Thompson v P & L Haulage Pty Limited
[2010] NSWWCCPD 48
•5 May 2010
| WORKERS COMPENSATION COMMISSION | ||||||
| DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR | ||||||
| CITATION: | Thompson v P & L Haulage Pty Limited [2010] NSWWCCPD 48 | |||||
| APPELLANT: | Peter Thompson | |||||
| RESPONDENT: | P & L Haulage Pty Limited | |||||
| INSURER: | Employers Mutual NSW Limited | |||||
| FILE NUMBER: | A1-7017/09 | |||||
| ARBITRATOR: | Mr S Georgiadis | |||||
| DATE OF ARBITRATOR’S DECISION: | 30 December 2009 | |||||
| DATE OF APPEAL DECISION: | 5 May 2010 | |||||
| SUBJECT MATTER OF DECISION: | Section 55 of the Workers Compensation Act 1987; relevant change of circumstances; review of consent award | |||||
| PRESIDENTIAL MEMBER: | Deputy President Kevin O’ Grady | |||||
| HEARING: | On the papers | |||||
| REPRESENTATION: | Appellant: | Taperell Rutledge Lawyers | ||||
| Respondent: | Edwards Michael Lawyers | |||||
| ORDERS MADE ON APPEAL: | Paragraph one of the Arbitrator’s determination dated 23 December 2009 is revoked and the following order made in its place: | |||||
| “1. The Applicant’s application seeking review of the award dated 17 March 2009 is dismissed.” | ||||||
| Paragraph two of that decision is confirmed. | ||||||
| The Respondent is to pay the Appellant’s costs of the appeal. | ||||||
BACKGROUND TO THE APPEAL
Peter John Thompson, who is 40 years of age, was at all relevant times employed as a truck driver by P & L Haulage Pty Limited (‘the Respondent’). Mr Thompson and his wife were the sole directors and shareholders of the Respondent. As a working director, Mr Thompson was engaged in haulage work which had been obtained on contract by the Respondent with Boral Transport Limited. The contract involved the transport and delivery of building products to construction sites. Mr Thompson’s duties involved driving a truck which was fitted with a trailer and a three-wheeled forklift. He was engaged on a full-time basis and performed his duties on an average of 12 hours each day.
On 24 May 2006, Mr Thompson was severely injured whilst in the course of his employment when he was struck by the forklift, which had fallen from the trailer to the ground. His injuries required a lengthy period of hospitalisation, following which, to his credit, he was able to rehabilitate himself and, on 30 October 2006, resume employment as a driver with Borg Manufacturing Pty Ltd (‘Borg Manufacturing’). Mr Thompson had received weekly compensation payments on a voluntary basis from the Respondent’s insurer up until the date of the commencement of his employment with Borg Manufacturing.
A dispute arose between the parties concerning Mr Thompson’s entitlement to ongoing payments of weekly compensation. An Application to Resolve a Dispute was filed on Mr Thompson’s behalf, seeking appropriate orders with respect to weekly compensation. Those proceedings, being matter number 891/09, were settled by consent of the parties during the course of a Telephone Conference conducted by the Commission in March 2009. A Determination dated 17 March 2009 was made by the Commission in accordance with the terms of the agreement. The following orders were made:
“1. The Respondent will pay weekly compensation to the Applicant, pursuant to section 40 of the Workers Compensation Act 1987 (‘the Act’), at the rate of $250.00 per week for the period 30 October 2006 to 13 March 2009.
2. The Respondent is to receive credit up to the sum of $1,980.00 for any payments of weekly compensation that were made to the Applicant during the period referred to in Paragraph 1 above.
3. The Respondent will pay weekly compensation to the Applicant, pursuant to section 40 of the Act, at the rate of $350.00 per week with effect from 14 March 2009, on a continuing basis.
4. The Respondent will pay the Applicant’s costs as agreed or assessed.”
It is common ground between the parties that, at the date of the entry of the consent award noted above, Mr Thompson was unemployed. His position with Borg Manufacturing had come to an end earlier in March 2009, following his retrenchment. Mr Thompson, again to his credit, was able to secure employment later in that month with Dairy Distribution Trust as a driver. It seems that Mr Thompson remains in that employment to the present time.
By letter dated 21 August 2009, the Respondent’s insurer gave notice to Mr Thompson pursuant to section 54 of the Workers Compensation Act 1987 (‘the 1987 Act’) of its stated decision to reduce his weekly payments as from 25 May 2009 from the earlier agreed sum of $350.00 per week to the sum of $42.12 per week. The reason given by the insurer for its decision to reduce weekly payments was stated to be:
“Your weekly benefits will reduce on the basis that since approximately 25 May 2009 [sic], you have been earning $920.00 per week, compared to probable earnings of $962.12 per week.
This decision is made in accordance with Sections 40 and 55 of the Workers Compensation Act 1987.”
On 2 September 2009, an Application to Resolve a Dispute (‘ARD’) was filed on behalf of the Respondent seeking a review of the award dated 17 March 2009. That ARD made no reference to the basis in law upon which such review was sought. The matter was, on 2 December 2009, referred to an Arbitrator, at which time both parties were represented by counsel. It was then made clear that the application seeking “review” was intended as an application for review of weekly payments brought before the Commission pursuant to section 55 of the 1987 Act. The matter proceeded to arbitration, following which the Arbitrator reserved his decision. A Certificate of Determination was issued on 23 December 2009, accompanied by a Statement of Reasons (‘Reasons’).
THE DECISION UNDER REVIEW
The Certificate of Determination, dated 23 December 2009, records the Arbitrator’s orders as follows:
“The Commission determines:
1.That pursuant to section 55 of the Workers Compensation Act 1987 the previous determination of the Commission made by way of Consent Orders dated 17 March 2009, is reviewed in respect of weekly payments of compensation as follows:
That weekly benefits compensation payable by the Applicant to the Respondent pursuant to section 40 of the Workers Compensation Act 1987, be reduced to the rate of $63.45 per week from 25 May 2009 to date and continuing in accordance with the 1987 Act, and that credit be given to the Applicant for any payments made for the above period.
2.That the Applicant pay the Respondent’s costs as agreed or to be assessed. I certify the matter as complex and allow an uplift on the costs applicable to both parties of 15%.
A brief statement is attached to this determination setting out the Commission’s reasons for the determination.”
An Application Seeking Leave to Appeal Against Decision of Arbitrator was filed on behalf of Mr Thompson on 20 January 2010.
ISSUES IN DISPUTE
Mr Thompson has provided written submissions in support of the appeal, which appear to relate to three separate grounds of appeal. It is clear that Mr Thompson’s challenge concerns the Arbitrator’s determination of his probable earnings but for injury within the meaning of section 40 of the 1987 Act. The submissions state that the Respondent’s allegation that probable earnings were in the sum of $962.12 per week is not explained. Reference is made to the evidence, following which Mr Thompson appears to complain that the Arbitrator “should have found that the Application for Review was deficient”, given the absence of evidence as to how the suggested probable earnings were calculated.
It is reasonably clear that the issues raised on appeal concern the following matters:
(i)whether the Arbitrator erred in determining that the Respondent’s application was not deficient;
(ii)whether the Arbitrator erred in law in determining the manner in which Mr Thompson’s probable earnings but for injury were to be assessed;
(iii)whether the Arbitrator’s determination that Mr Thompson’s entitlement to weekly benefits pursuant to section 40 of the 1987 Act, being the sum of $63.45 per week, was against the evidence and the weight of the evidence.
ON THE PAPERS REVIEW
Section 354(6) of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’) provides:
“(6) If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”
Having regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submissions by the parties that the appeal can proceed to be determined on the basis of these documents, I am satisfied that I have sufficient information to proceed ‘on the papers’, without holding any conference or formal hearing, and that this is the appropriate course in the circumstances.
LEAVE
There is no dispute between the parties concerning threshold requirements as prescribed by section 352 of the 1998 Act.
The appeal having been lodged within the time prescribed by that section and the fact that the monetary threshold prescribed by that section has been met, together with a consideration of the arguments raised on appeal, lead me to conclude that it is appropriate that leave be granted to proceed with the appeal and I so order.
EVIDENCE
The proceedings before the Arbitrator conducted on 2 December 2009 were recorded and a transcript (‘T’) has been produced, and a copy provided to each party. That transcript records submissions put on behalf of the Respondent and Mr Thompson. No oral evidence was taken on that day. The documentary evidence adduced by each party was noted by the Arbitrator at T2. That evidence is also summarised at [6] of the Arbitrator’s Reasons. The Respondent relied upon all those documents attached to its ARD and Mr Thompson relied upon all those documents attached to his Reply filed on 23 September 2009. He also relied upon his statement dated 28 September 2009 attached to an Application to Admit Late Documents filed on 29 September 2009, as well as documents which were apparently tendered during the conciliation stage of the proceedings, being documents produced by Dairy Distribution Trust. Those documents related to the earnings of Mr Thompson and of a fellow worker in the employ of Dairy Distribution, Mr Jordan Kaine.
Evidence of the Respondent
The Respondent’s ARD had attached to it a copy of the Certificate of Determination dated 17 March 2009, which is noted at [3] above. The Respondent also relied upon a copy of the section 54 Notice referred to at [5] above. That notice had the undermentioned documents attached.
Included in the tender was a copy of a workers compensation claim form lodged by Mr Thompson on 26 May 2006. That document contained a notation that Mr Thompson’s gross normal pay was $900.00 per week. In response to a question, “How many total hours do you work per week?”, that claim form had noted “40 hrs”. In response to a question, “What are your normal working hours?”, the form had a notation, “5.00 am – 5.00 pm”. That form recorded that there was no relevant enterprise agreement or workplace agreement.
Attached to the notice was a lengthy “Record of Interview”, which had been conducted on 23 June 2006 between an investigator, Mr Clout, and Mr Thompson. The following matters, which are relevant to the issues on this appeal, were recorded in that interview:
(i)Mr Thompson and his wife were the sole directors of the Respondent, and Mr Thompson was employed by the Respondent as a driver. His duties involved delivery of building products to various sites. The Respondent had a contract with Boral concerning that delivery work.
(ii)Mr Thompson had trade qualifications as a plumber and was the holder of a driver’s licence permitting operation of a prime mover and semi-trailer.
(iii)Mr Thompson described the circumstances of his injury, which occurred on 24 May 2006. Following the injury, he was transferred to Gosford Hospital by ambulance, and then by helicopter to Royal North Shore Hospital. He remained an inpatient until 19 June 2006.
A copy of correspondence from Borg Manufacturing dated 19 February 2008 was attached to the notice. That document confirmed that Mr Thompson commenced employment with that company on 30 October 2006, and that his average weekly earnings, including bonus and overtime (if any), were $1,097.11 per week gross. That document and another copy of correspondence from that company dated 9 April 2008 contained earnings records of fellow workers of Mr Thompson, detail of which is addressed hereunder.
A copy of a report by McKee Cherry Partners, chartered accountants, dated 17 June 2008, addressed to Mr Thompson’s solicitors, was attached to the notice. That report related to the operation of the Respondent company and included a hypothetical calculation of earnings and payment of “wages” to Mr Thompson in the year ending 30 June 2008. The relevance of this document is addressed hereunder.
The Respondent relied upon a report by Furzer Crestani Services, chartered accountants, dated 30 July 2008. That report was requested by the Respondent’s solicitors. The author of the report was Mr Chris Katehos, who stated that the purpose of the report was to “provide you with my opinion as to the likely wage payments to Mr Thompson during the period from 24 May 2006 to date”. That report was seven pages long and had a large number of attachments. That report contained a critical assessment of the report prepared by McKee Cherry Partners and it was stated in conclusion that Mr Katehos was “unable to determine Mr Thompson’s likely level of wage payments in the period 24 May 2006 to date”. The relevance of this document to the issues raised in these proceedings is addressed hereunder.
The Respondent relied upon a copy of “Application for Review By Insurer”, dated 4 November 2008, prepared on behalf of Mr Thompson by his solicitor. That document detailed the injuries and disabilities suffered by Mr Thompson, detail of which appears hereunder. It was stated in that document that Mr Thompson was certified fit to resume work as a driver provided that he avoided heavy duties which might involve lifting, loading or unloading trucks, lengthy hours, and driving over rough terrain. It was further recorded that Mr Thompson and his wife were each declared bankrupt following Mr Thompson’s injury, and that they were forced to sell their home in Forresters Beach.
The Respondent relied upon the contents of a Declaration of Actual Wages made by Mr Thompson as director of the Respondent company on 15 September 2006. That Declaration recorded payments between 21 July 2005 to 31 May 2006 as being $39,600.00 to subcontractor truck driver and $6,100.00 to bookkeeper.
The Respondent relied on a number of other documents, not all of which are relevant to the issues raised on this appeal. Where relevant, those other documents are addressed hereunder.
Evidence of Mr Thompson
Mr Thompson relied upon a large number of medical records, including clinical notes produced by the Royal North Shore Hospital, as well as a number of medical reports from practitioners who had treated him, and a report from Professor Robin J E D Higgs, orthopaedic consultant, biomedical and forensic engineer, who had been qualified by Mr Thompson’s solicitors to provide an opinion as to the nature of his injuries and the extent of his continuing disabilities. Professor Higgs summarised Mr Thompson’s injuries as follows:
· occipital scalp laceration
· dental injury
· head injury – later complicated by a subarachnoid haemorrhage
· orthopaedic injuries, including fracture of right scapula and Chance fracture of T11 vertebral segment.
Professor Higgs recorded that treatment included pedicle screw fixation of the thoracic levels T10 to T12 inclusive. A spinal fusion procedure was performed at these levels, in order to stabilise the thoracic vertebral segments associated with the Chance fracture of the T11 vertebral region. Professor Higgs expressed the opinion that Mr Thompson had recovered from his injuries to a degree and that he was fit to work full-time as a truck driver, although he should not perform any loading or unloading activities. Mr Thompson should avoid lifting objects weighing more than 10 kg and should not push or pull objects weighing more than 15 kg. He should avoid work that required the use of the right upper extremity above chest height, and work that required frequent or repetitive bending, twisting or stooping.
Mr Thompson’s Reply also had attached many of the documents which had been tendered on behalf of the Respondent, including the report from McKee Cherry Partners. As earlier noted, those documents are, where relevant, referred to hereunder.
A letter dated 27 August 2009 to the insurer from Mr Thompson’s solicitors was attached to the Reply. That correspondence made reference to the consent award, the section 54 Notice, and the worker’s earnings record since the date of injury. It was noted in that correspondence that the insurer had not provided any new medical evidence in support of its suggestion that the consent award should be reviewed in accordance with section 55. It was further asserted that “there has been no change of circumstances which would warrant any review”.
A statement made by Mr Thompson dated 3 November 2008 was in evidence. It was there stated (at [5]) that “as at the date of the accident, I drove the truck on an average of 12 hours each day. The job involved delivering building products to various building sites.”
A second statement dated 28 September 2009 recorded that Mr Thompson was retrenched from his position with Borg Manufacturing on 5 March 2009, and that he was thereafter able to find work as a driver with Dairy Distribution Trust. A statement from that organisation was annexed to the statement. That annexure recorded that Mr Thompson commenced work in March 2009, and that his gross salary was $920.00 per week. His duties were delivering milk to customers with a trolley, and the work did not involve any heavy lifting or long-distance driving. Reference was made in the annexure, signed by Mr Russo, the general manager, that “if [Mr Thompson] did not have his medical condition, he would have the opportunity, as our other drivers do, to load his own truck and drive longer distances, and would be therefore capable of earning $1,650.00 per week gross”.
Mr Thompson stated that his fellow drivers at Dairy Distribution Trust were required to drive much larger trucks and to work up to 12 hours per day, whereas he was “only required to work 6-7 hours a day”. Mr Thompson described his ongoing pain, discomfort and disabilities, and stated that he had been advised to defer operative treatment to his shoulder because it would cause total incapacity for up to 12 months.
Mr Thompson tendered in evidence copies of pay slips issued to him by Dairy Distribution Trust between 3 July 2009 and 30 October 2009. Those documents indicated that his gross wage during that period was $920.00 per week.
Wages schedules
It is important to note that the Respondent relied upon a schedule of wages in its ARD which nominated actual earnings as being $920.00 per week and comparable/probable earnings as being $962.12 per week.
Mr Thompson included a schedule of wages in his Reply which nominated actual earnings at $920.00 per week and comparable/probable earnings at $1,595.52 per week.
SUBMISSIONS BEFORE THE ARBITRATOR
Counsel appearing on behalf of the Respondent before the Arbitrator confirmed that the Application brought by his client was one seeking review pursuant to section 55 of the 1987 Act. It was acknowledged that “there is a threshold requirement under that section that there be a change of circumstances since the previous award”. Reference was made to relevant authority, and it was put:
“We say that the change of circumstances is simply that as at the date of the resolution by consent award on 17 March 2009 the worker was not employed. Shortly thereafter, we understood it to be 25 May 2009, he obtained employment as a truck driver.”
Counsel stated that there was “no issue between the parties as to the worker’s actual earnings since 25 May 2009, being $920.00 per week”.
Counsel stated that the “real issue in dispute” concerned the correct identification of the worker’s probable earnings but for injury. That question was identified in submissions as being “the first step in the Mitchell equation”. It was argued that, as at the date of injury, the worker was a working director of the Respondent company. It was put that it is “well established that the earnings of a working director for workers compensation purposes are limited to the earnings as an employee of the entity and does not extend to director’s fees, dividends, or other emoluments which may flow from being an owner or a director of a company”.
Counsel developed his argument by putting that the question was raised as to the level of the worker’s earnings at the time of injury. It was argued that they “are unequivocally established at somewhere in the vicinity of $900.00 per week”. Counsel proceeded to identify the documentary evidence in support of that proposition. They included the claim form and the wages declarations referred to above.
Counsel made reference to the Respondent’s profit and loss account for the period 1 July 2004 to 30 June 2005. It was put that that document established that the Respondent company’s earnings were significant, as were its financial overheads. Following the summary of that financial detail found in the accounts, counsel submitted that the Commission was “concerned with [Mr Thompson’s] earnings as an employee of this company. [The Commission] is not concerned with the company’s broader finances”.
Counsel proceeded to address the question of “probable earnings but for injury”. It was noted that probable earnings were alleged in his client’s wages schedule to be $962.12 per week from 25 May 2009 to date. It is recorded at T10 that the figure of $962.12 had been fixed having regard to an increase of pre-injury earnings calculated by reference to the Consumer Price Index (‘CPI’) of 3 per cent per annum over the relevant period. It was put in submissions that there were no annual calculations but that, rather, a calculation was made to the year 2009 and the resultant dollar figure was relied on by the Respondent as being the relevant quantum of probable earnings from May 2009.
Counsel noted in the course of submissions that Mr Thompson had placed reliance upon the decision of the High Court in Johnston v Commissioner for Railways (1973) 128 CLR 632 (‘Johnston’). Reference had been made to Johnston in the course of written submissions which had been prepared by Mr Thompson and presented to the Arbitrator on hearing. These submissions are addressed below. It was acknowledged by the Respondent’s counsel that the decision in Johnston addressed the concept of “comparable employment” in the context of determining probable earnings but for injury. The worker’s argument that the Commission should “deal with the occupation of a truck driver” and to draw inferences from the earnings of employed truck drivers should not be accepted. Counsel sought to emphasise that the Commission was bound to “deal with each case on the facts as they appear”, and it was put that Mr Thompson, as a working director, was in a different position to an employee, being a truck driver employed “in a direct employment relationship”. It was put that Mr Thompson had “elected to take the risk [of working in his own business] in return for the added benefits which we perceived to flow from being a small company comprised of himself as director employing himself”. It was put that those circumstances distinguished Mr Thompson from “others who are direct employees of a much larger and more independent entity”. It was further argued that it was not “appropriate on the facts of this case to compare [Mr Thompson] to people who elect to adopt a more independent [sic] and traditional employment relationship”. Counsel suggested that Mr Thompson’s argument that guidance as to probable earnings may be gained from the evidence concerning the earnings of Mr Kaine amounted to “trying to compare … apples and oranges in the sense that you have an entirely different relationship between Mr Kaine and his employer on the one hand, and the worker and his employer being the company he is the director of on the other”.
Counsel for the Respondent drew the Arbitrator’s attention to the statement made by Mr Thompson in his compensation claim form that “he worked 40 hours a week”. It was submitted that the evidence presented by Mr Thompson concerning the earnings of other truck drivers did not include evidence as to the number of hours worked by each driver. Counsel summarised his argument by putting that the Commission did not “really know that [the nominated drivers] are truly comparable in a number of respects”.
Mr Thompson’s solicitor presented written submissions at the hearing. It was noted (at [23]) that it was agreed that “the worker is earning or would be able to earn in some suitable employment from time to time after the injury, namely the current wage of $920.00 per week”. It was put that the matter in dispute was the manner of determining Mr Thompson’s probable earnings but for injury, as provided by section 40(2)(a) of the 1987 Act.
Reference was made in those submissions to the decision in Johnston. The High Court was there addressing the terms of section 11(1) of the former Workers Compensation Act 1926 (‘the 1926 Act’) which was in substantially similar terms to section 40(2). Particular reliance was placed upon that which was there stated by Stephen J (at [640]):
“If in the relevant phrase of Section 11(1)(a) ‘employment’ bears the meaning ‘occupation’ the reference to the worker continuing ‘to be employed in the same or some comparable employment’ means that the worker is to be treated as if he continued in the same or some similar occupation as that in which he was engaged when injured. Neither the same employer nor the same task, classification or rank is stipulated but this will occasion no difficulty; the Court is, by the sub section, required to form its own view of what would ‘probably’ have been the workers weekly earnings but for the injury and must, from the evidence before it, determine how the worker would have fared in his occupation had he not been injured.”
Those submissions include a citation of that which was stated by Mason J in Johnston (at [644]):
“[T]he sub-section provides a yardstick by which weekly payments by way of compensation for incapacity are to be measured. It conforms more closely with the compensatory character of the provision that the weekly payments should be assessed by reference to the probability of what the employee would have earned in his occupation had he not been injured and had he continued in that occupation rather than that the weekly payments should be assessed by reference to probable earnings in the performance of the particular work or duties which the employee happened to be performing at the date of his injury.”
The argument was advanced that “it would not be reasonable to limit determination of [Mr Thompson’s] probable earnings but for the injury to his average weekly earnings as at the date of injury with some nominal uplift”. It was suggested that such approach “would not take into account the matters referred to in the report from McKee Cherry Partners”.
The submissions suggested that it was “not feasible” to provide details of other owner/drivers by reason of variations of the level of expenses. The best measure of probable earnings, it was argued, were those earnings of truck drivers in the employ of Borg Manufacturing or with his current employer. It was submitted that such an approach did not require any unreasonable speculation, and would be consistent with the approach stated by Kirby P in Australian Wheat Board v Pantaleo (1984) 3 NSWLR 530 (‘Pantaleo’). His Honour there stated “the overall objective of providing fair money compensation for the proved measure of physical disability in the particular worker sounding in his loss of earning capacity should not be ignored” (at 541).
The written submissions presented on behalf of Mr Thompson were supplemented by oral submissions at the hearing. It was put that, in the context of the application being a review brought pursuant to section 55 of the 1987 Act, there had been no relevant change of circumstances. Reference was made by counsel to Mr Thompson’s record of earnings between his post-injury resumption of work and the date of the Consent Order. It was accepted that, at the time the Consent Order was made, Mr Thompson was unemployed. That fact did not, it was submitted, establish that the worker had “no earning capacity”. It was put that his earnings shortly after the Consent Order, being $920.00 per week, were less than his earnings with Borg Manufacturing, and it was argued that such reduction of earnings was “hardly a relevant change of circumstances to bring an application to vary the award downwards”.
It was conceded in submissions that Mr Thompson’s earnings at the time of the subject accident “were $900.00 a week”. It was made clear by counsel that, notwithstanding that concession, it was not agreed that probable earnings during the relevant period were in the sum of $962.00 per week.
Attention was given in the course of submissions to the evidence concerning projected earnings of the business as contained in the chartered accountant’s report. Reference was also made to the evidence relied upon by the Respondent contained in its expert’s report. It is proposed to deal with these matters in the course of discussion which appears below. The balance of argument advanced on behalf of Mr Thompson appears to relate to the proper means of assessing the probable earnings but for injury. Counsel relied upon the decision of Johnston and that of the Court of Appeal in Hill v Bryant (1974) 2 NSWLR 423 (‘Hill’). These matters raised are also addressed hereunder.
THE DECISION OF THE ARBITRATOR
The Arbitrator in his Reasons noted that the application before him was one brought pursuant to section 55 of the 1987 Act in which the Respondent was seeking a review of a Consent Order. The consent award made provision for continuing payment of $350.00 per week pursuant to section 40. The application sought a reduction of that weekly amount to $42.12 per week as from 25 May 2009.
The Arbitrator, following a summary of submissions put on behalf of each party, noted that the provisions of section 55 require “that there be a change of circumstances since the previous award before any ‘review’ of the award can take place”. Such change of circumstance is a pre-condition to the conduct of such a review. It was noted, by reason of the fact that the award was entered by consent between the parties, that there were no findings made by the Commission. Reference was made by the Arbitrator to relevant authorities (at [11] and [12]).
The Arbitrator noted that the Respondent relied upon the fact that, as at the date of the Consent Order, the worker was unemployed and that subsequently he obtained employment as a truck driver. Mr Thompson’s submission was noted being that, having regard to his post-injury work record, his “change in employment does not sound in a change of circumstances.” Mr Thompson’s submission was rejected by the Arbitrator.
The Arbitrator found (at [16]) that there was “a self-evident change of circumstances since the previous award.” That change was identified as being the fact that Mr Thompson had obtained employment, and the Arbitrator expressed the view that “that fact will impact on the way section 40 entitlements will be assessed.” For those reasons the Arbitrator expressed his satisfaction that the threshold requirement of there being a change of circumstances had been made out by the Respondent.
The Arbitrator proceeded to summarise the evidence relating to Mr Thompson’s earnings since his return to work following injury and the evidence of earnings of Mr Kaine. The Arbitrator found (at [24]) that “the earnings of Mr Kaine cannot appropriately be considered to be comparable to those of [Mr Thompson]”. The Arbitrator also rejected the evidence concerning the earnings of truck drivers in the employ of Borg Manufacturing as being relevant to a determination of Mr Thompson’s probable earnings but for injury. The Arbitrator stated “there is no persuasive evidence to suggest that these employees are comparable working directors of a truck driving company” (at [24]).
The Arbitrator proceeded to make reference to the terms of section 55(3) of the 1987 Act. It is implicit that the Arbitrator considered that the task before him required application of the provisions of that sub-section to the relevant facts. There followed a discussion between [26] and [28] of the evidence contained in the expert reports relied upon by each party.
The Arbitrator at [29] summarised Mr Thompson’s work restrictions by reason of injury. Having accepted those restrictions the Arbitrator stated that Mr Thompson “is entitled to an award under section 40, in accordance with the steps set out in Mitchell v Central Western Health Service (1997) 14 NSWCCR 526” (‘Mitchell’). The Arbitrator proceeded to determine Mr Thompson’s probable earnings but for injury. Reference was made by the Arbitrator to Mr Thompson’s pre-injury earnings of $900.00 per week and appeared to have accepted the Respondent’s argument that probable earnings may be determined by calculating annual increases since the date of injury by reference to the CPI. His conclusion, notwithstanding certain arithmetic vagaries, was that probable earnings were in the sum of $983.45 per week. That finding, it may be implied, represented the calculation required by the first step as enunciated in Mitchell.
With respect to the second step identified in Mitchell, that being the determination of ability to earn in suitable employment, the Arbitrator made a finding of $920.00 per week “since shortly after the earlier consent orders made on 17 March 2009”.
The Arbitrator proceeded to calculate the difference between probable earnings and ability to earn and determined that the amount of weekly benefits “potentially available” to Mr Thompson as being $63.45 per week (at [34]). The Arbitrator expressed his view that there was no basis upon which that arithmetic difference should be varied in exercise of discretion which was granted to the Commission pursuant to section 40.
On the basis of the reasoning as I have attempted to summarise above, the Arbitrator ordered variation of the consent award dated 17 March 2009 as from 25 May 2009 to reduce the weekly amount from the figure of $350.00 per week to the sum of $63.45 per week.
SUBMISSIONS ON APPEAL
Mr Thompson’s submissions on appeal
The first ground of appeal appears to suggest deficiencies in the form of notice provided by the Respondent concerning the basis upon which review was sought. That ground asserts that there “were no particulars nor was there any evidence as to how the alleged probable earnings figure of $962.12 per week was arrived at.” The error suggested in this ground was the Arbitrator’s finding that the Application of the insurer was not deficient (at [22]).
The submissions in support of this “ground” address the evidence concerning Mr Thompson’s earnings at relevant times as well as that evidence relating to the earnings of truck drivers in the employ of Borg Manufacturing and Dairy Distribution Trust. On the basis of that evidence it is submitted that the probable earnings should be found to be $1,595.52 per week. The argument advanced by Mr Thompson appears to be that there was no evidence to support the suggested probable earnings figure of $962.12 per week. The argument appears to include a suggestion that “the Arbitrator was entitled to proceed based on the particulars in the evidence of probable earnings which were before him on behalf of [Mr Thompson]”.
The Appellant’s second ground of appeal suggests error on the part of the Arbitrator in finding that Mr Thompson’s probable earnings have been $983.45 per week as from 25 May 2009 to date of the determination. Reliance is again placed upon the decision of the High Court in Johnston.
The Appellant’s third ground of appeal challenges the Arbitrator’s finding “that a weekly benefit of $63.45 per week is a fair sum after a consideration of [Mr Thompson’s] partial capacity [sic] for work”. Reliance is placed upon the evidence of earnings of other truck drivers in the employ of Borg Manufacturing and Dairy Distribution Trust and it is argued that the report from McKee Cherry, if read together with the evidence as to earnings, would suggest that Mr Thompson, uninjured, would probably earn “in the vicinity of $1,500.00 per week as at May 2009”. Reference is made to the medical evidence with particular attention given to Mr Thompson’s orthopaedic injuries and the impairment assessment made of 24 per cent whole person impairment. It is put that a reduction of the weekly award from $350.00 to $63.45 “does not fulfil the overall objective of the legislation” as stated by Kirby P in Pantaleo.
At [2.9] of submissions, Mr Thompson outlines the relief which he seeks from this appeal. The first order sought is that the Arbitrator’s determination be revoked. A second order is sought, that being a review pursuant to section 55 of the 1987 Act of the consent award made in March 2009. The review sought is that the weekly sum of $350.00 per week be increased to the rate of $675.52 per week from 25 May 2009 to date and continuing.
The Respondent’s submissions on appeal
The Respondent argues that the manner in which the insurer’s decision had been particularised in the notice issued pursuant to section 54 of the 1987 Act gives rise to no basis for challenge or complaint by Mr Thompson. Reliance is placed on the decision of Pages Hire Centre Kogarah v Chapman (2009) NSWWCCPD9. The Respondent in it’s submissions accepts that it had not particularised “the basis upon which the probable earnings but for injury had been determined” but argues that the relevant amounts “were clearly set out in the ARD.” It is suggested that, even in the case of there being a lack of particulars found in the notice, it is not appropriate to dismiss the application for review. Reliance is placed upon the decision of Seddon v NSW Police Force (2009) NSWWCCPD 29 in support of that proposition. It is also argued that no prejudice to Mr Thompson had been occasioned by the manner in which the review application was particularised in the notice.
The Respondent proceeds to address Mr Thompson’s argument that the Arbitrator has erred in the manner in which his probable earnings but for injury had been determined. The point is made that the Arbitrator’s finding that the worker at the date of injury was in fact being paid $900.00 per week was a matter agreed to by Mr Thompson. It is suggested that “entitlement to weekly benefits is to be determined by reference only to earnings ‘as a worker’ (ie. under a contract of service) and the labour provided in return for such wages and that other forms of income resulting from the position of owner and director of the company, such as dividends, distributions or directors fees are to be excluded.” It is argued that it is “not feasible to determine the Appellant’s probable earnings by reference to the financial circumstances of his company as this does not take into account the fact that, for a multitude of potential reasons, the fortunes and profitability of the company would not necessarily impact upon the Appellant’s earnings as an employee of that company”. It is submitted that the speculations found in the report of McKee Cherry Partners do not assist Mr Thompson’s case.
The Respondent argues that the evidence of the earnings of those truck drivers employed by Borg Manufacturing and Dairy Distribution Trust should not be accepted as being relevant. The position of a working director is contrasted with that of an employed driver. Reference is made to the decision of Johnston and the Respondent accepts that the term “employment” as it appears in section 40 is a reference to an “occupation” rather than employment with a particular employer or with the same employer, but at a different grade or classification. Notwithstanding acceptance of that matter of construction, it is argued that there is a need to take into account “the facts as established by the evidence in a particular case.” It is argued that the factual difference between Mr Thompson as a working director and those truck drivers whose earnings are in evidence before the Commission leads to the conclusion that the earnings of those drivers are in no way relevant to a determination of Mr Thompson’s post-injury probable earnings. Reference is made to the decision of Simpkins v Lismore and District Workers Club Limited & anor (2007) NSWWCCPD 187 and it is put that there is an absence of evidence that Mr Thompson would, but for injury, have “abandoned his position as a working director employed by his own company and taken employment with an employer with whom he had no connection other than under a contract of employment”.
The Respondent argues that the Arbitrator was correct to determine on review that Mr Thompson’s entitlement pursuant to section 40 was $63.45 per week.
The Respondent draws the Commission’s attention to the fact that there is no application by Mr Thompson for review of the consent award pursuant to section 55. In those circumstances, it is argued, it is not open to the Commission to order any increase pursuant to section 55 of Mr Thompson’s entitlement to weekly compensation.
DISCUSSION AND FINDINGS
It is necessary, at the outset, to state that the only application before the Commission was that of the Respondent which, as made clear at the hearing before the Arbitrator, was one made pursuant to section 55 of the 1987 Act seeking review of the order entered by consent on 17 March 2009. There was no such application brought on behalf of Mr Thompson as seems to be suggested in his submissions at [2.9]. It is recorded at T3 that counsel for the Respondent corrected the Arbitrator who had earlier suggested, in the course of a summary of the matter at the time of its commencement, that there had been a “cross application” made by Mr Thompson. It is unfortunate that the state of the record was not clarified at the time the matter was raised by counsel, however it is clear having regard to those submissions advanced on behalf of Mr Thompson before the Arbitrator, that there was no subsequent suggestion made that an application for a review of the award was being sought by him.
The Arbitrator’s incorrect assumption made during the course of his introductory comments at T2, may be explained by the detail found in Mr Thompson’s Reply. At Part 4.1 of the Reply the schedule of wages suggests a difference between actual earnings and probable earnings but for injury of $675.52. It is clear that the inclusion of those figures in the Reply falls short of being capable of being construed as an application for review as permitted by section 55. In the circumstances Mr Thompson’s belated request for a review which appears in submissions filed in support of this appeal must be disregarded.
The provisions of section 55 of the 1987 Act provide:
Any weekly payment of compensation may, because of a change of
circumstances, be reviewed by the Commission at the request of the employer or the worker or of the Authority.
On any such review:
(a)the weekly payment may be ended, reduced or increased (but subject to
the provisions of this Division relating to the amount of the weekly payment), and
(b)the amount of the weekly payment (if any) shall, in default of
agreement, be determined by the Commission.
(2A) If on any such review a weekly payment of compensation is ended or reduced with effect from a day that is earlier than the date of the Commission’s order on the review, the Commission may order the worker to refund the amount of any payments made to the worker to which the worker is not entitled as a result of the order on the review.
On any such review, the amount of any weekly payment payable in respect of an injury may be increased to such an amount as would have been awarded if the worker had, at the time of the injury, been earning the wage or salary which the worker would probably have been earning, at the date of the review, if the worker had remained uninjured and continued to be employed in the same or some comparable employment.
A review under this section shall be given such priority as is reasonably practicable, and any necessary directions may be given to expedite the hearing of the matter.”
Each party appears, during the course of submissions before the Arbitrator, to have accepted that there is a “threshold issue”, that being that the party seeking a review must establish that there has, since the entry of the subject award, been a change of circumstances. The difficulty which confronted the Commission in the present matter is illustrated by various exchanges made between the Arbitrator and counsel concerning that issue. The award was one made by consent and in those circumstances there had been no necessity for a determination by the Commission of relevant matters in dispute. It is clear that the award, which made provision for past compensation payments as well as a continuing award of weekly benefits, had been agreed to between the parties upon the basis of compromise.
I accept that the provisions of section 55 are such that a party seeking review needs to establish a change of circumstances since the entry of the award. If that fact is established there will only be a review of the award in respect of weekly payments if such changed circumstances are relevant to a worker’s entitlement. I have earlier had occasion to consider the application of section 55 in NSW TAFE Commission – North Sydney Institute v Zuk [2006] NSWWCCPD 148 where the manner of construction and application of the section was summarised as follows (at [34]):
“(i) A section 55 review is not a reconsideration of facts found in the earlier proceedings.
(ii)The review is an examination of circumstances which may have occurred since the original determination.
(iii)If such circumstances represent a change from those prevailing at the date of the original determination there may be grounds upon which a review is made.
(iii)In applying section 55 of the 1987 Act the starting point is an unqualified acceptance of the original decision maker’s findings.
(iv)A review will occur only where it is established that circumstances that were before the original decision maker at the time of the award of weekly benefits and upon which the findings in relation to a statutory entitlement were made have changed.
(v)Relevant ‘circumstances’ are not restricted to consideration of change of medical condition or capacity for work.
(vii)The onus is upon the party seeking review to satisfy the threshold issue of ‘change of circumstances’.”
In the present matter there has been no determination other than quantification of entitlement as agreed between the parties. The Commission is not here dealing with an analysis of facts found leading to an award and suggested subsequent relevant change of circumstances. The Respondent’s argument before the Arbitrator is to be found at T4 where it was put by counsel, “We say that the change of circumstances is simply that as at the date of the resolution by consent award on 17 March 2009 the worker was not employed. Shortly thereafter we understood it to be 25 May 2009, he obtained employment as a truck driver.”
It is clear on the evidence, and appears to have been accepted by the Appellant, that the facts stated by counsel quoted immediately above were correct. At [16] of his Reasons the Arbitrator stated, “I am not persuaded by the Respondent’s submission that a change in employment does not sound in a change of circumstances.” The Arbitrator proceeded to state that he was satisfied there had been “a change of circumstances satisfying the threshold first requirement (section 55(1)) for a review under section 55 requested by the Applicant in these proceedings”.
The Arbitrator’s finding as summarised enlivens the review procedure provided by that section. The onus remains upon the Respondent, being the party seeking such review, to establish the relevance of those changed circumstances.
On the present facts, in the absence of an original decision as contemplated in [75(iv)] above, it is necessary that the Respondent establish facts relevant to a determination of Mr Thompson’s entitlement upon commencement of employment with Dairy Distribution Trust.
It is not in issue between the parties that Mr Thompson had at all relevant times been partially incapacitated for his pre-injury employment. The Respondent’s right to have the award reviewed is dependent upon proof that the difference between his probable earnings but for injury and his actual earnings since resumption of work with Dairy Distribution Trust is less than $350.00 per week.
The above analysis of the issues raised in this matter does not entirely correspond with the approach taken by the parties in their submissions before the Arbitrator and on this appeal. However the parties, when formulating their submissions, appear to acknowledge the need to evaluate Mr Thompson’s entitlement to weekly payments at the date of resumption of employment. I note in passing that in fact Mr Thompson resumed employment with Dairy Distribution Trust in March 2009, a matter of days following entry of the award. It is recorded in the transcript that the Respondent treats itself as bound by the manner in which the variation of the award is particularised in its application.
The Arbitrator, in the course of his Reasons, had dealt with the parties’ submissions concerning the proper manner of determining Mr Thompson’s probable earnings but for injury dating from 25 May 2009.
The Arbitrator at [29] of Reasons summarised the evidence concerning Mr Thompson’s disabilities and concluded that he was “at a disadvantage in the general labour market which should be reflected in a partial incapacity award under section 40 of the 1987 Act. I find therefore that the Applicant is entitled to an award under section 40, in accordance with the steps set out in Mitchell v Central Western Health Service (1997) 14 NSWCCR 526”.
Mr Thompson had the security of an award as at the date of hearing and was defending an application brought by his employer seeking a review of his entitlement to weekly compensation. In the circumstances the Arbitrator has misstated the task before him. As I have earlier observed the Respondent’s entitlement to a review of the award is dependent upon proof that, relevantly, circumstances had changed. The only argument advanced by the Respondent related to economic circumstances, they being that the difference between Mr Thompson’s demonstrated ability to earn and his probable earnings but for injury was less than $350.00 per week. The Arbitrator was correct in stating that the matter of Mitchell enunciates the steps to be taken to determine entitlement to weekly compensation in the case of partial incapacity. The dispute between the parties as has been argued in the course of submissions focuses on the manner in which probable earnings but for injury are to be determined. A worker’s entitlement to weekly payments in respect of partial incapacity is to be calculated in accordance with the provisions of section 40(2) of the 1987 Act which provides:
“(2) Calculation of reduction in earnings of worker—general
The reduction in the worker’s weekly earnings is (except as provided by this section) the difference between:
(a)the weekly amount which the worker would probably have been earning
as a worker but for the injury and had the worker continued to be employed in the same or some comparable employment (but not exceeding $1,000), and
(b)the average weekly amount that the worker is earning, or would be able
to earn in some suitable employment, from time to time after the injury (but not exceeding $1,000).”
It is convenient to note at this time that the Arbitrator’s reference to section 55(3) of the 1987 Act which appears at [25] of Reasons has no relevance to the task of determining whether there has been a relevant change of circumstances. That subsection is apposite in circumstances where, on an application for review, the evidence supports an increase of the quantum of the weekly payment. Whilst the provisions of that subsection, for practical purposes, require an exercise similar to that which is prescribed by the provisions of section 40(2), there is no application brought on behalf of Mr Thompson and the subsection can in no way be relevant to a resolution of the rights and liabilities of the parties.
The first matter to be determined is the question of the probable earnings of Mr Thompson but for injury since 25 May 2009. This is the fundamental dispute between the parties and each has addressed the evidence relevant to this issue both before the Arbitrator and on this appeal. The fact that Mr Thompson was a working director at the time of injury has given rise to difficulty with respect to the appropriate means of calculating this sum. The reasoning adopted by the Arbitrator as demonstrated at [18] and [19] was to make reference to the evidence as to the quantum of wages paid by the Respondent to Mr Thompson as at the date of injury. He found that the quantum of those wages was $900.00 per week. Upon the basis of that figure the Arbitrator ultimately accepted the Respondent’s argument that probable earnings are to be extrapolated by making allowances for an appropriate CPI increase from that time to the present. That is the means by which he found that probable earnings at the relevant date were $983.45 per week (at [32]). I am of the opinion that the Arbitrator has erred in his approach to the relevance of resumption of work and the task of determining probable earnings. It is proposed to review the evidence in the light of relevant authority to determine whether the evidence establishes a relevant change of circumstances.
It will be noted that section 40(2)(a) makes reference to “the weekly amount which the worker would probably have been earning as a worker but for the injury…”. The difficulty presented by the fact that Mr Thompson was a working director conducting the business which employed him arose on the facts of J&H Timbers Pty Ltd v Nelson (1971-72) 126 CLR 625 (‘Nelson’). The injured worker in that matter conducted a business which included hauling logs on contract. He was injured in that work and the facts as found established that the claimant at the time of injury was a deemed worker for the purposes of the Workers Compensation Act 1926 (‘the 1926 Act’). In the course of his reasoning, Barwick CJ made the following observations concerning the proper application of section 11(1) of the 1926 Act, which was in terms similar to the present section 40, in circumstances where, pre-injury, the deemed worker conducted a business (at 632):
“The difference of which s. 11 speaks is not the difference between the net gains of the business before and after receipt of an injury but the difference in the appropriate remuneration for the physical labour of the worker in the business in the two periods of time. There being no claim that the business was run at a loss or that it produced less than the appropriate amount to be paid in wages for the respondent’s physical labour in the business, it seems to me with due respect that in endeavouring to quantify the net gains of the respondent’s business before and after the receipt of his injury the Commission was pursuing an irrelevant course. Apart from all else the net gains will be affected by many circumstances and will not necessarily reflect the difference in the respondent’s earning capacity as a deemed worker. The Commission’s task was to assess the diminution in earning capacity due to the injury, a diminution which would exist whether or not the respondent continued to conduct a business.
In relation to that question the Commission had an account of what physical work the respondent performed in the business and was able to assess the wages which it would have been reasonably necessary to pay in order to procure its performance by another. It also had evidence as to the diminution of the respondent’s physical capacity to do work due to the injury. The Commission concluded the loss of physical capacity would be reflected in the capacity of the respondent to earn wages; it found that he had suffered an economic loss. It was well able in my opinion to assess the extent of that diminution.”
The observations made by the Chief Justice concerning this subject were the subject of substantial agreement by Windeyer J who stated (at 643):
“His Honour who tried the case in the Commission abandoned any attempt to determine with precision what were the earnings of the respondent before his injury, as the records of his affairs did not enable his weekly gains from his contract to haul logs to the appellant’s mill to be segregated from other gains. I think that his Honour was right in not attempting to compute this. But I say so not so much because the computation was difficult or impossible by reason of insufficient data as because it was in my opinion irrelevant and unnecessary. The Act is concerned with compensation for the total or partial incapacity of a worker – that is, the destruction or diminution of his earning capacity measured by his earnings ‘as a worker’. The question is not the same as is involved in assessing ‘economic loss’ in an action for damages for personal injuries. The earning capacity of a man as a worker is measured by the remuneration that is the fruit of his labour, his wages or their equivalent. It is not to be measured by the profits he derives by embarking his capital in a business or by his usual capital equipment in earning money. In the present case the respondent carried on a business on his own account, using his own truck and other equipment. To assess his profits for a given period it, would be necessary to set against receipts all actual and notional outgoings of the undertaking, including all those relevant to the maintenance of the equipment. These might if the equipment were the contractor’s property include an allowance for its depreciation; if it were not owned by him, outgoings for its hire or hire purchase. But to my mind the respondent’s profits and gains from his business before he was injured were irrelevant.”
It must be noted that both the Chief Justice and Windeyer J were in the minority in the matter of Nelson. That fact does not lessen the authority of their Honours’ observations given that, as observed by Glass JA in Cage Developments Pty Ltd v Schubert [1981] 2 NSWLR 227 at 230 (‘Schubert’) the views expressed by their Honours in Nelson were not in conflict with the views of the majority in that case with respect to the particular matter in question.
The decision of Schubert was confirmed on appeal to the High Court (reported (1983) 151 CLR 584). In the Court of Appeal Glass JA had summarised a number of propositions relevant to the calculation of entitlement upon proof of partial incapacity in circumstances where the claimant conducted a business either before injury or thereafter. That summary appears at 230 and is as follows:
“1. The section directs the ascertainment of the difference between the applicant’s hypothetical earnings as a worker, assuming no injury, and the actual earnings received by or accessible to him in his injured condition, Australian Iron & Steel Pty Ltd v Elliott (1996) 67 SR (NSW) 87; 84 WN (Pt 2) 45.
2. The first figure is normally limited to earnings as a worker but the second includes not only earnings as a worker but also earnings as a self-employed person in his own business: Hill v Bryant [1974] 2 NSWLR 423. The first figure will also include the earnings of a self-employed person where he is deemed to be a worker in another man’s business (Windeyer J, at p 643).
3. Whether relevant to the second figure, or both figures, earnings in the business are limited to earnings as a worker in the business (Barwick CJ, at p 632; Windeyer J, at p 643; Gibbs J, at p 652). With great respect to Barwick CJ who speaks only of physical labour it would include the value to the business of any exertions whether physical or mental.
4. The difference between the two figures can be ascertained without any process of subtraction by accepting evidence directed in terms to the difference in earnings (Gibbs J, pp 652, 653).
5. Normally, however, the difference is ascertained by determining both the hypothetical and factual earning figures and then subtracting the latter from the former. Where one or both figures involve the earnings of a self-employed person, there are two means of ascertaining the value of his work to the business.
6. The first method is to determine the nett remuneration being received for his labour by examining the business accounts and making all proper allowances for overhead expenses, costs of materials and other labour, maintenance and depreciation of plant, return on capital invested and the like (Gibbs J, at p 652; Windeyer J, at p 643).
7. The second method is to calculate without reference to the business accounts the worth to the business of his labour. In assessing the worth of an unimpaired earning capacity, as with a deemed worker before injury, industry rates will provide a measure. But if the work capacity is impaired another choice in method of proof is available. A direct determination may be made of the cost to the business of employing someone to do the reduced work of which the applicant is capable. Alternatively, it may be determined by deducting from the cost of employing someone whose work capacity is unimpaired the cost of supplementing the reduced efforts of the applicant so as to produce for the business the services of one fully capable worker (Barwick CJ, at pp 631-632).”
I am of the view that the analyses of the expert accountant and the Respondent’s expert are of no assistance in determining Mr Thompson’s probable earnings but for injury. The uncontroverted evidence is that Mr Thompson worked 60 hours a week pre-injury. The experts’ views can have no relevance to the appropriate enquiry, that being a determination of the worth to the business of his labour. It is Mr Thompson’s case that the payment of $900.00 per week pre-injury did not represent a realistic assessment of the worth of his labour 12 hours per day, five days per week to the business. It is upon that basis that he has relied upon the earnings of those other drivers employed by Borg Manufacturing and Dairy Distribution Trust. That is not to say that the $900.00 per week is of no relevance when determining the entitlement to weekly benefits. Whilst it is unnecessary to make any determination on this subject, I note in passing that those pre-injury earnings are arguably relevant to the determination of Mr Thompson’s current weekly wage rate in terms of section 42 of the 1987 Act.
It is Mr Thompson’s case that he is unable to undertake heavy work including driving long distances. Such work, it is submitted, is performed by those drivers whose earnings have been provided by Borg Manufacturing in correspondence dated 19 February 2008. In submissions Mr Thompson has chosen to average the three highest earners of that group of four. There is no apparent justification for that approach and for present purposes I note the average of the four nominated drivers is $1,480.00 per week (rounded). It is, as the Respondent has submitted, unknown as to whether included in those weekly figures are any allowances in respect of overtime. That fact is of little significance given the evidence that, pre-injury, Mr Thompson was working 60 hours per week and, further, that the figures have been presented in evidence to establish the earnings of a fully-fit truck driver. The most compelling evidence that the Respondent’s suggested figure of $962.12 per week is an inaccurate calculation of probable earnings is the evidence demonstrating the past earnings of Mr Thompson with Borg Manufacturing being in the sum of $1,097.11 per week. It must be remembered that the award which is the subject of this application made provision for weekly payments at the rate of $250.00 per week during the period that Mr Thompson was employed by Borg Manufacturing. That weekly sum was determined by agreement upon a compromise and I make no finding concerning past calculations. However the terms of the agreement strongly suggest that, notwithstanding Mr Thompson’s then earnings of almost $1,100.00 per week, he had an arguable case of entitlement to $250.00 per week pursuant to section 40.
It is open to inference from the correspondence received from Borg Manufacturing that Mr Thompson, if fully fit, could have earned somewhere between $1,145.00 per week and $1,694.00 per week. Upon the basis of that evidence and having regard to the requirement of section 40 that probable earnings be assessed on the basis of earnings “as a worker but for the injury” I conclude that such probable earnings are, since 25 May 2009, in the sum of $1,480.00 per week being the average of the Borg Manufacturing drivers.
The actual earnings of Mr Thompson were agreed at $920.00 per week. Whilst he has earlier demonstrated a capacity to earn somewhat more than that sum there is no suggestion in the Respondent’s submissions that Mr Thompson’s ability to earn, for present purposes, should be treated other than as being in the sum of $920.00 per week.
It may be seen that the arithmetic difference between Mr Thompson’s actual earnings and his probable earnings but for injury is in the sum of $560.00 per week. There is no argument advanced that the Commission’s discretion granted by section 40 would require exercise with respect to such calculation. This process of calculation has been undertaken for the limited purpose of determining whether the evidence supports the Respondent’s contention that there has been a relevant change of circumstances. There has been no determination on this appeal as to Mr Thompson’s entitlement or otherwise to a review of the current award.
It cannot be said that by reason of his resumption at work with Dairy Distribution Trust there has been a relevant change of circumstances which would give rise to the Respondent’s entitlement to a review of the award. There is no suggestion made by the Respondent that there is any other circumstance that has changed relevant to Mr Thompson’s entitlement. In those circumstances the order made in paragraph one of the Arbitrator’s determination is to be revoked and substituted by the order which appears below.
DECISION
Paragraph one of the Arbitrator’s determination dated 23 December 2009 is revoked and the following order made in its place:
“1. The Applicant’s application seeking review of the award dated 17 March 2009 is dismissed.”
Paragraph two of that decision is confirmed.
COSTS
The Respondent is to pay the Appellant’s costs of the appeal.
Kevin O’Grady
Deputy President
5 May 2010
I, RAMON LOYOLA, CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF KEVIN O’GRADY, DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
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