Waycon Services Pty Ltd v Sutton
[2005] NSWWCCPD 132
•11 November 2005
WORKERS COMPENSATION COMMISSION
APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:Waycon Services Pty Ltd v Sutton and ors [2005] NSWWCCPD 132
APPELLANT: Waycon Services Pty Ltd
RESPONDENTS: Barry Kenneth Sutton Bucyrus (Australia) Pty Limited t/as Beco Engineering
Skilled Engineering Limited
INSURERS:Employers Mutual Insurance (Workers Compensation) Limited (for Waycon Services Pty Ltd)
Allianz Australia Workers Compensation (NSW) Ltd (for Bucyrus (Australia) Pty Limited)
NRMA Workers Compensation (NSW) (No 2) Pty Limited (for Skilled Engineering Limited)
FILE NUMBER: WCC7897-2004
DATE OF ARBITRATOR’S DECISION: 10 September 2004
DATE OF APPEAL DECISION: 11 November 2005
SUBJECT MATTER OF DECISION: Apportionment of liability; section 22 Workers Compensation Act 1987
PRESIDENTIAL MEMBER: Acting Deputy President Lansdowne
HEARING:On the papers
REPRESENTATION: Appellant: Nevill & Edwards
Respondents: Messenger & Messenger
Sparke Helmore Lawyers
Leitch Hasson Dent
ORDERS MADE ON APPEAL: The decision of the Arbitrator, dated 10 September 2004, is revoked and the following decision is made in its place:
1. Waycon Services Pty Ltd (‘the third employer’), Bucyrus (Australia) Pty Ltd (‘the first employer’) and Skilled Engineering Limited (‘the second employer’) to pay Barry Sutton (‘the worker’) weekly benefits pursuant to section 40 of the Workers Compensation Act 1987 (‘the 1987 Act’) at the maximum statutory rate, as adjusted from time to time, for a worker without dependents from 23.12.02 to date and continuing.
2. The third, first and second employers to pay the worker’s medical and related expenses pursuant to section 60 of the 1987 Act.
3. The third, first and second employers to pay the worker’s costs of the original proceedings as agreed or assessed.
4. The first and second employers are jointly responsible for one third of the amount ordered to be paid by orders 1, 2 and 3 above and the third employer is responsible as to two thirds pursuant to section 22 of the 1987 Act.
5. The original proceedings are certified as complex for the purposes of determining the maximum amount of costs recoverable pursuant to Schedule 6 of the Workers Compensation (General) Regulation 1995.
6. The first and second employers are jointly ordered to pay the costs of the appeal of the third employer and the worker.
BACKGROUND TO THE APPEAL
This appeal concerns apportionment under section 22 of the Workers Compensation Act 1987 (‘the 1987 Act’). The original applicant, Mr Barry Sutton (‘the worker’) received three distinct work injuries, each one in the employ of a different employer, respectively on 26 May 1997, 1 September 1999 and 24 January 2000. He filed an application in the Workers Compensation Commission (‘the Commission’) for weekly benefits compensation and medical expenses against each of those employers, which were, in chronological order, Bucyrus (Australia) Pty Limited t/as Beco Engineering (‘the first employer’), Skilled Engineering Limited (‘the second employer’) and Waycon Services Pty Ltd (‘the third employer’ and ‘the Appellant’). The applications were registered on 18 May 2004. On 10 September 2004 an arbitrator (‘the Arbitrator’) made an award in the worker’s favour solely against the third employer, Waycon Services Pty Ltd. The third employer had sought apportionment of any liability as between all three employers under section 22 of the 1987 Act. The third employer filed this appeal on 30 September 2004. The respondents to the appeal are the worker, the first employer and the second employer.
The Appellant does not seek leave to appeal the finding that the Appellant is liable for the award in favour of the worker under section 33 of the 1987 Act or the quantum of that award. It does seek leave to appeal the refusal of the Arbitrator to apportion the liability to pay the compensation under section 22 of the 1987 Act. The Appellant seeks orders that the first and second employers be jointly ordered to pay one third of the award in favour of the worker. The first and second employers oppose the appeal. As the appeal does not relate to the amount to be paid to the worker, the worker neither opposes nor supports the appeal, stating that he accepts the decision of the Commission.
THE DECISION UNDER REVIEW
The Certificate of Determination, dated 17 September 2004, records the Arbitrator’s orders as follows:
“1. The Third Respondent, Waycon Pty Ltd [sic], is liable, pursuant to s40 of the Workers Compensation Act, to pay the applicant weekly benefits at the maximum statutory rate, as adjusted from time to time, for a worker without dependents from 23.12.02 to date and continuing
2. There will be a general award for the Applicant in relation to s60 expenses to be paid by the Third Respondent
3. There will be an award for the First and Second Respondents (the first and second employers) in relation to weekly benefits and s60 expenses
4. The Third Respondent is to pay the applicant’s costs as agreed or assessed
5. I certify that the matter is complex for the purpose of determining the maximum amount of costs recoverable pursuant to Schedule 6 of the Workers Compensation (General) Regulation 1995”
There was no dispute before the Arbitrator in relation to the following facts. The worker, who was born 19 March 1961, worked as a boilermaker until the third work injury, in January 2000. He received an injury to his back while lifting a heavy steel plate in the employ of the first employer on 26 May 1997. His employment with that employer ceased in October 1997. In November 1997 an MRI scan of his back revealed a tumour (unrelated to any work injury), which was removed by surgery in March 1998. He commenced his employment as a boilermaker with the second employer in July 1998. On 1 September 1999 he received a twisting injury to his left ankle on his way to that work. He commenced work with another employer as a boilermaker for a short period shortly thereafter. In October or November of 1999 he commenced employment with the third employer as a boilermaker. That work involved the installation of baggage handling conveyors. On 24 January 2000 he was involved in a motor cycle accident on his way to that employment, which caused injuries to his right ankle, his right clavicle and right shoulder, his left ankle and his back. He had six weeks off work following the motor cycle accident then returned to the third employer for a short period on light duties. He received weekly benefits compensation until 23 December 2002. Claims against each employer for permanent impairment were settled independently. The worker received $7,200 for permanent impairment of 12% in respect of his back in relation to the first injury (agreement registered 20 August 2001); $7,000 in respect of permanent impairment of his left leg in relation to the second injury (agreement registered 1 November 2002) and $8,100 in respect of 13.5% permanent impairment of his back, $14,000 in respect of 17.5% impairment of his right arm and $2,812.50 in respect of 3.75% impairment of his left leg in relation to the third injury (agreement November 2001).
The Arbitrator gave her decision ex tempore. It can be found in the transcript of the arbitration (which is mistakenly dated 19 August 2004). She found that the worker was partially incapacitated for work, in that he was not fit for his previous employment as a boilermaker, but that he could earn $564 per week, a reduction of $358 per week from his probable earnings as a boilermaker. In relation to apportionment she made the following comments. She stated:
“As a matter of history, Mr Sutton’s incapacity arises from the injuries that he received in the motor vehicle crash. I should say just in relation to those agreements about permanent impairment, permanent impairment and incapacity are two different issues, and that was made clear, I think, in the case of Blayney Abattoirs Pty Limited v McConnell, a 1998 case, where the Court of Appeal did deal with this issue of apportionment pursuant to section 40 and incapacity and determined that the apportionment in relation to either of those was not necessarily going to follow, and what I have to look at in this case is where incapacity arose” (transcript page 56, lines 41-52; see also page 57 lines 14-20 where the Arbitrator makes similar comments that the “real issue” is the extent of incapacity and “where that incapacity arose” and that “as a matter of history, Mr Sutton’s incapacity arises from the injuries he received in the motor cycle accident”).
After referring to some of the medical evidence and portions of the worker’s evidence she concluded:
“As a result of all that, I conclude pursuant to section 33 that the incapacity resulted from the injuries received in the motor vehicle accident, and, to summarise that is the injuries to the right arm and shoulder, the injuries to the left ankle and possibly the back injuries which are reflected in the second CT scan, and I see no reason to apportion the weekly benefits payable pursuant to section 22 as I was urged to do by Mr Wardell (counsel for the insurer of the third employer)” (transcript page 59 lines 17-25).
The Arbitrator made separate reference to apportionment in relation to the claim for payment of section 60 expenses. She stated:
“…whilst I do make a distinction between incapacity and permanent impairment, and I think that’s justified in this case and justified on the case law. However, I do also think that on Dr Pillemer’s evidence, and maybe on some of the other medical evidence, that the second respondent in terms of medicals could be argued to have some ongoing responsibility in relation to the left ankle. On the other hand, I don’t want to make it a completely unworkable order…” (transcript page 63, lines 41-49).
The Arbitrator then indicated that she proposed to make a general section 60 order in relation to the third employer solely (transcript page 64, line 6). The evidence of Dr Pillemer to which she referred was to the effect that the primary injury to the left ankle was occasioned in the injury in September 1999 (while the worker was in the employ of the second employer), and merely aggravated by the motor vehicle accident.
In his submissions before the Arbitrator counsel for the third employer referred in detail to the decision of the Court of Appeal in Sutherland Shire Council v Baltica General Insurance Co Ltd (1996) 39 NSWLR 87 (‘Baltica’). Counsel submitted that the Court in Baltica held that a two stage inquiry is required by section 22, as amended in 1995 to add section 22(1A), the first step of which is to consider under section 33 the injury from which incapacity results (which he conceded was the motor vehicle accident), and the second step of which is to consider whether other injuries had contributed to that incapacity. At the end of those submissions there was a discussion between the Arbitrator and counsel in which the Arbitrator said “the evidence, the actual history of this matter, shows that there was no -from an historical point of view - leave aside the present for the moment - that there simply was not an incapacity before the third accident” (transcript page 42, lines 5-16) and “I can’t go to 22 until I get over 33” (page 42, line 27). The Arbitrator then posited a case where apportionment might apply because there was a partial incapacity prior to the final injury (page 43, line 53 and page 44, line 36). Counsel for the third employer replied that in this case there would be two awards for compensation, not apportionment under section 22, which applies where there is a single incapacity but more than one injury.
ISSUES IN DISPUTE
The Appellant contends that the Arbitrator made the following errors:
(a)an error of law, in that she failed to undertake the ‘two stage process’ required when an apportionment is requested;
(b)an error of law, in that she approached the issue on the basis that the finding that incapacity ‘resulted from’ an injury within the meaning of s33 of the 1987 Act was determinative of whether the incapacity ‘resulted from more than one injury’ within the meaning of s22(1) as defined by s22(1A);
(c)an error of law, in that she determined whether incapacity ‘resulted from’ a particular injury by reference to a test of causation involving last or ‘proximate’ cause;
(d)an error of law, in that she failed to give any or any adequate reasons for showing that she did determine the apportionment issue without falling into the errors referred to in (a), (b) or (c); and
(e)an error of fact, in that she failed to apportion the liability under s22 when, on the whole of the evidence, such apportionment was warranted.
The first employer agrees that the correct approach to section 22 is set out in Baltica, as confirmed by the Court of Appeal in Rail Services Australia v Dimovski (2004) NSWCA 267, (‘Dimovski’), but disagrees that the Arbitrator made any error in application of that test. The first employer advances two reasons for this. First, a CT scan of the worker’s back after the first injury did not identify any abnormality, whereas one after the third injury did. Alternatively, the evidence did not allow a conclusion that any ongoing symptoms in the worker’s back before the third injury were related to the first injury, as opposed to the tumour and its removal, which took place shortly after the first injury. The first employer also asserts that the Arbitrator’s findings of fact are not subject to appeal. This last contention is incorrect. An appellant in an appeal against a decision of an arbitrator must establish error before the Commission can reconsider the decision, but the required error is not limited to an error of law. Case law has established that the basis of appeal to the Commission from the decision of an Arbitrator is that the Arbitrator erred, whether by way of law, fact or discretion (Allesch v Maunz (2000) 203 CLR 172, as applied to the Commission in Mayne Health Group t/as Nepean Private Hospital v Sandford [2002] NSW WCC PD 6).
The second employer also disputes that the Arbitrator erred. It asserts that the Arbitrator made adequate reference to the submissions on section 22 in the portion of her reasons extracted in paragraph 6 above, and that her conclusions were findings of fact that were available to her on the evidence. The conclusion of the second employer is that “the Arbitrator did not err in law and leave for appeal should not be granted”. If this is a contention that only errors of law can ground an appeal it is incorrect, as stated above.
ON THE PAPERS REVIEW
Section 354(6) of 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.”
No objection is taken by any party to the appeal being determined on the papers. Having regard to Practice Directions Numbers 1 and 6, the fact that no party seeks leave to adduce further evidence, and the documents that are before me, I am satisfied that I have sufficient information to proceed ‘on the papers’, without holding any conference or formal hearing, and that this is the appropriate course in the circumstances.
LEAVE
Before proceeding to deal with an appeal the Commission must determine whether leave should be granted pursuant to section 352 of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’). Sub-section 2 of section 352 provides a minimum quantum of compensation before leave may be granted, and sub-section 4 provides that the appeal must be made “within 28 days of the making of the decision appealed against”. There is no dispute that both requirements are met. Leave to appeal is granted.
EVIDENCE
The documents before me are as follows:
(1) The three original applications, three replies and subsequent documents admitted by leave of the Arbitrator given at the teleconference on 19 August 2004.
(2) Transcript of the arbitration held on 10 September 2004. Note: the transcript is wrongly dated 19 August 2004.
(3) Certificate of Determination and Statement of Reasons (which refers to the reasons given orally).
(4) Appeal, submissions by the respondents and further submissions in reply by the Appellant.
The parties should note that I do not have available to me the video-recorded surveillance of the worker.
DISCUSSION AND FINDINGS
The first two grounds of appeal allege that the Arbitrator failed to undertake the ‘two stage’ test required when an apportionment is requested, in that she regarded her finding that the worker’s incapacity “resulted from” the third injury within section 33 of the 1987 Act as determinative of the enquiry under section 22 of the 1987 Act, as amended in 1995 to add sub-section (1A). The detailed arguments in support of this contention are set out in paragraphs 6-10 of the appeal. The first limb of the fourth ground of appeal asserts, in the alternative, that even if the Arbitrator did not in fact make this error, her reasons were so inadequate that it is not clear what test she applied. The arguments in support of the fourth ground of appeal are set out in paragraph 14 of the appeal. The third ground asserts that the Arbitrator erred even in relation to the test under section 33, in that she used too narrow a test of causation in determining whether the incapacity “resulted from” a particular injury. The arguments in support of this contention are set out in paragraphs 11-13. The second limb of the fourth ground (inadequate reasons) is the alternative argument - that even if this error was not made, the reasons are inadequate. The fifth ground of appeal asserts an error of fact in not making an apportionment warranted by the evidence. This ground of appeal is only independent of the others if the Arbitrator applied the correct test and her reasons were adequate.
Failure to undertake ‘two stage process’ in relation to apportionment
The relevant sections of the 1987 Act are sections 33 and 22. Section 33 provides that where “total or partial incapacity results from an injury” then “the compensation payable by the employer under this Act to the injured worker shall include a weekly payment during the incapacity” (emphasis added). The relevant portions of section 22 provide as follows:
Section 22
“(1) If :(a) the death or incapacity of a worker; or
(b) (not relevant); or
(c) (not relevant),
results from more than one injury to the worker, liability to pay compensation under this Act is to be apportioned in such manner as the Commission determines.
(1A) Death, incapacity, loss or liability that results partly from one injury and partly from one or more other injuries is taken to have resulted from more than one injury. (emphasis added)”
At first blush, it might be thought that the same enquiry as to causation of the incapacity is required by section 22 as by section 33, given the use in each case of the phrase “results from”. On this interpretation, if an incapacity was found under section 33 to “result from” the last of a series of injuries, because the worker continued working after the earlier injuries (as here), then there would be no basis for apportionment under section 22. This was the interpretation of section 22 by the Court of Appeal prior to the 1995 amendments, which introduced sub-section (1A) (see the discussion in Baltica at page 725). In Baltica, however, the Court of Appeal held that the 1995 amendments, and specifically the inclusion of sub-section (1A), changed the requirements. Clarke J.A., with whom Priestley J.A. and Hunter A-J.A. agreed, held in Baltica that the effect of the amendments was to introduce an additional, and broader, test as to causation, for the purposes of section 22. The determination of liability under section 33 by way of a conclusion of fact that incapacity, in the sense of an economic loss, did not eventuate until the last in a series of injuries, is not the end of the enquiry under section 22. Once that is established, the finder of fact, here the arbitrator, is required to undertake a further enquiry, necessitated by sub-section 22 (1A), as to whether the incapacity has resulted “partly from one injury and partly from one or more other injuries”. This is a broader enquiry. If that is the case, then the incapacity is taken to have “resulted from more than one injury” in the words of sub-section 22(1), requiring apportionment under that sub-section.
Baltica has been recently approved by the Court of Appeal in Dimovski. The relevant portion of Baltica is contained in the decision of Clarke J.A. at pp 726-727 as follows (emphasis added):
“The introduction into subsection (1) of the wider meaning of the expression ‘results from more than one injury’ means, in the present context, that the trial Court is concerned to have regard to more than one test. The first is the old test and the second is the new test in which the Court’s attention is directed to the question whether the incapacity, for instance, results partly from one and partly from one or more other injuries. Not only is there an additional test but it is one which is not to be found in other parts of the Act.
These tests, in terms, require the Court to determine, whenever apportionment is sought, whether the incapacity results from more than one injury. In considering that question, the Court is first obliged to inquire whether the incapacity, in strictness, resulted from more than one injury. However, the answer to that question will not necessarily provide a resolution of the claim for the Court may be required to go further and inquire whether the incapacity resulted partly from one injury and partly from another injury or other injuries. Both tests give rise to questions of fact which, like all questions of causation, are almost universally resolved by applying ordinary common sense….(authorities quoted including Kooragang Cement Pty Ltd v Bates (1994) 35 NSWLR 452 at 463).
What is involved in the wider test introduced by section 22(1A) is an inquiry whether the incapacity was so connected with a number of injuries that, as a matter of ordinary common sense and experience, it should be regarded as having resulted partly from all or any of them.”
The portions of this extract that I have underlined emphasise the Court’s view that, despite the rather confusing use of the same phrase “results from” in section 33, and sub-sections (1) and (1A) of section 22, the test of causation in section 22 is wider than the test in section 33, and may catch earlier injuries even if they did not immediately cause economic incapacity. This may be illustrated by reference to the example used by Moffit P. in Morris v George [1977] 2 NSWLR 552, a leading authority on section 22 prior to the 1995 amendments, which is discussed by Clarke J.A. in Baltica. Moffit P. referred to the case of a first injury causing the loss of one eye, which may not cause any economic incapacity, and a second injury causing the loss of the other eye and so blindness and incapacity. In his view the incapacity arising from being blind arose solely from the second injury and there would be, under the old section 22, no basis for finding that the incapacity “resulted from” both injuries. He stated “At most it could be said each contributed to the …incapacity, which is not sufficient” (page 567A cited in Baltica at page 722). Clarke J.A. in Baltica commented in relation to this example that “In the example given by Moffit P of total blindness, it would, in my opinion, be open to a court to hold that the incapacity flowing from the blindness was partly the result of the earlier injury” (page 727).
The basis of the Court’s decision in Baltica is further illuminated by Clarke J.A.’s discussion of the purpose of the 1995 amendments. He stated that although he reached his conclusions on the basis of the “clear meaning” of the words in sub-section (1A), had he considered there was some ambiguity he would have reached the same conclusion by a purposive construction, as required by section 33 of the Interpretation Act 1987 (page 727). The explanatory note to the 1995 amendments, the relevant portion of which is set out in the judgment of Clarke J. A. at pages 723-724, indicates clearly that the narrow interpretation of section 22 was seen to lead to the undesirable outcome that “employers may be deterred from employing workers previously injured elsewhere or from re-employing their own injured workers” because this narrow interpretation led to “full liability being allocated to the most recent employer, or to an employer’s most recent period of insurance”. The note states that the intention of the amendments was to deal with these difficulties by “making it clear that the apportionment provisions can cover situations where successive injuries to a worker have contributed to his or her eventual incapacity etc” (emphasis added).
Clarke J.A. also discussed the application of section 22, as amended, by the finder of fact in the context of his discussion of a decision by Chief Justice Burke of the Compensation Court, Wilson v Blayney Abattoir County Council (1995) 12 NSWCCR 509. In the course of that discussion Clarke J.A. expressed the view that even under section 33, the test of causation was not limited to the search for a “proximate or direct cause”, but is “whether the injury caused or materially contributed to the incapacity”. To this extent he disagreed with Burke CCJ in that case. However, he continued :
“… I agree with Burke CCJ’s conclusion that a trial judge’s initial task is to determine the liability of an employer or employers to pay compensation to a worker. If the worker satisfies the test in a case where there are a number of work injuries and apportionment is sought, the trial judge is then to apply the section 22 test and that test will be satisfied if the incapacity resulted partly from one injury (presumably the injury which led to the finding under section 33) and partly from another or other injuries. While, therefore, I disagree with Burke CCJ in his description of the primary test of causation, I do agree with his view that there is a two stage process when apportionment is sought”(page 732 emphasis added).
This quote makes it clear that the “two stage process” referred to by counsel for the third employer in this case refers, as counsel indicated, to an enquiry under section 33 and then an enquiry under section 22 (as broadened by sub-section (1A). The two stages are not, as the earlier quote from the judgement of Clarke J.A. might suggest, both contained within section 22.
On balance I consider that the Appellant has established that the Arbitrator did not engage in this two stage process. It is true that in the passage in her reasons relied on by the second employer, at page 59 of the transcript, (quoted in paragraph 6 of these reasons) she refers to both section 33 and section 22 and states that her conclusion that “the incapacity resulted from the injuries received in the motor vehicle accident” relates to section 33. However, she does not indicate what test she applies under section 22, and in particular that this is an additional test, to reach her conclusion “and I see no reason to apportion the weekly benefits payable pursuant to section 22”. Having regard to her comments on pages 56 and 57 that “as a matter of history Mr Sutton’s incapacity arises from the injuries that he received in the motor vehicle crash” (which is the section 33 enquiry) in the same breath as reference to apportionment (the section 22 enquiry) I conclude that she did not undertake the second and additional enquiry required by section 22.
I am assisted in this conclusion by the fact that she does not refer to Baltica in her reasons, although referred to it by counsel for the third employer, and also by the exchange between her and that counsel towards the end of his submissions, referred to in paragraph 9 of these reasons. In that discussion she appears to suggest that apportionment would only apply if there was some incapacity after the earlier injuries, and made the comment to counsel that “I can’t go to 22 until I get over 33” (transcript page 42 line 27). While this comment is capable of the interpretation that section 33 was merely the first stage of the enquiry, or that no apportionment could apply if there was no incapacity at all, I consider that the exchange as a whole makes it clear that the Arbitrator considered, at least at that point in submissions, that determination of liability for the eventual incapacity under section 33 could be the end of the enquiry. By this I mean she considered that it was necessary for an incapacity to have arisen from the earlier injuries if liability for the ultimate incapacity was to be apportioned under section 22. Of course, she may have changed her view as a result of those submissions, but one would expect in those circumstances a reference to the two stage process which was the subject of the discussion and Baltica in her reasons.
For these reasons, I consider that the first two grounds of appeal are established and that the Arbitrator’s decision in relation to apportionment should be revoked. That makes it unnecessary to consider the remaining grounds, and I do not make any determination in respect of them.
Should the matter be remitted to the Arbitrator or a new decision made?
Section 352(7) permits the Commission on appeal from an arbitrator to either substitute a decision, where error is established and the arbitrator’s decision revoked, or remit the matter to the arbitrator for determination in accordance with the appeal decision. In this case the Appellant seeks a substituted decision and no other party seeks that the matter be remitted if the appeal is successful. It is generally desirable to resolve as many issues as possible on review, with a view to finalising the litigation (Chubb Security Australia Pty Ltd v Trevarrow [2004] NSWCA 344). The difficulty in substituting a decision in this case, however, is that the second and third employers have attached to their replies multiple reports from doctors in the same speciality. Clause 43 of the Workers Compensation Regulation 2003 (‘the Regulation’) provides that only one medical report in any particular speciality may be admitted on behalf of a party. For a recent discussion of the reasons for this requirement and previous cases dealing with it see Fishburn v Integral Energy Australia [2005] NSW WCC PD 53. The rule is mandatory- there is no discretion under this Clause to admit more than one medical report in any particular speciality (Devine v Coles Supermarket Australia Pty Ltd [2003] NSW WCC PD 28). The Arbitrator does not appear to have applied the Clause, but nor is there any objection by any other party recorded in the transcript and the issue is not raised on appeal.
Notwithstanding this difficulty I have come to the conclusion that it is preferable to substitute a decision on review, rather than remit the matter to the Arbitrator. I reach this conclusion because the parties have not objected to the apparent admission of multiple reports, the issue to be determined is narrow, and substitution of a decision is in all the circumstances the more cost effective and timely way to deal with the matter. The Commission took the same view in another recent matter afflicted with the same difficulty (Phelan v Jasper Asset Pty Ltd t/as Formula 1 Motel [2005] NSW WCC PD 90). I have given consideration to the fact that I do not have the video evidence (as opposed to the written reports in relation to it) but I consider that this evidence was critical only in relation to the question of incapacity, and that issue is not under appeal.
Consideration of the medical and other evidence
I take the following evidence into account in relation to the question of apportionment:
(1) the medical evidence
(2) the worker’s evidence
(3) the prior settlements between the worker and the various employers.
I have not considered the rehabilitation evidence, as I consider that this relates to the issue of incapacity which is not under appeal. My approach is to start with the findings made by the Arbitrator as to injury and incapacity (which are not appealed) and then to determine on the basis of the evidence above whether the worker’s incapacity after the third injury (the motor vehicle accident) was (to use the test from Baltica) “so connected” with the injuries to the worker’s back and left ankle suffered in the first and second injuries respectively that, “as a matter of ordinary common sense and experience” it should be regarded as having resulted partly from the first injury or the second or both, and, if so, in what proportions.
The Arbitrator found that the worker had suffered an injury to his back in the first injury, to his left ankle in the second injury and to his right clavicle, right ankle, right shoulder, ribs and neck, and an aggravation to his left ankle injury in the third injury (the motor vehicle accident) (page 55 transcript). She found that his current complaints are as set out in the report of Dr Gliksman, being pain in the right shoulder, mid thoracic and lower lumber back pain radiating to his legs, crepitus and pain in his left ankle and crepitus and pain in his right ankle. She found that the problem with his left ankle is worse than that with the right. The Arbitrator did not specifically identify in the reasons which of these complaints and injuries lead to her finding as to partial incapacity, but it is apparent in the reasons as a whole that she considered the right shoulder, back and left ankle injuries to be the most significant.
I turn now to the question of apportionment, and the medical evidence as to the continuing contribution, if any, of the earlier back and left ankle injuries to the worker’s incapacity after the motor vehicle accident. The medical evidence relied on by the worker, being principally the reports of Dr Douglas, ascribes greater significance to the motor vehicle accident in relation to both the back and left ankle injuries than to the original injuries themselves. He ascribes two thirds of what he considers to be a 15% permanent impairment of the worker’s back to the motor vehicle accident, and three quarters of what he considers to be a 12% permanent impairment of the worker’s left ankle to the motor vehicle accident (report dated 7 October 2003). Doing the best that I can with the medical evidence of the second and third employers, without giving undue weight to the sheer number of reports, the thrust of the reports is to discount the significance of any ongoing injury to the left ankle and, to the extent that it was injured, to ascribe this principally to the second injury, not the motor vehicle accident (see, for example, report of Dr Pillemer dated 31 March 2000). In relation to the back injury, the thrust of the medical reports relied on by the third employer is that the worker did not injure his back in the motor vehicle accident (see the reports of Drs Smith, Bliss and Millions, all of whom are orthopaedic specialists) or, to the extent that the accident aggravated earlier problems, this was due to the worker’s inability to swim (due to his shoulder injury) after the motor vehicle accident (see reports of Drs 0’Neill and Davis). The first employer relied on the reports of Dr Christie, the neurosurgeon who removed the tumour from the worker’s back after the first injury, to support its submission that it is unclear whether ongoing pain after the first injury was due to that injury, or the surgery, in which a nerve root was removed and which was not completely successful in removing all the tumour.
I take into account that, notwithstanding these reports, each employer has entered into a registered agreement with the worker in relation to permanent impairment arising from his injuries. I note the reservations expressed by Neilson J. in Anderson v Charles Sturt University [2002] NSWCC 63 in relation to regarding consent determinations as giving rise to an estoppel, for fear that this would discourage settlement (see paragraph 27). This case was relied on by the first employer before the Arbitrator. It is also of course the case that apportionment of liability for incapacity does not involve the same questions as liability for permanent impairment, as the Arbitrator noted. Nevertheless, it seems to me that some weight needs to be given to the fact that the worker and the third employer agreed in earlier permanent impairment proceedings that his back and left ankle were injured in the motor vehicle accident in addition to his right arm, and that the permanent impairment thus occasioned to his back was not insubstantial (13.5% i.e. greater than the impairment of 12% the worker and first employer agreed), while the permanent impairment thus occasioned to his left ankle was considerably less (at 3.75%) than the impairment the worker agreed with the second employer.
The worker’s own evidence was that he was able to continue working as a boilermaker after the first and second injuries, but only while undertaking physiotherapy for his ankle, chiropractic treatment for his back when required and regular swimming for his back. Prior to the second injury he said he was coping well with back pain by reason of swimming and chiropractic treatment when required. Shortly prior to the third injury he stopped physiotherapy on this left ankle and found this caused him problems in working. He agreed with the proposition put to him in cross-examination by the second employer that his left ankle was “a lot worse” after the third injury. In response to cross-examination by the first employer he said he could not continue working after the motor vehicle accident because the injury to his right shoulder meant he could not swim, thus causing his fitness to “drop off”. To the Arbitrator he said he considered his left ankle to be his “major undoing” in that he could not work a full week being on his feet all day. He said that his ankle problem contributed to pain in his back as well.
My conclusion arising from all this material is that the apportionment sought by the Appellant and third employer is appropriate. That apportionment is that the first and second employers jointly pay one third of the whole award. I consider this reflects the Arbitrator’s conclusion, which I consider correct on all the evidence, that after the motor vehicle accident the worker was left with three principal injuries that affected his capacity to work, being his right shoulder, back and left ankle injuries. The worker first injured his back and left ankle in the earlier injuries but as he was able to work in his trade after the first two injuries it is not appropriate to apportion liability equally between all employers. However, for the reasons set out below I consider that the Appellant has established that the first and second injuries were “so connected” with the eventual incapacity that the employers at the time of those injuries should bear some responsibility for the eventual incapacity. I consider the Appellant’s submission that it, as the third employer, be responsible for two thirds of the award and the other employers jointly responsible for one third to be reasonable.
In relation to the back, having regard to the comparative CT scans of the worker’s back before and after the third injury and the agreements between the worker and the first and third employers as to permanent impairment, I find that the third injury did cause direct injury to his back. However, I also consider that a significant reason the third injury caused back problems is that the worker was unable to continue his swimming program due to his shoulder injury. The reason swimming was necessary was pain in his back prior to the second and third injuries. That is, this pain and the need to manage it to be able to work contributed to the worker’s eventual incapacity.
The first employer says it has not been established that this pain was due to the first injury, as opposed to the tumour and the surgery for the tumour. There is no medical report that specifically addresses this question for the purposes of workers compensation. The reports of Dr Christie, relied on by the first employer, are those of the treating neurosurgeon, prepared in relation to the surgery. The worker was already seeking medical assistance for pain before the tumour was found, and Dr Christie’s report of 18 February 1998 to the worker’s then orthopaedic surgeon, Dr Isaacs, says that it is “difficult to know whether the (tumour) was actually causing (the worker) any symptoms or whether in fact it was just an incidental finding”. Dr Christie continues that “the surgery may not have any affect (sic) on his symptoms”. Dr Christie’s subsequent reports to the worker’s general practitioner dated 28 April 1998 and 24 November 1998 report that the worker continued to experience lower back pain despite the surgery, although by November, with exercise, he was “getting along pretty well”. Given that the surgery did not resolve the pain and the reservations expressed by Dr Christie as to whether or not the tumour caused the pain I find that the pain was due to the first injury. For these reasons I consider that his first injury has contributed to his eventual incapacity.
In relation to the left ankle, the Arbitrator accepted the worker’s evidence that he continues to suffer from weakness and pain in that ankle. This finding is not contested in this appeal. The only issue on this appeal is whether the ankle injury in September 1999 contributed to that weakness and pain, and, if so, to what degree. The worker’s medical evidence that the motor vehicle accident played the greater role differs from the medical evidence for the third employer. The worker’s own evidence is that he needed physiotherapy on this ankle prior to the third injury, but his ankle was worse after the third injury. In his agreements with the second and third employer as to permanent impairment of the ankle he accepted that a greater proportion of the responsibility as to permanent impairment lay with the first ankle injury. Baltica requires that this issue be determined by “ordinary common sense and experience”. Applying that test, I consider the apportionment of one sixth of the total liability to the second employer to be appropriate.
I consider that my findings in relation to apportionment of liability for weekly payments should be reflected in the order in relation to medical expenses. There was no evidence in the original proceedings as to the extent to which medical and related expenses relate now or may in the future to different aspects of the worker’s injuries. In the absence of such evidence the best course in my view is to make the same order as to apportionment that applies in relation to the primary payments. Similarly, I consider that this apportionment should be reflected in the order relating to the costs of the original proceedings i.e. the first and second employers should be required to reimburse the third employer, or pay the worker as the case may be, the same proportion of the worker’s costs as they are required to pay of the award. I will confirm the Arbitrator’s certification of the matter as complex.
DECISION
For these reasons I revoke the decision of the Arbitrator and substitute the following decision:
1. Waycon Services Pty Ltd (‘the third employer’), Bucyrus (Australia) Pty Ltd (‘the first employer’) and Skilled Engineering Limited (‘the second employer’) to pay Barry Sutton (‘the worker’) weekly benefits pursuant to section 40 of the Workers Compensation Act 1987 (‘the 1987 Act’) at the maximum statutory rate, as adjusted from time to time, for a worker without dependents from 23.12.02 to date and continuing.
2. The third, first and second employers to pay the worker’s medical and related expenses pursuant to section 60 of the 1987 Act.
3. The third, first and second employers to pay the worker’s costs of the original proceedings as agreed or assessed.
4. The first and second employers are jointly responsible for one third of the amount ordered to be paid by orders 1, 2 and 3 above and the third employer is responsible as to two thirds pursuant to section 22 of the 1987 Act.
5. The original proceedings are certified as complex for the purposes of determining the maximum amount of costs recoverable pursuant to Schedule 6 of the Workers Compensation (General) Regulation 1995.
COSTS OF THE APPEAL
The Appellant has been successful on the appeal and should be paid its costs jointly by the first and second employers. These employers are also required to jointly pay the workers costs of the appeal.
Robyn Lansdowne
Acting Deputy President
11 November 2005
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF ROBYN LANSDOWNE, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
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