Oxford Art Supplies & Books Pty Limited v Gardiner (No 2)
[2008] NSWWCCPD 122
•22 October 2008
| WORKERS COMPENSATION COMMISSION | ||||||
| DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR | ||||||
| CITATION: | Oxford Art Supplies & Books Pty Limited v Gardiner (No 2) [2008] NSWWCCPD 122 | |||||
| APPELLANT: | Oxford Art Supplies & Books Pty Limited | |||||
| RESPONDENT: | Janette Gardiner | |||||
| INSURER: | GIO General Limited | |||||
| FILE NUMBER: | WCC1447-08 | |||||
| DATE OF ARBITRATOR’S DECISION: | 26 May 2008 | |||||
| DATE OF APPEAL DECISION: | 22 October 2008 | |||||
| SUBJECT MATTER OF DECISION: | “Unnotified matter” – exercise of discretion pursuant to section 289A of the Workplace Injury Management and Workers Compensation Act 1998; application of Mateus v Zodune Pty Ltd t/as Tempo Cleaning Services [2007] NSWWCCPD 227; section 151A(1) of the Workers Compensation Act 1987 – deed of release providing for dismissal of complaint to Anti-Discrimination Board; exercise of discretion on application to admit late documents pursuant to Rule 10.3 of the Workers Compensation Commission Rules 2006; quantum of award under section 67 of the Workers Compensation Act 1987 – application of Dunlop Limited v Krivec (1996) 13 NSWCCR 353. | |||||
| PRESIDENTIAL MEMBER: | Acting Deputy President Snell | |||||
| HEARING: | On the papers | |||||
| REPRESENTATION: | Appellant: | Sparke Helmore | ||||
| Respondent: | Somerville & Co | |||||
| ORDERS MADE ON APPEAL: | The decision of the Arbitrator dated 26 May 2008 is confirmed. | |||||
| The Appellant Employer is to pay the Respondent Worker’s costs of the appeal. | ||||||
BACKGROUND TO THE APPEAL
On 18 June 2008 Oxford Art Supplies & Books 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 26 May 2008.
The Respondent to the Appeal is Janette Gardiner (‘the Respondent Worker’).
The Respondent Worker is fifty-three years of age, and claims no dependants. She has some training in the visual arts field. The Appellant Employer operates shops at Darlinghurst and Chatswood, retailing art supplies and books. The Respondent Worker was employed at the Chatswood shop, from November 2000, initially on a casual basis. Her employment became permanent part-time, from August 2001. She typically worked from 10 am to 6 pm on Tuesday, Wednesday and Thursday, with a half hour lunch break, 22 ½ hours per week. She last carried out active duties with the Appellant Employer on 8 July 2005. Her duties essentially were those of a shop assistant, although because of the nature of the business, she would also offer advice and assistance to customers regarding their needs.
In these proceedings the Respondent Worker sought lump sum compensation pursuant to sections 66 and 67 of the Workers Compensation Act 1987 (‘the 1987 Act’). The injury is described in the Respondent Worker’s Application to Resolve a Dispute (‘the application’) as “Post traumatic stress disorder, anxiety, and depression”, occurring due to “Harassment and bullying in the workplace”. Whilst the date of injury is given as 8 July 2005, the matter was conducted throughout on the basis the alleged injury resulted from the alleged harassment and bullying occurring during an extended period of the Respondent Worker’s employment with the Appellant Employer. 8 July 2005 is simply the last day on which she carried out duties for the Appellant Employer.
The matters relied upon essentially relate to alleged bullying by other staff members, and alleged sexual harassment by “the owner and Managing Director” of the Appellant Employer, Mr David Altshuler.
The Respondent Worker wrote to the Anti-Discrimination Board of NSW on 14 June 2006, enclosing a complaint. The letter asserted she had suffered “bullying” by her employer and other staff, and “sexual harassment” by her employer. The letter referred to her suffering from “adjustment disorder, anxiety and depression and continuing sinusitis as a result of my workplace conditions”. The complaint document nominated David Altshulter, the “owner of Oxford Art Supplies, Chatswood” as the individual who had discriminated against her. It also nominated three named female employees of the Appellant Employer as discriminating against her. The complaint was accompanied by a sixteen page statement of the Respondent Worker dated 16 June 2006, dealing with the alleged discrimination and harassment. Although I have referred to the complaint and supporting statement here, as part of the general history, one of the matters at issue was the admissibility of those documents. The arbitrator did not permit their use at the arbitration hearing, and a question on this appeal was the correctness of that approach.
A deed of release was entered into by the Respondent Worker, the Appellant Employer (described in the deed as “Oxford Art Supplies Pty Ltd”), and David Altshuler, the signatures are dated 8 and 9 November 2006 (‘the deed’). The deed recited the employment and the complaint to the Anti Discrimination Board. It provided for the Appellant Employer and Mr Altshulter to pay the Respondent Worker a sum of $10,000.00 in two instalments, on 15 November 2006 and 15 December 2006. It provided that, within fourteen days of receipt of the second instalment, the Respondent Worker would “advise the Anti-Discrimination Board in writing that the complaint is withdrawn”. The Respondent Worker agreed that, subject to performance by the parties of their obligations pursuant to the deed, she would not bring further action against the Appellant Employer or Mr Altshulter, pursuant to various nominated pieces of legislation, which dealt (in general terms) with discrimination.
The Appellant Employer’s insurer initially paid compensation benefits on a voluntary basis, until issuing a Notice pursuant to section 74 of the 1998 Act, on 20 February 2007. This notice denied liability for further weekly compensation from 2 April 2007, and for medical and related expenses from 23 February 2007. The notice indicated the claim pursuant to which payments were made was in respect of chronic allergy and sinus infections, in addition to psychological injury. The allergy and sinus problems are not relied upon in the current application.
The basis of the Appellant Employer’s declinature was that, “pursuant to Sections 4, 9 and 9A of the Workers Compensation Act (the Respondent Worker) did not receive an injury as alleged or at all and that employment was not a substantial contributing factor to (her) injury”. The notice also denied ‘incapacity’.
The matter has a somewhat extended procedural history. The application was registered on 5 March 2007. There was an initial arbitration hearing on 21 May 2007. That hearing was decided adversely to the Respondent Worker, the arbitrator deciding she had not established her case on ‘injury’, and ‘substantial contributing factor’. The Respondent Worker appealed that result. On 15 October 2007 Roche DP upheld the Respondent Worker’s appeal, set aside the award that had been entered in the Appellant Employer’s favour, and remitted the matter to a different arbitrator for re-determination (Gardiner v Oxford Art Supplies & Books Pty Limited [2007] NSWWCCPD 210).
A further arbitration hearing was held on 4 December 2007 before the current arbitrator. The arbitrator was precluded, by section 65(3) of the 1987 Act, from making an award for permanent impairment or pain and suffering compensation, in the absence of assessment by an approved medical specialist (there was no such assessment). Accordingly the arbitrator confined himself to deciding “whether the Applicant suffered a compensable injury and whether the Applicant has completely recovered from that injury”.
A Certificate of Determination was issued on 12 December 2007 in the following terms:
“1. That the Applicant suffered a psychological injury arising out of or in the course of her employment with the Respondent.
2. That the Applicant’s employment with the respondent was a substantial contributing factor to her injury.
3. That the matter be referred to the Registrar for referral to an Approved Medical Specialist and that AMS be provided with
a. These reasons
b. The evidence referred to in these reasons.
4. That for the purposes of the costs and in accordance with the regulation Table 4 Item 4 it is certified that this was a complex matter and the costs of the parties be increased by 30%”
The Respondent Worker was examined by an approved medical specialist on 3 March 2008, and he issued a medical assessment certificate dated 17 March 2008. It certified the Respondent Worker suffered 19% whole person impairment resulting from the psychological injury.
Further reasons of the arbitrator accompanied a Certificate of Determination dated 26 May 2008 (‘the reasons’), and will be dealt with below. Those reasons record a “Post Medical Assessment Certificate telephone conference” was held on 28 April 2008. At that teleconference the Appellant Employer “sought to rely on the ‘settlement’ of the Anti Discrimination claim brought by the Applicant, which ‘settlement’ occurred on 9 November 2006”. The Appellant Employer wished to argue that, pursuant to sections 151A and 151Z of the 1987 Act, the Respondent Worker had no further entitlement to compensation under the workers compensation legislation, she having recovered damages in respect of the psychological injury on which she relied, on settlement of the Anti-Discrimination claim. This was not an argument that had been previously raised. The deed had been attached to the application, but according to written submissions of the Respondent Worker, had been “excluded from consideration” due to the Appellant Employer’s objection to it.
A further arbitration hearing was held on the afternoon of 8 May 2008. The parties put on written submissions going to the ‘recovery of damages’ argument, prior to this further hearing. It appears the only document before the arbitrator, at that point, going to the anti-discrimination claim and settlement, was the deed. On 8 May 2008 at 4.05 pm the Appellant Employer’s solicitors served, by email, to the office of those acting for the Respondent Worker, a copy of the complaint to the Anti-Discrimination Board, and supporting statement, described at [6] above. The arbitration hearing reconvened (after a break) at 4:20 pm. The Appellant Employer’s solicitor indicated copies of the complaint and supporting statement were forwarded by her firm, by facsimile transmission, to the Commission, so she could seek to use them at the arbitration hearing. At one point the solicitor sought a short adjournment so she could attend at the front office of the Commission, to see if the material had arrived. Ultimately the material did not arrive during the course of this arbitration hearing. The solicitor sought an adjournment to permit the Appellant Employer to file and serve the statement that accompanied the complaint to the Anti-Discrimination Board. This application was unsuccessful. Both parties made submissions going to whether the Appellant Employer should be permitted, at that late stage, to rely upon a defence not previously raised. The parties also addressed on quantum of the section 67 entitlement. The arbitrator reserved his decision.
On 9 May 2008 the solicitors for the Appellant Employer served an Application to Admit Late Documents, attaching the anti-discrimination complaint and supporting statement. The matter was listed for further teleconference on 20 May 2008, to deal with this application. The arbitrator, after hearing submissions, refused the application to admit late documents, giving some oral reasons, which were expanded upon in his later written reasons.
THE DECISION UNDER REVIEW
The ‘Certificate of Determination’, dated 26 May 2008 records the Arbitrator’s orders as follows:
“1. That the Respondent pay to the Applicant lump sum compensation as follows:
a. $26,000.00 for a 19% Whole person impairment under Section 66
b. $25,000.00 under Section 67
2. That the respondent pay the Applicant’s costs of the proceedings as agreed or assessed in accordance with my Order of 12 December 2007
3. That the Respondent pay the Applicant’s costs of the telephone conference of 20 May 2008 on an indemnity basis, those costs being assessed in the sum of $605.00 inclusive of GST.”
The Certificate was accompanied by a Statement of Reasons for Decision (‘the reasons’).
ISSUES IN DISPUTE
The Appellant Employer’s grounds of appeal and submissions are amalgamated. They refer to “Error of law and failure to give adequate reasons”. The appeal effectively restricts itself to two issues. The first is whether the arbitrator erred in refusing leave to rely upon the ‘recovery of damages’ argument, and late documents in support of that argument. The second is whether the quantum of the section 67 award for pain and suffering was excessive. The following matters are raised:
(i)the arbitrator erred in the exercise of his discretion, in refusing to permit the Appellant Employer to rely upon a defence pursuant to sections 151A and 151Z of the 1987 Act. There was discretion pursuant to section 289A of the 1998 Act, to hear a dispute relating to a previously unnotified matter. Various Presidential decisions, including Mateus v Zodune Pty Limited t/as Tempo Cleaning Services [2007] NSWWCCPD 227 (‘Mateus’), deal with the principles associated with the exercise of this discretion. In support of this argument, it is submitted delay was adequately explained in the circumstances, the Respondent Worker was not prejudiced, and the interests of justice dictated leave should have been granted. It is submitted the arbitrator placed too much weight on delay, which is only one of the relevant factors;
(ii)the arbitrator’s reliance on the decision of the High Court in Port of Melbourne Authority v Anshun Pty Limited (1981) 147 CLR 589 (‘Anshun’) was erroneous. That authority did not apply as there had not, at the time leave was sought to rely upon the additional matters, been a final determination in the matter;
(iii)the arbitrator erred in failing to exercise his discretion to allow the Appellant Employer to rely upon the material attached to the Application to Admit Late Documents dated 9 May 2008. The evidence was relevant, was necessary (in part) to put in context the deed attached to the Respondent Worker’s application, and the Respondent Worker was not prejudiced. Alternatively, the arbitrator did not address the question of whether any prejudice could be cured by the Respondent Worker giving further evidence;
(iv)the sum awarded pursuant to section 67 was excessive. A number of matters considered by the arbitrator, in making an assessment pursuant to section 67, had already been taken into account in assessing the level of whole person impairment pursuant to section 66. They should not be compensated twice. Reference is made to the decision of the Court of Appeal in Pacific Dunlop Ltd v Krivec (1996) 13 NSWCCR 353, and
(v)the Appellant Employer submits there should be an award in its favour, as on a proper analysis, the Respondent Worker had previously recovered damages, both from the Appellant Employer, and a person other than the employer (Mr Altshulter). Sections 151A and 151Z of the 1987 Act preclude the recovery of further compensation.
The Respondent Worker takes issue with the various points raised by the Appellant Employer, and in submitting the arbitrator’s decision should be confirmed, argues:
(i)the delay in raising the ‘recovery of damages’ argument (encompassing two earlier arbitrations and an appeal), when the Appellant Employer was represented by a firm of solicitors and two experienced counsel specialist in the jurisdiction, was such there was “no reasonable excuse” for failing to raise the issue earlier;
(ii)in considering whether to permit reliance on the argument, the arbitrator considered appropriate matters, being the legislative basis of the application, questions of fairness and prejudice, the matters previously raised by the Appellant Employer in its section 74 notice and Reply, when the issue was first raised, and the circumstances of the individual case. The arbitrator’s exercise of his discretion was consistent with the principles identified in Mateus. If the discretion were to be re-exercised, the result would be the same;
(iii)the documents the subject of the Application to Admit Late Documents dated 9 May 2008 had been in the possession of the Appellant Employer from before the first arbitration hearing in April 2007. There is no reasonable excuse for the failure to adduce the evidence at an earlier time. Although the Appellant Employer refers to the material as “new evidence”, it is in no way fresh evidence. The arbitrator considered appropriate matters in refusing the Appellant Employer’s application to rely on this material;
(iv)the Respondent Worker objects to the Appellant Employer making submissions based upon these documents, as they are not in evidence, and indeed there is no application to adduce fresh evidence on the appeal;
(v)the assessment pursuant to section 67 cannot be successfully appealed, as it “does not disclose an error of law which is the only basis upon which an appeal can be founded”. The Commission is not bound to follow an arbitral decision referred to by the Appellant Employer of Beck v Simeon Wines Ltd (WCC1672-08), and
(vi)If leave were granted to the Appellant Employer to rely upon the ‘recovery of damages’ argument, and the disputed material were allowed into evidence, the argument would still fail, as “there is no evidence before the Commission that can establish the respondent has received damages for an injury within the definition of injury contained in section 4” of the 1998 Act.
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.
On 2 October 2008 I conducted a teleconference, in which I raised with the parties the fact that a solicitor, who is a partner in the firm that acts for the Respondent Worker, had in the past acted for a deceased estate of which I was an executor. Both parties expressed no objection to my continuing to deal with this appeal in such 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 relevant arbitrator’s decision in compliance with section 352(4) of the 1998 Act.
The amount at issue exceeds the sum of $5,000 prescribed in section 352(2)(a), and the whole of the award is appealed against, satisfying section 352(2)(b). The Respondent Worker has not submitted the threshold requirements in section 352 are not satisfied.
I grant leave to appeal.
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.”
The Appellant Employer does not seek to adduce fresh evidence on this appeal, pursuant to section 352(6). It has not approached the appeal on that basis. Rather what is sought is to appeal the manner in which the arbitrator exercised his discretion. There are two stages to this process. The evidence attached to the Application to Admit Late Evidence dated 9 May 2008 became relevant, if the Appellant Employer was given leave to agitate the ‘recovery of damages’ argument, notwithstanding it had not been previously pleaded, and was not referred to in the section 74 notice. Thus the first step is to review the exercise of the arbitrator’s discretion, in considering whether that dispute should have been dealt with, on a discretionary basis, pursuant to section 289A of the 1998 Act. If it should, then the second stage of the process is to review the exercise of the arbitrator’s discretion, in respect of the Application to Admit Late Documents. If, on review, the view were taken that the arbitrator’s decision on this point was not true and correct, and the discretion was re-exercised to admit the documents, then the documents would be properly before me on the review. The documents would not be fresh evidence as such.
It follows that the point taken by the Respondent Worker, referred to at [20(iv)] above, does not succeed. The documents are either admitted into evidence pursuant to re-exercise of the arbitrator’s discretion, or they are not. If they are, then they are before me for the purposes of this review, without the need for an application to admit fresh evidence.
DISCUSSION AND FINDINGS
The General Basis of the ‘Recovery of Damages’ Argument
Section 149(1) of the 1987 Act provides:
“(1) In this Part:
damages includes:
(a) any form of monetary compensation, and
(b) without limiting paragraph (a), any amount paid under a compromise or settlement of a claim for damages (whether or not legal proceedings have been instituted),
but does not include:
(c) compensation under this Act, or
(d) additional or alternative compensation to which Division 8 of Part 3 applies, or
(e) an award of compensation or direction for compensation under Part 2 or Part 4 of the Victims Compensation Act 1996, or
(f) a sum required or authorised to be paid under a State industrial instrument, or
(g) any sum payable under a superannuation scheme or any life or other insurance policy, or
(h) any amount paid in respect of costs incurred in connection with legal proceedings, or
(i) damages of a class which is excluded by the regulations from this definition.”
Section 151A of the 1987 Act relevantly provides:
“151A Effect of recovery of damages on compensation
(1) If a person recovers damages in respect of an injury from the employer liable to pay compensation under this Act then (except to the extent that subsection (2), (3) or (4) covers the case):
(a) the person ceases to be entitled to any further compensation under this Act in respect of the injury concerned (including compensation claimed but not yet paid), and
(b) the amount of any weekly payments of compensation already paid in respect of the injury concerned is to be deducted from the damages (awarded or otherwise paid as a lump sum) and is to be paid to the person who paid the compensation, and
(c) the person ceases to be entitled to participate in any injury management program provided for under this Act or the 1998 Act.”
Section 151Z of the 1987 Act relevantly provides:
“151Z Recovery against both employer and stranger
(1) If the injury for which compensation is payable under this Act was caused under circumstances creating a liability in some person other than the worker’s employer to pay damages in respect of the injury, the following provisions have effect:
(a) the worker may take proceedings both against that person to recover damages and against any person liable to pay compensation under this Act for payment of that compensation, but is not entitled to retain both damages and compensation,
(b) if the worker recovers firstly compensation and secondly those damages, the worker is liable to repay out of those damages the amount of compensation which a person has paid in respect of the worker’s injury under this Act, and the worker is not entitled to any further compensation,
(c) if the worker firstly recovers those damages the worker is not entitled to recover compensation under this Act,
(d) if the worker has recovered compensation under this Act, the person by whom the compensation was paid is entitled to be indemnified by the person so liable to pay those damages (being an indemnity limited to the amount of those damages),
(e) if any payment is made under the indemnity and, at the time of the payment, the worker has not obtained judgment for damages against the person paying under the indemnity, the payment is, to the extent of its amount, a defence to proceedings by the worker against that person for damages,
(e1) if any payment is made under the indemnity and, at the time of the payment, the worker has obtained judgment for damages against the person paying under the indemnity (but judgment has not been satisfied), the payment, to the extent of its amount, satisfies the judgment,
(f) all questions relating to matters arising under this section are, in default of agreement, to be settled by action or, with the consent of the parties, by the Commission.”
Thus if the recovery of moneys by the Respondent Worker, pursuant to the deed, can be characterised as the recovery of ‘damages’ within the meaning of section 149(1), then potentially it precludes the recovery of compensation pursuant to the 1987 Act. It is argued this occurs either pursuant to section 151A(1)(a) (insofar as recovery was from the employer), or section 151Z(1)(c) (insofar as recovery was from a person other than the employer, being Mr Antshuler). The Appellant Employer relies upon a decision of Bishop J in Burns v Gladesville Bowling & Sports Club Ltd (2000) 20 NSWCCR 648 (‘Burns’). In that matter the payment of moneys by an employer, pursuant to consent orders in the Equal Opportunity Tribunal, following a complaint to the Anti-Discrimination Board, was held to constitute the recovery of damages, thus preventing a worker from recovering further compensation
The Section 74 Notice and Section 289A
Section 74 of the 1998 Act obliges an insurer that disputes a claim or any aspect of a claim to give notice of the dispute to the claimant. The section, and Regulations 34 and 37 of the Workers Compensation Regulation 2003, make provision for what the notice must contain. Section 74(2)(a) provides the notice must contain a statement of the reason the insurer disputes liability and the issues relevant to the decision. Section 74(2A) provides the notice must indicate the provision of the workers compensation legislation on which the insurer relies to dispute liability. The provisions in sections 151A and 151Z on which the Appellant Employer seeks to rely are statutory defences. They operate in certain specified factual circumstances. In my view it is quite clear that, if reliance is to be placed upon such provisions, it is necessary the section 74 notice contain appropriate reference to them (see the discussion in Seaib v Hays Personnel Services (Aust) Pty Ltd [2008] NSWWCCPD 36 (‘Seaib’) at [45] to [51]).
In the current matter the section 74 notice did not in any way raise the complaint to the Anti-Discrimination Board, the deed, payments pursuant to the deed, or the statutory provisions in sections 151A and 151Z. The Appellant Employer (quite properly) does not contend that it did.
Section 289A of the 1998 Act provides:
“289A Further restrictions as to when a dispute can be referred to Commission
(1) A dispute cannot be referred for determination by the Commission unless it concerns only matters previously notified as disputed.
(2) A matter is taken to have been previously notified as disputed if:
(a) it was notified in a notice of dispute under this Act or the 1987 Act after a claim was made or a claim was reviewed, or
(b) it concerns matters, raised in writing between the parties before the dispute is referred to the Registrar for determination by the Commission, concerning an offer of settlement of a claim for lump sum compensation.
(3) The Commission may not hear or otherwise deal with any dispute if this section provides that the dispute cannot be referred for determination by the Commission. However, the Commission may hear or otherwise deal with a matter subsequently arising out of such a dispute.
(4) Despite subsection (3), a dispute relating to previously unnotified matters may be heard or otherwise dealt with by the Commission if the Commission is of the opinion that it is in the interests of justice to do so.”
The operation of section 289A is discussed in Mateus, a decision to which both parties refer in their submissions, and which I have previously applied (see Seaib at [49] to [50]). Applying what was said in Mateus at [45], the issue of whether sections 151A and/or 151Z operate to preclude the Respondent Worker recovering compensation in the circumstances is a previously unnotified matter. Accordingly it can only be dealt with by the Commission pursuant to the discretionary power in section 289A(4), if the Commission is of the opinion it is in the interests of justice to do so.
It appears the ‘recovery of damages’ argument was first raised by the Appellant Employer at the time of the teleconference on 28 April 2008. What was said at that time is not transcribed. Subsequently both parties put on written material, dealing with whether the Appellant Employer should be given leave to agitate the argument, having raised it at such a late stage, and also the merits of the argument. The Appellant Employer sought to rely on the argument at the arbitration hearing on 8 May 2008. In a related application, the Appellant Employer sought leave to rely on its late documents, at the teleconference on 20 May 2008. On none of these occasions was the arbitrator referred to section 289A, or to the decision in Mateus. The Appellant Employer’s application to rely on the ‘recovery of damages’ argument was dealt with in the reasons, on the basis it was an application to amend the Reply (see [54]). The reasons do deal with some matters relevant to the discretion in section 289A, in particular the adequacy of the explanation for delay, and prejudice.
On this appeal both parties have approached the issue, of whether the ‘recovery of damages’ argument can be pursued, on the basis the Appellant Employer makes an application pursuant to section 289A(4). This is consistent with the statutory framework, and I will do likewise.
The power in section 289A(4) is discretionary. Notwithstanding this, in conducting an appeal pursuant to section 352 by way of review, I am not obliged to identify error of the kind in House v The King (1936) 55 CLR 499, before I can vary or discharge the decision of the arbitrator (see the cases cited in The Office of the Public Guardian v Manning [2008] NSWWCCPD 94 at [57] to [59], in particular Tan v National Australia Bank Ltd [2008] NSWCA 198). I should conduct a merits based review of the decision. Even if I were required to find error of the kind in House v The King, it would be appropriate that I re-exercise the discretion in the current matter, as the arbitrator did not, in doing so, have regard to the appropriate legal principles, being those governing an exercise of the statutory discretion contained in section 289A. I mean no disrespect in saying this, the arbitrator was not referred to such principles at the time.
In Mateus the arbitrator who initially dealt with the application identified the following matters as being relevant to the exercise of her discretion under section 289A(4):
“(a) the degree of difficulty or complexity to which the unnotified issues give rise;
(b) when the insurer notified that it wished to contest any unnotified issue/s;
(c) the degree to which the insurer has otherwise fulfilled its statutory obligation to notify the worker of its decision disputing liability;
(d) any prejudice that may be occasioned to the worker, and
(e) any other relevant matters arising from the particular circumstances of the case.
Roche DP agreed with the arbitrator’s identification of these matters, and stated he would add the following observations:
“(a) a decision by an insurer to dispute a claim for compensation should not be made lightly or without proper and careful consideration of the factual and legal issues involved;
(b) any insurer seeking to dispute an unnotified matter is seeking to have a discretion exercised in its favour and, accordingly, must act promptly to bring the matter to the attention of the Commission and all other parties;
(c) any unreasonable or unexplained delay in giving notice of an unnotified matter will be relevant to the exercise of the discretion;
(d) in exercising its discretion the Commission may have regard to the merit and substance of the issue that is sought to be raised;
(e) in assessing prejudice to the worker it will be significant to consider when and in what circumstances the worker was first made aware of the unnotified issue that is sought to be raised;
(f) though it will be relevant to the exercise of the discretion to keep in mind that the Commission must act according to equity, good conscience and the substantial merits of the case, those matters will not be determinative, and
(g) the general conduct of the parties in the proceedings will also be relevant to the exercise of the discretion.”
Applying the principles set out in Mateus, the following matters would favour exercising the discretion in the Appellant Employer’s favour:
(i)the merit and substance of the matter sought to be raised is significant. Whilst the proposed defence is in no way assured of success, it is arguable, and if successful would represent a total defence to the claim.
(ii)the insurer fulfilled its statutory obligation by notifying the Respondent Worker of its decision to dispute liability.
The following matters would militate against exercising the discretion:
The degree of difficulty or complexity to which the unnotified matter gives rise
(i)The only available authority to which the parties refer, on the application of section 151A(1) to such a payment, is the decision of Bishop J in Burns. The facts in that matter are not on all fours with those in the current application. In Burns Bishop J considered the availability of the defence on the basis of facts agreed between the parties. It was agreed (for the purposes of the preliminary point) that the worker suffered injury by reason of things done and said by members and employees of the employer (a licensed club). The payment to the worker was pursuant to consent orders of the Equal Opportunity Tribunal. The consent orders were accompanied by a deed releasing and discharging the employer from further claims. Thus it was apparent the payment ordered by the Tribunal was in respect of the subject matter of the worker’s complaint, which included allegations of stress, anxiety, migraines, insomnia, the cost of psychological counselling, and past and future economic loss. It was apparent the payment related to the psychological injury relied upon in the Tribunal.
(ii)Bishop J then applied a passage from General Motors Holden Limited v Sema (1994) 10 NSWCCR 612 in which Burke J said:
“The injury which gave rise to the two entitlements must be the same for the section to operate. Injury is the personal injury as defined. It must result from the same causative events.”
(iii)Bishop J then compared the pleadings in the workers compensation application, with the statement of facts and deed of settlement in the Anti- Discrimination proceedings. His Honour concluded the injury was the same, and the relevant provision (then in section 151B of the 1987 Act) prevented the recovery of compensation by the worker. In the course of his judgment his Honour said:
“The analysis of the Anti-Discrimination Act above and the comments referred to in the Najdovska decision (Australian Iron & Steel Pty Ltd v Najdovska (1988) 12 NSWLR 587) indicate that it would be a very rare situation for the relief sought under the Workers Compensation Act and under the Anti-Discrimination Act to coincide, in the sense of arising out of the same circumstances. However I am of the view that in this situation they do.”
(iv)In the current matter, the deed inter alia recited the Respondent Worker’s employment with the Appellant Employer, and that the Respondent Worker had lodged a complaint “alleging sexual harassment and disability discrimination”. It provided for payment of a total of $10,000, in exchange for withdrawal of the complaint. There was a confidentiality clause. There were no orders for payment by a tribunal. There could be many reasons why the Appellant Employer or Mr Altshuler could have regarded it as convenient to have the complaint withdrawn, justifying payment of moneys, regardless of whether the Respondent Worker had suffered injury. The payment may not have been in respect of the subject matter of the Respondent Worker’s complaint. It may have been simply convenient, or a way of avoiding embarrassment, to make a payment to the Respondent Worker in exchange for withdrawal. This, of course, is conjecture, but it does demonstrate the difficulty of characterising the payment as one resulting from the same causative events as are relied upon in the workers compensation proceedings. In the current matter, there was no order for payment of money made by any tribunal, in respect of any specific allegations. The deed provided for withdrawal of the complaint, so there could be no order for payment in respect of the complaint.
(v)Whether a payment of monetary compensation, pursuant to a deed of release, could be characterised as being “in respect of an injury”, was recently dealt with in the Court of Appeal in Adams v Fletcher International Exports Pty Limited [2008] NSWCA 238 (‘Adams’). The payment in that matter was so characterised, in circumstances where the recitals in the deed of release described injuries suffered by the worker, and the deed described the release of any entitlement to work injury damages in consideration for the payment. There is no reference to injury in the deed in the current matter.
(vi)It is at least possible an analysis of a payment pursuant to the Anti-Discrimination Act 1977, for the purposes of section 151A of the 1987 Act, would be different if it were a payment ordered by the Tribunal, as opposed to a sum paid in exchange for withdrawal of a complaint.
(vii)Additionally, on the basis of the deed only, it would be difficult to conclude the payment was in respect of the same causative events. I have already observed the deed itself contains no reference to injury. Whether any other documents could be used to support the Appellant Employer’s argument on the point depends on the outcome of the Application to Admit Late Documents dated 9 May 2008, itself the subject of a contested discretionary application.
(viii)In written submissions lodged on her behalf before the arbitrator, the Respondent Worker argued also that Burns was not, as a decision of a single judge of the Compensation Court, binding on the Commission, and submitted a contrary view should be reached regarding whether a payment, pursuant to the Anti-Discrimination Act, could trigger the operation of section 151A(1).
(ix)An additional complicating factor is the Appellant Employer’s reliance upon section 151Z, on the basis money recovered from Mr Altshuler constituted recovery from a person other than the employer. The deed provided for money to be paid by “the Respondents”, without differentiating between the Appellant Employer, and Mr Altshuler. The evidence is silent as regards who was to pay what part of the sums specified. The evidence also is silent as regards whether such sums were actually paid. It is probably unlikely a payment by Mr Altshuler (if made) could be characterised as one by a person other than the employer (thus triggering the operation of section 151Z), due to section 150 of the 1987 Act.
(x)A further problem relates to the absence of evidence establishing the Respondent Worker actually recovered the moneys referred to in the deed. Actual recovery of moneys is crucial if section 151A is to apply. In Adams Handley AJA, applying the decision of the High Court in Smith v Commonwealth Oil Refineries Ltd [1938] 60 CLR 141, said (at [17]):
“The deed by itself could not have affected the worker's rights to compensation because s 234 of the 1998 Act provides that the two Acts apply "despite any contract to the contrary". The worker's difficulties flow not from the deed as such, but from his acceptance of the payment of $2500.”
(xi)I raise the above matters to demonstrate there was a considerable degree of difficulty and complexity associated with the unnotified matter the Appellant Employer sought to raise, pursuant to section 289A(4).
The Appellant Employer did not act promptly in bringing the unnotified matter to the attention of the Commission and the parties
(xii)The Appellant Employer was a party to the deed, and must have been aware of its contents from when the document was executed. The deed was attached to the application, and clearly those acting for the Appellant Employer knew of its existence at least from when they were instructed, which must have been prior to the date of the Reply. During the teleconference on 20 May 2008 the Appellant Employer’s solicitor advised the arbitrator his firm had requested records, from the firm that acted for the Appellant Employer in respect of the complaint, on 11 April 2007. He thought the records “came in some time after that date”, although could not be precise. He said they came into existence “well before the arbitration hearing”, without specifying which arbitration hearing (see T3). The Appellant Employer, seeking the exercise of discretion in its favour, carries the persuasive onus. Although it is unclear, from the above exchange, precisely when the Appellant Employer’s solicitors came into possession of relevant documents additional to the deed, it was likely to have been long before the teleconference of 28 April 2008, when it appears the potential argument was first brought to the notice of the Commission and the Respondent Worker.
Unreasonable or unexplained delay
(xiii)The procedural history of the matter is set out at [8] to [16] above. By the time the ‘recovery of damages’ argument was first raised, the proceedings had been on foot in excess of one year. It was more than one year after the Appellant Employer had lodged its Reply. There had been an arbitration hearing, a successful appeal, and a further arbitration hearing dealing with the threshold issue of ‘injury’. The only reason an award had not already been entered in the Respondent Worker’s favour by that stage, was the need for assessment of the quantum of the whole person impairment by an approved medical specialist, in compliance with section 65(3) of the 1987 Act. The delay, in the circumstances, is substantial. While it is true that delay is only one factor to be considered, it is necessary the delay be explained. In Iovanescu v McDermott [2004] NSWCA 106 (‘Iovanescu’) the NSW Court of Appeal dealt with an application pursuant to the District Court Rules, seeking the extension of time in which to seek rescission of a dismissal order. Young CJ said:
“4. It is true, as has been said many times over, that the rules must be the servant and not the master, in litigation.
5. However, the authorities, when properly examined, do not stop there, but actually make it clear that prima facie the rules must be observed and that a person who seeks dispensation from them, particularly because of delay, must show good reason why such dispensation should be granted and must endeavour to explain away his or her apparent blameworthiness in connection with the total delay involved.”
(xiv)In the same case, Windeyer J said:
“I turn now to the explanation as to whether or not there was a proper explanation for delay. Counsel for the respondent argued that as there was no statutory requirement for an explanation, no explanation was required. That is not correct. It is always a question bearing upon the exercise of discretion in a claim for extension of time: Salido v Nominal Defendant (1993) 32 NSWLR 524 at 533, 539 and 541; Holt v Wynter [2000] NSWCA 143; (2000) 49 NSWLR 128 at 136. That is because it goes to the question of whether it is just and fair to grant the indulgence sought, namely an extension of time to apply to rescind the dismissal. It cannot just be a question of prejudice and ability to have a fair trial. If that were the position and everything else could be sorted out by appropriate costs orders then the accepted requirements for case management would go out the window. Hence the principles of case management assume that the parties will comply with rules or give proper reasons for failure to do so.”
(xv)Iovanescu dealt with an application pursuant to the District Court Rules, in a context different to the current application. However, as a general principle, a party seeking the exercise of a discretion in its favour, to cure its failure to do something at an appropriate time, needs to explain its delay.
During the arbitration hearing on 8 May 2008 the following exchange occurred (at T6), regarding whether there was an explanation for delay:
“ARBITRATOR: So why wasn’t that able to be raised in the two hearings I’ve already conducted and in the appeal proceedings?
MS EDWARDS: Well, the only answer that I have to that is that, first of all, not all of the documentary evidence was necessarily relevant to those proceedings. I mean, the first proceeding was on the question of injury, which the respondent was, first of all, successful in until the applicant’s appeal. In terms of whether it was raised earlier, I can’t answer that, only other than that it wasn’t.ARBITRATOR: So there’s no explanation for that?
MS EDWARDS: No, only that, as I say, often it’s difficult to trace back exactly what documents were admitted into evidence at certain times, and being a question of law, as a matter of whether the applicant is actually entitled to the compensation, it’s a matter that is a question of law that the applicant can’t be double compensated. As to why it wasn’t raised earlier ---
ARBITRATOR: That’s not what the Act says.”
(xvi)There is a further relevant passage at T11:
“ARBITRATOR: Can you go back and please address me on the question I’ve asked you. Why should the respondent at this late stage, having filed a section 74 notice – having served a section 74 notice, having filed the reply, having had two hearings when this point is not raised be entitled to raise it now?
MS EDWARDS: Because it’s a question of law that the applicant is not entitled to receive double compensation when the Act provides that she can’t.”
(xvii)The following is recorded at T12:
“ARBITRATOR: There are some factual issues that would have to be determined for you to have run that defence.
MS EDWARDS: Yes. But the – what I’m saying is – you’re asking why the respondent didn’t bring it earlier.ARBITRATOR: Mmm.
MS EDWARDS: All I’m saying is that whether the respondent did so is irrelevant for the fact that the applicant, if you determine that she’s received damages in the other proceedings, that she’s not entitled to receive double-compensation in respect of the same matters that are raised in these proceedings.”
(xviii)In its submissions on this appeal, the Appellant Employer deals with delay in the following fashion:
“Contrary to paragraph 25, the Appellant indicated that the matter was not previously notified due to an oversight by the previous solicitor with conduct of the matter and counsel briefed in earlier proceedings. The Appellant submits that the fact that fresh eyes had identified this issue as being relevant is a reason for the delay in notification. The Appellant argues that the issue raised is a technical issue and not the usual grounds on which liability is declined, and that this provides an explanation for the delay in notification. The Appellant accepts that the notice was late, but submits the primary considerations that the Arbitrator should have considered were prejudice to the parties and the interests of justice.”
(xix)There was no evidence as such, dealing with the explanation for delay. The matters raised above, by way of submissions on the point, do not, in my view, provide any satisfactory explanation.
(xx)The Appellant Employer, at the arbitration hearing, argued the unnotified matter on which it sought to rely was essentially a matter of law, to prevent double compensation. An issue that is purely a point of law may even (with leave) be raised for the first time in the Court of Appeal (see Agusta Pty Limited & Anor v Provident Capital Limited [2008] NSWCA 234). However it is not correct that the application of sections 151A(1)(a) and 151Z(1)(c) simply operate as matters of law, without the need for a factual basis to support them. It is necessary to prove the recovery of damages, and that the injury giving rise to the two entitlements was the same, resulting from the same causative events. Neither of these was likely to be straightforward in the current matter. It is not simply an issue of law.
(xxi)The alternative explanation, in the submissions on this appeal, seems to be that no one had previously thought of the ‘recovery of damages’ argument, although it is not put quite that bluntly.
(xxii)The Appellant Employer itself clearly was aware of the complaint and deed from at least when the deed was executed, it being a party to it. Those acting for the Appellant Employer, in the current proceedings, were aware of the deed from when they were instructed, and had an opportunity to peruse the application (which included the deed). They were aware of associated documentation from when it was furnished to them by the Appellant Employer’s solicitors acting on the anti-discrimination complaint. This date is not known, but the material was requested on 11 April 2007. It is not suggested, by way of explanation for delay, that there was any untoward delay in obtaining that material.
(xxiii)The delay is probably in the vicinity of one year, perhaps a little less, from when the Appellant Employer’s solicitors had the relevant documentation, until the matter was raised with the Respondent Worker and the Commission. In my view this delay is not adequately explained, and is unreasonable. This is more so, in circumstances where the matter went through two arbitrations, and an appeal pursuant to section 352, before the issue was raised. The Appellant Employer had the benefit of lawyers acting for it throughout the period of the delay. The delay is a powerful factor, militating against the Appellant Employer’s application pursuant to section 289A(4).
Prejudice
(xxiv)The Appellant Employer submits the Respondent Worker was not prejudiced, as she was represented by counsel, and had the opportunity to make submissions on the unnotified matter, through her counsel ([23.2(b) of its submissions). At [1] of its Further Submissions dated 7 July 2008, the Appellant Employer submits the Respondent Worker could have given further oral evidence to deal with issues arising from the unnotified matter, thus avoiding prejudice. The Respondent Worker submits this ignores the fact that the Respondent Worker’s case has been run, and a different course of action may have been taken had the issue been raised at an appropriate time.
(xxv)The Respondent Worker did not give oral evidence at the arbitration hearings of 4 December 2007 and 8 May 2008. Her case was documentary. Leave to rely on oral evidence, or cross-examine, is discretionary (see Aluminium Louvres & Ceilings Pty Limited v Zheng [2006] NSWCA 34, (2007) 4 DDCR 358). The subject matter of the Respondent Worker’s description of the circumstances giving rise to injury was likely to be emotionally distressing. If it became necessary for the Respondent Worker to give oral evidence, and be cross-examined, to elucidate the circumstances surrounding her complaint to the Anti-Discrimination Board, and execution of the deed, this potentially would constitute prejudice. It also could potentially have opened up other areas of cross-examination, going to the nature of the harassment and bullying alleged by her.
(xxvi)Delay in the conclusion of her proceedings also represents a potential prejudice to the Respondent Worker, had the Appellant Employer’s application been permitted. The Appellant Employer, having raised the issue around the time of the teleconference of 28 April 2008, pursued the application to rely on a previously unnotified matter at the arbitration hearing on 8 May 2008. In the normal course of events, threshold questions of injury having been decided in the Certificate of Determination dated 12 December 2007, that arbitration hearing would have involved the formal entry of an award pursuant to section 66 consistent with the assessment of the approved medical specialist, and submissions going to the entitlement pursuant to section 67 of the 1987 Act.
(xxvii)The transcript records that the further documentation the Appellant Employer wished to tender, going to the ‘recovery of damages’ issue, was not available for tender, and at 4.47 pm the Appellant Employer sought an adjournment to permit it to file and serve the statement (presumably that which accompanied the complaint to the Anti-Discrimination Tribunal): T13. The argument clearly would have been untenable without further material beyond the deed itself, as the deed did not establish any recovery of moneys, or that the complaint to the Anti-Discrimination Board arose out of the same circumstances as the injury pleaded in the workers compensation proceedings. Thus if there were to be any viable reliance upon the ‘recovery of damages’ argument, this would have involved an adjournment to permit the Appellant Employer to obtain copies of the material on which it sought to rely. It is also highly probable the Respondent Worker would have required further time to consider her position, and whether further evidence, including oral evidence, was required. The possibility of oral evidence from the worker, to cure possible prejudice, is raised in the Appellant Employer’s submissions.
(xxviii)In Menzies & Anor v CRCI Pty Limited [2007] NSWCA 118 Hodgson JA at [27] said:
“It was put that, in accordance with JL Holdings, the Court should grant an amendment, unless prejudice was caused to the other side that could not be met by an adjournment and costs, and that any prejudice in this case could have been so met. However, in my opinion, where an amendment would require vacation of a hearing date which was set to take place within a few days, generally there is prejudice through prolongation of the litigation that is not entirely met by costs, and the imposition of that prejudice on the other party needs to be justified by the strength of the case made for the indulgence by the party applying for it. I do not think this was made out in this case, for the reasons I have given, especially in circumstances where no explanation was given for not complying with the terms of the previous indulgence granted.”
(xix) It flows from the above that, in my view, the leave sought by the Appellant Employer, pursuant to section 289A, would have resulted in prejudice.
In balancing the competing factors, in my view those against exercising the discretion pursuant to section 289A(4) significantly outweigh those favouring its exercise. The extent and circumstances of the delay are powerful factors against exercising the discretion, although not the only ones. In re-exercising the discretion pursuant to section 289A(4), I decline the Appellant Employer’s application that the unnotified matter be heard or otherwise dealt with. It follows, that section 289A prevents the unnotified matter being raised by the Appellant Employer.
This is sufficient to dispose of the appeal, other than that part of it going to quantum of the section 67 entitlement. I should deal briefly with the other matters raised in the appeal, other than quantum, should it prove relevant.
The Application to Admit Late Documents
The application pursuant to section 289A(4) having been refused, the material attached to the Application to Admit Late Documents dated 9 May 2008 is effectively irrelevant to other matters in dispute between the parties. Even if this were not so, in my view the same factors that militated against exercise of the discretion pursuant to section 289A(4), would also operate against admission of the late documents. Section 290 of the 1998 Act deals with ‘Information exchange between parties’. The admission of late documents is dealt with in Rule 10.3 of the Workers Compensation Commission Rules 2006 (‘the Rules’), which relevantly provides:
“10.3 Material to be lodged with application or reply
(1) For the purposes of section 290 of the 1998 Act, a party to proceedings must lodge and serve with:
(a) the application to resolve the dispute, if the party is the applicant, or
(b) the reply required by rule 10.4 (1), if the party is a respondent, or
(c) the reply required by rule 11.1 (7), if the party is a party joined under rule 11.1 (4),
all information and documents on which the party proposes to rely and that are in the possession or control of the party, and that have not been lodged by a party in the current proceedings.
(2) Subject to subrules (3)–(5), a party may not in proceedings introduce evidence that has not been lodged and served as required by subrule (1) or has not been provided to any other party as required by the 1998 Act or any Regulation or Guideline made under that Act.
(3) The Commission may, if it is satisfied that it is necessary to do so in the interests of justice, allow a party to introduce evidence that the party would otherwise be prevented from introducing because of the operation of subrule (2).”
The power to admit late documents is discretionary. Byron DP, in Coles Myer Limited v Tabassum [2005] NSWWCCPD 16 dealt with an application under the corresponding provision of the Workers Compensation Commission Rules 2003, and identified a number of factors that might be taken into account in such an application. Significant factors going against the exercise of the discretion in this matter are the delay, which in my view is not adequately explained (discussed above), prejudice to the other party (also discussed above), and general considerations of fairness and justice between the parties. The application was made at a very late stage of the proceedings, after the question of ‘injury’ had been determined (for the second time). The material attached to the Appellant Employer’s appeal indicates a copy of the statement that accompanied the complaint to the Anti-Discrimination Board was served on the solicitors for the Respondent Worker, by email on 8 May 2008 at 4.05pm. At that point the third arbitration hearing in the matter was under way. Whilst the Appellant Employer is doubtlessly prejudiced by being unable to run an argument that may have been viable, most other factors oppose admission of the late documents. The issue they raised was a difficult one, likely to extend the hearing time of a matter that had already been determined, at least on the threshold issues other than quantum. The documents had been in the possession of the Appellant Employer, and its solicitors, for a lengthy period, without being served or notice being given they would be relied upon. In my view the arbitrator was correct in refusing the Application to Admit Late Documents.
The Anshun Argument
In the course of his reasons, at [48], the arbitrator referred to the decision of the High Court in Anshun. He cited that case as “authority for the proposition that a party will be estopped from bringing a cause of action (or in this case alleging a defence) which if it succeeds could result in a judgment which conflicts with an earlier judgment”. The Appellant Employer complains this passage of the reasons is in error, as there had not, at the time it sought to raise the unnotified matter, been any final determination in the proceedings. I incline to the view the Appellant Employer is correct in this regard. In Anshun the joint judgment of Gibbs CJ, Mason & Aickin JJ said:
“The judgment which the Authority seeks to obtain in the present action is one which would contradict the judgment which has been entered in the Soterales action.” (at 596)
And:
“It has generally been accepted that a party will be estopped from bringing an action which, if it succeeds, will result in a judgment which conflicts with an earlier judgment.” (at 603)
It is unnecessary that I deal in any detail with this argument. This appeal is already disposed of on a different basis. As I read the arbitrator’s reasons, the reference to Anshun was not an essential part of his reasoning process, in reaching the conclusion that he did.
Quantum of the Section 67 Entitlement
The arbitrator awarded a sum for pain and suffering, pursuant to section 67, of $25,000.00, which represented one half of the maximum available. The arbitrator deals with this aspect at [61] to [66] of the reasons. The Appellant Employer argues there is an element of double compensation in the assessment pursuant to section 67. It is submitted the assessment for psychological injury, applying the Workcover Guidelines, takes into account various subjective complaints, being self care and hygiene, social and recreational activities, travel, social functioning, concentration, persistence and pace, and employability. It is submitted complaints falling into these areas have already been taken into account in assessing the degree of permanent impairment. To the extent complaints in these areas are also considered in assessing compensation for pain and suffering, it is submitted this is error, involving double compensation. Reference is made to a decision of the Court of Appeal in Dunlop Limited v Krivec (1996) 13 NSWCCR 353 (‘Krivec’), and also to a decision of an arbitrator in Beck v Simeon Wines Limited (WCC1672-08) (‘Beck’).
The assessment of the degree of permanent impairment of a worker, for the purposes of an award under section 66 of the 1987 Act, is made in accordance with the Workcover Guidelines, pursuant to section 322 of the 1998 Act. Chapter 11 of the Workcover Guides for the Evaluation of Permanent Impairment (‘the Guidelines’) deals with the assessment of permanent impairment in cases of psychological injury. In its introduction at 11.3 it states:
“Permanent impairment assessments for psychiatric and psychological disorders are only required where the primary injury is a psychological one. The psychiatrist needs to confirm that the psychiatric diagnosis is the injured worker’s primary diagnosis. This assessment is not done for the purposes of determining ‘pain and suffering’ as defined for the purposes of section 67 of the Workers Compensation Act 1987. ‘Pain and suffering’ means actual pain, distress or anxiety, suffered or likely to be suffered by the injured worker, whether resulting from the permanent impairment concerned or from any necessary treatment of that impairment.”
At 11.12 the Guidelines set out the following:
“Psychiatric impairment rating scale (PIRS)
11.12 Behavioural consequences of psychiatric disorder are assessed on six scales, each of which evaluates an area of functional impairment:
1. Self care and personal hygiene (Table 11.1)
2. Social and recreational activities (Table 11.2) Activities of daily living
3. Travel (Table 11.3)
4. Social functioning (relationships) (Table 11.4)
5. Concentration (Table 11.5)
6. Employability (Table 11.6).”
The Guidelines at 11.14 then set out tables, in which behaviours mentioned in 11.12 can be placed in different classes, depending upon severity. At 11.15 and 11.16 a method is set out to arrive at median class scores, based upon the PIRS scores. There is then a procedure set out at 11.18 to 11.22, to convert the median class scores, using a conversion table, to an assessment of permanent impairment. It is apparent the activities and limitations considered, pursuant to the Psychiatric Impairment Rating Scale, are designed to permit assessment of permanent impairment, in cases of psychiatric impairment, by reference to a worker’s level of functioning. It is clear, from the passage in the introduction quoted above, that ‘pain and suffering’, relevant for the purposes of section 67, is not something the Guidelines seek to assess. One can readily conceive that two different workers may suffer a similar impairment pursuant to one of the rating scales, for example employability, yet one may be relatively unconcerned about it, whilst the other may find it productive of high levels of distress and anxiety. The Guidelines draw a clear distinction between assessment of permanent impairment, and pain and suffering, and make it clear the methodology is designed only to assess the former.
Krivec was decided under an earlier statutory regime for assessment of compensation under section 66. The case involved injury to the back, compensation for which, pursuant to section 66, was to be “reasonably proportionate” to the maximum provided, the maximum being reserved for “a most extreme case” (see generally Jones Bros Bus Company Pty Limited v Baker (1992) 26 NSWLR 322). Determination of an appropriate figure was a question of fact for a trial judge. There was no regime, comparable to that now applying under the Guidelines, specifying the manner of assessment.
In Krivec Handley JA (at 358) said:
“There will normally be evidence before the tribunal of fact of the practical consequences of back impairment in terms of the restrictions on the person’s movements and activities, which may include the results of examinations and measurements by medical practitioners. To the extent to which that evidence is accepted, it will enable the tribunal of fact to make the required comparison with a most extreme case, even if there has been no expert opinion on that question expressed as a percentage.
Where pain is avoided by restricting back movements, compensation is properly payable under section 66 for impairment and not under section 67 for pain and suffering. Where back movements which the worker chooses to make, or cannot help making, cause pain, compensation is properly payable under section 67 for pain and suffering rather than under section 66 for impairment. At all events compensation should not be awarded twice for what is in substance the same pain and suffering.”
What this passage seeks to do, in my respectful view, is simply to draw an appropriate distinction between the concepts of permanent impairment (compensable pursuant to section 66), and actual pain or distress or anxiety (compensable pursuant to section 67). The latter must result from the former, to be compensable (see sub-sections 67(1) and 67(2) of the 1987 Act in its current form). If a worker with a back injury never lifted more than ten kilograms, because it hurt, then it would be inappropriate to award damages for pain and suffering to compensate the pain associated with lifting over ten kilograms, which the worker did not experience, as he avoided the activity. If, however, the worker experienced significant distress because this lifting restriction prevented him lifting his children, this distress would be compensable, although it resulted from the lifting restriction. It is actual distress resulting from the permanent impairment.
The PIRS Rating Form, setting out the application by Dr Gertler (the approved medical specialist) of the criteria in the Guidelines, is attached to the medical assessment certificate dated 17 March 2008. It does not, in applying the criteria, make any reference to actual pain or distress or anxiety (the matters compensable pursuant to section 67), save for a reference “avoids public transport because of anxiety”. The arbitrator’s reasons at [65] set out a number of matters he described as being raised in the Respondent Worker’s statement and multiple medical reports. He does not suggest the list of symptoms he sets out is exhaustive. There is an extensive description by the Respondent Worker of her symptoms at pages 5 to 8 of her statement dated 23 February 2007. There is some potential overlap between some of the symptoms the arbitrator describes, and matters considered by Dr Gertler for the purpose of completing the PIRS Rating Form. For example, the reference in the reasons “lives as a hermit, only going out when necessary” may depict some aspects of symptomatology similar to that which led Dr Gertler to describe the “Social and recreational activities” as “No longer attends previous activities. Mostly at home, generally only visits immediate family”.
However, after setting out various symptoms at [65], the arbitrator went on to say at [66]:
“The state of well being (or lack of it) described by the Applicant, and not challenged by the Respondent is demonstrative of a significant amount of constant and permanent pain and suffering. I would assess that the Applicant, in respect of such pain and suffering damages, as 50% of a most extreme case.” (my emphasis)
This passage makes it apparent the arbitrator has, in making an assessment pursuant to section 67, drawn a distinction between the permanent impairment, and actual pain or distress or anxiety resulting from the impairment. The reference to “damages” is inappropriate, but is not argued to have effected the result, or to be of any particular significance. Thus in my view the arbitrator has not erred in the manner contended for by the Appellant Employer. The Appellant Employer does not attack the quantum of the section 67 award, other than on the basis of the possible application of Krivec.
I should refer in passing to the submission by the Respondent Worker, that the Appellant Employer could not appeal the quantum of the section 67 award, as “the assessment of the degree of pain and suffering equating to 50% of a most extreme case does not disclose an error of law which is the only basis on which an appeal can be founded.” Appeals from Presidential members to the Court of Appeal, pursuant to section 353 of the 1998 Act, are restricted to point of law. An appeal from an arbitrator to a Presidential member, pursuant to section 352 of the 1998 Act, is not so restricted. It is by way of review – see generally the decisions discussed in Deadman v John A Gilbert Pty Ltd t/as Kirklands Buslines [2008] NSWWCCPD 105 at [65] to [69].
DECISION
Having conducted a merits based review, I am of the view the arbitrator’s decision is true and correct. The decision dated 26 May 2008 is confirmed.
COSTS
The Appellant Employer is to pay the Respondent Worker’s costs of the appeal.
Michael Snell
Acting Deputy President
22 October 2008
I, TUYET WALLIS, 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
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