Sweet Art Special Events Pty Ltd v Workers Compensation Nominal Insurer (icare)
[2024] NSWPICPD 66
•22 October 2024
| DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY A MEMBER | |
CITATION: | Sweet Art Special Events Pty Ltd v Workers Compensation Nominal Insurer (icare) [2024] NSWPICPD 66 |
APPELLANT: | Sweet Art Special Events Pty Ltd |
FIRST RESPONDENT: | Workers Compensation Nominal Insurer (icare) |
SECOND RESPONDENT: | Craig Michaels |
APPELLANT’SINSURER: | Uninsured |
FILE NUMBER: | A1-W5025/22 |
PRESIDENTIAL MEMBER: | Deputy President Elizabeth Wood |
DATE OF APPEAL DECISION: | 22 October 2024 |
ORDERS MADE ON APPEAL: | 1. The Senior Member’s determination that the deemed date of injury is 28 October 2019 is confirmed. 2. The Senior Member’s determination as to the second respondent’s actual earnings and his capacity for work during the period from 17 January 2020 to 19 March 2021 is confirmed. 3. The Senior Member’s determination as to the second respondent’s capacity for work during the period 20 March 2021 to 17 July 2022 is confirmed. 4. The Senior Member’s determinations of: (a) the second respondent’s pre-injury average weekly earnings, and (b) the second respondent’s capacity for work and ability to earn during the period from 28 October 2019 to 18 January 2020, and (c) the amount payable by the appellant to the Nominal Insurer are revoked and remitted to a different member for re-determination. |
CATCHWORDS: | WORKERS COMPENSATION – Section 16(1)(a) of the Workers Compensation Act 1987 – Husnain Pty Ltd v Workers Compensation Nominal Insurer [2023] NSWPICPD 65 applied – Magliano v Workers Compensation Nominal Insurer [2023] NSWPICPD 51 distinguished – whether error in factual determinations –Whiteley Muir & Zwanenberg Ltd v Kerr (1966) 39 ALJR 505 applied |
HEARING: | On the papers |
REPRESENTATION: | Appellant: |
| Mr P Macken, solicitor | |
| Leigh Virtue & Associates | |
| First Respondent: | |
| Mr G Dolan, solicitor | |
| HWL Ebsworth Lawyers | |
| Second Respondent: | |
| Mr S Moffet, counsel | |
| Melinda Griffiths Lawyers | |
DECISION UNDER APPEAL: | Sweet Art Special Events Pty Ltd v Workers Compensation Nominal Insurer (icare) [2023] NSWPIC 525 |
SENIOR MEMBER: | Ms K Haddock |
DATE OF SENIOR MEMBER’S DECISION: | 5 October 2023 |
INTRODUCTION AND BACKGROUND
Mr Craig Michaels (the second respondent) made a claim for workers compensation in respect of an alleged injury in the form of an aggravation of a prior psychological condition, arising out of or in the course of his employment with Sweet Art Special Events Pty Ltd (the appellant). The appellant did not hold a valid workers compensation policy at the relevant time so that the claim was lodged with the first respondent, the Workers Compensation Nominal Insurer (icare) (the Nominal Insurer). The Nominal Insurer investigated the claim and accepted liability, nominating 28 October 2019 as the deemed date of the injury.
On 26 July 2022, the Nominal Insurer wrote to the appellant, enclosing a notice issued pursuant to s 145(1) of the Workers Compensation Act 1987 (the 1987 Act) in which it sought reimbursement of the compensation paid to the second respondent totalling $195,394.61.
On 11 August 2022, the appellant lodged a Miscellaneous Application in the Personal Injury Commission (the Commission), disputing liability for the payments made, and seeking an order that the appellant was not liable to reimburse the amount to the Nominal Insurer or, in the alternative, an order reducing the amount to be reimbursed. The dispute ultimately proceeded to an arbitration hearing. A Senior Member of the Commission determined the dispute and issued a Certificate of Determination on 5 October 2023 in which she ordered the appellant to reimburse the Nominal Insurer the sum of $168,627.76.
The appellant appeals the Senior Member’s determination.
ON THE PAPERS
Section 52(3) of the Personal Injury Commission Act 2020 provides:
“(3) 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 and enabling legislation without holding any conference or formal hearing.”
The appellant seeks an oral hearing of the appeal on the basis that at the time of lodging the appeal, the transcript of the proceedings was not available and because the grounds of appeal relied upon by the appellant required oral submissions.
The absence of the transcript at the time of lodgement of the appeal is not generally a reason for requiring an oral hearing. Practitioners are required to record notes of the essentials of what occurs in court, including the elements of the arguments put to the decision-maker.[1] In any event, on 8 November 2023, the appellant was provided with copies of transcripts of proceedings dated 14 February 2023, 27 April 2023 and 25 July 2023 and, in a Direction issued by a Delegate of the President, was provided with the opportunity to make further submissions in respect of the transcript. The appellant provided its further submissions in accordance with the Direction issued by the Delegate of the President.
[1] Kounnas v Citywide Civil Engineering Pty Ltd [2012] NSWCA 287, [15].
The appellant relies upon three grounds of appeal. The grounds of appeal raised allege error on the part of the Senior Member in respect of her determination of the deemed date of injury, the calculation of the second respondent’s pre-injury average weekly earnings, the second respondent’s capacity for work and his earning ability. Those matters are frequently argued in the Commission and are not necessarily complex or unique.
Both the Nominal Insurer and the second respondent are of the view that the appeal can be determined ‘on the papers’.
I have had regard to Procedural Directions PIC2 and WC3; the documents that are before me, and the submissions by the parties as to whether the appeal can proceed to be determined on the basis of those 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 Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act) have been met.
THE RELEVANT EVIDENCE
As some issues determined by the Senior Member are not challenged in the appeal, only the evidence relevant to the issues raised on appeal are included in this summary.
The second respondent’s statements
The second respondent provided a statement dated 2 December 2019 to the Nominal Insurer’s investigator.[2] The second respondent described his employment with the appellant as that of a Business Development Manager and said that he commenced employment on 11 July 2019. He said that he had not resigned from the position, and his employment had not been terminated. He stated that he had not attended work since about the end of October or the start of November 2019. The second respondent explained that, at the time he ceased work, he was attempting to sell properties for the appellant but had not returned to work because he had not been paid and because he was fearful that Ms Anthea Leonard, the appellant’s director, would invent excuses as to why he was not being paid.
[2] Nominal Insurer’s Reply to Application to Resolve a Dispute (reply), pp 283–293.
The second respondent stated that when he commenced working for the appellant, the business takings were about $2,000 per week and there were outstanding debts owed to it from the previous two years amounting to about $45,000. He added that Ms Leonard had told him that the business needed to increase its income by about $1,500 per week to cover its own outstanding debts and his wages.
The second respondent said that he had been working at a bottle shop for 20 hours per week prior to commencing work with the appellant. He described how he had met Ms Leonard. He indicated that Ms Leonard invited him to meet with her at the appellant’s premises. The second respondent confirmed that he met with Ms Leonard, described his past work experience in transforming businesses and she advised him that she was looking for somebody with his skills to enter into a part ownership of the business. The second respondent said that he attended for a work trial on 11 July 2019, which was supposed to be for three hours, but he worked for eleven hours without a break. The second respondent stated that Ms Leonard offered him a package deal, which was to pay him 10% commission on any increase of business worth, an additional $1,500 as a contribution to his wages and 10% commission on any payments received in respect of the outstanding invoices. The second respondent indicated that he was also required to sell off old props belonging to Ms Leonard’s previous company, and he was asked to develop the appellant’s social media website and the customer management system, some of which he did in his own time. He said that he developed a technology-based design ordering system in order to fast-track sales.
The second respondent stated that he was asked to work on half of his base salary of $60,000 plus the commissions, with the incentive of ownership. He said that he was not being paid his wages except for small amounts sporadically, so he showed Ms Leonard a spreadsheet of the hours he had worked between 11 July 2019 and 15 September 2019 and the award rate, which showed that he was owed in excess of $10,000. He said that sometimes the appellant would pay him $200 when he was owed $1,000.
The second respondent disclosed that he suffered from a pre-existing psychological condition but was working and coping and had been receiving treatment from Dr Brad McKay, general practitioner, and was consulting Mr Jonathan Derkenne, psychologist. He said he continued to consult those practitioners and also consulted “Lisette” from the Langton Institute as he was drinking alcohol in excess in order to deal with concerns about keeping a roof over his head. He asserted that, while he worked for the bottle shop, he was coping and recovering from his mental health issues, but when he commenced with the appellant his condition went downhill. He described his feelings.
The second respondent indicated that he had text messages from Ms Leonard that showed that Ms Leonard had lied to him and that the appellant had failed to pay him the wages he was owed. He described an event at the Art Gallery of NSW and asserted that the appellant was paid $20,000 for that event.
The second respondent said that his health declined and that his doctor had certified him as only being able to work for 15 hours per week, but it was difficult to find such work. He stated that he commenced a consulting business in October or November 2019 for which he was paid $35 per hour, for fifteen hours per week for a period of five weeks.
The second respondent referred to an employment contract that Ms Leonard had presented to him but said he did not sign it because there were certain clauses in it about intellectual property that he did not agree to and there was no mention of the commissions he was to be paid. He said that he could provide a copy of that document. He asserted that he was employed as an employee and not a contractor, although some other workers were contractors. He added that he was to be paid four weeks’ annual leave after twelve months’ employment, 10 days’ sick leave, paid public holidays and contributions to superannuation were to be made.
The second respondent described the events leading up to the development of his pre-existing psychological condition. He further described the interpersonal difficulties he experienced because of the failure by the appellant to pay him and of Ms Leonard’s conduct, which he described as a “betrayal.”
The second respondent stated that he did not work for anyone after he ceased working with the appellant, other than on a few odd days re-styling a house owned by Ms Michelle Forrester towards the end of October 2019.
The second respondent provided further statements dated 13 July 2020,[3] 16 August 2022[4] and 4 October 2022[5] which do not touch upon matters the subject of the appeal, other than in the statement dated 13 July 2020, the second respondent said that throughout his employment with the appellant he did not receive any payslips, and his wages were withheld.
[3] Second respondent’s reply, pp 12–13.
[4] Second respondent’s reply, pp 14–16.
[5] Second respondent’s reply, pp 17–19.
In a further statement dated 19 April 2023,[6] the second respondent confirmed that he was to be paid $30 per hour plus superannuation and the contract of employment recorded that he would be paid $60,000 per annum. He asserted that the contract did not say that his employment was to be on a casual basis, and nor did his future employment depend upon him being able to recover the appellant’s debts. He added that he filled out a superannuation form and a taxation declaration form. The second respondent disputed Ms Leonard’s allegations that:
(a) he negotiated three weeks off work to renovate his new apartment;
(b) the payments to him were subject to him being able to recover past funds that were owing to the appellant;
(c) he took a holiday, and
(d) Ms Forrester offered him work.
[6] Second Respondent’s Application to Admit Late Documents (AALD) dated 19 April 2023, pp 1–6.
The second respondent advised that Mr Burton was his landlord and he was in arrears to Mr Burton for his rent, so Mr Burton asked him to tidy up some old apartments and help to find tenants at a higher rent and in exchange, the second respondent would receive free rent. He said he declared the work that he did to the Nominal Insurer in a statutory declaration. He advised that Mr Burton refused to pay money he was owed which resulted in a NSW Civil and Administrative Tribunal hearing against Mr Burton and an Order that Mr Burton repay him for overpaid rent.
The second respondent provided a final statement dated 17 May 2023.[7] Relevantly, he denied allegations made by Ms Leonard that Ms Forrester told him she wanted him to take over the appellant’s business and that he was heavily medicated while working for the appellant.
[7] Second respondent’s AALD dated 18 May 2023, pp 1–16.
Ms Leonard’s evidence
Ms Leonard provided a statement dated 25 November 2019 to the Nominal Insurer’s investigator.[8] She confirmed that she was the appellant’s sole director. She advised that the second respondent was employed as a sales and customer attendant with the collection of $100,000 in debts owed to the appellant as his first priority. She advised that the second respondent had provided to her his resume, a form for his superannuation payments and a taxation file form. She asserted that the second respondent was employed on a casual basis to work from 9 am to 5 pm, Monday to Friday, but he actually worked 11 hours in the first week, 46 in the second and 23 in the third week. Ms Leonard said that the second respondent was to be paid at the rate of $30 per hour but his log of the hours worked differed to hers and he sometimes increased the hourly rate to $45 or $70 which she had not agreed to, so she paid him at his normal rate.
[8] Nominal Insurer’s reply, pp 300–306.
Ms Leonard conceded that the second respondent did work more than 40 hours per week, but he was only ever paid at the agreed hourly rate of $30. Ms Leonard said that she handed the second respondent an employment contract indicating that he would be paid $60,000 per annum, but he declined to sign it. She added that at his request he was not paid by electronic transfer, so she paid him by cash but kept a record of those payments.
Ms Leonard stated that it was her belief that, after the second respondent stopped working for her, he accompanied Ms Forrester to the country where he helped her to set up a bottle shop, and also assisted her to clear out, reorganise and re-design Ms Forrester’s home.
Ms Leonard asserted that, after the second respondent had worked for a period of three weeks, he reported that he was finding the job tiring and reduced his hours and advised that he needed to have three weeks off. Ms Leonard said that he then returned to work. She indicated that, at that time, she had overpaid the second respondent by $2,000 but when she advised him of the error, he disputed there had been an overpayment and a heated argument ensued in which he threatened her, as he had done on prior occasions.
Ms Leonard stated that, as the second respondent was a casual employee, he was not entitled to annual leave, sick leave or paid public holidays but she intended to pay his superannuation. She confirmed that he commenced working for her on 11 July 2019 and last worked for one hour on 15 September 2019. She said that he did not return to work and did not notify her that he was not returning. She denied the second respondent reported an injury in her employ and denied that she had ever threatened or bullied him.
Ms Leonard gave a further statement of the same date, however, it provided no further evidence relevant to the appeal.[9]
[9] Nominal Insurer’s reply, pp 307–311.
Ms Leonard also provided a statement dated 19 December 2019 in response to the second respondent’s statement evidence.[10] She asserted that the second respondent was not employed as a business development manager, but she had told him that she would consider the proposition if he worked for her for three months and was able to recover the outstanding debts, which he never did. She disputed that the outstanding debts totalled $45,000 and said that they totalled approximately $180,000. She further disputed that she had agreed to pay the second respondent commissions. Ms Leonard confirmed that she paid the second respondent at the rate of $30 per hour.
[10] Nominal Insurer’s reply, pp 320–328.
Ms Leonard disputed many other aspects of the second respondent’s evidence that are not relevant to the issues on appeal, however, it is apparent that there was a significant ongoing dispute between the second respondent and Ms Leonard. The only “middle ground” was that Ms Leonard handed the second respondent a contract of employment, setting out that the second respondent would be paid $60,000 per annum, working from 9 am to 6 pm and at times the appellant did not have the money to pay the second respondent.
Ms Leonard provided a further undated statement that appears to have been taken in February 2023.[11] She confirmed that the second respondent was employed by the appellant to recover unpaid debts owing to the appellant, his employment was contingent upon recovery of the debts, and he was a casual employee. She further confirmed that he was paid $30 per hour and at his request his wages were paid in cash with no record of his employment made in the appellant’s documentation. Ms Leonard said that initially she declined his request that there be no record of his employment but later agreed because she was frightened of his aggressive behaviour. She added, however, that she did keep an excel spreadsheet notation of every payment made.
[11] Appellant’s AALD dated 7 February 2023, pp 122–125.
Ms Leonard advised that they had agreed that the second respond would work 5 days per week, however after four weeks, he took three weeks off from 5 August 2019 to renovate his apartment. She said that over the period of eleven weeks of employment, he actually only worked 28 days.
Ms Leonard stated that she had been contacted by a Mr Craig Burton, a property developer, who told her that the second respondent was intent on destroying her. She said that Mr Burton told her that the second respondent had been working for him doing repairs, maintenance and property decorating, as well as showing the properties to prospective tenants and for each new tenant the second respondent was given free rent for one week. She said that Mr Burton told her that to date, the second respondent had found tenants for 40 properties, which amounted to a payment of approximately $16,000 as well as the free rent. Ms Leonard stated that Mr Burton advised her that he had taken court proceedings against the second respondent in respect of the arrangement. She said that Mr Burton was to provide her with the documentation that showed that the second respondent had performed that work over the period that he had been in receipt of workers compensation payments.
Ms Leonard indicated that the second respondent had nominated 5 August 2019 as the date upon which she bullied him. She said that that date was the date upon which he took two weeks’ absence from work to renovate his apartment and she visited him that evening at his apartment at his invitation as well as at other times during that period.
Ms Leonard stated that over the period of his employment, the second respondent was paid at the correct hourly rate of $30 per hour and the total averaged $902 per week, but that included an overpayment, which, when deducted, resulted in an average of $640 per week.
Ms Leonard provided a further statement dated 27 April 2023 in response to the second respondent’s statement dated 19 April 2019.[12] She stated that:
(a) at no time was the second respondent offered a $10,000 salary bonus;
(b) the employment contract was a draft of what she and the second respondent could work towards in the future and did not reflect the agreement that the second respondent was to work on recovering debts owing to the appellant;
(c) she was advised by the second respondent that Dr McKay instructed the second respondent to take two weeks of leave because he was only capable of working 5 hours per day, 3 days per week;
(d) at the end of the two weeks, he asked for a further week off to attend to work on his apartment and garden;
(e) the second respondent had been paid all wages due to him, as well as an over-payment;
(f) the conversation with Mr Burton occurred in September 2020;
(g) The second respondent did not disclose that he had earned income from Mr Burton until after she advised the Nominal Insurer, and
(h) she rejected the allegation that she bullied the second respondent.
[12] Appellant’s AALD dated 1 May 2023, pp 1–4.
Ms Leonard made yet a further additional statement dated 30 June 2023 in response to the second respondent’s evidence.[13] Much of the statement covered matters that she had already addressed in earlier statements. Relevant to the issues on appeal, she added:
(a) the excel worksheet that the second respondent had created disclosed that between 11 July 2019 and 15 September 2019 (a period of nine weeks) the second respondent worked 246.5 hours, which was an average of 27 hours per week, and the agreed rate was $30 per hour;
(b) the mobile telephone text messages exchanged between the second respondent and her during September and October 2019 disclosed that they enjoyed a cordial relationship at that time, and
(c) because of the global financial crisis and the COVID-19 restrictions, the business suffered and the appellant was faced with cash flow problems, and there were unpaid invoices which was the reason for the appellant engaging the second respondent.
[13] Appellant’s AALD dated 10 July 2023, pp 1–8.
In the same statement, Ms Leonard responded to a statement made by Ms Forrester. She said that:
(a) only one of her employees had been given a contract of employment;
(b) the second respondent was not Ms Leonard’s executive assistant, although at times he would sign emails under that title;
(c) she never directed the second respondent to assist with the bookkeeping because it was clear that he did not have those skills, and
(d) she did not offer the second respondent a percentage of the appellant’s business.
Ms Leonard said that in about October 2019, the second respondent returned from a trip to the country and showed her photographs of improvements he had done to Ms Forrester’s house, and he told her that Ms Forrester paid him $500 per week in cash for the work he did.
In a letter to the Nominal Insurer dated 28 February 2021, Ms Leonard advised that the first indication she had that the second respondent had made a claim for compensation was in the Certificate of Capacity dated 28 October 2019.[14]
[14] Nominal Insurer’s reply, pp 30–32.
Ms Forrester’s evidence
Ms Forrester made a statement dated 14 December 2019 at the request of the Nominal Insurer’s investigator.[15] She described her occupation as a self-employed business adviser. She advised that she had met Ms Leonard in about September 2017 at a business group meeting. She said that, from discussions with Ms Leonard, she was aware that the appellant had staffing issues and significant financial issues related to unpaid invoices for work done over the previous two years.
[15] Nominal Insurer’s AALD dated 22 June 2023, pp 1–11.
Ms Forrester stated that in June 2019, she began working with Ms Leonard to assist her with setting up a new file system. She indicated that the appellant was struggling with being very cash poor and still had a large debtor list which had not been dealt with, and there were issues with staff, the Australian Taxation Office and the bank, which were causing Ms Leonard concern. Ms Forrester said she assisted the appellant with the accounts system and in setting up a payroll data entry system. She described the difficulties she had in completing the set-up of the new system, which in part was a result of some of the staff being paid in cash or in electronic transfers.
Ms Forrester recalled that the second respondent commenced in July 2019 and she thought that he was paid between $25 and $30 per hour and then at the rate of approximately $60,000 per annum. She said she did not know the exact hours the second respondent worked because she was not always at the premises.
Ms Forrester indicated that as at the end of August and September 2019, her own business interests increased, and she became less involved with the appellant. She noted that there were a number of emails and messages sent by text between the second respondent and Ms Leonard relating to the second respondent’s pay entitlements that indicated to her that there was a major issue developing in which she did not want to become involved.
Ms Forrester said that she remained friends with the second respondent and lent money to him as the appellant was not paying the second respondent the wages due to him. Ms Forrester said that, in return for the loans, the second respondent did some work around her house and thus was paying her back “in kind.” Ms Forrester observed that the second respondent was becoming anxious about the money that was owing to him. She made the observation that the manner in which the appellant’s business was conducted led her to believe that money was also owing to other staff and the appellant’s suppliers.
Ms Forrester made a supplementary statement dated 18 May 2023.[16] Ms Forrester confirmed and added greater detail to the evidence she provided in her previous statement. Relevantly, Ms Forrester stated that when she took the second respondent with her to the country in 2019, she paid his travel expenses and lent him money, which he had not yet repaid. She further stated that the second respondent was not paid for any professional services by any company that she controlled.
[16] Second respondent’s AALD dated 18 May 2023, pp 17–22.
The relevant documents
The draft unsigned contract of employment dated 29 July 2019 was in evidence.[17] It is apparent from the handwritten notations on the draft document and the evidence of both Ms Leonard and the second respondent that many of the terms of employment set out in that document were never agreed between the appellant and the second respondent.
[17] Nominal Insurer’s reply, pp 364–372.
A letter from the Nominal Insurer (icare) to the appellant dated 8 September 2020 discloses that the Nominal Insurer had calculated the second respondent’s pre-injury average weekly earnings to be $1,153.85, based upon the contract of employment, which indicated that the second respondent was to be paid $60,000 per annum.[18]
[18] Nominal Insurer’s reply, pp 18–20.
Mobile telephone text messages passing between the appellant and the second respondent indicate that there were issues between the second respondent and the appellant in respect of the payment of the second respondent’s wages.[19]
[19] Second Respondent’s AALD dated 18 May 2023, pp 6–16.
The second respondent completed an Employment Statutory Declaration on 29 April 2021.[20] He disclosed that since 15 July 2020 he had performed casual cleaning work for Mr Burton and he also performed casual gardening work. He disclosed a total income from Mr Burton of $478.02 from 15 July 2020 to 11 November 2020.
[20] Nominal Insurer’s reply, pp 39–41.
Documents obtained from the NSW Civil and Administrative Tribunal related to proceedings brought by the second respondent against Mr Burton in respect of an application for refunds of rental bonds and rental arrears were in evidence. The documents showed that the second respondent received the benefit of “gifted rent” of $340 per week between 17 January 2020 and 1 May 2020, from 15 May 2020 to 3 July 2020, and various amounts from 18 December 2020 to 19 March 2021. He also received a total of $4,000 deposited in a “property account.” A number of taxation invoices were also included for odd jobs done, directed to Mr Burton from the second respondent.[21] On 8 October 2021, the Tribunal ordered Mr Burton to pay the second respondent overpaid rent in the sum of $276.87.[22]
[21] Nominal Insurer’s AALD dated 19 April 2023.
[22] Second respondent’s AALD dated 19 April 2023, pp 22–25.
On 10 December 2019, the second respondent sent an email to the Nominal Insurer’s investigator, attaching what he described as a “PDF created from Excel” in regard to what hours and days he worked and the money he was paid.[23] The spreadsheet showed that:
[23] Nominal Insurer’s reply, pp 396–397.
(a) the second respondent commenced work on 11 July 2019 and worked 11 hours on that day at a rate of $30 per hour;
(b) in the week commencing 15 July 2019, the second respondent worked 46 hours at a rate of $30 per hour;
(c) in the week commencing 22 July 2019, the second respondent worked 45 hours at a rate of $30 per hour;
(d) in the week commencing 29 July 2019, the second respondent worked 23 hours at a rate of $30 per hour;
(e) in the 2 weeks commencing 5 August 2019 and 12 August 2019, the second respondent did not work;
(f) in the week commencing 19 August 2019, the second respondent worked 4 hours at a rate of $30 per hour;
(g) in the week commencing 26 August 2019, the second respondent worked 44 hours at a rate of $30 per hour;
(h) in the week commencing 2 September 2019, the second respondent worked 45.5 hours and claimed a rate of $70 per hour;
(i) in the week commencing 9 September 2019, the second respondent worked 28 hours at a rate of $30 per hour, and
(j) the second respondent’s last day of work was 15 September 2019.
The medical evidence as to the second respondent’s incapacity
Dr Brad McKay, general practitioner
The clinical records of Dr McKay commencing from 8 July 2019 were in evidence.[24] In the first entry, Dr McKay provided a diagnosis of anxiety and depression, that had decreased when the second respondent commenced medication. Dr McKay noted that the second respondent was working limited hours, work was not being supportive, and he was feeling stressed. Dr McKay noted that the second respondent was experiencing issues with housing. On 15 July 2019, Dr McKay recorded that the second respondent had been offered 25 hours per week working for the appellant.[25] On 29 July 2019, Dr McKay noted that there were unrelated stressors, including being robbed by his friends, but also that “work [was] going OK” and the second respondent was “now getting paid some money after a delay in payments” to the second respondent for the work he had done for the appellant.[26]
[24] Nominal Insurer’s reply, pp 53–194.
[25] Nominal Insurer’s reply, pp 56–57.
[26] Nominal Insurer’s reply, p 57.
On 5 August 2019, Dr McKay recorded that:
“[The second respondent] has been told by his recent employer at ‘Sweet Art’ that she won’t be paying him, even though he has been working for her
-> Recurrent issues of betrayal, broken friendships, deceit
-> Not in a fit state to look for work at the moment considering these circumstances---> Centrelink Cert completed”.[27][27] Nominal Insurer’s reply, p 63.
Over further consultations, the second respondent continued to suffer from anxiety and depression in the context of his wages being paid only sporadically. On 21 October 2019, Dr McKay recorded that the second respondent was working 8 to 15 hours per week.[28]
[28] Nominal Insurer’s reply, p 60.
On 4 November 2019, Dr McKay suggested the second respondent was fit for work, limited to 15 hours per week.[29]
[29] Nominal Insurer’s reply, p 60.
Dr McKay provided a number of Workcover Certificates of Capacity between 28 October 2019 and 20 January 2020,[30] certifying that the second respondent was fit for 15 hours’ work over a period of three days. On 21 January 2020, Dr McKay certified that the second respondent had no capacity for work, and maintained that certification until 1 August 2022, which was the last certificate in evidence.[31]
[30] Nominal Insurer’s reply, pp 74–91.
[31] Nominal Insurer’s reply, pp 92–194.
Dr Adam Bayes, psychiatrist
The second respondent was referred to Dr Bayes by Dr McKay. Dr Bayes reported to Dr McKay on 12 November 2020.[32] He took a thorough history of the second respondent’s traumatic past and his pre-existing psychological condition and noted the workplace challenges that were said to have precipitated the current workers compensation claim. Dr Bayes commented that the second respondent was not currently psychotic, his mood was stable, and he had developed a beneficial therapeutic relationship with his psychologist. He made recommendations in respect of appropriate medication.
[32] Nominal Insurer’s reply, pp 196–210.
On 11 February 2021, Dr Bayes corresponded with the Nominal Insurer in response to queries posed. He advised that the second respondent was suffering from a generalised anxiety disorder and a major depressive disorder. He opined that the second respondent would be able to return to pre-injury duties after an estimated period of six months but said that he was currently unfit for work.
Dr Bayes reported to Dr McKay again on 6 April 2021 in the context of the second respondent struggling to put in place alcohol free days. On 24 August 2021, Dr Bayes advised Dr McKay that the second respondent’s “motivation and cognitive symptoms of depression have markedly improved.”[33] He confirmed that a support dog would assist the second respondent with his agoraphobia.
[33] Nominal Insurer’s reply, p 209.
On 1 February 2022, Dr Bayes again corresponded with the Nominal Insurer in support of the second respondent’s request for an assistance (therapy) dog. He provided a diagnosis of a major depressive disorder with post-traumatic stress disorder and agoraphobia. He explained that the second respondent was isolated with agoraphobia and would benefit from the external focus on the dog, the companionship, walking the dog and engagement with other dog owners.
Dr Thomas Oldtree Clark, psychiatrist
Dr Oldtree Clark examined the second respondent by way of Telehealth conference on 22 July 2020 at the request of the second respondent’s legal representatives. He provided a report dated 29 July 2020.[34] He took a consistent history of the second respondent’s past and workplace stressors. He noted that the second respondent had not worked since 22 October 2019 because of the workplace stressors. He diagnosed the second respondent as suffering from a generalised anxiety disorder and major depressive disorder, which was an aggravation of his pre-existing condition and directly related to the second respondent’s employment.
[34] Nominal Insurer’s reply, pp 212–220.
Dr Oldtree Clark considered that the second respondent was capable of part-time work, but not in his former employment and that the loss of capacity was a consequence of the injury sustained in the appellant’s employ. He declined to make an assessment of the second respondent’s whole person impairment because his condition had not yet stabilised.
Dr Graham George, psychiatrist
Dr George provided a report dated 19 November 2019 at the request of the Nominal Insurer.[35] He took a detailed history of the stressors experienced by the second respondent in the employ of the appellant and the progression of the second respondent’s psychological condition. He diagnosed the second respondent as suffering from an exacerbation of a major depressive disorder implicated by apparent substance abuse.
[35] Nominal Insurer’s reply, pp 221–229.
Dr George remarked that it was obvious that the second respondent could not return to his pre-injury duties. He noted that the second respondent was controlling his alcohol use and working in his own business for ten hours per week although the business was not generating ongoing income at that stage. Dr George was of the view that the second respondent had the capacity to work for a maximum of 20 hours per week. He advised that the second respondent’s ability to work full time was affected by the need for ongoing antidepressant and antipsychotic medication, which he required in order to maintain his mood state.
Dr Christopher Canaris, psychiatrist
Dr Canaris was requested to examine the second respondent by the Nominal Insurer. He reported to the Nominal Insurer on 17 February 2022.[36] He took a detailed history of the second respondent’s past psychological issues and the exacerbation of the condition in the employ of the appellant. He concluded that the second respondent was in a fragile state when he commenced work with the appellant but was then faced with a stressful environment, which caused worsening anxiety and depression, resulting in him ceasing work and claiming workers compensation. Dr Canaris observed that the second respondent’s life was:
“… now dominated by anxiety and depression with fragmented sleep, panic attacks, agoraphobia, poor self-care, weight gain, social withdrawal, loss of libido, poor concentration, and loss of motivation.”[37]
[36] Nominal Insurer’s reply, pp 240–249.
[37] Dr Canaris’ report, p 6, Nominal Insurer’s reply, p 245.
Dr Canaris noted that the second respondent’s psychological issues pre-dated the difficulties at work with the appellant but said that on the history provided, the second respondent experienced a major worsening of his mood disorder as a consequence of the workplace stressors with apparent emergence (or re-emergence) of an alcohol abuse disorder. He considered that the second respondent’s work-related psychological or psychiatric condition had not resolved. Dr Canaris was of the view that the second respondent’s reported level of symptoms led him to conclude that the second respondent did not have any capacity for work, whether in the same line of work or elsewhere and that occupational rehabilitation was, at that stage, not an option.
Dr Frank Chow, psychiatrist
The second respondent’s legal representatives arranged for him to be examined by Dr Chow for the purpose of these proceedings. Dr Chow provided a report dated 23 September 2022.[38] Dr Chow recorded the history reported by the second respondent in relation to his employment difficulties working for the appellant, which caused the second respondent to cease work. Dr Chow noted that the second respondent’s psychological condition over the previous three years was severe, and that he had been diagnosed with anxiety, depression and post-traumatic stress disorder as well as agoraphobia and panic attacks. Dr Chow recorded that, since the second respondent had acquired a therapy dog, he was able to go out more frequently.
[38] Second respondent’s reply, pp 33–39.
Dr Chow observed that the second respondent had a pre-existing history of anxiety requiring anti-depressant medication on and off over the years. Dr Chow recorded that the second respondent complained of concentration difficulties, together with “ongoing pervasive low mood, anxiety, poor sleep, poor appetite, no interest in activities, poor motivation and energy with feelings of guilt, worthlessness and hopelessness.”[39] Dr Chow added that:
“Since ceasing work, he has suffered worsening psychological symptoms and his alcohol intake increased. With psychological and psychiatric treatment, there has been some alleviation of his alcohol drinking and psychological symptoms.
He continues to experience significant psychological symptoms to warrant a diagnosis of major depressive disorder and alcohol use disorder. There are some traumatisation symptoms and recurrent panic attacks.
He will need ongoing psychological and psychiatric treatment.
He remains totally unfit for work.”[40]
[39] Dr Chow’s report, p 4, second respondent’s reply, p 36.
[40] Dr Chow’s report, p 5, second respondent’s reply, p 37.
THE SENIOR MEMBER’S REASONS
The Senior Member made a number of findings in respect of the issues for determination by her, including the issues of whether the second respondent suffered a psychological injury and whether the Nominal Insurer was liable to pay compensation for the second respondent’s psychological injury in circumstances where the injury was asserted to have resulted from reasonable action taken by the appellant in respect of the provision of employment benefits. This appeal is limited to allegations of error on the part of the Senior Member with respect to her findings as to:
(a) the deemed date of the injury;
(b) the calculation of the second respondent’s pre-injury average weekly earnings, and
(c) the second respondent’s capacity for work.
This summary of the Senior Member’s reasons is therefore limited to the Senior Member’s consideration of those issues.
The Senior Member noted that the appellant conceded that it did not have a workers compensation insurance policy in place as at 28 October 2019, but otherwise did not concede that it was uninsured. The Senior Member further noted that the second respondent completed a claim form on 10 January 2020, in which it was noted that the claim was originally submitted in September 2019, however, there was no evidence of that document in the evidence before the Commission. The Senior Member observed that the date of injury in the claim form dated 10 January 2020 was said to be 26 July 2019 and that the injury was described as an exacerbation of the second respondent’s pre-existing depression and anxiety caused by mental abuse and bullying.
The Senior Member indicated that the Nominal Insurer had recorded a date of injury of 5 August 2019, had initially declined liability and then subsequently accepted liability for the claim. The Senior Member referred to the Nominal Insurer’s determinations that the appellant was not an employer who was exempt from holding a policy of insurance for the relevant financial year and was an uninsured employer as at 28 October 2019. The Senior Member further referred to the Nominal Insurer’s determination that, based upon the second respondent’s contract of employment, the second respondent’s pre-injury average weekly earnings figure was $1,153.85 per week, and the further determination that the second respondent had been assessed as having no capacity for employment.
The Senior Member observed that the Nominal Insurer issued a notice pursuant to s 145(1) of the 1987 Act seeking reimbursement from the appellant of payments made to the second respondent totalling $195,394.61, following which the appellant commenced proceedings in the Commission, disputing liability for the payments made by the Nominal Insurer.
The Senior Member noted the issues in dispute which she was required to determine and provided an extensive summary of the procedural matters leading up to the arbitration on 25 July 2023. The Senior Member advised that, following the arbitration, the parties were given the opportunity to file further submissions in respect of the second respondent’s capacity for work during the period from 17 January 2020 to 19 March 2021, and were directed to file a wages schedule for that period.
The Senior Member provided a detailed summary of the lay and medical evidence before her, and the submissions of the parties. The Senior Member remarked that:
“Both the second respondent and Ms Leonard have given contradictory and to some extent self-serving evidence. It has been necessary to analyse their evidence in some detail. There is documentary evidence of some events, and evidence of other witnesses, some of which was of little assistance.
Ms Leonard has provided references as to her character and the manner in which she ran her business. While I have reviewed that evidence, I ultimately found it of little assistance in determining the issues in dispute.”[41]
[41] Sweet Art Special Events Pty Ltd v Workers Compensation Nominal Insurer (icare) [2023] NSWPIC 525 (reasons), [769]–[770].
The Senior Member proceeded to determine the question of whether the second respondent had suffered injury as alleged. She weighed the available evidence and observed that the medical evidence was consistent with the second respondent having suffered an aggravation, acceleration, exacerbation or deterioration of his pre-existing psychological condition. The Senior Member determined that the second respondent suffered a psychological injury in the course of his employment with the appellant pursuant to s 4(b)(ii) of the 1987 Act and that the employment was the main contributing factor to the aggravation of the second respondent’s psychological injury.
The Senior Member considered the issue of the deemed date of injury. She observed that the second respondent’s perception of the date of injury and/or the date of injury recorded by the Nominal Insurer were not relevant. She noted that the appellant submitted that the second respondent was not employed on 28 October 2019, which she considered was irrelevant to the determination of the deemed date of injury. She observed that Ms Leonard’s evidence was that the second respondent had never been terminated or dismissed, he had not resigned, and he had not given any indication that he was not returning to work. She added that the second respondent said that he had not been notified that his employment had been terminated and he had not resigned from his employment.
The Senior Member referred to the appellant’s concession that it was uninsured on 28 October 2019, however, did not concede that it was uninsured for any other period. The Senior Member referred to Ms Leonard’s evidence that she became aware that the appellant was uninsured when the second respondent lodged his compensation claim, and that the Nominal Insurer had advised her that the appellant was uninsured for the 2019/2020 period.
The Senior Member accepted that the deemed date of injury was 28 October 2019. She reasoned that a Certificate of Capacity was issued on that date, which was the first period of incapacity for which compensation was claimed.
The Senior Member proceeded to determine whether the second respondent’s injury was wholly or predominantly caused by reasonable action on the part of the appellant in respect of the provision of employment benefits. She determined that the appellant’s actions in respect of the payment of wages were not with respect to the provision of employment benefits, were not the whole or predominant cause of the injury and, in any event, were not reasonable.
The Senior Member accepted the Nominal Insurer’s submissions that the second respondent was employed on a full-time basis, working Monday to Friday from 9 am to 5 pm at a rate of $30 per hour and his salary was $60,000 per year. She said that this was consistent with the evidence of Ms Leonard in her first statement, consistent with the contract of employment she had prepared (but was unsigned), and with Ms Forrester’s evidence. She said that additionally, Ms Leonard’s evidence was that she did not agree to increase the second respondent’s hourly rate and paid him at the normal rate. The Senior Member noted that Ms Leonard had later attempted to resile from that evidence, but she accepted the Nominal Insurer’s submission that Ms Leonard’s first statement was more likely to be more accurate. Further, it was not contradicted by the evidence of Ms Forrester about the basis upon which the second respondent was employed.
The Senior Member said that she accepted that:
“the [second respondent] was paid sporadically, and he had to consistently request payment of his wages. The text messages, Ms Forrester’s evidence, the clinical records of Dr McKay, Open Dialogue Psychotherapy, and Ms Leonard’s evidence, confirm this.
Ms Leonard, for example, said that had the [second respondent] collected outstanding debts, she would have had the money to pay him, and he knew that she could only afford to have him if he collected the outstanding money. She also said when he started to demand payment and threaten her, she had to pay what she could, when she could.”[42]
[42] Reasons, [777]–[778].
The Senior Member considered the issue of the second respondent’s capacity for work. She noted that the second respondent performed some work with Ms Forrester at about the end of October 2019, which Ms Forrester said was unpaid work. The Senior Member said that, although the second respondent had not mentioned in his evidence that he had worked for Mr Burton, he had submitted a statutory declaration to the Nominal Insurer in April 2021 in which he disclosed doing some work for Mr Burton in return for “gifted” rent.
The Senior Member said that she had sought submissions from the parties in respect of the second respondent’s capacity to work between 17 January 2020 and 19 March 2021, which was the period during which the second respondent performed work for Mr Burton. She noted that the appellant submitted that the second respondent’s capacity during the period in question was relevant to the entire period that the second respondent was in receipt of weekly payments. The Senior Member remarked that the second respondent was the only party to provide a wages schedule.
The Senior Member noted that the Nominal Insurer submitted that the second respondent’s ability to earn in that relevant period was $340 per week. She said that she did not accept the second respondent’s submission that, in accordance with the Certificates of Capacity issued by Dr McKay, he had no capacity for work during that period. She explained that, despite the certificates, the second respondent had demonstrated some capacity to work during that time. The Senior Member referred to Dr Oldtree Clark’s evidence that in July 2020, the second respondent was capable of doing part-time work, noting that Dr Oldtree Clark was qualified by the second respondent. She observed that at the time Dr Bayes reviewed the second respondent on 23 March 2021, the second respondent’s condition had appeared to deteriorate and by August 2021 the second respondent was “struggling” with agoraphobia.
The Senior Member observed that, in her view, the second respondent had a limited capacity for work during the relevant period but thereafter the medical evidence indicated that he had no work capacity. The Senior Member concluded that she did not accept the appellant’s submission that the work the second respondent performed for Mr Burton showed that the second respondent could work as a real estate agent. She observed that:
“[The second respondent] lacks the qualifications to do so. He was not working on a full-time basis, and I do not believe he had the capacity to work full time. It appears that, at least initially, he was on good terms with Mr Burton, and it is likely that the latter tried to assist him by offering small tasks and gifted rent. This is unlikely to have been the case with other employers.”[43]
[43] Reasons, [834].
The Senior Member indicated that she also did not accept the appellant’s submission that the second respondent had demonstrated an ability to earn $400 per hour for a full-time week because he had earned $340 per week from Mr Burton in respect of 45 minutes’ work per week. The Senior Member thought it illogical that a worker would be capable of earning the same rate that he was paid for less than an hour’s work over a full week.
The Senior Member turned to the definition of suitable employment contained in s 32A of the 1987 Act and noted that the definition did not permit her to take into account whether the employment was available to the second respondent, or the nature of the work, or where the second respondent lived. She said that she was to have regard to the nature of the second respondent’s capacity, his age, education, skills and work experience. The Senior Member noted the second respondent’s age and commented that his experience appeared to have been mainly in sales and he had been involved in charity work, however, his history of employment was limited. The Senior Member reasoned that the second respondent would have difficulty in performing sales work because of his psychological injury, given that he was isolated, had symptoms of agoraphobia and was abusing alcohol. She concluded that the second respondent’s work with Mr Burton represented his work capacity and that during the period from 17 January 2020 to 19 March 2021, the second respondent had the capacity to earn $340 per week as “gifted” rent.
The Senior Member observed that, in the statutory declaration provided to the Nominal Insurer, the second respondent also disclosed a payment of a total of $478.02 earned from performing odd jobs from 15 July 2020 to 11 November 2020, which she calculated as $28.11 per week, and which she concluded was income in addition to the gifted rent. She determined that the second respondent had a capacity to perform the odd jobs between 17 January 2020 and 19 March 2021 that amounted to $28.11 per week, which disclosed an ability to earn $368.11 per week for that period.
The Senior Member said that the second respondent’s entitlements were to be calculated in accordance with s 37 of the 1987 Act. She noted that the second respondent’s pre-injury average weekly earnings figure was $1,153.85 per week, so that 80% of that amount was $923.08, from which the ability to earn of $368.11 was to be deducted which left a weekly entitlement during that period of $554.97 per week. The Senior Member observed that the second respondent had been paid during that period at the rate of $923.08 per week on the basis that he had no capacity for work, so that the amount the appellant was required to reimburse the Nominal Insurer was to be reduced by $26,766.85.
The Senior Member proceeded to determine the issue of whether the treatment expenses were reasonable and appropriate and found in favour of the Nominal Insurer. The Senior Member determined that:
“(a) the second respondent sustained injury, that is, aggravation of a disease, pursuant to s 4(b)(ii) of the 1987 Act, deemed to have happened on 28 October 2019, in the employ of the [appellant];
(b) the [appellant] does not have a defence to the claim pursuant to s 11A of the 1987 Act;
(c) the second respondent’s PIAWE were $1,153.85 per week;
(d) the second respondent had work capacity from 17 January 2020 to 19 March 2021, but has otherwise had no capacity for work during the period in which the [Nominal Insurer] has made weekly payments of compensation;
(e) the medical treatment provided to the second respondent, including the provision of a support animal, was reasonably necessary treatment, and
(f) the [appellant], which has conceded that it was not insured at the relevant time, is to reimburse the first respondent for payments made to, for, or on behalf of the second respondent, subject to a reduction of $26,766.85.”[44]
[44] Reasons, [854].
The Certificate of Determination issued on dated 5 October 2023 records:
“The Commission determines:
1. Pursuant to s 145 of the Workers Compensation Act 1987, the [appellant] is to pay to the first respondent the sum of $168,627.76.”
GROUNDS OF APPEAL
The appellant brings the following grounds of appeal:
(a) Ground A: error of law in determining the date of the injury;
(b) Ground B: error of law and fact in determining the second respondent’s pre-injury average weekly earnings, and
(c) Ground C: error of fact and law in determining the second respondent’s capacity for work and ability to earn.
LEGISLATION
Section 16 of the 1987 Act makes provision for the determination of the deemed date of injury in respect of an injury that consists in the aggravation, acceleration, exacerbation or deterioration of a disease. It provides as follows:
“16 Aggravation etc of diseases—employer liable, date of injury etc …
(1) If an injury consists in the aggravation, acceleration, exacerbation or deterioration of a disease:
(a)the injury shall, for the purposes of this Act, be deemed to have happened:
(i)at the time of the worker’s death or incapacity, or
(ii)if death or incapacity has not resulted from the injury—at the time the worker makes a claim for compensation with respect to the injury, and
(b)compensation is payable by the employer who last employed the worker in employment that was a substantial contributing factor to the aggravation, acceleration, exacerbation or deterioration.
…
(3) In this section, a reference to an injury includes a reference to a permanent impairment for which compensation is payable under Division 4 of Part 3.”
Section 32A of the 1987 Act defines “suitable employment” as:
“32A Definitions
(1) In this Division and in Schedule 3—
…
suitable employment, in relation to a worker, means employment in work for which the worker is currently suited—
(a) having regard to—
(i) the nature of the worker’s incapacity and the details provided in medical information including, but not limited to, any certificate of capacity supplied by the worker (under section 44B), and
(ii) the worker’s age, education, skills and work experience, and
(iii) any plan or document prepared as part of the return to work planning process, including an injury management plan under Chapter 3 of the 1998 Act, and
(iv) any occupational rehabilitation services that are being, or have been, provided to or for the worker, and
(v) such other matters as the Workers Compensation Guidelines may specify, and
(b) regardless of—
(i) whether the work or the employment is available, and
(ii) whether the work or the employment is of a type or nature that is generally available in the employment market, and
(iii) the nature of the worker’s pre-injury employment, and
(iv) the worker’s place of residence.”
Sections 36 and 37 of the 1987 Act provide for the payment of weekly compensation to an injured worker during the first 130 weeks of compensation payments and the percentage rate applicable in calculating the amount payable. Those sections provide as follows:
“36 Weekly payments during first entitlement period (first 13 weeks)
(1) The weekly payment of compensation to which an injured worker who has no current work capacity is entitled during the first entitlement period is to be at the rate of 95% of the worker’s pre-injury average weekly earnings.
(2) The weekly payment of compensation to which an injured worker who has current work capacity is entitled during the first entitlement period is to be at the lesser of the following rates—
(a) 95% of the worker’s pre-injury average weekly earnings, less the worker’s current weekly earnings,
(b) the maximum weekly compensation amount, less the worker’s current weekly earnings.
37 Weekly payments during second entitlement period (weeks 14–130)
(1) The weekly payment of compensation to which an injured worker who has no current work capacity is entitled during the second entitlement period is to be at the rate of 80% of the worker’s pre-injury average weekly earnings.
(2) The weekly payment of compensation to which an injured worker who has current work capacity and has returned to work for not less than 15 hours per week is entitled during the second entitlement period is to be at the lesser of the following rates—
(a) 95% of the worker’s pre-injury average weekly earnings, less the worker’s current weekly earnings,
(b) the maximum weekly compensation amount, less the worker’s current weekly earnings.
(3) The weekly payment of compensation to which an injured worker who has current work capacity and has returned to work for less than 15 hours per week (or who has not returned to work) is entitled during the second entitlement period is to be at the lesser of the following rates—
(a) 80% of the worker’s pre-injury average weekly earnings, less the worker’s current weekly earnings,
(b) the maximum weekly compensation amount, less the worker’s current weekly earnings.”
Clause 2 of Sch 3 to the 1987 Act defines the term “pre-injury average weekly earnings” and prescribes the method for calculating that figure. Relevantly, cl 2 provides:
“(1) …
(2) Except as provided by this clause (or by regulations made under this clause), in calculating the pre-injury earnings received by a worker in employment for the purposes of subclause (1), no regard is to be had to earnings in the employment paid or payable to the worker for work performed before or after the period of 52 weeks ending immediately before the date of the injury (the relevant earning period).
(3) The regulations may provide for the adjustment of the relevant earning period for a worker in employment (including, for example, by extending or reducing the period)—
(a) to take into account any period of unpaid leave or other change in earnings circumstances in the employment, or
(b) to align the relevant earning period with any regular interval at which the worker is entitled to receive payment of earnings for work performed in the employment.
(4) …”.
Clause 8 of Pt 4 of the Workers Compensation Regulation 2016 (the 2016 Regulation) provides that Pt 4 of the 2016 Regulation relates to injuries occurring after 21 October 2019.
Regulation 8C of Pt 4 provides for the adjustment of the relevant earning period in the following circumstances:
“8C Adjustment for financially material change to earnings—Schedule 3, clause 2(3)(a) of 1987 Act
(1) The relevant earning period for a worker is to be adjusted in accordance with this clause if, during the unadjusted earning period, there was a change of an ongoing nature to the employment arrangement resulting in a financially material change to the earnings of the worker (for example, a change from full-time to part-time work).
(2) The relevant earning period is to be adjusted by excluding from the period any period before the change to the earnings of the worker occurred.”
SUBMISSIONS
As to Ground A
The appellant’s submissions
The appellant asserts that the matter proceeded on the basis that the notice to the appellant to reimburse the Nominal Insurer was issued in respect of a date of injury nominated as 28 October 2019, and if that date was incorrect then the Nominal Insurer’s request for reimbursement would fail. The appellant relies upon its submissions made on that issue at arbitration. The appellant refers to Husnain Pty Ltd v Workers Compensation Nominal Insurer,[45] in which the worker had claimed weekly payments and was paid only on and from 22 January 2021, however, the Workers Compensation Nominal Insurer sought reimbursement in respect of an injury dated 27 November 2020. The appellant submits that in that case Snell DP determined that the Member was not in error for accepting the earlier date of injury because although there were no weekly payments claimed from that earlier date, the worker was nonetheless incapacitated from that date.
[45] [2023] NSWPICPD 65 (Husnain).
The appellant submits that the position is precisely the same in this case, where the Senior Member accepted that the deemed date of injury was 28 October 2019, which was the second respondent’s first date of incapacity for which weekly compensation was claimed. The appellant asserts that the Senior Member’s finding was factually incorrect as it is apparent from the evidence relied upon by the Nominal Insurer that the second respondent claimed weekly payments from 8 September 2019.
The appellant adds that there were numerous other relevant periods of incapacity, such as from 5 August 2019 when the second respondent was given a medical certificate for Centrelink, in which he was certified as unfit for work from 12 August 2019 to 16 September 2019 and was fit for work on reduced hours from 8 October 2019. The appellant reiterates that this evidence does not support a finding that the first date of incapacity was 28 October 2019 and is contrary to Snell DP’s reasoning in Husnain. The appellant submits that the Senior Member’s Certificate of Determination should therefore be revoked.
Following receipt of the transcript the appellant lodged further submissions. The appellant submits that it relies upon its submission made at arbitration as to:
(a) the deemed date of injury;[46]
(b) the submissions made by the Nominal Insurer in respect of the deemed date of injury,[47] and
(c) the appellant’s submissions in reply.[48]
[46] Transcript of proceedings dated 25 July 2023 (T), Sweet Art Special Events Pty Ltd v Workers Compensation Nominal Insurer (icare) [2023] NSWPIC 525, T17.
[47] T58–60.
[48] T95–96.
The appellant submits that the Nominal Insurer conceded at pages 58 to 60 of the transcript that the deemed date of injury might not be 28 October 2019.
The appellant submits that the Nominal Insurer’s submission that the appellant has not provided an alternate date of injury is irrelevant in circumstances where the Nominal Insurer sought recovery of payments made in respect of an injury on 28 October 2019. The appellant submits that, once it is determined that the date of injury is incorrect then the notice to reimburse issued by the Nominal Insurer is not valid and the appellant is entitled to an order that no money is payable. The appellant asserts that the Commission has no jurisdiction to determine the matter if there is a different date of injury, relying on Magliano v Workers Compensation Nominal Insurer[49].
[49] [2023] NSWPICPD 51 (Magliano).
The Nominal Insurer’s submissions
The Nominal Insurer asserts that the Senior Member’s approach to the finding of the deemed date of injury discloses no error and the appellant’s submissions should be rejected. The Nominal Insurer points out that the Senior Member found that the second respondent’s injury was an injury in the form of an aggravation of a disease. The Nominal Insurer submits that, in accordance with s 16 of the 1987 Act, the Senior Member determined the deemed date of injury to be 28 October 2019, which was the first date of incapacity supported by a Certificate of Capacity provided by Dr McKay. The Nominal Insurer indicates that the appellant does not put forward a different date.
The Nominal Insurer submits that the Senior Member observed that neither the second respondent’s perceived date of injury nor the date initially recorded by the Nominal Insurer was relevant to a finding of the deemed date made in accordance with “s 16(1)(a)(1)” [sic] of the 1987 Act. The Nominal Insurer submits that the meaning of “incapacity” for the purposes of s 16 means the incapacity falling within the period that the worker becomes entitled to payments of weekly compensation and not the incapacity at the time of injury, citing P&O Berkeley Challenge Pty Ltd v Alfonso[50] as authority for that proposition.
[50] (2000) 49 NSWLR 481.
The Nominal Insurer quotes from the judgment of Sheller JA in Alto Ford Pty Ltd v Antaw[51] that, in relation to the disease provisions, “the injury is, for the purposes of the Act, if incapacity has resulted, and since the respondent is alive, deemed to have happened at the time of incapacity …”. The Nominal Insurer further refers to Basten JA’s observations in Inghams Enterprises Pty Ltd v Thoroughgood[52] and those of Handley JA in Stone v Stannard Brothers Launch Services Pty Ltd.[53] The Nominal Insurer submits that, in accordance with those authorities, the Senior Member was correct to find that the deemed date of injury was 28 October 2019, which was the first period of incapacity for which compensation was claimed.
[51] [1999] NSWCA 234, [15].
[52] [2014] NSWCA 166.
[53] [2004] NSWCA 277.
The Nominal Insurer indicates that there were a number of relevant periods of incapacity, such as the Certificate of Capacity dated 12 August 2019 that certified the second respondent as having no capacity for work from 12 August 2019 to 16 August 2019, with a date of onset of 12 June 2019. The Nominal Insurer submits that the certificate related to an earlier injury, prior to the second respondent’s commencement of employment with the appellant on 11 July 2019 and thus cannot provide a deemed date in respect of this claim. The Nominal Insurer refers to the claim form completed by the second respondent in which it was particularised that the second respondent had no capacity for work from 9 September 2019 and submits that there is no medical evidence to support any incapacity from that date.
In respect of the appellant’s supplementary submissions following receipt of the transcript, the Nominal Insurer says that the appellant’s submission that the Nominal Insurer concedes that the deemed date of injury was wrong was not consistent with the transcript of the arbitration. The Nominal Insurer explains that it submitted to the Senior Member that there may be a number of different dates to be considered in determining the deemed date of injury, however, the deemed date must comply with ss 15 or 16 of the 1987 Act. The Nominal Insurer submits that the Senior Member correctly applied s 16 in determining the first date of incapacity that was supported by medical evidence.
The Nominal Insurer asserts that this ground of appeal fails.
The second respondent’s submissions
The second respondent adopts the Nominal Insurer’s submissions in respect of this ground of appeal.
The appellant’s submissions in reply
The appellant submits that the fact that it did not identify a different date of injury is irrelevant. The appellant says that the Nominal Insurer sought recovery of payments made in respect of an injury on 28 October 2019, and if the date of injury was incorrect, then the appropriate order to be made is that there is no amount recoverable. The appellant refers to Magliano as authority to say that the Commission does not have jurisdiction to determine a dispute in respect of a different injury.
As To Ground B
The appellant’s submissions
The appellant says that the Senior Member determined the second respondent’s pre-injury average weekly earnings on the basis of the initial intention of the parties that the second respondent would be paid $60,000 per annum. The appellant points out that the proposed contract was never agreed to, and that the evidence was that the second respondent was unable to work full time, so the intention to work in accordance with the employment contract did not eventuate. The appellant refers to the evidence recorded by Dr McKay that from 8 July 2019, the second respondent was unable to work more than limited hours and on 15 July 2019, Dr McKay recorded that the second respondent was offered employment with the appellant working 25 hours per week. The appellant further points out that the second respondent was not offered a contract at the commencement of his employment and did not request a contract until 29 July 2019.
The appellant submits that the second respondent’s pre-injury average weekly earnings ought to have been determined in accordance with cl 8B of Pt 4 of the 2016 Regulation, in circumstances where the second respondent was not employed from the commencement of the non-adjusted earnings period. The appellant asserts that the pre-injury average weekly earnings should have been calculated by reference to the total amount paid during the employment period, which was $8,228.92 after the overpayment was deducted. The appellant submits that the figure should be divided by the total weeks worked, which it says was approximately 13.5 weeks and results in a pre-injury earnings amount of approximately $600 per week, as detailed in the Nominal Insurer’s Reply to Application to Resolve a Dispute.
The appellant provided further submissions upon receipt of the transcript. The appellant refers to the transcript at pages 15, 83 and 84, in which it submitted that:
(a) there was no signed written contract of employment;
(b) the draft written contract did not come into existence until 29 July 2019;
(c) the contemporaneous note recorded by Dr McKay prior to the commencement of the employment indicated that the second respondent was to work for the appellant for 25 hours per week, which was the basis of the contract between the parties, and
(d) the second respondent’s pre-injury average weekly earnings figure was therefore approximately $640 per week.
The appellant submits that those matters are supportive of his submissions already made as to the calculation of the second respondent’s pre-injury average weekly earnings.
The Nominal Insurer’s submissions
The Nominal Insurer submits that the second respondent’s pre-injury average weekly earnings figure was calculated by the Senior Member on the basis of the appellant’s own evidence in the statement of Ms Leonard dated 25 November 2019 that the intention was to employ the second respondent on a full-time basis and pay him $60,000 per annum. Further, Ms Leonard’s evidence was that she employed the second respondent to work from 9 am to 5 pm at the rate of $30 per hour, plus superannuation but she later resiled from that evidence and informed the Nominal Insurer that the second respondent was employed to perform part-time work, then in further evidence said that he was to work on a full-time basis. The Nominal Insurer also submits that the evidence of Ms Forrester’s conversation with Ms Leonard confirmed that the second respondent was engaged on a full-time basis.
In respect of the appellant’s further submissions following receipt of the transcript, the Nominal Insurer disputes that the submissions made by the appellant, recorded at pages 15, 83 and 84 of the transcript, support the appellant’s case in respect of Ground B of the appeal.
The Nominal Insurer submits that it was open to the Senior Member to accept that evidence in her determination of the second respondent’s pre-injury average weekly earnings and asserts that this ground of appeal is not made out.
The second respondent’s submissions
In the alternative to his submissions in respect of his Notice of Contention (referred to below), the second respondent submits that the Senior Member’s finding that he was “paid sporadically” and had to repeatedly request payment was supported by the evidence. The second respondent submits that the fact that he was paid sporadically was “capable of amounting to a ‘change of an ongoing nature to the employment arrangement resulting in a financially material change to the earnings’” as provided for in reg 8C(1) of the 2016 Regulation. The second respondent relies on Secretary, Department of Communities and Justice v Pell.[54]
[54] [2023] NSWPICPD 19 (Pell).
The second respondent refers to the evidence of Dr McKay, which he says supports the proposition that initially, there was a failure to pay him his earnings and, on 5 August 2019, recorded that there had been “betrayal, broken friendships and deceit”, following which Dr McKay issued Centrelink certificates on two consecutive weeks.
The second respondent submits that the infrequent and inadequate payments to him, together with the incapacity certified by Dr McKay, as well as the disagreement about the basis upon which the second respondent was employed were facts consistent with the facts in Pell and therefore capable of satisfying reg 8C(1) of the 2016 Regulation.
The second respondent otherwise indicates that he relies upon the Nominal Insurer’s submissions.
The appellant’s submissions in reply
The appellant submits that the casual nature of the employment relationship and the variable rate of pay the second respondent was paid did not constitute any ongoing change in the nature of his employment but was entirely consistent with the entire arrangement between the second respondent and the appellant. The appellant says that the discussion about a change in the employment arrangement never came to fruition so that the arrangement never changed.
As to Ground C
The appellant’s submissions
The appellant submits that the Senior Member took into account the second respondent’s capacity to earn in the form of the second respondent’s undisclosed receipt of “rent abatement” but limited that consideration to the period from 17 January 2020 to 19 March 2021. The appellant asserts that there was no basis to restrict consideration to that period and to only have regard to the Certificates of Capacity when considering the periods before and after those dates.
The appellant refers to the Certificates of Capacity attached to the Nominal Insurer’s reply, which the appellant says disclose that the second respondent had a capacity to work approximately 15 hours per week from 28 October 2019 to 20 January 2020 and thereafter had no capacity for work. The appellant submits that, despite the Certificates of Capacity certifying him as unfit for work and his declaration in those certificates that he was not working, the second respondent was able to carry out work during the period from 17 January 2020 to 19 March 2021. The appellant asserts that the second respondent’s ability to work for the period 17 January 2020 to 19 March 2021 is evidence that he had an ability to earn at least $368.11 throughout the whole period. The appellant maintains that the second respondent’s ability to earn was greater than that figure and adds that consideration cannot be given to whether or not the work was available. The appellant says that the Senior Member ought to have determined that the second respondent’s ability to earn during the period should be considered to be his ability to earn considered for the whole of the period during which the second respondent was paid weekly compensation.
The appellant refers to those parts of the transcript where the appellant made submissions as to the second respondent’s ability to earn and his further submissions made at the direction of the Senior Member and says that he relies upon those submissions.
The Nominal Insurer’s submissions
The Nominal Insurer asserts that the appellant does not dispute the Senior Member’s determination that the second respondent had an ability to earn $361.11 per week from 17 January 2020 to 19 March 2021. The Nominal Insurer points to the Senior Member’s reasons in relation to the second respondent’s capacity and submits that the Senior Member relied upon the report of Dr Clarke dated 27 July 2020 that the second respondent was fit for part-time employment as at the date of the report and the evidence of Dr Bayes dated 23 March 2021. The Nominal Insurer points out that the Senior Member also referred to the report of Dr McKay dated 21 March 2022, in which Dr McKay recorded a deterioration in the second respondent’s condition at that time and that the Senior Member noted that the second respondent had developed agoraphobia.
The Nominal Insurer refers to the Senior Member’s finding that the medical evidence indicated that after 19 March 2021, the second respondent had no work capacity. The Nominal Insurer submits that the finding was consistent with the medical evidence summarised by the Senior Member, particularly that of the medical evidence provided by Dr McKay and that of Dr Bayes in his report dated 10 August 2021, who recorded that the second respondent was, at the time of the report, struggling with agoraphobia.
The Nominal Insurer contends that the Senior Member’s findings were consistent with the medical evidence and that the Senior Member did not err in her determination in respect of the second respondent’s capacity for work.
The second respondent’s submissions
The second respondent relies upon the submissions made by the Nominal Insurer.
The appellant’s submissions in reply
The appellant repeats its submissions made in respect of the Certificates of Capacity issued by Dr McKay.
The Notice of Contention
The second respondent’s submissions
Given that the matter is to be remitted for re-determination as to the second respondent’s pre-injury average weekly earnings, it is not necessary to provide a detailed summary of the submissions made in respect of the contention, other than to say:
(a) the second respondent contends that the Senior Member was correct, but for different reasons;
(b) the deemed date of injury should not be used in calculating the number of weeks the worker worked, and
(c) cl 4 of Sch 3 to the 1987 Act may possibly apply.
It is also not necessary to record the submissions in response provided by the appellant and the Nominal Insurer.
THE RELIEF SOUGHT
The appellant seeks to have the Senior Member’s Certificate of Determination revoked and a determination made in its favour, or in the alternative the matter remitted to a different member for re-determination.
The Nominal Insurer submits that the appeal should be dismissed, and the Senior Member’s Certificate of Determination ought to be confirmed.
The second respondent is silent as to the relief sought.
CONSIDERATION
Ground A: error of law in determining the date of the injury
The appellant asserts that the deemed date of injury found by the Senior Member was incorrect and, if that date is incorrect, then the notice pursuant to s 145(1) of the 1987 Act seeking reimbursement from the appellant of payments made is invalid. The appellant relies upon Deputy President Snell’s decision in Husnain to say that it is not an error to determine an earlier date, even if weekly payments had not been paid until a later date.
The appellant’s reliance on Husnain is misplaced. In that case, Snell DP dealt with an appeal from a Member in respect of the deemed date of injury in circumstances where the worker lodged a claim for weekly payments on 27 January 2021, but the worker had initially ceased work on 27 November 2020. In assessing whether the Senior Member had erred in determining that the date of injury was the date of the first incapacity, Snell DP reviewed the relevant authorities of Inghams Enterprises Pty Ltd v Thoroughgood,[55] Stone v Stannard Brothers Launch Services Pty Ltd,[56] and the respective observations of Basten JA and Hodgson JA. Snell DP concluded that:
“The Senior Member did not err in accepting the worker’s submissions on this issue. In Stone, Hodgson JA said ‘GIO shows that one must relate the question of the time of death or incapacity under s 16(1)(a)(i) to what is being claimed’. In the same case, Hodgson JA said that ‘Berkeley Challenge shows that, if the claim under consideration is for weekly compensation based on incapacity, the relevant incapacity for the purposes of s 16(1)(a)(i) is incapacity giving rise to entitlement to weekly compensation. (emphasis added) In Stone, Handley JA said:
‘The evident purpose of s 16(1)(a) is to fix a precise date for a s 16 injury. Where the worker claims or could claim weekly compensation for incapacity the section enables this to be done.’ (emphasis added).”[57]
[55][2014] NSWCA 166.
[56] [2004] NSWCA 277.
[57] Husnain, [53].
Deputy President Snell noted that the worker’s claim for compensation from 27 November 2020 was supported by medical evidence from that date. He concluded that the Member did not err in her determination as to the deemed date of injury.
The appellant asserts that there were earlier periods of incapacity, and points to the entry in Dr Mackay’s clinical notes on 5 August 2019 whereby Dr McKay recorded that a medical certificate directed to Centrelink had been issued certifying that:
(a) the second respondent was not fit to look for work at that stage;
(b) the second respondent had been told by the appellant that he would not be paid, and
(c) there were “recurrent issues of betrayal, broken friendships, deceit”.[58]
[58] Nominal Insurer’s reply, p 58.
The appellant also identifies a Centrelink certificate dated 12 August 2019.[59] The certificate recorded the stressors as:
“Recently his home was robbed and he is under extreme financial stress. This financial situation is exacerbating his current mental health issues and causing significant anxiety.”
[59] Appellant’s AALD dated 7 February 2023, p 68.
The date of onset of the condition was recorded as 13 May 2016. Both the certificate and the entry in the clinical notes must be read in the context of the preceding clinical note, when, at the consultation on 29 July 2019 Dr McKay recorded:
“2) Recently moved into his new house - left for a few minutes and then on his return, his friends had robbed him
-> Found them at a local pub, called the police, emptied out their bag and found his phone and other possessions
-> Police attended but didn’t arrest anyone-> Increased stress, but coping OK considering the circumstances”.[60]
[60] Appellant’s AALD dated 7 February 2023, p 58.
Nothing in that material suggests an entitlement for the second respondent to make a claim for weekly compensation against the appellant in respect of any incapacity arising on 5 August 2019. In accordance with Hodgson JA’s observations and those of Handley JA recorded at [145] above, where the worker claims or could claim weekly compensation for incapacity, s 16(1)(a) of the 1987 Act enables the fixing of a precise date of the injury. There is no probative evidence that any incapacity commencing from 5 August 2019 resulted from the injury the subject of these proceedings.
The appellant further challenges the Senior Member’s determination of the date of claim on the basis that the second respondent had made a claim for compensation on 8 September 2019. The claim form for compensation completed by the second respondent asserted a date of injury as 26 July 2019 and asserted that he had no capacity for work from 8 September 2019. The document was signed by the second respondent and dated 10 January 2020, well after the claim made on 28 October 2019 for incapacity from that date.[61] The appellant does not identify any medical evidence that supports the asserted claim for a work-related incapacity from 8 September 2019 arising from the injury the subject of these proceedings, or any other period prior to 28 October 2019.
[61] Nominal Insurer’s reply, pp 3–7.
The appellant submits that, if the date of injury (determined by the Senior Member as 28 October 2019) is incorrect, then the appropriate order is that no amount is recoverable by the Nominal Insurer, referring to my decision of Magliano as authority for that proposition.
In Magliano, I made a factual determination that the worker did not suffer the alleged frank injury for which compensation was paid and thus the uninsured employer was not liable for the payments made. The factual circumstances in that case are entirely different to the current dispute. Magliano does not assist the appellant. In any event, the Senior Member’s determination that the deemed of injury was 28 October 2019 was not erroneous.
It follows that the Senior Member did not err in respect of her determination that the deemed date of injury was 28 October 2019. This ground of appeal fails.
Ground B: error of law and fact in determining the second respondent’s pre-injury average weekly earnings
The appellant asserts that the Senior Member erred by basing the calculation of the second respondent’s average weekly earnings on the contract of employment.
The Nominal Insurer submits that the evidence of Ms Leonard in her first statement and that of Ms Forrester supported the notion that the intention was that the second respondent was to be employed on a full-time basis, working 9 am to 5 pm at the rate of $30 per hour.
The Senior Member accepted that the evidence contained in Ms Leonard’s first statement was likely to be more accurate than her later statements and was not inconsistent with the evidence of Ms Forrester. She accepted the submissions of the Nominal Insurer that Ms Leonard agreed to employ the worker for 40 hours per week at a rate of $30 per hour and that whether he worked those hours was not relevant. The Senior Member determined that the second respondent was to be paid a salary of $60,000 per annum.
In order for the appellant to succeed on this ground of appeal, it is necessary for it to establish that the Senior Member erred by having overlooked material facts, or by placing undue or too little weight on that evidence in deciding the inference to be drawn.[62]
[62] Whiteley Muir & Zwanenberg Ltd v Kerr (1966) 39 ALJR 505 (Whiteley Muir) per Barwick CJ.
It is relevant that the contract of employment was dated 29 July 2019, which indicates that it was not in place at the commencement of the second respondent’s employment with the appellant. It is also relevant that the evidence discloses that the employment contract was never agreed to between the parties.
In Ms Leonard’s first statement, she said that the second respondent was to be employed on a casual basis, working 9 am to 5 pm, Monday to Friday at the rate of $30 per hour but confirmed that, in fact, the second respondent worked 11 hours in the first week, 46 in the second, and 23 in the third week.
Ms Leonard’s statement as to the hours worked is consistent with the second respondent’s schedule of hours worked and the rate of pay provided to the Nominal Insurer’s investigator, except for the entry where he expected to be paid $70 per hour. I have summarised that evidence at [56] above. Ms Leonard provided a similarly consistent schedule to the Nominal Insurer’s investigator that is endorsed with handwritten comments and approval ticks.[63]
[63] Nominal Insurer’s reply, p 373.
In addition, the second respondent advised Dr McKay at the consultation on 15 July 2019 that he would be working for the appellant performing 25 hours per week (which was after the second respondent had commenced employment with the appellant).
Overall, that evidence is evidence tending to show that the second respondent did not work from 9 am to 5 pm, but rather worked on a casual basis at variable hours and on variable days.
The pre-injury average weekly earnings figure is defined in cl 2 of Sch 3 to the 1987 Act as the weekly average of the gross pre-injury earnings received by the worker for work in any employment in which the worker was engaged at the time of the injury. This means, in my view, that the actual earnings that the worker was in fact paid for work done (or in the circumstances of this case, were payable to the worker for work done) are to be used in the calculation.
The Senior Member did not explain why she accepted that the second respondent’s pre-injury earnings figure was $1,153.85, other than, in relation to Ms Leonard’s evidence, she preferred the evidence contained in Ms Leonard’s first statement to the evidence she provided in later statements. There was competing contemporaneous evidence contrary to the proposition that the second respondent was engaged in full-time employment, earning $60,000 per annum, or $1,153.85 per week. The Senior Member did not resolve the conflict in that evidence.
It follows that the appellant has established that the Senior Member erred in her conclusions that the second respondent’s average weekly earnings were in accordance with the purported intention to pay the second respondent a figure of $60,000 per annum and by determining that the average weekly earnings figure was $1,153.85.
The Senior Member’s determination of the second respondent’s pre-injury average weekly earnings is erroneous and is revoked.
Ground C: error of fact and law in determining the second respondent’s capacity for work and ability to earn
The appellant asserts that the Senior Member erred when she found that the second respondent only had the capacity to earn income when he received gifted rent during the period from 17 January 2020 to 19 March 2021. The appellant asserts that there was no basis upon which to restrict the period in that manner and says that the Senior Member ought not to have relied upon the Certificates of Capacity produced by Dr McKay that certified the second respondent as having no capacity for employment.
The appellant submits that the Certificates of Capacity issued by Dr McKay for the period 28 October 2019 to 20 January 2020 certified that the second respondent had the capacity to work for 15 hours per week. Thereafter, Dr McKay certified that the second respondent had no capacity for work, including during the period when the second respondent received gifted rent in return for his efforts in improving properties and securing tenants for Mr Burton. The appellant contends that the Senior Member ought to have determined that the second respondent had the capacity to perform that work over the entire period of the claim.
The second respondent last worked for the appellant on 15 September 2019. On 21 October 2019, some five weeks after the second respondent’s last day of work and just prior to making his claim for compensation, Dr McKay recorded that the second respondent was working 8 to 15 hours per week.[64] On 4 November 2019, Dr McKay further noted that the second respondent’s capacity to work was limited to 15 hours per week.[65]
[64] Nominal Insurer’s reply, p 60.
[65] Nominal Insurer’s reply, p 60.
During the period from 28 October 2019 to 20 January 2020, Dr McKay issued Certificates of Capacity certifying that the second respondent was fit for work for 15 hours per week, 3 days per week.[66]
[66] Nominal Insurer’s reply, pp 74–91.
The more contemporaneous records also indicate that the second respondent had a capacity to work and did in fact work during that period. The second respondent said in his statement dated 2 December 2019 that he had commenced a consulting business in October or November 2019, for which he was paid $35 per hour for 15 hours per week for five weeks. Additionally, the second respondent was examined by Dr George, who reported on 19 November 2019 that the second respondent was working in his own business for ten hours per week, although not receiving income from the business at that time. Dr George was of the view that the second respondent could work a maximum of 20 hours per week.[67] Ms Forrester also stated that she had lent the second respondent money, and in return for the loans he performed some work around her house, thus paying her back “in kind.”
[67] Nominal Insurer’s reply, pp 221–229.
It is noted that the list of payments discloses that the second respondent was paid compensation by the Nominal Insurer pursuant to s 36 of the 1987 Act from 28 October 2019 to 24 November 2019 at the rate of $976.16 per week and from 25 November 2019 to 19 January 2020 at the rate of $1,096.16 per week.[68]
[68] Appellant’s Miscellaneous Application, p 15.
The Senior Member did not deal with the appellant’s submission that the second respondent had a capacity to earn during the period from 28 October 2019 and 17 January 2020. In accordance with the principles set out by Barwick CJ in Whiteley Muir, the Senior Member was required to consider the above evidence and the weight to be afforded to that evidence in order to reach a determination as to the second respondent’s capacity for work and ability to earn. By failing to address that evidence, the Senior Member’s determination that the second respondent had no capacity for work in respect of the period from 28 October 2019 to 17 January 2020 is affected by error and is revoked.
The appellant also complains that the Senior Member erred in respect of her determination that the second respondent had no capacity for work from 20 March 2021 to 17 July 2022. The appellant submits that the fact that the second respondent was able to carry out work from 17 January 2020 to 19 March 2021 shows that the second respondent had that capacity to work (or greater) thereafter. The Senior Member rejected the notion that the second respondent could work as a real estate agent because he was not qualified to do that work and she did not believe that he could work full time. She set out the requirements of s 32A of the 1987 Act as to the definition of suitable employment. She noted that the second respondent had a background in sales, but considered that that work would be difficult for him because of his isolation, agoraphobia and alcohol abuse. The Senior Member observed that the evidence from Dr Bayes showed that from 23 March 2021, the second respondent’s condition deteriorated, and he was struggling with agoraphobia. She added that it was unlikely that other employers would have offered the second respondent small tasks to assist him. She determined that the second respondent had no capacity for work, other than in the period between 17 January 2020 and 19 March 2021.
The appellant submits that all of the Certificates of Capacity provided by Dr McKay should be disregarded because Dr McKay had certified the second respondent as having no capacity throughout. It must be noted, however, that the certifications that the second respondent had no capacity from March 2021 are not inconsistent with other evidence. The Senior Member’s conclusion that the second respondent suffered a worsening of his condition in April 2021 was supported by the reports of Dr Bayes. Her determination that the second respondent had no capacity thereafter was consistent with the Certificates of Capacity issued by Dr McKay and the reports of both Dr Canaris dated 17 February 2022 and Dr Chow dated 23 September 2022.
In Whiteley Muir, Barwick CJ observed that a primary decision-maker, though not basing his or her findings on credit, may have preferred one view of the primary facts to another as being more probable. In such circumstances the finding may only be disturbed on appeal if other probabilities so outweigh that chosen by the decision-maker that the conclusion was wrong.
The appellant points to no medical evidence to support the notion that the second respondent had capacity for work beyond March 2021 and there was sufficient evidence before the Senior Member to support her conclusion that the second respondent had no capacity for work in respect of the period from 20 March 2021 to 17 July 2022. In those circumstances, there is no basis upon which to disturb the Senior Member’s conclusion that the second respondent had no capacity for work in that period. This ground of appeal fails.
CONCLUSION
For the reasons expressed above the Senior Member’s ultimate calculation of the amount to be repaid to the Nominal Insurer by the appellant requires re-calculation for the entire period of the claim because of the error on the part of the Senior Member in her calculation of the pre-injury average weekly earnings (Ground B).
The second respondent’s capacity for work during the period from 28 October 2019 to 17 January 2020 (Ground C) is erroneous and is revoked, as is the Senior Member’s determination that the appellant is to pay to the first respondent the sum of $168,627.76.
It follows from the above that the second respondent’s pre-injury average weekly earnings, his ability to earn during the period from 28 October 2019 to 17 January 2020, and the calculation of his entitlement to weekly compensation during the whole period claimed requires re-determination.
Section 352(5) of the 1998 Act provides that an appeal brought pursuant to s 352 is limited to a determination of whether the decision appealed against was or was not affected by any error of fact, law or discretion, and to the correction of any such error. The appeal is not a review or new hearing. Section 352(6A) allows that a member’s decision can be confirmed or revoked, and a new decision made in its place, or, in accordance with s 352(7), the matter can be remitted to the same member or a different member, for re-determination.
The re-determination of the second respondent’s pre-injury average weekly earnings requires an evaluation of the available factual evidence and the application of the relevant legislation. The second respondent raises a fresh issue on appeal that reg 8C of the 2016 Regulation applies and also raises the contention that cl 4 of Sch 3 to the 1987 Act applies. Neither of those submissions were made to the Senior Member and in fact the Senior Member was given no assistance at all in respect of whether regs 8B to 8E of the 2016 Regulation applied. The deemed date of injury for this matter is 28 October 2019. Clause 8 of Pt 4 of the 2016 Regulation provides that Pt 4 of the 2016 Regulation relates to injuries occurring after 21 October 2019.
I am of the view that in those circumstances, together with the circumstances where the evidence relating to the second respondent’s capacity for work during the period from 28 October 2019 to 17 January 2019 requires a factual evaluation of the evidence, it is appropriate for submissions to be made to, and determinations to be made by, a primary decision maker.
The matter is therefore remitted to a different member of the Commission for determination of the outstanding issues.
CONSIDERATION OF THE NOTICE OF CONTENTION
The issue of the second respondent’s pre-injury earnings is to be remitted for re-determination by another member of the Commission. It is therefore not necessary, nor is it appropriate to deal with the notice of contention on appeal.
DECISION
The Senior Member’s determination that the deemed date of injury is 28 October 2019 is confirmed.
The Senior Member’s determination as to the second respondent’s actual earnings and his capacity for work during the period from 17 January 2020 to 19 March 2021 is confirmed.
The Senior Member’s determination as to the second respondent’s capacity for work during the period 20 March 2021 to 17 July 2022 is confirmed.
The Senior Member’s determinations of:
(a) the second respondent’s pre-injury average weekly earnings;
(b) the second respondent’s capacity for work and ability to earn during the period from 28 October 2019 to 18 January 2020, and
(c) the amount payable by the appellant to the Nominal Insurer
are revoked and remitted to a different member for re-determination.
Elizabeth Wood
DEPUTY PRESIDENT
22 October 2024
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