Santa Sabina College Pty Ltd v Agius
[2006] NSWWCCPD 58
•4 April 2006
WORKERS COMPENSATION COMMISSION
APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:Santa Sabina College Pty Ltd v Agius [2006] NSWWCCPD 58
APPELLANT: Santa Sabina College Pty Ltd
RESPONDENT: Mari-Luise Agius
INSURER:Employers’ Mutual Indemnity (Workers’ Compensation) Ltd
FILE NUMBER: WCC 15101-04
DATE OF ARBITRATOR’S DECISION: 13 January 2005
DATE OF APPEAL DECISION: 4 April 2006
SUBJECT MATTER OF DECISION: Leave to admit fresh evidence; leave to file a (cross) ‘Application to Resolve a Dispute’ with the Commission; the onus of establishing a change of circumstances under section 55 of the Workers Compensation Act 1987; exercise of the discretion under section 40 of the 1987 Act; treatment of evidence.
PRESIDENTIAL MEMBER: Acting Deputy President Robin Handley
HEARING:On the papers
REPRESENTATION: Appellant: Edwards Michael Lawyers
Respondent: Creagh & Creagh, Solicitors
ORDERS MADE ON APPEAL: The decision of the Arbitrator dated 13 January 2005 is confirmed.
The Appellant, Santa Sabina College Pty Ltd, is to pay the Respondent, Ms Agius’ costs in this appeal.
BACKGROUND TO THE APPEAL
On 10 February 2005, Santa Sabina College Pty Ltd (‘the College’) sought leave in the Workers Compensation Commission (‘the Commission’) to bring an appeal against the decision of an Arbitrator dated 13 January 2005. The Respondent to the appeal is Mari-Luise Agius. The College’s workers compensation insurer is Employers’ Mutual Indemnity (Workers’ Compensation) Ltd (‘EMI’).
Ms Agius was born on 23 May 1963 and is aged 42. She was employed as a physical education teacher by the College, teaching pupils in years 7 to 12. In the course of a bushwalking trip at Cape Knox on the Hawkesbury River with pupils from the College between 1 and 4 April 1997, Ms Agius injured her left knee. She had previously injured that knee while playing soccer in 1987, suffering a rupture of the anterior crucuiate ligament as a result of which she underwent surgery, followed by a program of rehabilitation including physiotherapy. Her evidence at the Compensation Court was that she subsequently returned to teaching physical education and engaging in strenuous sports.
Ms Agius commenced workers compensation proceedings against the College in the Compensation Court of NSW culminating in a judgment in her favour by Quirk J on 20 July 2001. Her Honour made the following order:
“I order the respondent to pay to the applicant:
1. $5,250 in respect of 7 per cent permanent loss of efficient use of the left leg at or above the knee (being 35 per cent less the 80 per cent deduction pursuant to s 68A).
2. $140 per week from 1 November 2000 to date and continuing pursuant to s 40.
3. Hospital and medical expenses pursuant to s 60.
4. Costs.”
On 23 September 2004, the Commission registered the College’s ‘Application to Resolve a Dispute’ in respect of its claim that there had been a change in Ms Agius’ circumstances justifying the extinguishment or dimunition of the award of weekly compensation made by Judge Quirk, and the cessation of any further liability in respect of medical, hospital or related expenses. In her ‘Reply’, Ms Agius sought to reactivate a similar application, discontinued in 2004, in which she contended there had been a change in her circumstances justifying an increase in her weekly compensation.
On 22 December 2004, conciliation having proved unsuccessful, the Arbitrator conducted an arbitration hearing with the parties. Then on 13 January 2005, he made the decision set out below.
THE DECISION UNDER REVIEW
The Certificate of Determination, dated 13 January 2005, records the Arbitrator’s orders as follows:
“1. That pursuant to Rule 5 of the Workers Compensation Commission Rules 2003:
a. Leave be granted to the respondent worker to file an application in the same form as that annexed to the Reply.
b. That such application be treated as fresh proceedings; and
c. That such application be determined concurrently with proceedings 15101 of 2004.
d. That such application be filed and served within 48 hours of the hearing on 14 December 2004.
2. That the Applicant employer’s application is dismissed.
3. That the Respondent [employer] pay the Applicant [worker] weekly compensation at the rate of $300.00 from 29 April 2004 to date under section 40 of the Workers Compensation Act 1987.
4. That such weekly payments continue in accordance with the provisions of the Act.
5. That the Applicant employer pay the Respondent worker’s costs of and incidental to both the application and cross-application as agreed or assessed.”
In his ‘Statement of Reasons for Decision’, the Arbitrator summarised the issues in dispute as follows:
“a. The Commission does not have jurisdiction under section 55 of the 1987 Act to review payments claimed or to be claimed under section 60 the 1987 Act.
b. Even if the Commission does have jurisdiction to review payments claimed or to be claimed under section 60 the 1987 Act, the applicant employer has failed to establish a change in the circumstances prevailing at the time of Judge Quirk’s 20 July 2001 judgement.
c. The applicant employer failed to establish a change in the circumstances prevailing at the time of Judge Quirk’s 20 July 2001 judgement as required by section 55 of the 1987 Act in order to obtain orders ending or reducing Judge Quirk’s order for weekly payments.
d. The respondent worker established a change in the circumstances prevailing at the time of Judge Quirk’s 20 July 2001 judgement as required by section 55 of the 1987 Act. The relevant change was an increase in the differential between the respondent’s probable weekly earnings, but for the injury, and her actual earnings.
e. The respondent worker’s probable weekly earnings, but for the injury, had she continued to be employed by the applicant employer are $1213.38 a week from 29 April 2004.
f. The respondent worker’s actual weekly earnings are $630.00 a week from 29 April 2004.
g. The average weekly amount the worker would be able to earn in some suitable employment from time to time after the injury (section 40(2)(b)) is the amount of her current earnings from Agius Estates Pty Ltd.
h. Her employment as a real estate agent is suitable employment within the meaning of section 43A of the 1987 Act and is in some general labour market reasonably accessible to her.
i. In the exercise of the discretion under section 40(1) of the 1987 Act the payment for [sic] the reduction in the respondent worker’s weekly earnings which is proper in the circumstances of the case is $300.00 per week from 29 April 2004.
j. The respondent worker has already been paid compensation of $140.00 per week from 29 April 2004.”
ISSUES IN DISPUTE
The procedural issue in dispute in the appeal is whether the College should be given leave to file fresh evidence. The substantive issues in dispute in the appeal are whether the Arbitrator made an error of law or discretion (1) by allowing Ms Agius to file a (cross) ‘Application to Resolve a Dispute’, (2) by finding that the College had not established a change of circumstances, and in his treatment of the medical evidence, and (3) in the exercise of his discretion under section 40(1) of the Workers Compensation Act 1987 (‘the 1987 Act’). These issues and the parties’ submissions are discussed more fully below.
ON THE PAPERS REVIEW
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.”
I have had regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submissions of the parties on the appeal. The College submits the appeal can be determined on the papers. Ms Agius’ solicitors submit the matter can be determined on the papers unless leave is granted to admit the report of Dr David Wood, Orthopaedic Surgeon, dated 18 March 2005, as fresh evidence, in which case the matter needs to be determined by oral hearing. Having considered these submissions and the relevant documents, I am satisfied that I have sufficient information to proceed ‘on the papers’, without holding any conference or formal hearing, and that this is the appropriate course in the circumstances.
LEAVE
Before proceeding to deal with an appeal, the Commission must determine whether the application meets the requirements of section 352 of the 1998 Act. The appeal was lodged within 28 days of the issue of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act. With regard to section 352(2), I accept that the amount of weekly compensation at issue exceeds $5,000 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.
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.”
Practice Direction No 6 sets out the process for seeking leave of the Commission to give ‘new evidence’ on appeal. It provides as follows:
“New Evidence
Where a party seeks leave to give new evidence in relation to the decision appealed against, that party must serve a copy of the new evidence on the other parties to the dispute when serving the Application or Opposition.
In general, the Commission will allow new evidence to be introduced only where it can be demonstrated that the new evidence could not reasonably have been obtained by the party and tendered in proceedings before the Arbitrator and that failure to allow the new evidence would cause a substantial injustice in the circumstances of the individual case.”
Practice Direction No 6 also provides that if new evidence is sought to be relied upon, the Application or Opposition to the Appeal must contain:
“ -a schedule of the new evidence,
-a copy of the new evidence,
-a brief outline of the new evidence and the reasons why it was not given in the
proceedings before the Arbitrator, and
-submissions why the new evidence should be admitted.”
As noted above, the College seeks leave to admit new evidence, namely a report by Dr Woods dated 18 March 2005. This application was made in an ‘Application to Admit Late Documents’ filed on 31 March 2005.
The exercise of two discretions is involved here: first, the discretion to admit late documents and, second, the discretion to grant leave to admit fresh evidence. With regard to the discretion to admit late documents, I note first that the further submissions and report dated 18 March 2005 should have been lodged with the application ‘Appeal against Decision of Arbitrator’. However, I grant leave to admit the further submissions since it is necessary to do so in order to determine the application for leave to admit the fresh evidence, and the admission of the further submissions does not, of itself, affect the timely resolution of the dispute or cause prejudice to the other party.
With regard to the admission of fresh evidence, the College submits this evidence was not given in proceedings before the Arbitrator because it was not available at the time. Moreover, for the College to communicate directly with Dr Woods, Ms Agius’ expert witness, prior to the determination of the proceedings, would also have been objectionable for practical and ethical reasons. The College submits, further, that a substantial injustice will be caused to the College if the report of Dr Woods is not admitted because it is “of the highest probative value” and “there is a high degree of probability that it would have led to a different outcome in the case ... [because] the Doctor crystalises what had previously been vague and somewhat ambiguous evidence in relation to causation”.
In their submissions, Ms Agius’ solicitors contend that the College does not provide any adequate reason why Dr Woods’ report could not have been obtained and tendered in the proceedings before the Arbitrator. Ms Agius had “no property in Dr Woods as a witness” and such a report could have been obtained before the proceedings that were initiated by the College. Ms Agius’ solicitors submit any prejudice to the College by reason of the evidence not being admitted is of their own making and, in any event, is not substantial compared to the prejudice that will be caused to Ms Agius who, had the report been served in a timely fashion, could have chosen to rely on the views of another specialist. Ms Agius’ solicitors also contend the report of 18 March 2005 is likely to confuse the evidence.
In Dr Woods’ report of 30 November 2004, he said he believed Ms Agius aggravated her knee during the bushwalking trip in April 1997:
“I consider she still has an ongoing aggravation in her medial compartment but certainly the medial compartment osteoarthritis was pre existing at the time of the aggravation.”
In his report dated 18 March 2005, Dr Woods expresses an opinion not previously expressed, that “Ms Agius would have had the ability to continue work as a PE teacher for at most five years after 1997”. But he does not say the aggravation caused by the incident in 1997 has ceased. Moreover, this is a very brief report of only two substantive sentences and there is no indication of his understanding of what is required of a physical education teacher. In my view, Dr Woods’ report of 18 March 2005, when read in the light of his earlier report, is more obfuscatory than of assistance. I do not accept that the College could not have sought such a report before the arbitration and, in my view, the potential prejudice to Ms Agius is far greater than that to the College. If the College wishes to rely on such evidence, it could make a further application to the Commission for a review because of a change of circumstances, pursuant to section 55 of the 1987 Act. Thus, I am not satisfied that my not admitting this new evidence will, in the circumstances, cause the College a substantial injustice. Leave to admit the new evidence is therefore refused.
SUBMISSIONS
The College
The College notes that Judge Quirk found that 80% of the loss of function of Ms Agius’ left leg at or above the knee was due to her pre-existing condition. In determining the weekly compensation payable to Ms Agius, Her Honour exercised her discretion under section 40 of the 1987 Act to take account of the fact that Ms Agius had ceased suitable employment as a teacher to commence work as a real estate agent. Her Honour therefore reduced the difference of $391.00 between Ms Agius’ probable weekly earnings of $891.54 and her residual capacity to earn as a real estate agent of $500.00 per week, to $140.00, a reduction of 64%. By contrast, the Arbitrator found Ms Agius’ probable weekly earnings would be $1,213.38 and her actual earnings were $630.00 per week. He exercised his discretion under section 40 to reduce the difference of $582.38 per week to $300.00, a reduction of approximately 48%.
The College submits Ms Agius failed to discharge the onus of establishing that she would have been able to continue working as a physical education teacher regardless of the aggravation sustained in April 1997, and that the Arbitrator erred by rejecting the evidence of Dr K Wilding, Orthopaedic Surgeon, in this regard on the basis that it was inconsistent with the findings of Judge Quirk. Her Honour’s determination on the issue of the cause of Ms Agius’ condition was in accord with Dr Wilding’s opinion, that is that 80% of her loss of function was due to her pre-existing condition.
The College also submits the Arbitrator’s decision to allow Ms Agius to file a cross ‘Application to Resolve a Dispute’ in response to the College’s application, was procedurally defective and denied the College procedural fairness. There was, therefore, no jurisdictional basis for the Arbitrator to consider Ms Agius’ application for an increase in the weekly compensation payable.
Ms Agius
Ms Agius’ solicitors note that there were two applications under section 55 of the 1987 Act before the Arbitrator: the College’s application to terminate or reduce the award of weekly compensation, and Ms Agius’ application seeking an increase in the award. They submit that because Judge Quirk found that Ms Agius’ earnings but for the injury were those of a physical education teacher, Ms Agius was not required to re-establish those facts in a review. Rather, the onus was on the College, in seeking to terminate or reduce the award, to establish that there had been a change in this situation. The College was unsuccessful in seeking to do so.
With regard to the Arbitrator exercising his discretion under section 40 to vary the percentage reduction applied by Judge Quirk, additional evidence before the Arbitrator addressed some of the “poorly presented” aspects of Ms Agius’ case identified by Her Honour, and justified the Arbitrator in exercising his discretion differently in terms of the percentage reduction of the difference between her probable weekly earnings but for the injury and her actual earnings in suitable emplyment. Having determined that there had been a change of circumstances justifying an increase in the award, the Arbitrator’s determination was in accord with the approach prescribed in Mitchell v Central West Area Health Service (1997) 14 NSWCCR 527.
With regard to Dr Wilding’s evidence, Ms Agius’ solicitors point out that his opinion that Ms Agius would have been prevented from working as a physical education teacher beyond either 1999 or 2000 because of her pre-existing condition, contradicted the findings made by Judge Quirk in July 2001 of an ongoing work-related incapacity. That the Arbitrator preferred the opinion expressed by Dr Woods that Ms Agius had an ongoing aggravation, because he was the treating specialist, does not disclose any error of law, fact or discretion. Indeed, for the Arbitrator to have accepted Dr Wilding’s opinion would have been an error of law because this would have involved a rejection of Judge Quirk’s findings.
Ms Agius’ solicitors reject the College’s argument that the Arbitrator did not have jurisdiction to hear Ms Agius’ application seeking an increase in the award. They rely on section 350(2)(a) of the 1998 Act which states that a decision of or proceeding before the Commission is not to be vitiated because of any informality or lack of form. As to procedural fairness, they submit the College was aware of the case it had to meet and had the opportunity to be heard in respect of this.
DISCUSSION AND FINDINGS
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, the College 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.”
Section 55(1) of the 1987 Act provides for a review of weekly compensation where there is a change of circumstances. It states:
“Any weekly payment of compensation may, because of a change of circumstances, be reviewed by the Commission at the request of the employer or the worker or of the Authority.”
The change of circumstances must be established as a precondition to a review by the Commission, and the onus of proving a change of circumstances rests with the party asserting it. The findings of a trial judge do not estop the parties from asserting that there has been a change in the circumstances found by the trial judge to have existed previously.
(1) Allowing Ms Agius to file a cross application
The Arbitrator’s determination involved two applications to review an award of weekly compensation made by Judge Quirk on 20 July 2001: the first by the College and the second by Ms Agius. The Arbitrator was entitled to exercise his discretion to allow the filing of the second application by issuing a direction pursuant to Rule 5 of the Workers Compensation Rules 2003 and stated that he did so in order to avoid duplication of proceedings and in the absence of any evidence that this would cause prejudice to the College. This was in accord with the requirement in section 354(1) of the 1998 Act that proceedings before the Commission are to be conducted with as little formality and technicality as the proper consideration of the matter permits. I therefore reject the College’s submission that the proceedings before the Arbitrator were procedurally defective. There is also no evidence to indicate that the College was not accorded procedural fairness in relation to this second application. The College was aware of the basis of Ms Agius’ application, was given a proper opportunity to be heard in relation thereto and, at the arbitration hearing, was unable to point to any prejudice arising from the Arbitrator allowing the filing of the application (transcript page 4).
(2) Change of circumstances and treatment of medical evidence
With regard to the College’s submission that Ms Agius failed to discharge the onus of establishing that she would have been able to continue working as a physical education teacher regardless of the aggravation sustained in April 1997, I note, as stated above, that the onus of proving a change of circumstances under section 55 of the 1987 Act rests with the party asserting it: Atlas v Bulli Spinners Pty Ltd (1993) 9 NSWLR 378. The Arbitrator found that while the College had failed to establish a change of circumstances as required by section 55, Ms Agius had established a change of circumstances being “an increase in the differential between the respondent’s probable weekly earnings, but for the injury, and her actual earnings” (paragraph 46). I am not satisfied that the Arbitrator made any error in terms of the weight he accorded to the medical evidence of either Dr Wilding or Dr Woods. His treatment of Dr Wilding’s evidence was consistent with the treatment of that evidence by Judge Quirk. I note that one of the difficulties in this matter would seem to have been the lack of clarity in the medical evidence of both doctors.
(3) Exercise of the discretion under section 40(1)
In her decision dated 20 July 2001, Judge Quirk, having discussed the medical evidence, concluded (at paragraph 27):
“a good deal of her [Ms Agius’] incapacity to perform her pre-injury work is due to the earlier injury which, although ... the fairly significant osteoarthritic changes in her knee were not causing her any problems prior to the work injury would probably have caused problems in the future.”
Her Honour found that as a result of the injury in the course of her employment, Ms Agius “has been totally or partially incapacitated for work” and was entitled to an award under section 40. Her Honour was motivated to exercise her discretion to reduce the award because of the contribution to her incapacity from her pre-existing condition and because (at paragraph 26):
“there is really no evidence to suggest that the applicant could not have continued earning what she was earning prior to the injury if she had continued performing alternative duties for the respondent. There is no suggestion that she was forced to take up a new career, although of course in the circumstances, it being accepted by the medical experts in this case that she is unfit for her pre-injury duties as a physical education teacher, it was not unreasonable that she embark on a new career. However, the evidence is unclear as to why she did not choose to either retrain or continue teaching, although she was untrained in some of the subjects she was given to teach by her employer.”
The Arbitrator had the benefit of additional evidence addressing some of these issues that was not available to Judge Quirk (see paragraph 44 of the Arbitrator’s Statement of Reasons), in particular, the report prepared by a Rehabilitation Consultant, Maureen Edwards, dated 23 August 2004. On the basis of the additional evidence, the Arbitrator found that Ms Agius’ employment as a real estate agent was “suitable employment”. It seems likely that this persuaded the Arbitrator to exercise his discretion under section 40(1) slightly differently from that of Judge Quirk, although the difference between 64% and 48% is not great, and one assumes from the award figures that both Her Honour and the Arbitrator selected a figure that was rounded off to what they regarded as a suitable amount.
In conclusion, I am not satisfied that the Arbitrator made any legal, factual or discretionary error and his decision must therefore be confirmed.
DECISION
The decision of the Arbitrator dated 13 January 2005 is confirmed.
COSTS
The Appellant, Santa Sabina College Pty Ltd, is to pay the Respondent, Ms Agius’ costs in this appeal.
Robin Handley
Acting Deputy President
4 April 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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