Round the Clock Transport Services Pty Limited v Flynn

[2007] NSWWCCPD 204

WORKERS COMPENSATION COMMISSION

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

CITATION:Round the Clock Transport Services Pty Limited v Flynn [2007] NSWWCCPD 204

APPELLANT:  Round the Clock Transport Services Pty Limited

RESPONDENT:  Steven Flynn

INSURER:Allianz Australia Workers Compensation (NSW) Limited

FILE NUMBER:  WCC1495-07

DATE OF ARBITRATOR’S DECISION:          14 June 2007

DATE OF APPEAL DECISION:  2 October 2007

SUBJECT MATTER OF DECISION: Probable earnings but for injury; section 40(2)(a) of Workers Compensation Act 1987; evidence

PRESIDENTIAL MEMBER:  Deputy President Bill Roche

HEARING:On the papers

REPRESENTATION:  Appellant:      Sparke Helmore

Respondent:   Leitch Hasson Dent

ORDERS MADE ON APPEAL:  The Arbitrator’s determination dated 14 June 2007 is confirmed.

The Appellant Employer is to pay the Respondent Worker’s costs of the appeal.

BACKGROUND TO THE APPEAL

1. Steven Flynn (‘the Respondent Worker/Mr Flynn’) sustained injury to his neck in the course of his employment as a truck driver for Round the Clock Transport Services Pty Limited (wrongly sued as Round the Clock Transport) (‘the Appellant Employer’) on 13 January 2005 and as a result of the nature and conditions of his employment from 1 July 2002 to 13 January 2005.

1. His claim for compensation was initially accepted but liability was declined by letter from the Appellant Employer’s insurer dated 20 May 2005 with compensation payments ceasing on 3 June 2005.  After being off work for an unidentified period, Mr Flynn returned to work on suitable duties, which he continued to perform up to the date of the arbitration and, presumably, thereafter.

1. By his Application to Resolve a Dispute (‘the Application’) registered in the Commission on 6 March 2007 he claimed weekly compensation in the sum of $308.50 per week from 2 May 2005 to date and continuing together with lump sum compensation and a general order for medical expenses.

1. The Appellant Employer’s Reply filed on 29 March 2007 disputed injury, substantial contributing factor, incapacity, entitlement to lump sum compensation and entitlement to medical expenses.

1. The matter was listed for conciliation and arbitration on 2 and 30 May 2007 when Mr Flynn abandoned his claim for lump sum compensation because of his intention to have the cervical surgery recommended by his treating specialist.  The claim proceeded to arbitration on all remaining issues. 

1. In a reserved decision delivered on 14 June 2007 the Arbitrator found in favour of Mr Flynn and made the following orders:

“1.That the Respondent pay the Applicant weekly compensation pursuant to s. 40 of the Act at the rate of $219.88 per week from 21 May 2005 to date and continuing in accordance with the provisions of the Workers Compensation Act 1987.

2.That the Respondent pay the Applicant’s expenses pursuant to s. 60 of the Act on production of accounts or receipts.

3.        That the Respondent pay the Applicant’s costs as agreed or assessed.”

1. The Arbitrator arrived at the figure of $219.88 per week after finding probable earnings but for injury to be $950.00 per week and deducting Mr Flynn’s actual earnings of $730.12 per week. 

1. The Appellant Employer seeks leave to appeal the Arbitrator’s decision on the ground that probable earnings but for injury were and are $850.00 per week and the award should therefore be $119.88 per week.

LEAVE TO APPEAL

Monetary Threshold

1. Before proceeding to deal with an appeal the Commission must determine whether the application meets the requirements of section 352 of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’).

1. The quantum in issue on the appeal is in excess of $5,000.00 and more than 20% of the amount awarded is at issue on appeal. Therefore, the thresholds in section 352(2) of the 1998 Act are satisfied.

Time

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

1. I grant leave to appeal.

PRELIMINARY MATTERS

1. Section 354(6) of 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.”

1. Having regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submissions by the parties that the appeal can proceed to be determined on the basis of these documents, I am satisfied that I have sufficient information to proceed ‘on the papers’, without holding any conference or formal hearing, and that this is the appropriate course in the circumstances. 

ISSUES IN DISPUTE

1. The issues in dispute in the appeal are whether the Arbitrator erred in her determination of the probable earnings but for injury under section 40(2)(a) of the Workers Compensation Act 1987 (‘the 1987 Act’) and in her application of the five step process set out in Mitchell v Central West Area Health Service (1997) 14 NSWCA 526 (‘Mitchell’).  If she did, it is submitted that the correct award should be $119.88 per week.

REVIEW

1. The nature of a review and the role and function of a Presidential member on appeal has been considered in many cases in the Commission.  In The King Island Company Limited v Deery [2005] NSWWCCPD 1 it was held at [19]:

“19. A Presidential Member on appeal has a specific and limited role in the review of a decision of an Arbitrator. The review is not a rehearing. The Presidential member is not dealing with the matter de novo and is not arriving at a fresh decision based on all of the evidence available at a later time (Coal & Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194; Builders Licensing Board v Sperway Constructions (Sydney) Pty Ltd (1976) 135 CLR 616). The powers of the Presidential Member to revoke the decision pursuant to section 352(7) of the 1998 Act and to substitute a new decision in its place, are exercisable only where it is demonstrated that the decision of the Arbitrator is affected by some legal, factual or discretionary error (Allesch v Maunz (2000) 203 CLR 172). Alternatively, the Presidential Member may remit the matter back to the Arbitrator concerned, or to another Arbitrator, for determination in accordance with any decision or directions made.”

1. The nature of a review was considered by the Court of Appeal in Aluminium Louvres & Ceilings Pty Limited v Zheng [2006] NSWCA 34 where Bryson JA said at [38]:

“A review is a different process to an appeal and the matters which may be considered and the manner in which they may be considered are somewhat wider. See Boston Clothing Co Pty Ltd v. Margaronis (1992) 27 NSWLR 580 at 584 (Kirby P). An attack, on review or otherwise, on an Arbitrator's discretionary decision in controlling procedure may be based on the test stated in House v. R (1936) 55 CLR 499 at 504 - 505; but that is not the only basis on which the Presidential member may act. The powers of a Presidential member on review are somewhat wider and extend to power to reopen consideration of a matter of which an Arbitrator has disposed; the manner in which the powers of the Presidential member are to be exercised is itself the subject of discretion of the Presidential member.”

1. This passage was recently quoted with approval by McColl JA in South Western Sydney Area Health Service v Edmonds [2007] NSWCA 16 at [134] (‘Edmonds’).  To describe the relative weight and relevance of the expert evidence as “a discretionary decision which could only be disturbed on House v The King principles” was described by McColl JA as “an over-generalisation” (at [133]).

1. Before an Arbitrator’s decision will be revoked on review it must be demonstrated that it contains or has resulted from an error of fact, law or discretion.  The error must be such that, but for it, a different decision should have been made (see Snow Confectionary Pty Ltd v Askin [2004] NSWWCCPD 56; Section 294 of the 1998 Act; YG & GG v Minister for Community Services [2002] NSWCA 247; Absolon v NSW TAFE [1999] NSWCA 311).

1. I intend to apply the above principles in the matter before me.

SUBMISSIONS AND FINDINGS

1. The Appellant Employer contends that the Arbitrator adopted an incorrect reasoning process in her approach to the section 40 calculations.  The Arbitrator dealt with this issue at paragraphs 41 to 44 inclusive in her Statement of Reasons for Decision (‘Reasons’).  She noted:

(a)Mr Flynn’s average weekly earnings for the financial years ending 2004, 2005 and 2006 were $973.31, $937.62 and $730.12 respectively (Reasons, paragraph 42);

(b)Mr Flynn claimed he was losing about $300.00 per week (Mr Flynn’s statement 8 May 2007, paragraph 35);

(c)the Appellant Employer argued that overtime was reduced for all employees following the loss of a contract in 2004/5 and that there was only one comparable employee, who earned $850.00 per week (Reasons, paragraph 42);

(d)no details of the alleged comparable employee (either that persons name or duties he or she performed) were provided (Reasons, paragraph 42), and

(e)taking into account the fact that there had been some drop in overtime, and noting generally that the amount of overtime offered was irregular, the Arbitrator discounted Mr Flynn’s 2004 average weekly earnings ($973.62) by “a small margin to allow for some reduction due to factors not associated with the Applicant’s injury” (Reasons, paragraph 43) and found probable earnings but for injury to be $950.00 per week.

1. The Appellant Employer argues that as the Arbitrator accepted that overtime had decreased and as there was only one comparable employee (earning $850.00 per week), whom the Arbitrator did not reject, she was in error in finding probable earnings to be $950.00 per week instead of $850.00 per week.

1. Mr Flynn points out that the Appellant Employer’s evidence on wages is set out in a letter from the company addressed to its solicitors, Sparke Helmore, dated 27 April 2007.  In paragraph five of that letter there are certain annual earnings (presumably for Mr Flynn) for the financial years 2004 to 2008 inclusive.  The accuracy of the figures for 2007 and 2008 is open to doubt as they clearly involved some degree of estimation or extrapolation.  Also included in paragraph five is the following statement:

“AFTER THE ’04-’05 PERIOD, RTC LOST A MAJOR CONTRACT – SO OVERTIME FOR EVERYONE WAS GREATLY REDUCED.
All drivers dropped approx. 75% of their overtime.  Steve’s hours would also have been reduced accordingly.”

1. Paragraphs six and seven of the letter add:

“6.Being a small company, there is only 1 comparable – approximately $850.00 gross per week

7.        Overtime is not fixed or regular – some weeks 6-8 hours, some weeks nil.”

1. The Appellant Employer also relied on a letter from it to Sparke Helmore dated 9 May 2007, which states that due to another company taking over “the CSL contract” Mr Flynn ceased employment with the Appellant Employer and started work with Better Alternative Transport on 9 December 2006.  The letter added:

“2.In November 2004 RTC cut back on drivers – with no-one taken on for 17 mths [sic].  At the time, there was no guarantee of employment due to [the] downturn of work.  When Steve took extended time off, RTC did not need to employ anyone to fill his shift.  When the CSL contract came on board in July 2005, it was offered to Steve as secure employment, as well as the lighter duties benefiting his requirements.”

1. No wage records or time sheets were tendered to support the conclusions set out in the above letters. 

2. Mr Flynn’s further evidence on wages is in his statement of 8 May 2007 where he said at paragraphs 33 to 35 inclusive:

“33.I do not accept what she says in relation to overtime.  It is true that RTC did lose a contract but since that time they have picked up a few lucrative jobs with other suppliers, in particular the delivery of flu vaccines from CLS CSL.

34.I find it surprising that she would say overtime has been reduced as it has been my observation that everyone is working flat out.

35.I am losing more than $300.00 per week and I am very worried about my future, especially after surgery.”

1. Mr Flynn submits:

(a)the Appellant Employer provided no evidence of probable earnings but relied on vague assertions unsupported by facts and unsupported by documentary evidence to refute his claim;

(b)as noted by the Arbitrator at paragraph 42 of her Reasons, neither the alleged comparable employee nor the duties he or she performed were identified;

(c)in respect of the allegation that a contract was lost in 2004, it is noted that Mr Flynn’s earnings for the 2005 financial year were $937.62 per week which would tend to suggest that the assertions about the impact of the lost contract is open to question, and

(d)the Arbitrator took some account of the alleged drop in overtime and assessed probable earnings at $950.00 per week.

1. In circumstances where the Appellant Employer did not provide the Commission with full and proper wage records for the alleged comparable employee, it is hardly surprising that the Arbitrator took the approach she did.  Whilst she did not expressly state that she rejected the ‘evidence’ that comparable earnings were $850.00 per week that was the effect of her finding.  That was hardly surprising.  The Appellant Employer’s evidence was vague, imprecise and inadequate.  The alleged comparable employee was not named.  His or her wage records were not produced.  The figure of $850.00 per week was only an ‘approximation’.  Though it is not entirely clear, it seems to have covered the period from 1 July 2003 to 29 March 2007 (see request for particulars from Sparke Helmore to Appellant Employer dated 29 March 2007 which requested gross earnings details for comparable employees for that period).  The evidence would have been more helpful if it had properly identified the alleged comparable employee and set out that persons earnings in the 12 months up to January 2005 and then, separately, the earnings for the period from January 2005 to date.  As that was not done, it was for the Arbitrator to do the best she could with the evidence tendered.

1. Mr Flynn’s evidence was that the Appellant Employer had picked up other contracts to offset the contract lost in 2004 and that “everyone was working flat out”.  In his estimation he was losing $300.00 per week as a result of his injury.

1. It was for the Arbitrator to consider and weigh up this conflicting evidence.  She did that.  She rightly noted that the Appellant Employer had not provided details of the alleged comparable employee or the duties performed by that person.  She then took into account that there had been a drop in overtime and that overtime was irregular.  She then discounted Mr Flynn’s 2004 earnings “by a small margin to allow for some reduction due to factors not associated with the Applicant’s injury” (Reasons, paragraph 43).  This approach was open on the evidence and discloses no error. 

1. The evidence called by the Appellant Employer was seriously deficient and fell well short of what was required.  The Arbitrator did not accept it.  Had she done so Mr Flynn would have had a powerful argument that he had been denied procedural fairness because the evidence was in such a form that he could not have adequately responded to it because the alleged comparable employee had not been identified and no formal wages produced.

1. Whilst proceedings in the Commission are to be conducted with as little formality and technicality as the proper consideration of the matter permits (section 354(1) of the 1998 Act), evidence must be logical and probative.  Evidence based on speculation or unsubstantiated assumptions is unacceptable.  To a large extent the Appellant Employer’s evidence was unsubstantiated and the Arbitrator was therefore entitled to give it less weight.

1. In all the circumstances I reject the Appellant Employer’s grounds of appeal.

DECISION

1. The Arbitrator’s determination dated 14 June 2007 is confirmed.

COSTS

1. The Appellant Employer is to pay the Respondent Worker’s costs of the appeal.

Bill Roche

Deputy President  

2 October 2007

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

ASSOCIATE