Wilkie Fleming & Associates Pty Ltd v Highlands - [2014] NSWWCCPD 39

WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:	Wilkie Fleming & Associates Pty Ltd v Highlands [2014] NSWWCCPD 39
APPELLANT:	Wilkie Fleming & Associates Pty Ltd
RESPONDENT:	John Highlands
INSURER:	Allianz Australia Workers Compensation (NSW) Ltd
FILE NUMBER:	A1-2366/13
ARBITRATOR:	Mr J Hertzberg
DATE OF ARBITRATOR’S DECISION:	27 February 2014
DATE OF APPEAL DECISION:	26 June 2014
SUBJECT MATTER OF DECISION:	Interlocutory orders; leave to appeal; defective s 74 notice; leave to dispute unnotified matters refused; alternative finding if leave had been granted; alleged absence of jurisdiction
PRESIDENTIAL MEMBER:	Acting President Bill Roche
HEARING:	On the papers
REPRESENTATION:	Appellant:	Sparke Helmore Lawyers
Respondent:	Somerville Laundry Lomax
ORDERS MADE ON APPEAL:	1. Leave to appeal is refused. 2. The appellant employer is to pay the respondent worker’s costs of the appeal, as agreed or assessed.

INTRODUCTION

This matter involves a claim for lump sum compensation and for hospital and medical expenses as a result of an accepted knee injury that occurred in 2005. The appeal does not seek to challenge the Arbitrator’s orders, which have merely referred the assessment of worker’s claim for whole person impairment to an Approved Medical Specialist (AMS) for assessment, but seeks to challenge a finding by the Arbitrator that knee replacement surgery in 2011 resulted from the 2005 injury. For the reasons explained below, the orders made are interlocutory and leave to appeal is refused.

BACKGROUND

On 6 July 2005, the respondent worker, John Highlands, injured his left knee in the course of his employment for the appellant employer, Wilkie Fleming & Associates Pty Ltd. At that time, Allianz Australia Workers Compensation (NSW) Ltd (Allianz) insured the appellant.
On 23 September 2005, Mr Highlands underwent surgery to his knee, which revealed significant degenerative changes in the medial side of the knee and a torn meniscus.
On 1 April 2009, due to a deterioration in Mr Highlands’ condition, he underwent further surgery on his left knee.
On 27 May 2010, Mr Highlands stopped work for the appellant.
On 16 March 2011, Mr Highlands underwent a unicompartmental left knee replacement.
On 27 June 2012, in a letter addressed to Allianz, Mr Highlands’ solicitors claimed lump sum compensation on his behalf in the sum of $24,500 under s 66 of the Workers Compensation Act 1987 in respect of an 18 per cent whole person impairment as a result of the 2005 injury, plus $40,000 compensation for pain and suffering and unspecified medical and treatment expenses.
It was alleged in the letter that Mr Highlands suffered a torn medical meniscus to his left knee on 6 July 2005 “which progressively worsened requiring arthroscopies in 2005 and 2009 before undergoing a unicompartmental left knee replacement in March 2011”. The letter also requested the insurer to determine liability for Mr Highlands’ claim for medical expenses within 21 days, but did not particularise any expenses.
On 24 August 2012, Allianz issued a notice under s 74 of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act) in which it denied liability. So far as is relevant to the appeal, the letter said that Allianz had “concluded that”:
(a)     Mr Highlands continued to be employed by the appellant until at least May 2010;
(b)     Allianz ceased insuring the appellant on 24 November 2009;
(c)     Mr Highlands’ knee claim was finalised on 14 February 2007;
(d)     Allianz had no information of the 2009 or the 2011 operations or that treatment was a result of the 2005 injury, and
(e)     as Mr Highlands had continued to be employed by the appellant beyond the finalisation of the “06/07/2005 claim and proceeded to obtain treatment beyond finalisation and risk without our knowledge we deem that you have not fully particularised your claim and with the information available we dispute that we are on risk for the current claim of [sic] the knee”.
This notice was clearly defective and did not comply with s 74, which requires that the notice contain a concise and readily understandable statement of the reason the insurer disputes liability and the issues relevant to the decision. Nevertheless, the rejection of the claim triggered a dispute under s 289 of the 1998 Act to allow the matter to be referred to the Commission and to give the Commission jurisdiction.
On 24 December 2012, Mr Highlands filed an Application to Resolve a Dispute (the Application) in the Commission. He claimed hospital and medical expenses of $5,000 for treatment, care or related expenses incurred or needed for an arthroscopy on his left knee and for a left knee medial unicompartmental knee replacement, and $26,950 (the correct amount should have been $24,500) in respect of an 18 per cent whole person impairment due to the injury to his left knee, plus an unspecified amount for pain and suffering.
On 25 February 2013, the appellant’s solicitors filed a Reply confirming that the matters in dispute were the matters “as per the dispute notice(s) attached to the Application” (that is, as per the s 74 notice of 24 August 2012 referred to at [9] above) and adding:
“The [appellant] disputes that [Mr Highlands’] claimed whole person impairment is attributable to injury on 6 July 2005.
The [appellant] has requested clinical notes from [Mr Highlands’] treating doctors and if such records are not produced prior to [the] teleconference, the [appellant] intends to seek leave to issue Directions for Production.”
At the arbitration on 25 February 2014, counsel for the appellant, Mr Somerville, sought leave under s 289A(4) of the 1998 Act to argue two issues not previously identified as being in dispute. They were:
(a) that Mr Highlands suffered a further injury with a deemed date of injury after its period of risk (the further injury issue), and
(b) that the need for the 2011 surgery did not result from the 2005 injury (the nexus issue).
The Arbitrator heard argument on the application for leave to dispute the additional matters and full argument on the merits of the nexus issue. He refused leave to dispute either matter. In respect of the further injury issue, the Arbitrator said that:
(a)     the appellant had offered no explanation for having not raised the issue earlier (T14.11);
(b)     the argument that there was somehow a further injury “characterised by the disease provisions of the Act simply because a procedure occurred after the date of the insurer ceased being on risk, or indeed after the date of cessation of employment” (T14.29) had “no merit” (T14.34), and
(c)     the appellant produced no evidence that any of the activities undertaken by Mr Highlands in his work with the appellant, or in his subsequent employment, in any way materially or substantially contributed to any aggravation, acceleration, exacerbation of the disease (T14.35–40).
The appellant has not challenged these findings.
In respect of the nexus issue, the Arbitrator said that:
(a) the difficulty the appellant faced was its “inexpert, incomplete and noncompliant” s 74 notice (T15.14), which did not adequately set out that Mr Highlands was to address the issue of whether the (need for) the 2011 surgery resulted from the admitted injury in 2005 (T16.4);
(b) Mr Highlands was prejudiced (by the late raising of the issue) because he could have sought more detailed evidence to address the point (T16.10), and
(c) the insurer had had since June 2012 to fully investigate the claim, to obtain an independent medical report, and put on evidence, but had not done so (T16.18). Nor had it sought evidence from the appellant as to the nature of Mr Highlands’ duties subsequent to the initial injury (T16.20).
If he was wrong in refusing to grant leave to the appellant to dispute the nexus issue, the Arbitrator considered, in the alternative, the merits of that issue. After hearing detailed submissions from Mr Somerville, reviewing the evidence and relevant authorities, including Kooragang Cement Pty Ltd v Bates (1994) 35 NSWLR 452; 10 NSWCCR 796, the Arbitrator concluded that the condition that required the 2011 surgery resulted from a deterioration in Mr Highlands’ left knee as a result of the injury on 6 July 2005 (T19.12).
The Commission issued a Certificate of Determination on 27 February 2014 in the following terms:
“The determination of the Commission in this matter is as follows:
1.The claim for lump sum compensation for permanent impairment arising from injury to the left lower extremity(knee) on 6 July 2005 is referred to the Registrar for referral to an Approved Medical Specialist (AMS) to assess Whole Person Impairment.
2.The AMS is to be provided with documents attached to the Application and reply and the applicant’s statement filed on 24 January 2014.
Finding:
The condition which required left knee replacement surgery results from the injury on 6 July 2005.”
The appellant has not challenged the Arbitrator’s orders in paragraphs one and two of the Certificate of Determination, but seeks to challenge the Arbitrator’s finding that the condition that required the left knee replacement surgery resulted from the injury on 6 July 2005. The appellant contended that, having refused leave for that issue to be disputed, the Arbitrator had no jurisdiction to make that finding.

PRELIMINARY MATTERS

On the papers

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.”
Having regard to Practice Directions Nos 1 and 6, the documents that are before me, and the submissions by the parties that the appeal can proceed to be determined on the basis of these documents, and the parties’ submissions at the teleconference before me on 25 June 2014, I am satisfied that I have sufficient information to proceed ‘on the papers’ without holding any formal hearing and that this is the appropriate course in the circumstances.

Interlocutory

Section 352(3A) of the 1998 Act provides:
“(3A) There is no appeal under this section against an interlocutory decision except with the leave of the Commission. The Commission is not to grant leave unless of the opinion that determining the appeal is necessary or desirable for the proper and effective determination of the dispute.”
Because both parties asserted that the Arbitrator’s decision was not interlocutory, I listed the matter for teleconference on 25 June 2014 to hear submissions on that point. Mr Somerville represented the appellant and Mr Warren, solicitor, represented Mr Highlands.
Mr Somerville submitted that the Arbitrator’s “finding” was “effectively final relief” because it dealt with the nature of the injury and it was not open to the Arbitrator to make that finding. He said that the finding was a direction to the AMS to apply AMA5 in a particular way.
I do not accept Mr Somerville’s submissions, which are inconsistent with established authority. The Arbitrator’s orders are clearly interlocutory. The test of whether a court’s order, determination or ruling is interlocutory “depends on the nature of the order made; the test is: does the judgment or order, as made, finally dispose of the rights of the parties?” (per Gibbs J (as his Honour then was) in Licul v Corney [1976] HCA 6; 180 CLR 213 at 443–444).
I will deal first with the claim for lump sum compensation. The Arbitrator made no order finally disposing of the parties’ rights. He merely referred the claim for lump sum compensation to an AMS for assessment. In a case where injury has not been disputed, that order was appropriate (Greater Taree City Council v Moore [2010] NSWWCCPD 49; 12 DDCR 39) and I do not understand it to be challenged.
Neither that order, nor the challenged “finding”, has finally disposed of the parties’ rights. An AMS will determine the extent of Mr Highlands’ whole person impairment and that finding, subject to any appeal to a Medical Appeal Panel under s 327, will be conclusively presumed to be correct as to the extent of whole person impairment as a result of the injury (s 326 of the 1998 Act). Contrary to Mr Somerville’s submission, in making his or her assessment of whole person impairment, the AMS is not bound by the Arbitrator’s “finding” (Haroun v Rail Corp of New South Wales [2008] NSWCA 192; 7 DDCR 139). It follows that granting leave to appeal the Arbitrator’s finding is neither necessary nor desirable for the proper and effective determination of the claim for lump sum compensation.
With respect to the claim for hospital and medical expenses, which Mr Somerville has completely ignored in his submissions, which wrongly stated that the claim was only for lump sum compensation, the Arbitrator made no order for the payment of those expenses. It follows that the Arbitrator made no order finally disposing of that part of the claim. As the Arbitrator refused leave to the appellant to dispute the two unnotified matters, and as the appellant offered no other valid reason for disputing the claim for hospital and medical expenses, he was entitled to enter an award for the payment of those expenses, without making the challenged “finding”. For reasons that have not been explained, he did not do so. Nevertheless, Mr Highlands has not challenged that failure and it is not appropriate for me to deal with it.
It follows that the Arbitrator’s finding with respect to the connection between the 2011 surgery and the 2005 injury, so far as it relates to the claim for hospital and medical expenses, is also interlocutory because it has not finally determined the parties rights on that issue and the Arbitrator made no final orders. As with the claim for lump sum compensation, it is neither necessary nor desirable for the proper and effective determination of the claim for hospital and medical expenses that leave to appeal be granted.
The above findings are sufficient to dispose of the appeal: as the orders made are interlocutory, and it is neither necessary nor desirable for the proper and effective determination of the dispute, leave to appeal is refused. However, in view of Mr Somerville’s surprising submissions on appeal I make the following additional observations for the avoidance of doubt about the merits of the appeal.
The submission that the Arbitrator had no jurisdiction to make the challenged finding has completely ignored the way the parties conducted the arbitration and ignored the Arbitrator’s detailed reasons. Those reasons make it clear that the Arbitrator made the challenged finding on the assumption that he was wrong in refusing to grant leave to dispute the nexus issue (T16.42–46). In other words, he assumed, in the alternative, that the appellant had leave to argue the nexus point and he considered that issue on its merits. In these circumstances, it is not open to the appellant to complain on appeal that the Arbitrator had no jurisdiction to determine the merits of the dispute.
To understand how the Arbitrator came to consider the nexus issue it is necessary to consider the proceedings at the arbitration. In response to the Arbitrator’s express invitation to Mr Somerville to “just do it all at the one time” (T4.1), that is, the application for leave to dispute the nexus issue and the merits of the issue, Mr Somerville made lengthy submissions in support of the appellant’s contention that the need for the 2011 surgery had not resulted from the 2005 injury (see T4–7). For reasons given, which have not been challenged on appeal, the Arbitrator (rightly) rejected Mr Somerville’s arguments. He was therefore entitled to find, in the alternative, that the need for the 2011 surgery resulted from the 2005 injury. That is what he did.
Last, the argument that the Arbitrator lacked jurisdiction was not an argument raised at the arbitration. After summarising the issues (at T1.36 – T2.35), which made no reference to whether any issue of jurisdiction arose, the Arbitrator asked (at T2.45) if the parties agreed with his summary. Other than counsel for Mr Highlands suggesting that the Arbitrator had an incorrect date for one of the operations, neither counsel suggested that the Arbitrator had not accurately identified the issues. At no stage did Mr Somerville suggest that the Arbitrator did not have jurisdiction to make the alternative finding he made that is now the subject of challenge. It is therefore not open to suggest on appeal that the Arbitrator erred in his approach. It is not an error for an Arbitrator not to deal with a point never argued (Brambles Industries Ltd v Bell [2010] NSWCA 162).

CONCLUSION

This appeal was misconceived. It completely ignored the proceedings at the arbitration and the Arbitrator’s reasons. Leave to appeal is refused because the orders made are interlocutory and it is neither necessary nor desirable for the proper and effective determination of the dispute that leave be granted. Moreover, the proposed appeal is without merit and, if leave were granted, has no prospect of success. If he erred in refusing leave to dispute the nexus issue, the Arbitrator dealt fully with the merits of the appellant’s arguments on that issue and rightly rejected those arguments. His reasons for doing so have not been challenged and it is those reasons that provided the basis for his challenged finding.

DECISION

Leave to appeal is refused.

COSTS

The appellant employer is to pay the respondent worker’s costs of the appeal, as agreed or assessed.

Bill Roche
Acting President

26 June 2014

I, JACQUELINE HAGGER, CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF BILL ROCHE, ACTING PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.

ASSOCIATE