Sanchez v Swan Services Pty Ltd

[2006] NSWWCCPD 24

WORKERS COMPENSATION COMMISSION

APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR

CITATION:Sanchez v Swan Services Pty Ltd [2006] NSWWCCPD 24

APPELLANT:  Hector Manuel Sanchez

RESPONDENT:  Swan Services Pty Ltd

INSURER:Royal & Sun Alliance Workers Compensation (NSW) Ltd

FILE NUMBER:  WCC 8507-03

DATE OF ARBITRATOR’S DECISION:          23 November 2004

DATE OF APPEAL DECISION:  21 February 2006

SUBJECT MATTER OF DECISION:                Treatment of the evidence, adequacy of reasons

PRESIDENTIAL MEMBER:  Acting Deputy President Robin Handley

HEARING:On the papers

REPRESENTATION:  Appellant: Steve Masselos & Co, Solicitors

Respondent: Lee & Lyons, Lawyers

ORDERS MADE ON APPEAL:  The decision of the Arbitrator dated 23 November 2004 is confirmed.

There is no order as to the costs of this appeal.

BACKGROUND TO THE APPEAL

1. On 21 December 2004, Hector Manuel Sanchez sought leave in the Workers Compensation Commission (‘the Commission’) to bring an appeal against the decision of an arbitrator dated 23 November 2004. The Respondent to the appeal is Swan Services Pty Ltd (‘Swan’). Royal & Sun Alliance Workers Compensation (NSW) Ltd (‘Sun Alliance’) is Swan’s workers compensation insurer.

1. Mr Sanchez was born in Uruguay on 22 September 1958 and is aged 47. He migrated to Australia from Argentina in 1998. From about April 2001, Mr Sanchez was employed by Swan as a cleaner at the Eastgardens Shopping Centre. He was injured in the course of his employment on 14 March 2002, suffering pain in his right arm, both shoulders, his neck and back. He immediately reported the injury to his supervisor and went to see a doctor. Initially, Sun Alliance paid Mr Sanchez weekly compensation and reimbursed his medical expenses. Following the incident on 14 March 2002, Mr Sanchez remained “off work” until 27 May 2002 when he returned to work for one day. However, he said he was unable to do the work assigned to him. After this, Mr Sanchez was off work until 6 January 2003 when he returned to work on light duties for two to three hours per day. In the period to 19 January 2003, he worked a total of 11.5 hours.

1. By letter dated 18 December 2002, Mr Sanchez’s solicitors claimed lump sum compensation for Mr Sanchez in respect of permanent impairment and pain and suffering. By letter dated 17 February 2003, Sun Alliance denied Mr Sanchez’s claim and notified him that his medical expenses would no longer be reimbursed and weekly compensation payments would cease after 7 March 2003. On 13 April 2003, Swan terminated Mr Sanchez’s employment.

1. On 1 April 2003, Mr Sanchez lodged an ‘Application to Resolve a Dispute’ with the Commission in respect of his claim for (1) weekly compensation from 7 March 2003 to date and continuing, (2) medical expenses, and (3) compensation for permanent impairment and pain and suffering. Swan’s ‘Reply’ was lodged on 29 April 2003. On 12 August 2003, the Arbitrator conducted a teleconference with the parties, following which Mr Sanchez was referred to two Approved Medical Specialists (‘AMSs’) for assessment. On 29 June 2004, the Commission issued Medical Assessment Certificates (‘MACs’) completed by Dr Brian Noll, Orthopaedic Surgeon, and Dr Frank Breslin, Urologist.

1. Dr Noll said investigations “revealed well-established degenerative changes of the cervical spine involving particularly the C5/6 and to a lesser extent the C6/7 disc levels with foraminal encroachment”. While noting inconsistencies on clinical assessment, Dr Noll said:

“Giving him the benefit of the doubt, it is possible that the work-related incident on 14/3/02, as described, may have resulted in some aggravation of the underlying pre-existing degenerative disorder of the cervical spine.”

1. Dr Noll considered it possible that Mr Sanchez had sustained a soft tissue injury to his neck that “aggravated the underlying well established degenerative disorder of the spine”, and concluded that Mr Sanchez’s condition “has not yet reached maximum medical improvement and impairment therefore cannot be assessed at this time”. Maximum medical improvement could be achieved in approximately three months once appropriate clinical and radiological assessments have been completed. Dr Noll found Mr Sanchez’s employment was a substantial contributing factor to the injury. He considered Mr Sanchez was fit for alternative employment and would be able to undertake full-time work as a cleaner with restrictions on lifting weights heavier than 10 kgs and avoiding strenuous pushing and pulling activities. However, assessment of his fitness for work might be influenced by the findings of a neurologist to whom he had been recommended for clinical assessment.

1. Dr Breslin said:

“The diagnosis of his urinary frequency needs to be evaluated. There are numerous causes for it, but in the presence of neck pain and suggestion of myelomalacia, which has not been evaluated by the referring Neurosurgeon, Dr Teo, there is a doubt about the diagnosis. He may well have myelomalacia and this needs to be evaluated.”

Dr Breslin thought the injury had resulted in loss of efficient use or impairment and that this was related to the accident. He declined to provide an assessment of permanent impairment and recommended review of Mr Sanchez by a Neurosurgeon.

1. On 28 July 2004, the Arbitrator conducted a further teleconference with the parties at which Mr Sanchez’s solicitors decided to discontinue the claim for compensation for permanent impairment and pain and suffering because of Dr Noll’s opinion that Mr Sanchez’s condition had not stabilised. On 3 September 2004, conciliation having been unsuccessful, the Arbitrator conducted an arbitration hearing, following which the parties made written submissions. On 23 November 2004, the Arbitrator made the decision set out below.

THE DECISION UNDER REVIEW

1. The Certificate of Determination, dated 23 November 2004, records the Arbitrator’s orders as follows:

“1. That the Respondent pay the Applicant weekly compensation at the maximum statutory rate from 8 March 2003 to 8 December 2003 under s 40 of the Workers Compensation Act 1987.

2. The Respondent is not liable for the Applicant’s claim for weekly compensation pursuant to s 40 of the Workers Compensation Act 1987 from 9 December 2003 to date.

3. That the Respondent pay the Applicant’s section 60 of the Workers Compensation Act 1987 expenses on production of accounts or receipts.

4. That the Respondent pay the Applicant’s costs as agreed or assessed. I certify that this matter was complex and proceeded directly to arbitration.”

1. In her ‘Statement of Reasons for Decision’, the Arbitrator summarised the resolution of issues in dispute as follows:

“• On 14 March 2002, Hector Manuel Sanchez received an injury to his neck, right and left arms and right and left legs arising out of or in the course of his employment with Swan Services Pty Ltd.

•   Hector Manuel Sanchez’s employment was a substantial contributing factor to his injury.

Weekly Benefits Claim:

•   Hector Manuel Sanchez was totally incapacitated for work as a result of his injuries from 12 March 2002 to 5 January 2003.

•   Hector Manuel Sanchez was partially incapacitated for work as a result of his injuries from 6 January 2003 to date.

•   Hector Manuel Sanchez’s probable weekly earnings, but for the injury, had he continued to be employed in the same or some comparable employment, are $542.49 per week.

•   During Hector Manuel Sanchez’s period of partial incapacity for work from 6 January 2003 to 8 December 2003 the average weekly amount he was earning or would be able to earn in some suitable employment from time to time after the injury was $140. From 9 December 2003 to date, the average weekly amount he was earning or would be able to earn in some suitable employment was $542.49.

•   Hector Manuel Sanchez is therefore entitled to weekly payments for the period of incapacity for work from 6 January 2003 to 8 December 2003 at the maximum statutory rate.

•   Hector Manuel Sanchez has already been paid compensation to 7 March 2003. The Respondent should be given credit for these amounts already paid.

Medical Expenses Claim

•   The Respondent is liable for Hector Manuel Sanchez’s medical and related expenses incurred as a result of treatment, services or assistance that were reasonably necessary for the compensable injury.

Non Economic Loss Claim

• As stated earlier, as a result of the Medical Assessment Certificates issued by Dr Noll and Dr Breslin in this claim, the Applicant has discontinued his claim for compensation pursuant to ss 66 and 67 of the Workers Compensation Act 1987.”

1. The Arbitrator noted the parties had agreed that Mr Sanchez’s pre-injury earnings were $542.49 per week. Although she recognised that these earnings would probably have increased since 2002, she had no evidence upon which to assess any such increase. Her calculation of Mr Sanchez’s earnings post-injury in suitable employment, was based on Mr Sanchez’s concession that as at January 2003, he was capable of working two hours a day, albeit that he claimed he could only work such hours on three days a week. The Arbitrator agreed with Swan’s submissions that Mr Sanchez was limiting his own work activities and was capable of working at least 10 hours a week and, therefore, for the period 6 January 2003 to 8 December 2003, was capable of earning $140 per week. Thereafter, Mr Sanchez was capable of earning his pre-injury wages as a cleaner.

1. With regard to Mr Sanchez’s claim for medical expenses, the Arbitrator found that as his condition had not reached maximum medical improvement, and as the AMS had recommended further investigative studies, it was appropriate for there to be an award for Mr Sanchez in relation to medical expenses.

ISSUES IN DISPUTE

1. Mr Sanchez’s solicitors submit the Arbitrator made errors of law in determining Mr Sanchez’s claim for weekly compensation. Swan denies this. The parties’ submissions are discussed more fully below.

ON THE PAPERS REVIEW

1. Section 354(6) of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’) states:

“(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 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. 

1. Neither party sought to adduce fresh evidence.

LEAVE

1. 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. With regard to section 352(2), Mr Sanchez’s solicitors state the amount of compensation at issue is $15,827 and constitutes more than 20% of the amount claimed. I am therefore satisfied that the section 352 threshold has been met, and I grant leave to appeal.

SUBMISSIONS, EVIDENCE AND DISCUSSION

1. The role of the Presidential Member on appeal is to review the Arbitrator’s decision as a whole. The review is not a rehearing. In this case, Mr Sanchez’s solicitors must demonstrate that the decision of the Arbitrator is affected by some legal, factual or discretionary error (Allesch v Maunz (2000) 203 CLR 172; The King Island Company Limited v Deery [2005] NSW WCC PD 1) in order to enliven the Presidential Member’s power to interfere with the Arbitrator’s decision pursuant to section 352(7) of the 1998 Act. Where the weight accorded to the evidence by the Arbitrator is challenged, Deputy President Fleming’s comment in Knight v Eyles Nominees Pty Ltd [2004] NSW WCC PD 73 at paragraph 40 should be borne in mind:

“Interference with an Arbitrator’s discretionary judgement as to the weight of evidence should only be done where it is manifestly obvious that the discretion has so miscarried that it has not been exercised fairly and lawfully.”

1. Mr Sanchez’s solicitors submit the Arbitrator made errors of law in determining Mr Sanchez’s claim for weekly compensation. Swan submits that, in effect, Mr Sanchez is seeking a re-hearing, and the alleged errors of law are, in reality, complaints about the Arbitrator’s findings that, in Swan’s submission, were all available to the Arbitrator, whose reasons were clear and well presented. Having reviewed Mr Sanchez’s solicitor’s grounds of appeal, and considered the substance of those grounds, in my opinion, Swan’s comment is well founded. I have also had difficulty in characterising many of these grounds as errors of law or jurisdictional errors, as claimed. I will, nevertheless, deal with the errors alleged by Mr Sanchez’s solicitors in turn according to the letters by which they are designated in their submissions.

(a) Mr Sanchez’s solicitors submit the Arbitrator erred in law by finding Mr Sanchez’s probable weekly earnings but for the injury were $542.49. I note that in Mr Sanchez’s counsel’s written submissions to the Arbitrator, counsel stated that Mr Sanchez’s pre-injury earnings up until 14 March 2002 were $542.49, and that “comparable earnings in 2004 have probably increased”. There is then a calculation of entitlement to weekly payments based on this figure. The Arbitrator (paragraph 57) said she had no other evidence upon which to assess any increase and therefore made a finding for the purpose of section 40(2)(a) of the 1987 Act of probable earnings but for the injury of $542.49. In my view, she was entitled to do so and made no error of law thereby.

(b) Mr Sanchez’s solicitors submit the Arbitrator erred by not taking into account the restrictions to which his capacity for work is subject after 8 December 2003. I note the Arbitrator placed particular reliance on the opinion of the AMS, Dr Noll, Orthopaedic Surgeon, because he had the benefit of all the previous medical opinions plus his own medical assessment. As at the date of his examination (8 December 2003), Dr Noll assessed Mr Sanchez as being fit for full-time work as a cleaner, subject to avoiding strenuous pulling and pushing and lifting more than 10 kgs. The Arbitrator noted these restrictions (paragraph 58) but referred to the evidence of Judith Koch, General Manager of Swan, dated 10 August 2004, and of the Rehabilitation Provider, Norma Craven (see for example report dated 16 August 2004), that such restrictions could have and would have been accommodated by Swan in any return to work program. The Arbitrator therefore found Mr Sanchez was capable of earning his pre-injury wages as a cleaner from 9 December 2003. In my opinion, she was entitled to do so on the evidence before her and thereby made no error of law.

(c)   Mr Sanchez’s solicitors submit the Arbitrator did not apply the correct legal criteria in assessing Mr Sanchez’s ability to earn in some suitable employment after 8 December 2003. However, as Swan points out in its submissions, there was no evidence before the Arbitrator of Mr Sanchez’s attempts to obtain work or as to the availability of cleaning work. In my opinion, the Arbitrator was entitled to find Mr Sanchez was capable of earning his pre-injury earnings as a cleaner on the basis of the evidence referred to in paragraph (b) above.

(d) Mr Sanchez’s solicitors submit the Arbitrator erred by finding, without explanation and without reference to Mr Sanchez’s situation in the employment market available to him, that while Mr Sanchez was only able to earn $140 per week before 9 December 2003, he was able to earn $542 per week from that date. In my view, the Arbitrator did explain the basis for this finding. Clearly, she relied on Dr Noll’s opinion and, thereby, probably gave Mr Sanchez the benefit of the lack of persuasive evidence before that date as to his capacity for full-time work. I am not therefore satisfied that the Arbitrator made any error in so finding, noting once again the lack of evidence from Mr Sanchez as to his situation in the employment market available to him.

(e)   Mr Sanchez’s solicitors question the Arbitrator’s reasoning in relation to the periods when she found Mr Sanchez was totally incapacitated for work and then partially incapacitated for work. I note that in addition to Mr Sanchez’s concession that he was partially incapacitated for work from 6 January 2003, the Arbitrator discussed relevant medical evidence from his general practitioner, Dr Chris Eliades, in relation to mid-January 2003, and the video evidence provided by Swan, in the context of Dr Noll’s later opinion. In my opinion, it was open to the Arbitrator to make such findings, and I am satisfied that she clearly explained her reasoning process.

(f)   Mr Sanchez’s solicitors submit the Arbitrator misconceived the test for determining compensation for partial incapacity in so far as she did not consider Mr Sanchez’s ability to earn in the open labour market. As stated above in paragraphs (c) and (d), no such evidence was provided by Mr Sanchez.

(g) Mr Sanchez’s solicitors again question the basis for Arbitrator’s finding that, from 9 December 2003, Mr Sanchez would be earning or able to earn $542.49 in some suitable employment. I am not satisfied that this ground is made out and have already addressed this above.

(h) I reject Mr Sanchez’s solicitors submission that the Arbitrator exceeded her jurisdiction by making paragraph 2 of her Determination unnecessarily because, by inference, she purported to exclude the possibility of a review under section 55 of the 1987 Act or a reconsideration by the Commission pursuant to section 350(3) of the 1998 Act. As noted by Swan, section 55 only operates where weekly compensation is being paid, and no such determination could exclude the Commission’s statutory power to reconsider a matter.

(i)   Mr Sanchez’s solicitors submit the Arbitrator failed to take into account relevant medical evidence, in particular as to Mr Sanchez’s psychological symptoms and the possibility of his suffering from myelomalacia. I note there are two reports to Sun Alliance from a psychologist, Erigoni Nitsa Vlass, dated 12 August 2002 and 18 October 2002. There is also reference to Mr Sanchez experiencing anxiety and to him being prescribed antidepressants (for example, Dr Eliades’ report dated 23 October 2002). However, apart from comments by the Rehabilitation Provider and in the medical reports as to his exaggerating his symptoms, I have been unable to locate any other expert evidence about his psychological condition affecting his capacity for work or ability to earn. As Mr Sanchez’s solicitors acknowledge by drawing attention to it, relevant material was referred to by the Arbitrator in discussing the medical evidence. While medical opinion suggested Mr Sanchez might be suffering from myelomalacia, and the two AMSs both recommended that his neurologist should review his condition, there was no definitive evidence about whether Mr Sanchez suffers from this condition before the Arbitrator. She followed Dr Noll’s opinion, who knowing of this possibility and having declined to assess the degree of permanent impairment attributable to his cervical spine and right and left upper and lower extremities, nevertheless said that, as at the date of examination, Mr Sanchez was fit for work, subject to restrictions. I am not therefore satisfied that Mr Sanchez’s solicitors have made out this ground of review.

(j)   Mr Sanchez’s solicitors refer to the third paragraph of paragraph 58 of the Arbitrator’s Statement of Reasons. I can find no evidence of a report by the Rehabilitation Provider dated 22 August 2003, to which Mr Sanchez’s solicitors refer, being in evidence before the Commission. The Arbitrator’s reference to the Rehabilitation Provider, Ms Craven’s comments concerning the accommodation of the restrictions on Mr Sanchez’s capacity to work, appear to be a reference to Ms Craven’s comments in her report dated 16 August 2004. The Injury Management Closure Report prepared by Ms Craven in evidence is that dated 28 February 2003. In any event, as noted in paragraph (b) above, the Arbitrator took into account Ms Craven’s evidence, that of Ms Koch, and that of Dr Noll in making her finding as to Mr Sanchez’s capacity for work. I am not therefore satisfied that Mr Sanchez’s solicitors have made out this ground of review.

(k) Mr Sanchez’s solicitors submit the Arbitrator failed to take into account relevant matter of which she had judicial notice, namely the relevant award rates of pay for cleaners. No reference was made to this award by Mr Sanchez’s counsel in his submissions to the Arbitrator, the award was not otherwise in evidence before the Commission, and the Arbitrator, if she had knowledge of such an award would, for reasons of procedural fairness, have had to raise this with the parties. I therefore reject this ground of appeal.

(l)   Mr Sanchez’s solicitors submit that the Arbitrator exceeded her jurisdiction by going beyond Swan’s submission that if injury and incapacity were found, any incapacity is slight and there should be a fairly minimal award. As Swan points out in its submissions, the Commission is not bound by the submissions of the parties. The Commission has a duty to act lawfully and fairly, including giving proper consideration to the submissions of the parties. However, having done so, the Commission may accept or reject such submissions, provided it gives reasons for doing so, and is not in any way limited by those submissions in the way it exercises its power. I therefore reject this ground of appeal.

(m) This submission by Mr Sanchez’s solicitors is essentially a repetition of ground (d) which I have already rejected.

(n) Mr Sanchez’s solicitors submit that the Arbitrator failed to specify the nature of the two dependents referred to at paragraph 20 of her Statement of Reasons, thereby causing uncertainty. I note Mr Sanchez’s ‘Application to Resolve a Dispute’ does not refer to a claim in respect of dependents and makes no other reference to dependents. Moreover, no evidence was tendered as to his having dependents and no submissions were made as to dependents. Although it is apparent from the filed documents that Mr Sanchez is married, his wife has adult children from a previous relationship, and he has two children in their teens in Argentina from his previous marriage, there is no indication that Mr Sanchez’s claim includes any dependents. It must therefore be assumed that Mr Sanchez’s claim is as a worker with no dependents, and that the Arbitrator’s award at paragraph 1 of her Determination reflects this. In my view, the Arbitrator’s reference at paragraph 20 of her Statement of Reasons is by way of background only, and the use of the word ‘dependents’ there is not intended to qualify the award made.

1. In the penultimate paragraph of their submissions, Mr Sanchez’s solicitors contend the Arbitrator erred in determining Mr Sanchez’s probable weekly earnings and ability to earn from 9 December 2003, and by failing to give proper reasons for her decision. The first two issues I have already dealt with above. However, Swan notes, correctly, that the Commission is required to follow the steps prescribed by the NSW Court of Appeal in Mitchell v Central West Health Service (1997) 14 NSWCCR 527 (‘Mitchell’) in determining an award under section 40 of the 1987 Act, and the Arbitrator’s Statement of Reasons does not reveal whether she considered the exercise of her discretion pursuant to section 40(1).

1. Section 40(1) (step 4 of Mitchell) requires that the Arbitrator should decide whether and to what extent the reduction in the worker’s average weekly earnings as a result of the injury (calculated in accordance with steps 1 to 3 of Mitchell), “bears such relation to the amount of that reduction as may appear proper in the circumstances of the case” (Mitchell at 529). Swan contends it was unnecessary for the Arbitrator to consider the exercise of her discretion as she had made the finding that, from 9 December 2003, Mr Sanchez was capable of earning his pre-injury earnings as a cleaner. In my view, the Arbitrator should have specifically referred to her discretion pursuant to section 40(1), in accordance with step 4, even if she did not intend to exercise that discretion. That she did not refer to her discretion is probably a reflection, first, of the fact that that no specific submissions were made to her about this by the parties and, second, of there being no evidence that would warrant the exercise of the discretion. Thus although, strictly speaking, the Arbitrator made an error of law by failing to address step 4, in my view, were I to now address that step and substitute my own decision for that of the Arbitrator, I would come to the same conclusion. For this reason, I decline to interfere with the Arbitrator’s decision in relation to section 40.

1. More generally, in terms of the reasons for her decision, subject to the one exception mentioned above, I am satisfied that the Arbitrator has given an adequate and, indeed, clear and well-reasoned Statement of Reasons for her decision.

1. The final paragraph of Mr Sanchez’s solicitors’ submissions appears to be a general summary of all that has already been submitted and that I have rejected, above. Thus, Mr Sanchez’s solicitors having failed to make out any of their grounds of appeal, the Arbitrator’s decision must be confirmed.

DECISION

1. The decision of the Arbitrator dated 23 November 2004 is confirmed.

COSTS

1. There is no order as to the costs of this appeal.

Robin Handley

Acting Deputy President  

21 February 2006

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

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