Smith v Tonclay Services Pty Ltd trading as Budage Pty Ltd
[2005] NSWWCCPD 135
•17 November 2005
WORKERS COMPENSATION COMMISSION
APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:Smith v Tonclay Services Pty Ltd trading as Budage Pty Ltd [2005] NSW WCC PD 135
APPELLANT: Tracy Smith
RESPONDENT: Tonclay Services Pty Ltd trading as Budage Pty Ltd
FIRST INSURER: Allianz Australia Workers Compensation (NSW) Ltd on risk to 30 June 1998
SECOND INSURER: Vero Workers Compensation (NSW) Limited on risk from 30 June 1998 to 30 June 2002
FILE NUMBER: WCC 8455-03
DATE OF ARBITRATOR’S DECISION: 7 March 2004
DATE OF APPEAL DECISION: 17 November 2005
SUBJECT MATTER OF DECISION: Relevance and effect of agreement under section 66A of Workers Compensation Act 1987; relevance and effect of medical assessment certificate under section 326 of Workplace Injury Management and Workers Compensation Act 1998.
PRESIDENTIAL MEMBER: Acting Deputy President Sassella
HEARING:On the papers
REPRESENTATION: Appellant: Di Lizio & Associates
Respondent in the interest of Allianz: PricewaterhouseCoopers Legal
Respondent in the interest of Vero: Lander & Rogers Lawyers
ORDERS MADE ON APPEAL: (1) The decision of the Arbitrator dated 3 May 2004 is revoked and the following decision is made in its place:
1. That the Respondent Employer pay the Appellant Worker pursuant to section 40 of the Workers Compensation Act 1987 $103.60 a week from 18 October 2001 to today’s date and continuing, to be apportioned equally between the two insurers with credit allowed for any payments made to date by either insurer.
2. That the Respondent Employer in the interests of Vero pay the Appellant Worker compensation pursuant to section 66 of the Workers Compensation Act 1987, $4.500 in respect of 7.5% permanent impairment of the back and $1,875 in respect of a 2.5% permanent loss of efficient use of the right leg at or above the knee.
3. That the claim by the Appellant Worker against the Respondent Employer in the interests of Allianz for additional compensation under sections 66 and 67 of the Workers Compensation Act 1987 in respect of a deterioration in the effects of the 1997 injury is not proved.
4. That the Respondent Employer in the interests of the two insurers pay the Applicant’s expenses under section 60 of the Workers Compensation Act 1987 on production of accounts or receipts apportioned as follows:
· For any accounts or receipts referable to treatment reasonably necessary as a result of the 1997 injury and occurring between 25 June 1997 and 19 August 1998 Allianz is alone responsible.
· For any accounts or receipts referable to treatment reasonably necessary as a result of the physical conditions resulting from the two injuries and occurring on or after 20 August 1998 Allianz and Vero are equally responsible.
5. The Respondent Employer is to pay the Appellant Worker’s costs as agreed or assessed apportioned equally between Allianz and Vero.
(2)The Respondent Employer is to pay the Appellant Worker’s costs of the appeal as agreed or assessed apportioned equally between Allianz and Vero.
BACKGROUND TO THE APPEAL
On 21 May 2004 Tracy Smith (‘the Appellant Worker’) sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Workers Compensation Commission (‘the Commission’) against a decision, dated 3 May 2004.
The Respondent to the Appeal is Tonclay Services trading as Budage Pty Ltd (‘the Respondent Employer’). There are two insurers involved. Allianz Australia Workers Compensation (NSW) Ltd (‘Allianz’) was at risk at all relevant periods until 30 June 1998. Vero Workers Compensation (NSW) Limited formerly Royal & Sun Alliance Workers Compensation (NSW) Limited (‘Vero’) was at risk from 30 June 1998 until 30 June 2002.
The Appellant Worker was born on 22 June 1971 and is now 34 years of age. She is in a long-standing de facto relationship and has three children aged 7, 5 and 4 years. She has a long history of work as a legal secretary. She commenced working as a junior receptionist for Marsdens, a law firm, in 1986. She worked there for eight months followed by seven years with a second law firm. On 5 September 1994 she commenced work for Clayton Utz, a law firm. Clayton Utz is named in these proceedings as Tonclay Services Pty Ltd trading as Budage Pty Ltd.
There are two relevant incidents said to have caused injury to the Appellant Worker. The first occurred on 25 June 1997 (‘the 1997 injury’) when she slipped and fell on wet tiles at Circular Quay whilst on a periodic journey and while she was pregnant. The second occurred on 20 August 1998 (‘the 1998 injury’) when a lift carrying the Appellant Worker stopped one foot short of the correct floor level. The Appellant Worker stepped out, tripped and fell.
The Appellant Worker sought compensation following the 1997 injury. This resulted in a payment of lump sum compensation in respect of permanent impairment, the payment being made on or about 25 January 2000. MMI Insurance (Allianz) was the insurer on risk at the time. The parties applied to WorkCover NSW on 25 January 2000 for registration of an agreement under section 66A of the Workers Compensation Act 1987 (‘the 1987 Act’) dated 20 January 2000. The agreement was that the Appellant Worker was to be paid $28,350.00 consisting of $18,900.00 paid under section 66 of the 1987 Act representing 14% permanent impairment of the back, 7.5% permanent loss of efficient use of the left leg at or above the knee and 6.5% permanent loss of efficient use of the right leg at or above the knee and $9,450.00 paid for pain and suffering under section 67 of the same Act.
The Appellant Worker sought compensation following the 1998 injury. Liability was initially accepted on 12 October 1998. On 29 November 1999 the Respondent Employer denied liability on the basis that Dr Andrew Chan, a surgeon, had assessed the Appellant Worker as suffering only a 5% impairment of the back and considered that loss not to be work-related.
At an uncertain later date the Appellant Worker contacted Allianz seeking further compensation for the 1997 back injury. This application was rejected on 20 February 2001. Allianz said that the Appellant Worker’s back condition was not related to the 1997 injury. On 14 December 2001 the Appellant Worker’s solicitor wrote to Allianz seeking compensation under sections 66 and 67 of the 1987 Act. The letter suggested that the back now attracted a 25% impairment rating (previously 14%). There were claims also that:
· There was a 15% permanent loss of efficient use of the right leg at or above the knee (previously 7.5%).
· There was a 15% permanent loss of efficient use of the left leg at or above the knee (previously 6.5%).
Section 67 compensation for pain and suffering at a suggested level of $17,500.00 was also sought. The letter did not explicitly state that the basis for this claim was a deterioration in the Appellant Worker’s condition following the agreement made under section 66A of the 1987 Act. However, the presentation of the claims is probably best read as a claim based on deterioration. In respect of each of the back, right leg, left leg the letter cited the above gross percentage figure and deducted the percentage agreed earlier under section 66A. As regards the figure for pain and suffering the letter cited the gross claim as 35% of the most extreme case with a deduction representing the $9,500 paid under the section 66A agreement.
In a separate letter also dated 14 December 2001 the Appellant Worker’s solicitor claimed weekly compensation payments of $291.10 from Allianz, effective from 9 August 2001, the date on which the Appellant Worker last worked.
On 14 December 2001 the Appellant Worker’s solicitor also wrote to Royal & Sun Alliance (now known as ‘Vero’) claiming compensation under sections 66 and 67 of the 1987 Act. There is no copy of this correspondence on the Commission’s file. On 15 January 2002 Vero wrote back stating that it was unable to settle on the Appellant Worker’s permanent impairment entitlement because the claim was declined on 21 September 1999.
On 15 January 2002 Allianz’s solicitor wrote to the Appellant Worker’s solicitor denying liability in respect of the claims made in the letter dated 14 December 2001 (see paragraph 7 above).
On 3 June 2002 the Appellant Worker’s solicitor wrote to the solicitor for Allianz seeking weekly compensation payments of $750.00 with effect from 9 August 2001.
On 28 March 2003 the Appellant Worker made an ‘Application to Resolve a Dispute’ to the Commission. Allianz was identified as Insurer. Injury was said to be to the back and each leg. The date of injury referred to both 25 June 1997 and 20 August 1998. The disputed items were identified as weekly payments from 9 August 2001 onwards, $1,500.00 in medical expenses, coverage for treatment sought in the nature of physiotherapy, general practice supervision and a muscle strengthening program and $37,200.00 was sought under sections 66 and 67 of the 1987 Act.
On 15 April 2003 Allianz responded referring to the section 66A agreement previously registered (see paragraph 5 above), querying whether the Appellant Worker sustained a back injury in the 1997 injury, querying whether the Appellant Worker was claiming for a pre-existing condition, querying whether the Appellant Worker had suffered loss in the course of her employment, querying whether the conditions had worsened since the section 66A agreement and querying whether liability should be apportioned between the two insurers.
On 17 April Vero responded querying whether the Appellant Worker had sustained the injury as alleged, querying the extent of any permanent impairment or loss of use and/or any entitlement to treatment expenses, querying whether the Appellant Worker was incapacitated and disabled from earning, querying whether any incapacity was the result of any personal injury arising out of or in the course of the Appellant Worker’s employment with the Respondent Employer. The level of any pain and suffering was also questioned.
On 6 May 2003 Vero was joined as a party to the proceedings in the Commission.
On 22 October 2003, pursuant to section 321 of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’) the Appellant Worker was referred for examination by an Approved Medical Specialist (‘AMS’), Dr James Bodel, an orthopaedic surgeon. The referral asked Dr Bodel for assessment of the Appellant Worker:
“a.in accordance with the Table of Disabilities for the percentage loss of efficient use by comparison with the most extreme case and not on the basis of whole person impairment under AMA4. In addition, please do not refer in any way to the WorkCover Guides for the Evaluation of Permanent Impairment because this injury occurred prior to the changes in the law on 1 Jan 2002.
b.your opinion about the general medical dispute regarding the matters raised in the Arbitrator’s Request.”
The Arbitrator’s request for referral to an AMS is not on the Commission’s file. However, Dr Bodel in the certificate resulting from his examination of the Appellant Worker on 5 December 2003 reproduced four of the Arbitrator’s questions:
1.“Whether or not the applicant has suffered an incapacity to work for the period 09 August 2001 to date?”
2.“The extent of the incapacity if any suffered by the applicant for the period 09 August 2001 to date?”
3.“The extent if any that the first accident of 25 June 1997 is attributable to the applicant’s incapacity?”
4.“The extent if any that the second accident of 20 August 1998 is attributable to the applicant’s incapacity?”
Dr Bodel provided a certificate that contained the following assessments:
· The Appellant Worker “suffered an injury to the back in the form of a disc injury at L4/5 and L5/S1. Clinically this has mainly arisen as a result of the original injury on 25 June 1997 but there is a further small contribution to her ongoing complaints as a result of the subsequent injury on 20 August 1998”.
· The Appellant Worker’s clinical presentation was consistent with the history she gave.
· The Appellant Worker’s injury resulted in loss of efficient use or impairment.
· The Appellant Worker’s loss of efficient use or impairment is related to the accidents.
· The Appellant Worker’s injuries were stable at the date of the medical examination.
· The loss of efficient use or impairment is permanent.
· No proportion of the permanent loss of efficient use or impairment is due to any pre-existing injury, abnormality or condition.
· The Appellant Worker should be capable of her pre-injury work as a legal secretary, receptionist or person engaged in general clerical work. Elsewhere he agreed with Dr Phillip Haynes, an occupational physician whose report was commissioned by Vero, that she is physically fit for her pre-injury work duties as a word processor operator so long as she is provided with appropriate seating and as long as she can stand and walk around from time to time.
Dr Bodel answered the Arbitrator’s questions as follows:
1.The Appellant Worker “has suffered an incapacity to work as a result of her spinal injuries following the two episodes of injury at work” in 1997 and 1998. She “is probably fit for a slight modification of her duties in terms of the number of hours that she can work but she should be capable of her pre-injury style of work as a Word Processing Operator and Legal Secretary”.
2.The Appellant Worker “should be capable of six hours legal secretarial work, five days a week but may have difficulty upgrading to full time legal secretarial work because of her spinal pathology. She may also have difficulty travelling to and from work, particularly by public transport because of the tendency to aggravate underlying spinal pathology by travel on a train or bus.”
3.“[A]bout half of [the Appellant Worker’s] overall level of Permanent Impairment of function in the back and permanent loss of efficient use of the right leg at or above the knee is due to the injury that occurred on 25 June 1997.”
4.“[T]he remaining half of [the Appellant Worker’s] overall level of Permanent Impairment and permanent loss is due to the second accident on 20 August 1998.” He could see no evidence of any non-work-related component to the assessment of impairment and loss.
Dr Bodel presented a table as follows:
| Assessment in accordance with the Table of Disabilities for injuries received before 1 January 2002 | ||||
| Body Part (the body part must be described as per Table of Disabilities) | Date/s of injury | Total % permanent loss of efficient use or impairment | Proportion of permanent loss or impairment due to pre-existing injury, abnormality or condition | Total % permanent loss of efficient use or impairment attributable to this injury (after deduction of any pre-existing impairment in Column 4) |
| Back | 25 June 1997 20 August 1998 | 7.5% 7.5% | 0 0 | 7.5% 7.5% |
| Right leg at or above the knee | 25 June 1997 20 August 1998 | 2.5% 2.5% | 0 0 | 2.5% 2.5% |
| Left leg at or above the knee | 25 June 1997 20 August 1998 | 0% 0% | 0 0 | 0% 0% |
THE DECISION UNDER REVIEW
On 15 and 19 April 2004 the Arbitrator conducted conferences attended by the parties’ representatives and at which the Appellant Worker gave oral evidence. The transcripts of these conferences are available and I have read them. On 3 May 2004 the Arbitrator published a decision in this matter.
The Arbitrator’s Certificate of Determination dated 3 May 2004 records the Arbitrator’s orders as follows:
“The determination of the Commission in this matter is as follows:
1.That pursuant to section 40 of the Workers Compensation Act 1987, there be an Award in favour of the Applicant for Weekly payment of compensation, being $104.78 per week from 17th October 2001 to date and continuing.
2.That pursuant to section 60 of the Workers Compensation Act 1987, there be an Award in favour of the Applicant for all reasonable medical expenses, capped as of the date of this award to amount to $1,500.00.
3.That the Respondent pay the Applicant’s costs as agreed or assessed.
4.That Allianz Australia Workers Compensation (NSW) Limited and Royal and Sun Alliance Workers Compensation (NSW) Limited are equally responsible for the compensation referred to in paragraphs 1, 2 and 3 above.
The following is not a determination of the Commission; however, I note the following:
1.That as a consequence of my determination and findings in relation to the issue of section 66 of the Workers Compensation Act 1987, it is recommended that the Applicant discontinue the section 66 and section 67 component of the Application. I dispense with the requirement in accordance with the Workers Compensation Rules of the lodgement of a Notice of Discontinuance. It is recommended that the parties approach the Commission for the purpose of registering a section 66 determination made pursuant to section 66A of the Workers Compensation Act 1987, which will reflect the findings I have made in this determination concerning the section 66 issue.”
The Arbitrator’s reasoning was as follows.
· As regards the compensation for permanent impairment the Arbitrator considered himself bound in accordance with section 326 of the 1998 Act, by Dr Bodel’s overall assessments of the impairment levels affecting each bodily part. Thus the Arbitrator found that there was a 15% permanent impairment of the back and a 5% loss of efficient use of the right leg at or above the knee. There was a nil loss of the left leg.
· He also considered himself bound to abide by the section 66A agreement described in paragraph 5, above because of the terms of section 66A(1) and (2) of the 1987 Act. This meant that he accepted that more than 7.5% of the permanent impairment of the back was correctly attributed to the 1997 injury despite Dr Bodel’s finding that both of the 1997 and 1998 injuries contributed equally to the totality of the impairment. The Arbitrator noted that section 326(1) of the 1998 Act states that an assessment certified by a medical assessment certificate, as was Dr Bodel’s, is “conclusively presumed to be correct as to” a number of matters including the degree of permanent impairment of the worker resulting from the injury and whether any proportion of permanent impairment is due to any previous injury. He referred to the Macquarie Dictionary definition of “presumed”, which is “to assume as true in the absence of proof to the contrary”, to permit him to regard the terms of the section 66A agreement as proof to the contrary regarding the specific effects of the 1997 injury.
· The Arbitrator’s conclusion was that the Appellant Worker had received, under the section 66A agreement, at least as much as she was entitled to in accordance with Dr Bodel’s assessment except for an additional 1% in respect of the back condition. He then applied Dr Bodel’s assessment that each of the two injuries contributed equally to the impairment, to hold that each insurer should contribute one-half of the outstanding 1% to which the Appellant Worker was entitled.
On the question of weekly compensation payments under section 40 of the 1987 Act the Arbitrator found that:
· The Appellant Worker is capable of working as a secretary on an ongoing basis in the open labour market for 30 hours a week.
· The Appellant Worker was being paid at the rate of $20.88 an hour when her employment was terminated with effect from 17 October 2001. That means that she is capable of earning $626.40 a week (ie $20.88 x 30 hours = $626.40).
· The Appellant Worker’s pre-injury weekly earnings were $730.00.
· The Appellant Worker is entitled to weekly compensation payments of $104.78 from 17 October 2001 to date and continuing.
· The two insurers are equally liable to make these payments.
On the question of the treatment expenses under section 60 of the 1987 Act the Arbitrator found:
· The Appellant Worker had claimed $1,500.
· The Respondent Employer had not questioned this figure.
· The two insurers were equally liable to pay reasonable medical expenses capped at $750.00 each “for the purpose of the present time” and thereafter be responsible for all future and reasonable medical expenses incurred since the making of this award”.
ISSUES IN DISPUTE
The issues in dispute in the appeal are:
1.What is the correct compensation payable to the Appellant Worker in accordance with sections 66 and 67 of the 1987 Act?
2.What is the correct compensation payable to the Appellant Worker in accordance with section 40 of the 1987 Act?
ON THE PAPERS REVIEW
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 the available documents, I am satisfied that I have sufficient information to proceed ‘on the papers’, without holding any conference or formal hearing, and that this is the appropriate course in the circumstances.
LEAVE
Before proceeding to deal with an appeal the Commission must determine whether the application meets the requirements of section 352 of the 1998 Act.
The appeal was lodged within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act. The amount of compensation in contention could be at least $5,000 if the Appellant Worker succeeds in this appeal. This would be more than 20% of the Arbitrator’s award. Section 352(2) of the 1998 Act is therefore satisfied.
Leave to appeal is granted.
EVIDENCE AND SUBMISSIONS
On 21 May 2004 the Appellant Worker lodged with the Commission the ‘Application Appeal Against Decision of Arbitrator’. Submissions dated 18 May 2004 accompanied that application. The Appellant Worker’s relevant submissions were:
· The Arbitrator did not correctly apply the decision of the NSW Court of Appeal in Mitchell v Central West Health Service (1997) 14 NSWCCR 527 (‘Mitchell’) in assessing the Appellant Worker’s weekly payments. The correct weekly rate was said to be $208.80, based on a pre-injury earnings figure of $835.20.
· The Arbitrator should have made separate awards in relation to sections 66 and 67 of the 1987 Act for each of the two injuries. The decision in Sidiropoulos v Able Placements Pty Ltd (1998) 16 NSWCCR 123 (‘Sidiropoulos’) was cited in support. This would have resulted in no award attributable to the 1997 injury because that had been disposed of in the section 66A agreement (see paragraph 5 above). As regards the 1998 injury, based on Dr Bodel’s assessments, it would have resulted in an award of $4,400.00 in respect of 7.5% impairment of the back and $1,875.00 in respect of 2.5% loss of use of the right leg at or above the knee.
· The Arbitrator erred in not awarding the Appellant Worker compensation for pain and suffering under section 67 of the 1987 Act in respect of the 1998 injury.
On 18 June 2004 solicitors for Allianz lodged the following submissions.
· The Appellant Worker produced no evidence at the arbitration that the correct figure for her pre-injury earnings was $835.20.
· No further compensation under section 66 of the 1987 Act was payable by Allianz because of the payment made pursuant to the section 66A agreement (see paragraph 5 above). This submission echoed one of the submissions of the Appellant Worker.
· In the alternative, Dr Bodel’s certificate would mean that, at the most, Allianz was liable to compensate the Appellant Worker under section 66 of the 1987 Act only to the extent of 7.5% permanent impairment of the back and 2.5% permanent loss of efficient use of the right leg at or above the knee. Allianz had paid compensation in excess of these liabilities and so is not liable to pay anything further.
On 29 June 2004 solicitors for Vero lodged the following submissions:
· The Arbitrator did not err in calculating the Appellant Worker’s weekly compensation entitlements.
· The Arbitrator did not err in determining the Appellant Worker’s claim under section 66 of the 1987 Act. Section 66 requires that compensation is payable in respect of “permanent disability” and not separately in respect of injury.
“In other words, the Applicant having already received compensation for the permanent loss of use of his (sic) right leg in the sum equivalent to 14% cannot now claim any additional sum apart from the 1% found by Dr Bodel in his AMS report. It is irrelevant as to how the previous determination of entitlement for compensation was found because the Applicant cannot claim multiple compensation for the same bodily part.”
· The Arbitrator did not err in apportioning between the two insurers the additional 1% found by Dr Bodel because Dr Bodel’s finding was binding on the parties.
· The Respondent Employer is entitled to an order for costs. The Appellant Worker’s appeal is “frivolous given the Arbitrator’s determination is completely accurate as a matter of law”.
DISCUSSION AND FINDINGS
What is the correct compensation payable to the Appellant Worker in accordance with sections 66 and 67 of the 1987 Act?
At base, the question is whether the Appellant Worker is now entitled to an award under section 66 of the 1987 Act for 7.5% for permanent impairment of the back payable by Vero or 1% payable equally by both insurers for the same impairment, as was found to be the case by the Arbitrator. It is also possible that she is entitled to compensation from one or both of the insurers in respect of her loss of efficient use of her right leg at or above the knee.
Some assistance is found in the recent decision of Deputy President Fleming in Cole v Baytech Industrial Pty Ltd [2005] NSW WCC PD 70 (‘Cole’). In that case the worker sustained an injury to his right leg at work on 26 October 1998. He claimed compensation under section 66 of the 1987 Act for 18% loss of efficient use of the right leg below the knee and $15,000 for pain and suffering under section 67 of the 1987 Act. On 20 October 2000 the worker entered into a consent agreement whereby he accepted $3,500 representing 5% loss of efficient use of the right leg below the knee.
Later in 2000 the worker had an operation on the right leg as follow-up treatment stemming from the work injury. On 20 February 2003 the worker claimed further compensation in the form of 15% under section 66 for further loss of efficient use of the right leg below the knee and $20,000 additional for pain and suffering.
An AMS examined the worker and issued a certificate on 29 January 2004. He found that the worker’s loss at the time of the consent agreement was correctly 18% and the level as at the date of the certificate was 20%. The Respondent argued that the worker was entitled to only 2% additional compensation under section 66.
The Commission decided in Cole (paragraph 35 above) that it would be inherently unfair to confine the worker to only 7% compensation (5% in 2000 and 2% in 2004) when he was entitled, according to the AMS, to a gross assessment of 20%. The Commission considered whether issue estoppel affected the analysis in view of the earlier consent agreement. It was held not to do so. At paragraph 31 the Commission stated that res judicata did not apply, as it does not in the present case, because there had not been a court adjudication. In paragraphs 35 and 36 it was also held that there was no issue estoppel as a consequence of a court “entering up an award in accordance with [the parties’] agreement”. The parties’ agreement can, however, operate as an “admission” by either party or by both.
The present case differs from Cole (paragraph 35 above) in that the Appellant Worker is, among other things, seeking additional compensation from Allianz under section 66. In order to succeed in this she would have to show, as did the Worker in Cole, that there had been a deterioration in her physical condition caused by the 1997 injury. There is no evidence to suggest that has occurred. The Appellant Worker’s solicitor’s letter dated 14 December 2001 did not speak in terms of there being a deterioration as an effect of the 1997 injury. That correspondence points, in fact, in another direction. The writer of that letter enclosed a report by Dr Peter Conrad, a surgeon, dated 8 October 2001. Dr Conrad’s opinion was that the Appellant Worker’s 25% back impairment and 15% permanent loss of efficient use of each leg at or above the knee had occurred “as a result of her accidents” (my emphasis).
The questions referred to Dr Bodel should have asked the doctor to address whether there had been a deterioration attributable to the 1997 injury after the agreement in 2000. This was not done. In doing this, the referral should also have alerted Dr Bodel to the section 66A agreement and its terms. While I do not have access to the referral document, it appears unequivocally from Dr Bodel’s certificate that no mention was made of the earlier agreement. Allianz is strictly responsible, according to Dr Bodel, for only one-half of the Appellant Worker’s impairment. Allianz has more than paid out on that liability and should not be required to pay anything further in the absence of any evidence of a relevant deterioration. I am therefore not satisfied, on the available evidence and argument, that the Appellant Worker has experienced a deterioration in the condition caused by the 1997 injury. The Appellant Worker’s claim based on the letter to Allianz dated 14 December 2001 (see paragraphs 7, 8 and 39 above) is not proved and should be dismissed. The Arbitrator erred in law in not so finding.
Vero, the insurer on risk at the time of the second injury in 1998, however, is, according to Dr Bodel, responsible for payment of compensation under section 66 of 7.5% impairment of the Appellant Worker’s back and 2.5% permanent loss of efficient use of the right leg at or above the knee. In order to give proper effect to Dr Bodel’s certificate Vero should be required to pay compensation under section 66 reflecting the impairment and loss as a result of the 1998 injury. The Arbitrator erred in law in not making such a determination.
The Appellant Worker has raised the matter of there being no provision in the Arbitrator’s determination for compensation for pain and suffering under section 67 of the 1987 Act. The Arbitrator should have addressed that issue and not to have done so was an error of law. In the table at paragraph 20 above Dr Bodel found two distinct back impairments and two distinct losses affecting the right leg stemming from each discrete injury. This differs from the situation in Sidiropoulos (paragraph 31 above) where a single loss was held to have eventuated from two injuries.
In order that the Appellant Worker may qualify for compensation for pain and suffering, section 67(2), as it was before 1 January 2002, must be satisfied. Thus the compensation payable by Vero under section 66 must be at least 10% of the maximum referred to in section 66(1). At the relevant time the maximum expressed in section 66(1) was $100,000. Vero would therefore have to be liable to pay at least $10,000 in accordance with section 66(1). Vero’s liability in respect of the back impairment is $4,500.00 (7.5% of a maximum for permanent impairment of the back of $60,000). Vero’s liability in respect of the loss of use of the right leg at or above the knee is $1,875.00 (2.5% of a maximum for loss of either leg at or above the knee of $75,000). The total is $6,735.00. This is clearly lower than the required minimum of $10,000.00. While I note that Allianz has already paid the Appellant Worker some $9,450.00 pursuant to section 67, under the previous section 66A agreement, Vero is not liable to pay compensation to the Appellant Worker under section 67 of the 1987 Act.
Had this been a case where there was a single back impairment and/or a single loss caused by two or more different injuries, then Sidiropoulos (paragraph 31 above) would have applied with the result that the cumulative effects of the different injuries could have been agglomerated in ascertaining whether the Appellant Worker’s compensation under section 66(1) exceeded the $10,000 threshold.
Finally, there is a technical issue that must be addressed. The terms of the Arbitrator’s Certificate of Determination (see paragraph 22 above) do not appear to determine in a final sense the respective rights of the Appellant Worker, the Respondent Employer and the insurers. The terms anticipate the registration of an agreement under section 66A of the 1987 Act embodying the Arbitrator’s above findings. There is nothing before me to explain why the Arbitrator took this approach. Experience indicated very soon after the Certificate of Determination was settled that the Appellant Worker and Allianz were dissatisfied with the Arbitrator’s findings in relation to section 66 of the 1987 Act and the Appellant Worker launched this appeal promptly. I find that it was an error of law on the part of the Arbitrator to construct his determination in the way that he did. I will therefore be revoking that part of the determination and substitute my own decision incorporating the outcomes described above in paragraphs 39 – 41.
What is the correct compensation payable to the Appellant Worker in accordance with section 40 of the 1987 Act?
The Arbitrator should have explicitly applied the five-step process in Mitchell (paragraph 31 above) in discussing the Appellant Worker’s weekly incapacity entitlements in accordance with section 40 of the 1987 Act. It is possible that the Arbitrator thought he was applying the five-step process in his statement of reasons for decision but he did not say that he was doing so and he did not expressly refer to step (d) of the five steps and apply his discretion. This failure amounts to an error of law.
The steps are:
a) To determine the weekly amount the worker would probably have been earning if uninjured (section 40(2)(a)).
b) To determine the average weekly amount that the worker is earning or would be able to earn in some suitable employment from time to time after the injury (section 40(2)(b)). Section 40(3) provides that the determination of this amount is subject to the following: (i) the determination is to be based on the worker’s ability to earn in the general labour market reasonably accessible to the worker;
(ii) the determination is to be made having regard to suitable employment for the worker within the meaning of section 43A.
c) To subtract the figure derived from b) from the figure derived from a) (section 40(2)).
d) To decide whether and to what extent the reduction calculated as above, bears such relation to the amount of that reduction as may appear proper in the circumstances of the case (section 40(1)).
e) To make an award in the amount arrived at in d).
The weekly amount that the Appellant Worker would probably have been earning if uninjured was $730.00 a week. This was the Appellant Worker’s weekly remuneration as it appeared on her wage records dated 17 October 2001, the date of cessation of her employment by the Respondent Employer. These wage records were annexed to the material the Appellant Worker presented at the arbitration. It was noted above in paragraph 31 that the Appellant Worker sought in submissions to the Commission dated 21 May 2004 to increase this figure to $835.20 on the basis that the wage records indicated that she was paid $20.88 an hour and that she worked for 40 hours a week. This argument was not put to the Arbitrator. Indeed, at page 74 of the transcript of the arbitration conference held on 19 April 2004, the Appellant Worker’s representative stated “$730 per week is her pre-injury earnings. That’s not been traversed or disputed.” The appropriate figure for step (a) is therefore $730.00 a week. There was no error of law, fact or discretion in the Arbitrator’s acceptance of this as the correct figure for the Appellant Worker’s weekly earnings.
The average weekly amount that the Appellant Worker has been able to earn is $626.40 a week. The Arbitrator considered that the Appellant Worker was capable of working as a secretary on the open labour market for 30 hours a week. Her hourly wage rate was $20.88. The Arbitrator noted that Dr Bodel, having reviewed the available medical evidence and a vocational assessment, was of the view that the Appellant Worker was fit to work as a legal secretary for six hours a day on five days a week. The Appellant Worker did not challenge this aspect of the Arbitrator’s determination in her submissions to the Commission dated 21 May 2004. That submission states, “This was a discretionary finding and the Applicant does not seek a review of this finding.” There is no error of fact, law or discretion in this finding by the Arbitrator. The relevant figure for step (b) is therefore $626.40.
By subtracting the figure derived for step (b) from that derived for step (a), the figure for step (c) is ascertained. The appropriate figure for step (c) is therefore $103.60. The Arbitrator arrived at a figure of $104.78 a week. It is unclear from his statement of reasons for decision how he arrived at that figure. I find that the Arbitrator erred in fact in calculating the weekly reduction in the Appellant Worker’s earnings and that the correct figure is $103.60.
In accordance with section 40(5) it is necessary to ensure that this amount does not exceed the amount that would be payable to the Appellant Worker if she was totally incapacitated for work. The weekly compensation payment of $103.60 does not exceed the amount that would be payable to the Appellant Worker if she were totally incapacitated.
In applying step (d) of Mitchell (paragraph 31 above) it was necessary for the Arbitrator to exercise his discretion to decide whether and to what extent the reduction in the Appellant Worker’s weekly earnings calculated in paragraph 50 above bears such relation to the amount of that reduction as may appear proper in the circumstances of the case. The Arbitrator did not expressly consider that matter. While this was an error of law I consider that it can be cured at this appeal level. That is because, in addressing the discretion in section 40(1) of the 1987 Act, the types of factors to be taken into account include matters concerning which we have evidence. The only factor that might affect the Appellant Worker’s entitlements is her effort seeking work. The Arbitrator assessed the evidence on this point and concluded that her work efforts, while not consistently diligent over time, were sufficient for the purposes of section 40 of the 1987 Act. I see no error of fact, law or discretion in that finding. I consider that no further reduction should be applied in exercising the discretion in section 40(1). The appropriate weekly compensation is therefore $103.60.
It is necessary to consider any apportionment as between Allianz and Vero that should apply in relation to payment of weekly compensation. The Appellant Worker was entitled to these payments as of 18 October 2001, the day after the Appellant Worker’s dismissal from employment took effect. The payments are ongoing. The Arbitrator considered that the two insurers were to contribute equally to these payments. On the basis of Dr Bodel’s assessment that each of the two injuries contributed equally to the Appellant Worker’s condition I will confirm this aspect of the Arbitrator’s determination.
Compensation for cost of medical treatment
The Arbitrator determined that there would be an award under section 60 of the 1987 Act covering all reasonable medical expenses, capped as of the date of the award at $1,500.00. He said he was also making an award “in favour of the Applicant for all future and reasonable medical expenses incurred since the making of this award”, although that did not appear in the Certificate of Determination. He did not appear to require production of receipts or accounts to support the award of $1,500.00 for expenses incurred to that point. In Cole (paragraph 35 above) Deputy President Fleming explained the proper approach to section 60 by stating in paragraph 56 that the section is an indemnity provision and the Appellant Worker’s entitlement will arise only where she incurs such a cost. The correct form of order is “That the Respondent pay the Applicant’s expenses under section 60 of the Workers Compensation Act 1987 on production of accounts or receipts”. The requirement that the claims, when submitted to the insurer, must be ‘reasonably necessary’ as the result of the compensable injury, must then be met in relation to each expense. The Arbitrator erred in law in determining as he did without requiring evidence of actual medical expenditure by the Appellant Worker or of accounts for medical treatment provided to the Appellant Worker.
On the assumption that the Appellant Worker will be able to supply accounts or receipts it is necessary to address the apportionment of those expenses as between the two insurers. I consider it appropriate to substitute a new order pursuant to section 60 of the 1987 Act in favour of the Appellant Worker, with liability apportioned as follows:
· For any accounts or receipts referable to treatment reasonably necessary as a result of the 1997 injury and occurring between 25 June 1997 and 19 August 1998 Allianz is alone responsible because that treatment must have been necessitated by the injury for which Allianz is responsible.
· For any accounts or receipts referable to treatment reasonably necessary as a result of the physical conditions resulting from the two injuries and occurring on or after 20 August 1998 Allianz and Vero are equally responsible as a consequence of Dr Bodel’s assessment.
DECISION
The decision of the Arbitrator dated 3 May 2004 is revoked and the following decision is made in its place:
1.That the Respondent Employer pay the Appellant Worker pursuant to section 40 of the Workers Compensation Act 1987 $103.60 a week from 18 October 2001 to today’s date and continuing, to be apportioned equally between the two insurers with credit allowed for any payments made to date by either insurer.
2.That the Respondent Employer in the interests of Vero pay the Appellant Worker compensation pursuant to section 66 of the Workers Compensation Act 1987, $4.500 in respect of 7.5% permanent impairment of the back and $1,875 in respect of a 2.5% permanent loss of efficient use of the right leg at or above the knee.
3.That the claim by the Appellant Worker against the Respondent Employer in the interests of Allianz for additional compensation under sections 66 and 67 of the Workers Compensation Act 1987 in respect of a deterioration in the effects of the 1997 injury is dismissed.
4.That the Respondent Employer in the interests of the two insurers pay the Applicant’s expenses under section 60 of the Workers Compensation Act 1987 on production of accounts or receipts apportioned as follows:
· For any accounts or receipts referable to treatment reasonably necessary as a result of the 1997 injury and occurring between 25 June 1997 and 19 August 1998 Allianz is alone responsible.
· For any accounts or receipts referable to treatment reasonably necessary as a result of the physical conditions resulting from the two injuries and occurring on or after 20 August 1998 Allianz and Vero are equally responsible.
5.The Respondent Employer is to pay the Appellant Worker’s costs as agreed or assessed, apportioned equally between Allianz and Vero.
COSTS
The Respondent Employer is to pay the Appellant Worker’s costs of the appeal as agreed or assessed, apportioned equally between Allianz and Vero.
Michael Sassella
Acting Deputy President
17 November 2005
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE STATEMENT OF REASONS FOR DECISION OF MICHAEL SASSELLA, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
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