Smylie v Uniting Church in Australia (NSW) Property Trust t/as Mayflower Retirement Village
[2006] NSWWCCPD 322
•28 November 2006
WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:Smylie v Uniting Church in Australia (NSW) Property Trust t/as Mayflower Retirement Village [2006] NSWWCCPD 322
APPELLANT: Patricia Smylie
RESPONDENT: Uniting Church in Australia (NSW) Property Trust t/as Mayflower Retirement Village
INSURER:Allianz Australia Workers Compensation (NSW) Limited
FILE NUMBER: WCC20812-05
DATE OF ARBITRATOR’S DECISION: 11 April 2006
DATE OF APPEAL DECISION: 28 November 2006
SUBJECT MATTER OF DECISION: Estoppel; effect of prior consent award; effect of admissions and agreed facts
PRESIDENTIAL MEMBER: Acting Deputy President Bill Roche
HEARING:On the papers
REPRESENTATION: Appellant: Philip Lewis
Respondent: Leitch Hasson Dent
ORDERS MADE ON APPEAL: Time to appeal is extended to 2 June 2006.
The decision of the Arbitrator dated 11 April 2006 is revoked and the following order made:
“The matter is remitted to the original Arbitrator for determination of the quantum of the Appellant Worker’s entitlement under section 60 of the Workers Compensation Act 1987 in accordance with the reasons in this decision.”
The Respondent Employer is to pay the Appellant Worker’s costs of the appeal and of the Arbitration proceedings.
BACKGROUND TO THE APPEAL
On 2 June 2006 Patricia Smylie (‘the Appellant Worker/Ms Smylie’) sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Workers Compensation Commission (‘the Commission’) against a decision, dated 11 April 2006.
The Respondent to the Appeal is Uniting Church in Australia (NSW) Property Trust t/as Mayflower Retirement Village (‘the Respondent Employer/Mayflower’).
Ms Smylie was born on 11 November 1945. She commenced work as an enrolled nurse at Mayflower in 1984. Over a period of months in 1991 she suffered back, neck and right arm pain during the course of her employment as a result of having to lift patients. As a result of her symptoms she brought a claim for compensation in the Compensation Court of NSW (proceedings No. 2931 of 1994) (‘the Compensation Court’). Those proceedings resulted in a consent award being made in favour of the Appellant Worker as follows:
“1.That the respondent pay the applicant as lump sum compensation under section 66 –
(1)$15,792.00 in respect of 20% loss of efficient use of the applicant’s right arm at or above the elbow.
(2)$5,922.00 in respect of 10% permanent impairment of the applicant’s back.
(3)$3,948.00 in respect of 10% permanent impairment of the applicant’s neck.
2.That the respondent pay the applicant, as lump sum compensation under section 67, $12,000.00 in respect of pain and suffering.
3.That the Respondent pay the Applicant interest in the sum of $2,338.00 and on the lump sums awarded under sections 66 and 67.
4.That the Respondent pay the Applicant’s section 60 expenses in the agreed sum of $536.00 on production of accounts and receipts.
5.That the Respondent pay the Applicant’s costs (including one qualifying fee and fee for counsel for advice on evidence) forthwith after they have been agreed or taxed.”
On 1 May 1997 whilst on a periodic journey to work with the Respondent Employer Ms Smylie was involved in a car accident (‘the car accident’). Her car was struck from behind resulting in her suffering an aggravation of her back and neck injury and sustaining new injuries to her left arm and shoulder and right knee.
Ms Smylie filed a second claim in the Compensation Court (matter No. 52551 of 2000) on 4 June 2001 (‘the Court claim’) in which she alleged she had sustained injuries to her “neck and back” in the car accident on 1 May 1997. She initially claimed only weekly compensation and medical expenses but made no claim for lump sum compensation. It is common ground that the Court claim was at some stage amended but the details of the amendments are not in evidence.
As a result of Ms Smylie’s right knee injury in the car accident on 1 May 1997 her right leg was unstable and would give way from time to time (Dr Bentivoglio, report 7 February 2001 and Appellant Worker’s statement 1 December 2005, paragraph seven). Her left knee was injured in about May 2002 when she fell as a result of her right knee giving way causing her to strike her left knee on a hard surface.
On 28 August 2002 Ms Smylie was examined by Dr Bentivoglio (report 30 August 2002) who recorded a history of her right knee giving way resulting in the injury to her left knee in May 2002. On examination he found evidence of post traumatic chondromalacia patella in the left knee, a condition that can be difficult to treat as it generally does not respond well to conservative or even operative treatment. He recommended that Ms Smylie avoid activities that require her to kneel, remain in one position for prolonged periods of time or do a lot of walking or climbing of stairs or ladders.
On 8 August 2003 Ms Smylie saw Dr Waller about her left knee on referral from her general practitioner, Dr Dostal. He took a history of instability in the right knee resulting in her falling onto her left knee in May 2002. On examination he found that she was limping and that her left knee had a moderately large effusion with medial joint line tenderness. He thought she had signs of medial compartment osteoarthritis which was also revealed in x rays taken in July 2002 and confirmed in x rays taken on 8 August 2003. Dr Waller thought that the fall in May 2002 had caused an “exacerbation and aggravation of her pre existing osteoarthritis” (Dr Waller report 5 April 2005, page three). He arranged for Ms Smylie to be admitted to Prince of Wales Private Hospital on 1 September 2003 for arthroscopic surgery on her left knee. That surgery revealed Grade III and IV osteoarthritis affecting the medial joint compartment and Grade II wear changes across the patellofemoral joint and a degenerate tear of the medial meniscus and a generalised synovitis. As a result of those findings he arranged for a medial unicondylar replacement to be performed on the left knee on 17 November 2003.
The Court claim was settled in the Compensation Court on 25 August 2003 and the following “Short Minutes of Order” (‘Short Minutes’) were file with the Court:
“By Consent:
1.The Respondent pay the Applicant as lump sum compensation pursuant to section 66:
(a) $6,000 in respect of 10% further permanent impairment of the
Applicant’s back.
(b) $2,000 in respect of 5% further permanent impairment of the
Applicant’s neck.
(c) $1,500 in respect of 2% permanent loss of use of the Applicant’s
right leg at or above the knee.
(d) $1,500 in respect of 2% permanent loss of use of the Applicant’s left
leg at or above the knee.
2.The Respondent pay the Applicant $9,000 pursuant to section 67.
3.
The Respondent pay the Applicant interest on the above amounts agreed in the sum of $Award for the Respondent in respect of interest.
4.The Respondent pay the Applicant’s Section 60 [sic] agreed in the total sum of $3,200 upon production of accounts and receipts.
Award for the Respondent in respect of medical expenses pursuant to section 60 thereafter.
5.The Respondent pay the Applicant’s costs as agreed or assessed, including $ qualifying fees and Advice on Evidence. No interest is payable on the worker’s costs if same are paid within 28 days of either the Respondent receiving a Tax Invoice following agreement of costs or in the absence of agreement, the Respondent receiving a certificate of assessment of costs.
6.No interest is payable on the Award moneys if said moneys are paid within 28 days from the date of receipt of a Notice of Charge issued under the Health and Other Services (Compensation) Act or Charges Act.
7.The Applicant acknowledges that they have been given notice that they may be liable for charge pursuant to the Health and Other Services (Compensation) Act or Charges Act.
8.The Respondent in respect of the Applicant’s claim for weekly compensation [sic] to pay
(a) $100 pw from 28/4/00 to 15/3/03 pursuant to s40 agreed to total $15,000. Award for the Respondent re weekly benefits thereafter.
9.
Other orders or notations.”
The Short Minutes were signed by counsel for both parties. I assume that the Short Minutes were entered into an award by the Compensation Court though that award is not before me.
Also filed with the court on 25 August 2003 were documents headed “Agreed Facts” and “Admissions”.
The Agreed Facts state:
“1.The Applicant has no economic incapacity after 15/3/03 causally related to any injury sustained during or aggravated by the Applicant’s employment with the Respondent.
2.The Applicant is not entitled to any further weekly payment or Compensation.
3.Other than as set forth in the Award herein, the Applicant has no entitlement to Compensation against the Respondent.
4.The Applicant agrees to sign a Common Law Release if required to do so.
5.Other than injuries the subject of these proceedings, the Applicant has suffered no injury within the meaning of the Act in the employ of the Respondent.”
The Agreed Facts are signed by counsel for each of the parties and by Ms Smylie.
The Admissions state:
“I, PATRICIA SMYLIE, the Applicant herein, make the following admissions to enable my claim to be finalised on the basis of a compromise settlement:-
1.Apart from the Awards referred to in the Short Minutes herein, I have been paid all wages and all weekly Compensation due to me up to 15/3/03.
2.Despite any losses and/or impairments for which the employer has agreed to pay me Compensation in these proceedings, since 15/3/03 I have been able to undertake work available to me in the Open Labour Market, in which work I would earn the same amount or more than I would have earned had I continued in my job with the employer uninjured.
3.Other than the losses and/or impairments for which the employer has agreed to pay me Compensation in these proceedings, I have not sustained any loss or impairment of any part of my body as a result of injury arising out of or in the course of my job with the employer.
4.I have not sustained any injury arising out of or in the course of my job with the employer, other than the injury or injuries specified in the Application for Determination.
5.I understand the nature and effect of these admissions, and the compromise settlement, which things have been explained to me by my legal advisers.
6.My medical hospital and other treatment expenses to date for which I claim payment by or reimbursement from the employer, total no more than_________.
6.I acknowledge that the employer disputes my claim and has agreed to compromise settlement on the basis of and in reliance upon these admissions.
7.I agreed to sign a Common Law Release if required to do so.”
The Admissions are signed by Ms Smylie and her counsel.
For convenience, the Short Minutes, Admissions and Agreed Facts dated 25 August 2003 are referred to as ‘the Settlement Documents’.
On 7 December 2005 an Application to Resolve a Dispute (‘the Commission claim’) was filed in the Commission alleging injuries due to the nature and conditions of employment from 1991 to August 2003, the car accident on 1 May 1997 and the fall as a result of the right knee giving way in May 2002. The Application claimed $21,000.00 in respect of an additional 28% loss of use of the left leg at or above the knee and $18,750.30 in respect of hospital and medical expenses pursuant to section 60 of the Workers Compensation Act 1987 (‘the 1987 Act’).
By its Reply filed on 11 January 2006 the Respondent Employer denied liability for the claim stating that the Appellant Worker was estopped from bringing a further claim for compensation because of the effect of the Settlement Documents signed on 25 August 2003 and set out above.
The claim proceeded to an Arbitrator hearing before a Commission Arbitrator on 20 March 2006 with the parties arguing as a preliminary issue the question of whether the Appellant Worker was “estopped or otherwise prevented from being paid the compensation claimed because of the terms of the consent award dated 25 August 2003 and the Admissions and Agreed Facts signed by the Applicant on 25 August 2003” ( Arbitrator’s Statement of Reasons for Decision (‘Reasons’) dated 11 April 2006, paragraph nine). The Appellant Worker’s claim for lump sum compensation was discontinued without objection on 20 March 2006 leaving only the claim for section 60 expenses to be determined (transcript, page one line 50).
After hearing lengthy submissions from the parties the Arbitrator found in favour of the Respondent Employer and dismissed the Application.
Ms Smylie seeks leave to appeal against that decision.
LEAVE TO APPEAL
Monetary Threshold
Before proceeding to deal with an appeal the Commission must determine whether the application meets the requirements of section 352 of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’).
The quantum in issue on the appeal is in excess of $5,000.00 and therefore the threshold in section 352(2)(a) of the 1998 Act is satisfied. No award of compensation has been made in this case but the Arbitrator’s finding would result in the Respondent Worker receiving no compensation and therefore the second limb of section 352(2) does not apply (see Mawson v Fletchers International Exports Pty Ltd [2002] NSWWCCPD 5).
Time
The appeal was initially lodged on 11 May 2006 and was rejected by the registry because it was outside the 28 day period set in section 352(4) of the 1998 Act and no submissions were filed seeking an extension of time.
The appeal was lodged again on 2 June 2006 with appropriate submissions seeking an extension of time.
An extension of time in which to appeal can be granted in certain limited circumstances. Part 16 Rule 16.11 of the Workers Compensation Commission Rules 2006 (‘the Rules’) provides that:
“(11) The Commission constituted by a Presidential member may, if a party satisfies the Presidential member, in exceptional circumstances, that to lose the right to seek leave to appeal would work demonstrable and substantial injustice, by order extend the time for making an appeal.”
The question of extending time to appeal was considered by Justice McHugh in Gallo v Dawson (1990) 93 ALR 479 (‘Gallo’) where his Honour said at 480:
“The discretion to extend time is given for the sole purpose of enabling the court or justice to do justice between the parties: see Hughes v National Trustees Executors & Agency Co of Australasia Ltd [1978] VR 257 at 262. This means that the discretion can only be exercised in favour of an applicant upon proof that strict compliance with the rules will work an injustice upon the applicant. In order to determine whether the rules will work an injustice, it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation, and the consequences for the parties of the grant or refusal of the application for extension of time: see Avery v No 2 Public Service Appeal Board [1973] 2 NZLR 86 at 92; Jess v Scott (1986) 12 FCR 187 at 194-5; 70 ALR 185. When the application is for an extension of time in which to file an appeal, it is always necessary to consider the prospects of the applicant succeeding in the appeal: see Burns v Grigg [1967] VR 871 at 872; Hughes at 263-4, Mitchelson v Mitchelson (1979) 24 ALR 522 at 524. It is also necessary to bear in mind in such an application that, upon the expiry of the time for appealing, the respondent has ‘a vested right to retain the judgment’ unless the application is granted: Vilenius v Heinegar (1962) 36 ALJR 200 at 201.”
The Appellant Worker’s solicitor submits that the appeal documents were finalised, signed by him and forwarded to the Commission on 8 May 2006. The documents are date stamped as having been received by the Commission on 11 May 2006, two days out of time. The Respondent Employer makes no submissions in respect of the application to extend the time in which to appeal.
Having regard to the principles set out by McHugh J in Gallo, I believe that refusing to extend the time to appeal will result in a “demonstrable and substantial injustice” to the Appellant Worker. I have particular regard to the following matters:
(a)the conduct of the Appellant Worker solicitor in attempting to file the appeal on time,
(b)the fact that the appeal is only a few weeks out of time,
(c)the Respondent Employer has raised no objection or any prejudice, and
(d)the appeal raises arguable issues of general importance.
I therefore extend the time to appeal until 2 June 2006.
I grant leave to appeal.
PRELIMINARY MATTERS
Section 354(6) of the 1998 Act provides:
“(6)If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”
The Appellant Worker’s written submissions seek an oral hearing but clause 2.5 of the appeal form states that the appeal can be decided solely on the basis of the written application. The Respondent Employer is silent on this issue.
I do not believe that the issues raised on appeal are so complex or fundamental that an oral hearing is required. The submissions filed by the parties are detailed and comprehensive.
Having regard to Practice Directions Numbers 1 and 6, the documents that are before me, 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.
THE DECISION UNDER REVIEW
The ‘Certificate of Determination’, dated 11 April 2006, records the Arbitrator’s orders as follows:
“1.The Application is dismissed.
2.Each party to pay their own costs.”
ISSUES IN DISPUTE
The issues in dispute in the appeal are whether the Arbitrator:
(a)failed to understand or properly apply the concept of ‘injury’,
(b)failed to understand the concepts of ‘incapacity’, ‘impairment’ and ‘loss’ as distinct from the concept of injury,
(c)failed to understand or properly apply the concept of “unaccrued” [sic] entitlements,
(d)failed to correctly apply the decision of Woolworths Limited v Van Der Mast [2005] NSWWCCPD 108 (‘Van Der Mast’),
(e)failed to correctly apply the dicta of Judge Burke in Almario v Carrington Constructions Pty Ltd (1996) 13 NSWCCR 739 (‘Almario’),
(f)misunderstood the Agreed Facts,
(g)failed to comprehend the limitations necessarily involved in the concessions that can be made by an injured worker in Admissions and Agreed Facts,
(h)failed to consider the application of section 234 of the 1998 Act, and
(i)gave no or no adequate reasons for her understanding of the Short Minutes.
SUBMISSIONS AND FINDINGS
Appellant Worker’s Submissions
The Appellant Worker makes the following submissions:
· compensation is only payable for the consequences of an injury, namely, incapacity that results in economic loss or medical expenses actually incurred, not for the occurrence of the injury per se;
· losses may increase as a result of deteriorating pathology or the onset of additional pathology such as arthritis without the need for a further injury;
· a claim for hospital and medical expenses under section 60 cannot be made until they are incurred;
· lump sums are not payable until a loss or impairment has stabilized;
· a worker cannot give away a right he or she does not know exists;
· Ms Smylie’s current loss is greater than that agreed on 25 August 2003 and there has been a significant change in circumstances, namely, two operative procedures;
· the section 60 expenses now claimed had not been incurred as at 25 August 2003;
· the significant statement in Almario is at 744 where his Honour noted that the 1987 Act is “beneficial legislation bestowing upon workers a variety of entitlements enforceable by the Court” and that such rights are accorded “unusual statutory protection by section 272 of the Act [now section 234 of the 1998 Act] so that no contractual arrangement entered into by the worker can abridge or nullify such rights”;
· the rights the Appellant Worker seeks to have determined were not available at the time she signed the Admissions;
· the bulk of the section 60 expenses claimed are for the knee replacement operation which was not within the contemplation of the worker as at 25 August 2003;
· the surgery on 1 September 2003 was exploratory and done to establish the extent of damage suffered as a result of the injury;
· the deletion of the original paragraph six of the Admissions supports the proposition that both parties were equally aware of the impending surgery;
· there was no admission regarding section 60 expenses at all and no agreed facts relating to those expenses;
· a worker cannot be expected to make concessions on matters not within the workers knowledge;
· a worker cannot be expected to make concessions on medical diagnoses or potential future occurrences;
· the Appellant Worker admitted that there were no injuries other than those alleged, but she made no admission that the consequences of those injuries had stabilized or been finally quantified or had even materialized in all there forms such as to preclude her from relying on the change of circumstances that subsequently arose;
· the Arbitrator failed to consider section 234 of the 1998 Act which states that the 1987 Act and the 1998 Act apply “despite any contract to the contrary”, and
· the Arbitrator gave no adequate reasons, but correctly found that res judicata did not apply.
Respondent Employer’s Submissions
The Respondent Employer submits:
· on a background of the significant complaints made by Ms Smylie to Dr Waller on 8 August 2003, she settled her claim on the basis that she had a work related 2% permanent loss of efficient use of her left leg at or above the knee and agreed that certain facts were true and correct as at 25 August 2003;
· the Appellant Worker is estopped on the basis of the principles enunciated by the High Court in Port of Melbourne Authortiy v Anshun (1981) 147 CLR 589 (‘Anshun’) as applied by Judge Burke in Ada v Westmead Centre Parramatta Hospital (1985) 1 NSWCCR 101 (‘Ada’) where his Honour said at 106 that a worker was not permitted to split his or her case and seek “in two separate proceedings ultimately to allege two different causes of the same consequence”;
· Ms Smylie must have been aware as at 25 August 2003 that she potentially had serious concerns with her left knee, particularly bearing in mind she had surgery scheduled for 1 September 2003;
· the need for that surgery was different to the cause of incapacity and loss being advanced at the hearing on 25 August 2003, namely, referred pain and chrondromalacia patella;
· a consent award can create an estoppel;
· support for its position is found in my decision in Kaibau v Gillespie’s Produce and Packing Pty Ltd [2006] NSWWCCPD 168 at [61] (‘Kaibua’) where I placed great weight on the fact that in that case there were no ‘admissions’ or ‘agreed facts’;
· the evidentiary hurdle presented to Ms Smylie is “insurmountable” because she was aware of the “differential diagnosis” of aggravation of osteoarthritis at the time she agreed to accept that the work related loss of use of the left leg at or above the knee was 2%, she admitted she was not entitled to further compensation and had suffered no injury others than those set out in the Short Minutes, and consented to an award for medical treatment expenses beyond an agreed figure;
· the only interpretation available is that the Appellant Worker and her legal advisers were not satisfied as at 25 August 2003 that the known osteoarthritis in the left knee was compensable;
· it was open to the parties to resolve the claim on whatever basis they deemed appropriate (Van Der Mast);
· the parties are bound by the acts of their lawyers acting within their ostensible authority (Almario);
· the Appellant Worker made a “similar admission” to that made in Van Der Mast where the worker admitted that the compensation paid in the earlier settlement represented “the extent of his entitlement to compensation …to date” and that “other than the injuries, the subject of these proceedings, he sustained no other injuries of which he is aware” (Van Der Mast at [38]);
· the authority of Anshun prevents a “recasting” of the allegation of injury (Lambidis v Commissioner of Police (1995) 37 NSWLR 320 at 322) (‘Lambidis’), and
· the Appellant Worker provided no evidence to rebut the Admissions and Agreed Facts and any persisting problem with the left knee can only be categorised, on her own admission, to be due to osteoarthritis and is unrelated to any workplace injury.
Arbitrator’s Decision
In a carefully prepared decision the Arbitrator set out the evidence, the parties’ arguments and her conclusions. The basis for her decision is in paragraph 48 of her Reasons where she said:
“I find that the Applicant is bound by her admissions and the agreed facts that she signed in order to support the consent award on 25 August 2003. Those admissions preclude her from being paid the compensation that she now seeks because the alleged injury to the left leg as a result of the aggravation of her osteoarthritis is covered by her admission that she suffered no other injuries in the employ of the Respondent or no other losses or impairments other than those the subject of the proceedings before the Court.” (emphasis added)
After acknowledging that a worker cannot in general be prevented from claiming medical expenses in the future the Arbitrator added at paragraph 49:
“However, in this case I accept the submissions of the Respondent that it was entitled to rely on the admissions of the Applicant at the time of settlement that any need for treatment to the left knee was not as a result of any injury within the meaning of the Act. If the Applicant wished to claim the cost of the surgery, in circumstances where that surgery was required less than one week after the settlement, the proper course may well have been to exclude any compensation for permanent loss of efficient use of the left leg from the terms of settlement as the level of impairment was not yet capable of being assessed. That was not done here.” (emphasis added)
The Arbitrator therefore concluded that the Appellant Worker was not entitled to the compensation claimed under section 60 “because of the admissions and agreed facts contained in the documents signed by her on 25 August 2003” (Reasons, paragraph 50).
Discussions and Findings
The Settlement Documents
This case turns on the effect of the Short Minutes filed in the Compensation Court at the request of the parties on 25 August 2003 and the interpretation of the Admissions and Agreed Facts which were prepared and signed at the same time.
In my view the Arbitrator was in error in her interpretation of those documents. For the purposes of the current claim Ms Smylie’s relevant injury was the injury to her right knee in the car accident on 1 May 1997. As a result of that injury her right knee was unstable and gave way from time to time. Ms Smylie’s right knee gave way in May 2002 causing her to fall to the ground and injure her left knee. I do not understand these facts to be in dispute. Therefore, the only ‘injury’ of concern is the injury on 1 May 1997.
The fact that different diagnoses were made by Dr Bentivoglio and Dr Waller does not mean that there were different ‘injuries’ within the definition of that term in the legislation. It merely means that there was uncertainty as to the condition of the left knee and what damage had been caused by the May 2002 fall. The only relevant ‘injury’ was the car accident in 1997. If it is accepted that the left knee incident resulted from that injury then, subject to all other matters being established, compensation is payable for the consequences that have resulted from that injury. Provided the section 60 expenses that are now claimed were “reasonably necessary” as a result of the fall in May 2002 (which itself was the result of the injury in the 1997 car accident) compensation is recoverable for those expenses. A different diagnosis does not equate to a different injury and does not prevent recovery of the relevant section 60 expenses.
The relevant part of the Admissions is paragraph four in which the Appellant Worker stated that she had not sustained “any injury arising out of or in the course of” her job with the Respondent Employer “other than the injury or injuries specified in the Application for Determination”. The only injuries pleaded in the Court claim (matter No. 52551 of 2000) were the neck and back injuries sustained in the car accident on 1 May 1997. It seems likely that the Application for Determination was amended at some stage but what amendment was made is not identified in the evidence. If it is assumed that the amendment incorporated into the Application for Determination the body parts set out in the terms of the Short Minutes that still does not support an argument that the osteoarthritis in the left knee was a separate ‘injury’.
The original paragraph six of the Admissions has been deleted. That paragraph dealt hospital and medical expenses. If the intention of the settlement effected on 25 August 2003 was to prevent Ms Smylie from claiming for medical expenses incurred after that date it seems odd that the paragraph dealing with that aspect of the claim should have been deleted and nothing inserted in its place.
The Admissions mainly deal with Ms Smylie’s entitlement to weekly compensation and include detailed admissions about her ability to earn despite her agreed losses and impairments. There is nothing in the Admissions that would prevent Ms Smylie from recovering compensation under section 60 in the present claim.
There is no evidence to support the Arbitrator’s finding (set out at [40] above) that Ms Smylie admitted that the need for treatment to her left knee after 25 August 2003 was not the result of an injury within the meaning of the Act.
The Agreed Facts also need to be considered in detail.
Paragraph one of the Agreed Facts states that the Appellant Worker “has no economic incapacity after 15/3/03 causally related to any injury sustained during or aggravated by the Applicant’s employment with the Respondent”. The basis for this agreed fact was the Appellant Worker’s admission that despite any losses or impairments for which the employer agreed to pay her compensation, she was able to earn the same or more than she earned with the Respondent Employer (Admissions, paragraph two). It does not affect the claim for section 60 expenses. However, it does illustrate the detailed approach used by the parties to express their agreement in respect of the claim for weekly compensation. That approach is lacking when one considers the claim for section 60 expenses.
Paragraph two of the Agreed Facts states that the Appellant Worker “is not entitled to any further weekly payment or Compensation”. To the extent that this paragraph seeks to impose a blanket bar on the recovery of compensation after 25 August 2003, it must be read subject to section 234 of the 1998 Act which provides that the workers compensation Acts (the 1987 Act and the 1998 Act) “apply despite any contract to the contrary”. To the extent that it relates to the Appellant Worker’s entitlement to claim compensation up to 25 August 2003 it provides very persuasive evidence that all compensation entitlements up to that date have been satisfied.
Paragraph three of the Agreed Facts states that other than set out in the award made on 25 August 2003, the Appellant Worker “has no entitlement to compensation against the Respondent”. The same comment I have made about paragraph two is applicable to this paragraph.
Paragraph five of the Agreed Facts states that other than the injuries the subject of the proceedings in the Compensation Court, the Appellant Worker “has suffered no injury within the meaning of the Act in the employ of the Respondent”. Exactly which injuries were included in the proceedings in the Compensation Court has not been established. However, for the reasons set out above, the different diagnosis made by Dr Waller is not a separate injury. The Appellant Worker did not agree that the she had suffered no injury to her left knee. She did not agree that her left knee had recovered from the effects of the May 2002 incident. In the context of the settlement that was reached on 25 August 2003, paragraph five of the Agreed Facts means that the Appellant Worker suffered no injuries other than the injuries to her legs, right arm, back and neck. The payment of $1,500.00 in respect of a 2% permanent loss of use of the left leg at or above the knee amounts to an admission by the Respondent Employer that the Appellant Worker sustained an injury to the left leg that gave rise to that entitlement and that she had that loss as at 25 August 2003 (‘Dimovski’).
For the above reasons I believe the Arbitrator was in error in finding that the aggravation of osteoarthritis in Ms Smylie’s left knee was an ‘injury’ covered by the Admissions and Agreed Facts referred to above. It was not an ‘injury’ and Ms Smylie made no admissions in respect of it.
The Short Minutes must also be considered. The paragraph dealing with medical and hospital expenses is paragraph four. It provides for the payment of section 60 expenses agreed in the sum of $3,200.00 upon production of accounts and receipts. The next line states “award for the Respondent in respect of medical expenses pursuant to section 60 thereafter” (emphasis added).
Section 60 is an indemnity provision (New South Wales Sugar Milling Co-opinion Ltd v Manning (1998) 44 NSWLR 442). In light of that fact, and in the context of paragraph four of the Short Minutes, it is my view that the word “thereafter” means ‘over and above the agreed sum of $3,200.00’ in respect of expenses incurred up to 25 August 2003. If the paragraph was intended to eliminate the Appellant Worker’s future rights under section 60 I do not believe it achieved that end because there was no finding, admission or agreement that Ms Smylie had recovered from her left knee problem or that the need for future treatment of the left knee was unrelated to the injury sustained.
For the reasons set out above it is my view that none of the documents before the Arbitrator prevent the Appellant Worker from pursuing a claim for section 60 expenses in the present Application before the Commission.
Estoppel and Anshun
The Arbitrator does not appear to me to have made any finding in respect of the Respondent Employer’s estoppel or Anshun arguments. Those arguments have been raised on appeal and must be determined.
The Respondent Employer’s argument relies on a passage from Judge Burke in Ada where his Honour said at 106:
“Where the subject of the earlier litigation was whether the applicant had an incapacity because of injury to his left arm and a consequent anxiety state that was alleged to be compensable because it arose out of or in the course of his employment and the applicant alleged one only of apparently two limbs or incidents of his employment upon which he might rely, then certainly it was in essence the applicant splitting his case seeking, in two separate proceedings, ultimately to allege two different causes of the same consequence, each being allegedly compensable within the meaning of this Act. It seems to me that, with any reasonable diligence, the applicant could have, and indeed should have, litigated that issue concurrently with the actual allegation which he did in fact choose to litigate in the earlier proceedings.”
In Ada, the earlier litigation was the subject of a contested hearing before Judge O’Meally where the worker failed in his claim that his left arm injury and his anxiety state had resulted from a fall from a chair causing him to strike his head on wall. In later proceedings before Judge Burke the worker argued that the same injury had been caused by the nature and conditions of his employment up to a date well before the hearing before Judge O’Meally. It was in this context that Judge Burke held that the worker should not be permitted to ‘split his case’ because, with reasonable diligence, he could and should have litigated the nature and conditions allegation at the first hearing.
I do not believe that Ada gives the Respondent Employer any assistance in the present case. First, the earlier litigation in the current matter was not a contested hearing that resulted in a judgment which identified the issues and made factual findings. Second, the cause of problem in the left knee in the Commission claim is the same as it would have been had the Court claim been litigated. That is, the left knee problem has resulted from the fall caused by the giving way of the right knee. The Appellant Worker does not allege “two different causes of the same consequence”. She alleges one injury that has resulted in damage to her left knee.
Whilst there is a nature and conditions allegation in the Commission claim which was not part of the Court claim, it is irrelevant to the current argument as there is no evidence that the disputed section 60 expenses have resulted from the nature and conditions of the Appellant Worker’s employment.
Considering the doctrine of res judicata in Almario, Judge Burke held at 745 that:
“The ultimate test for the application of res judicata in the strict sense is whether a subsequent order granting the relief now sought would be inconsistent with an existing order.”
There is no sense in which it could be said that an order granting the relief now sought could be said to be inconsistent with the orders made on 25 August 2003. No order is sought in respect of the period up to 25 August 2003.
For the same reasons I reject the Respondent Employer’s argument in respect of Anshun estoppel. The principles discussed by the High Court in Anshun were explained by Justice Kirby in Lambidis v Commissioner of Police (1995) 37 NSWLR 320 at 322 (‘Lambidis’) where his Honour said that such an estoppel:
“…prevents a party from later relying upon a claim or defence which it has unreasonably refrained from raising in earlier proceedings which were so closely connected with the later subject matter that it might reasonably have been expected that the claim or defence would have been raised?” (emphasis added)
Anshun estoppel depends on “considerations of public policy and the reasonableness of the conduct of litigants” (per Justice Kirby in Lambidis at 325). It is intended to deal with the situation where a person suffers two injuries to one part of the body and in their claim for compensation only relies on one of those injuries. If that claim is unsuccessful they may be estopped from relying on the second injury in a later claim when they could and should have relied on it in the first proceedings (as in Ada). Each case will depend on its facts as the question of what is reasonable will vary according to the circumstances. However, for the reasons set out above the principles set out in Anshun and Lambidis have no application to the matter before me.
Other Matters
The Respondent Employer’s argument is flawed for other reasons. Where it has submitted that the need for the surgery on 1 September 2003 (osteoarthritis) “was different to the cause of incapacity and loss being advanced at the hearing” (referred pain and chrondomalacia), it has assumed that the Court claim proceeded to a hearing. It did not. No reasons were “advanced at the hearing” as to the cause of the left knee pain as at 25 August 2003. There was no hearing. It is not known what was said during negotiations between the parties on 25 August 2003.
Ms Smylie may well have had concerns about the condition of her left knee as at 25 August 2003. Whether those concerns were conveyed to the Respondent Employer is not known. Whether anything was said by or on behalf of Ms Smylie that induced the Respondent Employer to sign the Short Minutes on 25 August 2003 is not known as there is no evidence of what was said on that day. Without that evidence it is impossible to suggest that any kind of promissory estoppel or estoppel by representation arises.
The Respondent Employer’s reliance on my decision in Kaibau is misplaced. In Kaibau I conducted a review of the authorities on estoppel in general and, after quoting extensively from Dimovski, I said at [56]:
“Applying the above authority [Dimovski] to the present case it is clear that a consent award can create an estoppel. However, the extent of that estoppel is quite limited. In my view it can go no further than creating an estoppel on the fact that the Appellant Worker had, as at 20 February 2003, a 13.5% loss of use of his right leg below the knee as a result of injury sustained in or arising out of his employment with the Respondent Employer. The award for the Respondent Employer in respect of the claim for weekly compensation and section 60 expenses creates an estoppel that, as at 20 February 2003, the Appellant Worker had no right to weekly compensation or section 60 expenses up to that date. However, the award does not bind the parties into the future. There was no ‘determination’ as to why there was an award for the Respondent Employer in respect of weekly compensation and hospital and medical expenses as at 20 February 2003. There was no finding that the Appellant Worker had recovered from the effects of his injury by that date or that he suffered no economic loss or incapacity as a result of his agreed loss of use of his right leg below the knee. There were no ‘admissions’ or ‘agreed facts’ to the effect that, notwithstanding his 13.5% loss of use of the leg below the knee, the Appellant Worker was able to earn the same as he had earned in the employ of the Respondent Employer. Therefore, the estoppel can have no greater effect than appears on the face of the terms of settlement. Namely, that as a 20 February 2003 the Appellant Worker had no entitlement to weekly compensation or section 60 expenses. (emphasis added)
The same comment applies in the present case. There was no ‘determination’ by the Court about section 60 expenses. The Admissions and Agreed Facts do not, on there proper construction, provide any basis for depriving the Appellant Worker of her entitlement to an award for her claimed section 60 expenses if she is otherwise entitled to it.
The submission that the only interpretation available is that the Appellant Worker and her legal advisers were not satisfied that the osteoarthritis in the left knee was compensable is unsupported by evidence. Without any evidence as to what was said on 25 August 2003, I do not accept that submission. In any event, even if that was their view, in the absence of an admission or finding that the need for further treatment to the left knee was unrelated to the injury, the Appellant Worker is not prevented from recovering her reasonable section 60 expenses.
I do not believe the decision of Van Der Mast assists the Respondent Employer. In that case the worker’s first claim included, among other things, a claim for loss of sexual organs. That claim was settled for $15,000.00 in respect of 25% permanent impairment of the back and $7,500.00 in respect of 10% loss of efficient use of the left leg at or above the knee. No amount was paid for loss of sexual organs. The worker signed admissions that the payments to him represented the “extent of his entitlement to compensation against” his employer and that he had no injuries other than those the subject of the proceedings. In later proceedings seeking lump sum compensation in respect of loss of sexual organs the worker succeeded before the Arbitrator but failed on appeal to Acting Deputy President Moore. An appeal to the Court of Appeal has been discontinued.
In the present case Ms Smylie does not seek compensation for a loss that was claimed but excluded from the earlier settlement. She seeks compensation under section 60 for the treatment she says has resulted from the injury to her right knee which caused her to fall and injure her left knee.
The Respondent Employer submits that the Appellant Worker provided no evidence to rebut the Admissions and Agreed Facts. I reject this submission for the reasons set out above.
Last, it is submitted that the Appellant Worker’s problem in her left knee can only be categorised, on her own admission, as an osteoarthritis condition unrelated to any work injury. There are certain difficulties with this issue being raised on appeal. First, the issue of injury and whether the relevant medical expenses were reasonably necessary as a result of the injury was not raised as an issue in the Reply file by the Respondent Employer on 11 January 2006. Second, it is contrary to the concession made by counsel for the Respondent Employer at the Arbitrator hearing. That concession appears at page 27 line 47 of the transcript in the following exchange:
“APPLICANT’S COUNSEL: Yeah, I don’t really want to get distracted from ‑ I mean, I’ve come here on the basis that in the absence of an estoppel it would follow that the section 60 expenses result from the injury occurring as pleaded.
ARBITRATOR: Yes.
APPLICANT’S COUNSEL: And the applicant would succeed on the claim.
RESPONDENT’S COUNSEL: I can’t argue that.
ARBITRATOR: You can’t argue with that?
RESPONDENT’S COUNSEL: No.
ARBITRATOR: No. Okay.
RESPONDENT’S COUNSEL: My ‑ the estoppel ‑ we say we’ve got a very strong estoppel argument, but if we lose the estoppel argument, we lose.” (emphasis added)
At page 36 line 31 the following exchange is recorded:
“ARBITRATOR: Can I just check something that was, I think, agreed earlier?
APPLICANT’S COUNSEL: Mm‑mm.
ARBITRATOR: That if the applicant is not estopped from bringing her claim today in relation to a claim for reimbursement of the section 60 expenses, that it is agreed between the parties that those section 60 expenses as particularised in the application were reasonably necessary as a result of the injury as alleged?
RESPONDENT’S COUNSEL: Well, it’s not agreed. I’d simply say that the applicant has to prove its case and you have to be satisfied that you prefer ‑ you accept the opinion of Dr Waller in preference to the opinion of Dr Bentivoglio with respect to what flowed from that fall. As my friend correctly points out, we haven’t put injury per se in issue, but injury plays a part, we say, in the res judicata plea. You’ve got to find [inaudible].
ARBITRATOR: Okay.
APPLICANT’S COUNSEL: Well, just on that issue, Dr Waller in his report of 11 May 2005 has had a look at the schedule of medical expenses. He says they’re reasonable.
RESPONDENT’S COUNSEL: Oh, as far as that is concerned, I don’t have a problem with the fact that she needed it. It’s just a question as to why she needed it. And if you accept what Dr Waller says, she wins.
ARBITRATOR: And I think I know the answer but ‑‑
RESPONDENT’S COUNSEL: Sorry, there is a competing opinion, of course, from Dr Maxwell.” (emphasis added)
Given the inconsistent submissions by counsel for the Respondent Employer at the Arbitration the Respondent Employer’s position is unclear and it is necessary for me to review the evidence and make a determination on the issue of whether the claimed section 60 expenses were reasonably necessary as a result of the injury.
The Appellant Worker tendered reports from Drs Dostal, general practitioner, (2 September 2005), Waller (5 April and 11 May 2005) and Bentivoglio (7 February 2001, 30 August and 24 September 2002).
Dr Bentivoglio’s report of 7 February 2001 mainly dealt with Ms Smylie’s neck, back and right knee problems but also noted that she had referred symptoms in her left leg due to her back condition. This report also records Ms Smylie’s complaint that her right leg “ached anteriorly and tended to give way on her”. Dr Bentivoglio’s report of 30 August 2002 has been dealt with at paragraph [7] above.
Dr Dostal treated Ms Smylie from November 1998 to 12 May 2005. She had been a patient at his practice from 1992. In his report of 2 September 2005 he noted that between January 1999 and May 2005 Ms Smylie “consistently complained of …right knee pain and instability”. He recorded a history of Ms Smylie falling onto her left knee following an episode of instability of her right knee in May 2002. He added that “the left knee became a dominant symptom and continued, consistent with a chrondral injury and without help from physiotherapy or intra articular steroid injection”. Because of her left knee symptoms she was referred to Dr Waller in July 2003. On causation Dr Dostal stated:
“I would regard Ms Smylie’s employment was [sic] a substantial contributing factor to all the conditions listed above including the condition of the left knee leading to the surgical procedures described.”
Dr Waller’s report of 5 April 2005 has been discussed at paragraph [8] above. Under ‘opinion’ on page three of his report he stated:
“It is very likely that her osteoarthritis of the left knee was present but asymptomatic prior to her injury in May 2002. Her injury in May 2002 would have caused an exacerbation and aggravation of her pre-existing osteoarthritis.”
In his report of 11 May 2005 Dr Waller stated that the medical and hospital expenses set out in the letter from Ms Smylie’s solicitor dated 12 January 2005 were “reasonable and in accordance with standard practice”.
For the Respondent Employer reports were tendered from Dr Maxwell, orthopaedic surgeon, dated 7 September 2001 and 17 February 2006.
In his September 2001 report Dr Maxwell noted that the right knee symptoms from the car accident “improved quite rapidly”. He did not examine the right knee and concluded that “the effects of the motor vehicle accident of 1997 have now settled”. To the extent that Dr Maxwell’s history of the right knee symptoms settling rapidly and not giving way is inconsistent with Dr Dostal’s report, I prefer the general practitioner’s evidence that Ms Smylie did have pain and instability in her right knee consistently from 1999 until he ceased treating her in May 2005.
In his second report Dr Maxwell stated that the degenerative changes found by Dr Waller at surgery were not a consequence of the fall in May 2002. He also felt it was unlikely that the left knee was asymptomatic prior to that fall.
I find Dr Maxwell’s reports of no assistance in determining the Appellant Worker’s entitlement to the claimed section 60 expenses. I prefer and accept the evidence given by Ms Smylie that her right knee was unstable after the car accident and that that instability caused her to fall in May 2002. As a result of that fall she injured her left knee. I prefer and accept the evidence of Drs Dostal and Waller that the Appellant Worker suffered an aggravation of her pre existing osteoarthritis in her left knee when she fell in May 2002 and that the hospital and medical expenses incurred after 25 August 2003 in respect of treatment of the left knee were reasonably necessary as a result of the that fall which itself was a result of the 1997 car accident.
The amounts listed in the Appellant Worker’s solicitors letter of 12 January 2005 total $18,166.52. The amount claimed in the Application is $18,750.30 and the total in the document headed “Schedule of S60 Expenses” attached to the Application comes to $20,510.50. In view of the conflicting amounts claimed, the appropriate course is for the matter to be remitted to the Arbitrator for proper quantification of the amount claimed and for an award to be entered in accordance with the reasons given in this decision.
DECISION
Time to appeal is extended to 2 June 2006.
Paragraphs one and two of the Arbitrator’s decision dated 11 April 2006 are revoked and the following order made:
“The matter is remitted to the original Arbitrator for determination of the quantum of the Appellant Worker’s entitlement under section 60 of the Workers Compensation Act 1987 in accordance with the reasons in this decision.”
COSTS
The Respondent Employer is to pay the Appellant Worker’s costs of the appeal and of the Arbitration proceedings.
Bill Roche
Acting Deputy President
28 November 2006
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF BILL ROCHE, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
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