Turrell Pty Ltd v Fernandes
[2005] NSWWCCPD 149
•9 December 2005
WORKERS COMPENSATION COMMISSION
APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:Turrell Pty Ltd v Fernandes [2005] NSW WCC PD 149
APPELLANT: Turrell Pty Ltd
RESPONDENT: Ricardo Fernandes
INSURER:QBE Workers’ Compensation (NSW) Ltd
FILE NUMBER: WCC 8127-04
DATE OF ARBITRATOR’S DECISION: 15 October 2004
DATE OF APPEAL DECISION: 9 December 2005
SUBJECT MATTER OF DECISION: Weight of evidence, adequacy of reasons, application of section 40 of the Workers Compensation Act 1987
PRESIDENTIAL MEMBER: Acting Deputy President Robin Handley
HEARING:On the papers
REPRESENTATION: Appellant: McCulloch & Buggy, Solicitors
Respondent: Carroll & O’Dea, Lawyers
ORDERS MADE ON APPEAL: The decision of the Arbitrator is confirmed.
The Appellant, Turrell Pty Ltd, is to pay the Mr Fernandes’ costs in this appeal as agreed or assessed.
BACKGROUND TO THE APPEAL
On 25 October 2004, Turrell Pty Ltd sought leave in the Workers Compensation Commission (‘the Commission’) to bring an appeal against the decision of an arbitrator dated 15 October 2004.
The Respondent to the appeal is Ricardo Fernandes. Mr Fernandes was born in Portugal on 4 April 1949 and is aged 56. He migrated to Australia in 1972 and is married with two adult children. Mr Fernandes commenced employment with Turrell as an air conditioning installer in July 1993. He claims to have injured his neck, shoulder and arms on 23 April 2002 while attaching an air conditioning unit in the ceiling space of a house in Vaucluse. After telling his principal, Michael Terkasher, about this the next day, they had an argument, and Mr Terkasher terminated Mr Fernandes’ employment with effect from 24 April 2002. On 24 September 2002, Mr Fernandes lodged a claim for workers’ compensation. By letter dated 20 August 2003, the insurer, QBE Workers’ Compensation (NSW) Ltd (‘QBE’) notified Mr Fernandes that it had decided to decline liability on the ground that the injury was not related to his employment.
On 21 May 2004, the Commission registered Mr Fernandes’ ‘Application to Resolve a Dispute’ in respect of a claim for weekly compensation of $1200.00 per week from 1 October 2003, and for medical, hospital or related expenses. Turrell’s ‘Reply’ was lodged on 10 June 2004. On 10 September 2004, the Arbitrator conducted a teleconference with the parties. On 6 October 2004, conciliation having proved unsuccessful, the Arbitrator conducted an arbitration hearing, at the conclusion of which she gave an ex tempore (oral) decision. Her determination, set out below, was issued on 15 October 2004.
THE DECISION UNDER REVIEW
The Certificate of Determination, dated 15 October 2004, records the Arbitrator’s orders as follows:
“1. Pursuant to s40 of the Workers Compensation Act 1987 the respondent is to make weekly payments to the applicant at the full statutory rate from 1/10/03 to date and continuing.
2. The respondent is to pay the applicant’s reasonable s60 expenses upon production of receipts and/or accounts.
3. The respondent is to pay the applicant’s costs as agreed or assessed.
4. I certify that this matter was a complex matter.”
As noted above, the Arbitrator gave an ex tempore decision at the conclusion of the arbitration hearing on 6 October 2004. The Arbitrator acknowledged that Turrell disputed the date the lifting incident injury occurred as a result of which Mr Fernandes claims to have been injured. However, she commented on the lack of evidence to support Turrell’s claim that the installation of the air conditioning unit occurred on another date, and said (arbitration hearing transcript page 27):
“But there is really nothing from the respondent’s part to say, “No, it did not happen on this day because it was installed on another day”, apart from generalisations from people who say, “Oh no, I reckon it was done before”. So I just don’t find the respondent’s evidence in that regard compelling.
Now, I appreciate I have only [inaudible] the applicant’s assertion that something happened on that day, but it is a clear assertion about a description of an injury, what happened and what flowed from that.”
The Arbitrator referred to the medical evidence about the nature of the injury and found Mr Fernandes had suffered a rotator cuff injury as a result of which he remained incapacitated. Moreover, the Arbitrator said (arbitration hearing transcript page 29):
“In taking everything into account, I do accept the applicant’s assertion that he was injured at work on 23 April 2002 in the manner he described.
So I find he suffered an injury within the meaning of the Act in the course of his employment, and on the material available to me today, in particular the report of Dr Goldberg, who is his treating specialist, he is incapacitated for work.”
At the hearing, Mr Fernandes’ lawyer sought weekly compensation payments in respect of partial incapacity pursuant to section 40 of the Workers Compensation Act 1987 (‘the 1987 Act’). The Arbitrator found Mr Fernandes was earning $1,200 per week before the injury. Mr Fernandes’ lawyer submitted his capacity to earn would now be far less and mentioned the figure of $600 per week. It is implicit from the Arbitrator’s discussion that she took the view that Mr Fernandes’ earning capacity had been reduced although she does not specify a figure (arbitration hearing transcript page 32). She declined to exercise the discretion in section 40(1) on the basis that there was no information to support a reduction in the sum to be paid, especially in view of the fact that the maximum statutory award of “about $320” was a quarter of what he would have been earning had he not been injured: “So I think it’s appropriate to make a full award” (arbitration hearing transcript page 34).
The Arbitrator certified the matter was a complex one because of “the volume of material, the number of reports and statements”, the need for “attention to detail and to try to iron out exactly what the varying allegations, stories, claims were” (arbitration hearing transcript page 34).
ISSUES IN DISPUTE
The principal issue in dispute before the Arbitrator was whether Mr Fernandes suffered an injury arising out of or in the course of his employment as a result of which he was incapacitated for work so as to be entitled to weekly compensation. In the appeal, Turrell submits the Arbitrator made errors of law in relation to the weight accorded to the evidence, by the inadequacy of her reasons, and in her application of section 40 of the 1987 Act. The parties’ submissions 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. Turrell submits the matter is a complex one, and because the Commission would be assisted by oral submissions from the parties, this is not a matter that should be dealt with ‘on the papers’. Mr Fernandes’ solicitors have not commented on this issue. Having considered Turrell’s submission and the other documents, I am satisfied, nevertheless, 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 is, according to Turrell, at least $17,626.70 and represents 100% of the amount in dispute. I am therefore satisfied that the section 352 threshold has been met, and I grant leave to appeal.
SUBMISSIONS
Turrell submits that the Arbitrator erred in law in terms of the weight she accorded to the evidence and the inadequacy of her reasons for the decision:
(a) by finding that Turrell’s failure to produce evidence as to when the lifting incident occurred supported Mr Fernandes’ contention that the incident occurred on the date alleged, and by failing to give adequate reasons for preferring Mr Fernandes’ evidence over Turrell’s evidence in relation to the occurrence of the alleged incident and, in particular, for rejecting the witness statements of Mr Michael Terkasher, Mr Djorde Bolta and Mr Conrad Hewins.
(b) by failing to give adequate weight to Dr Braga’s medical certificate dated 26 April 2002 setting out a diagnosis, by finding that Dr Braga reconstructed his medical report and diagnosis, and by failing to give adequate reasons for rejecting his report of 17 March 2003.
(c) by finding, contrary to the evidence, that the injury occurred.
(d) by failing to give adequate weight to the report of Dr Lim dated 7 May 2003, and by failing to give adequate reasons for rejecting his findings.
(e) by finding in favour of Mr Fernandes against the weight of evidence.
Turrell also submits the Arbitrator failed to properly apply section 40 of the 1987 Act and failed to give reasons in relation thereto; in particular, for not exercising the section 40(1) discretion, against evidence of longstanding degenerative changes.
Mr Fernandes’ lawyers deny that the Arbitrator’s decision and reasons disclose any error of law. They submit the Arbitrator made no error of law by according greater weight to Mr Fernandes’ evidence in preference to that of Turrell’s, whose witness statements were vague. The Arbitrator gave sufficient reasons for rejecting Dr Braga’s report, for finding his notes to be inadequate and that his report had been reconstructed from the inadequate documentation. Moreover, the Arbitrator gave sufficient weight to Dr Braga’s medical certificate, preferring the diagnosis of Mr Fernandes’ treating specialist. Mr Fernandes’ lawyers also submit the Arbitrator’s decision to accept the evidence of Mr Fernandes’ treating operating surgeon in preference to that of Turrell’s expert witness, Dr Lim, discloses no error of law.
In relation to the Arbitrator’s application of section 40, Mr Fernandes’ lawyers submit the Arbitrator considered Mr Fernandes’ capacity to work and the medical evidence in relation thereto before making an award. Moreover, the award was consistent with Mr Fernandes’ age, experience and degree of injury, and supported by the predominant medical evidence, including that of Turrell’s expert witness, Dr Bodel. There was no error of law or failure to give reasons in relation to section 40.
EVIDENCE
There were three statements from Mr Fernandes in evidence before the Arbitrator. Mr Fernandes provided a statement dated 24 September 2002 in relation to proceedings brought by him in the Industrial Relations Commission for relief in respect of alleged unfair dismissal. In his statement dated 18 February 2004, provided in relation to the current proceedings, he said he received a settlement offer in respect of the unfair dismissal claim that he accepted. On 23 October 2002, Mr Fernandes also provided a statement to Brosnans, the insurance investigator that undertook an investigation and prepared a report for QBE, but declined to sign this. Mr Fernandes was not called to give evidence at the arbitration hearing.
In his statement dated 24 September 2002, Mr Fernandes said that on Tuesday 23 April 2002, he arrived at the house in Vaucluse at the usual time of 7.30am to continue work on the installation of air conditioning units. One of the units had to be installed in a confined space in a walk-in wardrobe off the master bedroom. At around 2.00pm that afternoon, he and one of his fellow workers, Conrad Hewins, were installing the fan coil unit in the space between the ceiling and the roof. It was necessary for them to lift the unit into the space, one person holding each end of the unit. According to Mr Fernandes, the unit weighed approximately 60 kgs. According to a later enquiry by Brosnans, the machine weight of the unit is 51 kgs (Brosnans’ Report, dated 24 October 2002, paragraph 3.4). In Mr Hewin’s statement dated 24 October 2002, he described the unit as “bulky” and said it could not be lifted into place and attached by one person.
Mr Fernandes said he supported his end of the unit on top of his head while he raised his arms to attach the unit and bolt it in place:
“11. ... The combination of the weight of the unit resting on my head coupled with the fact that I had my arms above my head caused me to feel a severe pain in my neck and down my right shoulder and to the elbow. I couldn’t let go because there is no way Conrad could have held the unit on his own. I struggled through and finished the bolting of the unit. I then helped Conrad lift his end of the unit and bolt it in place. Despite the pain I didn’t say anything to Conrad as this was the way I had worked for many years, just improvising and doing the best I could without having the correct equipment to work with. Conrad and I worked through to the normal finish time of 4pm.
12. That night when I got home from work, the muscles in my neck and shoulder had begun to tighten. It is hard to describe the pain I felt. It was like my arm was ‘dead’ and I had no strength in my right arm or hand. I took some pain killers, Panadeine Forte, and this gave me relief but only temporarily. I had great difficulty getting comfortable and sleeping that night.
13. The following day the pain was bad and I did not really feel like going to work; but I knew I had to, because there was no one else to do the job. I arrived at the site at about 7.30am and continued on with the job. Fortunately the heavy work was done and all I needed to do was to finish off some wiring. Michael arrived, as he normally did, at about 8.00am to check on our progress. I told him what had happened the day before and that I had pain in my neck and shoulder but he didn’t seem to care. He said to me ‘Join the club’. It was as if to say that any aches and pains were to be expected when doing this type of physical work. I did not document the accident and I am not sure Michael even has such a book.
14. Michael returned later in the day, perhaps around midday, and we had a disagreement about one part of the job. I was in pain and I know that my overall tolerance was less than it would normally have been. During the argument I admit to calling Michael an idiot. He then told me to go home. The reason for this I am sure is not so much because I was in pain rather it was because I had called him an idiot. Michael did not give me any indication at all that because of this disagreement my employment was to be terminated. Conrad was present throughout this whole incident.”
Mr Fernandes went on to say that the next day was the ANZAC Day public holiday, when he was in considerable pain. In the earlier unsigned statement taken by Brosnans on 23 October 2002, Mr Fernandes said that on Friday 26 April 2002, he went to see a general practitioner, Dr AM Braga, whom he thought spoke Portugese, at the Marrickville Medical Centre. He did not go to see his usual doctor, Dr Terkasher, who is his Principal, Michael Terkasher’s wife, because she was not at work that day:
“Dr Braga didn’t tell me what was wrong with my neck and shoulders, but instead gave me an injection in my right elbow. I had told him that I had a pain going from my neck into my right shoulder and down my right arm, but the muscle at the front of my right arm above my elbow was the worst. The pain was also in my left shoulder and top left arm, but was not as bad.”
Dr Braga gave Mr Fernandes a medical certificate stating he was suffering from “Bilateral lateral epicondylitis” and unable to attend work from 26 April 2002 to 10 May 2002. Mr Fernandes’ wife took the medical certificate round to Mr Terkasher’s house, but Mr Terkasher would not accept it. In his statement to Brosnans dated 24 October 2002, Mr Terkasher said he had already sent Mr Fernandes a letter of termination in the mail that morning. Mr Fernandes said he received this letter a few days later.
Mr Fernandes subsequently obtained a further medical certificate from Dr Braga, but said the injection in his elbow did not work. Mr Fernandes and his wife went ahead with a holiday they had planned to Portugal in late May 2002, returning to Australia in early August 2002. On his return, Mr Fernandes decided to see a different general practitioner and went to see Dr Reka Jayaram Rao, nearby at Earlwood. In an undated report received by Mr Fernandes’ lawyers on 20 April 2004, Dr Rao said she first saw Mr Fernandes on 13 August 2002. She referred him for an x-ray of his neck and shoulders and an ultrasound of his right and left shoulder:
“X-ray and US showed right shoulder degenerative changes and rotator cuff injury with full thickness tear of supraspinatus, tenosynovitis biceps and impingement. He was advised light duties, rest and analgesia and referred to Dr Goldberg.”
Dr Jerome Goldberg, an Orthopaedic Surgeon who specialises in shoulder surgery, first saw Mr Fernandes on 9 October 2002. He has provided reports dated 13 November 2002, 9 July 2003 and 12 February 2004, and also wrote to QBE about Mr Fernandes on 27 August 2003. Dr Goldberg recommended surgery to repair a partial tear of the supraspinatus in the right shoulder, although he said Mr Fernandes’ (report dated 13 November 2002):
“main problem relates to his neck. He has aggravated a cervical spondylitic condition. I would recommend a course of physiotherapy and anti-inflammatory medication, and if this does not improve his symptoms, then I would recommend referral to a spinal surgeon.”
On 14 January 2003, Mr Fernandes “underwent an arthroscopic rotator cuff repair and biceps tenotomy of the right shoulder”.
In his report dated 12 February 2004, Dr Goldberg said, in his opinion, “Mr Fernandes sustained a rotator cuff tear of his right shoulder and a chronic impingement lesion of his left shoulder” when injured at work on 23 April 2002. Dr Goldberg said Mr Fernandes also has cervical spondylosis, but declined to comment on liability in relation to this condition because “I have no expertise on conditions of the cervical spine and an expert opinion should be sought from a specialist in this field”.
Mr Fernandes’ lawyers obtained an expert opinion from Dr Raymond Wallace, Orthopaedic Surgeon, dated 24 January 2004. Dr Wallace said:
“I believe this patient has suffered a musculoligamentous strain at his cervical spine and rotator cuff tear at his right shoulder, as a result of injuries sustained in the course of his duties at work on 23rd April 2002.
His injuries are consistent with the mechanism described of heavy overhead lifting, and a compression force at his cervical spine, whilst manipulating air conditioning units into a ceiling space.
At present I do not believe he is fit to return to his pre-injury duties at work as an Air Conditioning Installer. He would not be fit for activities requiring repetitive bending or twisting movements at his cervical spine, sitting or standing in one position for prolonged periods, repetitive lifting above 10 kilos, working in confined spaces, at heights or on ladders, repetitive bending or twisting movements at his right shoulder, repetitive elevation of his right arm above shoulder level, repetitive fine movements at his right hand, prolonged periods of writing or typing, or prolonged use of hand utensils at his right hand ...
Unfortunately, he will be unfit to return to his full pre-injury duties at work as an Air Conditioning Installer in the long term.”
Turrell provided statements obtained by Brosnans from Michael Terkasher, Conrad Hewins and Djordje Bolta, all dated 24 October 2002, and a report from Mr Fernandes’ former general practitioner, Dr Braga, dated 17 March 2003. Mr Terkasher contended that the air conditioning unit in question had been lifted into place two weeks earlier than 23 April 2002, by which time the unit had already been commissioned and was working. Mr Terkasher said on the day following the alleged incident, that is on 24 April 2002, he had meetings from 8.30am and did not see Mr Fernandes on site at the Vaucluse house until about 1.00pm. He told Mr Fernandes not to continue with the installation of an electric sensor until he returned with the right piece of equipment. When Mr Terkasher returned about half an hour later, Mr Fernandes:
“had already installed a wire, which was incorrect in my opinion (and the manufacturer) and which he refused to change. He then called me ‘a fucking idiot’. I did not accept this behaviour from one of my employees and I verbally fired him asking him to submit the keys to his truck.”
Mr Terkasher also described previous incidents when he had given Mr Fernandes written warnings about unsatisfactory conduct.
Mr Hewins stated that the air conditioning unit in the walk-in wardrobe at the Vaucluse house had already been installed prior to 23 April 2002 although he could not remember the exact date and had no recollection of installing the actual unit in the wardrobe except “Ricardo freaking out after we had installed that particular unit because the builder had not left enough room around the edge of the unit to allow us access to the dampers on the unit”. Mr Hewins could also not remember what either he or Mr Fernandes were doing on 23 April 2002 and did not recall Mr Fernandes saying anything about being injured during the whole period when they were working at the Vaucluse house. Mr Hewins did, however, remember the argument between Mr Fernandes and Mr Terkasher on 24 April 2002, and Mr Terkasher saying words to the effect of “What must I do to make you listen to me? Do I have to threaten to fire you?” At this point, Mr Fernandes left the room followed by Mr Terkasher, with them continuing to argue.
The third witness statement relied on by Turrell was provided to Brosnans by Mr Bolta, another employee of Turrell. Mr Bolta also said the air conditioning unit in the walk-in wardrobe had been installed earlier in April 2002 and had already been commissioned by 23 April 2002. Mr Bolta had not, however, been involved in the installation. He said he was working at the Vaucluse house on 23 April 2002 but could not remember exactly what he was doing. However, he did not see Mr Fernandes hurt himself nor did Mr Fernandes tell him he had done so. Mr Bolta was working elsewhere next day.
Turrell provided medical reports from Dr James Bodel, Orthopaedic Surgeon, dated 20 May 2003, Dr Michael Lim, Occupational Physician, dated 7 May 2003, and Dr Con Kafataris, Injury Management Consultant, dated 14 April 2003. Dr Bodel stated the following opinion:
“This patient has suffered an injury to the neck and right shoulder and elbow in an incident that occurred at work on 23.4.02. His clinical condition in regard to his neck has stabilised but he has only recently undergone surgery on the shoulder and it will take at least eight or nine months from the time of the surgery before his shoulder and right upper limb condition has stabilised.
The patient is not fit for his pre injury work as an air conditioning installer or any other activity that requires strenuous or repetitive tasks overhead. He needs to continue physiotherapy and exercise to strengthen the neck and shoulder girdle region to optimise recovery.
He should be capable of part time light duty work at waist level with a five kilogram lifting limit on him and he will need the assistance of a rehabilitation facility in order to find more appropriate work. He will never be fit to return to work as an air conditioning installer in my view.
The patient’s complaints are quite genuine.”
Dr Lim stated:
“The symptoms, physical findings and the results of medical imaging indicated that Mr Fernandes has:
• Cervical spondylosis and accompanying osteoarthritis of the cervical spine (facet and uncovertebral joints)
• Degenerative rotator cuff disease in the right shoulder.
It is conceivable his alleged work activities on 23 April 2002 could trigger the symptoms of the underlying conditions.
However, the alleged incident could not have caused or worsened the severity of the underlying conditions:
• There was no external injury (ie sharp or blunt trauma).
• There was no physical effort out of the ordinary.
The incident could not have caused the large full thickness tear of the right rotator cuff, or contributed significantly to it:
• Such an outcome would be inconsistent with the biomechanical forces involved ...
• Radiology of the shoulder showed features indicative of longstanding degenerative changes affecting the rotator cuff.”
Dr Lim said he “would not consider the alleged incident on 23 April 2002 could have aggravated the underlying degenerative conditions in his neck or right shoulder”. However, the incident “may have triggered the symptoms of the underlying disorders”. Mr Fernandes’ employment “was not a substantial contributing factor to the degenerative disorders in his neck and right shoulder”.
Dr Kafataris said Mr Fernandes “has relatively widespread symptoms in his neck and right shoulder”. He was making a good recovery from the surgery to his right shoulder but was only part of the way through the rehabilitation process: “His level of function at the 6 to 9 month post-operation mark will be a gauge of the degree of recovery or the degree of improvement from his operation”. With regard to Mr Fernandes’ neck, Dr Kafataris could find “no evidence of significant radiculopathy. His MRI suggests degenerative disease only and there is no evidence of an acute traumatic lesion”. Dr Kafataris said Mr Fernandes was fit for suitable duties and the current restrictions (which were not stated but would appear to relate to the period of rehabilitation after surgery) are reasonable.
Dr Braga said Mr Fernandes first consulted him on 26 April 2002 “stating that he had pain to his left and right elbow for a period of three months”. Dr Braga gave him an injection “to his right lateral epicondyle” and issued a medical certificate stating that Mr Fernandes was suffering from “Bilateral Lateral Epicondylitis”. Dr Braga said Mr Fernandes did not mention “anything about Workers Compensation”. Dr Braga saw Mr Fernandes again on 6 May 2002 before he went to Portugal, and then on 7 and 8 August 2002, after his return from Portugal. On 7 August 2002, Mr Fernandes said he had neck pain, and on 8 August 2002 said it was all work related and Dr Braga should have treated him as a workers compensation case. In his report, Dr Braga said Mr Fernandes had not previously mentioned his neck and he had not, therefore, examined it.
A QBE Wage Payments Record showed Mr Fernandes had received weekly compensation from 22 August 2002. On 20 August 2003, QBE declined further liability.
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, Turrell 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.
Turrell’s submissions are directed, in particular, to the weight accorded to the evidence by the Arbitrator. Thus, what is challenged is the Arbitrator’s exercise of her discretionary judgment. As Deputy President Fleming stated in Knight v Eyles Nominees Pty Ltd [2004] NSW WCC PD 73 at paragraph 38, to succeed on this ground of appeal, “the Appellant must demonstrate that the Arbitrator has failed to exercise her discretion fairly and lawfully”. The Deputy President emphasised at paragraph 40:
“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.”
(See also Babylon Property & Cleaning Services Pty Ltd v Hormoz [2005] NSW WCC PD 21, especially at paragraphs 10 to 23.)
Dealing first with Turrell’s submissions as to the weight accorded to its witnesses’ evidence by the Arbitrator, the Arbitrator did not find Turrell’s evidence about when the air conditioning unit was installed in the walk-in wardrobe to be compelling. She said while Mr Fernandes stated consistently that he was injured while installing the unit on 23 April 2002, the statements from Mr Terkesher and his two employees, Mr Hewins and Mr Bolte, were vague about when the installation took place, except that it took place earlier than claimed by Mr Fernandes. In my view, in those circumstances, in the absence of other corroborating evidence, the Arbitrator was entitled to prefer Mr Fernandes’ evidence, noting his “description of an injury, what happened and what flowed from that” (arbitration hearing transcript page 27). Moreover, she expressed with reasonable clarity her reasons for doing so.
With regard to Dr Braga’s report and his medical certificate issued on 26 April 2002, the arbitration hearing transcript (pages 27 to 28) indicates the Arbitrator carefully examined Dr Braga’s clinical notes made on the occasion Mr Fernandes first consulted him on 26 April 2002. The Arbitrator notes this consultation date is consistent with Mr Fernandes’ account of events. She agreed with a comment by Mr Fernandes’ lawyer in submissions (arbitration hearing transcript page 27):
“what Dr Braga says in his report I agree would have to be a reconstruction of what he thought based on his clinical notes, and they are brief in the extreme. This is, I am told, the first time he’s consulted Dr Braga. There’s no patient history. There’s really no statement of, you know, anything about this man’s condition or previous injuries...”
Mr Fernandes’ lawyer also suggested Dr Braga should have recorded that Mr Fernandes experienced pain in the elbow three days previously and not three months previously as he actually noted. The Arbitrator commented that this might or might not have been an error. She found it “troubling” that Dr Braga only diagnosed “bilateral lateral epicondylitis”. However, in view of all the other medical evidence recognising that Mr Fernandes’ rotator cuff injury could have occurred in an incident such as that described by him or, at the very least, recognising that the symptoms could have been “triggered” by the incident (suggested by Dr Lim), she accepted that he suffered an injury “at about the time in question” (arbitration hearing transcript page 29). In so finding, the Arbitrator had particular regard to the evidence of Mr Fernandes’ treating specialist, Dr Goldberg, but also to that of the two orthopaedic surgeons who prepared reports, Dr Wallace (for Mr Fernandes’ lawyers) and Dr Bodel (for Turrell). The Arbitrator said that, taking everything into account, she also accepted that the injury occurred at work.
In my view, the Arbitrator gave adequate reasons for preferring the other medical evidence to that of Dr Braga and for according the other medical evidence greater weight. I do not accept that she found that Dr Braga reconstructed his medical report and diagnosis against the weight of evidence to the contrary. In my view, it would be reasonable for the Arbitrator to assume that, at the very least, Dr Braga would have consulted his clinical notes in preparing his report dated 17 March 2003. If those notes were “brief in the extreme”, this would make the writing of his report, nearly 11 months after the first consultation, more difficult. Thus, I am not persuaded that the Arbitrator made an error of law in finding that the injury occurred.
Turrell also submits the Arbitrator failed to give adequate weight to the findings of Dr Lim and failed to give adequate reasons for rejecting his findings. The Arbitrator said she did not find what Dr Lim said in relation to the incident having possibly triggered Mr Fernandes’ underlying degenerative symptoms to be consistent with her finding that Mr Fernandes had suffered an injury arising out of or in the course of his employment (arbitration hearing transcript page 33). The Arbitrator was not obliged to comment at length on each and very piece of evidence before her. Clearly, her discussion of the other medical evidence indicates that she relied, in particular, on the evidence of Dr Goldberg, Mr Fernandes’ treating specialist, and of Dr Wallace and Dr Bodel, in making her findings as to the injury. She rejected an oral submission from Turrell’s lawyer that she should take Dr Lim’s comments about the injuries being degenerative rather than work related into account in exercising her discretion under section 40(1) of the 1987 Act. Thus, I am not persuaded that the Arbitrator made any error in her treatment of Dr Lim’s evidence.
More generally in relation to section 40, Turrell submits the Arbitrator failed to properly apply the section and failed to give adequate reasons in relation thereto; in particular, for not exercising the section 40(1) discretion against evidence of longstanding degenerative changes. An application of section 40 requires a consideration of the steps prescribed by the NSW Court of Appeal in Mitchell v Central West Health Service (1997) 14 NSWCCR 527 (‘Mitchell’). Although the Arbitrator made no specific reference to the steps prescribed in Mitchell, in relation to step one, she found Mr Fernandes was earning $1,200 per week in the period before the injury.
In relation to step two, and Mr Fernandes’ capacity to earn in some suitable employment after the injury, there was some discussion between the Arbitrator and the parties’ lawyers at the arbitration hearing about what this figure might be. Mr Fernandes’ lawyer said that even if Mr Fernandes “could earn $600 a week, it still reflects in a weekly payment of compensation” (arbitration hearing transcript page 31), since Mr Fernandes would be limited to the maximum statutory award of $320, having already received weekly compensation for a period of 52 weeks. There appears to have been no further discussion of step three, the subtraction of the figure derived from step two from that in step one, although it was obviously assumed that any award in favour of Mr Fernandes would, in any event, be the (lower) figure constituting the maximum statutory award.
In relation to step four, the exercise of the section 40(1) discretion, as noted above, there was discussion between the parties and the Arbitrator about whether she should take into account the degenerative nature of Mr Fernandes’ conditions and exercise her discretion to reduce the amount awarded. The Arbitrator declined to do so. She said the reduction from his pre-injury earnings of $1,200 per week to the maximum statutory award of about $320 per week was already a substantial reduction. She therefore awarded Mr Fernandes (step five) the maximum statutory rate.
I agree that the Arbitrator’s treatment of section 40 is less than adequate and amounts to an error of law. The Arbitrator should have made findings where appropriate in respect of each of the Mitchell steps. However, if I were to revoke this part of the decision and substitute my own decision, the outcome would not be any different. My findings would be as follows:
Step 1 – a finding of pre-injury earnings of $1,200 per week.
Step 2 - it seems likely Mr Fernandes’ earning capacity post-injury would be significantly reduced by reason of the restrictions imposed as a result of the conditions affecting his activities. There is no disagreement amongst the medical opinions on this issue or that he is partially incapacitated for work. For example, Dr Bodel, who examined Mr Fernandes on behalf of Turrell, stated Mr Fernandes would never be fit to return to his pre-injury work but should be capable of part-time work with restrictions. The figure of $600 per week for post-injury earnings in suitable employment appears to be a figure mentioned by Mr Fernandes’s lawyer at the arbitration hearing (transcript page 31) for the purpose of working through the prescribed steps, on the basis that Mr Fernandes’ earning capacity had been substantially reduced as a result of his incapacity but would nevertheless still be greater than the statutory maximum to which an award would be subject at step 5. In the absence of any evidence in this regard, I adopt this figure as reasonable for the purpose of working through the Mitchell steps.
Step 3 – the subtraction of the figure derived from step 2 from that derived from step 1 gives a figure of $600.
Step 4 – I am not persuaded that there is any basis for exercising the section 40(1) discretion. The fact of Mr Fernandes having pre-existing degenerative conditions does not seem to me in this case to be a relevant consideration.
Step 5 – the award should therefore be the lesser of $600 or the maximum statutory award. Since the maximum statutory award for Mr Fernandes is less than $600, this is the award that should be made in his favour.
Since the outcome in any substituted decision would be the same as the award of weekly compensation made by the Arbitrator, the appropriate course is for me to confirm the Arbitrator’s decision.
DECISION
The decision of the Arbitrator is confirmed.
COSTS
I have not been persuaded by Turrell’s submissions in relation to the weight accorded to the evidence by the Arbitrator, nor generally by their submissions as to the adequacy of the Arbitrator’s reasons. While acknowledging the Arbitrator made an error of law in relation to her treatment of section 40 of the 1987 Act, this has not resulted in any change in the outcome in this matter. In all the circumstances, it is therefore appropriate that the Appellant, Turrell Pty Ltd, pay Mr Fernandes’ costs in this appeal as agreed or assessed.
Robin Handley
Acting Deputy President
9 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.
ASSOCIATE
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