Water Taxis combined Pty Limited and Harbour Taxi Boats Pty Limited v Wells
[2004] NSWWCCPD 30
•7 June 2004
WORKERS COMPENSATION COMMISSION
APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:Water Taxis Combined Pty Limited and Harbour Taxi Boats Pty Limited v Wells [2004] NSW WCC PD 30
1st APPELLANT: Water Taxis Combined Pty Limited
1st APPELLANT’S INSURER: Employers Mutual Indemnity (Workers Compensation) Ltd
2nd APPELLANT: Harbour Taxi Boats Pty Limited
2nd APPELLANT’S INSURER: Allianz Australia Workers Compensation (NSW)
RESPONDENT: Gordon Trevor Wells
FILE NUMBER: WCC659-2002
DATE OF ARBITRATOR’S DECISION: 13 October 2003
DATE OF APPEAL DECISION: 7 June 2004
SUBJECT MATTER OF DECISION: Power to make an award for future section 60 expenses; discretion to award costs after a reasonable offer of settlement.
PRESIDENTIAL MEMBER: President Justice Terry Sheahan
HEARING:On the papers
REPRESENTATION: 1st Appellant: Turks Legal
2nd Appellant: Goldbergs Lawyers
Respondent: Keddies Litigation Lawyers
ORDERS MADE ON APPEAL: Leave is granted for the First and Second Appellants to appeal against the decision of the Arbitrator, dated 13 October 2003.
The decision of the Arbitrator is confirmed other than in respect of part of order C thereof, and order C is amended to read as follows:-
The Respondents are to pay the Applicant’s expenses under section 60 of the Workers Compensation Act 1987, on production of accounts or receipts, on a contribution basis of 25% by the First Respondent and 75% by the Second Respondent, such expenses to include $4968.09 incurred to date, plus all appropriate physiotherapy and remedial massage expenses.
INTRODUCTION
On 7 November 2003, Water Taxis Combined Pty Limited (the Second Respondent in the original proceedings before the Arbitrator and ‘the First Appellant’ in this appeal) sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Workers Compensation Commission (‘the Commission’) and made submissions, against the relevant decision of an Arbitrator, dated 13 October 2003.
The Respondent to the Appeal is Gordon Trevor Wells (the Applicant in the proceedings before the Arbitrator and ‘the Respondent Worker’ in this appeal). The Respondent Worker filed submissions in Reply on 18 November 2003.
On 18 November 2003, Harbour Taxi Boats Pty Limited (the First Respondent in the proceedings before the Arbitrator and ‘the Second Appellant’ in this appeal) sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Commission against the same decision. Accompanying this application was an ‘Application to Admit Late Documents’.
On 21 November 2003 the Respondent Worker filed further submissions in Reply, limited to responding to the Second Appellant’s ‘Application to Admit Late Documents’.
On 8 January 2004 the matter was referred to the Presidential office for review.
BACKGROUND TO THE DECISION UNDER REVIEW
This appeal relates to an ‘Application to Resolve a Dispute’ that was filed in the Commission by the Respondent Worker on 2 July 2002. The original application named the First Appellant as the Employer, and indicated that the dispute concerned weekly compensation from 17 April 2002 to date and continuing, and medical expenses.
The First Appellant filed a ‘Respondent Reply to Application for Dispute Resolution’ on 12 July 2002.
A teleconference was held on 30 August 2002 at which the Arbitrator directed that the Respondent Worker serve on the First Appellant and the Commission “its [sic] Report on the psychological injury part of the Applicant’s claim”. The Statement of Reasons accompanying the Direction indicates that the reasons for the Direction were that the “Applicant’s claim includes a psychological component (not reported on).” An email from the Respondent Worker’s solicitor to the Commission, dated 3 September 2002, confirmed that: “the applicant’s claim does not include claim for psychological injuries.”
The matter was set down for a conciliation conference on 12 September 2002. A Direction was issued by the Commission on 13 September 2002 that the application be “adjourned for the Applicant to join a second Respondent”.
On 1 November 2002 the Respondent Worker filed a ‘First Amended Application to Resolve a Dispute’. This application named the First Appellant as the Employer and named two Insurers, namely Employers Mutual Indemnity (Workers Compensation) Limited and Allianz Australia Workers Compensation (NSW) Limited. The Amended Application indicated that the dispute concerned weekly compensation from 17 April 2002 and continuing, medical expenses and lump sum compensation for permanent impairment of $51,500 plus pain and suffering. The Amended Application described the injuries to the worker as “injury to the neck, back, left arm, left leg and right leg” and the date[s] of injury as “06/10/2001 including nature and conditions of employment since 2001.”
By letter dated 20 November 2002 the Respondent Worker sought to amend the Application filed on 1 November 2002 to include the Second Appellant as a second Employer. The Respondent Worker also sought to amend the date[s] of injury to “1. 6 October 2001 to include nature and condition of employment from commencement date of employment since 2001 whilst employed with Water Taxis Combined Pty Ltd” and “2. On or about October 1997 to include nature and conditions of employment from commence date of employment to date and continuing whilst employed with Harbour Taxi Boats Pty Ltd.”
On 20 November 2002 the Second Appellant filed a ‘Respondent Reply to Application for Dispute Resolution’.
On 21 November 2002 the First Appellant filed an ‘Amended Reply’.
A teleconference was held on 17 December 2002 at which the Arbitrator directed that the permanent impairment claim be referred to an Approved Medical Specialist (AMS).
On 5 June 2003 the Commission issued a Medical Assessment Certificate (MAC).
A further teleconference took place on 23 July 2003 at which the Respondent Worker indicated the section 67 claim had been withdrawn and that the First and Second Appellants were expected to make an order to settle the section 66 claims.
The matter was then set down for a conciliation conference and arbitration hearing before the Arbitrator on 3 September 2003. A partially recorded arbitral hearing took place on that date also. A Certificate of Determination was issued by the Commission on 13 October 2003, incorporating some matters, which are recorded in the transcript and the Arbitrator’s Statement of Reasons, as agreed.
The Certificate of Determination records the Arbitrator’s orders as follows:
A. The Applicant’s claim for compensation under Section 67 of the WCA is withdrawn and dismissed.
B. The Respondents pay the Applicant weekly compensation under Section 40 of the WCA, on a contribution basis, First Respondent as to 25% and Second Respondent as to 75%, as follows;
$730 per week from 16 May 2002 to 7 August 2002
$631 per week from 8 August 2002 to 30 September 2002
$730 per week from 1 October 2002 to 25 October 2002
$119 per week from 26 October 2002 to 4 May 2003
$730 per week from 5 May 2003 to 29 June 2003-10-04 [sic]
$308 per week from 30 June 2003 to date and continuing
C. The Respondents pay the Applicant’s expenses under Section 60 of the WCA, on a contribution basis, First Respondent as to 25% and Second Respondent as to 75%, as follows;
$4968.09 to date.
$2000 per annum for physiotherapy and massage.
D. The Respondents pay the Applicant’s costs (including the Application under Section 66 of the WCA).
I certify costs in this matter on a complex basis.
The Arbitrator’s ‘Statement of Reasons for Decision’ (the ‘Reasons’) was attached to the Certificate of Determination.
ON THE PAPERS REVIEW
I turn now to the appeals brought against the decision of the Arbitrator.
Section 354(6) of the Workplace Injury Management and Workers Compensation Act (‘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.
The First and Second Appellants have both stated that they do not object “to the Leave Application and Appeal being determined on the papers.” The Respondent Worker states that “[t]here is no objection to having this matter heard on the papers.”
Having regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submission by the parties that the appeal can proceed to be determined on the basis of these documents, I have decided to proceed ‘on the papers’, without holding any conference or formal hearing.
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, which provides:
352Appeal against decision of Commission constituted by Arbitrator
(1)A party to a dispute in connection with a claim for compensation may, with leave of the Commission constituted by a Presidential member, appeal to the Commission as so constituted against a decision in respect of the dispute by the Commission constituted by an Arbitrator.
(2)The Commission is not to grant leave to appeal unless the amount of compensation at issue on the appeal is both:
(a)at least $5,000 (or such other amount as may be prescribed by the regulations), and
(b) at least 20% of the amount awarded in the decision appealed against.
(3)If the Commission refuses to grant leave to appeal, the Commission must state reasons for the refusal in writing to the parties.
(4)An appeal can only be made within 28 days after the making of the decision appealed against.
(5)An appeal under this section is to be by way of review of the decision appealed against.
(6)Evidence that is fresh evidence or evidence in addition to or in substitution for the evidence received in relation to the decision appealed against may not be given on an appeal to the Commission except with the leave of the Commission.
(7)On appeal, the decision may be confirmed or may be revoked and a new decision made in its place.
(8)In this section, decision includes an award, interim award, order, determination, ruling and direction.
Time Limit – section 352(4)
In order to comply with the 28-day appeal period, the Appellants were required to file an application on or before 10 November 2003.
The First Appellant’s application to appeal, filed on 7 November 2003, was clearly lodged within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act.
The Second Appellant’s application to appeal, filed on 18 November 2003, was not lodged within 28 days of the decision appealed against.
Rule 77 of the Workers Compensation Commission Rules 2003 (‘the Rules’) provides (in part):
(8) The Commission constituted by a Presidential member may, if a party satisfies the Presidential member, in exceptional circumstances, that to lose the right to seek leave to appeal would work demonstrable and substantial injustice, by order extend the time for making an appeal.
(9) A party who seeks an extension of time as referred to in subrule (8) must:(a) as soon as practicable give notice to the other parties of the intention to seek the extension, and
(b) lodge and serve with the application for leave to appeal an application for the extension of time, including full details of the arguments to be put in favour of granting the extension.
On 18 November the Second Appellant filed an ‘Application to Admit Late Documents’ being the late ‘Application to Appeal Against Decision of Arbitrator’. Under the ‘Reasons in support of Application’ the Second Appellant states that it “seeks leave for an extension of time in which to file the Appeal” and submits that “no prejudice will be occasioned to the Applicant or the Second Respondent as the entire decision is appealed against in any event by the Second Respondent.”
The Respondent Worker objects to the late filing of the Application to Appeal on the basis it “will cause substantial prejudice and unecessary [sic] delay to the Respondent as the case against the first Appellant has already been prepared and answered within the 28 day time frame as provided for in s352.”
The Second Appellant’s Application for leave to appeal was filed eight days outside the prescribed period. The Second Appellant has essentially adopted the same grounds of appeal as the First Appellant. In fact the Second Appellant’s submissions are almost identical. The Respondent Worker has filed submissions in reply to these grounds of appeal. I cannot agree that the Respondent Worker will be prejudiced if the Second Appellant is granted an extension of time in which to bring its appeal.
For these reasons I grant the Second Appellant the necessary extension of time to make its application for leave to appeal.
Amount in issue – section 352(2)
The First Appellant asserts that, “the amount of compensation awarded in the decision appealed against is $23,724 in respect of weekly payments to 30 June 2003 and continuing at the rate of $308 per week plus Section 60 expenses of $4,968.09 to date and continuing at $2,000 per annum.” The First Appellant appeals against 100% of the amount awarded in the decision appealed against.
The Second Appellant asserts that “the amount of compensation awarded in the decision appealed against is $29,941.85 in respect of weekly payments to 30 June 2003 and continuing at the rate of $308.00 per week plus Section 60 expenses of $4,968.09 to date and continuing at $2,000.00 per annum.” The Second Appellant also appeals against the whole of the amount awarded by the Arbitrator.
The amount of compensation in dispute in the appeal is clearly more than $5,000 and exceeds 20% of the Arbitrator’s award, and therefore meets the monetary thresholds in section 352(2) of the 1998 Act.
Accordingly, leave is granted for the First and Second Appellants to appeal against the decision of the Arbitrator, dated 13 October 2003.
SUBMISSIONS
The First Appellant submits that the decision of the Arbitrator should be revoked and a new decision made in its place. The First Appellant’s stated grounds of appeal consist entirely of one page of submissions, as follows:
(i)The Arbitrator erred by accepting the Applicant’s Wage Schedule as having being admitted on the basis that agreement was reached on the weekly compensation payable pursuant to Section 40 (paragraph 18) so that only the liability for weekly compensation from 30 June 2003 remained to be determined.
(ii)The agreement reached between the parties in respect of the Applicant’s Wage Schedule was limited to the period shown in respect of the applicant’s actual earnings and probable earnings but not as to the Section 40 entitlement.
(iii)The Arbitrator thereby erred by failing to determine any entitlement based on the evidence before him.
(iv)The Arbitrator erred in finding the applicant is a truthful witness whose credit was not tested in cross-examination (paragraph 26) when such cross-examination was not allowed and questions directed to the applicant were limited to clarification of matters arising from a supplementary statement by the applicant lodged at the Arbitration hearing.
(v)The Arbitrator erred by failing to properly consider the evidence in relation to the cause of the applicant’s incapacity and whether this was as a result of any work injury.
(vi)The Arbitrator erred by failing to exercise his discretion under Section 40(1) such that the award is “to bear such relation to the amount of that reduction as may appear proper in the circumstances of the case.”
(vii)The Arbitrator erred by referring to findings by Dr Davis on permanent impairment notwithstanding the certificate of Dr Pillemer the approved medical specialist who issued a certificate pursuant to Section 325 of the WIM Act 1998 and his observations as to the cause of incapacity.
(viii)The Arbitrator erred by determining a future liability for physiotherapy and massage treatment for a fixed amount when this should be properly limited to a general order.
(ix)The Arbitrator erred by failing to take account of the reduction of any weekly compensation to the statutory rate after the first 26 weeks of incapacity taking account of payments already made.
(x)The Arbitrator erred by failing to include any order for payment of lump sum compensation under Section 66 in accordance with the determination by Dr Pillemer and the Medical Assessment Certificate for permanent impairment issued following the examination on 13 May 2003.
(xi)The Arbitrator erred by failing to give any or any adequate reasons for declining to limit the applicant’s costs against the second respondent (Water Taxis Combined Pty Ltd) for work done in relation to the lump sum claim. Those costs should have been restricted to the period prior to the date of the offer made by that respondent to settle that part of the claim.”
The Second Appellant has adopted the First Appellant’s grounds of appeal verbatim for grounds (i) – (ix). The Second Appellant has substantially adopted the First Appellant’s ground (x) but has also detailed the amount of compensation payable by each of the Respondents under section 66 in accordance with the MAC. The Second Appellant has not adopted the First Appellant’s ground (xi).
As recorded above at paragraphs 2 and 4, the Respondent Worker has filed submissions in Reply to the First Appellant’s grounds of appeal. The Respondent Worker’s Reply to the Second Appellant’s submissions was limited to the issue of the lateness of the Second Appellant’s Application for leave to appeal. As the Second Appellant’s grounds of appeal are in essence the same as the First Appellant’s grounds, I have taken the Respondent Worker’s earlier submissions as submissions against both the First and Second Appellants’ grounds of appeal.
In reply the Respondent Worker submits that “the Arbitrator’s determination does not contain any demonstrable error of law and there is no legal basis for issuing a new decision, or altering the current determination.” The Respondent Worker’s submissions may be summarised as follows:
(i)The Arbitrator did not err by taking into account the Respondent Worker’s Wage Schedule when determining the issue of entitlement under section 40 of the 1987 Act.
(ii)The Arbitrator considered and gave sufficient weight to all of the evidence when determining the correct award under section 40 of the 1987 Act.
(iii)There is no evidence that the order made under section 40 of the 1987 Act was “outside the limits of s354” of the 1998 Act (“Procedure before Commission”).
(iv)The Arbitrator did not err in not allowing cross-examination. “[I]t is clear that the WCC is not bound by the rules of evidence and that the Arbitrator may exercise his/her discretion with respect to the manner in which the Arbitration is run, as well as the evidence which is considered.”
(v)There is no evidence to support the Appellants’ contention that the Arbitrator failed to properly consider the evidence in relation to “causation”.
(vi)The Appellants have provided no evidence to support the submission that the Arbitrator erred by failing to exercise his discretion under section 40(1) of the 1987 Act. Furthermore, “[i]t is clear that there is an option to provide no reduction if appropriate under this section, and the Arbitrator was well within the bounds of this section to do so.”
(vii)No evidence has been provided to support the Appellants’ contention that the Arbitrator erred in relying upon the findings of Dr Davis. “[I]n the alternative, this consideration has no substantive effect with respect to the determination.”
(viii)The Arbitrator’s order that the Respondents pay the Applicant $2,000 per annum for physiotherapy and massage “is in accordance with s60 as it provides for reasonable medical expenses as outlined in the medical evidence that was before the Arbitrator.”
(ix)An order for lump sum compensation under section 66 of the 1987 Act can now be made in accordance with the MAC despite the absence of a section 66A Agreement.
ISSUES IN DISPUTE
The role of the Presidential member on appeal is to review the Arbitrator’s decision as a whole. It is not the role of the Presidential member to comb through the Arbitrator’s reasons looking for errors (Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259). The power of the Presidential member to revoke the decision of the Arbitrator is exercisable only where the Appellant can demonstrate that, having regard to all of the evidence, the decision of the Arbitrator is the result of “some legal, factual or discretionary error” (Allesch v Maunz (2000) 203 CLR 172 and Mayne Health Group t/as Nepean Private Hospital v Sandford [2002] NSW WCC PD 6).
The First and Second Appellants’ grounds of appeal assert a number of errors of fact, law and discretion. The issues in dispute in this appeal may be summarised and grouped as follows:
Section 40 Error
Did the Arbitrator err in that his findings in relation to section 40 were against the weight of the evidence? (the First Appellant’s grounds of appeal (i), (ii) and (iii))
Did the Arbitrator err by failing to exercise his discretion under section 40 of the 1987 Act? (ground (vi))
Did the Arbitrator err in failing to reduce the award under section 40 taking into account payments already made? (ground (ix))
Oral Evidence Error
Did the Arbitrator err in law by not allowing Mr Wells to be cross-examined as to credit? (ground (iv))
Did the Arbitrator err in finding that Mr Wells was a witness of credit when cross-examination as to credit was not permitted? (ground (iv))
Failure to Properly Consider the Evidence
Did the Arbitrator err by failing to properly consider the evidence in relation to the cause of the worker’s incapacity and whether this was the result of any work injury? (ground (v))
Section 66 Error
Did the Arbitrator err by referring to Dr Davis’ findings on permanent impairment? (ground (vii))
Did the Arbitrator err in failing to make an order under section 66 in accordance with the MAC? (ground (x))
Section 60 Error
Did the Arbitrator err in law by making an order under section 60 for a fixed amount for future medical treatment expenses? (ground (viii))
Costs Error
Did the Arbitrator err in failing to limit the order for costs for the Respondent Worker’s section 66 claim to prior to the First Appellant’s offer of settlement? (ground (xi))
Did the Arbitrator err in law by failing to provide adequate reasons for his decision in relation to costs? (ground (xi))
DISCUSSION AND FINDINGS
I have before me all of the evidence on the Commission file, including the evidence relied upon by the parties in the proceedings before the Arbitrator. Regrettably I do not have before me the Arbitrator’s file.
A conciliation conference was held in this matter on 3 September 2003. Despite the best endeavours of the Arbitrator, the parties were unable to reach an agreement on all of the issues in dispute. The matter therefore proceeded to Arbitration and, in accordance with the Commission’s Guideline for ‘The Practice of the Conciliation/Arbitration Process in the Workers Compensation Commission’ (‘the Guideline’), the arbitral proceedings, or at least some of them, were recorded.
A transcript of the first phase of the Arbitration proceedings has been made available to the parties. This transcript concludes with the Arbitrator taking a short break from the proceedings. Although it appears that the Arbitration may well have resumed some time afterwards, a transcript of any later phase of the Arbitration proceedings is not available to me. According to the Commission file, the later stage of the arbitral proceedings were either not recorded or there was a technical malfunction with the recording equipment.
Section 40 Error
The First and Second Appellants have submitted that the Arbitrator’s findings in relation to section 40 of the 1987 Act were not based on the evidence before him.
The calculation of a worker’s entitlement pursuant to section 40 of the 1987 Act is a five-step process (Mitchell v Central West Health Service (1997) 14 NSWCCR 526 (‘Mitchell’).
According to Mitchell, to make an award under section 40 of the 1987 Act an Arbitrator is required to:
1. Determine the weekly amount the worker would probably have been earning if uninjured (section 40(2)(a))…
2. To determine “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” (section 40(2)(b))…
3. To subtract the figure derived from 2. from the figure derived from 1. (section 40(2)).
4. To decide whether and to what extent the reduction calculated as above bears “such relation to the amount of that reduction as may appear proper in the circumstances of the case” (section 40(1))…
5. To make an award in the amount arrived at in step 4.
In his Reasons the Arbitrator stated at paragraph 18 that:
“The Applicant’s wage schedule was admitted on the basis that agreement was reached on the weekly compensation claim under Section 40 of the WCA outlined in the Orders below. The remaining issue to be determined was the claim for weekly compensation for the period 30 June 2003 to date and continuing.”
At the arbitral hearing, the Respondent Worker’s representative referred to the worker’s wage schedule and stated: “agreement has been reached with respect to the periods and with respect to the amounts without conceding the claimed entitlement that the applicant seeks”(page 5 of the transcript). This statement was not opposed by the representatives of the First and Second Appellants.
The First and Second Appellants contend that the Arbitrator erred as “[t]he agreement reached between the parties in respect of the Applicant’s Wage Schedule was limited to the period shown in respect of the applicant’s actual earnings and probable earnings but not as to the Section 40 entitlement.”
The Arbitrator was entitled to rely upon the agreement among the parties in respect of the Respondent Worker’s Wage Schedule, which reflected the agreement reached by the parties regarding the Respondent Worker’s probable and actual earnings, in order to calculate the worker’s probable and actual earnings as required by steps 1, 2 and 3 of Mitchell.
In calculating the Respondent Worker’s entitlement from 30 June 2003 and continuing, the Arbitrator found Mr Wells probable earnings under step 1 were $730 per week. This amount was based upon the amount asserted by the Respondent Worker in his ‘Wages Schedule’. This amount was “not admitted” in the ‘Response to Applicant’s Wage Schedule’. The Arbitrator stated that he accepted this amount as “there is no other comparable wage put forward by any other Party” (at [26] of the Reasons).
In relation to step 2 the Arbitrator found that the average weekly amount he was earning or would be able to earn in some suitable employment was $422 “for about 18 hours work a week” (at [26] of the Reasons).
The Arbitrator considered the Respondent Worker’s oral evidence outlining “his work history since employment with the Respondents, his attempt to undertake various types of employment, and difficulties with certain types of duties, especially bending, standing and lifting.” (at [17] of the Reasons) The Arbitrator also had before him various documents detailing the earnings of the Respondent Worker since the injury including Mr Wells’ statement, his Wage Records from Mosman Returned Servicemen’s Club Ltd, a letter from the Respondent Worker’s solicitor detailing Mr Wells’ earnings from 16 May 2002 to date at Wakehurst Golf Club and Blue Line Cruises, the Respondent Worker’s PAYG Summary for 2003 from Blue Line Cruises and Wakehurst Golf Club Ltd, and a Wage Schedule outlining his actual earnings from 30 June 2003 to date and continuing.
At the Arbitration the Respondent Worker’s representative referred to the wage records and submitted that “the average weekly earnings with respect to the applicant’s current employment, that is agreed at $422 per week” (page 6 of the transcript).
The Arbitrator stated: “I accept the Applicant’s evidence that he cannot work a full week in available employment, and that his ability to work in suitable employment is less than 33 hours per week” (at [26] of the Reasons). The Arbitrator specifically rejected the assertion by the Second Appellant that the Respondent Worker was capable of working 33 hours per week.
It is the role of the Arbitrator at first instance to determine the relative weight to be placed on the evidence. It not appropriate for a Presidential member on review to interfere with this determination unless the Arbitrator has applied the wrong legal test (Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259).
I find no evidence to support the First and Second Appellants’ contention that the Arbitrator’s determination of the Respondent Worker’s entitlement under section 40 was not based upon the evidence before him.
The First and Second Appellants have also submitted that the Arbitrator erred in “failing to exercise his discretion under Section 40(1)” (step 4 of Mitchell at paragraph 47 above).
In calculating the Respondent Worker’s entitlement from 30 June 2003 onwards the Arbitrator specifically considered the discretion in section 40, stating that the amount calculated in step 3 “should not be reduced in the circumstances” (at [27] of the Reasons).
Although the Arbitrator did not specifically refer to the discretion in section 40 in relation to his award for the periods from 16 May 2002 to 29 June 2003, there was no evidence before him nor before me on appeal, that would justify a reduction of the amounts calculated under steps 1, 2 and 3. I therefore find that the Arbitrator did not err in the exercise of his discretion in relation to section 40 of the 1987 Act.
The First and Second Appellants have submitted that the Arbitrator erred in not adjusting the award under section 40 of the 1987 Act taking into account payments already made by the Appellants.
An Arbitrator is empowered to determine a dispute in relation to the respective rights and liabilities of the parties under the Workers Compensation Acts. An order by an Arbitrator that a Respondent is to pay compensation to an Applicant is a determination of the Respondent’s liability under the Acts. In practical terms, where a Respondent has already made payments to an Applicant, that part of any liability has already been met.
For the reasons outlined above I confirm the Arbitrator’s decision and orders under section 40 of the 1987 Act, (order B at paragraph 18 above).
Oral Evidence Error
The Respondent Worker gave sworn evidence at the arbitral hearing and the Arbitrator found him to be a truthful witness. The First and Second Appellants submit that the Arbitrator erred in finding that the worker was a witness of credit “when such cross-examination was not allowed”.
As stated above, I do not have before me a transcript of the later stages of the arbitral proceedings. Therefore, I do not have the benefit of a full record of the evidence given by the Mr Wells. The absence of the full transcript is not, in the circumstances of this case, fatal to the process of reviewing the decision in relation to the alleged oral evidence error.
In his Reasons the Arbitrator noted that the Second Appellant had “submitted that the Applicant’s credit was in doubt on the statement of Carl Fameli” (at [24] of the Reasons). The Arbitrator stated: “I accept the Applicant’s evidence in preference to the lay evidence relied upon by the Respondents. I accept the Applicant as a truthful witness, whose credit was not tested in cross-examination, which was focused on his employment since leaving the Respondents’ employment” (at [26] of the Reasons).
The Commission is not bound by the rules of evidence, and proceedings before the Commission are to be conducted with as little formality and technicality as the proper consideration of the matter permits (section 354 of the 1998 Act).
The Commission’s Guideline for ‘The Practice of the Conciliation/Arbitration Process in the Workers Compensation Commission’ specifically provides that cross-examination of witnesses will be permitted only in very limited circumstances. An Arbitrator thus has discretion whether to permit cross-examination.
In Aluminium Louvres & Ceilings Pty Ltd v Zheng [2004] NSW WCC PD 26 (‘Zheng’), Deputy President Fleming recognised that:
“Procedural fairness, in the context of Commission proceedings, does not demand that a party be afforded an unrestricted right of cross-examination in relation to evidence given at an arbitration hearing. To suggest otherwise would be to deny the broad provisions of section 354 of the 1998 Act any meaning or effect, and to force a Commission Arbitrator to conduct arbitration proceedings in the adversarial style of the traditional courts. This was clearly not the intention of the legislature in the establishment of the Commission.”
The present case can be distinguished from Zheng, on the basis that the First and Second Appellants have not submitted that the Arbitrator’s refusal to allow cross-examination as to credit amounted to a denial of procedural fairness. Rather, the Appellants appear to argue that an Arbitrator is not entitled to find that a worker is credible, unless the worker was cross-examined as to credit at the arbitration hearing. I cannot accept this submission. Such a finding would be inconsistent with the non-adversarial nature of the Commission’s proceedings under the 1998 Act.
In Abalos v Australian Postal Commission (1990) 171 CLR 167, the High Court warned against an appellant body overturning a finding of fact made by a decision maker who has had the benefit of seeing and hearing the witness. The Court referred to and endorsed the statement of Lord Sumner in SS Hontestroom v SS Sagaporak [1927] AC 37 that:
“The course of the trial and the whole substance of the judgment must be looked at, and the matter does not depend on the question whether a witness has been cross-examined to credit or has been pronounced by the judge in terms to be unworthy of it. If his estimate of the man forms any substantial part of his reasons for his judgment the trial judge’s conclusions of fact should, as I understand the decisions, be let alone.”
The Arbitrator, who had the benefit of seeing and hearing Mr Wells give evidence, found that he was a witness of credit, and preferred the evidence of Mr Wells over the evidence of Mr Fameli.
In Far West Area Health Service v Radford [2003] NSW WCC PD 10, Deputy President Fleming stated that:
“The function of a Presidential Member on review of an Arbitrator’s findings based on credit is to ensure the decision is not affected by demonstrable mistake or misapprehension about relevant facts and that the ‘value and importance’ of the advantage of the Arbitrator has not been misused”. (See also M & S Shipman Pty Ltd v Matters [2003] NSW WCC PD 19)
The Appellants have not demonstrated such an error in the decision of the Arbitrator. There is no justification for interfering with the Arbitrator’s findings of fact in relation to the credibility of the Mr Wells.
Failure to Properly Consider the Evidence
The First and Second Appellants submit that the Arbitrator erred by failing to properly consider the evidence “in relation to the cause of the applicant’s incapacity and whether this was a result of any work injury.”
The Arbitrator found that the Respondent Worker suffered an injury under section 4 of the 1987 Act, that is a personal injury that arose out of or in the course of his employment with the Appellants. The Arbitrator also found that his employment was a substantial contributing factor to his injury, in accordance with section 9A of the 1987 Act.
In the Reasons the Arbitrator summarised the medical evidence and the submissions made by the parties. At ‘Findings and Reasons’ he stated:
“I am also satisfied that his employment with both Respondents was a substantial contribution to his injuries, and continues to be so, even though his constitutional predisposition made him unsuitable for that employment…There is in the medical evidence on both sides, considerable description of the unsatisfactory working conditions giving rise to what I accept from the Applicant’s case was an ‘unmasking’ of the constitutional deficiencies in his back and neck” (at [26] of the Reasons).
It is evident that the Arbitrator considered all of the medical evidence, and the submissions of the parties, and found that the evidence supported a finding on his part that the Respondent Worker’s injury arose out of and in the course of his employment, and that his employment was a substantial contributing factor.
As I have stated above, it is not the role of the Presidential member on appeal to interfere with the Arbitrator’s weighing of the evidence. In any case, the weight of the evidence in this case overwhelmingly supported the finding that the Respondent Worker’s injury arose out of or in the course of his employment with the Appellants and that such employment was a substantial contributing factor to the injury. These findings were supported by the reports of Drs Chiu, Machart, Davis, O’Reilly, Bodel, Steel and the AMS, Dr Pillemer. In particular Dr Davis, an Injury Management Consultant, found that “work was a substantial contributing factor” and Dr Pillemer, an AMS, stated, “It would be my opinion that the nature and conditions of his work and the various incidents and injuries described would be significant contributing factors to his ongoing symptoms.” The only evidence, which could be said to contradict such a finding, would be the report of Dr Bornstein.
I conclude that the Arbitrator properly considered the evidence in relation to the cause of the Respondent Worker’s incapacity and whether it was the result of any work injury.
Section 66 Error
The First Appellant alleges that the Arbitrator erred in failing to make an order under section 66 of the 1987 Act, in accordance with the MAC issued by the Commission on 5 June 2003.
At the Arbitration hearing the parties indicated that an agreement had been reached in relation to the claim under section 66 of the 1987 Act. Mr Hick for the First Appellant informed the Arbitrator that the lump sum payable pursuant to the MAC issued by the Commission was $800 for 2% permanent impairment of the neck and $3,000 for 5% permanent impairment of the back. Mr Hick also indicated that the parties had come to an agreement in relation to apportionment of liability between the Appellants. (See pages 1-2 of the transcript.)
The Arbitrator obviously failed to make an order under section 66 of the 1987 Act as he quite reasonably assumed the parties would honour their agreement, and/or register a section 66A Agreement reflecting that agreement.
I can see no error by the Arbitrator in relation to section 66 of the 1987 Act.
There is no record before me that the parties have indeed registered a section 66A agreement, and it appears that the dispute regarding the Respondent Worker’s claim under section 66 remains unresolved. In accordance with the MAC issued on 5 June 2003, section 326 of the 1998 Act and the agreement between the parties regarding apportionment of liability, the Respondent Worker is entitled to lump sum compensation under section 66 of the 1987 Act, on a contribution basis of 25% by the Second Appellant and 75% by the First Appellant, in the sum of:
$800 in respect of 2% permanent loss of efficient use or impairment of the neck, plus
$3,000 in respect of a 5% permanent loss of efficient use or impairment of the back.
I do not propose to make formal orders to this effect, as the role of the Presidential Member on appeal is to review the decision of the Arbitrator, and I have found no error by the Arbitrator in relation to section 66 of the 1987 Act. I urge the parties to resolve this issue themselves.
Section 60 Error
The First and Second Appellants submit that the Arbitrator erred in fixing the actual amount of a future liability of the Appellants under section 60 of the 1987 Act. Rather, the Appellants suggest the Arbitrator should have made a “general order”. I accept this submission.
Section 60 of the 1987 Act in part, provides that:
If, as a result of an injury received by a worker, it is reasonably necessary that:
(a)any medical or related treatment (other than domestic assistance) be given
…
the worker’s employer is liable to pay, in addition to any other compensation under this Act, the cost of that treatment or service…
(3) Payments under this section are to be made as the costs are incurred, but only if properly verified.
Section 59 of the 1987 Act defines “medical or related treatment” as including treatment by a registered physiotherapist or a masseur.
The Arbitrator ordered (order ‘C’ at [18] above) the Appellants to pay, on a contribution basis, $4,968.09 in respect of expenses to date, and a fixed amount of “$2,000 per annum for physiotherapy and massage.” This amount was based upon the report of Dr Davis, dated 6 May 2002, in which Dr Davis stated:
“There is no indication for operative intervention, and no rehabilitation will be of a curative nature, although I recommend that he be provided with a programme designed to prevent further deterioration in his current level of functional capacity and his ability to enjoy the general amenities of life. This should consist of a combined programme of hydrotherapy, physiotherapy and remedial massage, which would incur a cost of $2,000 per annum, and Mr Wells should also be provided with a work conditioning programme, at a cost of $1,800 and the ongoing cost of a gym membership.
He also requires ongoing medication, which should be covered by a cost of around $1,000 per annum, and quarterly visits to his GP, which will incur a cost of $45 per visit. Future investigative costs should be covered by $4,000 to $5,000.”
It is evident from reading Dr Davis’ report that the amount quoted for hydrotherapy, physiotherapy and remedial massage was only an estimate of cost. The Arbitrator found that the “physiotherapy and remedial massage” recommended by Dr Davis could be “justified”, but “not the other claims” (Reasons at [20]). The Arbitrator did not make a specific finding as to whether, if a result of the injury, it was reasonably necessary for Mr Wells to receive hydrotherapy. The $2,000 estimated by Dr Davis included provision for the cost of hydrotherapy.
The 1987 Act provides for a worker to be compensated for reasonable medical costs, actually incurred and properly verified, resulting from an injury (see section 60(3) of the 1987 Act).
An Arbitrator, therefore, does not have the power to make an order for the specified payment of medical expenses based upon an estimate of the likely future costs. An Arbitrator is entitled to find that an employer is liable to pay a worker for medical or related treatment, including future medical or related treatment, in accordance with section 60 of the 1987 Act. An employer, however, will not be liable to pay the worker’s section 60 expenses until they have been incurred and properly verified.
The Arbitrator in this case has erred in making an order for a fixed sum for the payment of medical expenses not yet incurred and properly verified.
I, therefore, revoke the relevant part of order C made by the Arbitrator, to the effect that:
The Respondents pay the Applicant’s expenses… [of] $2000 per annum for physiotherapy and massage.
The simplest solution would be to substitute the following as order C:
The Respondents are to pay the Applicant’s expenses under section 60 of the Workers Compensation Act 1987, on production of accounts or receipts, on a contribution basis of 25% by the First Respondent and 75% by the Second Respondent, such expenses to include $4968.09 incurred to date, plus all appropriate physiotherapy and remedial massage expenses.
Costs Error
The Arbitrator ordered that, “the Respondents pay the Applicant’s costs (including the Application under Section 66 of the WCA)”.
The First Appellant submits that the Arbitrator should have restricted costs in relation to the Respondent Worker’s claim under section 66 of the 1987 Act to “the period prior to the date of the offer made by [the First Appellant] to settle that part of the claim.” The First Appellant also maintains that the Arbitrator failed to give adequate reasons for this decision.
The Arbitrator found that “the Applicant was justified in bringing his claim under Section 66 of the WCA” (Reasons at [26]). The Arbitrator noted that an offer had been made on 10 July 2002, which was not accepted by the Respondent Worker, but found that the Respondent Worker “reasonably incurred costs in relation to that part of the claim given the medical and legal advice at that time.”
Section 342 of the 1998 in part, provides:
(1) If the Commission is satisfied that any costs on a claim were unreasonably incurred, the Commission is to order that those costs are to be treated as unreasonably incurred for the purposes of this section and the Commission is not to make an order for payment of those costs by any other party to the claim.
(2) Costs incurred by a party to a claim are considered to have been unreasonably incurred for the purposes of this section only if they were incurred by the party:
(a) after a reasonable offer of settlement of the claim was made to the party…
In Uniting Church of Australia (NSW Synod) v Legge [2002] NSWCA 307, the Court of Appeal considered section 115 of the 1998 Act, which is in substance almost identical to section 342 except that it applies to the former Compensation Court. Although not in issue in the case, Sheller JA (Santow JA and Foster A-JA agreeing) found that the court had a discretion to award costs to a party even after a reasonable offer of settlement. His Honour stated: “Even if the court is satisfied that the offer was a reasonable offer, the court may still not be satisfied that the costs incurred, after the offer was made, were unreasonably incurred.”
By a letter dated 10 July 2002 the First Appellant offered to pay the Respondent Worker $1,600 for a 4% permanent impairment of his neck and $3,000 for a 5% permanent impairment of his back, a total of $4,600, apparently on the basis of the report of Dr Bodel. This letter was attached to the First Appellant’s ‘Amended Reply to Application for Dispute Resolution’, and was in evidence before the Arbitrator.
The level of permanent impairment assessed by Dr Bodel was in fact greater than the level of permanent impairment determined by the AMS. The offer made by the First Appellant on 10 July 2002 is in fact higher than the compensation payable to the Respondent Worker under section 66 of the 1987 Act.
Although the offer made by the First Appellant could well be considered a reasonable offer, the Arbitrator had a discretion to conclude, nevertheless, that the costs incurred by the Respondent Worker after this offer was made were reasonable. The Arbitrator came to this conclusion on the basis that the costs were reasonable, considering the medical and legal advice at that time.
I can find no grounds upon which to interfere with the Arbitrator’s exercise of his discretion under section 342 of the 1998 Act. The reasons provided by the Arbitrator in relation to his order that the Appellants pay the Respondent Worker’s costs were brief, but adequate, taking into account the nature of the decision being made, the decision maker, and the objective of the Commission to provide a timely service (see Mayne Health Group t/as Nepean Private Hospital v Sandford [2002] NSW WCC PD 6, M & S Shipman Pty Ltd v Matters [2003] NSW WCC PD 19 and Cakir v Western Sydney Area Health Service t/as Parramatta Linen Service [2004] NSW WCC PD 1).
DECISION
The appeal has succeeded in part only.
The following part of order C made by the Arbitrator is revoked:
The Respondents pay the Applicant’s expenses… [of] $2000 per annum for physiotherapy and massage.
The following decision is made in its place:
The Respondents are to pay the Applicant’s expenses under section 60 of the Workers Compensation Act 1987, on production of accounts or receipts, on a contribution basis of 25% by the First Respondent and 75% by the Second Respondent, such expenses to include $4968.09 incurred to date, plus all appropriate physiotherapy and remedial massage expenses.
COSTS
The parties have made no submissions as to costs of this appeal. The Appellants have succeeded on only one technical point and are urged to come to an agreement as to costs in accordance with section 345 of the 1998 Act.
Justice Terry Sheahan
President
7 June 2004
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF JUSTICE TERRY SHEAHAN, PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
7
6
0