Smorgon Steel Manufacturing v Hinton and BHP Billiton Limited

[2005] NSWWCCPD 157

WORKERS COMPENSATION COMMISSION

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

CITATION:Smorgon Steel Manufacturing v Hinton and BHP Billiton Limited

[2005] NSWWCCPD 157

APPELLANT:  Smorgon Steel Manufacturing

FIRST RESPONDENT:  Shayne Hinton

SECOND RESPONDENT:  BHP Billiton Limited

FILE NUMBER:  WCC1082-2005

DATE OF ARBITRATOR’S DECISION:          14 June 2005

DATE OF APPEAL DECISION:  16 December 2005

SUBJECT MATTER OF DECISION: Determination of ‘injury’ pursuant to section 4 of the Workers Compensation Act 1987; apportionment of liability pursuant to section 22 of the Workers Compensation Act 1987.

PRESIDENTIAL MEMBER:  Dr Gabriel Fleming, Deputy President

HEARING:On the papers.

REPRESENTATION:  Appellant:                  Rankin Nathan  Lawyers

First Respondent:      Whitelaw McDonald

Second Respondent:   Sparke Helmore   Solicitors

ORDERS MADE ON APPEAL:  The decision of the Arbitrator is confirmed.

The Appellant is to pay the costs of the appeal.

Background to the Appeal

1.Shayne Hinton worked for BHP Billiton Limited at the Newcastle steelworks from 1989 until his employment was terminated because of the plant shutdown in 1999.  He began as an apprentice boilermaker and worked his way up to the position of blast furnace operator, a position that involved heavy work. 

2.On 26 May 1993 Mr Hinton injured his back at work.  He was placed on light duties for a short time but returned to his normal duties thereafter until his employment with BHP ceased.

3.Following the closure of the plant Mr Hinton travelled for a period and then returned to Newcastle where he worked for various employers until May 2003, when he began working for Smorgon Steel Manufacturing (‘the Appellant/Smorgon’) as a furnace operator.  The work was heavy and involved repetitive physical tasks such as shovelling, sweeping oxy lancing and the manual handling of various types of equipment.  It is common ground that Mr Hinton did not tell Smorgon that he had a previous back injury when he accepted the job. 

4.Mr Hinton experienced episodes of severe back pain in July, August and September 2004, for which he took time off work.  At the request of his employer, Smorgon, he attended Dr Graham for a medical examination.  On 29 September 2004 Mr Hinton’s employment was terminated on the basis that he was medically unfit to work in the industry, on the basis of Dr Graham’s report.

5.Mr Hinton claims compensation by way of lump sum compensation for permanent impairment and pain and suffering from BHP as a result of the injury on 26 May 2003 and the nature and conditions of his employment at the Newcastle plant.  Mr Hinton also claims compensation by way of weekly benefits, and lump sum compensation for permanent impairment and pain and suffering, from Smorgon as a result of his employment.  He claims that the ‘deemed’ date of the injury arising out of his employment with Smorgon is 29 September 2003.  He seeks a general order for medical expenses against both employers. 

6.Both BHP and Smorgon are ‘self-insurers’ for the purpose of workers compensation.

7.An ‘Application to Resolve a Dispute’ was filed in the Commission on 20 January 2005 and was decided by a Commission Arbitrator on 10 June 2005, as follows:

“The determination of the Commission in this matter is as follows;

1.That the Second Respondent [Smorgon Steel Manufacturing] pay the Applicant weekly compensation under section 38 of the Workers Compensation Act 1987 as follows:

1.1  from 11 October 2004 to 11 April 2004 at the rate of $549 per week.

1.2  From 12 April 2005 at the rate of $439 per week, such payments to continue in accordance with the provisions of the Act.

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

3.That in respect of the claim for compensation for permanent impairment the matter be referred to an Approved Medical Specialist to assess the degree of permanent impairment, if any, arising out of the injuries occurring on 26 May 2003 and 29 September 2004.”

8.A Statement of Reasons was also issued. The Arbitrator based the above orders on her finding that Mr Hinton suffered two injuries arising out of or in the course of his employment. The first was as the result of a frank injury during his employment with BHP when, on 26 May 2003 he suffered ‘muscle strain’ in his back, which fairly quickly resolved. The second was an injury by way of an aggravation of a disease, namely ‘degenerative disc disease’, to which his employment with both Smorgon and BHP was a substantial contributing factor. She determined the date of this injury was 29 September 2003 in accordance with section 16 of the Workers Compensation Act 1987.

9.On 8 July 2005 Smorgon sought leave to bring an appeal against the Arbitrator’s decision.  BHP has filed submissions in reply to that application.  Mr Hinton endorses and relies upon those submissions.

10.The application meets the requirements of section 352 of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’) and therefore leave to appeal is granted.

Issues in Dispute

11.The Appellant/ submits that the appeal should proceed on the grounds that the Arbitrator:

a.erred in fact or law or both in finding that [Mr Hinton] suffered injury in the course of his employment with [Smorgon];

b.erred in fact or law or both in failing to make any or any proper determination as to the nature of the injury [Mr Hinton] suffered in 1993 in the course of his employment with [Smorgon];

c.misdirected herself in law as to the exercise of her statutory obligation and discretion to apportion liability in accordance with section 22 of the Workers Compensation Act 1987

d.erred in fact or law or both in declining to apportion to [Smorgon] all or any of the liability to make weekly payments of compensation to [Mr Hinton]”.

On the Papers Review

12.The Appellant objects to the appeal being determined on the papers on the ground that the “interests of justice require that each party have the opportunity of properly addressing the points at issue”, in particular by way of oral submissions.

13.Mr Hinton and BHP submit that the nature of the issues on appeal make the matter appropriate for determination on the papers. 

14.In my view the issues on appeal are not of such complexity that an oral hearing is needed.  I have before me all of the evidence and submissions that were before the Arbitrator and the transcript of the proceedings of 21 April and 24 May 2005 which records the parties submission on the substantive issues.  The parties have also filed detailed written submissions on appeal.

15.I am satisfied that I have sufficient information to proceed ‘on the papers’, pursuant to section 354(6) of the 1998 Act, without holding any conference or formal hearing, and that this is the appropriate course in the circumstances. 

Fresh Evidence

16.The medical dispute was referred to an Approved Medical Specialist in accordance with the Arbitrator’s direction and, on 19 July 2005, the Medical Assessment Certificate of Dr Dixon was issued.  On 11 August 2005 the Appellant/Smorgon filed the Medical Assessment Certificate, as ‘fresh evidence’ in the appeal.

17.The Appellant argues that leave is not required as the Medical Assessment Certificate is before the Commission by operation of section 326(2) of the 1998 Act.  Alternatively it argues that the Medical Assessment Certificate is: relevant, highly probative of the issues in dispute, was unavailable at the time of the arbitration, its’ admission does not cause prejudice to the other parties and the failure to allow its’ admission would cause it a substantial injustice.

18.BHP object to the filing of the Medical Assessment Certificate in the appeal.  The certificate itself is under appeal to the Medical Appeal Panel and copies of the submissions on that appeal are also before me.  BHP argues that the certificate has little relevance to the reasons for the Arbitrator’s decision.

19.Leave to rely upon the Medical Assessment Certificate is granted and the fact that it is the subject of appeal is noted.  Section 326 of the 1998 Act provides that such a Certificate is evidence in any Commission proceedings with which it is concerned, and in some instances it is conclusive evidence of certain matters (section 326(1)). 

20.The weight to be given to the Medical Assessment Certificate, if any, in relation to the issues on appeal, is a matter for my discretion in the review of the Arbitrator’s decision.

Did the Arbitrator err in failing to determine the nature of the injury Mr Hinton suffered in 1993 in the course of his employment with Smorgon?

21.Smorgon submit that the Arbitrator failed to determine the “nature, extent and pathological significance” of the injury Mr Hinton suffered of 26 May 1993 while working for BHP.  It refers to the evidence of:

·     Referral by Dr Hollingsworth for an x-ray at the time and later (1999) to Dr Stenning for review,

·     referral for a CT scan in 1998,

·     evidence of the treating General Practitioner, Dr Woods,

·     the history taken by Dr Stenning, Dr Dalton, Dr Graham and Dr Kuru, and

·     clinical notes of Dr Woods in 2004.

22.BHP and Mr Hinton submit, correctly, that the consideration of the evidence and the weight to be attached to the evidence is entirely a matter for the Arbitrator. In the absence of demonstrable error by the Arbitrator in arriving at the decision it should not be disturbed. Presidential review (pursuant to section 352 of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’)) is not a rehearing where a matter is heard de novo based on all of the evidence available at a later time (Coal & Allied Operations Pty Limited v Australian Industrial Relations Commission (2000) 203 CLR 194; Builders Licensing Board v Sperway Constructions (Syd) Pty Ltd (1976) 135 CLR 616).

23.The errors alleged by the Appellant are largely matters of discretionary judgment by the Arbitrator, on the basis of her view of the evidence. As with any exercise of discretion by an administrative decision maker, this discretion must be exercised lawfully and fairly, taking into account the scope of the discretion and the objects of purpose for which it is conferred. It is only where the Arbitrator can be said to have failed to exercise his discretion fairly and according to law that his decision should be overturned. This occurs where the Arbitrator has: acted upon a wrong legal principle; allowed irrelevant considerations to influence the decision; made a material mistake as to the facts or failed to take into account relevant and material considerations (House v The King (1936) 55 CLR 499 at 504-505; Norbis v Norbis (1986) 161 CLR 513 at 520, National Roads and Motorists’ Association Ltd [2003] FCAFC 206 at [21] to [21]).

24.In this matter the Arbitrator has set out her consideration of the evidence in a clear and well-reasoned manner.  She has identified what evidence was before her and, without the need to refer to each and every piece of that evidence, has then set out what she found to be persuasive, or not.  She gave adequate reasons for not giving much weight to the report of Dr Graham and for preferring the report of Dr Kuru.

25.The submission that the Arbitrator failed to determine the nature of the injury of 26 May 1993 is not tenable.  It was common ground that the injury had occurred and that Mr Hinton’s work at BHP had been a substantial contributing factor to it.  The Arbitrator considered the evidence in relation to the 1993 injury in some detail and was clearly of the view that it was, on the medical evidence, ‘muscle strain’ and not of lasting impact, having largely ‘resolved’ within a week of the event, based on several factors including Mr Hinton’s return to normal duties and lack of proximate or ongoing treatment related to that event.  This is not to say that Mr Hinton did not himself continue to relate his back pain to this first injury. 

26.The Arbitrator has not erred in the exercise of her discretion to weigh the evidence and make appropriate findings, in this instance in relation to the 1993 injury.  She did not need to go further and indeed to do so would risk intrusion into the role and function of the Approved Medical Specialist.  It is for the Approved Medical Specialist to assess the degree of permanent impairment, if any, that arises from the injury.

Did the Arbitrator err in finding Mr Hinton suffered injury in the course of his employment with Smorgon?

27.Smorgon submit that the Arbitrator erred in finding that Mr Hinton’s injury arose in the course of his employment with it from May 2003 to September 2004.  This conclusion flows from the Arbitrator’s findings that: Mr Hinton suffered from ‘degenerative disc disease’ at the time he was employed by Smorgon, that the nature of his work at Smorgon was heavy and that it, in fact, aggravated his diseases.

28.The Arbitrator accepted Mr Hinton’s evidence as to his duties while employed at Smorgon.  She was entitled to accept this evidence and to weight it with other relevant evidence, which she did.  She considered the evidence of Mr Frazer, to the effect that the work at Smorgon had not become more physically demanding during Mr Hinton’s employment.  Nonetheless the Arbitrator found that the work was ‘heavy’.  The Arbitrator also accepted Mr Hinton’s evidence of increasing aggravation of his back pain as a result of the duties he performed at work.

29.As noted above the weight to be given to evidence is a matter for the Arbitrator.  BHP and Mr Hinton submit that the Arbitrator has properly considered the evidence and made clear and supportable findings.  In my view this submission is correct.  The Arbitrator has reviewed the medical evidence and carefully tried to reconcile the diversity of medical opinion about Mr Hinton’s condition.  Ultimately she found the reports of Dr Bracken and Dr Kuru were persuasive.  The fact that Dr Kuru was not providing a ‘medico-legal’ report does not, as the Appellant suggests, diminish his conclusion that Mr Hinton suffered from ‘degenerative disc disease’.  The Arbitrator has not taken irrelevant matters into account nor failed to base her ultimate findings on the evidence that was before her. 

30.The Arbitrator has not erred in finding that Mr Hinton suffered an injury arising out of or in the course of his employment with Smorgon.

Did the Arbitrator err in the apportionment of liability between BHP and Smorgon?

31.The Arbitrator reasoned that:

“. . . . by application of the provisions of section 16 of the 1987 Act, the Second Respondent [Smorgon] is liable to make these payments of weekly compensation. Not question of contribution arises under section 16(2) as the Second Respondent was the only employer in the 12-month period preceding the incapacity.
I note that I have found that there are in fact two injuries suffered by the Applicant, being one on 26 May 1993 and an injury deemed to occur on 29 September 2004, such that a referral will be made to an AMS to assess the degree of permanent impairment as at those dates of injury.
I am not satisfied that any apportionment of liability to pay weekly compensation should be attributed to the First Respondent by reason of the injury on 26 May 1993. I take into account that the Applicant’s incapacity by reason of that injury was limited to 2 days light duties and three days off work. He was then able to resume heavy work with the First Respondent [BHP] until the cessation of his employment on 30 September 1999 upon plant closure. He was later to work for over 12 months in heavy employment with the Second Respondent before any time was lost. Accordingly I find that the Second Respondent is wholly liable to make payments of weekly compensation under section 38 of the 1987 Act.”

32.The Appellant submits that, notwithstanding the Arbitrator may have correctly applied section 16 of the 1987 Act to her findings of injury:

“. . . this did not obviate the availability of the power to apportion liability, or the arbitrator’s obligation to do so according to law, under section 22 of the 1987 Act. In that respect, the arbitrator’s decision is that the first respondent suffered two separate and distinct injuries”.

33.The Appellant refers to the decision of the Court of Appeal in Rail Services Australia v Dimovski [2004] NSWCA 267 to support the proposition that it was incumbent upon the Arbitrator, having found that Mr Hinton suffered from more than one injury, to consider whether to apportion liability between Smorgon and BHP. The Arbitrator’s failure “ to order apportionment under section 22” of the 1987 was an error of law.

34.BHP and Mr Hinton submit that the Arbitrator “notes quite clearly her views that the incident in May 1993 has no bearing on the worker’s incapacity”. They also submit that the passage quoted from the Arbitrator’s reasons above, clearly demonstrates that the Arbitrator considered the application of section 22 of the 1987 Act to the facts as found.

35.The Appellant’s submission misconstrues the application of section 22 in cases where section 16 applies. Rail Services Australia v Dimovski [2004] NSWCA 267 is in fact authority for the proposition that, in section 16 cases apportionment is governed by section 16(2) and (2A). The Arbitrator’s determination concerned liability for weekly payments of compensation for incapacity. She found two injuries; a frank injury on 26 May 1993 and a ‘disease’ deemed to have occurred on 29 September 2004. Liability for weekly compensation as a result of the ‘disease’ was, correctly, apportioned according to section 16 of the 1987 Act. However the Arbitrator found, as a matter of fact, that Mr Hinton’s incapacity arising from the frank injury on 26 May 1993 was limited to “2 days light duties and 3 days off work”. The incapacity suffered by Mr Hinton on and from 29 September 1993 did not, on the facts found by the Arbitrator “result partly from one injury and partly from one or more other injuries” (section 22(1A)). I agree with the submission put by BHP and Mr Hinton that “ it is the finding of the Arbitrator in this case that the 1993 injury is not a separate cause of incapacity and therefore her determination in relation to apportionment is entirely correct both in fact and in law”.

36.Liability for lump sum compensation for permanent impairment as a result of both injuries remains to be determined.  This will be dependent upon the binding assessment of the Approved Medical Specialist as to the degree of permanent impairment, if any, suffered by Mr Hinton as a result of each ‘injury’ and “whether any proportion of permanent impairment is due to any previous injury or pre-existing condition or abnormality” (section 326 of the 1998 Act).

37.The Appellant submits that the findings of Dr Dixon, as set out in the Medical Assessment Certificate issued on 19 July 2005: “support the appellant’s argument as to apportionment and removes the factual basis for the second respondent’s submissions against apportionment.  It also highlights the appellant’s submissions that the arbitrator misdirected herself in law as to the matters for determination and the resulting deficiencies in the arbitrator’s finding”.  In my view the Medical Assessment Certificate does no such thing.  It concerns the assessment of permanent impairment resulting from the two identified injuries, namely the frank injury on 26 May 1993 and ‘disease’ of ‘degenerative disc disease’ that was deemed to have occurred on 29 September 2004.  The Appellant has failed to distinguish between liability for incapacity for injury/ies, resulting in an entitlement to weekly compensation, and liability for permanent impairment resulting from an injury/ies, resulting in an entitlement to lump sum compensation.  

38.The Medical Assessment Certificate is currently under appeal to a Medical Appeal Panel.  The determination of liability for lump sum compensation for permanent impairment (and the amount of the entitlement) will not, in any event, be decided until that application is finalised.  

Decision

39.The decision of the Arbitrator is confirmed.

Costs

40.The Appellant is to pay the costs of the appeal.

Dr Gabriel Fleming

Deputy President  

16 December 2005

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

ASSOCIATE