Milivoj Stekovic v Polyseal Waterproofing Technologies Pty Limited and Contexx Pty Ltd
[2012] ACTMC 8
•2 November 2012
MILIVOJ STEKOVIC v POLYSEAL WATERPROOFING TECHNOLOGIES PTY LIMITED & CONTEXX PTY LTD
[2012] ACTMC 8 (2 November 2012)
WORKERS COMPENSATION – liability of principal – definition of ‘worker’
Workers Compensation Act 1951 (ACT), ss 8, 11, 13, 27, 31
No. WC 350 of 2009
Magistrate: Chief Magistrate L A Walker
Magistrates Court of the ACT
Date: 2 November 2012
IN THE MAGISTRATES COURT OF THE )
) No. WC 350 of 2009
AUSTRALIAN CAPITAL TERRITORY )
BETWEEN:MILIVOJ STEKOVIC
First Applicant
AND:POLYSEAL WATERPROOFING TECHNOLOGIES PTY LIMITED (ACN 086 669 650)
First Respondent
CONTEXX PTY LTD
(ACN 119 908 039)
Second Respondent
ORDER
Magistrate: Chief Magistrate L A Walker
Date: 2 November 2012
Place: Canberra
THE COURT ORDERS THAT:
(a)That at all material times, the applicant was a worker as defined in the Workers Compensation Act 1951 (ACT) (the Act).
(b)That the applicant suffered an injury arising out of or in the course of his employment on 24 July 2008 being pain in the lumbar spine, left hip and left groin area.
(c)That the applicant is entitled to pursue his rights to compensation against both respondents by virtue of s 13 of the Act.
(d)That the applicant’s entitlement to the payment of compensation pursuant to Parts 4.2, 4.3 and 4.5 of the Act ceased as at 20 March 2010.
This is an application for arbitration pursuant to the Workers Compensation Act 1951 (ACT) (“the Act”) as amended. This is a civil matter and the balance of probabilities is the test which I apply to the determinations I make pursuant to the Act.
Background
The applicant, Mr Stekovic, secured work as a painter at the Direct Factory Outlet (DFO) in Fyshwick in May 2008. This now 51 year old man had no formal qualifications as a painter and was in fact in receipt of the Disability Support Pension at the time the opportunity arose.
He attended at the DFO with a friend who was already working there. Contexx Pty Ltd (“Contexx”, the second respondent) was the head contractor at the site. Polyseal Waterproofing Technologies Pty Limited (“Polyseal”, the first respondent) was sub-contracted by Contexx to paint the premises.
The applicant started working at DFO some time in May 2008. His continuation at the worksite was approved in June by a Polyseal supervisor, Guy Marshall. Initially the applicant’s pay went to his friend’s account. In June, the applicant received notification of an Australian Business Number (“ABN”) that he had applied for, effective from 30 May 2008. On 5 June 2008, the applicant signed a document headed “Polyseal Waterproofing Technologies Staff Induction”.
The applicant worked Mondays to Fridays in that role without sick leave until an incident on 29 July 2008.
The Applicant slipped whilst exiting a scissor lift that day, hitting his left hip, falling on to his left side. He felt what he described as an “hard strain in the joint area”. As he started to walk away he felt increasing pain in his lower back, left hip and groin. He tried to stretch it out but still felt pain. A supervisor “George” said to go home if he could not do the work. The applicant left and has not resumed any work, whether with Polyseal or otherwise, since that day.
I note that both respondents abandoned an argument as to the applicant’s state of connection at the outset of this hearing.
Was the applicant a worker?
The definition of worker in place at the time the applicant suffered injury, that is at 29 July 2008, was detailed in Revision 34 of the Act at s 8. Relevantly it stated that:
(1)In this Act (subject to this chapter):
worker means an individual who has entered into or works under a contract of service with an employer, whether the contract is express or implied, oral or written.
Subsequently s 8 has been amended to extend that definition in various ways including to categorise as a worker a person who works under a contract, or at piecework rates, for labour only or substantially for labour only.
The applicant clearly falls within the definition of worker detailed at the now extended s 8(1)(b). He was, without dispute, a person who worked under a contract. There is no requirement for a contract to be written. Its terms are discernable from the facts. The applicant offered his labour, Polyseal accepted it; the applicant did work, that is, painting; and he was paid for it on an hourly rate. There was offer, acceptance and consideration, a contract. It was for labour only. He did not supply materials, advice, planning or anything other than his labour. That is sufficient for him to fall within the definition of worker as amended.
10.However, that extended definition is not available to this applicant because of his date of injury. The issue to be determined then is whether the applicant worked under a contract of service. In interpreting this and similar provisions, a contract of service is distinguished from a contract for services. The evidence was divided but on balance I conclude that the applicant was employed under a contract of service.
11.The facts which support a different conclusion are that the applicant was paid in a fairly unusual way. Tax was not removed from his wages in the ordinary way; he was directed to obtain an ABN number and put in claims for the hours worked.
12.However, in every other respect his status reflected that of an employee. He worked set hours, under the direction of Polyseal. As I have said, he did not provide materials, equipment, advice or other workers. He signed a form headed “Staff Induction” as an “employee”. The form referred, amongst other things, to his job title, leave entitlements, work times and meal breaks, all indicia of employment. There is no evidence that the applicant was required to provide proof of his own insurance arrangements to Polyseal, as was a requirement of the contract between Polyseal and Contexx in relation to “secondary subcontractors”. Polyseal itself assumed in its dealings with the applicant that he was an employee, referring his injury to its workers compensation insurer on that basis.
13.I should indicate that the determination by the insurer of acceptance of the claim for compensation is not evidence of the applicant’s employment status which sways my approach; the insurer relied on the claim made by its insured until further information came to light. No estoppel flows from this in terms of determining future entitlements.
14.It was submitted in the alternative by the applicant that even if he was not a worker as defined in s 8 of the Act, he was otherwise a contractor as defined in s 11, being a person engaged under a contract on a systematic and regular basis. Had I not been satisfied that the applicant was a worker pursuant to s 8, I would have found him to be a deemed worker by virtue of s 11(2)(a) on the basis that he worked to a time schedule set by Polyseal, in common with its other employees, along with the other factors detailed above in relation to s 8 which are relevant when applying the provisions on s 11(3).
15.I note that s 11(2)(b) does not apply to this applicant’s situation. Polyseal was a NSW based company which did not ordinarily do work in the ACT and no one had indicated to the applicant that work would be available to him beyond the job at DFO. However, those two bases for deeming a person to be a worker having regard to s 11 operate independently of each other, so that the lack of such expectation would not defeat operation of the section to the applicant’s benefit.
Does the applicant have a remedy pursuant to s 13 of the Act?
16.The issue of s 13 was raised and whether or not the application has a remedy pursuant to that section.
17.The applicant discovered to his detriment that Polyseal, the contractor, was not actually insured to cover ACT workers. This came to light when the insurer ceased payments. The applicant now seeks to rely on s 13 of the Act to recover against the principal, Contexx.
18.I was referred throughout the proceedings to s 13 as its stands today. Submissions were made as to the amendment of the Act and the effect that such amendment has in terms of the principal’s ability to recover against the contractor. However, s 13 as it stood at the time of the injury, which is the provision I must apply, was quite different in its effect. It stated:
Subcontracting
(1) If any person (the principal), in the course of or for the purpose of the principal’s trade or business, contracts with anyone else (the contractor) for the execution by or under the contractor of the whole or any part of any work undertaken by the principal, the principal is liable to pay to any worker employed in the execution of the work any compensation that the principal would have been liable to pay if that worker had been immediately employed by the principal.
(2) If compensation is claimed from, or a proceeding is taken against, the principal, then, in the application of this Act, references to the principal must be substituted for reference to the employer, except that the amount of compensation must be calculated with reference to the earnings of the worker under the employer by whom the worker is immediately employed.
(3) If the principal is liable to pay compensation under this section, the principal is entitled to be indemnified by any person who would have been liable to pay compensation to the worker independently of this section.
(4) This section does not prevent a worker recovering compensation from the contractor instead of the principal.
19.The effect of this provision is to allow the injured worker to proceed, at his or her own discretion, against a principal, as opposed to the revised section which requires that the contractor be uninsured before the worker can proceed against the principal. Section 13 as it stood at the date of injury also allows the principal an unfettered right of recovery against any person who would have been liable to pay compensation to the worker independently of s 13. That, of course, includes the contractor. Under the modified s 13, the principal could only seek indemnification from the contractor if the principal was itself uninsured (which I am told is not the case in respect to Contexx).
20.Therefore, the worker is entitled to proceed against Contexx, as principal.
21.The question for determination then is, is the principal, Contexx, liable under the Act as it stood at the date of injury, and if I find that it is, is it entitled to recover from the contractor, Polyseal?
Did the applicant suffer an injury?
22.In determining this, I needed to consider whether the applicant suffered an injury arising out of his employment pursuant to s 31 of the Act or if he contracted or suffered an aggravation, acceleration or recurrence of a disease to which his employment was a substantial contributing factor pursuant to s 27 of the Act.
23.In their replies, liability for any initial injury was disputed by both respondents. They are not estopped from disputing liability by virtue of the insurer’s prior acceptance of that claim. That, of course is a different issue from any right to recover payments already made.
24.The applicant claims that he had had lower back problems in the past but had completely recovered from them. He also said in his evidence that his receipt of the Disability Support Pension at the time of his engagement with Polyseal was for reasons other than lower back pain. Despite some question being raised by Contexx, there was no real or effective challenge to this position.
25.I therefore find that the applicant was symptom-free in terms of any lumbar back pain at the time of an incident on 29 July 2008.
26.The applicant described slipping on 29 July as described above and suffering debilitating pain at that time and ever since.
27.The applicant’s credit was not seriously challenged as to the incident or the fact that he experienced pain as described immediately after the incident.
28.The real issue in dispute it seems to me is what is the nature if any injury suffered and the ongoing effects if any.
29.The applicant gave evidence unchallenged in cross-examination that he continues to experience pain in the same or similar regions as that experienced at, or very soon after, the slip.
30.However, apart from the applicant’s own evidence, I was provided with a significant amount of conflicting medical evidence. That medical evidence was tendered by consent, but all parties in the proceeding indicated that tender in that form did not indicate acceptance of the contents of those reports.
31.I was therefore left to weigh the contents and their conclusions as they stand.
32.The applicant, when asked, identified his injury as pain to his lower back, groin and left leg, evidence of which was available through the investigations revealing pathology but the source of which could not be pin-pointed.
33.Indeed investigations, including CT scan, MRI, bone scan and nerve conduction studies all demonstrate some pathology in the applicant’s lumbar spine at various levels.
34.Turning to the medical evidence beyond that, on 1 August 2008, two or three days after the incident, the applicant’s general practitioner (“GP”), Dr Hendry, initially diagnosed “lower back, pelvis and groin strain”. On 8 August 2008, that diagnosis changed to “soft tissue injury left lower back, pelvis and groin”. Certification of unfitness for work relied on this diagnosis under the hand of various GP’s until 28 June 2010 when the diagnosis provided was “lumbar disc herniation L4/L5, L5/S1”, then on 23 September 2010 to “mechanical low back pain L4/L5 disc herniation”. “L4/L5 disc herniation” remained the diagnosis upon which unfitness for work was certified thereafter until payments were ceased.
35.Dr Chandran, neurosurgeon, was the first specialist to become involved in the applicant’s care as a result of this first incident. He first saw the application on 4 September 2008, about a month or so after the incident occurred. He postulated that the L4/L5 disc was “probably the source” of the applicant’s pain. He noted at the time that there was no lower limb deficit, contrary to the applicant’s evidence that his leg had been painful from very soon after the slip. Dr Chandran performed a discogram on 18 September 2009, well over a year after the incident, and concluded, based upon this procedure, that the applicant would need surgery at L4/L5 to obtain relief from pain. Dr Chandran’s report of 10 November 2009 suggested that what may have been a pre-existing pathology at L4/L5 may have been provoked to ongoing pain by the injury. He recognised, however, the possibility, at that time, of a “functional” or non-organic component to the applicant’s complaint. As at February 2010, Dr Chandran still thought that the applicant suffered an abnormality which may be helped by surgery and referred him for a second opinion, to Dr Pik, a neurosurgeon. Following a further discogram, Dr Chandran basically concluded that the issue was “muddled”, he could no longer recommend surgery, and declined any further involvement with the applicant’s treatment. Ultimately, I am unable to rely on Chandran’s earlier view that L4/L5 was injured in the fall. That view was never confidently expressed, rather the possibility that this could have occurred was postulated. Dr Chandran’s evidential basis for identifying L4/L5 as the source of pain also proved unreliable. Dr Chandran’s evidence assists little in the ultimate determination of this matter.
36.Dr Chan, a rehabilitation and pain management physician, treated the applicant. In writing to an insurer in June 2009, Dr Chan referred to his “working diagnosis” including “pain originating from the lumbar disc and/or facet joints”. He said that objective testing had not been reliable in either refuting or confirming the diagnosis. The injury described by the applicant was thought by Dr Chan to be a “plausible” explanation of injury to the lumbar spine and scaro-iliac joint structures. He did not consider that the applicant had suffered an aggravation of any underlying condition. However, neither did he opine that the pathology evident on the MRI arose because of, or at the time of, the slip. By February 2010, Dr Chan had changed his diagnosis to one of “chronic pain syndrome”. He concluded that the applicant had “developed lower back pain as a result of a fall which contributed to the development of a chronic pain syndrome”. He stated that this involved psychological, behavioural and physical dysfunction, in addition to complaints of pain.
37.Ms Bruce, a psychologist, made a diagnosis of depression, anxiety and stress following workplace injury, which she later formalised as an Adjustment Disorder with mixed anxiety and depressed mood. The testing she applied showed a significant improvement between 27 February 2009 and 16 July 2009. She concluded that the applicant’s main cause of pain was physical. She went on however to state that the applicant was suicidal. This was not a statement repeated at all by the applicant in his oral evidence.
38.Dr Marsh, occupational physician, reported for the insurer on 10 June 2009 and noted “non-organic features” in his assessment of the applicant. That included “pain on simulated trunk rotation and non-dermatomal sensory deficit in the left leg”. He considered there may be an underlying cause for some of the pain but that there were also “non-organic” features.
39.Dr Andrews, neurologist, conducted nerve conduction studies which indicated some mild entrapment of the left S1 nerve root. He made no comment as to its possible relationship to any work injury.
40.Dr Pik, on his examination on 9 March 2010, noted the presence also of “non-dermatomal pattern of sensory alteration involving the whole of the left leg”. His review of the MRI report found no evidence of spinal canal stenosis or nerve root compromise. The applicant’s presentation was thought to be “suggestive” of mechanical low back pain but noted symptoms and signs in excess of what could be explained on that basis. He subsequently conducted a discogram at the L2/L3 levels through to the L5/S1 level. His findings were at odds with those of Dr Chandran. He concluded that surgery would not produce good results.
41.Dr Stuart, neurosurgeon, reported as an independent expert for the applicant. He, too, commented on the fact that the complained of numbness in the applicant’s left leg did not fit a dermatomal distribution. He concluded that the applicant had suffered a temporary aggravation of degenerative disease of the lumbosacral spine. He did not consider that the applicant’s presentation at assessment was consistent with the stated cause of injury. He thought the applicant incapable of a RTW at that time but not because of a work injury. He recommended against surgery.
42.Dr Mobbs, neurosurgeon, offered a surgical solution, that was a “motion-sparing implant” at L4/L5. That surgical solution was applied. It did not improve the applicant’s complaints. He expressed later an opinion that the work accident was a “significant contributor” to the applicant’s “overall back condition”.
43.Dr Bookalill, neurosurgeon, reported for Contexx. He expressed the opinion that the applicant’s “employment with Polyseal had contributed to a major extent to the ongoing symptomatology and requirement for surgery”. He did not indicate what feature of that employment so contributed but clearly he was aware of the slip incident.
44.Associate Professor Oakeshott, a general surgeon, reported for Contexx. He considered that there were definite non-anatomical and inconsistent responses by the applicant and no abnormality observable in the left groin region. He considered that the applicant’s symptoms did not correlate to physical injury at work or indeed aggravation of a pre-existing condition at work. He maintained this view following a review of further evidence.
45.Dr Silver, an occupational physician, also reported for Contexx. He noted that simulated rotation produced exclamations of pain. He considered that the applicant’s complaints of pain were grossly and deliberately embellished. He considered that the work incident was unlikely to have caused or aggravated the pre-existing lumbar degenerative disease and that any strain would have settled within days or weeks.
46.No specific injury can be identified on the available evidence. What I am presented with is an incident at work, the occurrence of which is unchallenged and which I have no reason to doubt, and ongoing complaints of pain. Pain alone is capable of being characterised as an injury. Where the source of that pain is not identified, however, the practical determination of pain as an injury becomes somewhat more difficult.
47.On the available evidence, there is a possible physical explanation for those complaints of pain in general terms, that is the slip could have caused an aggravation of a pre-existing lumbar degeneration. However, there are significant reasons to doubt the particular complaints made by the applicant and those are detailed particularly in the medical reports that I have alluded to. There is also reason to doubt their correlation to any work incident.
48.The applicant’s responses on medical examination and assessment have been inconsistent, so much so that Dr Chandran felt obliged to withdraw from further involvement in his treatment. The applicant’s responses on assessment have generally been recognised to be exaggerated and do not reflect a medical understanding of anatomical response. Dr Marsh, Dr Pik, Dr Stuart, Associate Professor Oakeshott and Dr Silver have all drawn these conclusions.
49.In so far as a psychological explanation for ongoing complaints have been proffered, the only reporting psychologist has expressed the view that the main issue is physical pain, for which no reliable medical explanation is available.
50.I am left with an overwhelming body of evidence that the Applicant suffered a work place injury on 29 July 2008 but that its affects have resolved and any ongoing complaints are no longer work-related.
51.Consequently, I am satisfied that the applicant was a worker in accordance with the provisions of the Act, that he suffered an injury in the course of employment, but there is no longer an ongoing entitlement to weekly payments nor to medical treatment expenses.
Addendum to oral decision
52.Pursuant to s 13 of the Act, Contexx was therefore potentially liable to make payments to the applicant pursuant to the Act in respect of an injury suffered by him. Had it made such payments, Contexx would be entitled to indemnification for such payments from Polyseal as employer.
I certify that the preceding number 52 paragraphs are a true copy of the Reasons for Judgment herein of her Honour, Chief Magistrate Walker.
Associate:
Date: 13 November 2012
Counsel for the applicant: Mr J Masters
Solicitor for the applicant: Bradley Allen Love
Advocate for the first respondent: Ms E Reilly
Solicitor for the first respondent: Moray & Agnew
Counsel for the second respondent: Mr A Muller
Solicitor for the second respondent: Sparke Helmore
Date of hearing: 22-23 October 2012
Date of judgment: 2 November 2012
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