Whelan v Sara Lee Australia Pty Limited
[2008] NSWWCCPD 93
•2 September 2008
| WORKERS COMPENSATION COMMISSION | |||||
| DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR | |||||
| CITATION: | Whelan v Sara Lee Australia Pty Limited [2008] NSWWCCPD 93 | ||||
| APPELLANT: | Julia Ann Whelan | ||||
| RESPONDENT: | Sara Lee Australia Pty Limited | ||||
| INSURER: | QBE Workers Compensation (NSW) Limited | ||||
| FILE NUMBER: | WCC8785-07 | ||||
| DATE OF ARBITRATOR’S DECISION: | 31 March 2008 | ||||
| DATE OF APPEAL DECISION: | 2 September 2008 | ||||
| SUBJECT MATTER OF DECISION: | Leave to appeal; partial incapacity; section 40 of the Workers Compensation Act 1987; whether the evidence supported a finding of ongoing economic loss; exercise of discretion. | ||||
| PRESIDENTIAL MEMBER: | Acting Deputy President Deborah Moore | ||||
| HEARING: | On the papers | ||||
| REPRESENTATION: | Appellant: | CBD Law | |||
| Respondent: | Moray and Agnew | ||||
| ORDERS MADE ON APPEAL: | 1. Time to appeal the Arbitrator’s determination dated 31 March 2008 is extended until 2 May 2008. 2. The decision of the Arbitrator dated 31 March 2008 is revoked. 3. The matter is remitted to the Arbitrator at first instance for redetermination in accordance with these reasons. 4. The Respondent is to pay the costs of the appeal. | ||||
BACKGROUND TO THE APPEAL
On 2 May 2008, Julia Ann Whelan (the Appellant/Ms Whelan) sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Workers Compensation Commission (‘the Commission’) against a decision dated 31 March 2008.
The Respondent to the Appeal is Sara Lee Australia Pty Limited (the Respondent/Sara Lee).
Ms Whelan injured her right arm when she slipped and fell during the course of her employment with the Respondent on 7 June 1999. She resumed on selected duties following her injury but eventually ceased work in 2001. Thereafter, she was employed in various jobs until she commenced employment with the University of Newcastle on 13 March 2005.
Ms Whelan instituted proceedings in the Commission in 2006. She was referred to an Approved Medical Specialist (AMS). The AMS, Professor Robin Higgs, assessed her as suffering from an 18% permanent loss of use of her right (dominant) arm at or above the elbow as a result of her injury.
On 19 November 2007, Ms Whelan filed an ‘Application to Resolve a Dispute’ in the Commission seeking weekly benefits compensation pursuant to section 40 of the Workers Compensation Act 1987 (‘the 1987 Act’). She claimed that she was suffering a loss of earnings in her job at Newcastle University of $170 per week from 1 July 2006.
The parties attended a conciliation/arbitration hearing on 28 February 2008. Ms Whelan gave oral evidence which is recorded in a transcript of that date.
The Arbitrator found that Ms Whelan had demonstrated an ability to earn the same or greater than she would probably have been earning during the relevant period, notwithstanding her partial incapacity, and accordingly entered an award in favour of the Respondent.
It is from this decision that Ms Whelan seeks leave to appeal.
THE DECISION UNDER REVIEW
The “Certificate of Determination” dated 31 March 2008 records the Arbitrator’s orders as follows:
“1.Award for the Respondent.
2.There is no order as to costs.”
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.”
Both parties submit that the matter is suitable for a determination ‘on the papers’. Having regard to Practice Direction No’s 1 and 6, the documents that are before me, including the Transcript, and the detailed submissions by both parties on appeal, 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 TO APPEAL
Before proceeding to deal with an appeal the Commission must determine whether the application meets the requirements of section 352 of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’).
Section 352 of the 1998 Act, as amended by the Workers Compensation Legislation Amendment (Miscellaneous Provisions) Act 2005 (‘the amending Act’), relevantly provides:
“352 Appeal 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.
(1A) An appeal is to be made by application to the Registrar. The appeal is not to proceed unless the Registrar is satisfied that the requirements of this section and any applicable Rules and regulations as to the making of the appeal have been complied with.
(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. “
Monetary threshold
The amount at issue on appeal satisfies the threshold requirements of section 352(2).
Time
The appeal was filed on 2 May 2008, out of time and contrary to the provisions of section 352(4).
Ms Whelan has filed submissions seeking an extension of time. No real explanation has been provided for the delay other than the “complexities” of the case requiring Counsel to be briefed. The thrust of Ms Whelan’s submissions is to the effect that, since the appeal falls out of time “…by the barest of margins…” no prejudice is caused to the Respondent. Conversely, it is claimed that Ms Whelan “…would suffer prejudice…” if leave to appeal was not granted.
The Respondent submits that Ms Whelan has failed to provide any explanation for the delay “…in obtaining and reviewing submissions drafted by Counsel particularly since Counsel was briefed in the matter and appeared at the Arbitration…”. I do note that the submissions on appeal were prepared by the same Counsel who appeared on behalf of Ms Whelan at the hearing before the Arbitrator.
In addition, the Respondent submits that Ms Whelan has failed to demonstrate that the circumstances of the late filing are exceptional as is required by Rule 16.2(11) of the Workers Compensation Commission Rules 2006 (‘the 2006 Rules’). Reference is made to the decision of Deputy President Roche in O’Carroll Constructions Pty Ltd v Burgess [2007] NSWWCCPD 224 [Burgess] to the effect that “…inadvertence or administrative errors by legal practitioners do not amount to exceptional circumstances.”
Discussion and Findings – Extension of time
Rule 16.2(11) of the 2006 Rules states as follows:
“(11) 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.”
The question of extending time to appeal was considered by Justice McHugh in Gallo v Dawson [1990] HCA 30; (1990) 93 ALR 479 (‘Gallo’) where his Honour said at 480:
“The discretion to extend time is given for the sole purpose of enabling the court or justice to do justice between the parties: see Hughes v National Trustees Executors & Agency Co of Australasia Ltd [1978] VR 257 at 262. This means that the discretion can only be exercised in favour of an applicant upon proof that strict compliance with the rules will work an injustice upon the applicant. In order to determine whether the rules will work an injustice, it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation, and the consequences for the parties of the grant or refusal of the application for extension of time: see Avery v No 2 Public Service Appeal Board [1973] 2 NZLR 86 at 92; Jess v Scott (1986) 12 FCR 187 at 194-5; 70 ALR 185. When the application is for an extension of time in which to file an appeal, it is always necessary to consider the prospects of the applicant succeeding in the appeal: see Burns v Grigg [1967] VR 871 at 872; Hughes at 263-4, Mitchelson v Mitchelson (1979) 24 ALR 522 at 524. It is also necessary to bear in mind in such an application that, upon the expiry of the time for appealing, the respondent has ‘a vested right to retain the judgment’ unless the application is granted: Vilenius v Heinegar (1962) 36 ALJR 200 at 201.”
I am of the view that there are a number of factors weighing against the granting of an extension of time in which to appeal in this matter. Firstly, there is no proper explanation for the delay in lodging the appeal other than that Counsel was required to draft the submissions which required “review” by Ms Whelan’s solicitor and”…instructions sought from the Applicant.” Ms Whelan’s legal advisors would be well aware of the requirement to file any appeal within 28 days.
Secondly, the proceedings were not particularly complex. As Ms Whelan points out in her submissions:
“…there was no dispute between the parties about there being a continuing physical effect on the Applicant of her injury. The dispute was narrowed to the issue whether there was any economic loss flowing from the physical problems she had.”
Thirdly, as Deputy President Roche noted in Burgess:
“inadvertence or administrative errors by a legal practitioner do not amount to exceptional circumstances (Department of Education & Training v Mekhail[2006] NSWWCCPD 1 and Department of Corrective Services v Buxton [2007] NSWWCCPD 55)”
In these circumstances, I am not persuaded that “exceptional circumstances” exist in this matter which would justify an extension of time to appeal. But, to quote Deputy President Roche again in Burgess:
“… to determine if the refusal to grant an extension of time will result in a ‘demonstrable and substantial injustice’ it is necessary that I consider the merits of the appeal in detail.”
Grounds of Appeal
Ms Whelan has listed 16 grounds of appeal. Many of these amount to no more than a reiteration of the claim, the evidence in support of it and the relief sought. Ms Whelan has also included a ‘chronology’ in her submissions, the relevance of which escapes me, since my task is to review the decision of the Arbitrator based on the material that was before him.
Supplementary submissions have also been made by Ms Whelan following receipt of the Transcript.
As both parties noted, the only issue to be determined was Ms Whelan’s entitlement, if any, to section 40 benefits. As I understand Ms Whelan’s submissions, she claims that the Arbitrator failed to correctly apply the principles set out in Mitchell v Central West Health Service (1997) 14 NSWCCR 171 (‘Mitchell’) and erred in the exercise of his discretion. In her supplementary submissions, Ms Whelan also claims that “…there was procedural unfairness revealed on the transcript” but no particulars of this allegations have been provided.
Having carefully read the Transcript, I have been unable to locate any instance of any failure by the Arbitrator to accord the parties procedural fairness in the conduct of the hearing before him such that I cannot accept Ms Whelan’s submissions on this point.
As to the submissions in relation to the Arbitrator’s consideration of the principles in Mitchell, there is some merit in Ms Whelan’s complaint. The Transcript reveals the parties’ agreement as to Ms Whelan’s probable earnings with the Respondent, but no reference is made by the Arbitrator to this evidence. The focus of the Arbitrator’s determination seems to be on a period at the Newcastle University between January 2007 and January 2008 where Ms Whelan elected to “annualise” her earnings to in effect take advantage of university holidays. The Arbitrator essentially found that this conduct did not impact upon Ms Whelan’s earning capacity, and that she was remunerated at the same rate for the work she performed. On this basis, an award was made in favour of the Respondent.
However, the Arbitrator seems to have overlooked any consideration of probable earnings or “comparable’ earnings with the Respondent. Moreover, the amounts referred to by the Arbitrator do not appear to reflect amounts apparently agreed to by the parties, or at least referred to in the Transcript. I will discuss these issues more fully below.
In all the circumstances, I am satisfied that to lose the right to seek leave to appeal would cause demonstrable and substantial injustice to Ms Whelan, such that I should extend the time for making the appeal pursuant to Rule 3.2 of the 2006 Rules.
Time to appeal the Arbitrator’s determination dated 31 March 2008 is extended to 2 May 2008.
Leave to appeal is granted.
THE ARBITRATOR’S FINDINGS AND REASONS
It is appropriate at this point to consider the claim as pleaded by Ms Whelan and the Arbitrator’s findings.
Ms Whelan sought in effect ‘make-up’ pay from 1 July 2006 “to date and continuing.” At the hearing, Ms Whelan gave evidence that in the calendar year 2007 she changed her salary arrangements to ‘annualised’ payments.
This arrangement was summarised by the Arbitrator as follows: [10 to 12]
“[10]Prior to approval of [that arrangement] the Applicant had been working 48 weeks per annum and had been entitled to 4 weeks paid annual leave. The new arrangement provided for the Applicant to reduce the number of weeks that she worked each year from 48 to 40.8. The periods during which she did not work coincided with the University vacations.
[11]The Applicant’s annual salary was reduced in accordance with the reduction in the number of weeks that she would be working. It was also agreed that [she] would receive a standard salary payment each week, regardless of whether she was working or on leave.
[12]The result was a reduction in …weekly earnings from $804.41 per week to $681 per week.”
Those figures do not accord with amounts referred to in the Transcript, but I will come back to that later.
The Arbitrator then noted Ms Whelan’s explanation for entering into that arrangement: she had “…taken the holidays off to enable my arm to recover…” before he embarked on a summary of the medical evidence.
The Arbitrator concluded as follows:
“[23] I am required to determine whether the Applicant’s ability to earn has been reduced as a consequence of a compensable injury. The Applicant worked on a full time basis for the University of Newcastle from 30 March 2005 to 21 January 2007. During that time she demonstrated an ability to earn no less than would be the case had she not been injured. The Applicant has not tendered any medical opinion which indicates that, as at January 2007, her condition had deteriorated, and that, as compared to the capacity she had demonstrated over the preceding 22 months, her capacity for work had diminished.
[24] There is no evidence that the arrangements were in response to medical advice that she would not have the capacity to work for more than 40.8 weeks or that she would not have the capacity to work when the University academic year was in recess
[25] The Applicant arranged to reduce the hours from 48 weeks per annum to 40.8. The rate at which she was remunerated did not decrease. In substance, the new arrangement involved reduced working hours, reduced annual leave, and a period of unpaid leave. The relevance of the ‘annualisation’ is that it was an administrative arrangement to provide for a uniform salary payment each fortnight. The decrease in the payments the Applicant received from 22 January 2007 was therefore not reflective of her ability to earn; it was a matter of administrative convenience.
[26] The work for which the Applicant was responsible in November 2006 [was] no different in February 2007
[27] The Applicant has, with effect from 22 January 2008, resumed her original full time working arrangements i.e .a regular 35 hour week for 48 weeks per year. Just as the transition to reduced working hours in 2007 was not pursuant to any medical certification or recommendation, so the return in 2008 to the pre 2007 work arrangements was not pursuant to medical certification of any change in the Applicant’s condition. If the Applicant has had the capacity to work full time since January 2008, as was the case in 2005 and 2006, and to earn no less than she would have earned but for her injury, how does she explain that her condition was any different in 2007? There is, as I have indicated, simply no evidence to assist her.”
If the evidence was to the effect that Ms Whelan had indeed earned the same or greater amount since she commenced at the University, then I would accept the Arbitrator’s determination based on all the evidence to which he referred. The difficulty however is this: on page 1 of the Transcript the Arbitrator stated as follows:
“I have been informed by the representatives that there is agreement as to the applicant’s comparable earnings. Those earnings would be [$851.25] per week with effect from1 July 2006 to 19 April 2007 but for injury. There is a further figure in respect of comparable earnings for the period 20 April 2007 to date and continuing, that figure being agreed at $884.41…”
After further brief discussion about the evidence, Counsel for Ms Whelan was then invited “…to present your client’s case.”
It is clear that at the outset, the parties acknowledged the parameters of the case, that is, a claim for loss of wages commencing 1 July 2006. The questions asked of Ms Whelan by her Counsel were directed solely to the issue of the ‘annualisation’ of her pay. There was no cross-examination.
The submissions made by Counsel for Ms Whelan were focussed on her credibility, stoicism, and reduced capacity for employment. At page 7 of the Transcript, he stated: “…if you take the agreed capacity, which is a figure of $884.41, and you take from it her present earnings of $860 a week, the revealed difference is a sum just a little under $25 a week, which is a continuing loss by her.”
There followed discussion about Ms Whelan’s tax returns, apparently in evidence, and documents produced by the University admitted at the hearing. Counsel for Ms Whelan then stated at [7]:
“…commencing 7 February (the year was not mentioned) she is earning the equivalent of $860 a week…”
At page 7, the Arbitrator stated: “In the wages schedule there’s a figure of $681…as the actual earnings.” In further discussion, the parties eventually agreed [9] that $860 per week was Ms Whelan’s actual earnings, presumably during 2007.
On the face of it, that would suggest, as Ms Whelan submits, that there was a loss of approximately $25 per week.
It seems that confusion set in when this exchange took place [10]:
“Arbitrator: Just some detail as to the period that was taken off. We are only talking about the period from December 2006 to December 2007?
Counsel for Ms Whelan: For – on the annualised basis?
Arbitrator: Yes.
Counsel for Ms Whelan: Yes, that’s correct.”
It may be that, in reserving his decision, the Arbitrator formed the view that the claim had been confined to the period December 2006 to December 2007, or as it transpired, January 2007 to January 2008. Whatever happened, it seems that Ms Whelan’s claim for weekly benefits from 1 July 2006 was essentially overlooked.
The solicitor for the Respondent commenced his submissions at page 12 of the Transcript. Reference was made to Mitchell in support of the Respondent’s argument that Ms Whelan had no entitlement to section 40 benefits. It was submitted that the issue of ‘annualisation’ was a “red herring” in considering Ms Whelan’s ability to earn. The submissions then focussed on the medical evidence which was overwhelmingly to the effect that Ms Whelan was fit for full time work with certain lifting restrictions. For example, a section 40 assessment report dated 4 December 2007 compiled by Dr Robin Mitchell, occupational health specialist, and Mr David Brown, occupational psychologist, concluded that Ms Whelan was “… fit for full time duties (38 hours per week) including reasonable overtime subject to the [lifting] restrictions…” On this basis, it was put that Ms Whelan was fit for her previous employment with the Respondent.
At page 14, the solicitor for the Respondent then said:
“ Now, what is quite clear is that when she is working at the University her earnings – and I take you to the dispute letter – are such that she is earning more than the comparables…”
The nature of the “dispute letter” is not clear, and the statement as to comparable earnings seems inconsistent with the evidence to which I have referred.
At page 15 of the Transcript, this was said by the solicitor for the Respondent:
“…the views of the medical specialists who have seen her all say that she is fitted for administrative clerical work, including her pre-injury work as a quality assurance person at Sara Lee. Now, from the section 40 assessment you will see that the remuneration for that at the moment, according to the statistical material, and it may not be the figure payable at Sara Lee, who agreed on a different lower figure, is $902…”
The reference to “$902” is taken from the section 40 assessment report of 4 December 2007 to which I have referred previously. That report stated that “potential suitable employment options” for Ms Whelan included a job as “product examiner” which paid $902 per week.
I am at a loss to understand how the Respondent could assert that Ms Whelan was earning more than “the comparables” given the agreement noted on page 1 of the Transcript.
There was no suggestion that Ms Whelan was not partially incapacitated: the question to be determined was whether that translated into any economic loss.
As the Arbitrator concluded [para 40]:
“…the Applicant’s degree of partial incapacity has not varied during the course of her employment with the University of Newcastle, and she has not been certified totally incapacitated for any period during the course of such employment. Properly analysed, her claim is for the time she did not work, in excess of the 4 week annual leave period. There is no medical opinion which indicates that during the [university vacation] periods…she was incapacitated to a degree that she would not have been able to earn what she had been earning each week prior to 22 January 2007. The Applicant has therefore not demonstrated how her ability to earn at any time after 21 January 2007 was less than that demonstrated previously.”
On that basis, the Arbitrator entered an award in favour of the Respondent.
I accept the Arbitrator’s conclusions on the impact of the ‘annualisation’ on Ms Whelan’s ability to earn after 21 January 2007. However, that was never the claim brought by her. The Arbitrator’s conclusions have ignored the parameters of the claim. This is no criticism: the parties themselves have contributed to the problem by failing to properly identify the basis of their respective claims. There is no suggestion in the Transcript that the claim was to be amended in any way, and the focus on the issue of the ‘annualisation’ of Ms Whelan’s income in the 2007 calendar year was indeed something of a “red herring” but not for the reasons put forward by the Respondent.
The “5 steps” in Mitchell to be considered in a section 40 assessment as summarised by Deputy President Fleming in Snow Confectionary Pty Ltd v Askin [2004] NSWWCCPD 56 are as follows:
“1. To 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)). Section 40(3) provides that the determination of this amount is subject to the following:
(a) the determination is to be based on the worker’s ability to earn in the general labour market reasonably accessible to the worker;
(b) the determination is to be made having regard to suitable employment for the worker within the meaning of section 43A.’...
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 the present case, the Arbitrator has misconceived the nature and extent of Ms Whelan’s claim. Applying steps 1 and 2, there would appear to be a loss. If there were grounds for a reduction, as set out in step 4, reasons ought be provided. This would appear to have been done insofar as any claim for reduced earnings at the University during the 2007 calendar year is concerned, but that was not the basis of Ms Whelan’s claim. She sought benefits from 1 July 2006 being the difference between her actual earnings at the University and “comparable/probable” earnings with the Respondent. This aspect of her claim has simply never been determined.
CONCLUSION
Given my findings, I think the appropriate course is to remit the matter to the Arbitrator at first instance for re-determination. It seems that the parties have reached agreement on certain issues, and I have made findings on matters already dealt with by the Arbitrator such that the appropriate course is for the matter to be in effect “reconsidered’ by the Arbitrator at first instance.
DECISION
Time to appeal the Arbitrator’s determination dated 31 March 2008 is extended to 2 May 2008.
The decision of the Arbitrator dated 31 March 2008 is revoked.
The matter is remitted to the Arbitrator at first instance for redetermination in accordance with these reasons.
COSTS
The Respondent is to pay the costs of the appeal.
Deborah Moore
Acting Deputy President
2 September 2008
I, MARIE JOHNS, CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF DEBORAH MOORE, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
0
3
0