Star City Pty Ltd v Chen
[2005] NSWWCCPD 144
•30 November 2005
WORKERS COMPENSATION COMMISSION
APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:Star City Pty Ltd v Chen
[2005] NSWWCCPD 144
APPELLANT: Star City Pty Ltd
RESPONDENT: Jessie Chen
INSURER:Star City Pty Ltd
FILE NUMBER: WCC19408-03
DATE OF ARBITRATOR’S DECISION: 8 October 2004
DATE OF APPEAL DECISION: 30 November 2005
SUBJECT MATTER OF DECISION: Exercise of the discretion under section 40(1) of the Workers Compensation Act 1987
PRESIDENTIAL MEMBER: Acting Deputy President Robin Handley
HEARING:On the papers
REPRESENTATION: Appellant: Cutler Hughes & Harris, Business Lawyers
Respondent: Eugene Lepore & Associates, Solicitors
ORDERS MADE ON APPEAL: The decision of the Arbitrator is confirmed.
The Appellant, Star City Pty Ltd, is to pay Ms Chen’s costs in this appeal as agreed or assessed.
BACKGROUND TO THE APPEAL
On 5 November 2004, Star City Pty Ltd sought leave in the Workers Compensation Commission (‘the Commission’) to bring an appeal against a decision of an arbitrator dated 8 October 2004.
The Respondent to the Appeal is Jessie Chen who was born on 14 July 1976 and is aged 29. She has one child born on 30 September 2003 and separated from her husband on 15 November 2003. Ms Chen was employed by Star City as a VIP Host from 13 October 1997 until she resigned on 7 May 2001. She then worked with her husband in the newsagency they owned. In November 2001, Ms Chen lodged workers compensation claims in respect of two injuries. First, she claims to have injured her left ankle on 20 January 2000 when she caught the heel of her left shoe in a mat and fell. Second, she claims to have injured her right wrist in about mid-2000 as a result of repetitive carrying of heavy luggage and pushing heavy trolleys. Star City initially accepted liability in respect of the right wrist but, it appears, not the left ankle. By letter dated 1 April 2003, Ms Chen’s solicitors lodged a formal claim in respect of both injuries.
On 11 December 2003, the Commission registered Ms Chen’s ‘Application to Resolve a Dispute’ in respect of claims for (1) weekly compensation of $270 per week from 21 May 2001 to date and continuing, (2) medical, hospital or related expenses, and (3) compensation for permanent impairment and pain and suffering in respect of her left ankle and right wrist. Star City’s ‘Reply’ was lodged on 5 January 2004. On 15 April 2004, the Arbitrator conducted a teleconference with the parties and, on 29 April 2004, an arbitration hearing on preliminary issues in dispute.
On 4 May 2004, the Arbitrator issued a Certificate of Determination in which he determined that Ms Chen’s claim in respect of her left ankle was made within the required period of time, and although the claim in respect of her right wrist was not made within the required period of time, this was not a bar to recovery of compensation because the failure was occasioned by a reasonable cause. The Arbitrator also made two procedural directions and referred Ms Chen to an Approved Medical Specialist for assessment.
On 30 June 2004, an Approved Medical Specialist, Dr Brian Hagan, Surgeon, examined Ms Chen and, on 19 July 2004, the Commission issued Dr Hagan’s Medical Assessment Certificate. Dr Hagan diagnosed:
“• Dorsal ganglion over the scapho-lunate joint of the right wrist.
• Accessory left navicular bone with tendinitis in the tibialis posterior insertion.”
He commented that Ms Chen’s fall on 20 January 2000 “could reasonably be implicated in the left ankle condition”, although he noted that Ms Chen has “flat feet and there is a possible relationship between this abnormality and the presence of an accessory navicular bone”. He also commented that the development of a ganglion on the dorsum of the right wrist could be constitutional in origin, and that radiological changes in the scaphoid bone could be a residual of an old fracture, although Ms Chen had no memory of any such injury.
Dr Hagan assessed the permanent loss of efficient use of Ms Chen’s left leg below the knee at 6%, with “the accessory bone presence plus the flat feet condition to have contributed at least one third to the present condition”, so that 4% of the loss was attributable to the injury. He assessed the permanent loss of efficient use of her right arm below the elbow at 4%. He “felt that the wrist condition could be attributed to the luggage handling work described”, but attributed one quarter “to the constitutional possibilities and possible prior injuries to the scaphoid bone”, so that 3% was attributable to the injury.
In relation to Ms Chen’s claim for lump sum compensation, pursuant to section 326(1) of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’), the degree of permanent impairment of the worker specified in the Certificate is “conclusively presumed to be correct”.
The Arbitrator conducted a further teleconference with the parties on 18 August 2004 to discuss the outstanding issues. On 16 September 2004, conciliation having been unsuccessful, the Arbitrator conducted an arbitration hearing, following which, on 8 October 2004, he made the determination set out below.
THE DECISION UNDER REVIEW
The Certificate of Determination, dated 8 October 2004, records the Arbitrator’s orders as follows:
“1. That there be an Award for the Applicant in relation to the claim sought pursuant to section 40 of the Workers Compensation Act, 1987 for the following periods:
1.1. 21st May 2001 to 30th September 2003, being $107.50 per week
1.2. 1st October 2003 to date and continuing, being $10.00 per week
2. That there be an Award for the Applicant in relation to the claim sought pursuant to section 60 of the Workers Compensation Act, 1987, with the Respondent to pay the Applicant all reasonable medical expenses upon production of all receipts, accounts, invoices and Notice of HIC charges.
3. That the Respondent pay the Applicant’s costs as agreed or assessed.”
In his ‘Statement of Reasons for Decision’, the Arbitrator summarised the resolution of the issues in dispute as follows:
“Weekly Benefits Claim
• The Applicant has been partially incapacitated for work as a result of the injury she sustained on 20th January 2000 from her employment with the Respondent since 21st May 2001.
• However, because on 30th September 2003 her commitments were directed to the raising of a new baby, any weekly payments of compensation pursuant to the periods of section 40 should be divided into two discrete periods, namely from 21st May 2001 to 30th September 2003, (being the first period); and from 1st October 2003 to date and continuing, (being the second period).
• During the first period of incapacity for work the Applicant would be able to earn in some suitable employment from time to time after the injury was [sic] $682.50 per week…”
The Arbitrator noted that the parties had agreed that Ms Chen’s pre-injury earnings were $790 per week for a 40 hour week, an hourly rate of $19.75. The Arbitrator found that when Ms Chen and her husband commenced their newsagency business at Green Valley, which was from the time she resigned from Star City, she worked four hours a day on six days a week. At an hourly rate of $19.50, this equated to $468 per week. This continued until her child was born on 30 September 2003. She has not worked since the birth of her child. Since she and her husband separated in November 2003, he pays her $150 per fortnight by way of child support payments.
The Arbitrator found that because of the injury to her left ankle, Ms Chen suffers from a restricted walking capacity and would no longer be able to do the physical work that her position at Star City required of her. As a result, she had a partial incapacity to perform her pre-injury employment in relation to the closed period 21 May 2001 to 30 September 2003. However, the Arbitrator found on the evidence before the Commission, that Ms Chen’s wrist injury was not sufficiently serious to disable her from performing work in the newsagency. He found she had the capacity to work up to 35 hours per week in the newsagency business earning $19.50 per hour, and thus he assessed her capacity to earn for this period to be $682.50 per week:
“Noting that the Applicant’s pre-injury earnings were $790 per week as agreed between the parties, this would leave a gap of $107.50 for the period 21 May 2001 to 30 September 2003.”
The Arbitrator said:
“I do not believe that there are any further circumstances that warrant a discretionary change to the position that the Applicant’s weekly payment award pursuant to section 40 of the 1987 Act for the period 21 May 2001 to 30 September 2003 should be $107.50 per week.”
The Arbitrator also discussed Ms Chen’s entitlement to weekly compensation in the period from 1 October 2003, after the birth of her child. The Arbitrator, “taking into account the fact that the Applicant worker is no longer pursuing work in the open labour market”, decided that $10 per week was an appropriate award.
In relation to medical, hospital or related expenses, the Arbitrator noted this was not an issue that was the subject of submissions at the hearing. However, in view of the permanent impairment assessment of 3% in respect of Ms Chen’s right arm below the elbow and of 4% in respect of her left leg below the knee, together with the Commission’s finding that Ms Chen has an ongoing partial incapacity, he said “I do not believe it is unreasonable for her to be entitled to receive any reasonable medical expenses” in accordance with section 60 of the Workers Compensation Act 1987 (‘the 1987 Act’).
ISSUES IN DISPUTE
The issues in dispute in the appeal are, firstly, whether, in respect of the award in favour of Ms Chen for the period 21 May 2001 to 30 September 2003, there was sufficient evidence to support the Arbitrator’s findings and, second, whether in making that award, the Arbitrator properly applied section 40 of the 1987 Act. Star City states it does not dispute the award in respect of the period from 1 October 2003 to date and continuing, and makes no mention of the Arbitrator’s award under section 60 in respect of “all reasonable medical expenses”, which I therefore assume is not in dispute.
ON THE PAPERS REVIEW
Section 354(6) of the 1998 Act states:
“(6)If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”
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.
Neither party sought to adduce fresh evidence.
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. With regard to section 352(2), the amount of compensation at issue is that in respect of the period 21 May 2001 to 30 September 2003 which, according to Star City’s lawyers, totals $13,300 and constitutes more than 20% of the amount awarded by the Arbitrator. I am therefore satisfied that the section 352 threshold has been met, and I grant leave to appeal.
SUBMISSIONS
Star City contends Ms Chen’s evidence at the arbitration hearing that she did not complain to Star City about her injury before ceasing work because she was afraid she would loose her position, was new evidence that was not contained in her statement, and which Star City was, therefore, not in a position to contest. Star City submits a proper view of the evidence is that Ms Chen was performing her pre-injury duties without difficulty and not seeking substantial medical treatment for her injuries.
Ms Chen’s solicitor disputes that this was new evidence and refers to the medical evidence, including that of Dr Matthew Giblin, her treating Orthopaedic Surgeon. He submits that, in any event, the Arbitrator was at liberty to hear from Ms Chen on relevant issues to assist him in arriving at the correct decision.
Star City submits the drawings Ms Chen and her husband received from the newsagency of $500 per week, was on the advice of their accountant, and bore no relation to the work they performed and should not be used as a measure of Ms Chen’s capacity to earn for the period after she ceased work for Star City. Ms Chen did not supply information about the amount of work she was able to perform and the records of wages paid to her, which would have enabled Star City to properly analyse the evidence about the time she actually worked.
Ms Chen’s solicitor states $500 gross per week was the amount she earned during the relevant period. It was open to the Arbitrator to accept or reject that evidence in measuring Ms Chen’s ability to earn. With regard to information about her work and her wage records, this was a matter for the Arbitrator.
Star City submits there was no medical evidence to support Ms Chen’s claim that she could only work 24 hours per week. The Arbitrator erred in accepting Ms Chen’s statements as to her capacity in the absence of appropriate medical evidence. Similarly, Star City submits there is no medical evidence supporting Ms Chen’s cessation of work for Star City, and the Arbitrator should have taken this into account in exercising his discretion under section 40(1) of the 1987 Act. The Arbitrator’s reasons for the exercise of his discretion under section 40(1), step 4 of the steps prescribed by the NSW Court of Appeal in Mitchell v Central West Health Service (1997) 14 NSWCCR 527 (‘Mitchell’) at 529, are inadequate. The fact that Ms Chen was employed in a business, in which she was a partner, meant she was able to control both the hours she worked and the amount she was paid. The Arbitrator failed to give proper consideration to those circumstances and whether the amount she earned was in fact the amount that could be earned.
Ms Chen’s solicitor contends there was sufficient medical evidence to enable the Arbitrator to make an informed decision. The Arbitrator properly exercised his discretion under section 40(1), gave proper weight to all the evidence, and gave adequate reasons for his decision.
EVIDENCE
Ms Chen provided a statement dated 17 July 2003. She said that prior to her injuries, she was able to perform her duties as a VIP Host for Star City without pain. Following the injury to her ankle, she saw the first aid nurse at work, who bandaged her ankle and told her to get an x-ray done. She consulted her family doctor, Dr Elham Nashed, who prescribed Feldene gel. This did not help and Ms Chen had an x-ray done which failed to reveal anything wrong with the bone. About two years later, Ms Chen was referred to Dr Giblin, who identified the nature of the injury.
Ms Chen stated that after the injury to her wrist, she again consulted the nurse at work, who bandaged the wrist and told her to rest it and keep it straight. Ms Chen also consulted Dr Nashed about her wrist, as well as Dr Giblin and a Rheumatologist, Dr Graydon Howe, whom she consulted about both injuries.
Ms Chen said she did not take any time off because of her injuries, returning to full duties immediately: “I felt pressured to return to work straight away”. However, she continued to experience pain and swelling of the ankle “with a lot of walking and standing”, and pain and swelling with the use of her wrist (statement paragraphs 40 to 41). She left her job with Star City because (statement paragraph 55):
“I didn’t want to do the workload anymore. My work duties were going to change, but weren’t going to get any better. Also I went into business with my husband.”
Ms Chen said she continues to experience pain in both her ankle and wrist. Standing for long periods or walking for more than a short while causes pain in her ankle. Performing household tasks and, for example, carrying shopping bags, driving and washing her hair causes pain and swelling in her wrist. Working in the newsagency, she could work at her own pace, just doing the paperwork so that she was not on her feet all day. Her husband did any heavy work.
At the arbitration hearing, Ms Chen said she separated from her husband “due to difficulties with work and also the baby, after the baby’s birth, and we have a lot of friction” (arbitration hearing transcript page 5). In cross-examination, Ms Chen acknowledged she saw Dr Nashed for the first time about her injuries on 23 March 2000: “I didn’t think they were serious for the meantime” (arbitration hearing transcript page 6). She said the reason she resigned: “it was part of the injury and also because I knew that I couldn’t carry on the work any more so I have to go and look for something else”. She did not tell anyone at Star City of the injuries, apart from the nurse, because of her job (arbitration hearing transcript pages 8 to 9):
“I felt threatened ... I feel like my job was being threatened ... But if a certain job I can’t perform, I feel like that, if I still have to do it, that is – you know, that it is like a threat ... But when you are working in an environment like that where politics get involved, obviously everyone feels threatened.”
Ms Chen said the injuries did not stop her doing any part of her job at Star City. They just gave her pain. In the newsagency, she worked four hours a day, from 6am until 10am, on six days a week. She chose the morning shift because it was a bit easier than the afternoon shift, which was more hectic and therefore involved more standing. But for the injuries, however, she would still be working at Star City and, in the newsagency she would have worked longer hours. Ms Chen said the $500 gross she and her husband each took out of the business was determined by the takings of the business.
The medical evidence included reports from Dr Matthew Giblin, Orthopaedic Surgeon, dated 25 October 2002 and 10 February 2003, a report from Dr Graydon Howe, Rheumatologist, dated 26 August 2002, a report from Dr James Bodel, Orthopaedic Surgeon, dated 2 February 2004, and the Medical Assessment Certificate provided by the Approved Medical Specialist, Dr Brian Hagan, Surgeon, issued by the Commission on 30 June 2004. Only Dr Giblin comments specifically on Ms Chen’s capacity for work. In his report dated 10 February 2003, he said with regard to her left ankle, “She remains unfit for work that involves prolonged standing, walking on uneven surfaces or climbing stairs and ladders”, and with regard to her right wrist, “She remains unfit for work that involves repetitive, heavy use of the right upper limb”.
With regard to Ms Chen’s wages, as the Arbitrator noted, the parties agreed that Ms Chen’s pre-injury earnings were $790 for a 40 hour week, an hourly rate of $19.75. With regard to the period from 21 May 2001, the only information available specifically relating to Ms Chen is her evidence that she and her husband drew $500 per week each from the newsagency. This does not seem to have borne any relationship with the number of hours worked. The information provided by Ms Chen’s solicitors, including a letter from the accountants for the newsagency business, provides little assistance.
DISCUSSION AND FINDINGS
The role of the Presidential Member on appeal is to review the Arbitrator’s decision as a whole. The review is not a rehearing. In this case, Star City must demonstrate that the decision of the Arbitrator is affected by some legal, factual or discretionary error (Allesch v Maunz (2000) 203 CLR 172; The King Island Company Limited v Deery [2005] NSW WCC PD 1) in order to enliven the Presidential Member’s power to interfere with the Arbitrator’s decision pursuant to section 352(7) of the 1998 Act.
An application of section 40 of the 1987 Act to the period from 21 May 2001 to 30 September 2003 requires a consideration of the steps prescribed by the NSW Court of Appeal in ‘Mitchell’. It is clear that although the Arbitrator made no specific reference to Mitchell, he had in mind the steps required by an application of section 40, and I note the steps prescribed by Mitchell and the decision itself were discussed in the course of submissions at the arbitration hearing. In relation to step one of the steps prescribed by Mitchell, it was agreed between the parties that Ms Chen’s pre-injury earnings were $790 per week.
With regard to step two, the Arbitrator found that, on the evidence before the Commission, Ms Chen’s injury would not have prevented her working more than 24 hours per week, and he determined her probable earnings in suitable employment to be $682.50 per week on the basis of an hourly wage of $19.50 for a 35 hour week. Why the Arbitrator selected such an hourly rate is not entirely clear but seems to emanate in a discussion at the arbitration hearing during which a figure of “a little under $20 an hour” was mentioned (arbitration hearing transcript page 23), and, presumably, bearing in mind that Ms Chen’s hourly rate at Star City was $19.75.
In relation to step three, the Arbitrator subtracted $682.50 from $790.00 to give a figure of $107.50. It is in relation to step four that Star City makes its principal submission, that the Arbitrator failed to give adequate reasons for not exercising the discretion under section 40(1). It submits, in particular, that he should have taken into account the lack of medical evidence about Ms Chen’s capacity for work. The Arbitrator found, “in relation to the closed period 21 May 2001 to 30 September 2003, that the Applicant had a partial incapacity to perform her pre-injury employment based on her restricted walking capacity” (Statement of Reasons paragraph 45). The Arbitrator stated (Statement of Reasons paragraph 43):
“in my opinion Dr Hagan’s assessment would clearly suggest that taking into account the injury the Applicant suffered to her left ankle, she would no longer have the capacity to do the physical work involving her legs that was required of her at Star City”.
The Arbitrator also referred to Dr Hagan having “confirmed that the Applicant has from time to time and upon pursuit of certain activities, suffered from restricted walking capacity” (Statement of Reasons paragraph 44). Dr Hagan referred to such restrictions on page 3 of his Medical Assessment Certificate under the heading “Present Symptoms”. I note, as mentioned above, this is also consonant with Dr Giblin’s opinion. The Arbitrator concluded, in relation to steps four and five (Statement of Reasons paragraph 47):
“I do not believe that there are any further circumstances that warrant a discretionary change to the position that the Applicant’s weekly payment award pursuant to section 40 of the 1987 Act for the period 21 May 2001 to 30 September 2003 should be $107.50 per week.”
I have had regard to what Deputy President Fleming said in Snow Confectionary Pty Ltd v Askin [2004] NSW WCC PD 56 (‘Snow’), to which Star City referred in its submissions. In my view, Ms Chen’s case is different from Snow. There is no paucity of reasons as there was in that case and, in my view, it is clear the Arbitrator did consider the exercise of the section 40(1) discretion and referred in his Statement of Reasons to those matters he considered relevant. While the Arbitrator’s discussion of what Ms Chen would have been able to earn in suitable employment is not as comprehensive as it might have been, in my view, the end result is not unfair to Star City, being based on a 35 hour week, when she in fact only worked 24 hours, and approximately the same hourly rate that she was receiving while employed at Star City. Thus, I am not satisfied the Arbitrator made an error of law in his determination, and in my view, there is no basis on which interference with the Arbitrator’s decision is warranted.
With regard to other matters raised by Star City in their submissions and not already addressed, I also note that in her statement of 17 July 2003, Ms Chen mentioned “I felt pressured to return to work straight away”. I do not accept, therefore, that her oral evidence at the hearing that she felt threatened was new evidence of which Star City were entirely unaware. In my view, Ms Chen’s explanation for her course of action was a credible one. It is not unreasonable to suppose that she would remain in her employment with Star City until an alternative that suited her condition and allowed her greater flexibility in her work was open to her. Finally, with regard to Star City’s complaint about the adequacy of the wage records produced by Ms Chen’s solicitors, while I agree the information produced was minimal, there were no normal wage records in relation to her working in the newsagency because, of course, she was essentially a partner in the enterprise and not an employee. In my view, Star City was not significantly disadvantaged by the lack of more substantial information.
DECISION
The decision of the Arbitrator is confirmed.
COSTS
The Appellant, Star City Pty Ltd, is to pay Ms Chen’s costs in this appeal as agreed or assessed.
Robin Handley
Acting Deputy President
30 November 2005
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF ROBIN HANDLEY, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
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