Olympic Fencing (NSW) Pty Limited v Crossley - [2007] NSWWCCPD 121

WORKERS COMPENSATION COMMISSION

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

CITATION:Olympic Fencing (NSW) Pty Limited v Crossley [2007] NSWWCCPD 121
APPELLANT:  Olympic Fencing (NSW) Pty Limited
RESPONDENT:  Peter William Crossley
INSURER:QBE Workers Compensation (NSW) Limited
FILE NUMBER:  WCC7323-06
DATE OF ARBITRATOR’S DECISION:          27 October 2006
DATE OF APPEAL DECISION:  24 May 2007
SUBJECT MATTER OF DECISION:                Leave to appeal – section 352(2)(a) of the Workplace Injury Management & Workers Compensation Act 1998 where general order for section 60 expenses; pleadings; power to make a ‘general order’ for section 60 expenses; failure to make necessary findings of fact; failure to give adequate reasons.
PRESIDENTIAL MEMBER:  Acting Deputy President Michael Snell
HEARING:On the papers
REPRESENTATION:  Appellant: Moray & Agnew
Respondent: Abbott Pardy & Jenkins

ORDERS MADE ON APPEAL: The decision of the Arbitrator dated 30 October 2006 is revoked, and the matter is remitted to another Arbitrator for determination afresh in accordance with these reasons.

Costs of the arbitration hearing of 27 October 2006 should follow the event, when the matter is determined.
No order as to costs of the Appeal.

BACKGROUND TO THE APPEAL

On 24 November 2006 Olympic Fencing (NSW) Pty Limited (‘the Appellant Employer’) sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Workers Compensation Commission (‘the Commission’) against a decision, dated 27 October 2006.

The Respondent to the Appeal is Peter William Crossley (‘the Respondent Worker’).

The Respondent Worker was born on 21 November 1955, and resides in Glen Innes. He is said to have a dependant wife. The claim arises from injuries allegedly suffered by the Respondent Worker on 7 October 2004, whilst he was carrying out work involving the construction of fencing in the vicinity of a highway upgrade at Nabiac. It is claimed he was butted by a bull whilst working in a paddock on the Taree Road. The claim was pleaded in the Application to Resolve a Dispute registered 11 May 2006 (‘the Application’) as one for weekly payments of compensation from 7 October 2004, on an ongoing basis, and lump sum compensation in respect of 15% whole person impairment, together with associated moneys for pain and suffering. The printed section of the Application has left in it a claim for “medical, hospital or related expenses”, although that section of the document was not otherwise filled in. The form instructs those completing it to use the blank boxes under that heading “only for medical disputes over $5000”.

The Respondent Worker’s claim was denied outright by the Appellant Employer, its insurer advising the Respondent Worker in a letter of 21 February 2005 that “your employment circumstances indicate that you do not fit within the legal definition of a ‘worker’”. Prior to the Application being lodged the Respondent Worker’s solicitors wrote to the Appellant Employer and its insurer on 22 June 2005, formally claiming weekly and lump sum compensation, together with “expenses for medical treatment and associated expenses pursuant to a Health Insurance Commission Notice of Charge and other items to be particularised”. This claim was denied by the Appellant Employer fairly robustly, in a letter dated 27 June 2005.

The Reply lodged on behalf of the Appellant Employer, in response to the Application, put in issue the question of whether the Respondent Worker was a ‘worker’ or a ‘deemed worker’. It also pleaded multiple other defences, including ‘injury’, incapacity, substantial contributing factor, causation, earnings, dependency, the existence of whole person impairment, and entitlement to payment of treatment expenses pursuant to section 60 of the Workers Compensation Act 1987 (‘the 1987 Act’). Evidence relied upon by the Appellant Employer included reports of Dr Blue dated 7 July 2006 and 25 July 2006. In the earlier of these, the doctor opined the Respondent Worker injured his left knee in the relevant incident, and the incident also could have aggravated pre-existing degenerative change in the Respondent Worker’s back. Dr Blue stated the effects of the aggravation of the Respondent Worker’s back condition would have ceased within three months of the incident. In the second of these reports, Dr Blue commented on clinical notes forwarded to him, which suggested a possible alternative cause of the left knee complaints. Based upon this material, Dr Blue expressed the view the Respondent Worker’s left knee problems were unrelated to the incident of 7 October 2004.

The threshold question of whether the Respondent Worker was a ‘worker’ or a ‘deemed worker’ was dealt with by the Arbitrator as a preliminary issue, at a “formal hearing” held by telephone on 1 August 2006. Both parties were legally represented. The case presented by the Respondent Worker was that he was a ‘deemed worker’ pursuant to Schedule 1 clause 3 of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’). A Certificate of Determination dated 17 August 2006 records a decision by the Arbitrator, that the Respondent Worker was a ‘deemed worker’ for the purposes of the legislation. There were associated orders for the lodgement by the Respondent Worker of further documentation in support of his weekly payments claim, the appointment of a further teleconference to deal with the claims for weekly compensation and medical expenses, and referral of the lump sum claim for assessment by an approved medical specialist. This decision of 17 August 2006 was not the subject of appeal.

The Respondent Worker was examined by an approved medical specialist, Dr Murray Hyde-Page, on 26 September 2006. A medical assessment certificate issued on 11 October 2006 (‘the MAC’), in which the Respondent Worker was assessed as having nil per cent whole person impairment resulting from the alleged injury. The MAC is conclusively presumed to be correct as regards the degree of permanent impairment resulting from an injury, pursuant to section 326 of the 1998 Act. On 6 November 2006 the Respondent Worker lodged an appeal to the Registrar against the MAC, pursuant to section 327 of the 1998 Act.

Meanwhile, on 11 October 2006 notices were issued to the parties advising the matter had been set down for conciliation/arbitration hearing on 27 October 2006 in Armidale. On 20 October 2006 the solicitors for the Respondent Worker wrote to the Registrar, advising of their intention to appeal the MAC, submitting it would be prejudicial to the weekly payments claim of the Respondent Worker, that it proceed whilst the MAC was “under challenge”, and seeking the conciliation/arbitration hearing date be vacated. The solicitors for the Appellant Employer wrote to the Registrar on 23 October 2006 supporting the application that the date be vacated, advising they did not consider the matter “ready for arbitration”. The Workers Compensation Commission (‘the Commission’) advised the parties by facsimile dated 24 October 2006, that the Arbitrator had determined “the outstanding issues of medical expenses and weekly compensation” needed to be determined on 27 October 2006, and unless these were “resolved or discontinued the con/arb must go ahead”. Accordingly the parties’ application the date be vacated was refused.

On 26 October 2006 the Respondent Worker’s solicitors served an Application to Admit Late Documents on the Appellant Employer’s solicitors. Attached to that Application were medical certificates, copy income taxation returns of the Respondent Worker for the years 2003/04 and 2004/05, and a schedule of medical and treatment expenses totalling $6,478.71.

The conciliation/arbitration hearing was held at Armidale on 27 October 2006. Both parties were represented by counsel. The Respondent Worker sought to rely upon the income taxation returns attached to the Application to Admit Late Documents, to assist in quantifying the weekly payments claim (T1.45). The Appellant Employer submitted other material ought also be available to deal with the Respondent Worker’s probable earnings if not for injury (T3 to 5). This calculation was not necessarily straightforward, as the Respondent Worker was contracting with the Appellant Employer at the time of injury, for a limited period. The Arbitrator said:

“Look, I’m sorry, but I’m going to rule on it because I think there’s much in what (the Appellant Employer’s counsel) says. I made a Direction earlier in the previous teleconference, which was on 16 August – made a direction when I made my decision about Mr Crossley’s status as a worker and I published a direction to the effect that everything that was needed to support the claim for weekly compensation should be filed by 15 September.
Clearly that hasn’t been done but, more importantly, I don’t think the 2005 tax return is of great assistance to me without having some evidence from Mr Crossley, and it would have to be detailed evidence as to the incidence of contracts that he’s likely to have because, as I’ve already said, I can’t extrapolate from eleven weeks a full year or what is now getting close to two years’ earnings without having some idea of the pattern of work that Mr Crossley would have. I can see from the past that he’s done a number of different things and they haven’t all been in the fencing area. So, the kindest thing I can do is deal with the medical claim, as I foreshadowed earlier, and invite you to withdraw your claim for weekly benefits.” (T5)

Counsel for the Appellant Employer objected to the matter proceeding in this fashion, with the claim pursuant to section 60 being dealt with separately from the weekly claim (T6). Counsel for the Respondent Worker took instructions, and sought to withdraw the weekly claim, and proceed only with the claim for medical expenses pursuant to section 60 of the 1987 Act. He described the medical expenses, when travelling expenses were included, as involving “something in the order of $11,000 to date” (T6.50). He submitted the Respondent Worker was “entitled to success in his application on the material that is before you to an award in his favour under section 60. I’m content for it (to) be a general order.” (T7.5). The Arbitrator said “Yes, I think it should be a general order…There is the issue of that knee.” (T7.10). There were further interchanges going to costs, and whether the Appellant Employer was entitled to an award in its favour as regards any alleged injury to the left knee. Counsel for the Appellant Employer again stated his opposition to the claim pursuant to section 60 being dealt with separately to the weekly claim (T7.45). The Appellant Employer’s counsel submitted “if you were to deal with it separately for the purposes of just making a general order, then the same arguments apply on injury as I would have argued in the main case” (T8.5). The following interchange then occurred:

“ARBITRATOR: What I propose to do is to make a general order with respect to medicals –
(RESPONDENT WORKER’S COUNSEL): If the evidence is there.
ARBITRATOR: With the evidence that presently exists because it appears to me that there is no issue as to liability now. There is no doubt that there has been some incapacity.
(RESPONDENT WORKER’S COUNSEL): Yes, he certainly was in hospital for a period.
ARBITRATOR: So, no doubt, therefore, there have been some medical expenses incurred. I think it’s a matter of putting those expenses before the respondent, and the respondent can then determine – if there is to be an argument later about individual items, we can have them, but I think the bulk of the expenses should be paid as soon as possible.” (T8.20 to 8.40)

Subsequently, after a short adjournment, counsel for the Appellant Employer addressed on the opinions of Dr Blue and Dr Hyde-Page, submitting that any aggravation of the Respondent Worker’s back condition, resulting from the alleged injury, had ceased by the date of Dr Blue’s report, 7 July 2006. The Arbitrator responded “there’s much in what you’ve said but I’m not going to determine that issue at the moment because there’s also contrary medical evidence around” (T 9.45). The Arbitrator was invited by the Appellant Employer’s counsel to make an interim order for section 60 expenses up to 7 July 2006, but he declined to adopt this course.

The Certificate of Determination dated 30 October 2006 records the orders as follows:

“1. That these proceedings in so far as they relate to a claim for weekly benefits compensation be discontinued.
2. That the requirement to file a notice of discontinuance is dispensed with.

3. That the Respondent pay the applicant’s reasonable expenses under section 60 of the Workers Compensation Act 1987 on production of accounts or receipts in respect of the injury which occurred on 7 October 2004.
4. That the respondent pay the applicant’s costs as agreed or assessed.”

The Statement of Reasons attached to the Certificate of Determination, merely recites the orders, and indicates “A sound recording of the reasons given is available to the parties.” This is a reference to the transcript of the arbitration hearing, in so far as it includes reasons for the decision.

ISSUES IN DISPUTE

The grounds of appeal raised by the Appellant Employer are as follows:
(i)The Application did not plead a claim pursuant to section 60, so the orders made by the Arbitrator were for relief which was not pleaded. The Respondent Worker did not seek leave to amend the Application to include such a claim.
(ii)There is no power to make a general order pursuant to section 60 of the 1987 Act. Reference is made to the decision in Widdup v Hamilton [2006] NSWWCCPD 258 (‘Widdup’).
(iii)The general order for section 60 expenses was against the weight of the evidence.
(iv)The Arbitrator erred in permitting the Respondent Worker to persist with his claim pursuant to section 60, when it was not pleaded, and particulars of the treatment undergone by the Respondent Worker were only provided on the day prior to the arbitration hearing, depriving the Appellant Employer of sufficient opportunity to defend the claim. The grounds speak of the general order made as a ‘declaration’.
(v)The Arbitrator gave no adequate reasons for his decision.
A Notice of Opposition, filed on the Respondent Worker’s behalf, raises the following matters in opposition to the appeal:

(i)Correspondence attached to the Respondent Worker’s Application included reference to a claim pursuant to section 60.

(ii)The Reply filed on the Appellant Employer’s behalf, which specifically put in issue the question of whether the Respondent Worker had an entitlement pursuant to section 60, is inconsistent with an assertion section 60 expenses were not a part of the claim the subject of the Application.

(iii)The existence of a claim for medical expenses was specifically acknowledged in the reasons for decision of the Arbitrator when he dealt with the threshold issue of ‘worker’ (see [6] above).
(iv)The conciliation/arbitration hearing set down for 27 October 2006 was always to deal with a claim pursuant to section 60, as well as the weekly claim.

(v)Counsel for the Appellant Employer did not raise, at the arbitration hearing, any argument that a claim pursuant to section 60 did not form part of the pleadings, or was not otherwise available for determination.

(vi)The authority of Widdup is irrelevant to the orders made by the Arbitrator.

(vii)The evidence overall supported the order pursuant to section 60.

(viii)The reasons given by the Arbitrator satisfied the test in Soulemezis v Dudley Holdings Pty Limited (1987) 10 NSWLR 247 (‘Soulemezis’).

(ix)There are also submissions relevant to the granting of leave, which will be further discussed below.

Further Submissions were filed on the Appellant Employer’s behalf on 23 January 2007. These asserted further particulars had been given by the Respondent Worker of section 60 expenses, subsequent to the decision of 30 October 2006, and the expenses claimed totalled $26,856.13. The Further Submissions reiterated the argument that section 60 expenses were not pleaded in the Application, and accordingly were not properly before the Arbitrator for determination. It is said there was “a contest as to the nature and duration of any compensable back problems and the Arbitrator should have made findings with respect to these crucial issues”. It is submitted the Arbitrator “failed to make any determination of the relevant issues”.

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 both 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 lodged within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act.

Section 352(2) of the 1998 Act provides:

“The Commission is not to grant leave to appeal unless the amount of compensation at issue on the appeal is both:
(a) at least $5,000 (or such other amount as may be prescribed by the regulations), and
(b) at least 20% of the amount awarded in the decision appealed against.”

The Respondent Worker has submitted the general order for section 60 expenses was not for “a specific sum”. It is further submitted the only medical expenses particularised in the correspondence attached to the Application were in a sum of $1,282.36, and leave to rely upon particulars containing a higher figure (attached to the Application to Admit Late Documents) was not granted at the arbitration hearing. Accordingly, the section 60 order is either for an unspecified figure, or a figure of less that $5,000. In either event, it is submitted section 352(2)(a) is not satisfied, and leave to appeal should not be granted.

A general order for section 60 expenses will never be for a specific sum. It has been the practice, in other Presidential decisions, to enquire into the sums of which recovery will be sought, pursuant to such general order, for the purpose of considering whether section 352(2)(a) is satisfied. Thus, notwithstanding the non-specific nature of such a general order, where the material before the Presidential member indicated the expenses involved were less than $5,000, leave was refused: Georgandas v Qantas Flight Catering [2003] NSWWCCPD 20, Miller v Anglican Retirement Village [2003] NSWWCCPD 33. Where the material indicated expenses recoverable pursuant to the general order would exceed $5,000, section 352(2)(a) was satisfied, and leave was granted: Lilly v Tomago Aluminium Company Pty Limited [2004] NSWWCCPD 62. I propose adopting the same practice.

Although the particulars, in correspondence attached to the Application, may have revealed a sum of $1,282.36, this is not the only figure to consider in the exercise. It is submitted on the Respondent Worker’s behalf, the Arbitrator refused him leave to rely on the material attached to the Application to Admit Late Documents, including the further schedule of section 60 expenses, which totalled $6,478.71. That this occurred is in no way clear from the transcript. Rather, the Arbitrator expressed misgivings regarding whether that material, in particular the 2005 taxation return, gave him sufficient material to be satisfied regarding the Respondent Worker’s probable earnings if not for injury (see T5.25 to 5.50). I cannot see the Arbitrator granted or refused leave to rely upon that material. Indeed the Arbitrator approached the question of whether the material was sufficient to establish the weekly claim, on the assumption the 2005 taxation return was before him. The Respondent Worker’s counsel made submissions on the section 60 claim, to the effect the sum involved was “something in the order of $11,000 to date, if one includes travelling expenses” (T6.50). Counsel for the Appellant Employer did not object to this submission on the basis it was outside the particulars.

Having regard to both the sum particularised in the attachment to the Application to Admit Late Documents, and the submission on the Respondent Worker’s behalf by his counsel regarding quantum of the claim, I am satisfied the sum involved exceeds $5,000, and section 352(2)(a) is satisfied. The Appellant Employer challenges the award pursuant to section 60 in its entirety on this appeal, and section 352(2)(b) is satisfied.

I grant leave to appeal.

DISCUSSION AND FINDINGS

The Pleadings Argument

The Appellant Employer argues the Arbitrator erred in making the order for section 60 expenses, either because a claim on this basis was not pleaded at all, or alternatively if pleaded, particulars of specific items comprising the claim were given very late, affording the Appellant Employer no opportunity to meet the claim.

The argument that a claim pursuant to section 60 was not an issue between the parties, it not having been pleaded, in my view has no merit. As has been submitted by the Respondent Worker, the issue of payment of treatment expenses was raised between the parties at an early stage. The letter from the Respondent Worker’s solicitors to the Respondent Employer (also copied to the insurer) dated 14 February 2005, claims various specific sums for medical treatment, and also encloses copies of receipts. The further letter from those solicitors to the Respondent Employer and its insurer dated 22 June 2005, making a claim, confirms a claim is made for medical treatment and associated expenses. Clearly this aspect formed part of the claim made by the Respondent Worker, and refused by the Appellant Employer. Whilst the section of the Application devoted to claims for “Medical, hospital or related expenses” is left blank, this is in circumstances where the notes to the document instruct those completing it to use that part “only for medical disputes over $5,000”. The quantum of the claim pursuant to section 60, particularised up to that point in time, was less than $5,000. It is unsurprising this part of the document was left blank, and completing the document in this fashion was not indicative of the absence of a claim pursuant to section 60.

The conduct of the matter thereafter is consistent with there being a claim pursuant to section 60. The Reply filed on behalf of the Appellant Employer put in issue the Respondent Worker’s entitlement pursuant to section 60. The Arbitrator’s reasons for decision on the threshold ‘worker’ point, described the Respondent Worker’s claim as including one for medical expenses (at [5]). The decision recorded in those reasons included an order the matter be stood over to a further teleconference “with respect to weekly compensation and medical expenses” (at [30]). On the arbitration hearing counsel for the Appellant Employer made clear his opposition to the weekly claim and section 60 claim being severed. But he did not indicate any objection to a general order pursuant to section 60 being ventilated, on the basis it was not part of the pleadings. Nor would one have expected him to do so, it is clear an entitlement pursuant to section 60 had been an issue between the parties from when the claim was initially made by the Respondent Worker’s solicitors.

The role of pleadings in proceedings in the Commission has been discussed in a number of Presidential decisions. It has been said that in “the informal, less technical environment of the Commission it is not necessary or desirable to rely upon strict pleadings to define the issues between the parties.” (Far West Area Health Service v. Radford[2003] NSWWCCPD 10 (Radford’) at [24]). However it is necessary that a party have notice of the case
against it, and an opportunity to respond (Radford at [34]). Looking at the dealings between the parties, it is clear a claim by the Respondent Worker pursuant to section 60 was always part of the claim the Appellant Employer was to meet.

A different point is taken by the Appellant Employer as regards the late particulars of the section 60 claim, contained in the Application to Admit Late Documents served on 26 October 2006, one day prior to the arbitration hearing. If the Arbitrator had permitted the Respondent Worker to agitate his entitlement to specific items of treatment claimed at that late stage, and made an order for the payment of such specific costs, then (in the absence of consent) this may well have amounted to a denial of procedural fairness, as discussed in Radford above. But this did not occur. The only order made was a general order, which does not enforce the payment of any specific treatment cost. It is in the nature of such an order that, if a dispute subsequently develops between the parties over a specific cost, the question of the reasonableness of such a cost can be the subject of further application in the Commission. Thus although the particulars given on 26 October 2006 were clearly late, no denial of procedural fairness occurred as a consequence, as the Arbitrator did not make any specific orders dealing with whether any of these particular costs were payable pursuant to section 60. Accordingly, in my view, this appeal point also is without merit.

The Lack of Power Argument

The Appellant Employer also argues there is no power in the Commission to make a ‘general order’ pursuant to section 60, relying upon the decision in Widdup. Widdup is not authority for this proposition. It was a decision of the President Justice Sheahan, on referral of a question of law pursuant to section 351 of the 1998 Act. There was no dispute between the parties that compensation (including the cost of reasonably necessary medical treatment) was payable. At issue was whether the Commission had power to make a declaratory order regarding a specific treatment cost (a discogram), which the worker had not yet undergone. In the course of his Reasons Sheahan J noted:

“18. The ‘dispute’ in which this Question of Law arises is clearly distinguishable from disputes normally dealt with in the Commission: such as disputes about liability for injury; causation and the ongoing effects, if any, of an injury; the need for medical treatment; and the adequacy or otherwise of the verification of the cost of the treatment, once it has been incurred.
19. In determining the above disputes it is accepted practice in the Commission that, after making the requisite findings of worker, injury, incapacity and/or permanent impairment and making the appropriate orders that result from those findings, it also makes an order for the payment of reasonably necessary medical expenses incurred and properly verified together with a ‘general order’ under section 60. This practice was expressly noted by Egan J in Brespro Pty Limited v Garry John Keenahan NSWCC 11155 of 1991, 12 May 1992 (‘Brespro’), unreported.”

The question under consideration in Widdup was not whether there was power to make a ‘general order’, which as Sheahan J noted was “accepted practice”. Rather it was whether there was power in the Commission to make a declaratory order for the payment of a specific treatment cost, not yet incurred by a worker. In considering this question his Honour said:
“42. I am satisfied, based on Manning and the wording of section 60, together with the relevant provisions of section 289(2) of the 1998 Act and the definitions of ‘claim’ and ‘compensation’, that the Commission’s jurisdiction to award compensation pursuant to section 60 is limited by the express provisions of the legislation. There is no express or incidental power to make ‘declaratory orders’ pursuant to section 60.
43. A declaration that certain medical treatment is reasonably necessary or that an employer is liable for certain proposed future medical treatment to be provided to a worker, is not a ‘monetary benefit’ (see the definition of ‘compensation’ above at 26). It is merely a declaration of potential future liability but it is not a ‘cost’ payable under section 60 until that cost is incurred.
44. To make a declaration that an employer is liable for the payment of specific future medical expenses exceeds the Commission’s express powers in the Workers Compensation Acts and gives an interpretation to section 60 that is contrary to the words in the section and contrary to binding Court of Appeal authority.” (emphasis added)
It is apparent from the above, that Widdup is not authority for the proposition that the “accepted practice” of the Compensation Court of NSW, and now the Commission, of making a ‘general order’ for payment of section 60 expenses, exceeds the jurisdiction of the Commission. To approach it another way, the ‘general order’ made by the Arbitrator is not a declaration of liability for the payment of specific future medical expenses, of the type held in Widdup to be beyond the power of the Commission. The Appellant Employer’s argument that there is no power in the Commission to make a ‘general order’ pursuant to section 60 must fail.

The Reasons/Failure to Make Necessary Findings Argument

The Appellant Employer in its grounds argued the Arbitrator had failed to give adequate reasons for his decision to make an order pursuant to section 60. In the Supplementary Submissions this was amplified somewhat, to an argument the Arbitrator had “failed to make any determination of the relevant issues”. It is submitted there were no findings of ‘injury’, duration of incapacity, or the resultant need for treatment. It is submitted this ignored the issues put in issue in the Reply (at [17] and [18]). It is further submitted “there was a contest as to the nature and duration of any compensable back problems and the Arbitrator should have made findings with respect to these crucial issues” (at [8]).
The Respondent Worker’s submissions assert the Arbitrator’s reasoning process is disclosed as involving the following steps:
(i)The Respondent Worker was a ‘deemed worker’ for the purposes of the legislation, who sustained injury in the course of his employment.
(ii)As a result of the injury he incurred medical expenses specified in particulars.
(iii)Such expenses were payable, notwithstanding the Appellant Employer’s denial of its obligation to pay them.
The Respondent Worker submits the reasons satisfy the test in Soulemezis.
The Reply lodged on the Appellant Employer’s behalf pleaded multiple issues, including ‘worker’, ‘injury’, ‘substantial contributing factor’ and causation. Some of the pleaded issues were not of direct relevance to the claim pursuant to section 60, dealt with in isolation (for example probable and actual earnings, or the degree of whole person impairment). However clearly, for an award to be made for a general order pursuant to section 60, it was necessary that the Arbitrator be satisfied, and make appropriate findings, on issues such as ‘worker’, ‘injury’, ‘substantial contributing factor’, and causation. These were matters left in issue between the parties, which required determination, if the Respondent Worker were to succeed in his claim.
The issue of ‘worker’ had been decided in the decision of 17 August 2006. However this left a number of further matters requiring determination, before the Respondent Worker was entitled to an award, even one restricted to a general order pursuant to section 60. These matters simply were not determined by the Arbitrator. The transcript does not contain any discrete reasons for decision at all. Rather, there are a series of interchanges between the Arbitrator and counsel for the parties. The Arbitrator indicated he proposed to make “a general order with respect to medicals” (T8.20). This ultimately led to the following:
“(RESPONDENT WORKER’S COUNSEL): …it’s equally clear that none of the medical expenses which have been incurred by the applicant as a result of the injury sustained in the deemed employment of the respondent have been paid by the respondent despite the fact that there’s been a request and a claim on foot for a long time that they be paid. So, we’ve come to Armidale to press for an order that they be paid, and on your view about the matter, we are entitled to that order.
ARBITRATOR: Yes.” (T8.50 to 9.5)
There is a suggestion the Appellant Employer may have conceded the question of ‘injury’, having regard to the following exchange:
“ARBITRATOR: We know he was injured.”
(APPELLANT EMPLOYER’S COUNSEL): We know he was injured…” (at T6.5)
I would be hesitant to rely upon this exchange as a formal concession on the topic of ‘injury’. The Reply put in issue not only whether an injury had occurred, but also whether an injury, if it did occur, arose out of, or was in the course of, the Respondent Worker’s employment. These questions, of course, can raise their own particular problems from case to case. I would not read the above exchange as conceding the various elements which would give rise to a finding of compensable injury.
There are no findings relevant to whether section 9A of the 1987 Act was satisfied, nor as to the necessary causal link between the incident of 7 October 2004, and the Respondent Worker’s condition thereafter, and any associated need for treatment. Section 9A, although raised on the pleadings, did not present itself as a significant issue on the material in the case. The same cannot be said of ‘causation’. It was clearly raised as an issue not only by the pleadings, but also by the evidence relied upon by the Appellant Employer. The reports of Dr Blue, utilised by the Appellant Employer, concluded the Respondent Worker’s knee problem was unrelated to the employment injury, and that the effect of injury on the condition of the Respondent Worker’s back would have ceased within three months of 7 October 2004. Clearly, if an award were to be entered in the Respondent Worker’s favour, even a ‘general order’ pursuant to section 60, it was necessary that the Arbitrator make findings regarding the effects of the incident of 7 October 2004, and the causal link (or lack of it) between that incident, and the Respondent Worker’s condition.
Counsel for the Appellant Employer specifically addressed the Arbitrator on this question of causation (at T9.35). Notwithstanding this, there is simply no decision made on the point. After being addressed on the point, the Arbitrator said:
“ARBITRATOR: …It’s really a matter for the respondent to decide if they’re reasonable and then, if the applicant disagrees with the decision, they bring a fresh application.” (at T10.5)
The question of whether the effects of injury continue such that, for example, treatment to the Respondent Worker’s back one year after 7 October 2004 should be regarded as treatment for a condition resulting from work injury, is not simply a question of ‘reasonableness’, pursuant to section 60. It raises a more fundamental question of whether the Respondent Worker’s condition results from the employment injury. It was a question for the Arbitrator to decide, before he could make an award pursuant to section 60. If the effects of the work injury continued, this should have been found as a fact. If the effects of work injury had, on the evidence, ceased at some point, this too should have been found.
It follows that the Arbitrator’s failure to make necessary findings of fact, including but not limited to, the question of causation, demonstrates error such that the decision cannot stand.
There is a related argument the Arbitrator failed to give adequate reasons for his decision. There is a statutory obligation to give reasons, found in section 294 of the 1998 Act, which relevantly provides:
“(1)If a dispute is determined by the Commission, the Commission must as soon as practicable after the determination of the dispute issue the parties to the dispute with a certificate as to the determination.
(2)A brief statement is to be attached to the certificate setting out the Commission’s reasons for the determination.”
Rule 15.6 of the Workers Compensation Commission Rules 2006 (previously Rule 73) provides:
“(1)A statement of the Commission’s reasons referred to in section 294(2) of the 1998 Act is to include:
(a)  the Commission’s findings on material questions of fact, referring to the evidence or other material on which those findings were based, and
(b)  the Commission’s understanding of the applicable law, and
(c)  the reasoning processes that lead the Commission to the conclusions it made.
(2)Without limiting subrule (1), the reasons set out in a statement referred to in subrule (1) are to be stated sufficiently (in the opinion of the Commission) to make the parties aware of the Commission’s view of the case made by each of them.
In Phelan v Jasper Asset Pty Ltd t/as Formula 1 Motel [2005] NSWWCCPD 90 Fleming DP cited the following passage from the judgment of Kirby J in Re Minister for Immigration and Multicultural and Indigenous Affairs: Ex parte Palme [2003] HCA 56:
“The more significant the decision, the clearer the duty may be, the clearer the reasons should be and the clearer the consequences will be for the breach. Some decisions cry out for a clear explanation. Especially is this so where the legislature has recognised the need and imposed a duty to give reasons and where the decision is very important for the person affected and for others close to that person. In such a case, the duty to give reasons is one, which this Court should uphold. The just, rational and lawful administration of the law is at stake” (at paragraph 64).
In the same decision, Fleming DP also referred to the following helpful passage from the judgment of McColl JA in Hume v Walton [2005] NSWCA 148:
“The primary judge’s duty was not only to record the evidence but also to record the findings she made based on that evidence: Mifsud v Campbell (1991) 21 NSWLR 725 at 728. While the extent of that duty may depend upon the circumstances of the individual case (ibid), where there is disputed expert evidence, the ‘parties are entitled to have the judge enter into the issues canvassed before the Court and to an explanation by the judge as to why the judge prefers one case over the other’: Archibald v Byron Shire Council [2003] NSWCA 292; (2003) 129 LGERA 311 at [54] per Sheller JA (with whom Beazley JA agreed); see also Bright v Joodie Holdings No 2 Pty Ltd [2005] NSWCA 134 at [33] per Santow JA (with whom Sheller JA and Campbell AJA agreed)” ( at paragraph 69).”
As I have already indicated, the Arbitrator did not make express findings of fact, on matters calling for decision before an award could be made. This error is more fundamental than failure to give adequate reasons. However, implicit in this, is a failure to give reasons which would conform to the statutory requirement, and the common law duty to provide adequate reasons. The reasons, such as can be gleaned from the transcript, contain virtually no reference to the evidence before the Arbitrator, or to the findings on the evidence in the case. This amounts to appealable error.

DECISION

For the foregoing reasons, the decision of the Arbitrator dated 30 October 2006 is revoked. This does not revoke the decision dated 17 August 2006, which was not the subject of challenge, by either party. The preferable course is that the matter be remitted to another arbitrator for determination. The preferable course, subject to the consent of the parties, would be that the subject matter of the Application, as originally framed, be determined in its entirety, rather than restricting the determination to the discrete issue of the Respondent Worker’s entitlement pursuant to section 60.

COSTS

Costs of the arbitration hearing of 27 October 2006 should follow the event, when the matter is determined.

I make no order as to costs of the appeal.

Michael Snell
Acting Deputy President
24 May 2007

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

ASSOCIATE