Southside Glass Supplies Pty Ltd v Enviropest Pty Ltd and McMahon
[2006] NSWWCCPD 268
•11 October 2006
WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:Southside Glass Supplies Pty Ltd v Enviropest Pty Ltd and McMahon [2006] NSWWCCPD 268
APPELLANT: Southside Glass Supplies Pty Ltd
FIRST RESPONDENT: Enviropest Pty Ltd
SECOND RESPONDENT: Warren McMahon
APPELLANT’S INSURER: Employers Mutual Indemnity
FIRST RESPONDENT’S INSURER: CGU Australian Workers Compensation Limited
FILE NUMBER: WCC 18539-05
DATE OF ARBITRATOR’S DECISION: 1 March 2006
DATE OF APPEAL DECISION: 11 October 2006
SUBJECT MATTER OF DECISION: Sections 60 and 9A of the Workers Compensation Act 1987
PRESIDENTIAL MEMBER: Acting Deputy President Julian Martin
HEARING:On the papers
REPRESENTATION: Appellant: Edwards Michael Lawyers
First Respondent: Moray & Agnew
Second Respondent: Stacks Goudkamp
ORDERS MADE ON APPEAL: 1. Paragraphs 1, 2 and 3 of the Arbitrator’s decision dated 1 March 2006 are revoked and the following order is substituted:
“1.Enviropest Pty Ltd and Southside Glass Supplies Pty Ltd are to pay the Mr McMahon’s expenses under section 60 of the Workers Compensation Act 1987 on production of accounts or receipts, on a contribution basis of 75% by Enviropest Pty Ltd and 25% by Southside Glass Supplies Pty Ltd.”
2. Paragraph 4 of the Certificate of Determination of 1 March 2006 is confirmed.
3. No order is made as to costs of the appeal.
BACKGROUND TO THE APPEAL
On 20 March 2006 Southside Glass Supplies Pty Ltd (‘Southside Glass’) sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Workers Compensation Commission (‘the Commission’) against a decision, dated 1 March 2006.
There are two respondents to the Appeal. The First Respondent to the Appeal is Enviropest Pty Ltd (‘Enviropest’). The Second Respondent to the Appeal is the worker, Warren McMahon, (‘Mr McMahon’).
Mr McMahon was born on 3 June 1947 and is 59 years of age. Since leaving school he has been predominantly employed in the building industry. He commenced employment with Enviropest in late 1996 where he was employed as a granite guard installer.
On 27 March 2003 Mr McMahon was carrying bags of gravel weighing 25 – 30kgs at work. It was a wet day and as he stepped off a concrete step and down onto the ground, his left foot went out from under him causing him to slip. He did not fall, but felt as if his left knee had twisted at the time.
Mr McMahon’s general practitioner referred him to Dr Hugh Jones, orthopaedic surgeon, who performed an arthroscopy of the left knee on 11 June 2003. After two weeks off work he returned to work on normal duties with Enviropest where he remained employed until January 2005. From August/September 2004 the work had ‘dropped off’ at Enviropest to about 2-3 days a week.
On 13 December 2004 Mr McMahon commenced employment as a cleaner with Southside Glass. The work was casual, 15-20 hours per week. He claims that this employment aggravated his left knee and he stopped work on 24 June 2005. Mr McMahon continued to be off work at the time of the arbitration hearing.
Proceedings were commenced in the Commission on 31 October 2005 and an arbitration hearing took place on 24 February 2006. Southside Glass have appealed from the decision handed down by the Arbitrator.
THE DECISION UNDER REVIEW
The decision and reasons were given orally by the Arbitrator at the conclusion of the arbitration hearing. They were transcribed and a copy of the transcript is before me. A ‘Certificate of Determination’, was issued on 1 March 2006, which records the decision as follows:
“1.I declare that it is reasonably necessary for the Applicant to be given medical treatment in the form of a left knee total replacement.
2.I order the First Respondent to pay 75% of the cost of such treatment.
3.I order the Second Respondent to pay 25% of the cost of such treatment.
4.The Respondents are to pay the Applicant’s costs as agreed or assessed.”
ISSUES IN DISPUTE
The issues in dispute in the appeal are that the Arbitrator erred:
“1.in purporting to make a declaratory order in respect of a section 60 expense not yet incurred;
2.in finding that the worker has suffered injury in the employ of the Appellant when such finding was against the evidence and the weight of the evidence;
3.in failing to give any or any adequate reasons;
4.in applying the wrong ‘test’ on the issue of disease;
5.in failing to consider or properly consider section 9A of the 1987 Act;
6.in determining that the Appellant should bear 25% of the liability for the worker’s proposed knee surgery when such surgery was inevitably going to be necessary regardless of whether the worker was employed by the Appellant; and
7.in failing to consider the requirement of section 60 of the 1987 Act that an employer is only liable for medical expenses which ‘results from’ an injury.”
Enviropest submit that the Arbitrator’s decision was correct and should be confirmed.
Mr McMahon has not filed a Notice of Opposition to Appeal.
ON THE PAPERS REVIEW
Section 354(6) of the Workplace Injury Management and Workers Compensation Act 1998 (‘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.”
Having regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submission by the parties that the appeal can proceed to be determined on the basis of these documents, I am satisfied that I have sufficient information to proceed ‘on the papers’, without holding any conference or formal hearing, and that this is the appropriate course in the circumstances.
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.
Although no compensation was awarded, Southside Glass submit that Dr Evans has provided an estimate that the proposed surgery would cost $20,000.00 and the 25% contribution ordered by the Arbitrator is therefore $5,000.00. In addition it is submitted that the finding of injury appealed against may expose Southside Glass to future liability in respect of weekly payments, further future section 60 medical expenses and possibly further claims for lump sum compensation.
Enviropest submit that leave to appeal should be granted.
The amount of compensation at issue on the appeal is at least $5,000.00 (section 352(2)(a) of the 1998 Act).
No amount was awarded in the decision appealed against and therefore section 352(2)(b) of the 1998 Act has no application (Mawson v Fletchers International Exports Pty Limited [2002] NSWWCCPD 5).
Accordingly I grant leave to appeal.
FRESH EVIDENCE
Neither party seeks to introduce fresh evidence.
PRELIMINARY
The proceedings lodged in the Commission were for weekly payments of compensation and medical, hospital or related expenses for surgery to the left knee. At the arbitration hearing Mr McMahon discontinued his claim for weekly compensation and indicated that he was seeking a declaration that medical treatment was reasonable and necessary for a total left knee replacement.
Both Southside Glass and Enviropest agreed that ‘the medical evidence is unanimous that the knee replacement is required’. As stated by Southside Glass in their submissions on appeal, the dispute was limited to the question of liability.
In the decision and reasons the Arbitrator found that (transcript page 25.30):
“I am satisfied that the event of 23 March 2003 [sic 27 March 2003] in which the applicant felt something go in his knee does constitute a frank injury. The evidence is that that incident caused meniscal damage of itself as well as obviously aggravating the condition of the knee, which was then found to be arthritic.”
The Arbitrator having found that Mr McMahon suffered a ‘personal injury’ within the meaning of section 4(a) of the Workers Compensation Act 1987 (‘the 1987 Act’) whilst employed by Enviropest then proceeded to consider if there was a further injury within the meaning of section 4(b) whilst employed by Southside Glass.
Enviropest have not appealed from this finding of ‘personal injury’ whilst Mr McMahon was employed by them. In fact they had paid Mr McMahon lump sum compensation of $35,000.00 pursuant to sections 66 and 67 of the 1987 Act resulting from the injury to the left knee on 27 March 2003.
A complicating factor was that in 1995 whilst working for ‘Spinners’, Mr McMahon experienced pain and swelling in his left knee when carrying ten 30kg bags up a flight of stairs. This resulted in an arthroscope of the left knee by an unknown doctor which he told Dr Evans “led to complete correction of the symptoms”. Spinners was not a party to the proceedings before the Arbitrator.
EVIDENCE AND DISCUSSION
In his decision and reasons (transcript page 22.15) the Arbitrator posed the question whether the work Mr McMahon did at Southside Glass “aggravated, accelerated, deteriorated or exacerbated the applicant’s condition”. Clearly the Arbitrator was properly asking the question whether Mr McMahon had suffered injury within the meaning of section 4(b)(ii) of the 1987 Act. Section 4 of the 1987 Act provides as follows:
“injury:
(a)means personal injury arising out of or in the course of employment,
(b)includes:
(i)a disease which is contracted by a worker in the course of employment and to which the employment was a contributing factor, and
(ii)the aggravation, acceleration, exacerbation or deterioration of any disease, where the employment was a contributing factor to the aggravation, acceleration, exacerbation or deterioration,…”
Having asked the question, the Arbitrator found that Southside Glass “certainly had the responsibility in the causation of this man’s condition in his knee by virtue of an aggravation of a disease process” (Sections 4(b)(ii) and 16(1)(b) of the 1987 Act).
Medical Evidence
Southside Glass submit that this finding of injury was against the weight of the evidence because Mr McMahon’s evidence from his own statements and his history to doctors, was that from the time of the arthroscope to his left knee on 11 June 2003 his knee condition continued to deteriorate, both in terms of function and in terms of increasing symptoms. Southside Glass submit that such deterioration continued to occur whilst employed by both employers. It is further submitted that given that there is no doubt that Mr McMahon had a progressive degenerative condition in his knee and was suffering significant symptoms prior to being employed by Southside Glass, the history of continuing deterioration while employed by Southside Glass is not evidence of injury. It is submitted that the worsening of symptoms was inevitable as a result of the progressive nature of the disease and would have occurred regardless of Mr McMahon’s employment with Southside Glass.
In support of this submission reference is made to the evidence of Dr Jones and Dr Evans. Dr Jones, as stated above, was the treating orthopaedic surgeon. There were four medical reports in evidence from this doctor, two of which were addressed to the treating general practitioner and are of no assistance on the issue of liability. The other two reports are addressed to the workers compensation insurer of Enviropest and are requesting permission to perform surgery on Mr McMahon. Southside Glass points to the report dated 15 July 2005 addressed to the workers compensation insurer and submits that it is significant that the doctor made no effort to inculpate the employment with Southside Glass when requesting permission to perform surgery. I do not agree with this submission as Dr Jones is specifically responding to a fax letter from the workers compensation insurer that refers only to the injury of 27 March 2003 and makes no reference to the later employment with Southside Glass. Dr Jones was not asked for his opinion on whether the period of employment with Southside Glass contributed to Mr McMahon’s condition.
Mr McMahon was examined by Dr Richard Evans on 13 July 2004 at the request of his solicitor. Southside Glass submit that Dr Evans was of the opinion that knee replacement surgery was inevitable regardless of the frank injury in March 2003, but that the need for it had been accelerated by that frank injury. In my opinion Dr Evans does not assist Southside Glass’ submission because the doctor saw Mr McMahon before he commenced employment with Southside Glass and further Dr Evans’ evidence needs to be considered in context. The doctor provided the following prognosis in his report of 13 July 2004:
“He will continue to experience pain in the left knee.
It is likely that he will, within the next five years or so, come to arthroplasty, either a unicompartmental medial joint replacement (cost around $10,000) or a total knee replacement (cost around $20,000). This would most likely have been necessary eventually even had the episode of March 2003 not occurred. However, its need will have been brought forward by perhaps five years or so by that episode.”
It can be seen that Dr Evans in July 2004 was considering the need for total knee replacement ‘within the next five years or so’. However, the employment with Southside Glass from 13 December 2004 to 24 June 2005 has brought forward the need for total knee replacement to the present time.
Reference is made to the evidence of Dr Bodel in support of Southside Glass’ submissions. Dr Bodel examined Mr McMahon on 23 August 2005 at the request of Enviropest. In his report of 24 August 2005 Dr Bodel had this to say on the issue of liability:
“Mr McMahon has medial compartment osteoarthritis in the left knee. Clinically this commenced with an injury in 1995. The episode on 27 March 2003 has also been a contributing factor as has the most recent flare up of pain with the work as a cleaner at a factory….
Liability is a difficult issue here. Clearly the arthritic process which is now evident, has arisen as a result of the original injury to the medial compartment in the 1995 episode. The injury on 27 March 2003 probably caused some additional structural damage and the current flare up of symptoms may also be associated with some additional structural damage. It would appear clinically that the main causation is linked to the original injury in 1995.”
The doctor was then provided with some medical reports by Enviropest and in a supplementary report dated 24 November 2005 stated:
“As mentioned previously, apportionment for liability is difficult as clearly the initial episode in 1995 is a contributing factor but also the injury on 27 March 2003 is a contributing factor as this caused a tear of the medial meniscus and aggravation of the severe medial compartment arthritis.
He then had a further flare-up of his symptoms in June 2004 [sic June 2005] and he may have had a further structural injury at that time as well. It is likely therefore that at least two out of these three episodes are contributing factors to the ongoing pathology.
Clearly, the major contributing factor is the original injury and I would estimate that about half of the overall pathology is due to that injury, one-quarter due to the injury at Enviropest Pty Limited and the remaining one-quarter due to the injury at Southside Glass.”
Southside Glass submit that the Arbitrator erred in purporting to accept Dr Bodel’s opinion on the issue of their liability because the doctor, being an experienced medico-legal specialist, can be expected to appreciate the difference between probabilities and possibilities. In support of this submission they refer to the doctor’s use of the word ‘may’ when he states in his report of 24 August 2005 “…the current flare-up of symptoms may also be associated with some additional structural damage”. Reference is also made to the doctor’s report of 24 November 2005 where he states “It is likely therefore that at least two out of these three episodes are contributing factors to the ongoing pathology”.
I do not agree with this submission as the doctor in his report of 24 August 2005 also stated:
“The episode on 27 March 2003 has also been a contributing factor as has the most recent flare-up of pain with the work as a cleaner at a factory”.
In considering the meaning of the phrase ‘aggravation, acceleration, exacerbation or deterioration’ of a ‘disease’ it is important to remember the words of Justice Moffitt in the Full Court of the Supreme Court of New South Wales which were cited with approval by Justice Kitto in Federal Broom Co Pty Ltd v Semlitch (1964) 110 CLR 626 (‘Federal Broom’):
“There is an exacerbation of a disease where the experience of the disease by the patient is increased or intensified by an increase or intensifying of symptoms. The word is directed to the individual and the effect of the disease upon him rather than being concerned with the underlying mechanism.”
It may well be that Dr Bodel is indeed an experienced medico-legal specialist as in my view he is saying that on the probabilities the work at Southside Glass was a ‘contributing factor’ to the aggravation, acceleration, exacerbation or deterioration of a disease (sections 4(b)(ii) and 16(1)(b) of the 1987 Act) and that it may also have had an effect on the “underlying mechanism”.
Southside Glass further submit that the Arbitrator purported to accept Dr Bodel’s opinion in relation to Mr McMahon’s period of employment with them but rejected the doctor’s opinion in so far as it inculpated the 1995 incident and that the illogical and unexplained reasoning undermines confidence in the decision as a whole.
I do not agree with this submission by Southside Glass as the Arbitrator in his decision and reasons stated that he rejected Dr Bodel’s opinion “…in attributing any percentage of causation to that 1995 incident” (transcript page 26.32) because of the history taken by Dr Evans. In his report of 13 July 2004 Dr Evans recorded that Mr McMahon after the arthroscope following the 1995 incident:
“…led to a complete correction of the symptoms. Mr McMahon was off work for five weeks following this injury, and was then free of knee pain until March 2003”.
Dr Evans was of the opinion that:
“One possibility is that there was a medial meniscal tear in 1995, treated arthroscopically, with correction of symptoms, but leading to the development of medial compartment degeneration. However, this must be speculative”.
As Deputy President Fleming said in Knight v Eyles Nominees Pty Ltd [2004] NSWWCCPD 73:
“Interference with an Arbitrator’s discretionary judgment as to the weight of evidence should only be done where it is manifestly obvious that the discretion has so miscarried that it has not been exercised fairly and lawfully.”
In my view it was open to the Arbitrator to prefer the evidence of Dr Evans on the issue of whether the 1995 incident had a part to play in the overall question of liability. Further, there is some force in the doctor’s statement that it is ‘speculative’ when considering if the arthroscope after the 1995 incident led to the development of medial compartment degeneration. This is particularly so in the absence of any medical evidence relating to the 1995 incident and having regard to the history of Mr McMahon that he was ‘free of knee pain until March 2003’. I am satisfied that the Arbitrator did explain his reasoning on this issue when in his decision he referred to the report of Dr Evans and quoted the relevant history.
Southside Glass next refer to the evidence of Dr Burke and Dr Wilding who were both qualified on their behalf. Dr Burke examined Mr McMahon on 13 December 2005 and took a history that included the following:
“He resigned from Granite Guard [Enviropest] in January 2005. His left knee continued to worsen. He said that the cleaning job involved carrying an industrial vacuum cleaner up and down steps. Mr McMahon had no idea of the weight of the device but he said that it was “heavy enough”. His activities seemed to aggravate his left knee”.
Dr Burke was of the opinion that:
“These symptoms are all due to underlying, advanced and progressive osteoarthritis of the left knee….There is no evidence of any specific injury occurred [sic] during his more recent cleaning job. There is no evidence that the nature of that job has contributed significantly to the present condition of his knee”.
Dr Wilding examined Mr McMahon on 22 September 2005 and took a history that included the following:
“At the time he commenced work with Southside Glass Supplies his left knee was painful and swollen and he was limping. He said that he worked there for 6 months. During each work day he had to carry an industrial vacuum cleaner upstairs approximately 6 times. He said that his [sic] aggravated the symptoms in his left knee. There was no specific injury to the left knee while he was employed by Southside Glass Supplies.”
Dr Wilding was of the opinion that:
“I do not consider that his work at Southside Glass Supplies has been a substantial contributing factor to the current condition of his left knee. It should be noted that when he commenced work with Southside Glass Supplies he already had symptoms in the left knee due to osteoarthritis.
I do not consider that his employment at Southside Glass Supplies has caused the osteoarthritic change in the left knee nor do I consider that it has accelerated the osteoarthritic change in the left knee. Any aggravation of the underlying osteoarthritic change that occurred whilst employed by Southside Glass Supplies when he was walking up and down stairs on a regular basis has long ceased.
I agree that a left total knee replacement is indicated.
I do not consider that his employment with Southside Glass Supplies has contributed to the need for a total knee replacement. The knee replacement would have been required regardless of whether Mr McMahon was performing duties for Southside Glass Supplies.”
The Arbitrator in his decision and reasons rejected both the opinions of Dr Burke and Dr Wilding “…as to the responsibility by the work with the second respondent [Southside Glass] for the present condition of the applicant’s knee”. In so doing the Arbitrator noted that Mr McMahon had said his knee worsened following that employment and has not improved. He further noted in relation to Dr Burke’s statement that “there is no evidence of any specific injury”:
“I observe, of course, that an aggravation or exacerbation, deterioration or acceleration of a disease process is defined by section 16 [sic section 4(b)(ii)] as being an injury”.
In my opinion it was open to the Arbitrator to reject the opinions of Dr Burke and Dr Wilding. Ultimately it is a question of fact for the Arbitrator whether the ‘injury consists in the aggravation, acceleration, exacerbation or deterioration’ of a ‘disease’. (J Robins & Sons Group Limited v Ly [2006] NSWWCCPD 162).
In this case Mr McMahon’s “experience of the disease” was “increased or intensified” as a result of carrying the vacuum cleaner up and down steps. He experienced “aggravation” and “could not cope with that employment. My knee was painful after work”.
Failure to give adequate reasons
It is submitted by Southside Glass that the Arbitrator failed to give any or any adequate reasons for rejecting the evidence of Dr Burke and Dr Wilding. It is further submitted this is particularly relevant where there is a dispute between medical witnesses where it is then incumbent upon the tribunal of fact to give reasons as to why one body of expert opinion is being preferred over another.
I have referred to the Arbitrator’s decision and reasons above (paragraph 44) and although brief I am satisfied that he set out the “essential…grounds upon which the decision rests” (Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247). The Arbitrator clearly rejected the evidence of both doctors and although his reasons were brief, he explained his reasoning process. As Meagher JA said in Beale v GIO of NSW (1997) 48 NSWLR 430 at 443:
“…reasons need not necessarily be lengthy or elaborate [but relate]… to the function to be served by the giving of reasons…there is no need to refer to the relevant evidence in detail, especially in circumstances where it is clear that the evidence has been considered.”
It is further submitted that the Arbitrator failed to give adequate reasons when addressing the appropriate test on the issue of disease. Southside Glass submit that the Arbitrator ‘appears to have confused the test’ applicable to injuries under section 4(b)(i) and section 4(b)(ii) of the 1987 Act. I accept that the Arbitrator’s reasoning on this issue is not altogether clear. In his decision and reasons the Arbitrator stated (transcript page 22.15):
“There is no doubt that the applicant is suffering from a clearly advanced disease process, and the first question to arise is as to whether the work done by him for six or seven months for the second respondent [Southside Glass] was of a nature that would have aggravated, accelerated, deteriorated or exacerbated the applicant’s condition.”
However, the Arbitrator then went on to read onto the record the relevant part of section 16(1)(b) of the 1987 Act. Further the Arbitrator made the comment which I have set out above (paragraph 44) where he noted the terms of section 4(b)(ii) of the 1987 Act in response to the evidence of Dr Burke.
As Deputy President Fleming said in Email Limited (in the interests of Allianz Australia Workers Compensation (NSW) Limited) v Qummou and others [2006] NSWWCCPD 198:
“Commission Arbitrators are encouraged to provide ex tempore reasons in appropriate cases. This gives the parties a timely resolution of their dispute. However, reasons given orally must comply with Rule 73.”
Although the Arbitrator incorrectly used the words ‘was of a nature that would’ I am satisfied that his decision and reasons adequately set out his ‘understanding of the applicable law’.
Substantial Contributing Factor
Southside Glass submit that the evidence before the Arbitrator was such that he could not have been reasonably satisfied in accordance with section 9A of the 1987 Act. In particular it is pointed out that:
§there was no particular incident of injury;
§that Mr McMahon was employed by Southside Glass for about 6 months only on a part-time basis; and
§that Mr McMahon’s state of health before being employed by Southside Glass was such that knee replacement surgery was inevitably required ‘anyway, at about the same time or same stage of the worker’s life, if he …had not been in that employment’.
It is further pointed out that the Arbitrator in his reasons and decision stated that he did not ‘understand substantial contributing factor in disease cases’ and hence his reasons on this issue are non-existent.
I accept Southside Glass’ submissions to the extent that the Arbitrator’s reasoning on this issue is not clearly disclosed. However, it is to be remembered that this was an ex tempore decision which goes some way to explaining a certain looseness of language. I am satisfied when reading the reasons and decision as a whole, that the Arbitrator rejected the opinions of Dr Burke and Dr Wilding on the issue of substantial contributing factor. As Deputy President Byron said in John Robinson t/as Robinson’s Pharmacy v King [2005] NSWWCCPD 39:
“However, in making an assessment of the matter, the Arbitrator’s decision must be read as a whole, (Beale v GIO (NSW) (1997) 48 NSWLR 430 at 444), and without combing it for error, Minister for Immigration and Multicultural Affairs v Wu Shan Liang (1996) 185 CLR 259).”
In my view there is some misunderstanding on the part of Southside Glass as to substantial contributing factor. As Judge Burke said in Rootsey v Tiger Nominees Pty Ltd (2002) 23 NSWCCR 725 at 733:
“However, as I read s9A the employment must be a substantial contributing factor to the event causing the injury; that is, to the receipt of the injury, rather than to be a substantial contributing factor to the ongoing incapacity.”
Mr McMahon must demonstrate that his employment with Southside Glass was a substantial contributing factor to the event giving rise to the aggravation, not to the ‘underlying mechanism’ of the disease (see King v Commissioner of Police (2004) 2 DDCR 416).
In my opinion Dr Bodel provided evidence that there was an aggravation, acceleration, exacerbation or deterioration of the disease. I am further satisfied that the employment at Southside Glass was a substantial contributing factor to the ‘receipt of the injury’ (climbing stairs with a vacuum cleaner) giving rise to the aggravation.
Southside Glass submit that Mr McMahon’s state of health before commencing employment with them was such that knee replacement was inevitably required, at about the same time or same stage of his life. As I stated above (paragraph 32) this was not the opinion of Dr Evans, who is the only doctor who examined Mr McMahon before he commenced employment with Southside Glass. Dr Evans was of the opinion that it was likely that Mr McMahon would come to total knee replacement within the next 5 years or so.
Contribution between the employers
The Arbitrator having found both Enviropest and Southside Glass liable, he then proceeded to apportion liability in accordance with section 16(2A) of the 1987 Act. This section states:
“The Commission is to determine the contributions that a particular employer is liable to make on the basis of the following formula, or on such other basis as the Commission considers just and equitable in the special circumstances of the case.”
The Arbitrator found that there were ‘special circumstances of the case’ and accordingly dealt with the matter other than by way of the formula. The Arbitrator apportioned 75% contribution to Enviropest and the remaining 25% to Southside Glass. The complaint by Southside Glass is that their contribution is disproportionate because the surgery to Mr McMahon’s knee was necessary prior to and regardless of his employment with them.
I do not agree with this submission of Southside Glass. The contribution between the parties was a question of fact for the Arbitrator and he had regard to those facts which included the injury at Enviropest causing the ‘medial meniscus problem’ and the period of time and the duties performed by Mr McMahon whilst employed by Southside Glass.
Section 60 Medical Expenses
Southside Glass submit that section 60 of the 1987 Act provides that an employer is liable for medical treatment, reasonably necessary ‘as a result of injury’ and the need for surgery did not ‘result from’ injury with Southside Glass.
I fail to understand this submission by Southside Glass, which sounds like an attempt to re-argue the issue of liability which the Arbitrator determined and I have confirmed. The work of section 60 of the 1987 Act is to determine whether medical expenses are reasonably necessary once injury as defined in section 4 of the 1987 Act has been established.
Declaration for medical treatment
Southside Glass challenges the power of the Arbitrator to make a declaration for the proposed surgery on the basis that section 60 is an indemnity provision which only operates in respect of expenses already incurred. Further it is submitted that the Commission being a statutory tribunal whose power must be derived from the relevant legislation, there is no express or inherent power to make declaratory orders.
I agree with this submission of Southside Glass. President Justice Sheahan has recently delivered a decision on a Question of Law on this very issue as to whether an Arbitrator has the power to make a declaratory order for proposed specific medical treatment within the meaning of section 60 of the 1987 Act. In Widdup v Hamilton [2006] NSWWCCPD 258 President Justice Sheahan held:
“I am satisfied, based on Manning and the wording of section 60, together with the relevant provision of section 289(2) of the 1998 Act and the definitions of ‘claim’ and ‘compensation’, that the Commission’s jurisdiction to award compensation pursuant to section 60 is limited by the express provisions of the legislation. There is no express or incidental power to make ‘declaratory orders’ pursuant to section 60.
A declaration that certain medical treatment is reasonably necessary or that an employer is liable for certain proposed future medical treatment to be provided to a worker, is not a ‘monetary benefit’ (see the definition of ‘compensation’ above at 26). It is merely a declaration of potential future liability but it is not a ‘cost’ payable under section 60 until that cost is incurred.
To make a declaration that an employer is liable for the payment of specific future medical expenses exceeds the Commission’s express powers in the Workers Compensation Acts and gives an interpretation to section 60 that is contrary to the words in the section and contrary to binding Court of Appeal authority.”
Accordingly it was an error of law for the Arbitrator to “declare that it is reasonably necessary for the Applicant to be given medical treatment in the form of a left knee total replacement”.
Southside Glass further submit that once Mr McMahon withdrew his weekly payments claim (see paragraph 22 above) there was no dispute before the Commission over which the Commission had jurisdiction to make binding orders. I disagree with this submission as there was a dispute over liability for section 60 medical expenses. As President Justice Sheahan held in Water Taxis Combined Pty Ltd and Harbour Taxi Boats Pty Ltd v Wells [2004] NSWWCCPD 30 ‘where a dispute is properly before the Commission, it has the power to make factual findings that will be relevant to workers’ entitlements for future section 60 expenses’.
Having found an error of law it is preferable in the circumstances that I revoke paragraphs 1, 2 and 3 of the Certificate of Determination and substitute a new decision in its place (Chubb Security Australia Pty Ltd v Trevarrow [2004] NSWCA 344).
Notwithstanding the error in relation to the declaration, for the reasons above I am of the opinion that the Arbitrator’s conclusions of fact with respect to the issue of liability are well founded and should stand.
DECISION
The appeal has succeeded in part only.
For the reasons referred to above, I revoke paragraphs 1, 2 and 3 of the Arbitrator’s Decision dated 1 March 2006 and the following order is substituted:
“1.Enviropest Pty Ltd and Southside Glass Supplies Pty Ltd are to pay Mr McMahon’s expenses under section 60 of the Workers Compensation Act 1987 on production of accounts or receipts, on a contribution basis of 75% by Enviropest Pty Ltd and 25% by Southside Glass Supplies Pty Ltd.”.
Paragraph 4 of the Certificate of Determination of 1 March 2006 is confirmed.
COSTS
No order is made as to costs of the appeal.
Julian Martin
Acting Deputy President
11 October 2006
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF JULIAN MARTIN, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
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