NSW Police Service v Tillitzki
[2006] NSWWCCPD 65
•26 April 2006
WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:NSW Police Service v Tillitzki [2006] NSWWCCPD 65
APPELLANT: NSW Police Service
RESPONDENT: Ray Arthur Tillitzki
INSURER:NSW Treasury Managed Fund (GIO General Limited)
FILE NUMBER: WCC20400-04
DATE OF ARBITRATOR’S DECISION: 8 April 2005
DATE OF APPEAL DECISION: 26 April 2006
SUBJECT MATTER OF DECISION: Proper application of section 40 Workers Compensation Act 1987; adequacy (sufficiency) of reasons for decision.
PRESIDENTIAL MEMBER: Acting Deputy President Kevin O’Grady
HEARING:On the papers
REPRESENTATION: Appellant: Phillips Fox
Respondent: Harris Wheeler
ORDERS MADE ON APPEAL: The decision of the Arbitrator dated 8 April 2005 is confirmed.
The Appellant is to pay the Respondent’s costs of the Appeal.
BACKGROUND TO THE APPEAL
On 29 April 2005 the NSW Police Service (‘the Appellant ’) sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Workers Compensation Commission (‘the Commission’) against a decision, dated 8 April 2005.
The Respondent to the Appeal is Ray Arthur Tillitzki (‘the Respondent ’).
The Respondent served as a Police Officer with the Appellant during two discrete periods namely between 1984 and 1989 and between 1994 and 2002. The Respondent was discharged from his service as a Police Officer which took effect on 14 February 2002 following a medical examination and assessment conducted by HealthQuest [Dr A Casolin NSW Government Medical Officer] which took place on 19 November 2001 and was the subject of a report dated 6 December 2001. That report was before the Arbitrator. In that report Dr Casolin expressed the view that the Respondent was incapable of discharging the duties of his office by reason of infirmity being chronic post traumatic stress disorder. Dr Casolin expressed the view that notwithstanding that disorder the Respondent “should be expected to be or to become capable of appropriate remunerative work outside the NSW Police Service, so it [sic] is not classified as totally and permanently invalided”.
Since termination of his service with the Appellant the Respondent has derived income from the conduct of the business of an electrical contractor [in respect of which he was qualified prior to his police service] as well as receipt of certain social security benefits.
The Respondent filed an Application to Resolve a Dispute with the Commission in December 2004 seeking orders regarding his entitlement to weekly payments since 15 February 2002 and medical expenses by reason of his alleged incapacity following injury in the course of his service and need for reasonable medical treatment. The “date of injury” referred to in the Application stated “Various dates from the commencement of the Applicant’s employment with the NSW Police Service”, and the “injury description” in that document was – “Chronic post traumatic stress disorder, anxiety and depression”. Liability for such payments of compensation benefits was denied by the Appellant.
THE DECISION UNDER REVIEW
The ‘Certificate of Determination’, dated 8 April 2005 records the Arbitrator’s orders as follows:
“1.Respondent is to pay the Applicant weekly payments of compensation pursuant to section 40 of the Workers Compensation Act as follows;
a. 15.02.02 to 31.03.02 at the rate of $581.00 per week
b. 01.04.02 to 30.09.02 at the rate of $591.00 per week
c. 01.10.02 to 31.03.03 at the rate of $599.70 per week
d. 01.04.03 to 30.09.03 at the rate of $609.90 per week
e. 01.10.03 to 31.03.04 at the rate of $622.20 per week
f. 01.04.04 to 30.09.04 at the rate of $633.50 per week
g. 01.10.04 to 31.01.05 at the rate of $645.10 per week
h. 01.02.05 to 31.03.05 at the rate of $558.40 per week
i. 01.04.05 to 08.04.05 at the rate of $567.30 per week, such payments are to continue in accordance with the provisions of the Act.
2.Respondent is to pay the Applicant’s section 60 expenses upon production of accounts and/or receipts.
3.Respondent is to pay the Applicant’s costs as agreed or assessed.”
The Arbitrator’s reasons for the orders set out above were given orally at the Conciliation/Arbitration Hearing held on 8 April 2005.
ISSUES IN DISPUTE
The issues in dispute in the appeal are:
(i)Whether the Arbitrator gave adequate/sufficient reasons for the orders made at the Hearing.
(ii)Whether the Arbitrator committed error in the manner of his application of section 40 of the Workers Compensation Act 1987 (‘the 1987 Act’) in arriving at his calculations of entitlement to weekly compensation.
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 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.
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 amount of compensation at issue on the appeal exceeds the sum of $5,000.00 and is at least 20 per cent of the amount awarded in the decision appealed against and thereby the subject matter of the appeal meets the threshold requirements of section 352(2) of the 1998 Act which must be met before a grant of leave to appeal may be made by the Commission.
The appeal was lodged within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act.
The requirements of sections 352(2) and (4) having been satisfied and having regard to the subject matter of the appeal and the arguments raised I order that leave be granted to the Appellant to appeal to the Commission.
EVIDENCE AND SUBMISSIONS
The documentary evidence before the Arbitrator comprised the following:
(i)Those documents which were attached to the original Application to Resolve a Dispute. In addition to that material the Respondent was permitted to rely upon material enclosed with correspondence dated 3 February 2005 addressed to the Commission. Also before the Arbitrator was a Wages Schedule prepared by the Respondent bearing date 6 April 2005.
(ii)Documents annexed to the Appellant’s Application to Admit Late Documents filed 22 March 2005 were before the Arbitrator as was the report of Dr Vickery dated 2 March 2005.
In addition to the documentary evidence referred to in paragraph 15 above the Arbitrator permitted the parties to adduce the following further evidence at the Hearing:
(i)Oral evidence in chief and in cross-examination was given by the Respondent.
(ii)In the course of cross-examination the Appellant’s Counsel was permitted to tender the Respondent’s financial records being taxation returns for the years 2002, 2003 and 2004.
(iii)In addition to the abovementioned material the Arbitrator also had before him what may be described as an “explanation” of the basis upon which the Respondent’s Wages Schedule was prepared. [See Transcript pages 3, 4, 5 and 6.] That explanation was given by the Respondent’s Solicitor Mr Cardillo with the consent of the Appellant’s representative at the hearing . Whilst there is no express statement by the Arbitrator in his Reasons it may be observed that the Arbitrator in permitting the “explanation” was conducting the proceedings in accordance with the provisions of the 1998 Act in particular section 354(2) which provides:
“(2) The Commission is not bound by the rules of evidence but may inform itself on any matter in such manner as the Commission thinks appropriate and as the proper consideration of the matter before the Commission permits.”
Much of the documentary evidence referred to above addressed the medical issues raised on the facts of the present case. It was the Respondent’s allegation that, as a result of his experience in the course of his employment of a series of horrific incidents involving death by accident and suicide, he had developed a disability diagnosed as a post traumatic stress disorder, that such disorder constituted an injury in terms of the 1987 Act and that incapacity flowed from such injury and persisted to the date of the Hearing. The issue of “injury” was determined by the Arbitrator in the Respondent’s favour and this Appeal does not raise any ground seeking to disturb that finding.
The Appellant in its Application [Appeal Against Decision of Arbitrator] submits that the Arbitrator erred in the following respects:
(i)by failing to give adequate reasons (“reasons”); and
(ii)the manner in which the provisions of section 40 were applied to the present facts (“application of section 40”).
The Appellant’s submissions in support of the matters enumerated above are limited to an attack on the reasoning processes revealed in the Arbitrator’s decision regarding the proper adjudication of the parties’ rights having regard to the provisions of section 40 of the 1987 Act. With respect to the “reasons” ground the Appellant cites the decision of the NSW Court of Appeal in Department of Corrective Services v Smith (CA 40341/97 [1998] NSWSC 211 27 May 1998, unreported) (‘Smith’). The Appellant extracts from Smith the directions enunciated by the Court of Appeal with respect to the steps required to be taken by a decision maker when the provisions of section 40 of the Act are applied. The thrust of the submission under this ground is that the Arbitrator failed to sufficiently state reasons for the manner in which he calculated the sum required by section 40(2)(b). The Appellant challenges the Arbitrator’s conclusion that the Respondent’s “ability to earn” in terms of section 40(2)(b) is to be determined having regard to the relevant State Award by reason of his failure to give “sufficient reasons for his determination in this regard” [see paragraph 4 of Appellant’s Statement in Support of Appeal].
With respect to the ground “application of section 40” the Appellant challenges the factual conclusions of the Arbitrator upon the basis of inconsistency [see paragraph 9 of Statement in Support of Appeal].
The medical evidence before the Arbitrator which is pertinent to the matters raised on this appeal include the reports of Dr Butler dated 13 October 2004 and Dr Lambeth of 16 September 2004. Each of those practitioners concluded that the Respondent suffered from chronic post traumatic stress disorder and was incapable of work as a Police Officer and was partially incapacitated for work outside the Police Service. Dr Lumley in his report of 19 November 2001 and Dr Casolin in his report of 6 December 2001 both diagnosed chronic post traumatic stress disorder and expressed a view that the Respondent was unfit to continue work as a Police Officer.
The report of Dr White dated 26 February 2001 which was adduced by the Appellant concluded that:
“Although Senior Constable Tillitzki may suffer from either an alcohol induced psychiatric disorder or mild co-morbid anxiety and depression, neither of these conditions can be reasonably attributed to his employment with the NSW Police Service and both are treatable.”
Dr Vickery, in his report dated of 2 March 2005 was of the view that the diagnosed condition of PTSD associated with his employment with the Police Service “resolved with treatment”.
As noted above the dispute as to diagnosis and injury was, on the medical evidence, determined in the Respondent’s favour by the Arbitrator.
The Wages Schedule relied upon by the Respondent dated 6 April 2005 [which was accepted into evidence by the Arbitrator in substitution for the Wages Schedule included in the Respondent’s original Application] and the explanation by the Respondent’s Solicitor Mr Cardillo at the hearing contained a column purporting that during the period of the claim the Respondent received nil by way of actual earnings. Another column is headed “Comparable Earnings” which contain details of the average weekly earnings of a “comparable employee” one Senior Constable McMichael. Another column sets out the relevant Award [Electrician’s (State) Award Electrical Fitter/Mechanic]. Particulars of this Award were included having regard to the evidence that the Respondent was qualified as an Electrical Fitter/Mechanic and had at all relevant times conducted a business as an Electrical Contractor.
The Respondent’s taxation returns which were before the Arbitrator detailed the gross takings of the Respondent’s business, the permissible deductions and revealed that in the year ending June 2002 the business suffered a loss of $8,692.00, in the year ending June 2003 the loss was $1,813.00 and in the year ending June 2004 the Respondent’s business had a profit of $4,435.00. It can be seen that, in respect of the year ending June 2004, the taxation return contradicts the detail contained in the Respondent’s Wage Schedule as to the Respondent’s actual earnings.
The Appellant’s documentary evidence before the Arbitrator included what was described by the Arbitrator as “the section 40 assessment” [see page 1 of Transcript line 30]. That document was compiled by an Occupational Therapist Mr Clark in conjunction with a Psychologist Bronwyn Bosilla and was dated 18 March 2005. The report addressed the question of the Respondent’s capacity for work and concluded that the Respondent demonstrated ability that would be consistent with “medium to heavy work” [as defined in the report] and, significantly, outlined “appropriate job options” for the Respondent. A number of occupations were particularised in the report and relevant remuneration of those occupations was also noted. The first appropriate job option nominated in the report was that as an Electrician and the report cited the same industrial Award relied upon by the Respondent in the Wage Schedule noted above. It was also stated by the authors of the report that an appropriate job option for the Respondent was that of a Stock and Purchasing Clerk, the earnings for which work exceeded the award rate of an Electrical Fitter.
DISCUSSION AND FINDINGS
Section 352(5) of the 1998 Act provides:
“(5)An appeal under this section is to be by way of review of the decision appealed against.”
The nature of such “review” within the meaning of the sub-section has been considered in the past by numerous Presidential Members of the Commission [see Mayne Health Group t/as Nepean Private Hospital v Sarah Sandford [2002] NSWWCCPD 6 a decision of Deputy President Dr. Gabriel Fleming as but one example]. Such a proceeding is not an “appeal” in the strict sense nor is it a hearing de novo. As stated by Dr Fleming in the aforementioned decision:
“The ‘review’ is by way of rehearing where the powers of the Commission to confirm, revoke or substitute a new decision are exercisable only where it can be demonstrated that the original decision of the Arbitrator is affected by ‘… some legal factual or discretionary error’ [Allesh v Maunz [2000] HCA 40 (3 August 2000)].”
The Appellant submits that the Arbitrator fell into error in two respects firstly with regard to “reasons” and secondly with respect to the “application of section 40”.
Dealing firstly with the question of “reasons” the Appellant correctly cites the decision of the NSW Supreme Court, Court of Appeal in Department of Corrective Services v Smith ([1998] NSWSC 211 (27 May 1998)) (‘Smith’) as authority for the proposition that when determining entitlement under section 40 of the 1987 Act the Commission is required to take the five steps summarised in the Appellant’s submissions as follows:
(a)determination that the Plaintiff is partially incapacitated for work;
(b)calculation of the sum required by section 40(2)(a);
(c)calculation of the sum required by section 40(2)(b);
(d)deduction of the figure arrived at in (c) from the figure in (b);
(e)the determination, under section 40(1), of the amount that appears proper in the circumstances of the case.
The Appellant’s submissions with respect to this ground are limited to the Arbitrator’s reasoning and conclusions as to the calculation stated in (c) above namely section 40(2)(b) which provides:
“(b)The average weekly amount which the Worker is earning, or would be able to earn in some suitable employment, from time to time after the injury (but not exceeding $1,000.00).”
I note in passing that the last mentioned dollar amount has been the subject of indexation since passage of the Act.
The Appellant includes in its submissions a breakdown of the Respondent’s “gross business income” and “net business income”. It is to be noted that that breakdown included figures in respect of the years 2000 and 2001 which were not relevant to the claim before the Arbitrator. [See page 2 of Appellant’s Statement in Support of Appeal.]
The Appellant in its submissions [submission 4 at page 3 of Appellant’s Statement in Support of Appeal] draws the Commission’s attention to the fact that “the income generated by the Respondent’s business, both gross and net terms fails to correlate with the Electrician’s (State) Award, which is currently indexed at $565.10 gross per week”. The Appellant goes on to submit that the Arbitrator has failed to provide sufficient reasons for his determination.
The thrust of the Appellant’s submissions is that, faced with the body of economic evidence before the Arbitrator his selection of the State Award as being the appropriate measure of the Respondent’s “ability to earn” and his determination of quantum in accordance with that Award was flawed by reason of an absence of reasons for such choice.
It can be seen that whilst the heading of this ground makes reference to “adequate reasons” the Appellant ultimately submits that the Arbitrator “has failed to provide sufficient reasons for his determination …”. The distinction between “adequacy” of reasons and “sufficiency” of reasons was addressed by the NSW Court of Appeal in the matter of Haris v Bulldog’s Rugby League Club ([2006] NSWCA 53 17 March 2006 unreported)(‘Haris’). It was there stated by Santow JA [at para 121]:
“Decisions on appellate review, such as Fox v Percy (2003) 214 CLR 118, bear more on the adequacy of reasons than their sufficiency. Sufficiency of reasons is concerned with whether there is a process of reasoning sufficiently revealed to permit appellate review and detect appellable error; rather like the invocation to show one’s workings in answering a problem in maths so the source of any error is apparent. Reasons are likely to be sufficient precisely because they are explicit enough to permit the actual appellable error to be revealed …”
In the present context I am of the opinion that the Appellant’s attack upon the reasoning process of the Arbitrator is in fact an attack on the “sufficiency” of his reasons for concluding that the State Award represents the true measure of the Respondent’s ability to earn in terms of the Act.
An examination of the Arbitrator’s reasons for decision [delivered orally on the day of hearing] reveals a brief statement of reasons for the Arbitrator’s conclusion as to “ability to earn”. [See page 24 of Transcript lines 10 to 50.] Those reasons include the Arbitrator’s view that the Respondent’s “present employment is totally appropriate in terms of those disabilities …”. The Arbitrator accepted that “essentially where he is now is really the best that he can do”. The Arbitrator also concluded that “it would be difficult to find an employer that would tolerate the Applicant coming and going as he felt on totally unpredictable times because of unpredictable events that affect his ability to work a fulltime week.” The Arbitrator accepted the Respondent’s evidence “that working a fulltime week is something that he can do on occasions but just is unable to maintain on a consistent basis because of the effects of the post traumatic stress disorder.”
In stating his reasons the Arbitrator correctly, in my view, had regard to “the actual worth that the Applicant is contributing to his business”. [This matter of principle is addressed when the second ground of appeal is considered hereafter.]
The Arbitrator’s reasons for rejection of the Appellant’s submission as to the appropriate determination of the question of “ability to earn” appears at lines 40 to 50 of page 24 of the Transcript. That submission at the hearing was that “a true reflection of his work for the business would be something in the vicinity of $1,000.00 a week.” The Arbitrator stated at line 45 page 24 of the Transcript:
“… There is nothing in the tax returns themselves or any other extrinsic material that persuades me that the actual minimal earnings after deductions isn’t really the reality of the situation and, accordingly I believe, as I have indicated, Mr Cardillo’s submission that the Electrician’s (State) Award is an appropriate gauge of the value of this man’s activity to his business.”
As was stated by Meagher JA in Beale v GIO of NSW (1997) 48 NSWLR 430 at 443 “reasons need not necessarily be lengthy or elaborate” but “relate to the function to be served by the giving of reasons”. When needing to refer to relevant evidence “there is no need to refer to [it] in detail, especially in circumstances where it is clear that the evidence has been considered”. [This line of reasoning was cited by Santow JA in Haris.]
I am of the opinion, notwithstanding the brevity of the reasons stated and, to an extent, the inexactitude of the language used, the Arbitrator has discharged his duty to sufficiently state reasons for the conclusion of fact which is the subject of this ground of the appeal.
The second ground of appeal namely “application of section 40” is addressed by the Appellant’s submissions numbers 5 to 11 inclusive forming part of its Statement in Support of Appeal. Those submissions include a narration of the provisions of section 40(2) of the Act, a summary of the Respondent’s gross business income in respect of the years 2000 to 2004 inclusive, a notation [submission 7] that the Respondent “has been running a business which generates in excess of $1,000.00 gross per week” and despite which fact “the Arbitrator determined that the Electrician’s (State) Award ($565.10 gross per week) is an appropriate gauge of this man’s activity to his business”. The submissions proceed to extract evidence from the Transcript as to the Respondent’s duties within the business. [It is noted that the series of questions was in fact put to the Respondent by the Appellant’s Counsel rather than by the Arbitrator as is noted in the submission.] Submission numbered 9 asserts that there is a factual inconsistency demonstrated by the determination “that the gauge of the Applicant’s value to his business is to be assessed in relation to the Electrician’s (State) Award rather than the actual income generated by the business …”.
The thrust of the submissions in support of this ground of appeal is that the Arbitrator erred with respect to the manner in which section 40 of the 1987 Act is to be applied to the relevant facts as well as an assertion that the factual conclusion [as to the Worker’s “ability to earn”] was “factually inconsistent”.
With regard to the assertion that the provisions of section 40 of the Act have been erroneously applied it becomes necessary to examine the reasons for decision of the Arbitrator to determine whether he has complied with his obligation to adhere to the steps enunciated in the various authorities and which are conveniently stated by Stein JA in the matter of Smith. His Honour at page 4 of the printed report annexed to the Appellant’s submissions said:
“The steps required in an application under section 40 may be summarised in the following way:
(a) determination that the Plaintiff is partially incapacitated for work;
(b) calculation of the sum required by section 40(2)(a);
(c) calculation of the sum required by section 40(2)(b);
(d) deduction of the figure arrived at in (c) from the figure in (b);
(e) the determination under section 40(1), of the amount that appears proper in the circumstances of the case.”
As to step (a), I make the general observation that the lack of precision of the Arbitrator’s language in the course of his reasons for decision does not assist in determining compliance or otherwise with the requirements of the statute. Notwithstanding that imprecision it is clear, as I have observed in relation to the first ground of this appeal, that the reasoning process of the Arbitrator is discernable. It is clear that the Arbitrator, in his determination of the question of incapacity, accepted the opinion of Dr Vickery as expressed in his report of 2 March 2005 as quoted in the Arbitrator’s reasons at line 45 of page 23 of the Transcript. It is implicit from that acceptance and the Arbitrator’s discussion in relation to the determination of HealthQuest (Dr Casolin) that the Arbitrator concluded as a matter of fact that the Respondent was partially incapacitated for work. That being so the requirements of step (a) have been met.
As to step (b) namely a determination of “probable earnings” had the Worker continued to be employed in the same or some comparable employment the Arbitrator stated:
“Although there was no agreement in relation to the comparable earnings, Mr Newton didn’t address me on that, and I, in any event, am persuaded in the light of the matters as they unfolded by essentially, I suppose, Mr Cardillo’s submission [sic] that were made before his client gave evidence that those earnings, being Constable McMichael’s earnings, it seems to me transparently obtained, are the appropriate comparable earnings.” [Transcript page 24 line 55 and page 25 lines 1 to 5.]
It can be seen that the Arbitrator has used the term “comparable earnings”. That term also appears in column three of the Respondent’s final Wages Schedule dated 6 April 2005. In practice before the Commission the term “comparable employee” is regularly used to denote the identity of an employee whose earnings demonstrate the probable earnings of the Worker but for injury. [In terms of section 40(2)(a).] It is plain that the Arbitrator in the present matter has accepted that the earnings of Senior Constable McMichael represent a fair measure of the probable earnings and has so determined in accordance with step (b) as required by section 40(2)(a) of the 1987 Act.
Step (c) requires the decision maker to determine that amount which the Worker is earning or would be able to earn in some suitable employment. In determining this question of fact the Arbitrator concluded, following a summary of the Appellant’s submissions on the question:
“That the Electrician’s (State) Award is an appropriate gauge of the value of this man’s activity to his business.” [Transcript page 24 line 50.]
The question arises as to whether the statutory requirements [specifically step (c)] have been met by the Arbitrator’s evaluation of “ability to earn” by addressing the question “of the value of this man’s activity to his business”.
It is plain on a reading of the Transcript that the Appellant’s representative at the hearing accepted that the “value” of the Respondent’s labours to his business was a relevant factor and an appropriate consideration when determining the question of “ability to earn”. [Transcript page 12 line 25, page 22 line 55 and page 23 lines 1 to 5.]
The question as to whether the Arbitrator’s approach in the present matter was correct has been addressed by the High Court of Australia with respect to the legislative predecessor of section 40 [namely section 11(1) of the Workers Compensation Act 1926 (‘the 1926 Act’)]. In the matter of Cage Developments Pty. Ltd. v Schubert (1983) 151 CLR 584 (‘Cage’) the Full Court delivered a Joint Judgment with respect to the proper construction and application of the aforementioned section. The facts of that matter were similar to the present case and the issue was whether the Commission [Westcott J] had correctly determined the ability to earn of the Worker in the proceedings at first instance. In Cage the Worker was incapacitated but capable of working in a business partnership with his wife. The High Court [at page 586] noted:
“His Honour assessed compensation on the basis that the relevant ‘average weekly amount’ was to be ascertained, for the purposes of section 11(1)(a), by considering what services the Worker actually performed in the business and what those services would have been worth if, instead of serving himself, he had been serving an employer or, put in another way, what he would have had to pay another for those services …”
The Court concluded [at 587]:
“In a context where it is not suggested that the Respondent would have been more gainfully or suitably employed elsewhere, his Honour was entitled to adopt the approach which he did and determine that average weekly amount by reference to the value of the work which the Respondent was performing for the partnership during the relevant period of partial incapacity …”
Having regard to the statement of principle contained in Cage and the manner in which the Arbitrator in the present matter has approached the requirements of section 40(2)(b) I am of the opinion that there has been compliance with the requirements of step (c) noted above.
The Arbitrator’s order with respect to weekly compensation was founded upon an acceptance of the contents of the Respondent’s Schedule of Wages. That acceptance included the arithmetical determinations contained in the column headed “Difference”. The quantum of the weekly amounts from time to time were qualified , at least from 1 April 2003, by reason of the fact that the maximum statutory rate payable to the respondent was less than the arithmetic difference. I am of the opinion that, in so doing, the Arbitrator has complied with the requirement of step (d) noted above.
Step (e) requires the decision maker to determine, under section 40(1) of the Act the amount that “appears proper in the circumstances of the case”. A Worker’s prima facie entitlement to an award of weekly compensation pursuant to section 40 of the Act is the arithmetic difference determined in step (d). Such entitlement is subject to the exercise, in an appropriate case, of a discretion to vary the arithmetic difference having regard to the “circumstances of the case”. In the present case the Arbitrator concluded:
“So, accordingly, there will be an award for the Applicant for weekly payments of compensation in respect of the periods and amounts as set out in the Applicant’s Wages Schedule of 6 April 2005.” [Transcript page 24 lines 5 to 10.]
It can be seen that the Arbitrator concluded that he did not consider that any discount was appropriate under section 40(1) of the Act.
It is significant to note that during the course of submissions before the Arbitrator the subject of “discretion” in the context of section 40 of the Act was touched upon. [See Transcript page 12 line 35 and page 23 lines 5 to 12.] Those submissions, put on behalf of the Appellant, addressed the general discretion under section 40 but were limited to the question of “ability to earn” which is addressed in step (c) above. There was no circumstance raised by the Appellant which would found an argument that the discretion contained in section 40(1) of the Act should be invoked. In the circumstances, notwithstanding again the brevity and imprecision of the Arbitrator’s language, I am of the opinion that the Arbitrator’s conclusion [implied from his reasons], that no further discounting was appropriate and that the arithmetic amount was proper in the circumstances, constituted compliance with step (e) stated above.
As noted above the Appellant submits that the Arbitrator erred when “arriving at his calculations he failed to have regard in relation to the Respondent’s actual average weekly earnings”. This submission appears to be a separate and distinct argument to that founded upon the proper application of section 40 of the Act. I am of the opinion that this submission is without merit. The term “average weekly earnings” has a statutory meaning and is addressed in section 37 and section 43 of the Act. That concept concerns the earnings of a Worker prior to injury and is relevant to the quantification of compensation entitlement. It is clear that what was intended by the Appellant was an argument that the Arbitrator erred in applying section 40 of the Act by failing to have regard to the gross business income which is tabulated at page 3 of the Appellant’s submissions.
I have dealt with the question as to the proper determination of “ability to earn” earlier in these reasons. The Arbitrator dismissed, in my view properly, the relevance of the “gross business income” having regard to the contents of the taxation returns which were before him. I am fortified in my view that the Arbitrator correctly dismissed those figures as being relevant to the questions before him by a reading of the Respondent’s evidence during the course of cross-examination where it is revealed that those “gross business income” figures include substantial sums charged by the business for “parts”. [Transcript page 17 lines 50 to 60 and page 18 lines 1 to 20.] The Arbitrator’s preference to apply the test as enunciated in Cage cannot, in my view, be criticised. For these reasons I am of the opinion that this ground, as supported by submissions numbered 5 to 11 inclusive, must fail.
DECISION
The appeal is unsuccessful. The decision of the Arbitrator dated 8 April 2005 is confirmed.
COSTS
The Appellant is to pay the Respondent’s costs of the appeal as agreed or assessed.
Kevin O’Grady
Acting Deputy President
26 April 2006
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF KEVIN O’GRADY, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
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