Stratco (NSW) Pty Ltd v Korunovic - [2009] NSWWCCPD 16

WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:	Stratco (NSW) Pty Ltd v Korunovic [2009] NSWWCCPD 16
APPELLANT:	Stratco (NSW) Pty Ltd
RESPONDENT:	Radomir Korunovic
INSURER:	GIO General Limited – Agent for NSW Workcover Scheme
FILE NUMBER:	A1-5048/08
DATE OF ARBITRATOR’S DECISION:	7 October 2008
DATE OF APPEAL DECISION:	17 February 2009
SUBJECT MATTER OF DECISION:	Review of credit findings where no oral evidence called; proof of facts through medical histories; application of the ‘disease’ provisions; duty to give reasons.
PRESIDENTIAL MEMBER:	Acting Deputy President Snell
HEARING:	On the papers
REPRESENTATION:	Appellant:	Turkslegal
Respondent:	Gajic & Co
ORDERS MADE ON APPEAL:	The decision of the Arbitrator dated 7 October 2008 is varied by substituting the figure “$154.15” for the figure “$274.15” in paragraph [5]. The decision is otherwise confirmed.
The Appellant Employer is to pay the costs of the Respondent Worker of this appeal.

BACKGROUND TO THE APPEAL

On 5 November 2008 Stratco (NSW) Pty Ltd (‘the Appellant Employer’) sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Workers Compensation Commission (‘the Commission’) against a decision, dated 7 October 2008.

The Respondent to the Appeal is Radomir Korunovic (‘the Respondent Worker’).

The Respondent Worker was born in 1954 in the then Yugoslavia. He had approximately ten years schooling in Serbia, then trained there as a fitter and turner, after which he carried out factory work. He came to Australia in about 1981, and carried out factory work in this country, before commencing in the employ of the Appellant Employer in about 1992. The Appellant Employer manufactured guttering and roofing, and the Respondent Worker carried out process work in its factory. He has a dependant wife.

The Respondent Worker was apparently in good health, until being injured in a motor accident whilst driving to work on 19 January 1998. He claimed compensation from the Appellant Employer, which accepted liability on a voluntary basis.

He was knocked unconscious in the accident of 19 January 1998, and also sustained multiple orthopaedic injuries, lacerations and contusions. The complaints are detailed in a report of his general practitioner Dr Khan dated 15 November 2002. He came under the care of an orthopaedic surgeon, Dr Lee, who at initial consultation (described in a report dated 25 March 1998) recorded “multiple injuries to his neck, right knee, left ankle and foot”. X-rays of the left foot and ankle indicated an avulsion of the lateral cortex of the lower fibula. Dr Lee also describes a CT scan as having demonstrated “lateral disc prolapse at C4/5”. Dr Lee carried out an arthroscopy of the right knee on 7 April 1998, which revealed a “torn posterior horn of the medial meniscus”, which he treated by way of partial medial menisectomy. Ongoing complaints recorded by Dr Lee thereafter in 1998 and 1999 were predominantly of the right knee and left ankle. In a report dated 13 August 1998 Dr Lee assessed various permanent losses involving the right arm, right leg, left ankle, neck and back. Notwithstanding this, there was little complaint of back symptoms to Dr Lee, or other medical practitioners, around that time.

The Respondent Worker was off work for approximately three months after the motor accident. The Respondent Worker’s statement dated 8 December 2006 records he resumed on normal duties. He told Dr Trivett on 8 February 2002 that this was “effectively the work of a sheet metal worker”, and was “very heavy”. He told Dr Bodel on 18 November 1998 that he had resumed work, but was having considerable difficulty and frequent days off. By 26 November 2001, when examined by Dr Irani, he reported he was carrying out his normal duties, although with some difficulty.

The Respondent Worker claimed lump sums pursuant to sections 66 and 67 of the Workers Compensation Act 1987 (‘the 1987 Act’) in respect of losses and impairments resulting from the motor accident, in correspondence of 27 August 1998. This claim was resolved without litigation, and an agreement was registered pursuant to section 66A of the 1987 Act on 23 March 1999. He recovered sums in respect of 20% permanent impairment of the neck, 10% permanent impairment of the back, 12.5% permanent loss of the right leg below the knee, and 14% permanent loss of the right arm above the elbow. He also recovered a sum of $16,050 pursuant to section 67 for pain and suffering.

When examined by Dr Irani on 26 November 2001, back complaints had become more prominent, the doctor recording “Low back pain, which he described as a continuous ache”. The Respondent Worker on 8 February 2002 told Dr Trivett he had “some degree of constant pain in the upper lumbar region of his back”, and said “he first noticed this pain (upper lumbar and base of the neck) a week or so after the accident but did not have any treatment for it”. He told Dr Trivett he had left foot pain relating to activity at the workplace and wearing a work boot. He said “for the past year he has had constant pain in the upper lumbar region…not too severe but it is there all the time and it is becoming more of a problem”. The Respondent Worker continued in the Appellant Employer’s employ.

Proceedings were commenced in the Compensation Court of NSW, number 3627 of 2002. The only pleadings before me are undated Terms of Settlement, which describe an “Award in favour of the Respondent (the employer) in respect of the claim for weekly compensation”, and an award of “$7,500 in respect of 10%loss of use/impairment of the Applicant’s (the worker’s) left leg at or above the knee”.

The Respondent Worker lodged a further claim form dated 20 July 2006 in which he claimed that “Due to the nature and conditions of employment from 2000 to date, further aggravated injuries to neck, back, right arm and right leg”, and that he also injured the left leg, left arm, and both feet. Dr Sun, a rehabilitation consultant, recorded “He presented in July 2006 with further increase in the neck, low back and right knee pain. Following review by his specialist his work hours were reduced to 4 hours 5 days.”

There is another claim form dated 1 November 2006, claiming the Respondent Worker suffered injury to the back and neck on 27 October 2006, when he “tripped over offset and fell against machine”. The Respondent Worker’s statement dated 8 December 2006 describes the incident in this way:

“24. In the process of carrying the offsets to the storage area a piece of my clothes or an offset I was carrying caught onto the offsets that were on the trolley. Some pieces fell down, I stepped on one of those, lost my footing and that caused me to drop a number of offsets I was carrying. For about two or three metres in an attempt to regain my balance, I overbalanced and fell and struck the apron of the guillotine.
25. I hit my left forearm then my left side then my lower back on the guillotine and this aggravated my arm, back and neck pain. The pains were so severe that I was shaking and could not control it. The pain was in my lower back, neck, left forearm area near the elbow.”

After this incident the Respondent Worker was taken by ambulance to the Nepean Hospital. Notes from that hospital indicate he complained of symptoms in the neck, thoracic back, lower back, left elbow, left flank and right knee. The history states he had suffered from chronic back and neck pain since a motor vehicle accident in 1998, and was on restricted duties at work. The Respondent Worker was off work from 27 October 2006 until about mid-2007. His statement dated 30 June 2008 indicates he resumed with the Appellant Employer at about that time, working three hours per day, three days per week, with a ten minute break. He said he was worried about whether he could do the work, but felt he had no choice but to go back. He found it hard. Whilst working his back and neck ached and he suffered from quite bad headaches. He was “walking funny” as he was trying to protect his right knee, and also due to back pain. In late June or early July 2007 he noticed sharp pain in his left knee.

On 1 August 2007 the Respondent Worker was observed, by an investigator engaged by the Appellant Employer. The investigation report dated 10 August 2007, together with a DVD of the video exposed at that time, are in evidence, and relied on by the Appellant Employer. The activities involved the demolition of a fence, and construction of a new one to replace it, at a church at Mt Druitt. In his statement dated 30 June 2008 the Respondent Worker says he tried to help out a friend in about August 2007, and again about six or eight weeks later. He realised he could not do work of that nature – “it was too hard for me”.

The Appellant Employer’s insurer (‘the insurer’) made voluntary payments of compensation up to 24 June 2007, and indeed it appears some payments were made beyond that date, for which the Appellant Employer sought credit (see T2.45).

On 14 September 2007 the Appellant Employer wrote to the Respondent Worker, asserting that inconsistencies between the Respondent Worker’s version of how he was injured on 27 October 2006, and CCTV footage of that incident, were such that the Respondent Worker had “deliberately sought to mislead” the Appellant Employer and the insurer, and that this constituted serious and wilful misconduct. By letter dated 12 October 2007, the Appellant Employer summarily dismissed the Respondent Worker, as a disciplinary measure, due to this alleged serious and wilful misconduct.

The insurer issued a section 74 Notice dated 4 June 2008, declining liability in respect of the claims referred to in [10] and [11] above. The Notice disputed the occurrence of the injuries, put section 9A of the 1987 Act in issue, and disputed there was any liability to pay weekly compensation, lump sum compensation, or medical expenses.

An Application to Resolve a Dispute (‘the Application’) was lodged on the Respondent Worker’s behalf on 3 July 2008. By way of defence the Reply relied upon the matters previously specified in the section 74 Notice.

The matter was listed for conciliation/arbitration conference on 15 September 2008. Both parties were represented by counsel. The allegations of injury were refined (described at T1) without objection, to reflect the following allegations:

(i)injury to the neck, back and right knee resulting from the nature and conditions of employment between approximately April 1998 and 14 August 2006;
(ii)aggravation of injury to the neck, back and right knee resulting from the incident of 27 October 2006 (the mechanics are more fully described in the Application and at T1);
(iii)development of pathology in the left knee resulting from the Respondent Worker favouring his left knee due to the injuries above.

No oral evidence was called. The arbitrator dealt with an objection to certain CCTV footage on which the Appellant Employer sought to rely, heard addresses by both counsel, and reserved his decision.

THE DECISION UNDER REVIEW

The ‘Certificate of Determination’, dated 7 October 2008 records the Arbitrator’s orders as follows:

“1. The Applicant sustained injury within the meaning of s.4 of the Workers Compensation Act 1987 (‘the Act’) to his neck, back and right knee, as a result of the nature and conditions of his employment with the Respondent from April 1998 to 14 August 2006.
2.The Applicant’s employment with the Respondent was a substantial contributing factor, within the meaning of s.9A of the Act, to the injury to the Applicant’s neck, back and right knee that resulted from the nature and conditions of the Applicant’s employment.
3.The condition of the Applicant’s left knee is causally related to the injury sustained to his neck, back and right knee, as recorded in Order 1 above.
4.Award for the Respondent in respect of the Applicant’s allegation of injury on 27 October 2006.
5.The Respondent is ordered pursuant to s.40 of the Act, to pay weekly compensation to the Applicant at the rate of $274.15 per week from 24 June 2007 to date and continuing, with credit to be given to the Respondent for any payments made during that period.
6.The Respondent is ordered, pursuant to s.60 of the Act, to pay the Applicant’s reasonably necessary medical expenses associated with treatment of the Applicant’s neck, back and knees, upon production of accounts and/or receipts.
7.The matter is remitted to the Registrar for referral to an Approved Medical Specialist.
8.The Approved Medical Specialist shall be requested to provide an assessment of whole person impairment, with reference to a deemed date of injury of 14 August 2006, in respect of:
a.injury to the Applicant’s cervical spine, thoracic spine, lumbar spine, and right lower extremity (right knee), resulting from the nature and conditions of the Applicant’s employment with the Respondent; and
b.causally related pathology affecting the left lower extremity (left knee).

9.The materials to be provided to the Approved Medical Specialist shall comprise:
a. Application to Resolve a Dispute and all attachments; and
b. Reply and all attachments.

10.The Respondent is ordered to pay the Applicant’s costs as agreed or assessed.”

The Certificate of Determination was accompanied by fifteen pages of Reasons for Decision (‘the reasons’).

ISSUES IN DISPUTE

The grounds of appeal assert the arbitrator erred in:

(i)failing to consider, or properly consider, the medical evidence;
(ii)failing to consider whether the Respondent Worker was a credible witness;
(iii)failing to properly consider the effect of a finding that injury did not occur in the incident of 27 October 2006, on the Respondent Worker’s credit;
(iv)failing to give adequate reasons.

The Appellant Employer argues an award in its favour should be substituted for that entered by the arbitrator.

The Respondent Worker takes issue with the various grounds, and argues the appeal should be dismissed.

ON THE PAPERS REVIEW

Section 354(6) of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’) provides:

“(6) If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”

Having regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submission by both parties that the appeal can proceed to be determined on the basis of these documents, I am satisfied that I have sufficient information to proceed ‘on the papers’, without holding any conference or formal hearing, and that this is the appropriate course in the circumstances.

LEAVE

Before proceeding to deal with an appeal the Commission must determine whether the application meets the requirements of section 352 of the 1998 Act.

The appeal was lodged within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act.

The sum awarded exceeds $5,000, and the whole of the award is appealed against, satisfying the requirements of section 352(2) of the 1998 Act.

I grant leave to appeal.

DISCUSSION AND FINDINGS

Scope of ‘Review’ Pursuant to Section 352 of the 1998 Act

In Deadman v John A Gilbert Pty Limited t/as Kirklands Buslines [2008] NSWWCCPD 105 I set out a number of authorities of the Court of Appeal dealing with the scope of review pursuant to section 352 of the 1998 Act. It is necessary that I apply those principles in conducting this review. As the grounds of appeal in some respects invite review of the approach taken by the arbitrator to issues of credit, it is appropriate that I refer to the following passage of the judgment of Basten JA in Tan v National Australia Bank [2008] NSWCA 198:

“Where the statute refers to an “appeal”, as opposed to a review, it may be intended that the appellate tribunal could vary or discharge the decision below only if satisfied that it was affected by a relevant error. However, the concept of an “appeal” does not necessarily invoke the precondition of a finding of error: an appeal may be by way of hearing de novo, where “the matter is heard afresh and a decision is given on the evidence presented at that hearing”: Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission [2000] HCA 47; 203 CLR 194 at [13]. Furthermore, as noted in McKee v Allianz Australia Insurance Ltd [2008] NSWCA 163 at [64], the term “review” may connote a fresh consideration of a matter, without the need to find error before setting aside or varying the decision below. But even in a hearing de novo the appellate tribunal will not necessarily disregard conclusions reached by the original decision-maker. Constraints may arise at various stages. First, in deciding the primary facts, the appellate tribunal may defer to findings made by a decision-maker who has resolved conflicts in the course of hearing and assessing oral testimony. In such a case, the appellate tribunal which does not hear the witnesses, will be constrained to approach the findings in a manner similar to that described in Fox v Percy[2003] HCA 22; 214 CLR 118. Secondly, the appellate tribunal may be constrained in drawing inferences, not having seen the witnesses, but to a lesser extent, for reasons analogous to those identified in Warren v Coombes[1979] HCA 9; 142 CLR 531 at 551, despite there being no need to find error. Thirdly, a similar constraint may arise in relation to the exercise of a discretionary power, again recognising that the appellate tribunal may not be required to find error: cf House v The King[1936] HCA 40; 55 CLR 499 at 505.”

In Fox v Percy (2003) 214 CLR 118 Gleeson CJ, Gummow and Kirby JJ at [25] and [26] said:

“Within the constraints marked out by the nature of the appellate process, the appellate court is obliged to conduct a real review of the trial and, in cases where the trial was conducted before a judge sitting alone, of that judge's reasons. Appellate courts are not excused from the task of "weighing conflicting evidence and drawing [their] own inferences and conclusions, though [they] should always bear in mind that [they have] neither seen nor heard the witnesses, and should make due allowance in this respect". In Warren v Coombes, the majority of this Court reiterated the rule that:
"[I]n general an appellate court is in as good a position as the trial judge to decide on the proper inference to be drawn from facts which are undisputed or which, having been disputed, are established by the findings of the trial judge. In deciding what is the proper inference to be drawn, the appellate court will give respect and weight to the conclusion of the trial judge but, once having reached its own conclusion, will not shrink from giving effect to it."
As this Court there said, that approach was "not only sound in law, but beneficial in ... operation".
After Warren v Coombes, a series of cases was decided in which this Court reiterated its earlier statements concerning the need for appellate respect for the advantages of trial judges, and especially where their decisions might be affected by their impression about the credibility of witnesses whom the trial judge sees but the appellate court does not. Three important decisions in this regard were Jones v Hyde, Abalos v Australian Postal Commission and Devries v Australian National Railways Commission. This trilogy of cases did not constitute a departure from established doctrine. The decisions were simply a reminder of the limits under which appellate judges typically operate when compared with trial judges.”

In the circumstances of the current matter, no oral evidence was called before the arbitrator, by either party. The arbitrator dealt with the matter on the basis of the documentary material tendered by the parties, and submissions by counsel (of which I have a transcript). I am in as good a position as the arbitrator to consider the issues going to credit that are raised in this appeal.

Does the Finding Regarding the Incident of 27 October 2006 Impact Adversely on the Respondent Worker’s Credit?

There is some overlap between the first, second and third of the grounds of appeal. The appellant deals with these grounds together, in its submissions. It is convenient to deal with the third of the grounds initially, as it is relevant to the appropriate significance to be attached to a finding made by the arbitrator, regarding the alleged injury on 27 October 2006. The arbitrator’s consideration of that allegation is at [42] to [45] of his reasons, particularly at [44]. The incident had been recorded by a CCTV camera in the Appellant Employer’s premises. After setting out the Respondent Worker’s version of the incident, and the fact the Respondent Worker was taken to Nepean Hospital by ambulance after the incident, the arbitrator considered the CCTV footage:

“44. I have viewed the video recording of the incident of 27 October 2006. The Applicant is seen to fall slowly towards the guillotine and to stretch out, breaking the fall by holding the apron of the guillotine, and then lowering himself down onto his left knee. Having repeatedly viewed the video material, I do not consider that the Applicant suffered any injury in that incident. The velocity of the fall was slow, and the Applicant avoided trauma to the spine by cushioning the fall with his hands. The Applicant did not fall onto his right knee. That body part was not involved. The Applicant’s lowering of himself onto his left knee was controlled and would not have resulted in injury to that body part. I cannot accept that any pathological change could have resulted from the essentially innocuous incident recorded by one of the Respondent’s CCTV cameras on 27 October 2006.”

For this reason, the arbitrator found, at [45] of his reasons, that the Respondent Worker did not injure his neck, back and right knee on 27 October 2006.

The Appellant Employer’s submissions, where they purport to deal with the third of the grounds of appeal, in fact deal with surveillance material, and the arguable effect of that material on credit, and findings of ability to earn (the lower end of the section 40 equation). However the passage of the submissions dealing with the first two grounds, also addresses the third ground, at [40] to [42] of the Appellant Employer’s submissions. The submission effectively is that the finding made by the arbitrator, regarding whether the incident of 27 October 2006 caused injury, was adverse to the Respondent Worker on credit. This is particularly so, it is submitted, given the severity of symptoms at the time, as claimed in the Respondent Worker’s statement (set out at [11] above). It is submitted the finding that no pathological change occurred in the incident, particularly when considered in conjunction with surveillance evidence, “ought to have led the arbitrator to view the entirety of the Applicant’s evidence, including the history provided to the doctors, as discredible (sic)”.

There were two pieces of CCTV evidence. That of 27 October 2006 depicted the incident in which the Respondent Worker allegedly sustained injury. There was further CCTV footage exposed on 31 October 2006, when the Respondent Worker returned to the Appellant Employer’s premises with a medical certificate. On that date the operations manager, Ian Jansen asked the Respondent Worker to re-enact what had happened, which the Respondent Worker did. There are comments by Mr Jansen in a statement that forms part of a factual investigation report, on which the Appellant Employer relied. Unfortunately the front page (which includes the date of the statement) is missing. Mr Jansen expressed his view of the CCTV footage from 27 October 2006, that it “appears as though he (the Respondent Worker) was waiting for an appropriate time to stage his injury”. Mr Jansen’s description of what the CCTV footage showed was that the Respondent Worker’s “original version of what had happened was not consistent with the CCTV footage”. The re-enactment then is said to demonstrate the Respondent Worker “stuck to his original version of what had happened”.

At the arbitration hearing, the Respondent Worker’s counsel objected to the CCTV footage being used, on the basis the Appellant Employer was attempting to “allege fraud and dishonesty”, and no allegation of fraud had been made in the section 74 Notice, which set out the basis on which the Appellant Employer disputed the claim. In seeking to have the CCTV footage admitted, the Appellant Employer’s counsel said the following, regarding the use the Appellant Employer sought to make of the footage:

“…I don’t which (sic) fraud what I allege can be put as the worker is mistaken about what happened to him on the day. The video evidence will be displayed to you to compare and contrast with what the worker says happened on the day, and if he is mistaken about his belief as to what happened, that can be shown by the video without it being alleged to be fraud. You can challenge someone’s bona fides, as my friend says but it doesn’t necessarily make it that you are alleging he has acted fraudulently. You can say that he is not being truthful without saying that he is perpetrating a fraud as well. You can say he embellishes. You can say, as I say, he is wrong, but no consciousness of guilt can attach to that such as to make out fraud.” (at T5.30)

And at T6.55:
“So it is not, in my submission, any allegation of fraud, nor would it be said to me to be that, and clearly it is an allegation made that challenges the credit of the applicant without being one in which there’s an allegation that he’s perpetrating a fraud.”

Ultimately the arbitrator admitted the CCTV footage from 27 October 2006, and the Appellant Employer did not press the footage from 31 October 2006 (see T12.50).

The finding made by the arbitrator (described at [34] and [35] above) was not a finding the Respondent Worker had not been involved in an incident on 27 October 2006. Clearly he had, it was shown in the CCTV footage, witness statements detailed events surrounding it, and he was taken to hospital shortly after the incident, and gave a relatively consistent history of it there. Nor was it a finding the incident of 27 October 2006 was a staged accident, notwithstanding the view adopted by Mr Jansen of the Appellant Employer. Indeed a finding it was a staged incident would, in my view, have gone beyond the use the Appellant Employer submitted could be made of the CCTV footage. Neither party has challenged the finding made by the arbitrator, that the incident of 27 October 2006 did not result in injury to the Respondent Worker. I also have viewed the footage, and the view formed by the arbitrator was clearly open to him.

Having made a finding the Respondent Worker did not sustain injury in that incident, the arbitrator did not, in his reasons, consider whether this had an impact upon the Respondent Worker’s credit, in a more general sense. In my view he should have. Whether a comparison between the lack of significance of the incident revealed by the CCTV footage (and found by the arbitrator), and the Respondent Worker’s descriptions of symptoms after the incident, was indicative of embellishment or exaggeration, was a specific question raised by the Appellant Employer. It had the capacity to take on added significance, given the other video material relied upon by the Appellant Employer, also submitted to demonstrate inconsistency between the Respondent Worker’s presentation to doctors, and his capacity when observed (see T27.15). It should have been dealt with.

The Appellant Employer puts the submission in the following fashion:

“It is submitted that the adverse finding made by the arbitrator ought not to have been confined solely to the one incident on 27 October 2006. It is submitted that the credit finding made against the Applicant when placed in conjunction with that seen by the surveillance operatives of 1 August 2007, ought to have led the arbitrator to view the entirety of the Applicant’s evidence, including the history provided to the doctors, as discredible”

The submission reflects a passage of the judgment of Handley JA in Malco Engineering Pty Limited v Ferreira (1994) 10 NSWCCR 117 (‘Ferreira’) where his Honour said:

“In my opinion the perjury by the worker required the trial Judge to carefully assess the rest of his evidence in order to determine its honesty and reliability. Some of his evidence may have been acceptable because it was confirmed by other independent or objective evidence. However where the worker’s evidence was not independently supported it clearly had to be assessed with great care to determine whether it could properly be accepted as proof of any matter that was in issue in the proceedings.

The Respondent Worker’s description of symptoms immediately after the incident (set out at [11] above) was that the pain was so severe he was shaking and could not control this. This behaviour does not appear to have been present when he attended at the Nepean Hospital, and I would not draw any inference adverse to the Respondent Worker based on this description of the initial symptoms. However a number of medical practitioners thereafter record histories of a significant increase in the Respondent Worker’s symptoms, after the incident of 27 October 2006. On 20 February 2007 Dr Bleasel, after recording a history of the incident of 27 October 2006, recorded “His pain has been greatly increased since this fall and he has not been back to work. He is not improving and does not see any prospect of a return to work.” On 30 July 2007 Dr Machart recorded a history of the incident, and that “He claimed that this caused the severity of the existing back pain to increase by approximately 70%.”

Neither party has specifically challenged the arbitrator’s finding that no injury occurred in the incident. It is however necessary that I deal with the evidence regarding the incident and its significance, in considering the Appellant Employer’s argument that the nature of the incident was such that it impacts adversely on the Respondent Worker’s credit.

There is little support in the medical evidence for the proposition the incident of 27 October 2006 changed any pathology from which the Respondent Worker suffered, or was causative of ongoing symptoms. The report of Dr Bleasel that post-dates the incident (dated 20 February 2007), records a history of markedly increased symptoms after it (referred to at [44] above). Dr Bleasel regarded the Respondent Worker as wholly unfit for work at that time. He had previously (in the report of 26 July 2006) taken a history of ongoing light work, although he regarded the Respondent Worker as having “no hope of finding work on the open market”. On 20 February 2007 Dr Bleasel did not think there was any change in the level of whole person impairment compared with that he had assessed previously. Although the report describes the Respondent Worker’s pain as greater on the later occasion, it does not contain any expression of opinion that ongoing problems were caused by the incident, or that pathology was changed by the incident.

Dr Sun’s report dated 27 February 2008 records a history of the incident. However the opinion passage of the report ascribes causation of the Respondent Worker’s symptoms to a combination of the motor vehicle accident in 1998, and the “nature and conditions” of employment from “mid-1998 until October 2007”. It does not describe the 27 October 2006 incident as being causative of pathology or symptoms. Dr Lee’s report dated 27 November 2006 describes a history of an event that is probably the incident of 27 October 2006, but simply suggests “Now, after the current injury, I believe it is even more important for him to have this MRI scan to document how bad the prolapse disc is.” His reports otherwise do not say the incident was causative of changed pathology or symptoms. Dr Machart, in the Appellant Employer’s case, records a history of the incident increasing back pain by “approximately 70%”. Dr Machart however describes the incident as an “exacerbation”, says the incident involved a “non-structural injury”, and the Respondent Worker should have recovered from it within one month.

The only real medical support for the proposition the incident caused any significant symptoms is in the certificates of the general practitioner Dr Khan. His certificate dated 21 November 2006 records a “date of injury’ of 27 October 2006, gives a diagnosis of “Neckache, Backache (Aggravation of Injury)” and describes the Respondent Worker as unfit to work. His certificates thereafter do not refer to a date of injury, but continue to describe the diagnosis in the same way, until that dated 3 September 2007, in which the reference to “aggravation” does not appear. The certificates (unsurprisingly, I mean no criticism) contain no specific expression of opinion regarding the causal relationship between the incident of 27 October 2006 and symptoms thereafter. In considering the medical evidence, I am more assisted by the specialist practitioners who have provided reports.

The CCTV footage of the incident suggests the Respondent Worker was able largely to control his fall, and the level of trauma does not appear great. Considering both that footage, and the medical evidence which deals with the incident, I am of the view the incident was a relatively trivial one. I agree with the arbitrator’s conclusion the evidence does not establish any pathological change occurred in the incident. Given that the occurrence of the fall is not challenged per se, and that the Respondent Worker received hospital treatment immediately after it, I would not conclude the Respondent Worker suffered no injury at all in the incident. However I accept the opinion of Dr Machart, that any aggravation or exacerbation of the Respondent Worker’s symptoms occasioned by the incident ceased within one month of its occurrence.

In my view this leads to the conclusion that those histories of the Respondent Worker described at [44] above, are indicative of preparedness on his part to exaggerate the level of symptoms from which he suffers.

Failing to Consider Whether the Respondent Worker was a Credible Witness

The Appellant Employer at the arbitration hearing showed video of the Respondent Worker carrying out activities on 1 August 2007. The surveillance report dated 10 August 2007 indicates the location of this activity was a church at Mt Druitt. The Respondent Worker’s statement of 30 June 2008 indicates the friend he tried to help out was Michael Medic. During most of the video the Respondent Worker is in the company of another man, although the Respondent Worker carries out more of the physical activities at the site. The truck at the site is labelled “Michael Medic’s Fencing”. The Respondent Worker relied upon a statement of Momcilo Michael Medic dated 6 May 2008. It states Mr Medic was having troubles with his left shoulder at the time, and the Respondent Worker volunteered to help. It states the Respondent Worker helped twice on the job at Mt Druitt, and once (a few months later) on another job at Cabramatta. Mr Medic’s statement says that after the Cabramatta job the Respondent Worker asked him to find someone else to help. It says the Respondent Worker was not paid for his assistance on these jobs.

The video material demonstrates moderately arduous physical work. Without seeking to be exhaustive, the Respondent Worker dismantles a paling fence, using a hammer or mallet in his right hand to knock palings from the framework to which they are attached. He pulls the timber from the framework with both hands. He frequently bends fully at the waist to carry out activities at ground level. He works with his arms above head height. He bends, picks up, and carries bundles of timber palings. When he experiences difficulty removing palings from time to time, he uses his left foot to separate them from the framework. He uses a crowbar above head height to lever timber from the framework. He uses a circular saw in both hands, including whilst bent forward, to cut timber. He bends and lifts what appears to be a bag of cement. He uses a post hole digger vigorously, forcing it into the ground, on many occasions. He squats and rises with no apparent difficulty. He works above head height positioning crossbars on posts, and securing them with a power tool. He jumps up and down, putting pressure on a post to force it into the ground. The surveillance report dated 10 August 2007 indicates the Respondent Worker was present at the site, involved in activity on 1 August 2007, from 10.16am to 3.10pm. It states the Respondent Worker was still active at the site when the investigator left at 3.10pm to avoid arousing suspicion.

The arbitrator did not, in his reasons, engage in any consideration of whether the video material affected the Respondent Worker’s credit. He dealt with the video at [48] of his reasons, saying:

“I have viewed the video material recording surveillance of the Applicant on 1 August 2007. That material shows the Applicant performing arduous manual work. He is seen to bend, to carry timber, to apply force in using a post-hole digger, and to lift a bag of cement. The evidence of Michael Medic is that the Applicant assisted him at a job in Mt Druitt on two occasions, and on one further occasion in Cabramatta. The video material does demonstrate that on a particular occasion the Applicant performed physically demanding work. In view of the opinions of all of the specialists, the Applicant’s conduct in engaging as he did on 1 August 2007, was inappropriate and reckless. It does not represent a capacity to engage in continuing manual labour on a daily basis.”

The video material contrasts with presentations by the Respondent Worker to doctors, around the time the video was exposed. In his report dated 26 July 2006 (following examination that day) Dr Bleasel recorded:

“Head and neck movements, there is much pain with flexion but also pain with rotation and there is tender spasm of paravertebral muscles.
Arm movements of the right shoulder, there is pain with abduction 100 degrees and extension 20 degrees, crepitus and pain with passive internal rotation.
Lumbar spine, half expected range and spasm of paravertebral muscles.
There is pain in the right knee at 80 degrees of flexion when he squatted but with this test his knee gave way and he collapsed to the floor.”

Dr Bleasel in a report dated 20 February 2007, following an examination on the same day, recorded “His pain has been greatly increased since this fall (27 October 2006) and he has not been back to work. He is not improving and does not see any prospect of a return to work.” And “Because his wife is disabled after a stroke he has to do what he can to shop and prepare food.”.

Dr Thomson examined the Respondent Worker at the insurer’s request on 26 September 2006. He records being told of the following “Present Activities”:

“Mr Korunovic can drive a motor vehicle but not for very long. He does help his wife with the cooking and is doing the cooking at the moment because his wife is not well. She apparently had a stroke and is in rehabilitation.
He occasionally does some vacuuming. He uses a machine for washing the clothes.
He does do a little shopping but he does not carry heavy shopping bags.
He does not do any gardening or lawnmowing.”

Dr Machart examined the Respondent Worker at the Appellant Employer’s request on 30 July 2007, two days before the video was exposed. There were complaints of pain in the low back, mid-thoracic spine, neck, scalp, right forearm and right knee. The Respondent Worker “claimed that when walking 40 minutes or longer the pain in the back, neck and headaches became ‘unbearable’”. “The right arm pain was described as intermittent” “The right knee pain was intermittent and caused instability whereby his leg would sometimes shake.” “He walked slowly. He took a considerable amount of time getting out of a chair.” “He demonstrated minimal flexion” on examination of the lumbar spine.

Dr Sun prepared a report dated 27 February 2008 after examining the Respondent Worker on that date. He records a history of “difficulty with certain housework such as vacuuming, carrying shopping and putting dishes away. He has not driven since the accident because of the low back pain. Activities affected include casual construction work, fishing and soccer.”

Although the sequence is not totally clear from the Respondent Worker’s statement dated 30 June 2008, that statement at [4] to [10] suggests that from about mid-2007 to October 2007 the Respondent Worker was working with the Appellant Employer for three hours per day, three days per week, with a ten minute break. The history recorded by Dr Machart on 30 July 2007 is of the Respondent Worker commencing “light duties part time” three weeks prior to that examination. Doing these hours, the Respondent Worker states he “found it pretty hard”, his neck and back were aching, and headaches were “also quite bad”. He was “walking funny because (he) was trying to protect (his) right knee and because of the pain to (his) back”. In about “late June or early July 2007” he noticed sharp pain to his left knee.

There is in my view a marked contrast between the Respondent Worker’s presentation to doctors, and description of his symptoms around that time in his statement, compared with the video material. The existence of the surveillance material had been disclosed in the section 74 Notice, issued by the insurer to the Respondent Worker on 4 June 2008. The surveillance report dated 10 August 2007 was one of the copy documents attached to that Notice. Thus it would be expected the Respondent Worker was aware of the existence of the surveillance material (even if he had not actually seen the video) when his statement of 30 June 2008 was prepared and signed. In making submissions on the admissibility of that statement, and Mr Medic’s statement, at the arbitration hearing, the Respondent Worker’s counsel approached the issue on the basis both such statements “addressed the surveillance” (T14.40).

Mr Medic’s statement says the Respondent Worker volunteered to do the work, he was not asked to, much less under any compulsion to do it. Mr Medic’s statement says the Respondent Worker was not paid for it. The Respondent Worker’s statement dated 30 June 2008 gives no particular explanation for the activities on 1 August 2007. It is not suggested, for example, that the activities in the video left him suffering more severe symptoms than usual, that he needed to rest up after it, or take extra painkillers. The activities in the video, which are not really explained in any way by the Respondent Worker, in my view lead to the conclusion the Respondent Worker exaggerated his restrictions to doctors, and in his statement dated 30 June 2008.

Thus the conclusion I have reached, based upon both the Respondent Worker’s complaints regarding the effects of the incident of 27 October 2006, and the video material, is that the Respondent Worker has exaggerated his symptoms and restrictions. The Appellant Employer submits such a conclusion assists its defence of the Respondent Worker’s case on two bases.

Firstly, it is submitted a conclusion the Respondent Worker suffered injury resulting from the “nature and conditions” of his employment was dependant upon his credit:

“25. The Arbitrator ought to have been aware that the very basis for the assertions by the Applicant that the nature and conditions of employment had aggravated his neck back and leg injuries was consistent upon him being accepted as a witness of truth…”

And:
“39. The Applicant’s credit was a significant issue. He had received injuries in a motor vehicle accident in 1998, and the opinion of the specialists were split as to whether or not the nature and conditions of employment or a continuation of the 1998 injuries were causative of his ongoing injuries and incapacity. It was a central part of the Applicant’s case that he could persuade the Commission, via the qualified specialists, that he performed heavy and arduous work with the Respondent, thereby causing him further pain…”

This submission is somewhat bound up with the Appellant Employer’s first ground of appeal, that the arbitrator failed to properly consider the medical evidence.

Secondly, it is submitted an assessment of quantum is also dependant upon the Respondent Worker being “accepted as a credible witness”.

Some care must be taken in the application of the passage of Ferreira quoted at [43] above, to the circumstances of the current appeal. Ferreira was a matter in which a worker was found to have given perjured evidence in the Compensation Court of NSW. In the current matter the Respondent Worker did not give evidence; no application was made to cross-examine him at the arbitration hearing; he clearly did not commit perjury. However it is consistent with Ferreira that, having formed the view the Respondent Worker has exaggerated his symptoms and level of disability, I approach other evidence that is dependant upon his credit with some care.

The finding of injury resulting from the “nature and conditions” of the Respondent Worker’s employment has two facets that are attacked in this appeal. The first is whether the Respondent Worker proved his duties were of such a nature as to cause the injuries relied upon. The second is whether he has proved there was a progression of his symptoms subsequent to the motor vehicle accident in 1998, consistent with further injury. The Appellant Employer’s submissions refer at length to the medical evidence on both sides, in submitting the evidence of Drs Thomson, Lee and Machart should be preferred, leading to a conclusion the Respondent Worker’s symptoms result from constitutional causes and/or the 1998 motor vehicle accident, rather than the “nature and conditions” of his employment. To the extent proof of such matters is dependant upon the Respondent Worker’s evidence, it is submitted any adverse finding on credit makes it more difficult for him to discharge his onus of proving these things.

The Nature and Conditions of the Respondent Worker’s Employment

The Respondent Worker’s statement dated 8 December 2006 contains little evidence of his usual duties. At [14] it states:

“In my normal duties at work I do two sections. These are blanking, bending, jobbing sheet metal. Drive the forklift, cutting and putting in coils, making offsets. I do every part of work in the jobbing area.”

The second statement dated 30 June 2008 is silent as regards the physical demands of the Respondent Worker’s usual duties. However there were a number of medical reports. A history of injury contained in a medical report may be received as evidence of the fact under section 60 of the Evidence Act 1995 (NSW): Paper Coaters Pty Limited v Jessop [2009] NSWCA 1 at [42], per Bell JA (as her Honour then was). The rules of evidence do not apply in the Commission, and “in order to find error of law based upon absence of evidence there must be an absence of material, whether strictly admissible according to the rules of evidence or not”: South Western Sydney Area Health Service v Edmonds (2007) 4 DDCR 421 (‘Edmonds’) per McColl JA at [129]. A matter may be proved by material, even if not strictly admissible, although this is subject to the restrictions on the Commission informing itself, referred to in Edmonds at [127]. One way in which the Respondent Worker could prove the nature of his work duties was through histories contained in medical reports.

There are many histories dealing with such matters. Dr McGroder in a report dated 26 March 1998 recorded:

“He said that he was officially there as a process worker, but does everything around the factory and a lot of this involves maintenance and general labouring work. He said it is usually heavy work and there is often a good deal of bending, lifting and maintaining awkward positions.”

Dr Trevitt in a report dated 11 February 2002 recorded:

“He went back to his normal work about three months after the (motor vehicle) accident. He says this was the same job as he worked before and he worked as a process worker (he says he was doing the work of a sheetmetal worker). He tells me that this is very heavy and that he has continued with this work.”

Dr Bleasel in his report dated 26 July 2006 records the history:

“His work has involved heavy lifting and repetitive flexion and extension of the spine and as a result his cervical and lumbar pain has increased.”

Dr Thomson (qualified by the insurer) on 26 September 2006 reported:

“Mr Korunovic states that his work duties were heavy work at his place of employment.
His hours of work were 38 hours per week plus overtime. He worked up to 12 – 15 hours overtime and worked 6 days per week. He stopped work after the motor vehicle accident on 19.01.98. He was off work for approximately 3 months and then returned to work. He said that he went back to the same job at Stratco where he had worked for 14 years.”

Dr Sun on 27 February 2008 recorded this history of work after the motor vehicle accident:

“He was off work for 3 months. On return to work there was no light duties and he had to resume his normal duties, lifting up to 30 kg with repetitive bending and twisting and forklift use.”

Dr Machart in his report dated 1 August 2007 records the history:

“He claimed that the nature of his work continued to cause him pain in the neck and back. He described the work as strenuous and heavy factory work.”

The factual investigation relied upon by the Appellant Employer included a statement of Michael Micky Berber which relevantly stated:

“6. I undertake similar work to Mr Korunovic and use the same machines as he would.
7.The work does involve manual handling but it is not too difficult and the product is not too heavy to lift.
8. Whenever necessary we can use the forklifts and the overhead cranes to do any heavy lifting.
9. Also when lifting pieces of metal that are too long and/or too heavy we use two people to do this.
10. Workers are encouraged to use appropriate Manual Handling and we are often reminded by our supervisors to do this.
11. Sometimes we are handling sheets that are not necessarily too heavy but due to their length we require two people and this is the case with the folding machine where there are always two people working.
12. With the Break Press Machine you usually are doing small jobs that do not require more than one person.
13. If the sheets are more than three metres you might have another person assisting but this is not due to weight but rather due to having to keep the sheet in place.
14. The major problem with working at Stratco is that you are on your feet for the entire shift and this can cause aches and pains in your legs.”

There is also a statement of Ian Waine Jansen, operations manager with the Appellant Employer, dated 30 August 2006, attached to the factual investigation. It relevantly states:

“27. With regards to this most recent nature and conditions of employment claim by Mr Korunovic I would like to dispute this on the basis of the work required of him being appropriate and safe for him to perform.
28. Please find attached the Standard Operating Procedures for each machine that Mr Korunovic would have been working on since the date of the accident.
29. These procedures were documented in 2003 and are reflective of the work processes being undertaken on these machines since prior to that date.
30 Mr Korunovic has undergone Occupational Health and Safety Training, as has all our workers, including Manual Handling and a copy of the record of this is attached.
31. There is an element of manual handling required in the operation of the machines but this is subject to the appropriate Manual Handling procedures which is why Mr Korunovic was trained in this.
32. Also attached are copies of Occupational Health and Safety Policies which are accessible to all workers and would have been available to Mr Korunovic and he would have been aware of this.
36. In 2003 Mr Korunovic did make a complaint that his operation of the “Slitter” machine was hurting his leg and he was moved from that machine.
37 Mr Korunovic was assigned to work on the “Brake Press” machine as this was an easier job but he then complained that he was not getting sufficient overtime and asked to be moved to the “Blanker” machine.
38. Since that time Mr Korunovic has not reported any problems with operation of machines or any other work practice which may have caused him the type of injury which he is now claiming.”

Copies of “Standard Operating Procedures” relating to a number of machines are attached to the factual investigation report. These basically consist of operating instructions for the machines, and give little if any assistance in gauging how strenuous operating them would be.

The Respondent Worker has, since 1998, given consistent histories of his normal duties being strenuous, involving heavy lifting and repetitive bending. Although these histories post-date the motor vehicle accident, some date back to well before he was placing reliance upon an assertion of injury due to the “nature and conditions” of his employment.

The statement of Mr Berber confirms the duties involved manual handling, and being on one’s feet all day. His assessments of the level of strenuousness involved in the work are quite subjective. It is of little assistance to know that he finds the manual handling “not too difficult”, or the product “not too heavy to lift”. It may be of relevance, as was pointed out on the Respondent Worker’s behalf at the arbitration hearing, that Mr Berber was twenty-eight years of age when he gave the statement, the Respondent Worker at that time was fifty-three. A full factual investigation was carried out, including the obtaining of statements from a significant number of people. The statements of Mr Berber and Mr Jansen give little useful information regarding issues such as the frequency of bending, the range of weights lifted, the frequency with which different weights would be lifted, or other evidence that would assist in obtaining an accurate picture of the strenuousness of the work. The statements contain no measurement of the weights of the items the Respondent Worker was required to lift in the course of his normal duties. The factual investigation includes statements from Mr Forbes (the production manager), Mr Clews (a leading hand), and Mr Shepherd (a sheet metal worker). These are silent as regards the nature of the Respondent Worker’s usual duties, although on the face of it they are witnesses who would have been in a position to assist on the point.

The Respondent Worker’s submissions make the following valid point:

“15. The applicant alleged throughout the conduct of these proceedings that the employment in which he worked was of such a heavy nature as to give rise to an injury as a consequence of his repeated stresses.
16. The employer now seeks to rely upon half histories recorded by some doctors in comparison to more complete histories recorded by others as a basis upon which to reject the Arbitrator’s findings.
17 The employer was in a position to bring evidence with respect to the nature of the worker’s duties in particular where the relevance of a pre-existing problem occasioned by the motor vehicle accident in 1999 (sic) loomed large.
18. It would have been a simple task on the part of the employer to bring direct evidence either oral or in written form detailing the nature of the duties the worker performed and the hours he performed to contradict his evidence with respect to the sorts of work he did.
19. The employer, in its conduct of the proceedings, chose not to do so.”

Having regard to the consistent histories provided by the Respondent Worker of his strenuous duties (some of it pre-dating these particular allegations of injury), the partial corroboration of the Respondent Worker by Mr Berber (who confirms manual handling and long hours of standing), and the absence of any convincing evidence to the contrary, I am satisfied the Respondent Worker’s usual duties were strenuous, and involved heavy lifting, repeated bending, and long periods of standing.

The Medical Evidence Going to ‘Injury’

Radiological investigations following the 1998 motor vehicle accident are described in Dr Lee’s report dated 13 August 1998. X-ray of the left leg demonstrated avulsion of the lateral cortex of the lower fibula. X-rays subsequently demonstrated this had healed, although there was a small avulsion fragment at the lateral cuboid, said by Dr Lee to account for pain in the left foot. X-rays of the cervical spine demonstrated “minimum degenerative changes”. A CT scan is said to demonstrate lateral disc prolapse at C4/5. Dr Lee’s report dated 8 April 1998 states arthroscopy of the right knee on 7 April 1998 showed a torn posterior horn of the medial meniscus, for which partial medial menisectomy was performed. As noted at [5] above, there was little recorded complaint regarding the back at this time, notwithstanding Dr Lee assessing 10% permanent impairment of it, in a report dated 13 August 1998.

In his report dated 4 December 2001 Dr Irani records complaint of continuous aching in the low back, pain in the left foot where there was a bony swelling, and pain in the right knee. When Dr Trevitt examined the Respondent Worker on 8 February 2002 the “current symptoms” were constant pain in the upper lumbar region and the left foot. Dr Trevitt thought “some minimal restriction of motion” in the neck and lumbar region were “consistent with age-related degenerative changes”. Gait at that stage was normal. Dr Trevitt did not have the benefit of any X-rays.

When Dr Bleasel examined the Respondent Worker on 26 July 2006, there were more widespread complaints. The Respondent Worker complained of headaches, neck pain, shoulder pain, thoracic pain, low back pain, swelling of the right knee (which was painful and could give way), and sciatica down the right leg to the foot. There were significant restrictions of movement in these regions on examination. Dr Bleasel commented on some X-rays and scans. X-ray of the right knee in July 2006 showed osteophytic change in the joint. A cervical CT scan in March 1998 showed mild disc bulging at C4/5 and C5/6. Cervical CT scan in July 2006 showed cervical spondylosis, prominent osteophytes projecting into the cervical canal, disc degeneration at C3/4 and C6/7, and protrusions of C4/5 and C5/6.

A CT scan report of the lumbar spine of Dr De Silva dated 3 July 2006 demonstrated:

“Central posterior disc herniations are noted at the L2/3 and L3/4 levels with flattening of the dural sac at these levels. There is also evidence of anterior disc herniation at the L1/2 and L2/3 levels with associated osteophyte formation. The intervertebral foramina are not narrowed. The facet joints appear normal.”

A CT scan report of Dr Plehwe dated 11 July 2006 of the right knee states:

“Scanning of the right knee has been performed. There is no evidence of fracture. There is degenerative spurring involving the femoral condyles, patella and the tibial plateau. There is no joint effusion or radio-opaque intra-articular loose bodies.
The anterior and posterior cruciate ligaments are intact. There is considerable bulging and flattening of the medial meniscus consistent with meniscal degenerative change. Whilst no definite meniscal tear is seen, CT scanning is not optimal for demonstrating meniscal pathology.
Conclusion:
The findings indicate early osteoarthritic change in the knee joint particularly affecting the medial joint compartment.”

The Respondent Worker was again referred by his general practitioner to Dr Lee, who reported on 24 August 2006. Dr Lee described his treatment of the Respondent Worker in the late 1990’s, and said “He felt better afterwards. He has since returned to work but now the symptoms have deteriorated again.” Dr Lee thought a comparison of a recent CT scan of the neck, with that carried out in 1998, showed “further deterioration”. Dr Lee noted the Respondent Worker did “not have much pain initially” in his back, but now had back pain with radiation to the right leg sometimes. In relation to the right knee Dr Lee said “He has definitely deteriorated.” In a report dated 18 July 2007 Dr Lee said of the right knee:

“Reviewing his previous arthroscopy record, he had very localised torn meniscus and cartilage which was dealt with arthroscopically. I would consider that a cure for his condition and this time he has definitely reinjured his right knee.”

Dr Thomson examined the Respondent Worker at the insurer’s request on 26 September 2006. The Respondent Worker complained of pain around the base of the neck in the region of C7, with occasional radiation to the upper neck. Lower back pain was “a lot of problem to him”, and restricted his working hours. There was a painful click in the right knee, and he sometimes lost control of the knee. The knee had given way on one occasion causing him to fall. There was occasional pain in the right and left forearms.

X-rays and an MRI scan of the lumbar spine were carried out on 20 April 2007. X-rays showed minor retrolisthesis at L2/3. There was mild narrowing and moderate spondylitic lipping at the upper lumbar levels. There was minimal degenerative change at the sacroiliac joints. The MRI scan is reported:

“At L1/2 and L2/3 there is disc dehydration together with prominent anterior spondylitic change. There is a small contained posterior annular tear at L1/2 and there is minor posterior bulging at L2/3 associated with minimal retrolisthesis at this level. There is however minimal neurological encroachment.
Minor disc dehydration is noted at the lower lumbar levels, but the lumbar disc at L3/4, L4/5 and L5/S1 are intact.
Developmentally, the overall dimensions of the bony spinal canal were normal. The neural exit foramen were not encroached. The spinal cord ends normally in the upper lumbar region. The rest of the osseous and paraspinal soft tissues are unremarkable for age.”

Dr Machart’s history on 30 July 2007 was of pain in the low back, mid-thoracic spine, neck, scalp, right forearm and right knee. He thought the Respondent Worker suffered from widespread arthritis affecting the lumbar spine, thoracic spine, cervical spine and right knee, together with lateral epicondylitis of the right elbow. He thought the picture was complicated by “non-organic illness behaviour”.

Dr Lee, in his report dated 24 August 2006, thought the cervical and lumbar symptoms resulted from the motor vehicle accident in 1998. He did not expressly adopt the same view about the right knee symptoms, and his report dated 18 July 2007 would suggest he regarded the right knee symptoms at that time as the result of further injury, rather than a continuation of the effects of the 1998 motor vehicle accident. Dr Lee’s reports contain little history of the work duties undertaken by the Respondent Worker subsequent to the motor vehicle accident, and there is no indication he turned his mind to whether such duties caused further injury by way of aggravation.

Dr Bleasel in his report of 26 July 2006 said “As a result of the motor vehicle accident of January 1998 he suffered musculoligamentous damage to his cervical, thoracic and lumbar spine”, and “His work has involved heavy lifting and repetitive flexion and extension of the spine and as a result his cervical and lumbar pain has increased.” His opinion was not modified in his report dated 20 February 2007.

Dr Sun, in a report dated 27 February 2008, stated the Respondent Worker “suffers from persistent neck, back, right knee, left knee and ankle pain which were attributed to the physical nature of his work at Stratco”. He later said “I believe the nature and conditions of his employment was a substantial contributing factor to his ongoing impairment and disability.” He thought the left knee problems resulted from “favouring the left leg in ambulation following the work injury”.

In the Appellant Employer’s medical case, Dr Thomson thought the motor vehicle accident contributed to the condition of the right knee, but otherwise there were degenerative changes in the cervical and lumbar spine that were constitutional. Dr Machart thought the Respondent Worker suffered from age related osteoarthritis, and said “There is no objective evidence that the nature and conditions of employment aggravated injuries suffered in the motor vehicle accident of 1998”.

Overall, I am persuaded the Respondent Worker suffered injury by way of aggravation to the condition of his cervical spine, lumbar spine and right knee, resulting from the nature and conditions of his employment. I find the opinions of Drs Bleasel and Sun on this point more persuasive than those doctors who would suggest there is no relationship between the progressive degenerative conditions, and the work activities carried out by the Respondent Worker over many years. It should also be noted that Dr Machart, whilst he could not be described as supporting the existence of a causal connection between the “nature and conditions” of employment and the various medical conditions, does not reject the possibility with any great vigour. He says “There is no objective evidence that the nature and conditions of employment aggravated injuries suffered in the motor vehicle accident in 1998.” (emphasis added). In that passage of his report where he assesses permanent impairment, Dr Machart says “My assessment is that the impairments other than the right knee relate to osteoarthritis and not to a specific work related injury” (emphasis added). It is apparent from the medical evidence overall that the Respondent Worker suffers from degenerative conditions of the neck, back and right knee. Such conditions are regularly characterised as ‘diseases’ for the purposes of section 4 of the 1987 Act.

It is apparent, from how the arbitrator has expressed his findings of injury (with a deemed date of injury) that he approached the issue of ‘injury’ on the basis of the ‘disease’ provisions of the 1987 Act. In my view he was correct to do so, and I will take a like approach. In considering the application of those provisions, I am assisted by the decision of the Court of Appeal in Austin v Director General of Education (1994) 10 NSWCCR 373, in which Clarke JA said a judge should ask the following questions:

“(a) Was the applicant suffering from a disease?

(b) If so, was there an aggravation, acceleration, exacerbation or deterioration of it?

(c) If so, was her (his) employment a contributing factor?

(d) If so, did a total or partial incapacity for work result from such aggravation, acceleration, exacerbation or deterioration?” (at 378B)

As regards the right knee, following the motor vehicle accident the diagnosis of the treating orthopaedic surgeon, Dr Lee, following arthroscopy on 7 April 1998, was a tear of the posterior horn of the medial meniscus. Arthroscopic partial medial menisectomy was performed. Dr Lee, in a report dated 18 July 2007, after reviewing “his previous arthroscopy record”, considered that the earlier tear was “very localized”, and the treatment at the time offered a cure for the condition. Accordingly Dr Lee thought the Respondent Worker had “definitely reinjured his right knee”. The CT scan report dated 11 July 2006 details pathology in the right knee, said to be consistent with “early osteoarthritic change in the knee joint”. Dr Machart appears to have seen the films, as he describes that CT scan as showing “mild to moderately severe osteoarthritis”. The condition of the right knee has clearly advanced and changed, since the earlier injury and treatment in 1998. The condition of osteoarthritis is appropriately regarded as a ‘disease’ within the meaning of section 4 of the 1987 Act. I have found the Respondent Worker’s usual duties since the motor vehicle accident involved heavy lifting, repeated bending and long periods of standing, I am satisfied such duties aggravated the disease. I accept the opinion of Dr Sun that the employment duties were a substantial contributing factor to the impairment of the right knee.

The low back symptoms, when the Respondent Worker was assessed by various doctors during 1998, appear to have been pitched at a very low level. Although Dr Lee assessed an impairment of the back after the motor vehicle accident, the majority of reports at the time contain little if any reference to it. By 4 December 2001 (the examination with Dr Irani) and 8 February 2002 (the examination with Dr Trevitt) the low back had become a source of continuous pain. This was at a time when the Respondent Worker was back at his usual duties with the Appellant Employer. It was long before any claim was made on the basis of any injury caused by the “nature and conditions” of his work. It was two to three years after the original lump sum claim (which included the back) had been finalised. Even approaching the Respondent Worker’s complaints with some care, there is little apparent motivation for him to exaggerate the condition of his lower back at that time. The escalating back complaints at that time would be consistent with increasing degeneration of the Respondent Worker’s spine, at a time when he was carrying out his usual duties with the Appellant Employer.

A CT scan report on 3 July 2006 relating to the lumbar spine reports disc herniations at L1/2, L2/3 and L3/4, with associated osteophyte formation. An MRI scan of the lumbar spine dated 20 April 2007 is reported as showing disc dehydration with prominent anterior spondylitic change at L1/2 and L2/3. There was minor disc dehydration at the other lumbar disc spaces. Dr Machart considered the diagnosis to be that the Respondent Worker suffered from osteoarthritis of the thoracic and lumbar spines. I accept the changes at multiple levels of the lumbar spine probably represent degenerative disc disease of the lumbar spine, which is properly characterised as a ‘disease’ within the meaning of section 4 of the 1987 Act. The increasing development of such changes, over a time when the Respondent Worker was carrying out duties that I have found to involve heavy lifting, repeated bending and long periods of standing, is consistent with the “nature and conditions” of employment resulting in injury, being aggravation of the degenerative disc disease. I accept the opinion of Dr Sun that employment was a substantial contributing factor.

X-rays of the cervical spine taken in 1998 were described by Dr Lee as demonstrating “minimum degenerative changes”. Dr Machart described the X-rays (taken on 12 February 1998) as showing “mild degenerative changes at C3/4 and C6/7”. Dr Lee comments that a CT scan in 1998 showed a lateral disc prolapse at C4/5. There seems to have been some significant improvement of the cervical symptoms. On 3 August 1998 Dr Lee recorded “He still had pain in the neck”, however the serial reports dated 30 September 1998 and 4 January 1999 make no mention of neck symptoms, and deal with symptoms in the right knee and left ankle. These are the last of the serial reports of Dr Lee, in the material before me, that date from 1998 or 1999.

Dr Bodel on 18 November 1998 was told there was still neck pain. When Dr Bodel examined the neck he found “a good range of neck flexion, extension and rotation but there is some crepitus on the rotational movement and also discomfort on resisted movement.” Dr Sherry examined the Respondent Worker on 29 December 1998. He was told there was pain at the “dorsal base of the neck”, and there was a decreased range of neck movements.

When Dr Irani examined the Respondent Worker on 26 November 2001, there was no record of neck complaints at all, and it does not appear Dr Irani even examined the neck. When examined by Dr Trivett on 8 February 2002, the Respondent Worker did not nominate neck symptoms amongst his “Current Symptoms”. Dr Trivett however carried out an examination of the neck, and records “Examination of the cervical spine reveals no tenderness or muscle spasm. He has some mild limitation of movement in lateral flexion and rotation but movements are symmetrical and smooth and the only pain he tells me about is at the extreme of rotation to the right.” Thus although there were clearly some degenerative changes in the cervical spine dating back to 1998, there was subsequently a substantial symptomatic improvement for a preiod.

Dr Bleasel, in his report dated 26 July 2006, records the CT scan of the cervical spine taken in March 1998 as showing “mild disc bulging at C4/C5 and C5/C6”. Dr Bleasel then refers to a cervical CT scan from July 2006 that shows “cervical spondylosis, prominent osteophytes projecting into the cervical canal. There is disc degeneration involving C3/C4, C6/C7 and protrusions of C4/C5 and C5/C6 discs with narrowing of exit foramina, particularly on the left”. Dr Thomson (who also had access to these CT scans) described the Respondent Worker as suffering from “degenerative changes in his cervical and lumbar spine”. Dr Machart diagnosed osteoarthritis of the cervical spine. It is apparent, from the descriptions of the two cervical CT scans in the reports of both Drs Bleasel and Thomson, that the changes progressed between 1998 and 2006.

Dr Lee in his report dated 24 August 2006 said of the 2006 CT scan “Compared with the one taken in 1998 there appeared to be some further deterioration.” Dr Lee expressed the view “the degeneration is associated with the injury and has progressed.” In context, the “injury” to which he referred is the 1998 motor vehicle accident. I do not accept Dr Lee’s opinion on this point. There is no evidence to suggest Dr Lee treated the Respondent Worker between early 1999, and when he was referred back to the doctor in 2006. The history recorded in Dr Lee’s report dated 24 August 2006 would not suggest Dr Lee was aware of the substantial symptomatic improvement in neck symptoms, apparent from the reports of Drs Irani and Trevitt, in 2001 and 2002. This improvement would be indicative of the effects of the motor vehicle accident, upon the cervical degenerative changes, settling to a significant extent by that time. I note Dr Thomson (qualified by the insurer) thought “the motor vehicle accident did not significantly contribute to his present physical impairment”. Moreover, even if the view were taken that progression of the degenerative changes subsequent to 1998 did result to some extent from the motor vehicle accident, this would not be inconsistent with the proposition that such progression also resulted from the work duties. Incapacity and disability can have multiple causes. In Cluff v Dorahy Bros. (Wholesale) Pty Ltd [1979] 2 NSWLR 435 Reynolds JA said:

“It is well established, if a worker receives an injury in the course of his employment with A which renders him vulnerable to increased disability by the effects of further work; and then, in the employment of B, the work brings about those effects, that it is open to a tribunal of fact to hold that the ultimate incapacity has resulted from the first injury in the employment of A; and it is not to the point that, if the worker had in these circumstances proceeded against B, he might also have obtained an award in respect of the whole extent of his existing incapacity.”

The degenerative process in the Respondent Worker’s cervical spine is appropriately characterised as a ‘disease’. I find it probable the “nature and conditions” of the Respondent Worker’s employment resulted in aggravation of that disease process. I prefer the evidence of Drs Bleasel and Sun in this regard. It is, in my view, more probable the work duties I have found were performed, would aggravate such a process, rather than have no effect on it (the opinion of Drs Thomson and Machart). I accept the view of Dr Sun that such duties were a substantial contributing factor to such aggravation.

Bearing in mind the substantial advancement of the degenerative changes on radiological investigation, in the back, neck and right knee, and my finding that such changes advanced whilst they were being aggravated by the work duties, I am of the view the aggravation of the disease processes in the back, neck and right knee has been an ongoing one. The effects of aggravation continue.

The arbitrator, at [40] to [41] of his reasons, accepted the Respondent Worker’s argument, based upon the views of Dr Sun, that the condition of the Respondent Worker’s left knee resulted from the employment injuries to his neck, back and right knee, with resultant favouring of the originally injured right knee. The Appellant Employer has not raised any specific challenge to the arbitrator’s finding on this issue, and consequently neither party has argued the point. This finding being unchallenged, I do not need to deal with it further.

Quantum of the Weekly Award and My Finding on Credit

The Appellant Employer makes the further submission:

“43. As the Applicant cannot be accepted as a credible witness, this adversely affects the assessment of his entitlement to any claim for compensation. This is particularly so in relation to receipt of any injury, and any incapacity said to flow from such alleged injury. It is submitted that the Arbitrator ought not to have found the Applicant to have discharged the onus of proof to entitle him to any compensation.”

As regards the ‘injury’ question, I have reached the same conclusion as the arbitrator, contrary to the arguments of the Appellant Employer. However the video evidence, and my finding of exaggeration, potentially impact upon quantum of the weekly entitlement.

The passage of the arbitrator’s reasons dealing with the video is set out at [53] above. There is nothing in the reasons to suggest the arbitrator regarded the video as impacting upon quantification of the weekly entitlement. He regarded the work depicted in the video as unsuitable for the Respondent Worker, and said the video did not indicate a capacity to engage in “continuing manual labour on a daily basis”. After some consideration of the medical evidence going to the level of incapacity, the arbitrator concluded the Respondent Worker was fit to undertake sedentary light process work on a full time basis, earning $550.00 per week, and calculated an entitlement pursuant to section 40 on this basis. It should be noted the probable earnings if not for injury (the upper limb of the section 40 equation) were agreed at $824.15 per week.

In my view the video was of greater significance than this. It demonstrated the Respondent Worker carrying out activities that were at marked variance with his complaints and presentation to a number of doctors. This is relevant to the weight to be attached to the doctors’ opinions regarding his capacity to work (see generally Makita (Australia) Pty Limited v Sprowles (2001) 52 NSWLR 705). Additionally, in my view the level of activity shown in the video is directly relevant to a determination of the Respondent Worker’s ability to earn.

The Respondent Worker in his submissions makes the point that the Appellant Employer “had the opportunity of asking the Doctors to review their opinion after viewing the surveillance; no such opinion was advanced.” This is true. It would no doubt have been helpful to have available medical evidence dealing specifically with the significance of the surveillance material. However the Respondent Worker too has been aware of the surveillance material since it was revealed in the section 74 Notice, served prior to these proceedings being commenced. The Respondent Worker’s counsel referred to the Respondent Worker having been “presented with a surveillance film in a section 74 Notice” (T14.50). Neither party has relied upon medical evidence dealing with the surveillance material.

Dr Bleasel’s most recent report dated 20 February 2007 describes the Respondent Worker as “now completely unfit for work”. Dr Sun thought him fit for “permanently modified duties with no lifting over 8kg, no forceful pushing or pulling, no repetitive bending, squatting, kneeling or twisting and change of postures every 30 minutes. Provided suitable duties and workstation are available, he should be able to manage 30 hours a week of work.” Dr Thomson proffers no opinion regarding the Respondent Worker’s fitness for work. Dr Machart considered the Respondent Worker’s condition “may preclude him from conducting full labouring duties in unrestricted fashion. It may be best to rehabilitate him into light work. He should observe a 10kg lifting restriction.” On this basis Dr Machart thought the Respondent Worker could work full time duties including “production line work, security work, office work, quality control, or similar”.

Dr Bleasel’s view on incapacity simply cannot stand with the other medical evidence, and the activities depicted in the video material. The Respondent Worker’s incapacity is partial, and this was the approach taken by the arbitrator. The approach to be taken to an assessment pursuant to section 40 of the 1987 Act is that described by the Court of Appeal in Mitchell v Central West Health Service (1997) 14 NSWCCR 526.

The arbitrator accepted the limitations upon the Respondent Worker’s capacity assessed by Dr Sun, save the arbitrator considered the Respondent Worker capable of working thirty-eight hours per week, rather than the thirty hours Dr Sun had suggested. On this basis the arbitrator found the Respondent Worker fit for sedentary light process work on a full time basis, yielding an ability to earn he assessed at $550.00 per week.

Having regard to the video material, this in my view underestimates the Respondent Worker’s ability to earn. Dr Sun made his assessment based on a history the Respondent Worker had difficulty with certain housework such as vacuuming, carrying shopping and putting dishes away. This is quite inconsistent with the activities depicted in the video. Having regard to the video, in my view the Respondent Worker is capable of significant physical work. Based upon the medical evidence overall, he is probably not fit for heavy labouring work. There would, however, probably be many physical jobs, that avoided frequent heavy lifting and repetitive bending, of which he would be capable. It is necessary to have regard to the matters set out in section 43A of the 1987 Act. In this regard, English is not the Respondent Worker’s first language. Although he has been in Australia for approximately twenty-five years, he had the assistance of an interpreter for many of the medical examinations (Drs Bleasel, Thomson and Machart). He has a trade qualification from Serbia, and a history of factory work in Australia. He resides in a suburb of Sydney, a large job market. He is now fifty-four years of age. Jobs such as cleaning, security work, many forms of process work, or many stores jobs would be suitable, on a full time basis. In my view he has an ability to earn in some suitable employment of $670.00 per week

This leaves a difference between his probable earnings but for injury, and his ability to earn in some suitable employment, of $154.15. The Appellant Employer has not argued this figure should be reduced on a discretionary basis, and I find there is no reason to do so.

Thus the appropriate amount to award pursuant to section 40 is a figure of $154.15.

Failure to Give Adequate Reasons

The Appellant Employer also argues the arbitrator failed to give adequate reasons for his decision. It is submitted the reasons were inadequate to explain the arbitrator’s reasoning in respect of not accepting the views of Dr Lee, his treatment of the video evidence and its credit ramifications, and his assessment of the Respondent Worker’s ability to earn, particularly why the video did not prove the Respondent Worker was capable of engaging in “continuing manual labour on a daily basis”.

An arbitrator’s duty to give reasons was dealt with by Byron DP in Jennifer Tyack formerly t/as Country Kidz v Cain [2007] NSWWCCPD 119 where he said:

“102. The Arbitrator must not only note the relevant evidence and give reasons for findings made, but where the evidence is disputed, he must give a clear explanation of the reasons why some evidence is preferred over other evidence (Mayne Group Limited v Mikhail [2006] NSWWCCPD 249 at [41]. See also, Mifsud v Campbell (1991) 21 NSWLR 725 at 728; Bright v Joodie Holdings No 2 Pty Ltd [2005] NSWCA 134, and Hume v Walton [2005] NSWCA 148). The Arbitrator did not achieve that in his Statement of Reasons for Decision, as outlined above.
103. In the High Court in Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Palme [2003] HCA 56 at [64], Kirby J said:
“The more significant the decision the clearer the duty may be, the clearer the reasons should be and the clearer the consequences will be for the breach. Some decisions cry out for a clear explanation ... Especially is this so where the legislature has recognized the need and imposed a duty to give reasons and where the decision is very important for the person affected and for others close to that person.”
104. The duty to give reasons in the Commission is prescribed by statute at section 294(2) of the 1998 Act and at Rule 15.6 of the 2006 Rules.”

The arbitrator’s reason for not being guided by the reports of Dr Lee is set out at [36] of his reasons. Dr Lee did not reject the possibility of a relationship between the Respondent Worker’s duties, and his complaints. This is sufficient in my view to show why the arbitrator did not accept the view of Dr Lee on causation. As I hope my discussion of the medical evidence above shows, Dr Lee did not, on my reading of his reports, turn his mind to whether the Respondent Worker’s duties had aggravated the degenerative conditions in the back, neck and right knee (see [92] above). Although Dr Lee thought there was an ongoing causal relationship between the neck and back symptoms, and the motor vehicle accident in 1998, this does not preclude a finding that the nature and conditions of employment constituted a significant contributing factor to an aggravation of the degenerative processes in those parts.

The arbitrator’s reasons also explain adequately why he did not regard the video evidence as proving the Respondent Worker was capable of carrying out manual labour on a daily basis. Notwithstanding the video, the arbitrator thought such a proposition conflicted with “the opinions of all of the specialists” (at [48] of his reasons). Whilst I have not adopted the same approach to the video material as the arbitrator, in my view the arbitrator’s reasons were adequate to explain his reasoning on this point.

There is more validity to the submission that adequate reasons were not given for the arbitrator’s approach to the credit ramifications of the video evidence. The Appellant Employer had conducted its case on the basis the video impugned the Respondent Worker’s credit, and indicated he had been misrepresenting his condition to the doctors who assessed him (see T26-27). The only reasons dealing with the video material were at [48] of the arbitrator’s reasons, quoted at [53] above. Notwithstanding how the Appellant Employer sought to use the video, the arbitrator did not deal with the argument of whether the video indicated the Respondent Worker had been untruthful to doctors, and the significance of this. The reasons in my view were inadequate on this issue. This does not affect the orders on this appeal, as I have already engaged in review of that aspect of the arbitrator’s decision.

DECISION

For the above reasons, I have concluded the decision of the arbitrator was true and correct (to use the language of Spigelman CJ in State Transit Authority of NSW v Chemler (2007) 5 DDCR 287), save for the assessment of quantum of the award pursuant to section 40.

The decision of the arbitrator dated 7 October 2008 is varied by substituting the figure “$154.15” for the figure “$274.15” in paragraph [5]. The decision of the arbitrator dated 7 October 2008 is otherwise confirmed.

COSTS

The Appellant Employer has succeeded in part in its appeal, in that the weekly award has been reduced. However the Appellant Employer challenged the award in the Respondent Worker’s favour in its entirety, and the Respondent Worker has succeeded in defending that award to a large extent. It is appropriate in my view that the Respondent Worker have his costs of the appeal.

The Appellant Employer is to pay the costs of the Respondent Worker on this appeal.

Michael Snell
Acting Deputy President
17 February 2009

I, TUYET WALLIS, CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF MICHAEL SNELL, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.

ASSOCIATE

(b)	If so, was there an aggravation, acceleration, exacerbation or deterioration of it?
(c)	If so, was her (his) employment a contributing factor?
(d)	If so, did a total or partial incapacity for work result from such aggravation, acceleration, exacerbation or deterioration?” (at 378B)