Woodyard v MJ Hanna & Sons

[2008] NSWWCCPD 37

WORKERS COMPENSATION COMMISSION

DETERMINATION OF APPEAL AGAINST A DECISION OF

THE COMMISSION CONSTITUTED BY AN ARBITRATOR

CITATION:Woodyard v M J Hanna & Sons [2008] NSWWCCPD 37

APPELLANT:  Walter Woodyard

RESPONDENT:  M J Hanna & Sons

INSURER:CGU Workers Compensation (NSW) Limited

FILE NUMBER:  WCC10209-06

DATE OF ARBITRATOR’S DECISION:          19 November 2007

DATE OF APPEAL DECISION:  27 March 2008

SUBJECT MATTER OF DECISION:                Reasons or adequacy of reasons for decision; application of the steps in Mitchell v The Central West Health Service (1997) 4 NSWCCR 526; exercise of discretion under section 40(1) of the Workers Compensation Act 1987; difference between probable earnings and ability to earn.

PRESIDENTIAL MEMBER:  Deputy President Gary Byron

HEARING:Determined on the papers

REPRESENTATION:  Appellant: Carroll & O’Dea Lawyers

Respondent: Lyons Barnett Kennedy

ORDERS MADE ON APPEAL:  Paragraph 1 of the Arbitrator’s decision dated 19 November 2007 is revoked.

Paragraphs 2 and 3 are confirmed.

The matter is remitted to the Arbitrator concerned for determination afresh, in accordance with these Reasons.

The Respondent Employer is to pay the Appellant Worker’s costs of this appeal.

BACKGROUND

1. On 21 December 2007, Mr Walter Woodyard, the Appellant Worker, sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Workers Compensation Commission against a decision, dated 19 November 2007.

1. The Respondent Employer to the Appeal is M J Hanna & Sons.

1. The Insurer is CGU Workers Compensation (NSW) Limited.

1. M J Hanna & Sons employed Mr Woodyard as a sales assistant on 5 March 1999.  At the time of his injury he was working 26.5 hours per week, usually Monday to Wednesday, and four hours each Saturday.

1. On 30 August 1999, while walking upstairs to a storeroom to collect stock, Mr Woodyard slipped and fell, sustaining an injury to his back.  He was off work for about one week.  He made several attempts to return to work but on each occasion he could not do so because of pain.

1. He reported the injury on 31 August 1999 and submitted a ‘Workers Compensation Claim Form’ on 21 September 1999.  The Insurer accepted the claim and commenced weekly payments of compensation.

1. On 6 April 2000 the Insurer wrote to Mr Woodyard informing him that liability was denied from that date, with weekly payments to be made until 19 April 2000.

1. On 6 July 2006 an ‘Application to resolve a Dispute’ was registered in the Commission, seeking payment of weekly benefits compensation from 20 April 2000 to date and continuing at the rate of $466.33 gross per week, together with medical expenses.  The Application also identified a threshold dispute for work injury damages or commutation.

1. M J Hanna & Sons filed a Reply on 21 July 2006.  A number of issues were put in dispute but the principal issue was incapacity.

1. The matter was listed for conciliation/arbitration before a Commission Arbitrator on 17 October 2006.  The dispute could not be resolved and it proceeded to arbitration.  At the hearing, the parties tendered a number of additional documents, in particular, extensive medical records relating to Mr Woodyard’s psychiatric treatment over the years, both pre and post dating his injury, while employed by M J Hanna & Sons.

1. In a reserved decision issued on 16 April 2007, the Arbitrator found in favour of Mr Woodyard, entering an award pursuant to section 40 of the Workers Compensation Act 1987 (‘the 1987 Act’) at various rates from 20 April 2000 to date and continuing. An order was made for payment of certain medical expenses in respect of Mr Woodyard’s “physical injury” together with “… the Depressive Illness associated with that injury.” The Arbitrator also determined that Mr Woodyard be referred to an Approved Medical Specialist (‘AMS’) to assess whether the degree of permanent impairment from the injury was at least 15%.

1. On 8 March 2007, Dr Maxine Walden, AMS, issued a ‘Medical Assessment Certificate’ (‘MAC’) to the effect that Mr Woodyard suffered a 7% whole person impairment by way of psychological injury and on the same date, Dr Tony Blue, AMS, certified that he was suffering a 2% whole person impairment as a result of injury to his thoracic spine.

1. On 14 May 2007 M J Hanna & Sons appealed the decision of the Arbitrator.  The Acting Deputy President revoked the decision on 27 September 2007 (MJ Hanna & Sons Pty Limited v Woodyard [2007] NSWWCCPD 202) and remitted the matter to another Arbitrator for determination afresh in accordance with her Reasons for decision. She further ordered, “The costs of the proceedings before the Arbitrator on 17 October 2006 should follow the event when the matter is determined.” No order was made as to the costs of the appeal.

1. In allowing the appeal, the Acting Deputy President said at [72] of her Reasons:

“The appeal is allowed. The Arbitrator erred in the application of s. 40 of the 1987 Act in two respects: firstly, by incorrectly calculating comparable earnings and secondly, by failing to provide adequate reasons or properly identify factors taken into account in the exercise of his discretion. The arbitrator further erred in his apparent reliance upon ‘evidence’ not admitted in the proceedings, and his finding that ‘… there is no allegation of any intervening stress factor in the Applicant’s life’ in concluding that ‘… the effects of the physical injury are a substantial contributing cause of his continuing depression …’ was against the weight of the evidence.”

1. The matter was duly assigned to another Arbitrator who ultimately determined the matter, issuing a ‘Certificate of Determination’ dated 19 November 2007, together with a ‘Statement of Reasons for Decision’.  That decision, in part, is the subject of this Appeal.

THE DECISION UNDER REVIEW

1. The ‘Certificate of Determination’, dated 19 November 2007 records the Arbitrator’s orders as follows:

“1.The Respondent will pay to the Applicant the sum of $50.00 per week from 20 April 2000, to date and continuing.

2.The Respondent will pay the Applicant’s s. 60 expenses in relation to the injury to his lumbar spine.

3.The Respondent will pay the Applicant’s costs, in accordance with the Presidential Member’s order for the first arbitration as well as this hearing, as agreed or assessed.  This matter before me was complex and I certify an uplift of the maximum 30 percent in relation to that hearing.  The Respondent will pay the Applicant’s costs of the hearing before Arbitrator Theobald as agreed or assessed.”

ISSUES IN DISPUTE

1. The issues in dispute are found in the grounds of appeal.  Mr Woodyard submits that:

1.The Arbitrator erred in failing to provide reasons, or adequate reasons, demonstrating the basis for the exercise of his discretion pursuant to section 40(1) of the 1987 Act;

2.The Arbitrator erred in failing to follow the “five step” approach to an award pursuant to section 40 of the 1987 Act, and

3.The Arbitrator erred in failing to award the Appellant weekly compensation “on the basis for a reduction [sic] the mathematical difference between the Appellant’s comparable earnings and his ability to earn in suitable employment.”

ON THE PAPERS REVIEW

1. Section 354(6) of the Workplace Injury Management and Workers Compensation Act 1998 (‘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.”

1. 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 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

1. Before proceeding to deal with an appeal the Commission must determine whether the application meets the requirements of section 352 of the 1998 Act.

1. The appeal was lodged within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act.

1. There is no dispute that the monetary threshold set out in section 352(2) of the 1998 Act has been met.  The amount of compensation at issue on appeal is both at least $5,000 and at least 20% of the amount awarded in the decision of the Arbitrator that is appealed against.

1. Leave to appeal is granted.

SUBMISSIONS ON APPEAL

1. Mr Woodyard submits:

“At paragraph 33 of his decision the Arbitrator determined the Appellant’s current comparable earnings were $465 per week.

At paragraph 76 of his decision the arbitrator made a finding that the Appellant’s probable earnings were $365 per week.

At paragraph 60 of his decision the arbitrator determined the Appellant’s current ability to earn was $63 per week.

At paragraph 77 of his decision the Arbitrator made a finding that the Appellant was able to earn in some suitable employment an average weekly amount of $63.

At paragraph 78 the Arbitrator found:
‘The reduction between those figures is $302.’

However at paragraph 79 the Arbitrator found:

‘There will be an award in favour of the Applicant in respect of the claim for weekly compensation pursuant to section 40 in the sum of $50 from 20 April 2000 to date and continuing.’

The arbitrator’s reasons for decision are silent as to why he has ‘exercised his discretion’ to award the Appellant less than the mathematical difference between his probable earnings and his ability to earn.

Fundamentally, the Appellant submits that the reasons fail to disclose the reasoning process adopted by the Arbitrator.”

1. Mr Woodyard seeks an award in the sum of $302 per week from 20 April 2000 and continuing. In the alternative, he submits that the “Deputy President should undertake a s40 assessment without referring the matter for a rehearing before an Arbitrator.”

1. As to ground 1 of the Appeal, M J Hanna & Sons submit:

“1)The recitation of the Arbitrator’s findings set out in the Appellant’s submissions are correct. The Respondent submits the reasons for the exercise of his discretion pursuant to S40 (1) of the WCA are set out under the specific heading ‘Exercise of discretion and ability to earn’.

2)At paragraphs 34 through to (ultimately) par 75, whilst the reasoning therein traverses the medical evidence, it is submitted that such analysis is sufficient to accord with Mahoney J. A.’s test in Soulemzis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247.

‘A judge is not required to make a finding in respect of every fact leading to the final conclusion of fact … Nevertheless a judge must distinguish between the essentials and the peripherals … Reasons are necessary as an incidence to a judicial decision to provide a sufficient explanation of why an order is made.  The judge is to apprise the parties of the broad outline and constituent facts of the reasoning upon which he or she has acted…  It is necessary that the essential grounds upon which the decision rests should be articulated.’

3)If, by way of example, the arbitrator had added a paragraph after paragraph 78 as follows:-

‘For the various reasons already set out in paragraphs 34 to 75 herein I exercise my discretion pursuant to S40 (1) of the WCA to reduce the worker’s entitlement as follows …’ then the judgment in the Respondent’s respectful submission would most probably not have been appealed. This matter is one where regular practitioners would otherwise invoke the ‘slip rule’, in order to avoid the costs of an Appeal.”

1. As to ground 2 of the Appeal, M J Hanna & Sons submit:

“1)As there are no Appellant submissions in support of the ground, it is assumed that it follows from Ground 1 i.e. the Appellant complains that the fourth step in Mitchell v Central West Health Service 14 NSWCCR 526 was not taken by the Arbitrator. The Respondent submits as per Ground 1 above.

2)The other steps are found in the Arbitrator’s judgment (AJ)

As follows:-

Step 1 S40 (2)(a) – comparable earnings see pars AJ 33 and 76.

Step 2 S40 (2)(b) – see pars AJ 60 and 77.

Step 3 See par AJ 78.

Step 5 See par AJ 79.

1. As to ground 3 of the Appeal, M J Hanna & Sons submit:

“1)This action would only have been appropriate after the Arbitrator had examined ‘all the facts’ and exercised his discretion pursuant to S40 (1) WCA i.e. that he had come to the conclusion that there were no factual matters such as ‘… other supervening illnesses or injuries, the personal employment history of the worker and so on.’ (per McHugh J.A. in Australian Wire Industries Pty Ltd v Nicholson 1 NSWCCR 50 at P55A).

2)Clearly the Arbitrator (as had Deputy President Moore in her Judgment at par 49) [sic] in AJ in pars 41 and 72, 74 and 75 that the Appellant’s psychological state, while the cause of incapacity generally was not relevantly affected by the alleged injury in the employ of the Respondent.

3)Further, in adopting P.D. [sic] Moore’s findings at AJ pars 69 to 71, the arbitrator demonstrated there were other ‘… supervening illnesses and injury’ upon which he should base his discretion.  A convenient summary of the various illnesses/ailments the Appellant suffers is contained in D.P Moore’s Judgment par 66.

4)It is submitted that the Arbitrator was not then able to award the simple mathematical difference to the theoretical findings pursuant to sections 40 (2) (a) and S40 (2) (b).”

1. M J Hanna & Sons submit further:

“Whilst the Appeal does not raise the issue, this matter concerned compensation entitlements from 20/4/2000 to date and continuing.  The Arbitrator found in AJ par 33 that the Appellant’s comparable employment would return $365.00 per week now in respect of a 26.5 hour week (consistent with D.P. Moore’s finding at par 24 of her Judgment) and the Appellant’s capacity to earn was now $63.00 per week (AJ par 60).

Given the Arbitrator’s ultimate award after relevantly exercising his discretion of $50.00 per week was ‘proper in the circumstances of the case’ (S40 (1)), the Respondent did not seek to appeal that decision (presumably, various adjusted findings producing ongoing mathematical differences would relevantly be reduced back to the $50.00 so awarded upon the exercise of that discretion).  Should however the matter be returned for redetermination, it is submitted findings in respect of the Appellant’s comparable earnings/ability to earn should deal with the intervening 7 years.

In this respect it as noted above, at AJ par 33 the Appellant’s comparable employment should be based on a 26.5 hour week.

Further, whilst finding the Appellant’s current ability to earn as now only 4 hours per week on the basis of how the Arbitrator found the Appellant to present, it is noted that the previously unchallenged finding of Arbitrator Theobald was an ability to earn working 20 hours a week as a clerical worker at all relevant times from 20/4/2000 to the date of his Judgment, the 4/11/2006.

Arbitrator Wynyard was unable to reconcile the apparent discrepancy in the Appellant’s presentation (see A Theobald’s J at par 6, c/f Wynyard’s J par 38), but made his determination of his then ability to earn in light of his observations.”

1. M J. Hanna & Sons submit that the decision of the Arbitrator should be confirmed.  Alternatively, it submits that the matter ought to be returned to the Arbitrator to finalise his decision in accordance with appropriate directions, given the extensive material already dealt with by him in his original decision.

DISCUSSION AND FINDINGS

1. This dispute has an unusual history in that there have been three prior determinations, being the original determination by an Arbitrator, dated 16 April 2007, the review on appeal by an Acting Deputy President following which, on 27 September 2007, she revoked the Arbitrator’s decision and remitted the matter to another Arbitrator for determination afresh in accordance with her Reasons, and the determination of another Arbitrator, dated 19 November 2007, the subject of this Appeal.

1. In this matter, Mr Woodyard must demonstrate that the decision of the Arbitrator is affected by some legal, factual or discretionary error (Allesch v Maunz (2000) 203 CLR 172; The King Island Company Limited v Deery [2005] NSWWCCPD 1) in order to enliven my power to interfere with the Arbitrator’s decision pursuant to section 352(7) of the 1998 Act. Moreover, the error must be such that, but for it, a different decision should have been made in its place (see Snow Confectionary Pty Ltd v Askin [2004] NSWWCCPD 56, and Absolon v NSW TAFE [1999] NSWCA 311).

1. Mr Woodyard asserts that the Arbitrator has fallen into error on three specific aspects, but adds, “Fundamentally, the Appellant submits that the reasons fail to disclose the reasoning process adopted by the Arbitrator.”

1. Section 294(1) and (2) of the 1998 Act provide:

“(1)If a dispute is determined by the Commission, the Commission must as soon as practicable after the determination of the dispute issue the parties to the dispute with a certificate as to the determination.

(2)A brief statement is to be attached to the certificate setting out the Commission’s reasons for the determination.”

1. Rule 15.6 of the Workers Compensation Commission Rules 2006 provides:

(1)A statement of the Commission’s reasons referred to in section 294(2) of the 1998 Act is to include:

(a)the Commission’s findings on material questions of fact, referring to the evidence or other material on which those findings were based, and

(b)       the Commission’s understanding of the applicable law, and

(c)the reasoning processes that lead the Commission to the conclusions it made.

(2)Without limiting subrule (1), the reasons set out in the statement referred to in subrule (1) are to be stated sufficiently (in the opinion of the Commission) to make the parties aware of the Commission’s view of the case made by each of them.”

1. M J Hanna & Sons submit that the Arbitrator has provided adequate reasons for his decision and points to the test laid down by Mahony JA in Soulemezis v Dudley Holdings Pty Ltd (1987) 10 NSWLR 247 (‘Soulemezis’), (restated at [26 (2)] above).

1. The requirement for the Arbitrator to give lengthy reasons would be unreasonable and inconsistent with the objectives of the Commission (see Liverpool City Council v Trovato [2004] NSWWCCPD 15). It is generally not necessary for the Arbitrator to refer in detail to each and every step in the reasoning process (Yates Property Corporation Pty Ltd (In Liquidation) v Darling Harbour Authority (1991) 24 NSWLR 156; Ainger v Coffs Harbour City Council [2005] NSWCA 424). However, a statement of reasons must set out “with enough clarity, the relevant findings on material questions of fact, the Arbitrator’s understanding of the applicable law [and] the Arbitrator’s application of the law to those findings” (Snow Confectionary Pty Ltd v Askin [2004] NSWWCCPD 56 at [45] (‘Askin’)).  The reasons will be adequate, notwithstanding that they do not set out the statutory provisions at length, nor specify and examine all relevant and judicial authority on the matter decided (Askin). 

1. Mr Woodyard asserts that what is missing from the Arbitrator’s decision as to the exercise of his discretion under section 40 of the 1987 Act is the “essential grounds upon which the decision rests” (Soulemezis). This was essentially, the basis upon which the Acting Deputy President revoked the decision of the first Arbitrator and remitted the matter to another Arbitrator for determination afresh. Specifically, she said, “In the present case, the arbitrator failed to adequately identify the ‘essential grounds’ upon which his decision in relation to the discretionary aspects of section 40 of the 1987 Act was based.”

Did the second Arbitrator err in failing to provide reasons, or adequate reasons, demonstrating the basis for the exercise of his discretion pursuant to section 40(1) of the 1987 Act?

1. M J Hanna & Sons agree, “the recitation of the Arbitrator’s findings set out in the Appellant’s submissions are correct”.  It submits that the reasons for the exercise of his discretion are set out in his Reasons and that his analysis satisfies the test in Soulemezis (see [26 (2)] above).

1. Section 40(1) of the 1987 Act provides:

“40    Weekly payments during partial incapacity - general

(1)Entitlement.  The weekly payment of compensation to an injured worker in respect of any period of partial incapacity for work is to be an amount not exceeding the reduction in the worker’s weekly earnings, but is to bear such relation to the amount of that reduction as may appear proper in the circumstances of the case.”

1. The power to determine the amount of weekly compensation for partial incapacity under this section, is a discretionary power, and the relevant circumstances of each case must be given appropriate consideration (Pratt v Claydon (1996) 14 NSWCCR 86. See also Lovett Building Co Pty Ltd v Burns (1993) 29 NSWLR 4759 NSWCCR 58).

1. The discretion is exercised in the application of the principles in Mitchell v Central West Area Health Service (1997) 14 NSWCA 526 (‘Mitchell’).  In this case the Court of Appeal said at 529-530:

“An award of weekly payments of compensation is not to exceed the ‘reduction in the worker’s weekly earnings’ (s 40). Section 40, like its predecessor s 11 of the Workers Compensation Act 1926, requires the judge making an award to follow a number of steps, although the precise number is a matter of some debate: cf JC Ludowice & Son Ltd v Cutri (1992) 26 NSWLR 580 at 582. The judicial process is discussed in Australian Wheat Board v Panteleo [1984] 2 NSWLR 530 [‘Panteleo’].  For present purposes, it is sufficient to observe that the Court is required:

1.   To determine the weekly amount the worker would probably have been earning if uninjured (s40 (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’ (s40 (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) (s40 (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’ (s40(1)).”

1. It is not appropriate to reduce the mathematical difference between the probable earnings of the worker and the ability to earn, solely because the worker is not looking for work (Mitchell, 534).

1. A variety of situations in which the courts have held it to be appropriate to use the discretion to reduce the arithmetical difference between Steps 1 and 2 of the Mitchell ‘test’ are set out in Khouri v Pacific National (NSW) Pty Ltd [2008] NSWWCCPD 23:

“(a)where the worker has retired or suffered some supervening illness or injury (Australian Wire Industries v Nicholson (1985) 1 NSWCCR 50 at 55, and Australian Iron & Steel Pty Ltd v Elliott (1966) 67 SR (NSW) 87 [‘Elliott’]);

(b)where the worker had been retired for two years before the injury, which occurred during a short period of work, which was a one-off job (Pratt v Claydon (1996) 14 NSWCCR 86);

(c)where the worker was imprisoned during the period of partial incapacity (Stranlund v Mid Coast Meat Co Pty Ltd (1999) 19 NSWCCR 91);

(d)since the injury the worker has been dismissed because of a criminal conviction (Morgan v Commissioner for Railways [1972] WCR 330);

(e)before the injury the worker chose to work for only limited periods each year (May v Eisenhower [1967] WCR 137), and

(f)where the worker was pregnant (Wrigley Co Pty Ltd v Holland (2002) NSWCCR 463).”

1. A factual inquiry as to the financial loss sustained by the worker by reason of his or her partial incapacity must be carried out (Elliott). If the weekly payments are to be less than the calculation made pursuant to section 40(2) of the 1987 Act, this should be supported by an adequate indication of the basis for the exercise of the discretion.  The failure to do so may lead to an error of law (Kesen v Luke Singer Pty Ltd (1989) 18 NSWLR 566; Gregory R Ball Pty Ltd v Stead (1993) 9 NSWCCR 148). The exercise of the discretion is subject to an award not exceeding the reduction in the worker’s weekly earnings, and being “proper in the circumstances of the case” (see Panteleo; Bevan v Energlyn Colliery Co [1912] 1 KB 63).

1. Mr Woodyard contends that the Arbitrator’s Reasons “are silent as to why he has ‘exercised his discretion’ to award the Appellant less than the mathematical difference between his probable earnings and his ability to earn.”

1. M J Hanna & Sons submit that the reasons for his exercise of the discretion under section 40(1) of the 1987 Act “are set out under the specific heading “Exercise of discretion and ability to earn”. However, it is then submitted that the Arbitrator’s analysis is found at paragraphs 34 to “ultimately”, paragraph 75 of his Reasons.

1. I am mindful that the Arbitrator was required to determine this matter afresh in accordance with Acting Deputy President Moore’s reasons for decision (see section 352(7) of the 1998 Act).  The Arbitrator was therefore required to observe and comply with the “decision or directions” of the Deputy President on remittal to him.  The decision of the Arbitrator must necessarily be viewed as having been made in that context, and not in isolation.  In determining the matter afresh, the Arbitrator in this matter, acknowledged at [34] of his Reasons, “As has been seen, one of the grounds upon which the appeal was allowed was the failure by the original Arbitrator to provide adequate reasons or properly identify factors taken into account in the exercise of his discretion.”

1. The Acting Deputy President’s Reasons state, in part:

“65.However, as the Appellant submits, ‘… the Arbitrator is required to take all matters such as the Applicant’s other supervening illnesses into account in the section 40(1) exercise …’ (See Mitchell v Central West Health Service (1997) 4 NSWCCR 526 and Australian Wire Industries Pty Limited v Nicholson (1985) 1 NSWCCR 50 and Singh v Taj (Sydney) Pty Limited [2006] NSWCA 330).

66.In the Appellant’s submission, the Arbitrator should have taken into account factors such as Mr Woodyard’s obesity, diabetes and cardiovascular problems as described by Dr Whittington, and right knee and right carpal tunnel syndrome as described by Dr Mahony in a report dated 16 July 2004 (unrelated to the injury on 30 August 1999).  In addition, in a report from Dr Anthony Ridings at the Grice Avenue Medical Centre dated 1 March 2004, Dr Ridings set out ‘… your several past and continuing illnesses … which included: depression, carpal tunnel syndrome, gastro-oesophageal reflux disease, asthma, sciatica’.  Dr Ridings then referred to the development of ‘other illnesses in the course of the next two years (presumably since 2001 when Mr Woodyard first consulted Dr Ridings) as including hypertension, diabetes and erectile failure’.

67.I accept the Appellant’s submission that it is not at all clear from the Arbitrator’s statement at paragraph 69 whether or not he in fact took into account the various factors to which I have referred.  However, the Arbitrator nonetheless stated that he had ‘already taken into account that there are other factors which prevent the Applicant working …’, but it is difficult to determine just when and where the Arbitrator considered these matters.  Certainly a reference is made to Mr Woodyard’s obesity at paragraph 59, but that appears to be the only reference to his other medical conditions.

68.It is simply impossible to tell from the Arbitrator’s statement just what ‘factors’ he took into account.”

1. Under the heading “Exercise of discretion and ability to earn”, comprised of [34] – [41] the Arbitrator considered Mr Woodyard’s psychological condition, as well as his ability to earn pursuant to section 40(2)(b) of the 1987 Act. He concluded:

“41.These opinions support the proposition that the measure of incapacity could not be related solely to the physical injuries sustained.  As will be seen when considered in the light of the findings of the Presidential Member as to the pr-existing psychological condition (with which findings I respectfully concur), Mr Baker’s submission that the incapacity was caused by other factors beside the physical injuries sustained in the fall obtains some weight.”

1. The Arbitrator canvassed the available medical evidence and Mr Woodyard’s medical condition and concluded at [59]:

“The nature of the back injury suffered is relevant to the likely level of incapacity arising from it, as distinct from the many other non-employment related incapacitating conditions from which the Applicant suffers.”

1. He stated further at [60]:

“That the combined effect of the medical view and the Applicant’s presentation before me satisfy me that the Applicant has a limited ability to earn.  This I assess as restricted to 4 hours per week at $15.75 per hour, a weekly amount of $63 in some clerical capacity as suggested by the original Arbitrator – one shift per week of four hours, say, at a help desk.”

1. The Arbitrator then said at [61]:

“Before moving to the question of whether that reduction is proper in these circumstances, as required by s.40 (1) of the 1987 Act, it is convenient to deal with the remittal on the question of the psychological injury.”

1. The Arbitrator found at [72] that the relationship between Mr Woodyard’s psychological condition and his physical condition has not been demonstrated as a cause of any incapacity of itself.  He was not satisfied that this increase caused any additional incapacity to that already present as a result of the psychological state “already present as described by Dr Whittington in 2002.”  He stated at [75] that there is no record of Mr Woodyard complaining that the physical injuries had anything to do with his psychological state.

1. While the Arbitrator complied assiduously and in some detail with the Acting Deputy President’s finding that “other factors” needed to be articulated, he did not return to discuss or make any finding as “to the question of whether that reduction is proper in these circumstances”, as he indicated at [61] of his Reasons that he would, and as he was required to do by Section 40 (1) of the 1987 Act. It would appear that this was an oversight.

1. In light of the Arbitrator’s omission, I do not agree with M J. Hanna & Sons that the Arbitrator has adequately set out his reasons for decision (or indeed that the defect could have been cured by invoking the slip rule). The Arbitrator has not completed the task in order to satisfy the requirements of section 40(1) of the 1987 Act, in accordance with relevant legal authority.

1. The Arbitrator is in error in failing to complete this critical step in the process.

1. This ground of appeal is made out.

Did the Arbitrator err in failing to follow the ‘five step’ approach to an award pursuant to section 40 of the 1987 Act?

1. I agree with M J Hanna & Co that essentially, the Mitchell “steps” are to be found in various parts of the Arbitrator’s Reasons, as set out in its submissions.  However, a more ordered and systematic approach in setting out the five “steps” is preferable for obvious reasons, and in this case, may have avoided this particular ground of appeal being made at all.

1. Subject to my findings in relation to the previous ground of appeal, this ground of appeal is not made out.

Did the Arbitrator err in failing to award the Appellant weekly compensation “on the basis of a reduction of the mathematical difference between the Appellant’s comparable earnings and his ability to earn in suitable employment”?

1. The Arbitrator concluded on the basis of the medical evidence and Mr Woodyard’s medical condition that he has a limited ability to earn.  He was satisfied that Mr Woodyard’s incapacity could not be related solely to the physical injuries sustained.  He canvassed in some detail the “other factors” which the Acting Deputy President found to be missing from the Reasons of the first Arbitrator.

1. The Arbitrator complied with the decision and directions of the Acting Deputy President, in adopting this course. Because of his failure to satisfy the requirements of section 40(1) of the 1987 Act, the Arbitrator may (or may not have) erred as alleged. However, I do agree with Mr Woodyard to the extent that the Arbitrator’s assessment should have been more clearly exposed.

1. Accordingly, I make no finding on this ground.

CONCLUSION

1. The appeal is successful.  The Arbitrator has erred at law as set out in these Reasons.  I propose to remit the matter to the Arbitrator concerned for consideration afresh, in relation only as to the issues relating to the matter of weekly payments of compensation, which is the subject of this Appeal.

GENERAL SUBMISSIONS MADE BY THE RESPONDENT EMPLOYER

1. M J Hanna & Sons make submissions as to matters of detail not raised by Mr Woodyard in his appeal.  It is not appropriate to deal with these matters at this point.  However, it is appropriate for the Arbitrator to address and consider them, in his determination afresh.  In relation to these matters, and the substantive issues relating to the matter of weekly payments, the Arbitrator may wish to provide an opportunity to the parties to make further submissions, to assist him in the exercise.

DECISION

1. The appeal is successful.  Paragraph 1 of the Arbitrator’s decision dated 19 November 2007 is revoked.  Paragraphs 2 and 3 are confirmed.  The matter is remitted to the Arbitrator concerned for determination afresh, in accordance with these Reasons.

COSTS

1. The Respondent Employer is to pay the Appellant Worker’s costs of this appeal.

Gary Byron

Deputy President  

27 March 2008

I MARIE JOHNS CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF GARY BYRON DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.

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