Treloar Group Pty Ltd v Cowen
[2005] NSWWCCPD 150
•12 December 2005
WORKERS COMPENSATION COMMISSION
APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:Treloar Group Pty Ltd v Cowen [2005] NSWWCCPD 150
APPELLANT: Treloar Group Pty Ltd
RESPONDENT: Michael Cowen
INSURER:QBE Workers’ Compensation (NSW) Ltd
FILE NUMBER: WCC 5534-04
DATE OF ARBITRATOR’S DECISION: 22 October 2004
DATE OF APPEAL DECISION: 12 December 2005
SUBJECT MATTER OF DECISION: Weekly compensation and medical expenses: sections 40 and 60 of the Workers Compensation Act 1987.
PRESIDENTIAL MEMBER: Acting Deputy President Robin Handley
HEARING:On the papers
REPRESENTATION: Appellant: In-House Legal Department, QBE Workers’ Compensation (NSW) Ltd
Respondent: Stacks/Goudkamp
ORDERS MADE ON APPEAL: The decision of the Arbitrator is confirmed.
The Appellant, Treloar Group Pty Ltd, is to pay Mr Cowen’s costs in this appeal as agreed or assessed.
BACKGROUND TO THE APPEAL
On 18 November 2004, Treloar Group Pty Ltd (‘Treloar’) sought leave in the Workers Compensation Commission (‘the Commission’) to bring an appeal against the decision of an arbitrator dated 22 October 2004.
The Respondent to the Appeal is Michael Cowen. Mr Cowen was born on 27 February 1969 and is aged 36. He and his partner have four children, two of whom are dependents of Mr Cowen’s. Mr Cowen commenced employment with Treloar in 1991 as an assistant furnace man. He injured his lower back on 26 March 1991 when a manually operated crane jammed carrying a large pot containing molten metal from the furnace. Mr Cowen attempted to move the pot by pushing and pulling on chains connecting the pot to the crane, as a result of which he experienced lower back pain. He notified Treloar of the injury on that day. Mr Cowen said that following this and a similar second incident, he continued to work as an assistant furnace man, but regularly experienced lower back pain. Finally, the pain became so intense that he could no longer continue working and was off work for several months receiving treatment. When he returned to work, he found even the light duties to which he was assigned were too physically demanding, and his employment was eventually terminated. Mr Cowen said that since then, he has only been employed on a casual basis, but has not been able to work since October 2002.
Mr Cowen’s initial claim for weekly compensation and medical expenses was made on 13 September 1992. On 15 June 2003, Mr Cowen’s solicitors wrote to the insurer, QBE Workers’ Compensation (NSW) Ltd (‘QBE’), to pursue his claim in respect of the 1991 injury.
On 2 April 2004, the Commission registered Mr Cowen’s ‘Application to Resolve a Dispute’ in respect of his claim for weekly compensation of $600 from 9 October 2002 to date and continuing, and for medical, hospital or related expenses of $20,000. The Commission received Treloar’s ‘Reply’ on 26 May 2004. On 1 September 2004, the Arbitrator conducted a teleconference with the parties. On 22 September 2004, conciliation having proved unsuccessful, the Arbitrator conducted an arbitration hearing, following which, on 22 October 2004, he made the determination set out below.
THE DECISION UNDER REVIEW
The Certificate of Determination, dated 22 October 2004, records the Arbitrator’s orders as follows:
“1. That the Respondent pay the Applicant weekly compensation at the rate of $300 from 9 October 2002 to date under s40 of the Workers Compensation Act 1987.
2. Such weekly payments to continue in accordance with the provisions of the Act.
3. That the Respondent pay the Applicant’s s60 of the Act expenses on production of accounts or receipts.
4. That the Respondent pay the Applicant’s costs as agreed or assessed.”
In his ‘Statement of Reasons for Decision’, the Arbitrator said the issue in dispute between the parties was narrowed to that of Mr Cowen’s earning capacity from 9 October 2002, and his entitlement to medical expenses pursuant to section 60 of the Workers Compensation Act 1987 (‘the 1987 Act’) for an impending surgical procedure to his back. In determining whether Mr Cowen was entitled to weekly compensation under section 40 of the 1987 Act, the Arbitrator addressed the steps prescribed by the NSW Court of Appeal in Mitchell v Central West Health Service (1997) 14 NSWCCR 527 (‘Mitchell’). Having done so, and considered the evidence in relation to medical expenses, the Arbitrator summarised the resolution of issues in dispute as follows:
“Weekly Benefits Claim
• Michael Cowen was partially incapacitated for work as a result of his injuries from 9 October 2002.
• Michael Cowen’s probable weekly earnings, but for the injury, had he continued to be employed in the same or comparable employment, are $600 per week.
• During Michael Cowen’s period of partial incapacity for work from 9 October 2002, the average weekly amount he was earning or would be able to earn in some suitable employment from time to time after the injury was $300.
• He sought suitable employment, and was able to obtain it from 9 October 2002 to early 2003, earning on average $277 per week.
• Michael Cowen is therefore entitled to weekly payments for the period of partial incapacity for work from 9 October 2002 of $300.Medical Expenses Claim
• Michael Cowen’s medical and related expenses incurred as a result of treatment, services or assistance are reasonably necessary for the compensable injury.”
ISSUES IN DISPUTE
Treloar submits the Arbitrator made errors of law and fact in reaching his decision, both in his treatment of the evidence and findings, and his application of sections 40 and 60 of the 1987 Act. Mr Cowen’s solicitor submits the Arbitrator’s findings were soundly based on the evidence and his decision was properly and adequately reasoned according to law. The parties’ submissions on these issues are discussed more fully below.
ON THE PAPERS REVIEW
Section 354(6) of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’) states:
“(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.”
I have had regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submissions of the parties. Treloar submits there should be an oral hearing, in part because of the large amount of compensation at issue and in order to facilitate the parties’ exchange of submissions. Mr Cowen’s solicitors are content for the matter to be dealt with on the basis of written submissions. Having considered the relevant 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.
Neither party sought to adduce fresh evidence.
LEAVE
Before proceeding to deal with an appeal, the Commission must determine whether the application meets the requirements of section 352 of the 1998 Act. The appeal was lodged within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act. With regard to section 352(2), the amount of compensation at issue exceeds $5,000 and is 100% of the amount in dispute, the Arbitrator having made an award in favour of Treloar. I am therefore satisfied that the section 352 threshold has been met, and I grant leave to appeal.
EVIDENCE
Mr Cowen brought proceedings against Treloar in the Workers Compensation Court of NSW in 1992. Judge Johns heard the matter. His Honour, referring to the evidence of Dr YAE Ghabrial, Orthopaedic Surgeon, said: “There was no evidence of disc herniation or nerve root compression. Dr Ghabrial did refer to some loss of signal at the L5-S1 level of his spine.” Moreover, when one looked at Dr Ghabrial’s reports of 17 July 1992 and 22 March 1993, “in particular, referring to the extent of the applicant’s lifting incapacity, there had been a distinct improvement”. His Honour also noted the evidence of Dr CG Minogue, Consultant Occupational Physician, on behalf of QBE, that early disc degeneration was a possibility. In his judgment dated 30 June 1993, His Honour said he was not convinced, on the balance of probabilities, that Mr Cowen had suffered an ongoing incapacity from the date his compensation had ceased. He therefore made an award in favour of Treloar.
Mr Cowen’s solicitor provided more recent reports from Dr Ghabrial dated 1 November 2002, 15 July 2003 and 17 December 2003. In his report dated 1 November 2002, Dr Ghabrial referred to:
“the results of an MRI performed on 21 October 2002 which showed right L5/S1 disc degeneration with an anular tear. There was no significant disc protrusion or compression on the neural elements.
His clinical features are severe enough to warrant surgery. There is no doubt that he will need right L5/S1 disc excision and spinal fusion.
I explained to him the pros and cons of surgery and put his name on my waiting list at the Royal Newcastle Hospital for this procedure.”
In his report dated 15 July 2003, Dr Ghabrial said of Mr Cowen: “I believe he is unfit for any activities involving heavy lifting, excessive bending and excessive twisting.” In his report dated 17 December 2003, Dr Ghabrial stated:
“The estimated cost of surgery in the form of L5/S1 laminectomy, disc excision and spinal fusion is in the vicinity of $18,000 inclusive of all medical, paramedical, anaesthetic, assistant and hospital fees. The cost of post operative rehabilitation is in the vicinity of $2,000 for the first year.”
Mr Cowen’s solicitors also provided a copy of a WorkCover medical certificate issued by Mr Cowen’s general practitioner, Dr AB Kwa, dated 17 December 2003. Dr Kwa diagnosed “low back injury” and said Mr Cowen was unfit to work from 1 January 2004 to 31 March 2004.
At the request of QBE, Mr Cowen was re-examined by Dr Minogue on 7 June 2004. In a report dated 11 June 2004, Dr Minogue stated:
“His diagnosis is of L5/S1 disc degeneration, on the basis of MRI scans performed in 1992 and 2002.
The event in question is now in the distant past. On the basis of the history provided it is probably reasonable to assume that the disc degeneration developed as a result of the incident in question and that his previous employment was a substantial contributing factor to his back condition. There would appear to be no other causes.
His capacity for employment is difficult to assess. It is probably reasonable to assume that his pre-injury heavy manual work would be too strenuous for him to resume. There may be some degree of subjectivity in his presentation and on examination the apparent limitation of straight leg raising may not be valid. Mr Cowen is presumably fit for a range of lighter manual duties, at least on a part-time basis, in which he is able to avoid placing excessive strain on his lumbar spine and which permits regular postural variation.
Treatment is likely to remain conservative. An ongoing home, swimming pool and/or gymnasium-based exercise program may be of some benefit to him. On present evidence I doubt that he requires a lumbosacral fusion operation and would tend to recommend against it, although a more minor procedure(s) to relieve presumed discogenic pain could be indicated following further diagnostic workup.”
Mr Cowen provided a statement dated 10 June 2004. He stated:
“47. I have only been employed on a casual basis since the accident. Being casual has been the only sort of employment I can handle, as it allows me to get work when I can and not to have to work when my back is bad. I have worked intermittently for various labour hire companies.
48. I was generally able to work much more during the summer months than I could during winter, because the cold weather would make my back ache too much.
49. I haven’t been able to work since early in 2003.”
Mr Cowen said his back pain has increased since the Compensation Court hearing in 1993 to the point when, in 2002, it was necessary for him to see Dr Ghabrial, who recommended surgery on his back.
Mr Cowen also gave oral evidence at the arbitration hearing on 22 September 2004. He said he is separated “on and off” from his de facto spouse. His oldest son was dependent on him until about 12 months prior to the hearing when his son obtained employment. His youngest two children are still dependents. Mr Cowen described various work he performed between 1993 and about two years previously when he last worked. He said he stopped working because (arbitration hearing transcript page 9):
“I was just getting worse in me back, more pain in me back, and move the wrong way, if I twist or turn or even sneeze or just turn around to you like that, and I’d be falling down crying in pain, and I’d have to lay down to get myself back up, and then I’d be in bed for a week...”
Mr Cowen said the last job he did was about two years ago, in October 2002, for Choice Human Resources, pressure cleaning mine bolts. In cross-examination, he was asked whether his back was better or worse than it was in 1993. He replied (arbitration hearing transcript page 20):
“It’s kept the same. The only thing that’s got worse, as I said – and I keep repeating myself – every time I move the wrong way or sneeze or do something, I go down in pain.”
He said he also gets pain in his right leg.
SUBMISSIONS, DISCUSSION AND FINDINGS
The role of the Presidential Member on appeal is to review the Arbitrator’s decision as a whole. The review is not a rehearing. In this case, Treloar must demonstrate that the decision of the Arbitrator is affected by some legal, factual or discretionary error (Allesch v Maunz (2000) 203 CLR 172; The King Island Company Limited v Deery [2005] NSW WCC PD 1) in order to enliven the Presidential Member’s power to interfere with the Arbitrator’s decision pursuant to section 352(7) of the 1998 Act. Where the weight accorded to the evidence by the Arbitrator is challenged, Deputy President Fleming’s comment in Knight v Eyles Nominees Pty Ltd [2004] NSW WCC PD 73 at paragraph 40 should be borne in mind:
“Interference with an Arbitrator’s discretionary judgement as to the weight of evidence should only be done where it is manifestly obvious that the discretion has so miscarried that it has not been exercised fairly and lawfully.”
Treloar submits the Arbitrator made errors of law and fact in making his decision. I address these submissions below. Mr Cowen’s solicitor noted in her submissions, “The appellant employer’s written submissions on the substantive issues on appeal are difficult to characterise and have not been grouped”. I agree. A clearer and more succinct statement in relation to the grounds of appeal would have been beneficial.
Estoppel
Treloar submits the Arbitrator erred in law by finding that he was not bound by the findings of Judge Johns in the Compensation Court of NSW and by failing to give reasons for so finding. The Arbitrator stated (Statement of Reasons paragraph 22):
“I agree with the Applicant that the findings of Judge Johns are applicable at the date of the hearing, and the Commission is not bound by them now if the situation has changed.”
I have reviewed the transcript of the arbitration hearing and examined the parties’ submissions on the issue of estoppel. My reading of the transcript is that Mr Cowen’s counsel’s submission was that such estoppel as His Honour’s judgment gives rise to, is limited to proscribing any contradiction of His Honour’s findings as at the date of the Compensation Court hearing (arbitration hearing transcript page 29). While Treloar’s counsel submitted that estoppels arose as a result of His Honour’s findings on the issues of capacity for work, whether the diagnostic investigations showed an abnormality, and permanent impairment or loss of use (arbitration hearing transcript page 24), those submissions did not, in my view, suggest that the Arbitrator could not make findings in relation to Mr Cowen’s condition as at the date of the arbitration hearing, some 11 years after the Compensation Court hearing, if Mr Cowen’s condition has changed. In my view, the Arbitrator’s finding on the issue of estoppel and his reasons for so finding are sufficiently clear, and I am not satisfied that he made any error of law in so doing.
Capacity for Work
Treloar submits the Arbitrator erred in law by determining that the dispute regarding incapacity was confined to issues concerning Mr Cowen’s capacity to earn since 9 October 2002 and by failing to take into account Mr Cowen’s work activities since 30 June 1993. However, as Mr Cowen’s solicitor points out, the ‘Application to Resolve a Dispute’ identified the period in respect of which Mr Cowen claimed weekly compensation as being from 9 October 2002 to date and continuing. Moreover, it is clear that the Arbitrator took into account Mr Cowen’s work history between 1993 and 2002 in assessing his capacity for work since 9 October 2002 (Statement of Reasons paragraphs 23 to 25). Thus, I am not satisfied the Arbitrator made any error of law in this regard.
Evidence of Deterioration of Condition
Treloar submits the Arbitrator made an error of law and fact in finding that Mr Cowen’s ‘situation’ had deteriorated in October 2002 or at any other relevant time; in particular, Dr Minogue did not express the view that Mr Cowen’s condition had worsened although the Arbitrator inferred this. Mr Cowen’s solicitors submit there was clear evidence of the deterioration of Mr Cowen’s condition. The Arbitrator had the benefit of hearing oral evidence from Mr Cowen. The Arbitrator also noted the consistency of opinion as to Mr Cowen having an ongoing partial incapacity for work expressed in Dr Ghabrial’s reports, Dr Kwa’s WorkCover certificate and Dr Minogue’s report. That consistent opinion led to the inescapable inference that Mr Cowen’s condition had deteriorated in the period since the Compensation Court award in 1993.
In his report dated 11 June 2004, quoted in paragraph 17 above, Dr Minogue presumed Mr Cowen to be “fit for a range of lighter manual duties, at least on a part-time basis”, with restrictions. This should be contrasted with Dr Minogue’s opinion expressed in his report dated 6 August 1992 when he considered Mr Cowen fit to resume his normal duties. In my view, it is therefore reasonable to infer from the 2004 report that Dr Minogue recognised that Mr Cowen’s condition had deteriorated in the interim period. Despite the Arbitrator having found Mr Cowen’s memory to be unreliable, he “did not feel there was any intention to dissemble or mislead” (Statement of Reasons paragraph 23), and found Mr Cowen’s oral evidence at the arbitration hearing to be consistent with Dr Minogue’s assessment. I also note that Dr Minogue’s comments about Mr Cowen’s capacity for work are consistent with Dr Ghabrial’s opinion. I am not therefore persuaded that the Arbitrator made an error of law and fact in relation to Mr Cowen’s condition. The Arbitrator discussed the relevant medical evidence and drew on that evidence in making his findings.
Section 40
Treloar submits the Arbitrator erred in law by misconceiving the operation of section 40 of the 1987 Act, including the exercise of the discretion in section 40(1). In his Statement of Reasons, the Arbitrator correctly identified the steps prescribed by the NSW Court of Appeal in Mitchell and addressed each of those steps in turn, making relevant findings. It can clearly be inferred from the Arbitrator’s discussion that, in respect of the period from 9 October 2002, he was satisfied that Mr Cowen was partially incapacitated for work. The Arbitrator referred to the recent medical evidence – the reports of Dr Ghabrial and Dr Minogue, and the WorkCover certificate issued by Dr Kwa – which he said suggested that Mr Cowen’s injury had worsened between 1993 and 2002 (Statement of Reasons paragraph 22).
Treloar submits the Arbitrator erred in fact when he made a finding in relation to Step 1 of the Mitchell steps that Mr Cowen’s probable weekly earnings but for the injury were $600. As Mr Cowen’s solicitors point out, $600 per week was the figure identified in Mr Cowen’s ‘Application to Resolve a Dispute’ and this was also the figure identified in the Wages Schedule prepared by Mr Cowen’s solicitors. At the arbitration hearing, Treloar’s counsel submitted there was no evidence as to what Mr Cowen’s probable earnings would have been, but while agreeing that $600 per week was not a large amount of money, contended that in the period before 9 October 2002, Mr Cowen had demonstrated an ability to earn far more than $600 (arbitration hearing transcript page 26). However, Treloar did not itself adduce evidence of comparable earnings.
The Arbitrator inferred from Mr Cowen’s wage slips at the time of the injury in 1991 that he was then earning $415 per week. He noted that $600 represented considerably less than an increase of 5% per annum up to 2002, and accepted that the figure of $600 per week was reasonable for the period in respect of which the claim was made. In the absence of evidence from Treloar, it was, in my view, not unreasonable for the Arbitrator to make a finding on this basis. I do not consider his discussion of an increase of 5% per annum as being intended as anything more than a rough reckoning, such as any ordinary person might make, in the course of assessing the reasonableness of the figure of $600 in the absence of other more specific evidence. I am not persuaded that the Arbitrator made any error of fact in this regard.
With regard to the exercise of the discretion in section 40(1) of the 1987 Act, Treloar submits the Arbitrator failed to consider all relevant matters, including Mr Cowen’s “ingestion of medication and alcohol, his exaggeration of symptoms and the fact that he had re-located to an area where there were relatively little employment prospects”. Mr Cowen’s solicitors submit the Arbitrator took into account that Mr Cowen had been seeking appropriate employment and there were no other relevant matters or matters referred to in submissions by Treloar’s counsel to the Arbitrator in relation to the exercise of the section 40(1) discretion.
In relation to Step 4 of the Mitchell steps and the section 40(1) discretion, the Arbitrator found Mr Cowen had tried to find suitable employment and found that the discretion should not be exercised (Statement of Reasons paragraph 27). As noted above, the Arbitrator found that Mr Cowen’s memory was “quite unreliable”, but did not feel there was any intention on Mr Cowen’s part to dissemble or mislead. Mr Cowen had “moved to Iluka approximately 7 months ago”. I note Mr Cowen stated the warmer weather there was better for his back (Statement dated 10 June 2004, paragraph 46), and this move occurred after he had last worked in October 2002. Whilst the Arbitrator did not refer to any other relevant matters in considering whether to exercise the section 40(1) discretion, in the absence of submissions about this from Treloar, and given the evidence, which does not, in my view, suggest that other matters were relevant, I am not persuaded that the Arbitrator made any discretionary error in this regard.
Medical Expenses
Treloar also submits the Arbitrator erred in law and fact in finding that “the proposed spinal surgery is reasonably necessary for the compensable injury”. It contends the Arbitrator had no jurisdiction to make such a finding and that the finding was against the weight of evidence.
It is well established that section 60 of the 1987 Act is an indemnity provision (NSW Sugar Milling Co-op v Manning (1998) 44 NSWLR 442) and that an Arbitrator may not make an order pursuant to section 60 for a specified sum, based upon likely future costs. However, an Arbitrator may make a finding that certain future medical expenses are “reasonably necessary” as a result of the injury received by the worker, so that the expenses become payable as they are incurred: Water Taxis Combined Pty Ltd and Harbour Taxi Boats Pty Ltd v Wells [2004] NSW WCC PD 30; Lilly v Tomago Aluminium Company Pty Ltd [2004] NSW WCC PD 62.
The Arbitrator made the finding quoted in paragraph 31 above having discussed the evidence of Dr Ghabrial and Dr Minogue. He found Dr Minogue’s opinion “slightly equivocal” and preferred to accept the clear recommendation of the treating specialist, Dr Ghabrial. In my view, the Arbitrator’s finding was based on his assessment of the evidence and was one that he had jurisdiction to make. I am not, therefore, persuaded that he made any error of law or fact in relation to his award under section 60.
In conclusion, I am not satisfied that the Arbitrator made any error of law or fact in making his decision, which must therefore be confirmed.
DECISION
The Arbitrator’s decision is confirmed.
COSTS
The Appellant, Treloar Group Pty Ltd, is to pay Mr Cowen’s costs in this appeal as agreed or assessed.
Robin Handley
Acting Deputy President
12 December 2005
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF ROBIN HANDLEY, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
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