Worthington v Alexander
[2005] NSWWCCPD 12
•1 March 2005
WORKERS COMPENSATION COMMISSION
APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:Worthington v Alexander [2005] NSW WCC PD 12
APPELLANT: James Joseph Worthington
RESPONDENT: Michael Victor Alexander
INSURER:GIO Workers Compensation (NSW) Limited
FILE NUMBER: WCC12117-2003
DATE OF ARBITRATOR’S DECISION: 8 December 2003
DATE OF APPEAL DECISION: 1 March 2005
SUBJECT MATTER OF DECISION: Section 55 of the Workers Compensation Act 1987
PRESIDENTIAL MEMBER: Dr. Gabriel Fleming, Deputy President.
REPRESENTATION: Appellant: Phillips Fox Lawyers
Respondent: Carroll & O’Dea Lawyers
ORDERS MADE ON APPEAL: The decision of the Arbitrator, dated 4 December 2003, is revoked and the following decision is made in its place:
1. The Employer has established that there has been a “change of circumstances” pursuant to section 55(1) of the Workers Compensation Act 1987.
2. The matter is referred back to the Registrar, for constitution to a different Arbitrator, to undertake a review of Mr Alexander’s weekly payment of compensation, pursuant to section 55(2) of the Workers Compensation Act 1987.
Background to the Appeal
Michael Alexander injured his right wrist on 19 October 1989 when working as a Shearer for James Worthington. He subsequently made a claim for workers compensation benefits.
In May 1992, the Compensation Court (His Honour Judge Egan) awarded him $10,186.88 in lump sum compensation for 15% loss of use of his right arm below the elbow, $8000.00 for pain and suffering, and interest on both sums.
On 10 February 1993 the Court awarded him continuing weekly compensation payments at the maximum statutory rate, as adjusted, under the Workers Compensation Act 1987 (‘the 1987 Act’) on the basis he was partially incapacitated for work. The Court also ordered that Mr Worthington pay him reasonable medical expenses related to his work injury (pursuant to section 60 of the 1987 Act).
GIO Workers Compensation (NSW) Limited is the relevant insurer.
In 1996 Mr Alexander secured full-time employment in a supermarket called Sissians. He earned $35,000.00 gross per year. In 1998 his Employer applied to the Compensation Court to vary/terminate this award of weekly benefits on the basis that Mr Alexander had a “change of circumstances”, pursuant to section 55 of the 1987 Act. This section provides that an employer, worker or the Workcover Authority may request a review of weekly payments where there is a “change in circumstances”. The Employer’s application was unsuccessful and His Honour Judge Davidson confirmed Mr Alexander’s continuing entitlement to weekly compensation payments pursuant to section 40 of the 1987 Act, at the statutory rate.
Mr Alexander has continued to receive weekly compensation benefits to date.
In 2002, together with his brother, Mr Alexander leased a hotel in Harden. He has worked there ever since. He works six days per week, for long hours, and draws $200 net income per week. The Employer now submits that, as a result of this, Mr Alexander has had a “change of circumstances”. On 10 July 2003 the Employer filed an Application in the Commission seeking to terminate or reduce the amount of weekly compensation payable to Mr Alexander. If the Commission determines that there has been a “change of circumstances”, weekly payments of compensation may be ended, reduced or increased (section 55(2) of the 1987 Act).
A Commission Arbitrator held a conciliation and arbitration hearing on 4 December 2003. At the conclusion of the proceedings she found that there had not been a relevant “change of circumstances” and made an order, among others, in favour of Mr Alexander, effectively continuing his weekly benefits. The Arbitrator’s orders were subsequently issued in a ‘Certificate of Determination’ dated 8 December 2003. The Arbitrator also ordered the Employer to pay Mr Alexander’s costs, as agreed or assessed. The Employer has now appealed against the Arbitrator’s decision.
Both parties have filed written submissions in the appeal. I also have before me all of the material that was before the Arbitrator and a transcript of the hearing and ex tempore reasons.
10.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.
11.Leave to appeal is granted.
Issue in Dispute
12.To be successful on appeal an Appellant must demonstrate that the Arbitrator has made an error of law, fact or discretion (Allesch v Maunz (2000) 203 CLR 172, Mayne Health Group t/as Nepean Private Hospital v Sandford [2002] NSW WCC PD 6). The primary issue in this appeal is: Did the Arbitrator err in finding that Mr. Alexander had not had a “change of circumstances” since the award of weekly compensation made to him by the Compensation Court in 1993?
13.The Arbitrator decided that there had been no relevant “change of circumstances”. She took into account the fact that he is able to work six days a week, although there has been no change in his diagnosis. She found that his symptoms did not appear to have changed substantially nor had the restrictions in respect of his inability to undertake duties that require repetitive lifting, grasping or twisting. These restrictions were first placed on him in 1991 and relate to the pain he experienced in his right arm.
14.The Employer submits that “[t]he central issue in this appeal is that a change in circumstances pursuant to section 55 of the 1987 Act is not restricted to a change of circumstances of the worker’s medical condition”. It argues that the Arbitrator erred in law in finding there had not been a “change of circumstances”, because she based this determination only on her finding that there had not been a change in the worker’s medical condition since the award was made in the Compensation Court on 10 February 1993. The Employer submits that a change in circumstances pursuant to section 55 need not be restricted to demonstrating a change in the worker’s physical condition since the making of the award: “[A] change in circumstances can be established regardless of whether a worker’s condition has improved, remained the same or worsened since an award of the Court is handed down”.
15.The Employer wants the Arbitrator’s order revoked, a determination made that there has been a change in circumstances, and the matter referred back to an Arbitrator to determine the outstanding issue of whether there are grounds to terminate or vary the award. Alternatively, the matter should be remitted for a fresh conciliation/arbitration hearing.
16.Mr Alexander wants the Arbitrator’s decision confirmed. He argues that there has been no legal, factual or discretionary error to ground the appeal. He submits the Arbitrator considered the relevant facts, the parties’ lengthy submissions, and all aspects of section 55 of the 1987 Act. Evidence of the worker’s medical condition, incapacity and changed employment circumstances, from working in the supermarket to working in his own business as a hotel manager, were before the Arbitrator when she made her decision.
Did the Arbitrator err in finding that Mr. Alexander had not had a “change of circumstances” since the award of compensation to him made by the Compensation Court in 1993?
17.In the proceedings before the Arbitrator, the Employer relied upon a medical report of Dr Bye, Orthopaedic Surgeon, dated 22 May 2003, who diagnosed the worker as suffering from medial humeral epicondylitis of the right elbow and possible ulnar neuritis, now resolved. He was satisfied the symptoms and physical findings were consistent with the presenting complaints. Dr Bye concluded Mr Alexander was unfit for his pre injury work as a Shearer but fit for selected duties avoiding repetitive lifting and elbow rotation. He confirmed a 15% permanent loss of efficient use of the right arm at or above, and below, the elbow. The Employer also relied upon a ‘Work Capacity Assessment’ report prepared by Empact Pty Ltd dated 20 May 2003. This report identified ‘Bar Manager/Assistant Bar Manager’ as a “post injury work capacity job option” for Mr Alexander.
18.Mr Alexander also relied on the above reports, in addition to financial records including the worker’s taxation returns, group certificates and bank statements, a number of other medical reports and certificates dated from 3 October 1989 to 23 April 1998 and his own unsigned statement dated September 2003.
19.Both parties have referred to the leading cases on section 55, of Atlas v Bulli Spinners Pty Ltd (1993) 9 NSWCCR 378 (‘Atlas’) and George Weston Foods Ltd t/as Tip Top Bakeries v Goldsmith (1998) 17 NSWCCR 253 (‘George Weston’). These authorities were considered in the decision of Arbitrator Rowland in Derose Pty Ltd t/as Sydney Park Royal Hotel v Sgouros WCC 2405-2002 (17 March 2003). Mr Alexander asserts that in both of these cases review under section 55 was enlivened only by a change of circumstances in respect of a worker’s medical condition or level of incapacity.
20.On appeal the Employer has also referred to the decision of Moroney J in Rooney v Australian Iron & Steel Pty Ltd (1993) 9 NSWCCR 372 (‘Rooney’).
21.The onus of proving a change of circumstances rests with the party who asserts it (Atlas), in this case the Employer, Mr Worthington. A “change of circumstances” is a necessary pre-condition for any review of the previous award. The starting point for a consideration of change of circumstances is the original decision and the findings as to the worker’s capacity to work (George Weston).
22.It is clear from Atlas and George Weston that “change of circumstances” is a threshold issue to be determined prior to review under section 55 of the 1987 Act. It is a gateway to review, not the review itself. Only where a “change of circumstances” is demonstrated is the Arbitrator empowered to review the worker’s substantive entitlements to workers compensation benefits. Sections 55(2) and 55(3) provide that weekly benefits may be ended, reduced or increased following review.
23.I have considered the cases relied upon by the parties as stating the relevant law, and can find no authority for the Arbitrator’s proposition that, in order to enliven review under section 55 of the 1987 Act, the applicant (the employer in this case) “ . . . must show that there has been a change in the medical condition or capacity for work and that this has occurred since the consent award” (transcript of reasons at pages 25-26). In my view this places too restrictive an interpretation on “change of circumstances” and this is not justified by the plain words of section 55(1), understood in their context. (I note that the Arbitrator did not restrict her consideration to a change in the worker’s “medical condition”, as submitted by the Employer on the appeal).
24.Atlas concerned an appeal from O’Toole CCJ in respect of an application by an employer under section 55. Kirby P, as he then was, gave the leading judgment; Mahoney and Clarke JJA agreed. Justice Kirby outlined the correct approach to section 55 review as follows:
“Having, therefore, before her an application for review, which required proof of a change in circumstances, O’Toole CCJ should have taken the following steps. She should have determined first whether the requisite change of circumstances had been shown by the employer to warrant the exercise of the power of review. If, by reason of differing evidence about the extent of the worker’s incapacity she were convinced that an applicable “change of circumstances” was shown justifying review, her Honour would then be obliged to exercise the powers conferred upon the Compensation Court by section 55(2) of the 1987 Act (or section 60(1) of the 1926 Act). This empowers the Compensation Court, relevantly, to end or reduce the weekly payment.”
25.The reference by Kirby P to “differing evidence of the worker’s incapacity” does not generally limit the meaning of “change of circumstances” in section 55. Atlas was largely concerned with the application of section 11(2) of the Workers Compensation Act 1926, in relation to the burden of proof on an employer to demonstrate the provision of “suitable employment”. The threshold determination by O’Toole CCJ as to “change of circumstances” was not in issue in Atlas, and Kirby P noted, having set out the principles applicable to the application of section 11(2), that:
“The foregoing principles do not appear to have been applied by O’Toole CCJ once she decided that there had been a relevant “change of circumstances” and that review of Freeman CCJ’s award was appropriate. I do not pause to consider whether that decision was a correct one on the facts, given the finding that some degree of incapacity continued, the continuing obligation which rested on the employer to provide suitable work and the lack of any evidence that it had done so or even sought to do so. I will assume that her Honour was authorised to pass to the reopening of the award and thus to determining, in accordance with section 11 (including section 11(2)), the workers entitlement to weekly compensation upon the review.”
26.In Atlas, Kirby P refers to a line of authorities that incorporated a “change of circumstances” test into the review of an award of weekly payments under the 1926 Act (section 60) prior to the introduction of section 55 of the 1987 Act. He refers to Coalcliff Collieries Ltd v Campbell (1964) 112 CLR 349. In that case the relevant “change of circumstances” was a statutory amendment to the Workers Compensation Act 1926 that allowed for consideration of basic wage increases. There had been no change to the worker’s physical condition. In Rooney, Moroney CCJ held that a worker’s acceptance of an early retirement package constituted a “change of circumstances” within section 55(1) entitling the worker to an increase of his weekly award payments.
27.George Weston also concerned the proper approach to the review of an award pursuant to section 55 of the 1987 Act. Sheller JA referred to “circumstances” in broad terms, relating the matters to be considered prior to review under section 55 to the “findings about the relevant circumstances at the time of the award” (at 259). The change relied upon in that case was the extent of the worker’s incapacity. His Honour stated that (at 260):
“A change of circumstances is a necessary precondition for any review… The matter for the Commissioner was the straightforward one of whether there had been any change in those circumstances and, if there had, whether that change justified a review of the weekly payment of compensation. The change of circumstances, on which the respondent [sic] relied, was that the respondent was no longer incapacitated. . . . The starting point was an unqualified acceptance of Judge Davidson’s findings about the capacity of the respondent at the time he gave his decision, followed by consideration of whether at the time the Commissioner was dealing with the matter the evidence showed that the circumstances, in this case the respondent’s incapacity, had changed. If the Commissioner was satisfied that the incapacity had lessened or no longer existed, it was open to him to review the weekly payments of compensation. But the Commissioner, in my opinion wrongly, directed himself to other questions concerned with the merit of Judge Davidson’s findings.”
28.In the absence of any authority on the precise meaning to be afforded to the phrase “change of circumstances” it should, in my view, be given it’s ordinary meaning (Cody v J H Nelson Pty Ltd (1947) 74 CLR 629). Its ordinary meaning must be understood within the context of the 1987 Act. The “change of circumstances” must have relevance to the worker’s entitlement to statutory weekly benefits. As Justice Sheller noted in Weston, the relevant “circumstances” will be those that were before the decision-maker at the time the award of weekly benefits and upon which the findings in relation to a statutory entitlement were made. Some “change[s] of circumstances” may be irrelevant to an entitlement to weekly benefits, for example, a change of residential address or, in some cases, a change of marital status.
29.There is no reason to restrict “change of circumstances” to medical issues or incapacity although in many cases a resolution of medical issues or change in capacity to work is the central reason for making an application for review under section 55. The facts of the present case, and those of Rooney (discussed above), are good examples of other relevant changes of circumstances. Where compensation is payable over many years there may also, for example, be changes in the labour market relative to a workers ability to obtain suitable employment. The Employer’s legal representatives provide a further example; the worker may complete a course of study and/or obtain employment, which impact on his or her ability to earn, relative to pre-injury earnings. In my view the Employer is right to suggest that the Arbitrator erred in applying a narrow test to the meaning “change of circumstances” in section 55 of the 1987 Act.
30.If there were written reasons given for the decision of Egan J in 1993 to award Mr Alexander weekly compensation, they are not before me. This presents some difficulty in knowing exactly upon what “circumstances” he made relevant findings to found the award. However the evidence before the Arbitrator, and before me on appeal, discloses that at the time of the award, Mr Alexander’s circumstances, relevant to the payment of weekly compensation, were:
· He was incapacitated for work as a Shearer as a result of the injury to his right arm.
· He was unable to find suitable employment in Cootamundra where he lived.
· He had symptoms of pain in his right forearm and elbow, aggravated by certain movements such as grasping and twisting with his right hand. He also had disturbed sleep.
· In 1991 Dr Dewey diagnosed ‘ulnar nerve neuritis’ and recommended surgery, which Mr Alexander did not undertake.
31.In 1995 Mr Alexander obtained employment working behind the counter in a supermarket, owned by a friend. He performed customer service work, loading and unloading pallets and worked at the deli counter. He earned approximately $35,000 gross per year. However, in about 2001 his friend died and Mr Alexander left the supermarket. He was then unemployed until 2002 when he and his brother leased a hotel in Harden.
32.Mr Alexander’s current circumstances, relevant to the payment of weekly compensation, are:
· He remains incapacitated for work as a shearer.
· He lives in the hotel in Harden, which he runs with his brother.
· He works for about 18 hours per day, 6 days per week, for $200 net wages.
· He continues to have pain in his right arm if he does certain activities, e.g. operate a lawn mower.
· He sometimes experiences pain in his right elbow, which affects his sleep.
· Dr Bye reports that his current medical condition is “medial humeral epicondylitis of the right elbow” and that any previous “ulnar neuritis in the ulnar canal at the right elbow ” has resolved. He considers Mr Alexander fit for sedentary work, with “no repetitive lifting with wrist and finger caught in flexion and where there is no repetitive forearm rotation activities”.
· A work capacity assessment by Empact Pty Limited, dated 20 May 2003, concludes that Mr Alexander is fit for work as a Bar Manager and Assistant Bar Manager.
33.In my view these facts disclose a “change of circumstances” that satisfies the threshold consideration for a review of Mr Alexander’s weekly payment of compensation. Medically there is evidence to suggest that part of his injury may have resolved. His ability to earn in suitable employment, i.e. as a manager of a hotel/bar, is now established. He is now working in suitable employment for 18 hours per day, 6 days per week. To assert that Mr Alexander’s circumstances have not changed since the award of weekly benefits made by the Compensation Court in 1993 is to misconstrue the ordinary meaning of “change of circumstances”. Whether or not his entitlement to weekly benefits compensation has changed is a different question, and remains to be determined.
34.Having established a “change of circumstances” it is now for an Arbitrator to review Mr Alexander’s weekly payment of compensation. The matter should be referred back to a different Arbitrator for this to occur.
Decision
35.The decision of the Arbitrator, dated 4 December 2003, is revoked and the following decision is made in its place:
i.The Employer has established that there has been a “change of circumstances” pursuant to section 55(1) of the Workers Compensation Act 1987.
ii.The matter is referred back to the Registrar, for constitution to a different Arbitrator, to undertake a review of Mr Alexander’s weekly payment of compensation pursuant to section 55(2) of the Workers Compensation Act 1987.
Dr Gabriel Fleming
Deputy President
1 March 2005
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF DR. GABRIEL FLEMING, DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
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