Varela v Metroform Pty Ltd

[2006] NSWWCCPD 72

WORKERS COMPENSATION COMMISSION

DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR

CITATION:Varela v Metroform Pty Ltd [2006] NSWWCCPD 72

APPELLANT:  Raul Varela

RESPONDENT:  Metroform Pty Ltd

INSURER:QBE Workers Compensation (NSW) Ltd

FILE NUMBER:  WCC 4135-04

DATE OF ARBITRATOR’S DECISION:          25 January 2005

DATE OF APPEAL DECISION:  2 May 2006

SUBJECT MATTER OF DECISION:                Weight of evidence; Arbitrator’s dismissal of claim for compensation for permanent impairment

PRESIDENTIAL MEMBER:  Acting Deputy President Robin Handley

HEARING:On the papers

REPRESENTATION:  Appellant: Taylor & Scott, Lawyers

Respondent: Hunt & Hunt, Lawyers

ORDERS MADE ON APPEAL:  1. Paragraph 8 of the Arbitrator’s decision made on 25 January 2005 is revoked and the matter is remitted to another arbitrator for determination of the claim for compensation under section 66 of the Workers Compensation Act 1987.

2. The Arbitrator’s decision is otherwise confirmed.

3. The Respondent, Metroform Pty Ltd, is to pay the Appellant, Mr Varela’s costs in this appeal in relation to his claim for compensation for permanent impairment.

BACKGROUND TO THE APPEAL

1. On 22 February 2005, Raul Varela sought leave in the Workers Compensation Commission (‘the Commission’) to bring an appeal against the decision of an arbitrator dated 25 January 2005. The Respondent to the appeal is Metroform Pty Ltd (‘Metroform’). Metroform’s workers compensation insurer is QBE Workers Compensation (NSW) Ltd (‘QBE’).

1. Mr Varela was born in Columbia on 12 October 1951 and is aged 54. He migrated to Australia in about 1996 and subsequently obtained work as a labourer in the construction industry. He is married with a son aged about 16. His first language is Spanish.

1. Mr Varela was employed by Metroform as a formwork labourer, and injured his lower back while at work on a building site on 30 October 2002, notifying Metroform of the injury on that day.

1. On 9 March 2004, the Commission registered Mr Varela’s ‘Application to Resolve a Dispute’ in respect of his claim for weekly compensation and for medical, hospital or related expenses. On 22 July 2004, the Commission registered Mr Varela’s amended Application in respect of his claim for weekly compensation of $369.50, for medical, hospital or related expenses, and for compensation for permanent impairment. Metroform’s amended ‘Reply’ was filed on 3 August 2004.

1. The Arbitrator conducted a number of teleconferences with the parties. On 19 November 2004, conciliation having proved unsuccessful, he conducted an arbitration hearing which continued on 23 November 2004, with the oral delivery of his decision and the reasons for his decision on 20 and 25 January 2005.

THE DECISION UNDER REVIEW

1. The Certificate of Determination, dated 24 February 2005, records the Arbitrator’s orders as follows:

“1. The applicant received a personal injury (‘injury’) on 30 October 2002 arising out of and in the course of his employment with the respondent. The applicant’s employment was a substantial contributing factor to the injury.

2. The applicant recovered from injury by 31 October 2004. The applicant was no longer injured on and after 1 November 2004 from injury received on 30 October 2002.

3. The respondent is liable to the applicant for reasonably necessary expenses pursuant to s60 of the Workers Compensation Act 1987 (‘the 1987 Act’) incurred up to and including 31 October 2004. Award for the applicant for reasonably necessary s60 expenses incurred up to 31 October 2004. Award for the respondent pursuant to s60 for expenses incurred on or after 1 November 2004.

4. The applicant’s injury resulted in partial incapacity during the period in dispute between the parties that commenced on 16 September 2003, and the applicant remained partially incapacitated by injury until 31 October 2004. The applicant no longer suffered any incapacity from injury on and after 1 November 2004.

5. The applicant was offered suitable employment by the respondent with effect from 30 November 2002. The applicant unreasonably refused and rejected the respondent’s offer of suitable employment. The applicant did not seek suitable employment from the respondent at any time after the applicant unreasonably rejected the respondent’s offer of suitable employment.

6. The applicant is not entitled to weekly benefits compensation from the respondent during the period in dispute between the parties on and after 16 September 2003 pursuant to ss 36, 37, 38 or 40(2) of the 1987 Act.

7. The applicant is, however, entitled to weekly benefits compensation from 16 September 2003 to 31 October 2004 for partial incapacity calculated in accordance with s 40(2A) of the 1987 Act, and subject to the exercise of the discretion in s 40(1) of the 1987 Act. The applicant’s current weekly wage rate for the worker’s pre-injury employment within the meaning of s 40(2A)(a) is $641.44 per week from 16 September 2003 to 31 October 2004. The applicant’s current weekly wage rate for some suitable employment for the worker from time to time after the injury from 16 September 2003 to 31 October 2004 within the meaning of s 40(2A)(b) is $475 per week. The mathematical difference between these amounts is $166.44 per week. In the proper exercise of my discretion, pursuant to s 40(1) of the 1987 Act, I am satisfied in the circumstances of the case, that there is no reason to reduce the calculation of the worker’s weekly earnings any further. Award for the applicant for weekly benefits compensation pursuant to s 40 of the 1987 Act for $166.44 per week from 16 September 2003 to 31 October 2004. Award for the respondent for weekly benefits compensation on and after 1 November 2004.

8. As the applicant has recovered from injury, the Commission has no jurisdiction pursuant to s 65 of the 1987 Act to refer a medical dispute to an Approved Medical Specialist for assessment of permanent impairment resulting from injury pursuant to Chapter 7 Part 7 of the Workplace Injury Management & Workers Compensation Act 1998 (‘the 1998 Act’). The applicant’s claim for compensation pursuant to section 66 of the 1987 Act is a nullity.

9. The respondent is to pay the applicant’s costs as agreed or assessed. I determine that the dispute to be complex within the meaning of item 4.10 of the Compensation Costs Table in Schedule 6 to the Workers Compensation Regulation 2003.”

1. In the oral statement of reasons for his decision, the Arbitrator noted that there was no dispute that Mr Varela had been involved in an incident at work on 30 October 2002. The parties could not, however, agree on whether the injury “should be classified as a personal injury or as a disease injury” (transcript page 153). There was also no dispute that Mr Varela’s current weekly wage rate but for the injury was $641.44, that he was paid weekly benefits until 15 September 2003, and that he has a dependent child.

1. The Arbitrator found that following the accident on 30 October 2002, Mr Varela went to see his local doctor, Dr Katrinz Munz, who issued a medical certificate diagnosing low back pain. She referred him for x-rays, performed by Dr C Levitt on 31 October 2002. Dr Levitt found markedly degenerate narrowed discs and annular bulges at L4 - L5 and at L5 - S1 (transcript page 157). On 4 November 2002, Mr Varela was examined by an Orthopaedic Surgeon, Dr Loefler. The Arbitrator said (transcript page 157) Dr Loefler, who recorded that Mr Varela had experienced intermittent back pain in the past, interpreted the CT scan of Mr Varela’s lower back:

“as showing some bulging posteriorly at L4 - L5, L5 – S1 but with no focal disc prolapse. Dr Loefler’s opinion was that the applicant may have injured a muscle, which is a soft tissue injury, although he added it was also possible that Mr Varela had aggravated a degenerative process in his lumbar spine.”

1. On 4 November 2002, Mr Varela was also examined by a sports physician, Dr M Cusi, who, the Arbitrator said, concluded “Mr Varela had had an exacerbation of his chronic degeneration in his lower spine, which was directly related to the incident on 30 October 2002” (transcript page 158). Both Dr Munz and Dr Cusi found that Mr Varela was fit to return to work on light duties with restrictions, including on lifting. Dr Munz said Mr Varela would be fit for alternative work on suitable duties from 30 November 2002 to 29 December 2002 with restrictions. The Arbitrator found Mr Varela had provided a resignation letter dated 27 November 2002 in which he said he resigned because he felt incapacitated. QBE’s file evidence was that Metroform had offered Mr Varela suitable duties with restrictions. The Arbitrator found (transcript page 175):

“Objectively the employer did offer suitable duties and objectively he [Mr Varela] had a duty to try them out, and objectively I am satisfied that he refused to undertake suitable duties that were offered to him and that were available to him if he had not resigned to commence with effect from 30 November 2004 [sic – 2002] in accordance with Dr Munz’s medical certificate.”

1. The Arbitrator discussed the medical evidence in some detail. He concluded (transcript page 166) that for a number of years, since at least 1997, Mr Varela had suffered “underlying intermittent low-grade back pain, although apparently after he returned to work after two weeks off it did not prevent him going about his normal life and work”. The Arbitrator found (transcript page 169):

“that the frank incident of 30 October 2002 produced an immediate muscular type of injury predominantly at L4 – L5, L5 – S1, which is a personal injury within the meaning of section 4 of the Act and was, therefore, an injury – what’s described as an injury in the primary sense, and although it occurred against the background of an underlying disease, namely against the background of an underlying degenerative spinal dessication and degeneration, the injury was a personal injury and did not constitute a disease injury.”

1. The Arbitrator found that because Mr Varela was only partially incapacitated for work from 1 December 2002, he had no entitlement under section 37 of the Workers Compensation Act 1987 (‘the 1987 Act’). With regard to his entitlement under section 40 of the Act, the Arbitrator said that he did not regard Mr Varela’s move to Queensland in February or March 2003 “as objectively a factor as to why he did not take up suitable duties with the respondent in Sydney” (transcript page 177). Having reviewed the evidence, including as to Mr Varela’s trip to Columbia in January 2003 and his handyman activity in Queensland after moving there, the Arbitrator found that from January 2003, “Mr Varela occupationally had the capacity to work as a general handyman, perhaps also as a caretaker or a console operator and that he has a capacity in terms of occupation to do light duties such as pizza deliveries” (transcript page 182). The Arbitrator said he was satisfied that from January 2003, Mr Varela was able work on a full-time basis 38 hours a week, five days at an average, as a handyman or with some pizza delivery work or as a caretaker” (transcript page 182).

2. The Arbitrator found the current weekly rate for a handyman and console operator was about $500 gross per week and that of a pizza deliverer was $447.26 per week. He said (transcript page 205):

“I’ve reached the decision that the appropriate figure I shall use for the purpose of the current weekly wage rate from time to time is $475 per week, which is approximately the mid-point between the range for a caretaker/handyman, on the one hand, or a pizza deliverer on the other.”

The mathematical difference between Mr Varela’s agreed current weekly wage rate but for the injury of $641.44 and $475 was therefore $166.44. The Arbitrator found no reason to exercise his discretion under section 40(1) of the 1987 Act to reduce that amount.

1. Having reviewed the medical evidence, the Arbitrator found that Mr Varela’s condition improved following his injury on 30 October 2002, so that the effects of the injury had resolved by 31 October 2004. The Arbitrator recognised that Mr Varela had ongoing problems with his back but said these were not due to the injury. The Arbitrator found that Mr Varela was entitled to expenses pursuant to section 60 of the 1987 Act up to and including 31 October 2004 but not thereafter. He also found Mr Varela’s claim under section 66 of the Act to be a “nullity” because there can be no referral to an Approved Medical Specialist if the injury has ceased and therefore there is no longer an injury (transcript pages 213 to 215).

ISSUES IN DISPUTE

1. The grounds of appeal identified by Mr Varela’s solicitors are that the Arbitrator erred by (1) finding Mr Varela had unreasonably refused an offer of light duties, (2) finding the injury was a temporary aggravation of a pre-existing condition, an aggravation that had ceased by 31 October 2004, (3) finding that Mr Varela could earn $475 per week in suitable employment, (4) exceeding his jurisdiction by dismissing Mr Varela’s claim for compensation under section 66 of the 1987 Act, and (5) failing to refer Mr Varela’s claim pursuant to section 66 to the Registrar for referral to an Approved Medical Specialist. The parties’ submissions on these issues are discussed below.

ON THE PAPERS REVIEW

1. 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.”

1. I have had regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submissions of the parties on the appeal. Mr Varela’s solicitors seek leave to make oral submissions because of the complexity of the matter. Metroform’s solicitors submit that the appeal can be dealt with on the papers. Having considered these submissions and the relevant documents, and with the benefit of a transcript of the arbitration hearing, 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.

1. Neither party sought to adduce fresh evidence.

LEAVE

1. 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 issue of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act. With regard to section 352(2), I accept that the amount of weekly compensation at issue exceeds $5,000 and represents more than 20% of the amount awarded. I am therefore satisfied that the section 352 threshold has been met, and I grant leave to appeal.

SUBMISSIONS, DISCUSSION AND FINDINGS

1. 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, Mr Varela 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.”

Finding on light duties

1. Mr Varela’s solicitors submit the Arbitrator erred by finding Mr Varela had unreasonably refused an offer of light duties. They contend it was Mr Varela’s evidence, “which was not seriously challenged, that following his injury and during his incapacity he returned to his native Columbia to visit his family and recuperate”. He therefore did not unreasonably reject Metroform’s alleged offer of suitable employment.

1. Metroform submits the Arbitrator correctly found that it offered Mr Varela suitable employment from 30 November 2002 and that Mr Varela unreasonably refused and rejected this. Mr Varela admitted in evidence that he signed a letter of resignation dated 27 November 2002, and although he did not agree he had been offered light duties, he said he would have refused any offer of light duties because he felt he was incapacitated for work (transcript page 28). The Arbitrator accepted QBE’s file evidence that following receipt of the letter of resignation, QBE employed an interpreting service to explain to Mr Varela the consequence of his resignation, that Metroform could provide him with suitable duties to permit a return to work, and to offer him the opportunity of withdrawing his resignation (transcript page 160). Metroform submits no evidence was adduced stating that Mr Varela’s resignation was on account of his trip to Columbia in January 2003 and, in any event, this was not a reasonable excuse for refusing suitable duties.

1. Metroform submits the Arbitrator had regard to all the medical evidence, accepted this was a muscular type of injury, and that Mr Varela had a duty to try a return to work in accordance with the restrictions stated by Dr Munz in her medical certificate dated 25 November 2002 in which she said he was fit for suitable duties from 30 November 2002 to 31 December 2002.

1. I am not satisfied on the basis of Mr Varela’s solicitors’ submissions that the Arbitrator made any error in his finding on this issue. I accept Metroform’s submission that the Arbitrator properly considered the evidence and based his finding on plausible evidence that QBE took reasonable steps to advise Mr Varela of the consequence of his resigning and that suitable duties, in accordance with Dr Munz’s certificate, would be made available for him. I have also not seen any evidence to support the contention that Mr Varela returned to Columbia in January 2003 to recuperate.

Finding that injury was a temporary aggravation

1. Mr Varela’s solicitors submit the Arbitrator erred by finding the injury suffered by Mr Varela on 30 October 2002 was a temporary aggravation of a pre-existing condition and that the aggravation ceased on 31 October 2004. They submit the balance of the medical evidence supported Mr Varela’s claim that he suffered an ongoing incapacity as a result of the injury. In particular, they cite Dr George Weisz, Orthopaedic Surgeon, in his report dated 27 April 2004, as having concluded that Mr Varela suffered a permanent impairment as a result of the injury resulting in permanent restrictions on lifting, carrying, bending and travelling.

1. Metroform rejects Mr Varela’s solicitors’ submission. It contends the Arbitrator had regard to all the relevant medical evidence in concluding that the ongoing problems with Mr Varela’s back after 31 October 2004 were not due to the effects of the injury.

1. An examination of the transcript of the reasons stated by the Arbitrator’s for his decision in relation to the duration of the aggravation caused by the incident on 30 October 2002, reveals a discussion of the evidence of Dr M Cusi, Sports Physician, Dr Weisz, Dr Tony Blue, Orthopaedic Surgeon, and Dr Ernest Narodetsky and Dr Jacobus du Preez, both general practitioners in Robina, Queensland (transcript pages 208 to 212). In my view, it was reasonable for the Arbitrator to conclude on the basis of the balance of that evidence that the aggravation had ceased by 31 October 2004. I note the Arbitrator did not accept Dr Blue’s opinion, stated in his reports dated 1 July 2003 and 3 June 2004, that Mr Varela would have recovered from the incident within four months. The Arbitrator did, however, acknowledge Dr Weisz’s evidence that “one-quarter of the applicant’s back symptoms were due to his pre-existing back difficulties and three-quarters were due to the accident of 30 October 2002” (transcript page 209). In my view, there is nothing to indicate any obvious error by the Arbitrator in the exercise of his discretion nor is there anything to indicate that he has not exercised that discretion fairly and lawfully.

Finding that Mr Varela could earn $475 per week in suitable employment.

1. Mr Varela’s solicitors submit the Arbitrator erred by finding that Mr Varela could earn $475 per week in suitable employment as a caretaker/handyman, light delivery man or full-time pizza delivery man. They contend that the medical and lay evidence as to the significant restrictions to which Mr Varela is subject and the absence of evidence of a reasonably available labour market for such occupations for a significantly injured Spanish speaking formwork labourer of 53 years of age do not support this finding.

1. Metroform rejects these submissions. It notes Mr Varela’s oral evidence that he could drive a small car for 5 to 15 kms and sit for one to two hours if he changes position (transcript page 27), that he could make regular visits to and purchases from a hardware store and change the washers on taps (transcript pages 37 to 38), that notwithstanding his poor English, he was able to run his own business in Sydney undertaking casual work such as cleaning and painting between November 2000 and July 2002 (transcript page 14), and that he appeared to have no difficulty concentrating during the arbitration hearing and could help his son with school projects (transcript page 182). Metroform submits the Arbitrator concluded correctly that Mr Varela has the capacity to work as a general handyman, caretaker or console operator or to work making light deliveries such as pizza deliveries (transcript page 182). The Arbitrator gave proper consideration to both medical and lay evidence and was correct in concluding that Mr Varela could perform such suitable duties on a full-time basis. It was open to the Arbitrator to find that Mr Varela could earn approximately $475 per week in such employment, being the approximate mid-range between the wage of a caretaker/handyman and a pizza deliverer.

1. Once again, I am not satisfied that the Arbitrator made any error in this finding. His oral statement of reasons includes a relatively comprehensive discussion of the relevant evidence, referred to by Metroform in its submissions, noting also Mr Varela’s having travelled to Columbia in both January and August 2003, his ability to participate in a major move of residence from New South Wales to Queensland, including renting a house in Queensland before buying a house, and his subsequent involvement in undertaking some home improvements (transcript page 182). In my view, it was reasonable on the evidence for the Arbitrator to draw the conclusions he did concerning suitable employment for Mr Varela and his likely earnings in such employment. I therefore reject this ground of appeal.

Claim for compensation under section 66

1. Mr Varela’s solicitors submit the Arbitrator erred and exceeded his jurisdiction in dismissing Mr Varela’s claim for compensation pursuant to section 66 of the 1987 Act. There being no dispute that Mr Varela suffered a work related injury on 30 October 2002, the Arbitrator had no power to make findings in relation to permanent impairment until an assessment had been made by an Approved Medical Specialist.

1. Metroform “does not contest that the Arbitrator erred in finding that the applicant’s claim pursuant to section 66 is a nullity because the Commission has no jurisdiction to refer this to an approved medical specialist”.

1. The Arbitrator clearly made an error of law in so finding. There having been no dispute that Mr Varela suffered an injury in the incident on 30 October 2002, an injury that the Arbitrator found arose out of and in the course of Mr Varela’s employment by Metroform and to which his employment was a substantial contributing factor, the degree of permanent impairment should have been assessed in accordance with section 65 of the 1987 Act and Part 7 of Chapter 7 of the 1998 Act. The Arbitrator’s finding that Mr Varela had recovered from the effects of the injury does not negate the accepted fact of the injury. Mr Varela’s claim for compensation for permanent impairment should have resulted in the referral of Mr Varela to an Approved Medical Specialist for assessment of the degree of permanent impairment as a result of the injury.

Failure to refer Mr Varela to an Approved Medical Specialist

1. Mr Varela’s solicitors submit the Arbitrator erred by failing to refer Mr Varela’s claim for permanent impairment to an Approved Medical Specialist. Metroform does not contest this. It follows from my finding in paragraph 32 above, that I agree the Arbitrator made an error of law by failing to make this referral and by instead dismissing Mr Varela’s claim for compensation for permanent impairment as a nullity.

DECISION

1. Paragraph 8 of the Arbitrator’s decision made on 25 January 2005 is revoked and the matter is remitted to another arbitrator for determination of the claim for compensation under section 66 of the Workers Compensation Act 1987. The Arbitrator’s decision is otherwise confirmed.

COSTS

1. The Respondent, Metroform Pty Ltd, is to pay the Appellant, Mr Varela’s costs in this appeal in relation to his claim for compensation for permanent impairment.

Robin Handley

Acting Deputy President  

2 May 2006

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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