Star City Pty Ltd v Emery
[2007] NSWWCCPD 124
•30 May 2007
WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:Star City Pty Limited v Emery [2007] NSWWCCPD 124
APPELLANT: Star City Pty Limited
RESPONDENT: Kerrie-Anne Emery
INSURER:Self insured
FILE NUMBER: WCC9133-06
DATE OF ARBITRATOR’S DECISION: 22 January 2007
DATE OF APPEAL DECISION: 30 May 2007
SUBJECT MATTER OF DECISION: Review of a prior award of the Compensation Court; section 55 Workers Compensation Act 1987; Adequacy of Reasons; Estoppel
PRESIDENTIAL MEMBER: Deputy President Bill Roche
HEARING:On the papers
REPRESENTATION: Appellant: George Mallos
Respondent: Kingston Swift
ORDERS MADE ON APPEAL: The Arbitrator’s orders made on 22 January 2007 are revoked and the following orders made:
“1.The matter is remitted to a different Arbitrator to be re-determined in accordance with the reasons given in this decision.
2.Costs of the first Arbitration are to follow the event of the second Arbitration.”
No order as to costs of the appeal.
BACKGROUND TO THE APPEAL
On 15 February 2007 Star City Pty Limited (‘the Appellant Employer/Star City’) sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Workers Compensation Commission (‘the Commission’) against a decision, dated 22 January 2007.
The Respondent to the Appeal is Kerrie-Anne Emery (‘the Respondent Worker/Ms Emery’).
Ms Emery injured her right ankle on 13 August 2000 when she suffered an ‘inversion injury’ in the course of her employment as an ‘electronic gaming representative’ (poker machine attendant) with Star City. Her job required her to work a 10-hour shift and to stand or walk for the whole of that shift. She also alleged injury as a result of the nature and conditions of her employment with Star City and as a result of a further twisting injury on 25 September 2000 whilst on a journey to which section 10(3)(c) of the Workers Compensation Act 1987 (‘the 1987 Act’) applied.
She brought a claim for compensation in the Compensation Court of NSW (Matter No. 41350 of 2001), which was heard and decided by Judge Neilson on 1 July 2003. After a contested hearing his Honour made the following findings and orders:
a) that Ms Emery had been asymptomatic in her right ankle for some time prior to the incident on 13 August 2000 (judgment, paragraph eight);
b) Ms Emery’s work could require her to stand or walk for 10 hours each shift (judgment, paragraph 15);
c) on 13 August 2000 Ms Emery ruptured the anterior inferior tibio-fibular ligament of her right ankle (judgment, paragraphs 16 and 18);
d) Ms Emery’s employment with Star City was a substantial contributing factor to that injury (judgment, paragraph 17);
e) Ms Emery returned to work for Star City on restricted duties on 9 September 2000 working for four hours per day three days per week as a poker machine attendant. By 17 January 2001 Ms Emery was still performing work for 12 hours per week but the work was “computer work” which was mainly sedentary (judgment, paragraph 26);
f) on 17 January 2001 Ms Emery resigned her employment with Star City to move back to Dubbo where she came under the care of Dr Pandya, general practitioner, who referred her to Dr Rizkallah, specialist surgeon, who performed a lateral ligament reconstruction together with the excision of the pre-calcaneal bursa on her right ankle on 10 April 2001 (judgment, paragraph 27);
g) Ms Emery was totally unfit for work from 10 April 2001 until 25 July 2001 (judgment, paragraphs 27 and 28);
h) in October 2002 Ms Emery returned to work at “Kempston’s Take-Away and Supermarket” in Dubbo where she earned $92.82 per week working two hours per day three days per week making sandwiches and cooked fish and chips (judgment, paragraph 29);
i) Ms Emery’s probable earnings but for her injury were $615.38 per week for a 38 hour week ($16.19 per hour) (judgment, paragraph 30);
j) Ms Emery’s ability to earn after her injury up to 10 April 2001 was $194.33 ($16.19 x 12 hours) (judgment, paragraph 30);
k) Ms Emery had worked in the hospitality industry in hotels (judgment, paragraph 34) and was a woman who wanted to work and was keen to enter the workforce (judgment, paragraph 35);
l) at all material times after 25 July 2001 Ms Emery’s ability to earn was $194.33 calculated on the same basis as her ability to earn up to 10 April 2001 (judgment, paragraph 35);
m) Ms Emery did not get any great relief from the surgery performed by Dr Rizkallah and further surgery was discussed (judgment, paragraph 36);
n) Ms Emery was entitled to an award (‘the Court award’) of weekly compensation at the maximum statutory rate for a single worker from 25 March 2001 to date and continuing under section 40 (except for the period from 10 April to 25 July 2001 which was to be paid under section 37) (judgment, paragraph 42);
o) Star City was ordered to pay Ms Emery’s section 60 expenses, and
p) the claim for lump sum compensation was adjourned for mention on 15 December 2003.
On 15 December 2003 the claim for lump sum compensation was settled for $15,000.00 representing $10,500.00 in respect of 15% permanent loss of use of Ms Emery’s right leg below the knee and $4,500.00 for pain and suffering under section 67 (‘the consent award’).
On 16 June 2006 Star City filed an Application to Resolve a Dispute (‘the Application’) in the Commission seeking to “vary a previous order of the Compensation Court”. Exactly what order was sought was not identified in the Application, but it was assumed by the Arbitrator that the Application sought a review of the Court award under section 55 of the 1987 Act because of a change in circumstances. The two changes relied on by Star City were a change in Ms Emery’s medical condition and a change in her capacity for work. On appeal it is submitted that the Application sought “to terminate the award of Neilson J made on 1st July 2003 in the Compensation Court” (Appellant Employer’s submissions, paragraph three). The parties seem to have assumed that the Application sought termination of the Court award or, in the alternative, diminution of that award from the date of the Application (see Appellant Employer’s submissions dated 8 November 2006, paragraph one). Whilst the Application did not expressly seek any alternative remedy to that of termination of the earlier award, the Arbitrator considered the alternative remedy. In my view that was an appropriate course to adopt. The Commission is not a court and is not bound by strict pleadings. It is required to determine matters according to their “substantial merits” and “without regard to technicalities or legal form” (section 354(3) Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’)).
The evidence relied on in support of the Application was a report from Dr Davis, consultant surgeon, dated 13 April 2006. In his opinion Ms Emery was likely to have suffered minor soft tissue damage in the incident on 13 August 2000. He also noted that the MRI scan indicated “some minor tear of the anterior tibio-fibular ligament for which she has had surgical intervention” (report 13 April 2006, page three). He found no evidence at examination of “any reason for her continuing symptoms” (report 13 April 2006, page four) though thought she may have some nerve entrapment relative to the surgery. He expected the effect of the injury to have “long since resolved” and that her symptoms were not work related (report 13 April 2006, page four). In his opinion she was capable of resuming her job at Star City as an electronic gaming representative.
Star City also relied on a “Workers Compensation Payments Questionnaire” (‘the questionnaire’) forwarded to Ms Emery by letter dated 9 March 2006 in which she stated, among other things, that her income was “$0 dollars at the moment starting back at Hotel 13/3/06 for 6hr [sic] week”. The questionnaire is dated 15 March 2006 but the evidence suggests that it may have been completed a few days before that date. The hotel referred to is the Castlereagh Hotel (‘the hotel’), where she had worked for 16 years doing cooking, bar and office duties, some years prior to starting with Star City. Reliance was also placed on video evidence that suggested that Ms Emery had in fact worked at the hotel on the mornings of 7, 8, 9, and 10 March 2006 and that she had been working concurrently at a cafeteria run by her partner at the Dubbo TAFE cafeteria (‘the cafeteria’).
In her Reply filed on 4 July 2006 Ms Emery disputed there had been any change in her circumstances.
The matter was listed for conciliation and arbitration on 22 September 2006 when Ms Emery was cross-examined and certain documents admitted into evidence. It was then adjourned for submissions on 28 September 2006. In a reserved decision delivered on 24 October 2006 the Arbitrator made the following orders:
“1.A general medical dispute to be referred to an Approved Medical Specialist at the expiration of 28 days provided, in the meantime, neither party makes any application.
2.The parties have leave to make any application for a re-consideration, to admit late documents, to re-open the proceedings or in respect of any other matter within 28 days of the date of this determination.
3.The Applicant is directed to provide to the Workers Compensation Commission and the Respondent details of payments made from 1 April 2003 and the current earnings of a comparable employee within 28 days from the date of this determination.
4.The proceedings be adjourned.”
By letter dated 8 November 2006 Star City sought a reconsideration of “all orders and determinations made on 24 October 2006”. In support of the reconsideration application Star City filed written submissions dated 8 November 2006.
On 16 November 2006 Ms Emery applied to admit into evidence a report from Dr Pandya dated 11 November 2006. Star City filed further written submissions on 6 December 2006 and the matter was listed for further arbitration on 15 December 2006. On that day the Appellant Employer made submissions but there was no appearance by the Respondent Worker.
In a further reserved decision delivered on 22 January 2007 the Arbitrator made the following preliminary orders:
“(a)The excerpt of the report of Dr. Pandya, dated 11 November 2006, which reads “I mistakenly put on her last certificate that she has right ankle arthritits” is admitted into evidence.
(b)The Application by the employer for a Reconsideration of the order referring a general medical dispute to an Approved Medical Specialist and requesting a determination of the substantive issues is granted.
(b)Order (1) made on 23 October 2006 is set aside.”
The ‘Certificate of Determination’, dated 22 January 2007, records the Arbitrator’s final orders as follows:
“1. The award, pursuant to judgment dated 1 July 2003, in matter number CC 41350 of 2001 in respect of payment of weekly benefits to Kerrie Anne Emery is varied, as from 22 January 2007, in accordance with the provisions of s55 of the Workers Compensation Act 1987.
2. The Employer/Applicant in these proceedings is to pay the Worker/Respondent weekly benefits of compensation pursuant to s40 of the 1987 Act at the rate of $140.00 per week as from 22 January 2007 and such payments to continue in accordance with the provisions of the Act.
3.The Employer/Applicant to pay the costs of the Worker/Respondent as agreed or assessed.”
Star City seeks leave to appeal the Arbitrator’s orders and determinations of 22 January 2007.
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 1998 Act.
There is no issue that the thresholds in section 352(2) are satisfied.
Time
The appeal was lodged within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act.
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 Employer submits that because of the history of the matter the principles of natural justice and procedural fairness strongly indicate that the appeal should be conducted by way of an oral hearing. It relies on the statements of “fundamental principle” contained in Stead v State Government Insurance Commission (1986) 161 CLR 141. That case concerned a matter where counsel was stopped from making submissions about the acceptance of evidence from a certain witness because the trial judge indicated that he did not accept that witness’s evidence. In a reserved decision the trial judge did accept that witness’s evidence. On appeal the High Court held that by denying the Appellant the opportunity to make submissions on that issue the trial judge had denied him natural justice. No such issue arises in the present matter. The Appellant Employer made written submissions before the Arbitrator and on appeal.
In addition, it is argued that the proper resolution of the appeal will be more readily achieved if an oral hearing takes place.
A further issue arises in respect of the transcript of the proceedings before the Arbitrator. The Registrar forwarded a transcript of the proceedings on 22 September 2006 to the parties by letter dated 17 April 2007. The parties were advised that due to a malfunction in the recording equipment no transcript is available for the proceedings on 28 September or 15 December 2006. The Registrar’s letter advised the parties that any further submissions were to be lodged with the Commission and served in accordance with Practice Direction No. 6. That Practice Direction requires that any supplementary submissions following receipt of the transcript must be lodged and served within 28 days of the letter from the Registrar addressed to the party enclosing a copy of the transcript. No further submissions or applications have been received from either party since 17 April 2007.
I do not believe that the issues raised on appeal require an oral hearing. I am satisfied that both parties to the appeal have been given every opportunity to present their arguments on appeal and that dealing with the appeal ‘on the papers’ will not involve a denial of natural justice or procedural fairness.
Having regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submission by the Respondent Worker 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.
ISSUES IN DISPUTE
The issues in dispute in the appeal are whether the Arbitrator erred in:
(a)finding that Ms Emery continued to be unfit for her pre-injury duties when such a finding was against the evidence and the weight of the evidence (‘fitness for pre-injury duties’);
(b)failing to give reasons or adequate reasons for her determination (‘reasons’);
(c)failing to carry out an assessment with great care to determine whether or not Ms Emery’s evidence could be properly accepted as proof of any matter that was in issue (‘assessment of the evidence’), and
(d)failing to find there was no medical evidence in support of Ms Emery’s contention that she was unfit for her pre-injury duties there having been a change of circumstances as found by the Arbitrator (‘no medical evidence’).
SUBMISSIONS AND FINDINGS
The Appellant Employer submits:
a) Ms Emery’s credit was a major issue at the arbitration and the Appellant Employer submitted that she was an unreliable witness and that she had been “caught out” working when she stated that she had not been working;
b) the Arbitrator made at least three findings that were unfavourable to Ms Emery’s credit. First, that Ms Emery’s statement that she left the employ of the Castlereagh Hotel because of something she was told by Dr Davis was “somewhat implausible” (Statement of Reasons for Decision (‘Reasons’) at paragraph 16). Second, that Ms Emery’s evidence about the absence of any payment to family members for work done at the Dubbo TAFE Cafeteria was unacceptable (Reasons, paragraph 17) because of an observed change in demeanour during cross-examination. Third, that Ms Emery’s evidence that her visits to the cafeteria were primarily to visit her family was also unacceptable because of an observed change in demeanour during cross-examination (Reasons, paragraph 17);
c) Ms Emery failed to inform Star City that she was working at the hotel as at 7 March 2006 and she had clearly made a false representation to Star City when she answered question 1(vi) in the questionnaire and when she later claimed that she left the employ of the hotel because of a deterioration in her symptoms as a result of increased activities;
d) Ms Emery’s work activities at the cafeteria combined with the work she performed at the hotel indicated that she was capable of working approximately 9 hours per day;
e) the weight of the evidence was overwhelmingly in favour of a finding that Ms Emery was able to work a full 40 hour week in work where she was required to be on her feet for most if not all of the day;
f) having concluded that Ms Emery had been apparently untruthful both on oath and otherwise, the Arbitrator was obliged to carefully assess the rest of her evidence in order to determine its reliability (Malco Engineering Pty Limited v Ferreira & others (1994) 10 NSWCCR 117 (‘Ferreira’)). No such assessment took place and Ms Emery’s other oral evidence was accepted “in general terms” by the Arbitrator (Reasons, paragraph 17);
g) the Arbitrator’s reasoning process was not logical. She found that Ms Emery’s change in demeanour enabled her to assess her other oral evidence that, in general, she accepted. A witness’s change in demeanour sufficient to indicate a failure to tell the truth does not enable the fact finder to accept the evidence that was given before that change. Evidence cannot be ‘split’ into two compartments;
h) there was no independent or objective evidence to support Ms Emery’s case that she continued to be incapacitated in the economic sense;
i) the Arbitrator appears to have accepted that Star City established a change in circumstances (Reasons, paragraph 26) and appears to have accepted:
(i)Ms Emery’s symptoms in her right knee and right hip were unrelated to her injury (Reasons, paragraph 18);
(ii)when examined by Dr Davis Ms Emery claimed that she had significant symptoms in her right ankle for which the doctor found no objective evidence (Reasons, paragraph 22);
(iii)Dr Davis referred to possible nerve entrapment which (if it existed) was not a major problem (Reasons, paragraph 21), and
(iv)Ms Emery’s evidence regarding her current symptoms contained “some slight embellishment” but were “much as reported to Dr Davis” (Reasons, paragraph 22);
j) the Arbitrator’s finding that Ms Emery’s continuing symptoms were, on balance, a consequence of the injury (Reasons, paragraph 22) had no basis in the medical evidence. There was no medical evidence to support the Arbitrator’s conclusion on this issue. The Arbitrator had effectively rejected Dr Pandya’s evidence because the diagnosis and certification regarding incapacity had been based on a ‘mistake’. Dr Davis did not provide any opinion which supported Ms Emery’s contention that she continued to be unfit to perform her pre-injury duties. His opinion was that she was capable of resuming her job at Star City;
k) there was no sound basis on the lay evidence to conclude that Ms Emery was unfit for her pre-injury duties. The independent and objective evidence did not support her subjective complaints. The video did not disclose any limitation of movement as complained of by Ms Emery to Dr Davis. On examination Dr Davis found a full range of movement of the right ankle and an absence of swelling;
l) in light of the Arbitrator’s findings as to Ms Emery’s credit, she should not have accepted her uncorroborated assertions regarding continuing complaints and incapacity;
m) the Arbitrator did not give adequate reasons for accepting Ms Emery’s symptoms as reported to Dr Davis (Reasons, paragraph 22) or for accepting her “other oral evidence” (Reasons, paragraph 17). The only stated reason for the first finding was that Dr Davis did not attribute Ms Emery’s symptoms to any “specific non work related factors” and the second finding was not accompanied by any valid reasoning process;
n) the Arbitrator accepted that there had been a change in circumstances. The clear medical evidence was that Ms Emery is fit and Ms Emery has not called any medical to gainsay that evidence;
o) the Arbitrator’s award should be revoked and an award entered in favour of Star City, and
p) Ms Emery should pay Star City’s costs.
Ms Emery submits:
a) the credibility of a worker is a matter to be properly determined by the Arbitrator;
b) Judge Neilson formed a very favourable impression of Ms Emery and had no doubt that she did her best to tell the truth (judgment, paragraph 35);
c) the Arbitrator erred in allowing Star City to rely on the report of Dr Davis because it was and is estopped from relying on that doctor’s opinion in light of the findings by Judge Neilson;
d) Dr Davis’ finding that Ms Emery sustained a “minor tear of the lateral ligament of her right ankle” (Dr Davis, report page four) was contrary to the finding made by Judge Neilson that she ruptured the anterior inferior tibio-fibular ligament of her right ankle (judgment, paragraphs 16 and 18). The principles of res judicata should have been applied and the Arbitrator was in error in relying on Dr Davis’ report;
e) Star City should not have been allowed to revisit the issue of injury;
f) Dr Davis’ opinion that he expected the “effect of the injury to have long since resolved” runs counter to the matters conclusively determined between the parties by Judge Neilson after a contested hearing and the agreement that Ms Emery has a 15% permanent loss of efficient use of her right leg below the knee;
g) Dr Davis did not deal with whether there had been a change in circumstances since Judge Neilson’s decision but offered a differential diagnosis;
h) Star City bore the onus and failed to establish a change in circumstances;
i) in accepting Dr Davis’ opinion the Arbitrator erred in accepting that Star City had discharged the onus it carried;
j) the Arbitrator was in the best position to assess Ms Emery’s credit as she had the opportunity to observe and consider the oral evidence (Far West Area Health Service v Radford [2003] NSWWCCPD 10 (‘Radford’));
k) the Arbitrator’s decision must be read as a whole (Beale v Government Insurance Office of New South Wales (1997) 48 NSWLR 430 at 444) and without combing it for error (Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259). When that is done there is a clear basis in the Arbitrator’s reasoning for coming to the decision she did in accepting Ms Emery to the extent that she did;
l) in the questionnaire Ms Emery was forthright in informing Star City that she was returning to employment and had worked in the past. There was no attempt to deceive or to cover up. She had returned to the Castlereagh Hotel, a place where she had worked for many years in the past and where she was regarded like family, to see if she could cope with work;
m) the Arbitrator assessed the evidence about Ms Emery’s return to work and concluded that she did “not accept there was a deliberate attempt to deceive” (Reasons, paragraph 17(c));
n) no video was obtained suggesting that Ms Emery was making a physical contribution to her partner’s enterprise at the cafeteria other than a brief period of some minutes which was inconclusive at best;
o) the Arbitrator accepted that Ms Emery helped her partner at the cafeteria but was not being paid for that help. On that basis she accepted that Ms Emery’s capacity was greater than found by Judge Neilson;
p) the Arbitrator’s decision should be revoked and Judge Neilson’s award restored because Star City has not discharged the onus it carried to establish a change in circumstances, and
q) in the alternative, the Arbitrator assessed all the evidence and determined that there had been a change in Ms Emery’s ability to earn and made her determination accordingly and the appeal should be dismissed.
DISCUSSION AND FINDINGS
Fitness for Pre-Injury Duties and No Medical Evidence
The Arbitrator found that Ms Emery’s symptoms in her right ankle were as reported to Dr Davis (Reasons, paragraph 22). Those symptoms were recorded at page two of Dr Davis’ report to be:
a) constant aching;
b) recurrent swelling;
c) limited movement, and
d) constant pins and needles down the outside of the right foot.
In addition to the above symptoms, Dr Davis took a history that Ms Emery took all day to do her housework and that, though her ankle is stable, she finds that she cannot stand in the one spot for too long.
Dr Davis also recorded that Ms Emery complained of pain in her right hip and knee. There is no evidence to link those symptoms with her injury at Star City.
On examination all movements of the right ankle were full with no evidence of instability. Ms Emery was able to hop on both ankles and had no evidence of wasting of any muscle group in her left calf. There was diminished sensation in the lateral aspect of the right foot but otherwise no abnormality.
Dr Davis concluded that:
a) Ms Emery was “likely to have suffered minor soft tissue damage in the incident” on 13 August 2000, though he noted the MRI scan indicated some “minor tear of the anterior tibio-fibular ligament for which she has had surgical intervention”;
b) he found no evidence of any reason for her continuing symptoms;
c) Ms Emery may have some nerve entrapment relative to the surgery but that does not appear to be a major problem for her;
d) no further surgical or other treatment was indicated;
e) she would be capable of resuming her job at Star City as an electronic gaming representative, and
f) he expected the effect of the injury to “have long since resolved”.
The Respondent Worker submits that the Arbitrator was estopped from relying on Dr Davis’ report because of the principles of res judicata. It is argued that those principles prevented Star City from re-litigating issues that were determined in the proceedings before Judge Neilson.
The principle of res judicata estoppel may be stated as follows: where a final decision has been pronounced on the merits by a court or tribunal with jurisdiction over the parties and the subject matter, any party to such litigation, as against any other party is estopped in any subsequent litigation from disputing such decision on the merits (The Doctrine of Res Judicata by Spencer Bower, Turner and Handley 3rd edition, 1996, paragraph nine (‘Spencer Bower’)).
The application of the doctrine to proceedings seeking compensation under the 1987 Act has been considered by Judge Neilson in Bruce v Grocon Ltd (1995) 11 NSWCCR 247 at 264 (‘Bruce’) where his Honour said:
“Of course, the doctrine of res judicata, meaning cause of action estoppel, and also the doctrine of issue estoppel can have no application in a claim for reconsideration pursuant to section 17(4). It is to overcome such principles that the power of reconsideration exists. That is what Rainbow J was referring to in Humphreys v. Shell Co of Australia Ltd. However, in my view, absent an application under section 17(4) of the Compensation Court Act 1984, any determination made by this Court does create an issue estoppel: see Somodaj v. Australian Iron & Steel (1963) 109 CLR 285. Therefore, there is no reason in principle why a determination of this Court could not in appropriate circumstances create a cause of action estoppel, absent an application under section 17(4).”
His Honour’s reference to reconsideration under section 17(4) of the Compensation Court Act 1984 has no relevance to the present matter as Star City seeks a review under section 55 of the 1987 Act not a reconsideration under section 350(3) of the 1998 Act.
The distinction between res judicata and issue estoppel can be important and was considered by the Full Bench of the South Australian Workers Compensation Tribunal in Pond v WorkCover Corporation/Allianz Australia Workers Compensation (SA) Ltd (Wunda Joinery) [2001] SAWCT 69 which said:
“19 The principles of res judicata and issue estoppel are both based on the premise that a party cannot re-litigate that which has already been decided. In the case of res judicata, one need go no further than the formal judgment or order of the relevant adjudicating authority. It speaks for itself. In the case of issue estoppel, one can go further to the sub-stratum of findings upon which the formal judgment or order is based, although there are limitations. These are sometimes described as ‘facts fundamental to the decision arrived at’: Hoystead v Commission of Taxation [1926] AC 155; Blair v Curran (1939) 62 CLR 464 at 531 - 533 per Dixon J (as he then was).”
The distinction was also discussed by the Federal Court in Effem Foods Pty Ltd v Trawl Industries of Australia Pty Ltd (recs and mgrs apptd – in liq) and others (1993) 115 ALR 377 at 381 where Northrop and Lee JJ said:
“The question will be whether an issue of fact or law which is raised in the later proceedings was an issue of fact or law which was also raised in the earlier proceedings and therein determined.”
In Blair v Curran (1939) 62 CLR 464 at 531-3 Dixon J said:
“A judicial determination directly involving an issue of fact or of law disposes once for all of the issue, so that it cannot afterwards be raised between the same parties or their privies. The estoppel covers only those matters which the prior judgment, decree or order necessarily established as the legal foundation or justification of its conclusion, whether that conclusion is that a money sum be recovered or that the doing of an act be commanded or be restrained or that rights be declared. The distinction between res judicata and issue estoppel is that in the first the very right or cause of action claimed or put in suit has in the former proceedings passed into judgment, so that it is merged and has no longer an independent existence, while in the second, for the purpose of some other claim or cause of action, a state of fact or law is alleged or denied the existence of which is a matter necessarily decided by the prior judgment, decree or order.” (emphasis added)
The Respondent Worker’s argument is that Judge Neilson found that Ms Emery’s injury was a rupture of the anterior inferior tibio-fibula ligament of her right ankle and that finding binds the parties in subsequent claims between them, subject to any application for reconsideration. A finding of injury is an essential finding that must be made before compensation can be recovered. In Lyons v Master Builders Association of NSW (2003) 25 NSWCCR 423 (‘Lyons’) Judge Neilson held that ‘injury’ means both the ‘injurious event’ (the work event or incident) and the ‘pathology’ arising from that event. I agree with that statement. Therefore, the determination of the issue of ‘injury’ requires not only an assessment of whether the ‘injurious event’ occurred in compensable circumstances but also whether the pathology found to exist (if any) has been caused by the work event. Judge Neilson made findings on both those issues in Ms Emery’s matter and in the absence of any appeal or application for reconsideration, the parties are bound by those findings.
However, whilst the principles of estoppel are applicable in the present case, those principles do not make Dr Davis’ report inadmissible. The report deals with more than just the nature of Ms Emery’s injury. It also comments on her current condition and fitness for work. Dr Davis was entitled to give evidence on those issues but the question of what weight ought be attached to his conclusions must be considered in light of the fact that his opinion on the nature of Ms Emery’s injury is at odds with the express finding made by Judge Neilson and with the Appellant Employer’s admission that Ms Emery sustained a 15% permanent loss of efficient use of her right leg below the knee as a result of her injury. That admission results from the effect of the consent award filed on 15 December 2003 (see Rail Services Australia v Dimovski (2004) 1 DDCR 648).
Therefore, I reject the Respondent Worker’s argument that the Arbitrator should have excluded Dr Davis’ report. However, the question of the weight to be attached to it is another matter. Dr Davis initially described Ms Emery’s injury as “minor soft tissue damage” but then acknowledged the MRI findings of a minor tear for which surgery was necessary. In my view Dr Davis’ opinion on the nature of the injury sustained by Ms Emery is inconsistent with the clear finding made by Judge Neilson and, as a result, the weight to be attached to his conclusion on Ms Emery’s fitness for work is diminished. In addition, the reason for his conclusion that the “effect of this injury would have long since resolved” and Ms Emery’s “ongoing symptoms are not work related” is not explained and is implausible in light of the objective evidence of a rupture, the lack of any great relief from the surgery (Judge Neilson’s judgment, paragraph 36) and the scaring found at the second MRI scan performed on 16 August 2002 which Dr Davis did not see.
Ms Emery’s medical case consisted of two medical certificates and a report from Dr Pandya. The first certificate is dated 27 June 2006 and gives a diagnosis of “(R) ankle ligament injury (operation)”. The management plan was described as “analgesia”. The doctor declared Ms Emery to be fit for suitable duties for “25hrs/week” with walking up to “1/2hr” and standing up to “1/2hr and rest for 5 minutes”. The second certificate is dated 12 August 2006 and diagnoses “right ankle arthritis following an [sic] ligamentous injury”. The management plan was described as “Physiotherapy + 2 x operations” and Ms Emery was declared fit for suitable duties for 12 hours per week from 28 July 2006 to 28 January 2007. The next entry is difficult to read but appears to state, “her ankle has worsened since working 25 hours/week”. The Arbitrator noted the content of this certificate at paragraph 28 of her Reasons.
The only part of Dr Pandya’s report of 11 November 2006 admitted into evidence is the sentence “I mistakenly put on her last certificate that she has right ankle arthritis”.
The Appellant Employer’s submission that the only medical certificate in evidence was the certificate of 12 August 2006 is incorrect. The certificate of 27 June 2006 was attached to Ms Emery’s statement dated 20 September 2006 (see Arbitrator’s Reasons 24 October 2006, paragraph 10). The admission of those documents was the subject of lengthy debate before the Arbitrator and she ruled that the documents were admissible (T7.13) and indicated that she would grant an adjournment if that involved any denial of procedural fairness to Star City. No application was made for an adjournment.
Whilst there is some force in the Appellant Employer’s submission that the weight of the medical evidence did not support the Arbitrator’s conclusion, Dr Davis’ evidence was undermined by the fact that his diagnosis was inconsistent with the finding made by Judge Neilson that the injury was a rupture of the ligament and not merely “minor soft tissue damage” or a “minor tear” and by the voluntary payment of lump sum compensation in respect of 15% permanent loss of use of the right leg below the knee as a result of the injury. Dr Davis’ evidence did not lead to only one outcome.
In addition, whilst the medical evidence tendered on behalf of Ms Emery was less than ideal, the decision of Judge Neilson contains a reference to other relevant medical evidence. At [36] Judge Neilson referred to a second MRI scan performed on 16 August 2002 that showed scar tissue in the pre-Achilles tendon area extending from the front of the tendon to the peroneal retinaculum. Shortly after that scan Dr Lim discussed an arthroscopic lateral gutter debridement with Ms Emery. That was not done. Ms Emery’s solicitors sent her to Dr Morgan who thought there was some nerve involvement in the scar tissue causing Ms Emery a lot of pain and discomfort. Judge Neilson made no express finding on the relevance or extent of the possible nerve damage, but concluded at [39] of his decision that “if the Applicant’s current condition is largely mediated by some nerve damage which can be remedied, then her condition will improve”. There is no evidence that the nerve damage has been remedied. The Arbitrator referred to this part of Judge Neilson’s decision at paragraph 21 of her Reasons when she also noted that Dr Davis thought there may be some “nerve entrapment relative to the surgery, however, this does not appear to be a major problem for her”.
In all the circumstances the Arbitrator was not in error in not accepting the evidence of Dr Davis on the question of Ms Emery’s fitness for work.
Reasons and Assessment of the Evidence
The Appellant Employer argues that as the Arbitrator found Ms Emery’s evidence to be either implausible or unacceptable in several respects she was obliged to carefully assess the rest of her evidence in order to determine its reliability and, as she did not do that, she was in error because she merely stated that she accepted Ms Emery’s other oral evidence “in general terms”. Whilst it is open to an Arbitrator to accept some parts of a witness’s evidence and reject other parts, he or she must give reasons for doing so. The Appellant Employer argues that the Arbitrator has not given any or any adequate reasons for accepting Ms Emery’s other oral evidence in circumstances where she found that she had given implausible or unacceptable evidence on important issues.
The Respondent Worker’s submission that the Arbitrator is in the best position to assess a witness’s credit is correct and is supported by a long line of authorities of which Radford is one and that there is no suggestion that evidence was ignored by the Arbitrator.
Whether or not the Arbitrator failed to consider the balance of Ms Emery’s evidence requires a detailed analysis of her Reasons where she made the following observations and/or findings:
a) after the decision of Judge Neilson, Ms Emery started part time work at the hotel in May 2005 but resigned in November 2005 because her ankle “was causing her problems” (Reasons, paragraph 15 and Ms Emery’s statement 20 September 2006, paragraph three);
b) Ms Emery recommenced with the hotel in March 2006 working three days per week from 6.30am until 8.30am. She found these duties to be suitable because she could stand and sit as she pleased and was not required to perform any duties which put stress on her ankle (Reasons, paragraph 15);
c) Ms Emery stopped work at the hotel in the week ending 28 June 2006 because she had “been told by the insurer’s doctor that [she] could undertake more employment” (Ms Emery’s statement, paragraph nine). The Arbitrator found this reason “somewhat implausible”(Reasons, paragraph 16);
d) Ms Emery then started work for Myall Street Mini Mart working 25 hours per week but reduced her hours to 18 per week and then 12 per week because of pain in her right ankle. She remained working at the Mini Mart at the time of the Arbitration (Reasons, paragraph 16);
e) the surveillance reports alerted the Appellant Employer to the fact that Ms Emery attended at the cafeteria. The Appellant Employer’s conclusion that Ms Emery was in paid employment at the cafeteria was wrong but the attendance by Ms Emery at the cafeteria was a matter for consideration on the issue of incapacity (Reasons, paragraph 17(a));
f) on viewing the video evidence the Arbitrator could not detect a limp or any other abnormality in Ms Emery’s gait, even after finishing her shift at the hotel. Ms Emery’s evidence was that she did not limp all the time but the Arbitrator felt that the video “to some extent, supports the employer’s application” (Reasons, paragraph 17(b));
g) Ms Emery, and probably her solicitor, was careless in respect of the completion of the information in the questionnaire but the Arbitrator did not accept there was “a deliberate attempt to deceive”. The fact was that at that point in time (presumably March 2006) Ms Emery was entitled to payment of weekly benefits in accordance with Judge Neilson’s award and neither her hours of paid employment nor her earnings were in excess of the findings by Judge Neilson on those issues and the knowledge of those facts “almost certainly contributed to the careless attitude and inconsistencies” (Reasons, paragraph 17(c));
h) Ms Emery’s evidence was that her partner operated the cafeteria at Dubbo TAFE and she attended on “most days” to spend time with members of her family. She added that no family member received any remuneration for work done at the cafeteria and whilst she did “help out” in busy periods, if she was present, she was not paid for her efforts (Reasons paragraph, 17(e));
i) the Arbitrator accepted that Ms Emery was not paid for any work done at the cafeteria but did not accept that no member of the family was paid nor that Ms Emery attended the cafeteria primarily to visit her family. Ms Emery’s demeanour when cross-examined on these issues “did not convince” the Arbitrator of those facts. The change in demeanour on this issue enabled the Arbitrator to “assess her other oral evidence which, in general terms,” she accepted (Reasons, paragraph 17(e));
j) the Arbitrator found that Ms Emery attended the cafeteria “primarily to assist her partner and her mother when and if required”. Though she did not receive wages there would clearly have been some “flow on” benefits. The Arbitrator felt that she had to consider whether Ms Emery’s consistent attendance and the obligation to attend was indicative of an ability to work more than 12 hours per week and/or adversely impacted on her ability to engage in paid employment (Reasons, paragraph 17(e));
k) Ms Emery now has medical problems with her right knee and hip but there was no evidence that those problems are related to the injury on 13 August 2000. The Arbitrator posed the question of whether those complaints contributed to any incapacity for work (Reasons paragraph 18);
l) the Arbitrator noted Dr Davis’ history that Ms Emery complained of constant aching in her right ankle, swelling, limited movement and pins and needles down the right foot (Reasons, paragraph 19);
m) Dr Davis found no objective evidence to account for Ms Emery’s continuing symptoms but he did not suggest exaggeration or deception on the part of the worker and his examination would indicate Ms Emery was honest and co-operative in her presentation (Reasons, paragraph 20);
n) Dr Davis referred to possible nerve entrapment relative to the surgery but that did not appear to be a major problem for her. The possibility of nerve entrapment was discussed at length by Judge Neilson (Reasons, paragraph 21);
o) Ms Emery gave evidence about her symptoms which were much the same as the symptoms she reported to Dr Davis and, though there may “be some slight embellishment in respect of the severity”, the Arbitrator accepted that she had the symptoms reported to Dr Davis. The doctor did not attribute the symptoms to any specific non-work related factors and therefore, on balance, the Arbitrator found “these symptoms are a continuing consequence of the injury to the right ankle”. The Arbitrator then posed the question: had those symptoms improved sufficiently to warrant a review of the award? (Reasons, paragraph 22);
p) there was no evidence as to Ms Emery’s symptoms at the time of the hearing before Judge Neilson and none of the medical reports before his Honour were tendered before the Arbitrator (Reasons paragraph, 23);
q) Ms Emery gave no evidence as to the condition of her ankle at the time of the Court award nor that the condition of her ankle had changed since that award. The Arbitrator regarded this absence of evidence as a serious deficiency (Reasons paragraph, 24);
r) there was no report from Dr Pandya, or any other doctor, refuting the Appellant Employer’s allegation of a change in circumstances in respect of “the medical condition” (Reasons, paragraph 25);
s) prima facie the Appellant Employer had established a change in circumstances in respect of the medical condition (Reasons, paragraph 26);
t) the Arbitrator re-iterated her view that Ms Emery has continuing symptoms as a result of her injury and posed the question: do those symptoms create a continuing incapacity? If so, what is the extent of the incapacity? She noted the section 66 payment in respect of 15% loss of efficient use of the right leg [below the knee] (Reasons paragraph 27);
u) Ms Emery relied on Dr Pandya’s certificate of 12 August 2006 which the Arbitrator noted had no date of examination, was misleading in that it referred to the treatment provided shortly after the injury (physiotherapy and operations) and provided no evidence of any examination of the ankle. The Arbitrator felt the doctor recorded a statement made by Ms Emery and was not expressing his opinion formed after a proper examination. Consequently, she felt there was a real difficulty in accepting the doctor’s statement that Ms Emery was only fit for suitable duties for 12 hours per week. Therefore, the Arbitrator felt she “must rely on the statements of the worker” (Reasons, paragraph 28);
v) the Arbitrator accepted that Ms Emery still had an ache in her ankle, which swells on occasions, and that the symptoms were exacerbated after prolonged walking or standing. She did not accept that the symptoms were of such severity that Ms Emery could only work 12 hours per week. A close consideration of the video and surveillance reports convinced the Arbitrator that Ms Emery was capable of working more than 12 hours per week (Reasons, paragraph 29);
w) any incapacity was compounded by Ms Emery’s medical problems affecting the right knee and hip (Reasons, paragraph 30);
x) given the nature and hours of Ms Emery’s pre-injury duties (as described by Judge Neilson) the Arbitrator was of the view that she was not fit to resume her pre-injury duties (Reasons, paragraph 31);
y) Ms Emery’s skills and experience are in the hospitality industry. The Arbitrator could see no reason why Ms Emery could not work five hours per day five days per week at $20.00 per hour (Reasons, paragraph 32);
z) there was no evidence of probable earnings, in spite of the Arbitrator’s direction on 24 October 2006 that the Appellant Employer provide comparable wages. Before Judge Neilson probable earnings were $615.38 per week. The Arbitrator fixed an arbitrary figure of $640.00 per week for probable earnings (Reasons, paragraph 33), and
aa) the Arbitrator varied Judge Neilson’s award by reducing it to $140.00 per week from 22 January 2007.
The Commission’s Arbitrators are bound to provide reasons for their decisions. In NSW Department of Education and Training v Sanders [2004] NSWWCCPD 89 (‘Sanders’) it was noted:
“11. An Arbitrator has a statutory duty to provide adequate reasons for decision. Section 294(2) of the 1998 Act and Rule 73 require the Commission to provide reasons for decision in the determination of a dispute. (See also Absolon v NSW TAFE [1999] NSWCA 311 and YG v Minister for Community Services [2002] NSWCA 247). Failure to provide adequate reasons is not only a breach of an Arbitrator’s statutory and common law obligations, it is an error of law (Sydney Water Corporation Ltd v Aqua Clear Technology, Supreme Court of NSW, per Rolfe J, (P/L 55047/96) 17 December 1996; Dennis Willcox Pty Limited v Federal Commissioner of Taxation (1988) 79 ALR 267). If the failure is established, it may be a ground to revoke the decision made. An Arbitrator is not required to give lengthy and detailed reasons for decision, nor to recite and analyse in detail the content of the evidence and submissions. The standard by which adequacy of reasons must be determined is relative to the nature of the decision itself and the decision-maker (see discussion in Mayne Health Group t/as Nepean Private Hospital v Sandford [2002] NSW WCC PD 6 and Fraternity Bowling & Recreation Club Ltd v Sartor [2004] NSW WCC PD 47). The Commission is not a court and its proceedings are conducted with as little formality and technicality as the proper consideration of the matter permits (see Objectives of the Commission in section 367 of the 1998 Act). Fundamentally, the reasons given must be capable of conveying adequately to the parties, the basis upon which the Arbitrator came to the decision that was made.”
In Aluminium Louvres & Ceilings Pty Ltd v Zheng [2004] NSWWCCPD 26 the Court of Appeal stated at [58]:
“To succeed on the ground of ‘inadequate reasons’ the Appellant Employer must demonstrate not only that the reasons are inadequate, but that their inadequacy sufficiently demonstrates that the Arbitrator has failed to exercise his or her statutory duty to fairly and lawfully determine the application (YG v Minister for Community Services [2002] NSWCA 247 (26 July 2002); Absolon v NSW TAFE [1999] NSWCA 311; ADCO Constructions Pty Ltd v Ferguson [2003] NSW WCC PD 21).”
An Arbitrator’s reasons must disclose the reasoning process that lead to the conclusion reached.
Whilst the Arbitrator’s decision was detailed and carefully prepared, it failed to deal with the essential issue, namely: why did she find that, ‘on balance’, Ms Emery’s symptoms were continuing as a consequence of the injury on 13 August 2000? In other words, having rejected Ms Emery’s evidence on several important issues, why did the Arbitrator accept her on the ultimate issue of whether her symptoms were continuing when there was limited medical evidence to that effect and Ms Emery’s credit had been impugned? I have been unable to find a satisfactory answer to that question and in these circumstances it is my view that the Arbitrator was in error in not disclosing the reasoning process that led to a positive outcome for Ms Emery in spite of the credit findings.
It is not uncommon for an Arbitrator to say ‘I accept the worker’s case because I accept him as a witness of truth when he says he still has pain and is unable to do his pre-injury job’. If that finding is not inconsistent with incontrovertible facts or based on glaringly improbable evidence (Devries v Australian NationalRailways Commission (1993) 177 CLR 472, Abalos v Australian PostalCommission (1990) 171 CLR 167 and Fox v Percy (2003) 214 CLR 118) it will often (but not always) be adequate to sustain an award. However, in the present matter the Arbitrator’s finding was that Ms Emery’s evidence was implausible and or unacceptable on several issues. To then accept the Respondent Worker’s evidence ‘in general terms’ without explanation of why that other evidence was accepted and in circumstances where there was limited contemporaneous medical evidence to support the Respondent Worker’s contentions involves an error such that the determination must be revoked.
The Respondent Worker’s submission is that if the decision is read as a whole, without combing it for error, there is a clear basis “in the Arbitrator’s reasoning for coming to the decision she did in accepting the worker to the extent that she did” (Respondent Worker’s submissions, page six). The difficulty I have with this submission is that it does not disclose the “clear basis” in the Arbitrator’s reasoning.
In these circumstances the Arbitrator decision must be revoked and the matter must be re-determined. In view of the significant credit issues involved in the case it is not appropriate that I re-determine the matter. The proper course is that the matter be remitted to a different Arbitrator to be re-determined. It may be that at that re-determination the parties will wish to adduce additional evidence touching on the issues to be decided and the appropriate application to adduce such evidence can be made to the Arbitrator allocated to hear the matter.
DECISION
The Arbitrator’s orders made on 22 January 2007 are revoked and the following orders made:
“1.The matter is remitted to a different Arbitrator to be re-determined in accordance with the reasons given in this decision.
2.Costs of the first Arbitration are to follow the event of the second Arbitration.”
COSTS
The Appellant Employer’s application for an order that the Respondent Worker’s pay its costs is rejected. The order as to costs of the appeal is: no order as to costs of the appeal.
Bill Roche
Deputy President
30 May 2007
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF BILL ROCHE, DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
0
11
0