percentage of loss of hearing due to boilermaker’s deafness, that loss of hearing is to be determined as a proportionate loss of hearing of both ears, even if the loss is in one ear only (s 69A(5)).
In support of his claim, Mr McGowan relied on a report from Dr Robert Payten, ear, nose and throat physician, dated 8 December 2011. Dr Payten took a history that Mr McGowan had been exposed to hammering and drilling at work for the respondent for up to six hours per day, which employment was, in the doctor’s opinion, capable of causing noise-induced hearing loss. An audiogram showed a bilateral high frequency sensorineural hearing loss, worse in the right ear than the left. In addition, there was a low and mid frequency hearing loss in the right ear of unknown aetiology.
On 30 August 2012, the respondent’s insurer, Allianz Australia Insurance Ltd (Allianz), disputed liability for the claim on the grounds that:
(a) Mr McGowan’s employment with the respondent was not employment to the nature of which his hearing loss was due. In other words, it disputed that Mr McGowan’s employment was noisy;
(b) the need for hearing aids was not reasonably necessary as a result of injury with the respondent, and
(c) a deduction under s 323 of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act) should be made in respect of pre-existing conditions that contributed to the hearing loss.
Allianz relied on evidence from Dr Kenneth Howison, ear, nose and throat specialist, in a report dated 2 August 2012. Dr Howison took a history that, for about half an hour per day, Mr McGowan had to raise his voice to be heard by a colleague at a distance of one metre. In Dr Howison’s opinion, such noise exposure was not capable of causing noise induced hearing loss. Though Dr Howison found Mr McGowan to have a loss of hearing in both his ears, he said that the cause of the loss in the right ear was an acoustic neuroma, which was unrelated to his employment, and that the loss in the left ear was of unknown origin.
In an extempore decision delivered on 19 December 2013, the Arbitrator accepted Mr McGowan’s oral evidence that his work with the respondent exposed him, on average, to noise from drilling, grinding and hammering for three-and-a half hours per day (T71.27). Consistent with Blayney Shire Council v Lobley (1995) 12 NSWCCR 52 (Lobley), the Arbitrator found that the tendencies, incidents and characteristics of Mr McGowan’s employment with the respondent could give rise to a risk of industrial deafness (T74.12). Thus, the Arbitrator found that Mr McGowan’s employment with the respondent was employment to the nature of which boilermaker’s deafness was due. This finding has not been challenged.
The Arbitrator added, however, that it was only “noise exposure in respect of the Left Ear” that was “sufficient to satisfy the requirement of the authorities that the tendencies, incidents or characteristics of [Mr McGowan’s] employment were of a type as to give rise to a real risk of boilermakers deafness”. As a result, the Arbitrator made an award for the respondent “in respect of the right ear”.
As required by s 293(2) of the 1998 Act, the Arbitrator remitted the assessment of the degree of whole person impairment in respect of any industrial deafness in Mr McGowan’s left ear to the Registrar for referral to an AMS. He directed that the AMS “be requested to provide an assessment of the degree of whole person impairment in respect of the Left Ear that results from injury deemed on 8 June 2012”. He ordered the respondent to reimburse Mr McGowan for the cost of a hearing aid for the left ear.
The Arbitrator’s findings and orders were formally incorporated into a Certificate of Determination issued by the Commission on 23 December 2013:
“The orders made are as follows:
1.    The Application to Admit Late Documents filed by the Respondent on 18 December 2013, namely Noise Assessment Report dated 21/11/2012 is not admitted into evidence for purposes of the Arbitration hearing on 19 December 2013.
2.    I find that on balance the evidence in the proceedings of the nature (volume) and extent (duration) of noise exposure in respect of the Left Ear only is sufficient to satisfy the requirement of the authorities that the tendencies, incidents or characteristics of the Applicant’s employment were of a type as to give rise to a real risk of boilermakers deafness (The Real Cane Syndicate v Dawson (2008) NSWCCPD 19/3/2008) [sic].
3.    Award for the Respondent in respect of the right ear.
4.    I further find that any hearing loss injury in respect of the Left Ear is deemed on
8 June 2012 in the course of his employment with the Respondent and that the Applicant’s employment with the Respondent was a substantial contributing factor to such injury.
5.    The remaining issues in dispute between the parties are whether the Applicant has permanent binaural hearing loss and any whole person impairment that results from injury deemed on 8 June 2012 and whether a hearing aid for the Left Ear is a reasonably necessary medical or related expense?
6.    The matter of assessment of the degree of whole person impairment in respect of any industrial deafness in the Left Ear is remitted to the Registrar for referral to an Approved Medical Specialist.
7.    The Approved Medical Specialist shall be requested to provide an assessment of the degree of whole person impairment in respect of the Left Ear that results from injury deemed on 8 June 2012.
8.    The documents to be sent to the Approved Medical Specialist are those accepted into the proceedings, being the Application to Resolve a Dispute and all attached documents, and the Reply and all attached documents together with documents to be filed by the Applicant’s Application to Admit Late documents on 29 May 2013, 27 November 2013, together with the Respondent’s Application to Admit Late Documents filed 27 December 2012.
9.    The Respondent shall reimburse the Applicant in respect of the cost he incurred in relation to hearing aid for the Left Ear as a reasonably necessary medical or related expense.
10. The Respondent to pay the Applicant’s costs as agreed or assessed.
11. I certify this matter complex pursuant to Schedule 6 of the Workers Compensation Regulation 2010 for the Applicant and the insurer, as it involved issues of injury, including an exploration/research of a long history of alleged noise exposure, the interface with s59A under the amended legislation, 2 hearing dates, differing medical histories and medical opinions entitling the parties to 15% uplift. Costs are also to be treated as separate resolutions of injury and medical expenses issues under s59A which required an expedited hearing.”
Mr McGowan did not appeal the above orders and the Registrar referred the matter to an AMS for assessment of Mr McGowan’s whole person impairment as a result of industrial deafness in the left ear only.
The AMS, Dr Henley Harrison, issued a MAC on 19 February 2014, having examined Mr McGowan and arranged for an audiogram on 13 February 2014. The audiogram demonstrated bilateral sensorineural deafness, with a loss of hearing of 15.6 per cent on the left side and 82.6 per cent on the right. Dr Harrison agreed with the Arbitrator’s finding that Mr McGowan’s employment with the respondent posed a real risk of damaging his hearing. He diagnosed Mr McGowan to have “[b]ilateral sensorineural deafness due solely to occupational deafness on the left side and at least partly due to an acoustic neuroma on the right side”.
Commenting further on the results of the audiogram, Dr Harrison said that the result on the left side was typical of industrial deafness and he accepted that all of the frequencies on that side should be taken into account in assessing Mr McGowan’s industrial deafness. That gave a 15.6 per cent loss of hearing due to industrial deafness affecting the left side. Dr Harrison explained that industrial deafness “is usually fairly symmetrical and the gross asymmetry” of Mr McGowan’s hearing loss was not consistent with “purely industrial deafness”.

Dr Harrison added that:
“the usual method of assessment would be to apportion the industrial deafness affecting the right ear to the same amount of industrial deafness affecting the left and so determine the BHI [binaural hearing impairment]. However, this would be contrary to how I have been instructed to make the assessment which is to assess the industrial deafness affecting the left ear.”
In compliance with the Arbitrator’s direction, Dr Harrison assessed Mr McGowan’s binaural hearing loss on the assumption that, contrary to the fact, the hearing loss affecting the right ear at every frequency was nil. This gave a binaural hearing loss of 4.2 per cent. After a deduction for presbycusis, because of Mr McGowan’s age, this gave a binaural hearing loss of 2.2 per cent, which equalled nil per cent whole person impairment.
Dr Harrison added, in answer to what he said was a specific question from the Arbitrator as to whether hearing aids were reasonably necessary:
“Overall hearing aids are reasonably necessary but not for the work-related deafness as determined by the method required for this assessment because as determined by that method there is too little work-related deafness.”
Upon receipt of Dr Harrison’s MAC, the Deputy Registrar, acting as an Arbitrator, issued a Certificate of Determination on 26 March 2014 in the following terms:
“The Commission determines:
1.That the applicant suffers 0% permanent impairment resulting from injury deemed to have happened on 8 June 2012.
2.That the applicant has no entitlement to lump sum compensation resulting from injury deemed to have happened on 8 June 2012.
3.That there be an award for the respondent with respect to the claim for medical expenses.
The Commission notes:
4.That the respondent was ordered to pay the applicant’s costs as agreed or assessed by Certificate of Determination dated 23 December 2013. The matter was certified complex with an uplift of 15% applicable to both parties
Brief statement of reasons
5.This Certificate of Determination is issued in accordance with the Medical Assessment Certificate issued under Part 7 of Chapter 7 of the Workplace Injury Management and Workers Compensation Act 1998.”
In an appeal filed on 17 April 2014, Mr McGowan has challenged the determination of 26 March 2014 and the orders made on 23 December 2013. Before considering the merits of the appeal, it is necessary to deal with two preliminary matters.

PRELIMINARY MATTERS

Time

Submissions

The respondent’s solicitor, Bruce McLean, has submitted that the appeal is against the decision made on 23 December 2013 and is therefore out of time. He argued that that decision was a final decision on the issue of “injury” because it “finally determined [Mr McGowan’s] entitlement to compensation in respect of his right ear” (Licul v Corney [1976] HCA 6; 180 CLR 213 at 443–4).
Therefore, Mr McLean contended that, as the appeal was filed more than 28 days after 23 December 2013 (28 days being the time within which an appeal must be lodged (s 352(4) of the 1998 Act)), and as Mr McGowan has not sought an extension of time, or “advanced any reasons why leave should be granted”, the appeal should be dismissed.
Pursuant to a direction issued by the Commission on 10 July 2014, counsel for Mr McGowan, Mr McManamey, submitted that the appeal is in respect of the final decision on 26 March 2014. While the decision of 23 December 2013 made a determination about injury to the right ear, it did not finalise the proceedings. As such, it is an interlocutory decision. In any event, Mr McManamey contended that an appeal about the final decision can be based on any error that occurred in the process of reaching the final decision.
In the alternative, Mr McManamey sought leave to extend time to appeal the decision of 23 December 2013. He argued that it was not necessarily appropriate to appeal until the final assessment was made and, given the comments by the AMS, which identify a significant detriment to Mr McGowan as a consequence of the Arbitrator’s decision, it is in the interests of justice that time to appeal be extended.

In submissions that were filed out of time, and without any application for leave to rely on them, Mr McLean submitted that Mr McGowan provided no submissions on the basis of which leave to extend time to appeal might be granted. He said that Mr McGowan provided no submissions as to the exceptional circumstances which might allow the exercise of the discretion to extend time to appeal and no submissions on whether the loss of the right to appeal would work a demonstrable and substantial injustice.

Discussion and findings

A “final” decision is one which is not of an interlocutory character, but is “completely effective unless and until rescinded, altered or amended” (Kuligowski v Metrobus [2004] HCA 34, 220 CLR 363 at [25]). The general orders made on 23 December 2013 were not “final”, in that sense, because they did not make any orders for the payment of compensation, which had to await the outcome of the AMS’s assessment. In particular, the direction to the AMS as to the method of assessment of the hearing loss, namely, by reference only to the left ear, was not a final order because it did not finally determine Mr McGowan’s rights.
However, the order that there be an award for the respondent “in respect of the right ear” was a final order because, unless rescinded, altered or amended, it determined Mr McGowan’s rights in respect of that part of his body. That that order was a final order is demonstrated by the AMS’s approach, which he felt bound to take because of the award for the respondent in respect of the right ear and the specific direction from the Arbitrator as to how to assess Mr McGowan’s hearing loss.
The situation is analogous to a claim for lump sum compensation for an alleged injury to the neck and low back in the same incident where the insurer admits the injury to the neck but disputes the injury to the low back. If the worker fails to establish injury to the low back, an Arbitrator would be entitled to enter an award for the employer in respect of that claim. That would be a final order with respect to the low back. However, the referral to the AMS for assessment of the whole person impairment due to the accepted neck injury would be interlocutory because it has not finally determined the parties’ rights.
As Mr McGowan now challenges the award for the respondent in respect of the right ear, and as the Arbitrator made that order on 23 December 2013, the appeal against that order is out of time. While this result is most exceptional (because orders that merely refer matters to an AMS for assessment are usually interlocutory orders), it has come about because of the Arbitrator’s unusual orders with respect to the right ear.
An extension of time in which to appeal is governed by Pt 16 r 16.2(12) of the Workers Compensation Commission Rules 2011, which provides:
“(12) The Commission constituted by a Presidential member may, if a party satisfies the Presidential member, in exceptional circumstances, that to lose the right to seek leave to appeal would work demonstrable and substantial injustice, by order extend the time for making an appeal.”
As explained by Allsop P (as his Honour then was) in Bryce v Department of Corrective Services [2009] NSWCA 188 at [10] (Beazley JA (as her Honour then was) and Giles JA agreeing):
“Whether or not there are exceptional circumstances and whether in those circumstances it is shown to the satisfaction of the Deputy President that demonstrable or substantial injustice would occur if leave were not granted is a composite expression in the rule to be dealt with within jurisdiction.”
I am satisfied that, in the exceptional circumstances in the present case, for Mr McGowan to lose the right to appeal the Arbitrator’s orders of 23 December 2013 would work a demonstrable and substantial injustice.
That is because, for the reasons discussed fully below, the Arbitrator’s finding that the employment was noisy, but only in respect of the left ear, his consequential finding of an award for the respondent in respect of the right ear, and his direction that the AMS only assess Mr McGowan’s hearing loss in his left ear, are fundamentally wrong and completely unsustainable.
As Dr Harrison’s MAC makes clear, had he been permitted to assess Mr McGowan’s loss in accordance with the “usual method of assessment” in matters of this kind, the result would have been a finding of binaural hearing loss of 15.6 per cent. Had such a finding been made, Mr McGowan would have been entitled to lump sum compensation. It follows that, because of the Arbitrator’s error in the decision of 23 December 2013, Mr McGowan has been deprived of any lump sum compensation for his hearing loss. Thus, if time to appeal is not extended, Mr McGowan will suffer a demonstrable and substantial injustice. I do not accept Mr McLean’s submissions to the contrary.
As the matters outstanding on 23 December 2013 were not resolved until the Deputy Registrar made the orders in the second Certificate of Determination on 26 March 2014, and as those orders were based on the MAC, which was based on the Arbitrator’s erroneous orders made on 23 December 2013, there is no prejudice to the respondent if time to appeal is extended. The only way all matters can be properly considered and determined is for time to appeal the orders of 23 December 2013 to be extended and that is the order I make.

On the papers

Section 354(6) of 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 Nos 1 and 6, the documents that are before me, and the submissions by the parties that the appeal can proceed to be determined on the basis of these documents, I am satisfied that I have sufficient information to proceed ‘on the papers’ without holding any conference or formal hearing and that this is the appropriate course in the circumstances.

ISSUES IN DISPUTE

The issues in dispute in the appeal are whether the Arbitrator erred in:
(a) entering an award for the respondent in respect of the right ear, and
(b) referring only the left ear for assessment by the AMS.

SUBMISSIONS

Mr McManamey submitted that the s 74 notice did not dispute injury to the right ear, but asserted that there should be a s 323 deduction for a pre-existing condition because of Dr Howison’s evidence.
Relying on A & G Engineering Pty Ltd v Civitarese (1996) 41 NSWLR 41; 14 NSWCCR 158 (Civitarese), Mr McManamey argued that, due to the nature of the injury (boilermaker’s deafness or deafness of like origin), it was not necessary for Mr McGowan to prove that any of his hearing loss was caused by his employment with the respondent.
He contended that the Arbitrator was required to determine whether the respondent had engaged Mr McGowan in employment to the nature of which the injury was due. Once he found that it had, he was required to refer the matter for assessment by an AMS to determine the extent of the boilermaker’s deafness. That required a referral for the assessment of binaural hearing loss, that is, an assessment of the loss of hearing in both ears.
Instead of making that referral, the Arbitrator, by making an award for the respondent in respect to the right ear, sought to make a determination as to whether the hearing loss in the right ear had in fact been caused by Mr McGowan’s employment. That was not a matter to be determined by the Arbitrator but was a matter to be determined by the AMS. Because of the Arbitrator’s error, the AMS only assessed the loss in the left ear. Thus, because of the incorrect referral, the loss was assessed at nil.
Mr McLean submitted that it was open to the respondent to assert that, notwithstanding that the nature of the employment was of a kind that could cause hearing loss, such employment did not in fact cause the injury of boilermaker’s deafness. In support of this submission, Mr McLean relied on the following statement by Kirby A-CJ (as his Honour then was) in Lobley, at 56F:
“If that employer contends, notwithstanding the ‘nature’ of its employment, that it did not in fact cause any hearing loss (and thus that ‘the injury was not due’ to the nature of the employment properly understood) the forensic onus of exculpating itself falls upon it.”
Mr McLean argued that the s 74 notice “clearly raised with sufficient clarity a dispute in relation to ‘injury’ to Mr McGowan’s right ear and this dispute was supported by the report prepared by Dr Howison”. He said that the award for the respondent “in respect of the right ear” was a decision that Mr McGowan did not sustain “injury” to his right ear within the meaning of s 4 of the 1987 Act and was a decision open to the Arbitrator on the evidence.
Mr McLean did not accept that the question of whether Mr McGowan’s hearing loss in his right ear was in fact caused by Mr McGowan’s employment was an issue for the AMS to determine. He contended that the determination as to whether there was in fact any hearing loss caused by Mr McGowan’s employment is a determination as to “injury” and this is a matter solely within the province of an Arbitrator.
Having entered an award for the respondent in relation to Mr McGowan’s right ear, Mr McLean submitted that the Arbitrator adopted the correct course of then referring only the left ear for assessment by an AMS. As the MAC is conclusively presumed to be correct (s 326 of the 1998 Act), and in the absence of any appeal in respect of the MAC, the Commission was entitled and required to issue the Certificate of Determination dated 26 March 2014. Because of s 327(7) of the 1998 Act there can now be no appeal against the MAC.

DISCUSSION AND FINDINGS

There are a number of difficulties with the Arbitrator’s determination of 23 December 2013, the referral to the AMS and, as a consequence, the orders of 26 March 2014.
The disputed claim in the present matter was for lump sum compensation under s 66 of the 1987 Act and for hearing aids under s 60. Section 66 talks about a worker who “receives an injury” (emphasis added) being entitled to permanent impairment compensation. The “injury” in the present case is a loss, or further loss, of hearing of such a nature as to be caused by a gradual process (boilermaker’s deafness or deafness of a similar origin) (s 17(1)).
Section 17 applies to determine when the injury is deemed to have happened and by whom the compensation is payable. However, for reasons discussed below, and contrary to the usual practice, an AMS determines the nature and extent of the hearing loss. That is, the AMS determines the “injury”.
Relevantly, s 17 provides:
“(1) If an injury is a loss, or further loss, of hearing which is of such a nature as to be caused by a gradual process, the following provisions have effect:
(a)  for the purposes of this Act, the injury shall be deemed to have happened:
(i)  where the worker was, at the time when he or she gave notice of the injury, employed in an employment to the nature of which the injury was due—at the time when the notice was given, or
(ii)  where the worker was not so employed at the time when he or she gave notice of the injury—on the last day on which the worker was employed in an employment to the nature of which the injury was due before he or she gave the notice,
(b)     …
(c)  compensation is payable by:
(i)  where the worker was employed by an employer in an employment to the nature of which the injury was due at the time he or she gave notice of the injury—that employer, or
(ii)  where the worker was not so employed—the last employer by whom the worker was employed in an employment to the nature of which the injury was due before he or she gave the notice.
…
(2) Without limiting the generality of subsection (1), the condition known as ‘boilermaker’s deafness’ and any deafness of a similar origin shall, for the purposes of that subsection, be deemed to be losses of hearing which are of such a nature as to be caused by a gradual process.”
Leaving aside thresholds that a worker must meet before lump sum compensation can be recovered for boilermaker’s deafness, which vary according to the date of injury, to succeed with a claim for lump sum compensation for boilermaker’s deafness a worker must establish two things. First, that he or she suffers from an injury that is a loss, or further loss, of hearing of such a nature as to be caused by a gradual process. That is, boilermaker’s deafness or any deafness of a similar origin. Second, that he or she was employed in employment to the nature of which the injury was due. The second matter establishes the identity of the employer liable to pay such compensation as may be payable and it is this matter that is addressed by s 17.
Section 17 is not concerned with true causation of the relevant hearing loss, but “proceeds on a series of fictions or assumptions” (Civitarese per Beazley JA (as her Honour then was) (Handley and Sheller JJA agreeing) at 160G). A claimant does not have to establish that his or her employment with the named respondent brought about or contributed to the disease (the hearing loss) (Civitarese at 160G). It is concerned to determine the identity of the employer who employed the worker in employment to the nature of which the injury of boilermaker’s deafness was due. That is, the employer who employed the worker in employment whose tendencies, incidents and characteristics could give rise to a risk of industrial deafness.
In the present case, the Arbitrator determined that the respondent was that employer and that finding has not been challenged. As Mr McGowan was employed by the respondent at the time he gave notice of the injury, the injury is deemed to have happened at that time (s 17(1)(i)). In other words, the injury is taken to have happened “as it were, in one blow” (Commissioner for Railways v Bain [1965] HCA 5; 112 CLR 246 at 256–257).
There was no dispute that Mr McGowan had properly particularised his claim under s 282 and under the WorkCover Guidelines for Claiming Compensation Benefits, which require, among other things, that the claim be supported by a medical report completed in accordance with the WorkCover Guides for the Evaluation of Whole Person Impairment.
In these circumstances, given the Arbitrator’s finding that Mr McGowan’s employment with the respondent was employment to the nature of which the injury was due, the Arbitrator was required to remit the claim to the Registrar for referral to an AMS (s 293(2)) for the AMS to assess the nature and extent of the hearing loss and the degree of whole person impairment that resulted from that loss (s 319(e)).
On the evidence available to the Arbitrator in December 2013, it was not open to him to find that the tendencies and incidents of the relevant employment were liable to cause boilermaker’s deafness in one ear but not the other. Such a finding suggests that one ear was exposed to loud noise in the course of Mr McGowan’s employment with the respondent but the other was not. It is difficult to imagine a situation where that could occur, but it certainly did not occur in the present matter. If the employment is employment to the nature of which the injury is due, then, unless there is some unusual feature of the employment that makes the noise affect only one ear, which is highly improbable, then, as the AMS noted, it affects hearing in both ears.
By making a finding that Mr McGowan did not suffer an injury to his right ear the Arbitrator was purporting to make a finding on the actual cause of the loss of hearing in that ear. That is not something that is required by s 17 and, in a claim for lump sum compensation for hearing loss, is not permitted unless an AMS has first assessed the nature and extent of the loss of hearing, in which case the AMS’s assessment, in a valid MAC, is conclusively presumed to be correct (s 326(1)(c)). At the date of the first orders, made on 23 December 2013, there had been no assessment by an AMS. Thus, the Arbitrator erred in purporting to make an award for the respondent in respect of Mr McGowan’s right ear and in the terms of the referral to the AMS.
However, the finding that Mr McGowan was employed in employment to the nature of which the injury was due was not, without more, a determination that he was entitled to receive compensation for any hearing loss, regardless of its cause. Compensation is payable, in a claim such as the present, for a loss, or further loss, of hearing which is of such a nature as to be caused by a gradual process. That raises the next issue: the nature and extent of Mr McGowan’s loss of hearing. That must be determined by an AMS. It is at this stage of the process that the insurer’s argument about the effect of the acoustic neuroma becomes relevant.
Mr McLean’s reliance on the passage quoted from Lobley (see [48] above) is misplaced. Nothing in that case supports the award the Arbitrator made on 23 December 2013. Mr McLean has selectively quoted from that case and has ignored the terms of the legislation. The next two sentences immediately after the passage quoted by Mr McLean state:
“For the achievement of the purposes of section 17(1)(a) of the Act, it is enough for the worker to succeed against that employer to show that the ‘nature’ of the employment was such as to give rise to hearing loss.
The section [s 17] should be given application in such a way as to achieve its somewhat arbitrary, but highly practical, objectives and to discourage contests of the kind illustrated by this case.”
Thus, it was enough, for the purposes of s 17, for Mr McGowan to establish that his employment with the respondent was employment to the nature of which the injury of boilermaker’s deafness was due. That established the deemed date of injury and the employer liable to pay the compensation (if any) found to be payable. However, to succeed with his claim, Mr McGowan must also establish that his injury is in fact boilermaker’s deafness and that his loss meets the thresholds for compensation in s 69A. (It should be noted that different thresholds will apply depending on the deemed date of injury.) An AMS must determine those issues, once he or she has been asked the correct question/s.
In the former Compensation Court of NSW, the issue of the nature and extent of the injury was rarely an issue before the Court. That was because, before a claim for a loss, or further loss, of hearing due to boilermaker’s deafness could be listed for hearing in the Court, the certificate of readiness had to be accompanied by a binding medical panel certificate as to the loss, or a statement that the quantum of the loss was not in issue (see Compensation Court Practice Notes, Mills Workers Compensation, New South Wales, Repealed Legislation 2003 at 120,102).
In other words, the matter did not come before the Court unless a medical panel had certified as to the nature and extent of the loss, or that the nature and extent of the loss was not in issue. Thus, in that situation, once the worker established before the Court that his or her employment with the named respondent was employment to the nature of which the injury was due, liability was established against that respondent.
Different procedures apply in the Commission.
An Arbitrator cannot resolve the issue identified by Mr McLean, that is, the nature and extent of the hearing loss. That is because the legislature has reserved that question for an AMS. Thus, where the injury is the loss, or further loss, of hearing contracted by a gradual process, the dispute, if any, as to the nature and extent of the injury is determined not by the Commission but by an AMS. This is the reverse of the usual situation. Normally, the nature and extent of a worker’s injury, that is, whether a worker has received an injury, is a liability issue that is determined by the Commission before the matter is referred to an AMS for assessment of the degree of whole person impairment that has resulted from that injury (Connor v Trustees of the Roman Catholic Church for the Archdiocese of Sydney [2006] NSWWCCPD 124; 5 DDCR 337; s 321(4)(a)).

This creates a tension between s 321(4)(a) and s 293(3)(a), on the one hand, and s 293(2) on the other. Subsection (4) of s 321, which is in substantially the same terms as sub-s (3) of s 293, provides:
“(4) The Registrar may not refer [to an AMS] for assessment under this Part:
(a) a medical dispute concerning permanent impairment (including hearing loss) of an injured worker where liability is in issue and has not been determined by the Commission, or…” (emphasis added)
However, sub-s (2) of s 293 provides that:
“If the dispute concerns the degree of permanent impairment (including hearing loss) of an injured worker, the Registrar must refer [to an AMS] that aspect of the dispute for assessment under Part 7 and defer determination of the dispute by the Commission pending the outcome of that medical assessment.” (emphasis added)
To resolve this tension, in a claim for lump sum compensation for hearing loss, s 321(4)(a) must be read, in context, to mean “[t]he Registrar may not refer for assessment under this Part a medical dispute concerning permanent impairment (including hearing loss) of an injured worker where liability is in issue and has not been determined by the Commission, save for a claim for lump sum compensation for hearing loss where ss 319(e) and 326(1)(c) apply” (emphasis added).
This interpretation applies the words of the legislation (Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41 at [47]; 239 CLR 27) in a way that best gives effect to “the purpose and language of those provisions while maintaining the unity of all the statutory provisions” (Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 at [70] (Project Blue Sky)). It is not a matter of adding words to the legislation, but a matter of the construction of the words the legislature has enacted (Taylor v The Owners – Strata Plan No 11564 [2014] HCA 9, per French CJ, Crennan and Bell JJ at [39]) so as to best give effect to the intention of Parliament.
Consistent with Project Blue Sky, this treats sub-s (2) of s 293, as the “leading provision” and sub-ss (4)(a) of s 321 and (3) of s 293 as the “subordinate provision[s]”. Given the use of the mandatory “must” in s 293(2), as against the permissive “may” in the other subsections, that is appropriate in the circumstances of a claim for lump sum compensation for hearing loss.
The effect of this interpretation is sensible and workable. The Commission, which is best equipped to hear and determine disputes about the level of noise to which a worker is exposed, which will often involve the weighing of conflicting lay and expert evidence, determines whether the employment was employment to the nature of which the injury was due.
AMSs, who are, because of their training and expertise, best equipped to determine medical disputes, determine the nature and extent of the loss of hearing, including any deduction for a pre-existing condition or abnormality, such as, for example, the acoustic neuroma in Mr McGowan’s right ear.
The end result in the present case is that, by making an award for the respondent in respect of Mr McGowan’s right ear, the Arbitrator determined the “nature and extent of the loss of hearing” suffered by Mr McGowan in his right ear to be nil, when he had no power to do so. The issue before him was whether Mr McGowan’s employment with the respondent was employment to the nature of which the injury was due. The Arbitrator determined that question in favour of Mr McGowan and the next step in the process was for the nature and extent of Mr McGowan’s hearing loss to be assessed by an AMS according to law.
This raises a further complication in the present matter. While a MAC is conclusively presumed to be correct, a determination made in reliance upon an invalid or defective MAC is invalid (Jopa Pty Ltd t/as Tricia’s Clip-n-Snip v Edenden [2004] NSWWCCPD 50 at [37] (Jopa) and Ryan v State Transit Authority of NSW [2004] NSWWCCPD 81 at [18] (Ryan)).
In Jopa, the MAC was invalid because the AMS based his opinion on a “condition subsequent” that was never met. That being so, he had not been fully informed of the facts on which his assessment was based and his MAC did not comply with s 325(1) and (2). As a result, his assessment was invalid and the orders in the Certificate of Determination based on it were also invalid.
In Ryan, the Arbitrator’s direction to the AMS wrongly referred to the worker having ceased work in 1998 when the correct date was 1988. That error in the “referral” to the AMS (under s 293 of the 1998 Act) affected the validity of the MAC. Therefore, the Certificate of Determination, which was issued on the basis of the invalid MAC, was also invalid and was revoked.
In the present case, Dr Harrison’s MAC was based on a fundamentally flawed referral. That was because, as directed, he only assessed Mr McGowan’s hearing loss in his left ear when the claim, which was properly supported by appropriate medical evidence, was for loss of hearing in both ears and where the Commission had determined that Mr McGowan’s employment was employment to the nature of which the injury of boilermaker’s deafness was due. Though the doctor was well aware of the error, he felt bound to follow the Arbitrator’s incorrect direction, which he did. However, the Commission is bound to act according to law and a Certificate of Determination based on an invalid MAC is invalid and cannot stand.
This follows notwithstanding that Mr McGowan did not appeal against the MAC under s 327 of the 1998 Act. The only grounds of appeal that might have been available under that section were that the MAC contained a demonstrable error or was made on the basis of incorrect criteria. The difficulty with such arguments is that the AMS followed the directions of the Arbitrator. Thus, the error was by the Arbitrator and there was no demonstrable error by the AMS. Moreover, there is no evidence that the MAC was made on the basis of incorrect criteria.
For completeness, I should add one further point. If, contrary to my earlier finding, the orders and findings on 23 December 2013 about Mr McGowan’s right ear were interlocutory, and not final, that makes no difference to the outcome. That is because those orders have clearly affected the final result because of the incorrect finding of no injury to the right ear and the wrong direction to the AMS to assess only the loss of hearing in the left ear. As a result, those findings and orders can be challenged in an appeal against the final orders (Gerlach v Clifton Bricks Pty Ltd (2002) 209 CLR 478 at 482-4 [4]–[7] per Gaudron, McHugh and Hayne JJ).

OTHER MATTERS

To be consistent with Kelly v Secretary, Department of Family and Community Services [2014] NSWCA 102 and Pt 1 of Sch 1 of the Government Sector Employment Act 2013 (NSW), the name of the respondent has been amended to be Secretary, Department of Education and Communities.

CONCLUSION AND SUMMARY

It follows that:
(a)     the Arbitrator erred in finding that the nature and extent of noise exposure in respect of Mr McGowan’s left ear only was such as to create a real risk of boilermaker’s deafness;
(b)     the Arbitrator erred in making an award for the respondent in respect of Mr McGowan’s right ear;
(c)     the Arbitrator erred in asking the AMS to assess hearing loss in Mr McGowan’s left ear only;
(d) the error in the referral to the AMS under s 293 rendered the MAC issued pursuant to that referral invalid, and
(e)     the Certificate of Determination issued on 26 March 2014 on the basis of the invalid MAC is also invalid.
The proper course is to revoke the substantive orders made by the Arbitrator on 23 December 2013 and, save for the costs orders, all of the orders made on 26 March 2014, and to remit the matter to the same AMS under s 329(1)(b) for Mr McGowan’s hearing loss to be reassessed in accordance with the usual method of assessment in cases of this kind. That is, in accordance with the method correctly identified by Dr Harrison (see [20] and [21] above).
It will be noted that, at paragraph 9 of the Certificate of Determination of 23 December 2013, the Arbitrator ordered the respondent to reimburse Mr McGowan in respect of the cost he incurred in relation to a hearing aid, but only for the left ear. That was also an error. However, the error was overtaken by the order made on 26 March 2014 that there be an award for the respondent with respect to the claim for medical expenses. Both orders must be revoked. As the parties have made no submissions on this issue, the proper course is to remit that part of the claim to another Arbitrator to be re-determined, along with all other outstanding issues, after the AMS issues a further MAC.

DECISION

The name of the respondent is amended to be Secretary, Department of Education and Communities.
Time to appeal the Certificate of Determination dated 23 December 2013 is extended until 17 April 2014.
Save for the orders in paragraphs 1, 8, 10, and 11, which are confirmed, all other orders made by the Arbitrator in the Certificate of Determination dated 23 December 2013 are revoked and the following orders are made in their place:
“2. The applicant worker’s employment with the respondent employer was employment to the nature of which the injury of boilermaker’s deafness is due.
3. The deemed date of injury is the date of claim, 8 June 2012.
4. The assessment of the applicant worker’s binaural hearing loss, and the need for hearing aids, is referred to Dr Henley Harrison, Approved Medical Specialist, for a further assessment under s 329(1)(b) of the Workplace Injury Management and Workers Compensation Act 1998. Such assessment to be conducted in accordance with the reasons in this decision.
5. The applicant’s claim for reimbursement of the cost of hearing aids is remitted to a different Arbitrator to be re-determined after the further assessment by Dr Henley Harrison.”
Save for the costs order in paragraph 4, all orders made in the Certificate of Determination dated 26 March 2014 are revoked and the matter is remitted to a different Arbitrator for re-determination after the further assessment under s 329(1)(b) by Dr Henley Harrison.

COSTS

The respondent employer is to pay the appellant worker’s costs of the appeal, assessed at $2,530 plus GST.

Bill Roche
Deputy President

6 August 2014

I, JACQUELINE HAGGER, CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF BILL ROCHE, DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.

ASSOCIATE

[2014] NSWWCCPD 51

6 August 2014

Key Legal Topics

Areas of Law

Workers Compensation Law

Legal Concepts

Breach of Contract

Compensatory Damages

Interlocutory Orders

Appeal

Jurisdiction

Limitation Periods