State of New South Wales v Butler - [2017] NSWWCCPD 47

WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:	State of New South Wales v Butler [2017] NSWWCCPD 47
APPELLANT:	State of New South Wales
FIRST RESPONDENT: SECOND RESPONDENT:	Graham Leslie Butler JCS Big Country Security Pty Ltd
APPELLANT’S INSURER: SECOND RESPONDENT’S INSURER:	QBE Insurance Australia Ltd as Agent for the NSW Self Insurance Corporation GIO Workers Compensation (NSW) Ltd
FILE NUMBER:	A1-1508/17
ARBITRATOR:	Mr P Young
DATE OF ARBITRATOR’S DECISION:	14 June 2017 and 4 July 2017 (Amended)
DATE OF APPEAL DECISION:	3 November 2017
SUBJECT MATTER OF DECISION:	Section 65(3) of the Workplace Injury Management and Workers Compensation Act1998: the Commission’s jurisdiction and application of Haroun v Rail Corporation (NSW) [2008] NSWCA 192; 7 DDCR 139 and associated authorities, multiple causes of injury and incapacity: Sutherland Shire Council v Baltica General Insurance Co Ltd (1995) 39 NSWLR 87, error in fact finding: Waterways Authority v Fitzgibbon [2005] HCA 57; 221 ALR 402; 79 ALJR 1816
PRESIDENTIAL MEMBER:	Deputy President Michael Snell
HEARING:	On the papers
REPRESENTATION:	Appellant:	Moray & Agnew
First Respondent:	Everingham Solomons Lawyers
Second Respondent:	Hicksons
ORDERS MADE ON APPEAL:	1. The appellant, where it is described, is amended to read “State of New South Wales”. 2. The Certificate of Determination dated 14 June 2017 as amended by the Certificate of Determination dated 4 July 2017 is revoked. 3. The matter is remitted for re-determination by another Arbitrator.

INTRODUCTION

This appeal raises issues going to the adequacy of the fact finding process, and the appropriateness of an award in favour of one of the employers. There are issues about the orders that can be made by the Commission in the bifurcated system, where a ‘medical dispute’ exists.

BACKGROUND

Graham Leslie Butler suffered employment injuries involving his knees while employed by JCS Big Country Security Pty Ltd (JCS) (on 6 January 2006) and by the State of New South Wales (the State) in the operations of the Hunter New England Area Health Service[1] (on 20 June 2011). The occurrence of these injurious events is not in dispute, although the consequences are. Mr Butler underwent left total knee replacement surgery on 13 February 2012, and right total knee replacement surgery on 6 October 2015. He previously recovered lump sum compensation from JCS in respect of 2% whole person impairment (WPI) (right knee) pursuant to a s 66A agreement dated 26 September 2008.
[1] See State of New South Wales v Bishop [2014] NSWCA 354; 14 DDCR 1 at [26]–[28].
The current claim is for weekly compensation from 20 October 2013 to 15 September 2014, and from 24 March 2015 on a continuing basis. There is also a claim for lump sum compensation in respect of 20% WPI in respect of the right knee (against JCS) and 32% WPI in respect of the right and left knees (against the State). A claim in respect of medical expenses was discontinued, although was ultimately the subject of an award; this will be dealt with below.
JCS denied liability in a s 74 notice dated 7 February 2017. It asserted that the 2006 injury was “minor” and that Mr Butler “made a full recovery”. It said that the lump sum claim “relates to the 2011 injury which is outside our period of risk”, and additionally that it was “excessive”. The State denied liability in a s 74 notice dated 24 October 2014. It put in issue ‘injury’, s 9A of the Workers Compensation Act 1987 (the 1987 Act), whether ongoing treatment was “appropriate reasonable or necessary”, and whether there was any permanent impairment resulting from injury. It stated that the injury on 20 June 2011 did not cause any incapacity. It said that the injury to the left knee on 20 June 2011 “has now resolved”, and that there was no injury to the right knee.

THE ARBITRAL PROCEEDINGS AND DECISION

The proceedings were commenced by an Application to Resolve a Dispute registered on 27 March 2017. As against JCS, it alleged injury to the right knee on 6 January 2006 when Mr Butler tripped and fell on the front of his right knee. The lump sum claim was in respect of 20% WPI resulting from injury on 6 January 2006 to the right knee. As against the State, it pleaded injury on 20 June 2011 when Mr Butler was kicked by a patient, injuring his left knee. It alleged injury to the right knee, as “a result of favouring the left”. It claimed lump sum compensation in respect of 32% WPI resulting from injury to the right and left lower extremities on 20 June 2011. The weekly claim referred to at [3] above was made against both employers.
The matter was listed for arbitration hearing at Tamworth on 2 June 2017. Mr S Hickey, instructed by Mr Grady, appeared for Mr Butler, Mr Strachan, solicitor appeared for JCS, and Mr Tanner appeared for the State. Mr Hickey and Mr Strachan sought the entry of consent orders to resolve the matter as between Mr Butler and JCS. Mr Tanner opposed this course, on the basis it would “affect issues which are to be determined with reference to [the State].”[2] After hearing submissions, the Arbitrator declined to make the consent orders sought.[3] The matter proceeded on the written material, no party sought to adduce oral evidence or to cross-examine. Mr Hickey advised that he sought to “discontinue the claim for section 60 expenses and any application for a general order.”[4] The parties’ legal representatives addressed, and the Arbitrator reserved his decision.
[2] T2.29–31.
[3] T6.31–7.1.
[4] T28.23–5.
The Arbitrator delivered a written decision dated 14 June 2017.[5] In that decision he made some formal findings, and orders in relation to weekly compensation and medical expenses, but inadvertently neglected to make orders for referral of the lump sum claim to an Approved Medical Specialist (AMS). He held a telephone conference on 21 June 2017 (incorrectly described as 4 July 2017 in the supplementary reasons), and on 4 July 2017 issued a further Certificate of Determination, amending the first by providing for referral of the lump sum claim to an AMS.[6]
[5] Butler v JCS Big Country Security Pty Ltd [2017] NSWWCC 140 (reasons).
[6] Supplementary reasons.
The Arbitrator correctly described the injury on 6 January 2006 as “not seriously in dispute”.[7] He set out a history of the recorded complaints to the right knee following that injury, together with the consent lump sum payment based on 2% WPI of the right lower extremity. He referred to the general practitioner’s records, saying “there appears to be no further complaint regarding the right knee from 24 September 2010 to 23 March 2011”.[8]
[7] Reasons at [4].
[8] Reasons at [14].
The Arbitrator referred to the injury with the State on 20 June 2011, including contemporaneous complaints to doctors and Mr Butler’s claim form. He said Mr Butler’s “only immediate and frank injury on 20 June 2011 was an injury to his left knee” (emphasis in original).[9] The Arbitrator referred to complaints of right knee symptoms made by Mr Butler from 20 September 2012.[10] He referred to Mr Butler’s statement dated 14 April 2015, in which he said that after the surgery to his left knee, he heavily favoured his right leg and limped on his left leg.[11] The Arbitrator referred to Dr Hopcroft’s opinion that the right knee injury “occurred on 6 January 2006 and as a result of favouring his left knee following the injury of 20 June 2011”.[12] The Arbitrator concluded that “[o]n the strength of [Mr Butler’s] statement and with regard to Dr Hopcroft’s opinion”, he was satisfied on the probabilities that there were “underlying osteoarthritic degenerative changes” in the right knee, and “surgery to his left knee resulted in him favouring his left knee which in turn progressively accelerated his symptoms in respect of his right knee”.[13] He found that the “injury to [Mr Butler’s] left knee on 20 June 2011 materially contributed to the need for [Mr Butler’s] right knee surgery”.[14]
[9] Reasons at [16].
[10] Reasons at [24].
[11] Reasons at [25].
[12] Reasons at [28].
[13] Reasons at [30].
[14] Reasons at [31].
The Arbitrator made awards for weekly compensation and medical expenses, both only against the State. He entered an award in favour of JCS. In his supplementary reasons, the Arbitrator noted a submission by the State that whether permanent impairment resulted from the injury on 6 January 2006 was “wholly within the province of the AMS”. He said “whether there is a causal connection between an injury and impairment are matters for an arbitrator, not an AMS, to decide”.[15] The Arbitrator remitted the matter to the Registrar, for referral to an AMS, to assess WPI “which results from [Mr Butler’s] injury to his left knee on 20 June 2011 and a consequential condition in his right knee”.[16]
[15]Supplementary reasons at [7], citing Connor v Trustees of the Roman Catholic Church for the Archdiocese of Sydney [2006] NSWWCCPD 124; 5 DDCR 337 and Bhutta v RailCorp NSW [2010] NSWWCCPD 108.
[16]Supplementary reasons at [9].
The Arbitrator’s reasons included a discussion of the entitlement to weekly compensation, the award of which is challenged in this appeal.

ON THE PAPERS

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 Nos 1 and 6; the documents that are before me, and the submissions 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.

THRESHOLD MATTERS

There is no dispute between the parties that the threshold requirements as to quantum and time pursuant to ss 352(3) and 352(4) of the 1998 Act have been met.

GROUNDS OF APPEAL

References in this decision to the Application to Appeal Against Decision of Arbitrator are to the Amended Application lodged on 18 July 2017. That document raises the following grounds:
(a) The Arbitrator failed to consider and determine the rights and obligations of the parties arising from the injury on 6 January 2006. This included whether incapacity and the need for medical treatment resulted from that injury as well as the injury on 21 June 2011, and the need to refer WPI resulting from injury on 6 January 2006 to an AMS for assessment. It was necessary to determine the relief to which Mr Butler was entitled as against JCS, resulting from the injury on 6 January 2006 (Ground No 1).
(b) The award of weekly compensation, save for the period from 6 to 20 October 2015, was erroneous in that, during the other periods awarded, Mr Butler did not suffer any “economic incapacity” (Ground No 2).
Mr Butler supports some aspects of the appeal. He submits that:
(a)    The award in favour of JCS in respect of the injury on 6 January 2006 should be revoked.
(b)    The order remitting the matter to the Registrar for referral to an AMS, in its existing form, should be revoked. In substitution the referral should provide for assessment of:
(i)WPI resulting from injury to the right knee on 6 January 2006, and
(ii)WPI resulting from injury to the left knee on 20 June 2011 and the consequential condition of the right knee causally related to the left knee injury on 20 June 2011.
(c)    There should be a finding of injury to the right knee in the course of Mr Butler’s employment on 6 January 2006, with a finding that such employment was a substantial contributing factor to that injury.
(d)    There should be orders for the payment of expenses pursuant to s 60 of the 1987 Act:
(i)in respect of injury to the right knee on 6 January 2006, against JCS, and
(ii)in respect of injury to the left and right knees on 20 June 2011, against the State.
The Notice of Opposition lodged on behalf of JCS simply provides that JCS “accepts the Arbitrator’s decision”. It does not otherwise make any submissions on the merits of the appeal. Submissions on behalf of JCS will not be further referred to below. The arguments put by Mr Butler in support of the appeal essentially flow from the grounds and submissions of the State. It is appropriate that they be dealt with. JCS has had notice of those submissions since Mr Butler’s Notice of Opposition was lodged (on 13 September 2017) and served. JCS has not sought to put on further submissions addressing those of Mr Butler, and there is no suggestion of prejudice. This is generally consistent with the approach taken by Roche DP in BlueScope Steel Ltd v Markovski.[17]

GROUND NO 1

[17] [2013] NSWWCCPD 69 at [11]–[14]. See also Rail Corporation of New South Wales v B [2009] NSWWCCPD 81 at [54].

The State’s Submissions

The submissions recite passages of the medical evidence. They refer to a passage from Dr Hopcroft’s report dated 11 May 2016, which records:
“… following the injury to his left knee on 20 June 2011, he saw further rapid progression of problems with his right knee which resulted from a combination of two injuries, the first occurring when he was a security guard employed by JCS Big Country on 6 January 2006, and then aggravated by the same injury that injured his left knee, namely that on 20 June 2011 he fell when kicked by a patient in the back of an ambulance, landing on both knees, and noticing that his right knee then started to deteriorate rapidly.”
The State concedes that this history of injuring the right knee at the time of the incident on 20 June 2011 was not accepted by the Arbitrator. It nevertheless submits that it is relevant that Dr Hopcroft accepted the injury on 6 January 2006 as “one of a combination of factors causing the progression of problems”.[18] It refers to the “opinion” in the same report that Mr Butler “has now proceeded to right total knee replacement surgery following the injury suffered in the course of his work on 6 January 2006, and then the significant aggravating injury of 20 June 2011”. The State refers to Dr Hopcroft’s supplementary report dated 11 May 2016, which assessed WPI (including based on the right leg) by reference to two dates of injury, 6 January 2006 and 20 June 2011. It refers to Dr Hopcroft’s report dated 4 January 2017, in which he said:
“The injury to his right knee occurred on 6 January 2006 and as a result of favouring his left knee following the injury of 20 June 2011.”
[18] The State’s submissions at [6].
The State submits that it was an “undisputed fact” that Mr Butler injured his right knee on 6 January 2006. It was inappropriate to enter an award for JCS in the circumstances. It was necessary that the Arbitrator deal with the issue of whether incapacity and the need for treatment resulted from one or both of the relevant injuries. This was not addressed by the Arbitrator. It was necessary that WPI be assessed by an AMS in respect of each of the injuries.
The Application to Appeal includes a section headed “Application of Authorities to the Arbitrator’s overlooking of evidence” which includes further submissions. It refers to the statutory duty of arbitrators to give reasons (s 294 of the 1998 Act and r 15.6 of the Workers Compensation Rules 2011). The State submits that the Arbitrator’s reasons did not make findings on material questions of fact, contrary to his statutory duty. It submits that he failed to record the evidence which was the basis of, and the reasons for, the award in favour of JCS. It refers to Hume v Walton[19] and Beale v Government Insurance Office of NSW.[20] The State submits that the Arbitrator failed to disclose the reasoning process that led to the award in favour of JCS. The submissions refer to Whitely Muir & Zwanenberg Ltd v Kerr.[21] The State, referring to Whitely Muir, submits there is factual error, as the Arbitrator noted a material fact (the injury on 6 January 2006), then overlooked it in his findings and reasons, in making an award in favour of JCS.
[19] [2005] NSWCA 148 at [69].
[20] (1997) 48 NSWLR 430 at 442–4.
[21] (1966) 39 ALJR 505 at 506 (Whitely Muir).

Mr Butler’s Submissions

Mr Butler, supporting the State on this ground, refers to the Arbitrator’s reasons where they acknowledge the injury on 6 January 2006,[22] and to the Complying Agreement dated 26 September 2008.

Consideration

[22] Reasons at [8]–[13].

The Lump Sum Claim Against JCS

The Arbitrator’s reasons accurately described the occurrence of the injury on 6 January 2006 as “not seriously in dispute”[23]. The s 74 notice dated 16 February 2017, issued on behalf of JCS, did not dispute the occurrence of the injury, or that s 9A of the 1987 Act was satisfied. The Reply lodged by JCS confirmed that the issues it raised were “as per dispute notice(s) attached to the Application”. The discussion in the reasons, referring to treatment and complaints after this injury, did not suggest that there was any doubt about its occurrence.[24]
[23] Reasons at [4].
[24] Reasons at [8]–[14].
Mr Strachan, who appeared on behalf of JCS, informed the Arbitrator that there was:
“… no dispute that [Mr Butler] sustained an injury with [JCS] in April of 2006 subject to a complying agreement in – sorry, 6 January 2006 subject to a complying agreement in 2008. It’s my submission that you can’t take it any further than that it was an injury, that the extent of the injury is a matter for an AMS obviously.”[25]
[25] T28.34–29.6.
This was a frank and appropriate concession of ‘injury’, and also that permanent impairment resulting from it was a matter requiring assessment by an AMS. Mr Hickey, who appeared for Mr Butler, submitted (consistent with Dr Hopcroft’s opinion) that “[t]he injury to the right knee occurred on 6 January ’06 and as a result of favouring his left knee following the injury of 20 June ’11”[26]. Mr Hickey submitted that, subject to findings on ‘injury’, the knees “go off to an AMS for assessment.”[27] Mr Tanner, appearing for the State, submitted to similar effect:
“There’s no dispute that there was a right knee injury on 6 January 2006 and as [JCS’s] representative acknowledges, that body part will need to be referred to an AMS who will need to assess whole person impairment resulting from that injury.”[28]
[26] T20.20–2.
[27] T20.31–2.
[28] T32.26–30.
It was common ground that the injury on 6 January 2006 occurred, and that the lump sum claim in respect of it required assessment by an AMS. The position adopted by the parties was appropriate. The basis of JCS’s denial of the claim was that the claim was excessive, that the 2006 injury was “minor”, that Mr Butler had recovered fully from the injury, and that the permanent impairment claimed “relates to the 2011 injury”. These matters did not involve issues of ‘liability’ for the purposes of s 321(4)(a) of the 1998 Act. They involved issues which went to “the degree of permanent impairment of the worker as a result of an injury” (that of 6 January 2006), an issue on which a MAC was conclusively presumed to be correct pursuant to s 326(1)(a) of the 1998 Act.
In his supplementary reasons the Arbitrator rejected a submission by the State, that “the existence of any permanent impairment is wholly within the province of the AMS”. He said that “whether there is a causal connection between an injury and impairment are matters for an arbitrator, not an AMS, to decide”[29].
[29] Supplementary reasons at [7].
In Haroun v Rail Corporation (NSW)[30] Handley JA (McColl JA and McDougall J agreeing) said:
“19 The scheme of the two Acts is to ensure that the degree of permanent impairment that results from an injury, and any contribution to the worker’s total impairment that is due to an earlier injury or pre-existing condition are assessed under and in accordance with Part 7 of the 1998 Act and not otherwise.
20 If there is a medical dispute of a kind defined in s 326(1) of the 1998 Act, an Arbitrator has no jurisdiction to decide it, but “may refer it for assessment” by an AMS: s 321(1). That section confers a power which an Arbitrator is bound to exercise in a proper case in aid of the private rights of the parties: Julius v Lord Bishop of Oxford (1885) App Cas 214, 235, 243, 244.”[31]
[30] [2008] NSWCA 192; 7 DDCR 139 (Haroun) at [19]–[20]. See also Bindah v Carter Holt Harvey Woodproducts Australia Pty Ltd [2014] NSWCA 264; 13 DDCR 156 (Bindah) at [112], Abou-Haidar v Consolidated Wire Pty Ltd [2010] NSWWCCPD 128; 12 DDCR 307 at [54].
[31]Haroun at [19]–[20].

In Trustees for the Roman Catholic Church for the Diocese of Bathurst v Hine[32] Meagher JA (Leeming and Simpson JJA agreeing) said:
“Whether a medical dispute existed was a jurisdictional fact depending on the true character of any dispute between the parties. If there was such a dispute concerning permanent impairment it was required to be resolved in accordance with a medical assessment under Pt 7.”[33]
[32] [2016] NSWCA 213 (Hine).
[33] Hine at [56].
In Jaffarie v Quality Castings Pty Ltd[34] (in which an appeal to the Court of Appeal was allowed in part, but not in relation to the following) Roche DP, after reviewing a number of the appellate authorities including Haroun and Bindah, said:
“… Bindah is clear that, notwithstanding the different approaches by Meagher JA and Emmett JA, the Commission’s jurisdiction is restricted by s 65(3) of the 1987 Act, which precludes the Commission (an Arbitrator or a Presidential member) from awarding permanent impairment compensation, if there is a dispute about the degree of permanent impairment, unless an AMS has assessed the degree of impairment. Logically, given the statements in Bindah, that restriction also prevents the making of an award for the respondent in such circumstances, such award being the equivalent of a finding that, because the effect of the injury has ceased, the worker has suffered a nil permanent impairment as a result of the injury.”[35]
[34] [2014] NSWWCCPD 79 (Jaffarie).
[35] Jaffarie at [261].
The dispute regarding the permanent impairment that resulted from the conceded injury on 6 January 2006 was a ‘medical dispute’. Consistent with authority, in the absence of assessment pursuant to Pt 7 of Ch 7 of the 1998 Act, the Commission could not determine that medical dispute. This limitation on the Commission’s jurisdiction extended to the entry of an award in favour of the relevant employer. The submissions of the parties at the arbitration hearing were correct, it was necessary that the medical dispute relating to the injury of 6 January 2006 be referred to an AMS. The entry of an award in favour of JCS, including on the permanent impairment claim against it, involved jurisdictional error.

The Claims Against JCS for Medical Expenses and Weekly Payments

Mr Butler pleaded a claim for medical expenses, including the cost of a total knee replacement by Dr Lennox (apparently that to the right knee performed on 6 October 2015[36]). At the arbitration hearing Mr Butler’s counsel, Mr Hickey, addressed first. He sought to discontinue “the claim for section 60 expenses and any application for a general order”[37]. This was acknowledged by Mr Strachan who appeared for JCS[38], and by Mr Tanner who appeared for the State[39], neither of whom specifically addressed the issue of expenses pursuant to s 60 of the 1987 Act.
[36] Mr Butler’s statement dated 29 September 2016 at [4].
[37] T28.22–5.
[38] T31.21.
[39] T56.10–1.
The Arbitrator’s formal findings and awards provided for an award in favour of JCS. They made a finding of injury to the left knee on 20 June 2011, in the course of Mr Butler’s employment with the State, and “consequential right knee injury” caused by favouring his left lower limb. The finding was that “incapacity results from [Mr Butler’s] left knee injury and his consequential right knee injury”. Consistent with this, the weekly award was entered only against the State. There was a similar causation finding at [61(g)] of the reasons, going to “medical, hospital and other treatment expenses”. The award for such expenses was also only against the State.
None of the parties takes the point about the state of the pleadings, on the appeal. JCS, understandably, simply seeks to maintain the award in its favour. The State submits:
“Moreover, the fact of that injury [6 January 2006] required that it be taken into account when determining whether the need for treatment, and any incapacity, resulted from such injury, and/or from the injury of 20 June 2011. The Arbitrator failed to address this issue.”
The State’s submission on this issue is correct. The reasons at [8]–[11] summarised aspects of the history and medical evidence dealing with the injury on 6 January 2006. This included quoting the following passage from Dr Hopcroft’s report dated 16 April 2008:
“From the patient’s accident of 6 January 2006 he has suffered a significant patellofemoral chondromalacia patellae and continues to have significant pain with the development of that post traumatic arthritic condition.”[40]
[40] Reasons at [12].
The reasons recorded the earlier agreement by JCS to compensate Mr Butler in respect of 2% permanent impairment. The Arbitrator referred to consultations with Mr Butler’s general practitioner from 24 December 2008 to 23 March 2011. He noted that these entries did not refer to right knee complaints between 24 September 2010 and 23 March 2011.[41] The Arbitrator did not refer to evidence supporting the proposition, or make any finding, that the effects of the injury of 6 January 2006 had ceased.
[41] Reasons at [13]–[14].
The Arbitrator then discussed the injury to the left knee on 20 June 2011, and whether that incident resulted in injury to the right knee. He rejected the argument that, when Mr Butler fell on 20 June 2011, he landed on both knees.[42] The Arbitrator’s view on that issue was open on the evidence, and is not challenged on this appeal. The Arbitrator continued:
“I have come to the view on the balance of probabilities that [Mr Butler] was suffering from underlying osteoarthritic degenerative changes in his right knee and that [Mr Butler’s] surgery to his left knee resulted in him favouring his left knee which in turn progressively accelerated his symptoms in respect of his right knee.”[43]
[42] Reasons at [27].
[43] Reasons at [30].
The Arbitrator discussed causation. He referred to Kooragang Cement Pty Ltd v Bates[44], Comcare v Martin[45] and Rail Services Australia v Dimovski[46]. The Arbitrator made the following factual finding on causation regarding the condition of the right knee:
“I accept in this case that the totality of the evidence establishes that due to the left knee injury on 20 June 2011 there was propensity for further injury and incapacity in respect of Mr Butler’s right knee. As a result of the left knee injury and left knee replacement surgery that propensity, in the case of Mr Butler’s, was that he had underlying degenerative osteoarthritis of the right knee which was more likely prone to cause him incapacity and a need for the surgery than had the 20 June 2011 incident not occurred. I am also satisfied that although underlying osteoarthritis contributed to the need for [Mr Butler’s] right knee surgery, the injury to [Mr Butler’s] left knee on 20 June 2011 materially contributed to the need for [Mr Butler’s] right knee surgery.”[47]
[44] (1994) 35 NSWLR 452.
[45] [2016] HCA 43; 258 CLR 467.
[46] [2004] NSWCA 267; 1 DDCR 648.
[47] Reasons at [31].
The above involves a finding that the condition of Mr Butler’s right knee, and the need for surgery, resulted from the injury of 20 June 2011. Such a finding was open on the evidence. However a condition can have multiple causes[48]. In ACQ Pty Limited v Cook the High Court described as “uncontroversial … the proposition that there can be multiple causes of the damage suffered by a plaintiff”[49]. In Bushby v Morris[50] the Privy Council, dealing with the New South Wales legislation, said:
“It is well established in common law contexts that an injury or incapacity may be attributable to more than one cause, in the legal sense, operating concurrently …
There is no room for an artificial rule of law that, in such a situation, one or other accident must necessarily be selected as the cause of the incapacity, apparently on an entirely arbitrary or capricious basis.”[51]
[48] Cluff v Dorahy Bros (Wholesale) Pty Ltd [1979] 2 NSWLR 435 at 439, Conkey & Sons Ltd v Miller (1977) 51 ALJR 585 at 585G, Calman v Commissioner of Police [1999] HCA 60; 167 ALR 91; 73 ALJR 1609 at [39], Murphy v Allity Management Services Pty Ltd [2015] NSWWCCPD 49 at [57]–[58].
[49] [2009] HCA 28; 237 CLR 656 at [27].
[50] [1980] 1 NSWLR 81 (Bushby v Morris).
[51] Bushby v Morris at 87.
In Accident Compensation Commission v CE Heath Underwriting & Insurance (Australia) Pty Ltd[52] Brennan J, after referring to authority including the above passage from Bushby v Morris, said:
“Similarly, liability under the Act to make weekly payments during incapacity or to pay a lump sum in redemption of that liability arises from each of the injuries which caused or materially contributed to the incapacity. Any employment in the course of which the worker sustained an injury causing or materially contributing to his incapacity attracts liability to the employer and to the insurer on risk at the time of the injury …”[53]
[52] [1994] HCA 68; 121 ALR 417 (Accident Compensation Commission).
[53] Accident Compensation Commission at [3].
In Sutherland Shire Council v Baltica General Insurance Co Ltd[54] Clarke JA (Priestley JA and Hunter AJA agreeing), dealing with apportionment pursuant to s 22 of the 1987 Act, applied Accident Compensation Commission. His Honour said:
“What the court will be obliged to do is to determine a question of fact which directs attention to the existence of a number of injuries in order to determine whether a worker’s incapacity could properly be held to have resulted partly from one or more of them. If the question is answered in the affirmative the apportionment exercise will need to be carried out.”[55]
[54] (1995) 39 NSWLR 87 (Sutherland Shire Council).
[55] Sutherland Shire Council at 95B.
The occurrence of the injury to the right knee on 6 January 2006 was not in dispute. The Arbitrator’s reasons clearly accepted that this was so. After discussing that injury, the Arbitrator moved on to discuss the injury on 20 June 2011, and to find a causal link between this later injury, the condition of Mr Butler’s right knee, and the need for the surgery involving a right knee replacement. The reasons do not deal with whether the effects of the injury on 6 January 2006 continued, and if so, with what consequences. They do not deal with whether that injury caused or materially contributed to the periods of incapacity for which weekly compensation was ordered, or the need for medical treatment, including surgery. As the State correctly submits, there was a failure to address this issue.
In Baira v RHG Mortgage Corporation Limited[56] Bathurst CJ said:
“However, if it can be shown that in reaching his conclusion the primary judge failed to deal in a satisfactory way with the substantial amount of evidence necessary to be dealt with before the relevant finding against the Iannis could be made, an appellate court on a rehearing is entitled to order a retrial: Fox v Percy supra [104]; State Rail Authority NSW v Earthline Constructions Pty Limited supra at [60], [90], [94]. This is because in such a situation there has not been a determination of the case upon a consideration of the real strength of the body of evidence presented.”[57]
[56] [2012] NSWCA 387 (Baira).
[57] Baira at [175].
In Waterways Authority v Fitzgibbon[58] Hayne J said:
“In the present case, however, reference to the ‘sufficiency’ of the primary judge’s reasons is not to be understood as seeking to invoke only those principles. Rather, because the primary judge was bound to state the reasons for arriving at the decision reached, the reasons actually stated are to be understood as recording the steps that were in fact taken in arriving at that result. Understanding the reasons given at first instance in that way, the error identified in this case is revealed as an error in the process of fact finding. In particular, it is revealed as a failure to examine all of the material relevant to the particular issue.”[59]
[58] [2005] HCA 57; 221 ALR 402; 79 ALJR 1816 (Fitzgibbon).
[59] Fitzgibbon at [130].
In Mifsud v Campbell[60] Samuels JA (Clarke JA and Hope AJA agreeing) after referring to Soulemezis v Dudley Holdings Pty Ltd[61], said:
“… the failure to explain the basis of a crucial finding of fact involves a breach of the principle that justice must not only be done but must be seen to be done.”[62]
[60] (1991) 21 NSWLR 725 (Mifsud).
[61] (1987) 10 NSWLR 247.
[62] Mifsud at 728C.
For reasons given above, the Arbitrator’s reasons, dealing with the extent to which the right knee symptoms represented a consequential condition resulting from the injury on 20 June 2011, did not decide the issue of whether the effects of the injury on 6 January 2006 continued, and the significance of that to the relief claimed. There were no other reasons given for the award in favour of JCS, and the failure of all heads of Mr Butler’s claim against JCS.
It follows that the challenge in Ground No 1 of the appeal, against the awards in favour of JCS on the claims for lump sum compensation, weekly compensation and benefits under s 60 of the 1987 Act, is successful. For reasons which follow, the appropriate orders on disposition of the appeal involve remitter of the matter for re-determination by a different Arbitrator. It is not, in the circumstances, necessary to deal with Ground No 2.

DISPOSITION OF THE APPEAL

The appropriate order is that the matter be remitted to a different Arbitrator for re-determination.
Injury to the right knee, in the incident on 6 January 2006, was (properly) not placed in issue by JCS. When the issues regarding any liability of JCS are determined, it is realistically possible that the findings will give rise to rights of contribution between JCS and the State pursuant to s 22 of the 1987 Act.[63] Preservation by the State, of any right it has to contribution, was the basis of its opposition to the making of consent orders between Mr Butler and JCS at the arbitration hearing, and the Arbitrator’s refusal to do so.[64] In the course of that application, Mr Strachan (appearing for JCS) indicated that rights of contribution could not be appropriately dealt with at that arbitration hearing, they not having been previously raised.[65] Any rights to contribution were not further argued, in the circumstances, at the arbitration hearing.
[63] See Sutherland Shire Council and the passage quoted at [41] above.
[64] T2.3–7.13.
[65] T4.3–19.
On remitter, it will be possible for the parties to ventilate their positions on contribution pursuant to s 22 in advance of a further arbitration hearing, and for any rights to contribution to be dealt with at the hearing, by the different Arbitrator.
The Arbitrator made an order for the payment of s 60 expenses,[66] in circumstances where Mr Butler’s counsel, during his submissions, sought to withdraw that aspect of the claim.[67] The submissions, by the legal representatives of the employers, then proceeded on the basis that the claim pursuant to s 60 was not pursued.[68] The order made was one on the basis that treatment for both the left and the right knees resulted solely from the injury on 20 June 2011. The causation finding dealing with the requirement for right knee surgery, related it solely to the consequential condition of the right knee as a result of the injury on 20 June 2011. No associated issues of procedural fairness were raised on this appeal. The parties should, before the further arbitration hearing, turn their minds to (and give notice of) whether orders pursuant to s 60, including any orders that raise specific causation issues, are to be sought, so that they can be appropriately addressed.
[66] Reasons at [61(g)].
[67] T28.23–5.
[68] T31.21, T56.10–1.

DECISION

The appellant, where it is described, is amended to read “State of New South Wales”.
The Certificate of Determination dated 14 June 2017 as amended by the Certificate of Determination dated 4 July 2017 is revoked.
The matter is remitted for re-determination by another Arbitrator.

Michael Snell

Deputy President

3 November 2017