Nowakowska v Home Care Services of NSW
[2008] NSWWCCPD 62
•19 June 2008
| WORKERS COMPENSATION COMMISSION | ||||||
| DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR | ||||||
| CITATION: | Nowakowska v Home Care Services of NSW [2008] NSWWCCPD 62 | |||||
| APPELLANT: | Elizabeth Nowakowska | |||||
| FIRST RESPONDENT: | Home Care Services of NSW | |||||
| INSURER: | Allianz Australia Limited | |||||
| FILE NUMBER: | WCC5394-07 | |||||
| DATE OF ARBITRATOR’S DECISION: | 19 February 2008 | |||||
| DATE OF APPEAL DECISION: | 19 June 2008 | |||||
| SUBJECT MATTER OF DECISION: | Two awards of weekly compensation benefits, partial and total incapacity. | |||||
| PRESIDENTIAL MEMBER: | President Judge Greg Keating | |||||
| HEARING: | On the papers | |||||
| REPRESENTATION: | Appellant: | Firths | ||||
| Respondent: | McLean Lawyers | |||||
| ORDERS MADE ON APPEAL: | The decision of the Arbitrator dated 19 February 2008 is revoked and the following decision is made in its place: | |||||
| 1. The matter is remitted to a different Arbitrator for redetermination in accordance with the reasons in this decision. | ||||||
| 2. The costs of the first arbitration are to follow the outcome of the second arbitration. | ||||||
| The Respondent employer is to pay the Appellant worker’s costs of the appeal. | ||||||
BACKGROUND
On 17 March 2008 Ms Nowakowska (‘the Appellant /Worker’) sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Workers Compensation Commission (‘the Commission’) against a decision, dated 19 February 2008.
The Respondent to the Appeal is Home Care Services of NSW (‘the Respondent/Employer’).
Ms Nowakowska was employed by the Respondent as a disability and aged care worker and suffered injury to her back and right shoulder on 21 December 2002. The Respondent’s insurer, Allianz Australia Limited accepted liability for the claim and made payments of weekly compensation benefits and medical expenses. Ms Nowakowska resumed part time light duties with the Respondent and continued in receipt of compensation benefits under section 40 of the Workers Compensation Act 1987 (‘the 1987 Act’) for partial incapacity until 30 May 2005, when she was involved in a motor vehicle accident travelling home from work and suffered injury to her neck and back. Following this injury Ms Nowakowska made a claim, which the insurer accepted and commenced paying weekly compensation benefits on the basis of total incapacity. On 31 May 2005 the insurer ceased making payments for the partial incapacity flowing from 2002 injury.
On or about 18 July 2007, the Worker filed an Application to Resolve a Dispute in the Commission seeking weekly compensation payments at the statutory maximum rate from 31 May 2005 to date and continuing and compensation under section 66 in respect of 12% Whole Person Impairment (‘WPI’) and compensation pursuant to section 67 for pain and suffering as a result of the injury sustained on 21 December 2002. The Worker also claimed lump sum compensation under section 66 in respect of 11% WPI and compensation under section 67 in respect of the injury sustained in the car accident on 30 May 2005.
Ms Nowakowska underwent examination by an Approved Medical Specialist (Dr Stephenson) on 26 October 2007. The doctor assessed 10% WPI as a result of injuries sustained on 21 December 2002 and 9% WPI as a result of injuries sustained on 30 May 2005.
The parties were unable to settle the matter, which proceeded to an arbitration hearing on 25 January 2005. Both parties were represented by counsel who made oral submissions in relation to the outstanding claims for lump sum compensation under section 67 and for weekly benefits.
At the conclusion of the hearing the Arbitrator reserved and delivered a decision and written a statement of reasons on 19 February 2008, and it is from this decision that Ms Nowakowska seeks to appeal.
THE DECISION UNDER REVIEW
The ‘Certificate of Determination’, dated 19 February 2008 records the Arbitrator’s orders as follows:
“The Commission determines:
1. That the Application to Resolve a Dispute is amended to include a claim for weekly benefits compensation and lump sum compensation for injuries sustained on 21 December 2002 to the Applicant’s right shoulder and back and on 30 May 2005 to the Applicant’s back and neck, as lodged with the Commission on 10 December 2007.
2. That the Respondent pay the Applicant weekly benefits compensation at the maximum statutory rate for a worker with no dependants as adjusted, from 31 May 2005 to date and continuing under Section 37 of the Workers Compensation Act 1987 with credit to be given to the Respondent for any payments made for the period above.Such payments to continue in accordance with the provisions of the Workers Compensation Act 1987.
3. That the Respondent pay the Applicant, as lump sum compensation under Section 66 of the Workers Compensation Act 1987, $23,750.00 in respect of permanent impairment expressed as a percentage of whole person impairment of 10% ($12,500.00) in respect of the injury to the right upper extremity and lumbar spine of 21 December 2002 and of 9% ($11,250.00) in respect of the injury to the cervical spine and lumbar spine of 30 May 2005, as set out in the medical assessment certificate of Dr J B Stephenson (AMS) dated 26 October 2007.
4. That the Respondent pay the Applicant, as lump sum compensation under Section 67 of the Workers Compensation Act 1987, $17,500.00 in respect of pain and suffering attributable to the injury to the right upper extremity and lumbar spine of 21 December 2002.
5. That the Respondent pay the Applicant’s costs as agreed or to be assessed.”
ISSUES IN DISPUTE
The issues in dispute in the appeal are that the Arbitrator erred in:
1. determining the Appellant’s weekly compensation as a result of her injury on 30 May 2005, when he had no jurisdiction to deal with that issue;
2. not awarding weekly benefits pursuant to section 40 of the 1987 Act, after having determined that the Appellant was partially incapacitated and suffered economic loss as a result of her injuries in the employ of the Respondent on 21 December 2002, and
3. determining that payment for a later incapacity subsumed the Appellant’s rights to weekly benefits in respect of an earlier incapacity.
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 filed on 17 March 2008, within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act.
The monetary thresholds under section 352(2)(a) and (b) are met.
Leave to appeal is granted.
FRESH EVIDENCE
‘Fresh evidence’ on appeal is governed by section 352(6) of the 1998 Act, which provides as follows:
“(6) Evidence that is fresh evidence or evidence in addition to or in substitution for the evidence received in relation to the decision appealed against may not be given on an appeal to the Commission except with the leave of the Commission.”
Practice Direction No.6 sets out the process for seeking leave of the Commission to give ‘new evidence’ on appeal. It provides as follows:
“FRESH EVIDENCE AND/OR ADDITIONAL EVIDENCE
Each application to introduce fresh evidence or additional evidence on appeal will be considered on its own facts and circumstances and in the context of the Commission’s obligation to act according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms (see section 354 of the 1998 Act).
In the exercise of its discretion to admit fresh evidence or further evidence on appeal the Commission will have regard to, and the parties should make submissions on, whether:
·it can be demonstrated that the evidence could not with reasonable diligence have been obtained by the party and tendered in proceedings before the Arbitrator;
·the evidence is credible;
·there is a high degree of probability that there would have been a different decision if the evidence had been admitted at the arbitration, and/or
·it is just to admit the evidence in all the circumstances of the individual case.
Parties should be aware that a review under section 352 of the 1998 Act is not a rehearing or hearing de novo. The original arbitration should not be treated as a preliminary hearing and all relevant evidence should be called at that time.”
Practice Direction No.6 also provides that if fresh evidence or evidence in addition to or in substitution for the evidence received in relation to the decision appealed against is relied upon, parties must include:
· a schedule of the fresh or additional evidence;
· a copy of the fresh or additional evidence;
·a brief outline of the fresh or additional evidence and the reasons why it was not given in proceedings before the Arbitrator, and
·submissions on why the fresh or additional evidence should be admitted, or rejected as the case may be.
Where a party seeks leave to rely on fresh or additional evidence in relation to the decision appealed against, that party must serve a copy of the fresh or additional evidence on the other parties to the dispute when serving the Application or Notice of Opposition.
The Appellant seeks to rely on a letter dated 28 November 2007 serving an amended wages schedule on the basis that the Appellant is unclear whether the letter and amended wage schedule was before the Commission.
The Respondent does not seek to rely on fresh evidence, nor does it make any submissions on the Appellant’s application.
The letter and amended wage schedule that the Appellant seeks to have admitted as fresh evidence on appeal was lodged with the Commission on 29 November 2007, and the Commission file indicates that they were provided to the Arbitrator on or about 4 December 2007. Therefore the documents are already before the Commission and do not constitute fresh evidence on appeal as defined by section 352(6) of the 1998 Act.
Leave to admit fresh evidence on appeal is refused.
REVIEW
The nature of a review was considered by the Court of Appeal in Zheng where Bryson JA said at [38]:
“A review is a different process to an appeal and the matters which may be considered and the manner in which they may be considered are somewhat wider. See Boston Clothing Co Pty Ltd v Margaronis (1992) 27 NSWLR 580 at 584 (Kirby P). An attack, on review or otherwise, on an Arbitrator's discretionary decision in controlling procedure may be based on the test stated in House v. R [1936] 55 CLR 499 at 504 - 505; but that is not the only basis on which the Presidential member may act. The powers of a Presidential member on review are somewhat wider and extend to power to reopen consideration of a matter of which an Arbitrator has disposed; the manner in which the powers of the Presidential member are to be exercised is itself the subject of discretion of the Presidential member.”
This passage was recently quoted with approval by McColl JA in South Western Sydney Area Health Service v Edmonds [2007] NSWCA 16 at [134] (‘Edmonds’). To describe the relative weight and relevance of the expert evidence as “a discretionary decision which could only be disturbed on House v The King principles” was described by McColl JA as “an over-generalisation” (at [133]).
The nature of a review was further considered by the Court of Appeal in State Transit Authority of New South Wales v Fritzi Chemler [2007] NSWCA 249 where Spigelman CJ said at [28] and [30]:
“28. The concept of a review on the merits is wider than the concept of an appeal in a judicial context. There is a well established line of authority on the use of the terminology of ‘review’ instead of ‘appeal’ with respect to the workers compensation system in this State which establishes the breadth of a review on the merits.
30. A Presidential member exercising a power to review a decision must decide whether the original decision is wrong or, as it is often put in the context of administrative appeals on merits, must decide what is the true and correct view. If s/he does so decide then s/he should substitute his or her own views, unless it is an appropriate case to remit. The power to remit is not constrained in the manner for which the Appellant contends.”
I intend to apply the above principles in the matter before me.
DISCUSSION AND FINDINGS
Ground 1: “The Arbitrator erred in determining the Appellant’s weekly compensation as a result of her injury on 30 May 2005, when he had no jurisdiction to deal with that issue.”
The Appellant submits that her demand on the Respondent for weekly benefits in respect of the injury on 21 December 2002, was made by letter from Ms Nowakowska’s solicitors, Firths, to Allianz Australia Limited by letter dated 1 May 2007.
The letter relevantly is in these terms:
“Dear Sir/Madam
RE: Elizabeth Nowakowska v Homecare Service of New South Wales
INJURY: 21 December 2002
We refer to the above matter and we understand that as per our previous correspondence our client was injured in a subsequent work injury on 30 May 2005. As a result of that, she has had an ongoing incapacity since that time. We note she has not received weekly compensation benefits from you since 31 May 2005. In the circumstances, as it is clear that her continued incapacity clearly relates to this injury, we request that those payments be back‑paid and re‑instated herewith. In support thereof we enclose the following WorkCover Medical Certificates...” (emphasis added)
The reference to “this injury” in the text of the letter is ambiguous. In context it could refer to either the 2002 injury or the 2005 injury. It is made clear however, that the subject matter of the letter is the injury of 21 December 2002. I accept the purpose of the letter of 1 May 2007 was to make a demand for weekly benefits in respect of the injury of 21 December 2002.
The Appellant’s solicitors filed an Application to Resolve a Dispute and later filed two amended applications, which they readily concede created confusion. In order to clarify Ms Nowakowska’s claim, the solicitors for the Appellant sent to the Respondent’s solicitor, by facsimile and through the Document Exchange, a letter dated 28 November 2007. Relevantly, that correspondence is in these terms:
“RE: Elizabeth Nowakowska v Homecare Service of New South Wales-
INJURY:21 December 2002
We refer to the above matter and to the recent tele-conference held on 23 August 2007. With respect to our letter dated 29 August 2007, we confirm that after further review of this matter, we confirm that our initial claim for wages as contained in our original Application to Resolve a Dispute is in fact correct. Therefore, a claim for weekly compensation is made against Allianz from 31 May 2005 to date and continuing in relation to the injury on 21 December 2002.
In relation to the wages schedule enclosed in our letter of 29 August 2007, we request that you disregard same and advise that we will be pursuing our claim as per the enclosed Amended Wage Schedule.”
When the matter was listed for arbitration on 25 January 2008, the Appellant confirmed she was proceeding on the original Application to Resolve a Dispute, together with an amended wage schedule as per the letter of 28 November 2007 (see [31] above). No objection was taken to that course as it had been foreshadowed in the letter of 28 November 2007 and, apparently, at the telephone conference.
The Respondent submits that the Application to Resolve a Dispute on which the Appellant proceeded placed reliance only on the worker’s back and neck injury, resulting from the motor vehicle accident on 30 May 2005. I have examined the Application to Resolve a Dispute and the Respondent’s submission on this point is incorrect. The original application, which was ultimately relied upon, pleaded the 2002 injury in support of a claim for weekly compensation and lump sum benefits, whereas the 2005 injury was pleaded in support of a claim for lump sum benefits only.
The Respondent relies on the statement made by the Arbitrator at paragraph 10 of the Statement of Reasons where he said:
“The Applicant seeks two separate awards for weekly benefits compensation pursuant to section 40(1), such that the benefits are cumulative, in respect of both dates of injury of 21 December 2002 and 30 May 2005.”
The Respondent submits that the determination the Appellant sought before the Arbitrator required, as a matter of law, determination of entitlement flowing from the injuries, which occurred on 21 December 2002 and 30 May 2005, and the Appellant’s assertion of entitlements to two awards of weekly compensation necessarily invoked jurisdiction in respect of both injuries.
The Appellant’s “further submissions upon receipt of transcript” drew my attention to several references in the transcript that reinforce her contention that the claim was relevantly limited to her weekly compensation entitlements flowing only from the original injury on 21 December 2002.
It is relevant for the determination for this ground of appeal that I extract some of those transcript references:
“MR BAKER: Well, that’s precisely what the respondent has tried to do, or the insurer for the respondent has tried to do in this case. What they’ve tried to say is, ‘Look, that second incapacity that you've now suffered, we'll pay you as if you're totally incapacitated,’ and so they have. Well, we’re not arguing with that, and it's not part of this case. This case deals with the incapacity which flows from the first injury in 2002. Right? That's all we're arguing about. We've got no argument about the current” (Transcript page10, lines 1 to 11) (emphasis added).
“MR BAKER: Yes, a single worker no dependants. So that is why we would say at that point in time the statutory maximum, which they were paying, was the correct and appropriate figure, and, of course, what we would seek by way of an ongoing payment in respect of the injury in 2002” (Transcript page 11 – lines 41 to 47) (emphasis added).
“MR BAKER: The next issue is to do with a different matter altogether. All right. So from the perspective of the applicant in this case we're only dealing with what was the section 40, or the appropriate section 40 in respect of her first injury. In our respectful submission, that is what she was being paid prior to the cessation of the second injury, and we have no issue with what she's being paid in relation to the second injury, only in respect of the first.” (Transcript page 13 – lines 14 to 22) (emphasis added).
“MR BAKER: No, it's the reverse of my argument. I'm not concerned about the second injury, only the first.” (transcript page 15 – lines 21 to 22) (emphasis added).
“MR JUDD: ‑‑ because Mr Baker then says to you, ‘Then you have to look at what her losses are as a result of the second injury.’
MR BAKER: I don’t.” (transcript page 21 – lines 34 to 38).”
Taken as a whole, the correspondence from the Appellant’s solicitor to the Respondent of 28 November 2007, the pleading in the Application to Resolve a Dispute, ultimately relied upon, and the transcript references to which I have referred, make it clear that the Appellant proceeded only upon the injury of 21 December 2002 in support of her claim for weekly benefits.
The Arbitrator’s determination of the case proceeded on the basis that the injuries sustained on 21 December 2002 and on 30 May 2005, were before him (see reference to paragraph 10 Statement of Reasons). That construction is consistent with the Arbitrator’s “Final Summary” (see paragraph 1):
“That the Application to Resolve a Dispute is amended to include a claim for weekly benefits compensation and lump sum compensation for injuries sustained on 21 December 2002 to the Applicant’s right shoulder and back and on 30 May 2005 to the Applicant’s back and neck, as lodged with the Commission on 10 December 2007.”
Section 289 of the 1998 Act relevantly provides.
“ 289 Restrictions as to when a Dispute can be referred to the Commission
289(1)
A dispute about a claim for weekly payments cannot be referred for determination by the Commission unless the person on whom the claim is made:
(a)disputes liability for the claim (wholly or in part), or
(b)fails to determine the claim as and when required by this Act.”
Where an insurer disputes liability in respect of a claim, the insurer is required to issue to the claimant a notice pursuant to section 74 of the 1998 Act. The purpose of the notice is to identify the issues in dispute. No such notice was issued in respect of the injuries sustained on 30 May 2005.
I find that there was no dispute before the Commission in relation to the Applicant’s entitlement to benefits in respect of the injury sustained on 30 May 2005. Although there was reference to the 2005 injury in the pleadings, ultimately the Appellant did not rely on the 2005 injury to support the claim for weekly compensation payments. Indeed, the Respondent voluntarily paid the Applicant the full statutory rate of compensation in respect of the injury sustained on 30 May 2005 (see transcript page 4 line 47).
I accept the Appellant’s submission that the Arbitrator had no jurisdiction to determine the Appellant’s rights in respect of her injury of 30 May 2005. His orders in relation to the payment of weekly compensation in respect of the 2005 injuries went beyond his jurisdiction and constitute an error of law.
Ground 2: “The Arbitrator erred in having determined the Appellant was partially incapacitated and suffered economic loss as a result of her injuries in the employ of the Respondent on 21/12/2002, in not awarding weekly benefits pursuant to s 40 of the 1987 Act.”
The Appellant submits that the Arbitrator determined the Appellant had a partial incapacity for work as a result of her injuries sustained on 21 December 2002 (see Arbitrator’s Statement of Reasons paragraph 25). I accept that the Arbitrator made the following findings:
“From the Applicant’s own statement (at paragraph 53), together with a consideration of the medical evidence, attempted rehabilitation and what the Applicant was actually earning prior to the second injury on 30 May 2005, I am satisfied the Applicant had a partial incapacity where she could earn (and was in fact earning) a $105.75 per week, performing light duties of five hours, one day per week and undergoing TAFE training on a Certificate IV welfare course”(emphasis added).
The Appellant submits that accordingly, she is entitled to an award for the incapacity and loss so found on a continuing basis where there was no finding that such incapacity has ceased (see Sydney City Council v Ince [1989] 16 NSWLR 690) (‘Ince’).
The Appellant concedes on review that the Arbitrator’s determination under section 40(2)(a)[sic- 40 (2) (b)] should have taken account of her attendance for 20 hours per week at the TAFE course as part of her rehabilitation training, and as limiting her actual earnings. It is submitted that, at least upon the conclusion of her TAFE course her earning capacity, consequent upon her incapacity solely from the injury on 21 December 2002, would be greater than as found by the Arbitrator.
The Respondent submits that if reliance is placed on the original Application to Resolve a Dispute, the application did not include reliance upon the injury of 21 December 2002. As I have indicated I am satisfied that, looked at objectively, taking into consideration the pleadings, the relevant correspondence between the parties’ solicitors and the way in which the case was argued before the arbitrator as discussed, the only injuries relied on in support of the claim for weekly payments (as distinct from lump sum benefits), were those sustained on 21 December 2002.
The Respondent submits that the present case is distinguishable from Ince. In its submissions on appeal, the Respondent submits that it:
“repeats and adopts the submissions that are recorded in paragraph 25 of the Arbitrator’s Statement of Reasons.”
I assume that the reference to paragraph 25 is an erroneous reference to the submissions recorded at paragraph 24 of the Arbitrator’s Statement of Reasons. At paragraph 24 the Respondent seeks to distinguish Ince from the present case on the basis that Ince dealt with certain circumstances where the separate incapacities arose from injuries sustained by the worker during the course of his employment with two separate employers, whereas in this case the alleged incapacities arise from injuries sustained with the same employer. I am not persuaded that such a distinction is available.
In Ince, Clarke JA, with whom Hope and Meagher JJA agreed, referred to the example given by Buckley LJ in Harwood v Wyken Colliery Co. [1913] 2 KB 159 and accepted that the principles for which Ince stands are equally applicable whether or not the injuries received were sustained whilst working for the same employer or different employers.
At paragraph 24 of the Arbitrator’s Statement of Reasons, reference is also made by the Respondent to Thompson v Armstrong & Royce Pty Limited [1950] CLR 585 at 623 (‘Thompson’). I have considered the reliance placed on Thompson, but I find it unhelpful in determining this ground of appeal as Thompson was concerned with the payment of compensation for total incapacity during a period where the worker was on a compulsory holiday leave period. However in Thompson, Fullagar J, discussing the 1926 Act, noted:
“The Act has always been construed from the point of view that its nature and object are those of an Act to benefit the worker”.
In addition, the Respondent submits that section 40 of the 1987 Act by its terms (section 40(1)), provides an entitlement for the payment of compensation for partial incapacity in respect of a period, and that the section is in significantly different terms to the former section 9 and section 11 of the 1926 Act which, it is argued, provided a mechanism for the calculation of a weekly payment in the case of incapacity. The Respondent goes on to submit that, in its view, this is an important consideration, particularly having regard to section 40(5) of the 1987 Act, which is in these terms:
“The weekly payment of compensation to an injured worker in respect of any period of partial incapacity for work is not to exceed the weekly payment that would be payable to the worker if it were for a period of total incapacity for work” (emphasis added).
The Respondent submits that the enactment of section 40 of the 1987 Act evinces a clear intention by the Parliament to restrict the payment of weekly compensation in respect of any period that is under consideration to that amount which would be payable if it were for a period in which the worker was totally incapacitated for work. No authority is given to support this proposition. I take this to be a direct reference to section 40(5). However, reliance on the plain words of section 40(5) does not address the critical issue of concurrent entitlements to compensation in respect of separate incapacities. The quantum of any such award in respect of the 2002 injury will undeniably be governed by the operation of section 40(5). However, for reasons which I will explain, the existence of such an award, even if capped by the operation of section 40(5) does not preclude a concurrent entitlement under section 40 in respect of the injuries sustained in 2005.
Both section 40 of the 1987 Act and section 11 of the 1926 Act provide a mechanism for the quantification of an entitlement to compensation during partial incapacity. Whether that incapacity is expressed to be “in a period of partial incapacity” (see the 1987 Act) or “in the case of partial incapacity” (see the 1926 Act), is in my view, immaterial.
Finally on this ground, the Respondent makes two further submissions.
First, it is submitted that:
“although there may be circumstances where a worker is entitled to more than one award of weekly compensation based upon partial incapacity, in respect of any such period that is under consideration, the total amount of the payment(s) cannot be more than the amount that would be paid in that period for total incapacity.”
No authority is given for that proposition.
In Biegelmann v Iglo Engineering Co Limited [1979] 2 NSWLR 522 (‘Biegelmann’), the Court of Appeal considered the entitlement to compensation for partial incapacity followed by a period of deemed total incapacity under section 11(2) of the 1926 Act. The Court held:
“it is this incapacity which is elevated by the section and there is no basis for continuing an award beyond the time when the actual partial incapacity is translated into deemed total incapacity” (see Reynolds JA at 529).
However, in Ince the principle enunciated in Biegelmann was reargued and rejected. Clarke JA noted the approach taken in Harwood and the beneficial nature of the legislation read down the words ‘partial incapacity’ in section 11(2) to be understood in the same way as it is in section 9 or 11(1) when dealing with concurrent entitlements to compensation. He said that understood in this context, the sections provided a coherent, if complex, scheme providing for an employer to be liable only for the incapacity resulting from an injury suffered by a worker in the course of or arising out of the particular employment and giving full weight to the concept of diminishing capacity which is explained in Doudie v Kinneil, Cannell and Coking Coal Ltd [1947] 124 CLR 338 (‘Doudie’). I am not persuaded there is any reliable authority for the submission advanced at [56] above and I reject it.
Second, in contrast to the submission in [56] above, the Respondent submits:
“that the circumstances of the making of partial incapacity awards can never result in a situation where the worker may well be better off financially than had the worker never been injured”
The authority submitted for that proposition is Australian Iron & Steel Pty Limited v Elliot [1966] 67 SR (NSW) 87 (wrongly cited as Steel v Elliot) (‘Elliot’).
I agree with the final submission, although Elliot is not authority for the proposition advanced. There is, however, clear authority for the proposition (see Alcan Australia Ltd v Jordan (1995) 11 NSWCCR 475) (‘Alcan v Jordan’). If the circumstances exist which entitle the Appellant to concurrent entitlements to compensation in respect of separate incapacitates, the compensation payable should not exceed the sum the worker would have earned had she not been injured at all.
For the forgoing reasons, Ground 2 is upheld in that the Arbitrator erred in not awarding weekly benefits pursuant to section 40 of the 1987 Act, having determined the Applicant was partially incapacitated and suffered economic loss as a result of her injuries sustained on 21 December 2002.
Ground 3:“The Arbitrator erred in determining that payment for a later incapacity subsumed the Appellant’s rights to weekly benefits in respect of an earlier incapacity.”
The Appellant makes the following submissions:
(a)Having determined the Appellant was partially incapacitated as a result of her injuries to her back and right shoulder on 21 December 2002, the Arbitrator then found as a result of a further injury on 30 May 2005 to her neck and back, the Appellant was further incapacitated as to make her unemployable or totally incapacitated. In reaching these findings, the Arbitrator in fact found a further partial and separate incapacity.
(b)Notwithstanding, that the Appellant had returned to light duties on a rehabilitation program for a number of weeks and had in fact performed lighter duties as a part-time receptionist during September 2007, in a quest to retrain for suitable permanent employment, the Arbitrator determined that she was totally incapacitated. It is submitted that the Arbitrator confused the notion of separate incapacitates following from each of the injuries so as to render the Appellant totally incapacitated. The Arbitrator did not find the second injury of 30 May 2005 of itself resulted in the Appellant’s total incapacity.
(c)The Appellant argued for section 40 entitlements in respect of her injury of 21 December 2002. The fact of the compensation payments at the maximum statutory rate post the Appellant’s second injury on 30 May 2005, related to the Appellant’s entitlement as a result of that injury, did not remove the Appellant’s entitlement to weekly compensation (in respect of the 2002 injuries) as long as the two entitlements did not result in the Appellant receiving greater than she would have earned had she remained uninjured and continued in the Respondent’s employ (see Alcan v Jordan).
(d)It is submitted that the Appellant is entitled to an award in respect of the found incapacity following her first injury on 21 December 2002 on a continuing basis, notwithstanding the receipt of the weekly benefits as a result of the injury on 30 May 2005, even if those payments were being made for total incapacity.
(e)Relying on the authority of Ince, should the Appellant on review be found to suffer two partial incapacities, consequent from her two injuries, the Appellant submits that she is entitled to an award for weekly benefits in respect of that incapacity from her first injury. Whether those incapacities were sustained as a result of injuries in separate employment is irrelevant (see Ince 701D).
In response to these submissions the Respondent submits that it was open to the Arbitrator to determine that the Appellant was totally incapacitated beyond 30 May 2005. In all other respects the Respondent repeats the submissions in respect of Ground 2.
The entitlement of workers to receive concurrent entitlements to workers compensation benefits, arising from separate injuries leading to separate incapacities, has been the subject of judicial consideration both here and in the United Kingdom since at least the early 1920’s.
The Scottish Courts held that where partial incapacity occurred as a result of an accident, followed by another accident leading to total incapacity, the entitlement to compensation cannot be more than if there was a total incapacity from just one accident (see M’Kinstrey v Auchinlean Coal Co Limited [1920] SC 75 (‘M’Kinstrey’)).
In Thompson v London & North Eastern Railway Brigaded RY Co. [1935] 2 KB (‘Thompson’) the reverse of M’Kinstrey occurred. In this case it was found that the worker was entitled to retain his entitlement to benefits for partial incapacity in addition to the benefits for total incapacity.
In reviewing the Scottish and British authorities, the House of Lords in Doudie followed the approach in Thompson and overruled M’Kinstrey.
In Doudie the Court considered factual circumstances identical to those in issue with this case. In that matter, a workman met with an accident arising out of the course of his employment, which resulted in a partial incapacity for employment. He was reemployed by the same employer and received 15 shillings a week as compensation for the partial incapacity. Subsequently, the workman met with a second accident arising out of the course of his employment and was totally incapacitated for some weeks. He contended that for this period he was entitled to receive not only the sum of 30 shillings a week for total incapacity in respect of the second accident, but also the 15 shillings a week to which he was entitled in respect of the first accident. The Court found that the worker was entitled to the compensation payable in respect of the first accident in addition to the 30 shillings for the total incapacity in respect of the second accident. The provision in the English legislation limited compensation for total incapacity resulting from any one accident, it did not provide that a worker should never at any time receive more than 30 shillings a week under the Act however often he may have sustained injuries by accidents.
In Ince, Clark JA, with whom Hope and Maher JAA agreed, reviewed the relevant case law on this issue commencing with a review of Doudie. The Court of Appeal held that where an employee is partially incapacitated in the course of his employment and thereafter suffers another partial incapacity when employed by the same or another employer, each state of partial incapacity affects a separate continuing award of compensation. Even in the event that the latter incapacity is deemed total incapacity under section 11(2) of the 1926 Act, it does not cancel out the earlier award for partial incapacity under section 11(1) of the 1926 Act. Clark JA noted that the principle for which Doudie stands has been continuously applied in this State, see: Shaw v Darling Island Stevedoring & Lighterage Co. Limited [1957] WCR 134 (‘Shaw’); Beaton v Yips & Co [1966] WCR 78 (‘Beaton’); Gatti v Penfolds Wines Pty Limited [1969] WCR 197 (‘Gatti’); and Holmes v Civil and Civic Pty Limited [1970] 72 SR (NSW) 583 (‘Holmes’).
In Gatti, Ferrai J entered an award for a worker in respect of a period of partial incapacity at $37.00 followed by an award for total incapacity of $39.00. He did so in circumstances where it was agreed that the worker’s wages had at no relevant time been more than $55.00 per week. Ferrai J, speaking in terms of the provisions of the 1926 Act, described the outcome (at 200) as an “anomaly”.
The Court of Appeal in Holmes dealt with a slightly different factual scenario. In that case, the worker had received injuries in the course of his employment with two different employers. The injuries sustained in the course of his employment with the first employer led to a partial incapacity, whilst his employment with the second employer also resulted in a partial incapacity. In holding that where a worker suffers successive injuries in the course of work with different employers, the right to compensation for the earlier injury cannot be defeated or diminished by the fact of payment of compensation for a later injury, Moffit JA noted at 595D:
“The point is that when compensation for the first injury comes to be determined, the right to such compensation cannot be defeated or diminished by the mere fact of payment of compensation for a later injury. If a worker applies for compensation for the second injury, the evidence may establish that by reason of the first injury the worker is entitled to no compensation, or less compensation, in respect of the second injury. Upon the hearing of a claim for compensation in respect of the first injury, evidence concerning the later injury may be admissible if it tends to throw light upon whether any generally demonstrated incapacity for work is in fact due to the first injury. It may be of considerable importance on the question of credit. Beyond this, however, if evidence concerning the second injury and payments made concerning it, intrude into the case, it can do no more than go to the irrelevant matter of the second employer’s liability for the compensation paid.”
The Arbitrator drew a distinction between the Applicant’s entitlement to compensation arising from two discreet partial incapacities, giving rise to separate awards under section 40(1) of the 1987 Act, with her entitlement to compensation in circumstances where she suffered a partial incapacity followed by a period of total incapacity. The Arbitrator said at paragraph 33 of his Reasons:
“I am satisfied, on the balance of probabilities, that the Applicant suffered a total incapacity from 30 May 2005 to date. As such, she is not partially incapacitated for her work related injures and therefore cannot be said to have said two discreet partial incapacities that give rise to separate awards under section 40(1) of the 1987 Act. Accordingly, the continuing payments being made by the Respondent at the full statutory rate for a worker with no dependents, pursuant to section 37, satisfied the entitlements for weekly benefits of compensation that flow to the Applicant for total incapacity under the Workers Compensation Act 1987. I will order that the section 37 payments continued to be paid by the Respondent at the statutory rate for a worker with no dependents, from 31 May 2005 to date and continuing. The Respondent is to give credit for any payments of weekly compensation made under section 37 of the Act for that period. Such payments are to continue in accordance with the provisions of the Workers Compensation Act 1987.”
In taking this approach, in my view, the Arbitrator indicated an acceptance of the Applicant’s entitlement to concurrent awards of compensation provided that the incapacities concerned were partial incapacities. The Arbitrator, in my view, wrongly directed himself that as a matter of law where there is a period of partial incapacity followed by a period of total incapacity the compensation payments for the total incapacity under section 37 subsumed or exhaust the prior entitlement to compensation for partial incapacity. In so doing, the Arbitrator made an error of law. Whilst that view may have had some transitory attraction, as found in Biegelmann, certainly by the time Ince was decided in 1989 the principles for which Doudie stands were re‑established as preferred law in interpreting entitlements to concurrent compensation.
I do not consider it necessary to consider whether the Arbitrator was entitled to find total incapacity following the 2005 injury. It matters not whether his findings in respect of that injury concerned a partial or total incapacity for the outcome of this appeal would be the same.
For these reasons, the third ground of appeal is upheld and the Arbitrator’s decision is revoked.
It follows that the Appellant worker is entitled to an award of compensation for partial incapacity arising out of the injuries sustained by her during the course of her employment in 2002, in addition to any entitlement to compensation, whether partial or total, arising out of the injuries sustained by her in the course of her employment in 2005, for which she is currently receiving compensation payments. As previously noted at paragraph [61] above, the maximum entitlement is subject to the fact that a worker is not entitled to compensation that exceeds his average weekly earning if uninjured (Alcan v Jordon at 482).
I am not in a position to redetermine the quantum of the entitlement to weekly compensation payments for partial incapacity resulting from the injury in 2002. In those circumstances, the matter should be remitted to a different Arbitrator to determine the worker’s entitlements in accordance with these reasons.
DECISION
The Arbitrator’s determination of 19 February 2008 is revoked and the following orders are made:
1)Matter remitted to a different Arbitrator for redetermination in accordance with the reasons in this decision.
2)The costs of the first arbitration are to follow the outcome of the second arbitration.
COSTS
The Respondent employer is to pay the Appellant worker’s costs of the Appeal.
Judge Greg Keating
President
19 June 2008
I, MELANIE CURTIN CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF HIS HONOUR JUDGE GREG KEATING, PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
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