Issue 4: April 2009
Welcome to the Fourth edition of ‘On Appeal’.
Edition 4 - April 2009 includes a summary of the March 2009 decisions.
These summaries are prepared by the Presidential Unit and are designed to provide a brief overview of, and introduction to, the most recent Presidential and Court of Appeal decisions. They are not intended to be a substitute for reading the decisions in full, nor are they a substitute for a decision maker’s independent research.
Please note that the following abbreviations are used throughout these summaries:
Acting Deputy President
Approved Medical Specialist
Application to Resolve a Dispute
Workers Compensation Commission
Certificate of Determination
Medical Assessment Certificate
Reply to Application to Resolve a Dispute
Whole Person Impairment
Workers Compensation Act 1987
Workplace Injury Management and Workers Compensation Act 1998
Workers Compensation Commission Rules 2006
Workers Compensation Regulation 2003
Factual findings as to pre-injury earnings and hours; worker injured on a “work trial”; correct current weekly wage rate
13 March 2009
- Mr Ta worked for B&E Poultry cleaning and boning chickens from December 2000. Whether he worked full time or part time was the subject of conflicting evidence. After a work injury with B&E Poultry, Mr Ta worked on suitable duties until they were withdrawn. Following a Functional Capacity Assessment and a Vocational Assessment in early 2002, the rehabilitation provider (WIMS) determined that Mr Ta would be best suited to work full-time as a light product assembler, process worker or cleaner. Mr Ta’s treating doctor approved his working in such employment full time.
- WIMS arranged for Mr Ta to be placed with the second respondent, Abco, under a Work Trial Agreement, a voluntary agreement between a host employer, Abco, an injured worker, a rehabilitation provider and WorkCover involving short-term placement of an injured worker with an employer, other than the pre-injury employer. Under a Work Trial Agreement the host employer provides the workplace and the work, and WorkCover pays workers compensation benefits in the event of the worker sustaining an injury in the course of the work trial.
- On 18 June 2002, the second day of the work trial, Mr Ta injured his back. He completed a WorkCover Authority Worktrial Participant’s Compensation Claim on 4 July 2002. What happened to Mr Ta’s claim was not explained in the evidence. It was assumed that it was submitted to WorkCover and that compensation was paid, but the evidence did not disclose at what rate or by whom.
- GIO, as insurer for B&E Poultry, declined liability on the grounds that the medical evidence concluded that the nature and conditions of employment with B&E Poultry and Abco aggravated Mr Ta’s underlying degenerative back disease and, as Abco was the last employer to which aggravation was due on 18 June 2002, liability rested with Abco (section 16 of the 1987 Act).
- Mr Ta’s ARD claimed weekly compensation against Abco in the sum of $561.20 per week under the Plastic Moulding (State) Award from 19 June 2002 to date and continuing, and against B&E Poultry in the sum of $515.10 per week under the Poultry Award from 19 June 2002 to date and continuing, and lump sum compensation for the back injury on 18 June 2002.
The Arbitrator’s decision:
The Arbitrator found that Mr Ta’s incapacity resulted solely from his injury with Abco. She ordered Abco to pay Mr Ta weekly compensation at the rate of $339.00 per week from 18 December 2002 initially under section 36 and then under section 37. The amount of $339.00 was derived from applying the average hourly rate of $16.95 under the Plastic Moulding (State) Award, multiplied by 20 hours (decided by the Arbitrator to be the number of hours Mr Ta was certified to work when he commenced with Abco), resulting in $339.00.
Issues on appeal were whether the Arbitrator erred in that:
- having found that Mr Ta’s incapacity resulted solely from his injury with Abco on 18 June 2002, the Arbitrator then calculated weekly compensation on the basis that he was employed for only 20 hours per week when in fact the work trial was for full time hours.
- the Arbitrator relied on the incorrect award.
(1) The Arbitrator’s conclusion that Mr Ta was only certified fit for 20 hours per week at the time he started the work trial with Abco was unsupported by the evidence. Abco engaged Mr Ta as a full-time process worker for a two-week work trial. 
(2) Abco merely agreed to act as a “host employer” in a two-week “work trial”. The evidence did not suggest that a contract of service existed between Mr Ta and Abco and it was doubtful whether that company should ever have been a party to the proceedings. On the evidence, it was difficult to see how a contract of employment arose between Mr Ta and Abco (see Teen Ranch Pty Ltd v Brown (1995) 11 NSWCCR 197). 
(3) As no contract of service existed between Abco and Mr Ta, no question arose as to his current weekly wage rate or average weekly earnings with that company .
(4) Had Abco employed Mr Ta under a contract of service, then the appropriate wage rate was the award rate for a full-time process worker. However, the evidence suggested that Abco engaged Mr Ta in a work trial, not under a contract of service. Therefore, it was difficult to see how the hours of the work trial with Abco were relevant to the calculation of Mr Ta’s current weekly wage rate or average weekly earnings .
(5) The question of which award applied could be resolved once it was determined that Mr Ta was never employed by Abco. In those circumstances, the only relevant award was the Poultry Award. However if it was conceded, contrary to the evidence and the legislation, that Mr Ta’s work trial was relevant to the determination of his current weekly wage rate and average weekly earnings, further evidence was required to decide the correct award.
The weekly compensation claim was remitted to another Arbitrator for redetermination.
(i) Evidence did not support finding of ‘injury’
11 March 2009
- Mr Hanson worked as a manager in the finance section of AAP from 1987. In 2001 following a restructure he was transferred to the ITG department. Whilst his duties remained essentially the same, he claimed that he felt “sidelined” and “underemployed” since the transfer.
- On 12 October 2006 he was given a verbal warning after a miscommunication in relation to his installation of a new computer password (the ‘password’ incident).
- Events came to a head in May 2008 when Mr Hanson was asked by his superior to file some CDs. Mr Hanson refused, but the CDs were left on his desk (the ‘CD’ incident). He left work, consulted his general practitioner and has not returned to work since.
- The Arbitrator found that Mr Hanson’s psychological condition arose out of or in the course of employment with AAP and that his employment was a substantial contributing factor to the injury. She found “the evidence was that it was the Applicant’s concerns about the workplace that contributed to the injury” (at  of her Reasons).
- She relied essentially on Mr Hanson’s account of events given to the doctors and found that the injury arose because of a background of chronic dissatisfaction with being ‘side-lined’ and a sense of being ‘targeted’ and under-employed.
- The Arbitrator found that AAP’s actions in relation to discipline over the ‘password’ incident were reasonable (under section 11A) (at ), however that incident was not either wholly or predominantly the cause of Mr Hanson’s psychological injury (at ).
- The Arbitrator found that Mr Hanson was totally incapacitated for work and awarded weekly compensation pursuant to sections 36 and 37.
Issues on Appeal:
AAP appealed the Arbitrator’s findings under sections 4, 9A and 11A of the 1987 Act.
(1) Similar issues were considered by the Court of Appeal in State Transit Authority of New South Wales v Fritzi Chemler  NSWCA 249 and by Deputy President Roche in Callingham v Tophos Pty Ltd t/as Central Coast Easy Care  NSWWCCPD 140. 
(2) The Arbitrator mis-stated her task. She was required to determine whether real events or conduct at work satisfied the test of ‘injury’, not whether Mr Hanson’s perception of events, even if wrong, was “rational”.
(3) Consideration of the issues was hampered by the lack of any detailed statement from Mr Hanson, let alone any corroborative evidence from him .
(4) While it is true that the history of events given to doctors may be treated as evidence of the fact under section 60 of the Evidence Act 1995 (NSW), (see R v Welsh (1996) 90), there was very little information to ground those ‘facts’ in this case. Terms such as “side-lined” and “out of the loop” did not offer any insight into events. They are, simply put, “perceptions” of events .
(5) The principles in Makita (Australia) Pty Ltd v Sprowles  NSWCA 305 were also relevant in this context. With the exception of the ‘password’ incident many of the alleged ‘facts’ recorded were unsubstantiated. The histories given to the medical practitioners did not provide a ‘fair climate’ for the acceptance of the opinions proffered .
(6) Mr Hanson’s condition arose as a result of his perception of unsubstantiated events at work, and as a consequence of his unhappiness at his transfer to the ITG in 2001. There was no evidence to suggest that the transfer was in any way unreasonable, although it was clearly the focus of his dissatisfaction. The evidence did not support a finding of ‘injury’ .
(7) The evidence supported the Arbitrator’s treatment of the ‘password’ incident as ‘discipline’ pursuant to section 11A and her conclusion that AAP acted reasonably.
(8) The ‘CD’ incident was disputed by AAP. Further there was no evidence to assess the impact of this event on the issue of injury.
(9) Having determined that Mr Hanson’s had failed to establish an injury within the meaning of section 4 of the 1987 Act it was not necessary to determine the other matters raised on appeal .
Orders: Revoked and decision substituted - “Award for the Respondent”
(ii) Aggregation of injuries – reconsideration provisions
Lump sum compensation; multiple injuries; whether an impairment due to an incident at home resulted from earlier work injury/s; whether the effects of an incident at home could be combined with an earlier work injury/s to meet the threshold in section 67 of the 1987 Act; section 322 of the1998 Act; need for the ARD to clearly and precisely identify the nature of the claim and the relief sought; amendments; proper application of the reconsideration provisions in section 350(3) of the 1998 Act.
30 March 2009
- Ms Filippou sustained several injuries to different parts of her body in the course of her employment as a food distributor for Manly Hospital. On 17 May 2001 she injured her back and left leg. On 24 January 2003 she injured her left knee, left shoulder and left buttock. On 3 December 2003 she slipped and fell at work injuring her left shoulder, pelvis and left hip. On 26 December 2003 she alleged that her left knee and leg gave way causing her to fall injuring her left knee, left arm and left shoulder. Allegedly as a result of a weakness in her left knee caused by the 24 January 2003 incident, on 17 October 2004 she injured her right shoulder when she tried to get out of bed at home while convalescing after surgery to her left shoulder.
- Ms Filippou’s ARD filed on 3 January 2008 claimed lump sum compensation under the Table of Disabilities for injuries to her back and left leg as a result of the incident in May 2001, and 21% WPI as a result of injuries to her left shoulder, right shoulder and left knee on 24 January 2003, 3 December 2003, 26 December 2003 and 17 October 2004. The ARD did not allege that the incident at home on 17 October 2004 had resulted from the earlier work injuries.
- Following a teleconference on 7 February 2008, the Arbitrator issued Consent Orders referring the claim to an AMS for assessment of losses/ impairments resulting from each of the five incidents set out in the ARD.
- A MAC was issued on 13 March 2008 including assessments of 0% WPI in respect of the injury on 3 December 2003, 10% WPI in respect of the left upper extremity due to the 26 December 2003 incident and 10% WPI in respect of the right upper extremity due to the 17 October 2004 incident.
- Following a medical appeal by Manly Hospital, an amended MAC was issued with assessments of 9% WPI for the left shoulder injury on 26 December 2003 and 9% WPI for the right shoulder injury on 17 October 2004.
- The Registrar’s COD of 4 July 2008 included an order for payment of lump sum compensation for 9% WPI resulting from injury on 26 December 2003 and 9% WPI resulting from injury on 17 October 2004. On 10 July 2008 the Registrar rescinded the COD at the request of Ms Filippou who submitted that “causation” was still in dispute.
- The issue of causation was argued at proceedings on 24 July 2007 and 18 September 2008. At the Arbitrator’s direction, Ms Filippou filed a reconsideration application seeking orders that the ARD be amended to add to the description of the 17 October 2004 incident that the injury to the right shoulder was a consequential injury arising out of injury to the left shoulder from the earlier incidents. Ms Filippou also disputed that the Consent Orders amounted to any consent on the issue of liability/ causation.
The Arbitrator’s decision
- The Arbitrator issued a COD on 28 November 2008 refusing to grant the reconsideration application. The Arbitrator found that Ms Filippou had consented to the matter being referred to the AMS in the manner it was referred and to allow the reconsideration application would cause significant prejudice to Manly Hospital because it would deny it the chance of meeting the claim in these proceedings.
- The Registrar issued a further COD on 19 December 2008 in the same terms as the COD of 4 July 2008.
Issues on appeal were whether the Arbitrator erred:
In deciding that, because of the terms of the Consent Orders and the consequential MAC, the question of whether the multiple impairments could be combined on the ground that they had resulted from an earlier injury or injuries (referred to as the causation issue by Ms Filippou) was no longer arguable. Leave was granted to amend the appeal to include a challenge to the COD of 19 December 2008.
(1) Though a matter cannot be referred to an AMS for assessment if liability is in issue (section 321(4) of the 1998 Act), that does not mean that the issuing of a MAC equates to an award of compensation (Jopa Pty Ltd t/as Tricia’s Clip-n-Snip v Edenden  NSWWCCPD 50). The terms of the award to be entered must still be determined by the Commission. .
(2) The present claim was a rare situation where a question arose as to whether the impairment assessed by an AMS had resulted from an earlier injury or injuries, rather than the pleaded incident. 
(3) The question required a determination of whether the 9% impairment of Ms Filippou’s right shoulder, resulted from an earlier work incident or incidents. Whilst that issue was never properly identified in the ARD or the referral to the AMS, because of the unsatisfactory wording of Annexure A, which resulted in the misleading referral, that did not prevent the Commission from performing its statutory obligation to act according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal form (section 354(3) of the 1998 Act). Ms Filippou was entitled to have that question determined without the need to seek a reconsideration under section 350(3) of the 1998 Act. 
(4) The reconsideration power is restricted to the limited circumstances discussed in Samuel v Sebel Furniture Limited  NSWWCCPD 141 at  and an amendment in order to correct a drafting error or oversight by a solicitor is not one of those circumstances. Whether an amendment should be allowed in such circumstances will, subject to the application of the Workers Compensation Acts and the Commission’s Rules, generally depend on the application of the principles discussed in Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146 and Walshe v Prest  NSWCA 94. 
(5) The injury on 26 December 2003 occurred when the worker tripped while running to a car on her way to work and had not resulted from her knee giving way as a result of the injury on 24 January 2003, as argued by Mrs Filippou. The 9% impairment as a result of the right shoulder injury at home on 17 October 2004 resulted from the injury to the left shoulder on 26 December 2003. 
(6) Therefore, the impairments assessed by the AMS for the left and right shoulders (ie 9% WPI each) resulted from the “same incident (the incident on 26 December 2003) and are to be assessed together” (section 322(3) of the 1998 Act). Applying the WorkCover Benefits Guide, the total WPI was therefore 17%, entitling a section 67 award.
The Arbitrator’s decision was revoked and a new decision made in its place aggregating the impairments to the shoulders as those impairments resulted from the same injury, namely, the injury on 26 December 2003.
- The confusion would have been avoided had more care been taken in drafting the ARD. If a worker claims that compensation is payable for a particular condition because that condition resulted from an earlier work incident, that should be clearly and precisely identified in the ARD. On its face, the ARD suggested that the incident on 17 October 2004 was a separate work injury and, as a result, the AMS was asked to assess it as such.
- Ms Filippou was not granted costs because she rejected a reasonable offer of settlement of 17% WPI (aggregating the left and right shoulder impairments) made to her by Manly Hospital in its written submissions before the Arbitrator.
Causation – ‘presumption of continuance’
11 March 2009
- Mr Bree, a butcher worked for the Respondent for 26 years in total. On 12 November 2007 he injured to his right hip and back when he twisted his upper body carrying a tray of meat and immediately experienced severe pain in his right hip, going through his groin to the back of his hip.
- Liability was initially accepted but was declined in May 2008 on the basis that the incident on 12 November 2007, did not cause any increase in pre-existing long term back pain, that employment was not a substantial contributing factor to the hip injury and any ongoing incapacity was not as a result of the work injury.
- The Arbitrator found Mr Bree’s suffered injury in the form of an aggravation of an underlying osteoarthritic condition in the right hip as a consequence of the incident of 12 September 2007.
- However, in the absence of any other evidence, the Arbitrator relied upon the general practitioner’s clinical note of 30 July 2008, which noted “right hip OA: in [? sic –is] improving” to find that at about that date the effects of the aggravation had ceased and any ongoing incapacity beyond 30 July 2008 was due to the underlying osteoarthritic condition and not the work injury (Reasons at ).
The Worker submitted on appeal that:
- the Arbitrator misdirected himself on the issues relevant to the determination of incapacity;
- there was no evidence to support the Arbitrator’s finding that the possible improvement in Mr Bree’s symptoms, as recorded in the treating doctor’s progress notes for 30 July 2008, meant that the aggravation caused by his injury had ceased, and
- the Arbitrator erred in law in applying a “but for” test in relation to finding whether proposed surgery was required in the context of his assessment of incapacity.
(1) “But for” is not the correct legal test for determining whether incapacity results from a work injury. The correct test is that set out in Kooragang Cement Pty Ltd v Bates (1994) 35 NSWLR 452at463-4 .
(2) “But for” is also not the correct test to be applied in determining liability under section 60 in relation to medical treatment (see Bielecki v Rianthelle Pty Ltd  NSWWCCPD 53 at -) .
(3) Apart from WorkCover medical certificates and progress notes from Mr Bree’s general practitioner, Dr Naser, no other evidence was tendered by either party to address the question of whether the effects of the aggravating injury continued and were causative of any ongoing incapacity and the extent of that incapacity. There was no oral evidence from the Appellant concerning the extent of his symptoms as at 30 July 2008. There was no clarification sought, or given, as to what the Appellant told Dr Naser on 30 July 2008 that prompted his notation  – .
(4) A finding of “some possible improvement”, in Dr Naser’s progress note of 30 July 2008, was not reasonably capable of supporting the Arbitrator’s finding that Mr Bree’s condition had improved to the point where it could be equated with a cessation of the symptoms such that the aggravation to his condition caused by the injury had ceased .
(5) Given the totality of the evidence and the absence of evidence to rebut Mr Bree’s evidence that his symptoms continued, Mr Bree was entitled to the benefit of the presumption that the effects of the work injury continued (‘presumption of continuance’ see Cloverdell Lumber Co v Abbott  HCA 4; (1924) 34 CLR 122, 137-8 per Isaacs J and R v Noonan (2002) 127 A Crim R 599 at ; BC200200833;  NSWCCA 46 per Bell J)  – .
Finding that the effects of the work injury continued:
- Mr Bree’s entitlement to compensation from 31 July 2008 remitted to a different Arbitrator for re-determination.
Territorial jurisdiction – transitional provisions
Workers Compensation Nominal Insurer v McIntyre and anor NSWWCCPD 36
31 March 2009
- Mr McIntyre was employed by the Respondent Employer, Valconti Pty Ltd, as a deck hand on its fishing vessel ‘Osprey IV’. It was not disputed that Mr McIntyre suffered an injury to his neck and right arm on 23 June 1999. It was also common ground that the injury was sustained whilst Mr McIntyre was aboard the Osprey IV in waters beyond the territorial limits of New South Wales (‘NSW’).
- Liability was accepted by the Insurer whose policy had been issued in accordance with the Victorian Workers Compensation Scheme. Mr McIntyre was paid weekly benefits up until August 2001 and also received medical expenses and lump sum compensation pursuant to the Victorian Scheme.
- In late 2005 Mr McIntyre made a claim against the Respondent Employer in respect of worker’s compensation benefits as prescribed by the 1987 Act. The Respondent Employer did not hold a policy of insurance in respect of liability under the 1987 Act. The claim was subsequently made to the Uninsured Liability and Indemnity Scheme, WorkCover NSW. Both the Respondent Employer and WorkCover declined Mr McIntyre’s claim.
- On 23 June 2008 an ARD was filed in the Commission against the Respondent Employer and Workers Compensation Nominal Insurer in respect of weekly benefits and lump sums pursuant to sections 66 and 67 of the 1987 Act. Mr McIntyre alleged injuries to his back, neck, right arm and left arm.
- The Arbitrator made a finding that the Commission had jurisdiction in respect of the claim as Mr McIntyre’s employment was connected to NSW pursuant to the operation of section 9AA(3)(b) of the 1987 Act.
- She determined that Mr McIntyre did not suffer injuries to his back and left arm on 23 June 1999, as alleged. She remitted the matter to the Registrar for referral to an AMS for assessment of permanent impairment of Mr McIntyre’s neck and right arm in respect of the injury on that date.
- The Arbitrator determined that Mr McIntyre was not disentitled to compensation in NSW pursuant to section 9AC of the 1987 Act to the extent that he had any entitlements for which he had not received compensation elsewhere.
The Workers Compensation Nominal Insurer appealed the decision. In the course of the appeal both parties agreed that the Arbitrator’s determination concerning matters arising under section 9AA were misconceived and that having regard to all relevant facts, the apposite provision concerning entitlement or otherwise was the former section 13 of the 1987 Act.
ADP O’Grady issued a Direction on 30 January 2009 requesting the parties to attend a hearing and prepare submissions on the following issues:
- The correctness of the Arbitrator’s rulings with respect to section 9AA and 9AC of the 1987 Act given Mr McIntyre received injury on 23 June 1999. Attention was drawn to the date of commencement of those provisions.
- The relevance, if any, of the provisions of the now repealed section 13 to the present facts, and
- The relevance of the principle of statutory construction as explained in Mynott v Barnard (1939) 62 CLR 68 concerning relevant connection between employment and NSW, necessary to attract liability to pay compensation under the 1987 Act.
(1) The Arbitrator’s determination miscarried due to the erroneous application of section 9AA of the 1987 Act. Provisions of section 9AA came into force on 1 January 2006 and such provision did not have retrospective operation (see Schedule 6.2.11 of the 1987 Act) .
(2) Given the agreement that the subject injury was received outside NSW, the nature of the dispute required consideration of the proper construction and application of the former section 13 of the 1987 Act to the facts. The matters of fact required to be established for the purposes of the two separate provisions were very different. The erroneous application of section 9AA made it necessary that the Arbitrator’s determination be revoked .
(3) Pursuant to section 13 of the 1987 Act, liability to pay compensation will be established only upon proof that the employer has a place of employment in NSW or is for the time being present in NSW, and the employer “there employs a worker”. Reference to employing a worker in NSW is a reference to the place where the worker is engaged, not to the place where the work is performed (Starr v Douglas and Ors (1994) 10 NSWCCR 457) .
(4) Regarding the conflict between the evidence of Mr McIntyre and the Respondent Employer, more weight was ascribed to the evidence of Mr McIntyre concerning the making of the employment contract . That evidence established that the contract was made in NSW.
(5) ADP O’Grady determined that at the time Mr McIntyre was employed, the Respondent Employer had a place of employment in NSW, having regard to the following facts:
- Osprey IV was berthed at Eden, NSW;
- The Respondent Employer’s agent was present at that time in that town;
- Osprey IV had worked out of Eden’s port over a considerable period, and
- Osprey IV returned consistently to the port of Eden during the months identified in the Respondent Employer’s records with its catch.
(6) The injury received by Mr McIntyre outside NSW on 23 June 1999 was one to which section 13(1) of the 1987 Act applied and compensation was payable accordingly.
(7) Compensation was not payable to Mr McIntyre to the extent to which he had received workers compensation under the laws in Victoria.
Weight of evidence – application of Makita and Hevi Lift
19 March 2009
- Mr Kingi was employed by Australian Portable Buildings Pty Ltd as a carpenter between 1998 and 13 January 2006.
- Mr Kingi sustained three back injuries in the course of his employment on 12 October 2000, 29 January 2001 and 5 December 2003, in addition he had undergone hip replacements to his left and right hips.
- Mr Kingi claimed that although there was no specific injury to either hip, the nature and conditions of his employment contributed to his hip problems.
The Arbitrator’s Reasons
- The Arbitrator found in favour of the Employer in relation to the claimed hip injuries, but awarded Mr Kingi weekly benefits at varying rates from 13 January 2006 together with medical expenses consequent upon the back injury in December 2003.
Issues on Appeal
In summary, Mr Kingi challenged the Arbitrator’s findings in relation to the condition of his hips, and the quantum of the award of weekly benefits.
(1) The Arbitrator overstated the effect of the principles in Hevi Lift and their application to section 9A of the 1987 Act .
(2) Similar issues as the ones in this case were discussed by Deputy President Roche in Duc Dien Tran v Salamat Document Management Solutions Pty Ltd  NSWWCCPD 147 at -.
(3) There was consensus of opinion from Drs Mahmood, Collins and Bodel that the work performed aggravated the condition of Mr Kingi’s hips such that his injury ought be considered as being an aggravation of a disease within the meaning of section 16 of the 1987 Act. That evidence satisfied the Makita (Australila) Pty Ltd v Sprowles  NSWCA 305 and Hevi Lift tests  and .
(4) As to whether the provisions of section 9A of the 1987 Act had been satisfied ADP Moore was guided by the observations of Burke CCJ in Cant v Catholic Schools Office  NSWCCR 37 at - and held that in the present case there was ample evidence to support the proposition that the work performed by Mr Kingi substantially contributed to the aggravation of his hip disease .
Orders: Revoked and decision substituted. The determination of the Arbitrator in relation to costs was confirmed.
(i) Section 9A is a question of fact and a matter of impression and degree
10 March 2009
Facts and Issues
- Ms Lewington was walking up a flight of stairs at work when she heard her left knee click and felt pain in her knee, she was later diagnosed with a torn medical meniscus.
- The means of access to the staff amenities was via a steep staircase which Ms Lewington accessed daily.
- The issue in this case was whether Ms Lewington’s employment was a substantial contributing factor to the injury to her left knee.
The Arbitrator found Ms Lewington had suffered an injury and that her employment was a substantial contributing factor to the injury.
- Her employer appealed on the basis that the Arbitrator misapplied section 9A of the 1987 Act and mistreated the medical evidence.
(1) Relied on the authorities of
(a) Mercer v ANZ Banking Group (2000) 48 NSWLR 740 at  and .
(b) Dayton v Coles Supermarkets Pty Ltd  NSWCA 153; (2001) 22 NSWCCR 46 at  and .
“...‘substantial’ qualifies ‘contributing factor’, indicating that it is the strength of the causal linkage that is in question: and it is ‘the employment concerned’ which must be a substantial contributing factor, meaning not the fact of being employed but what the worker was doing in his employment.”
(c) Le Broq v WorkCover Authority of NSW  NSWCA 125 at -.
“25. Thus there is a need to determine what was the Appellant’s employment and to determine whether the activity or task which led to the injury was an activity or task falling within the tasks required by virtue of the contract of employment or was incidental to those tasks…
26. S 9A(3)(a) makes it clear that the fact that the injury arose out of, or in the course of, or arose both out of and in the course of employment is not of itself sufficient to make the worker’s employment a substantial contributing factor.”
(2) The ultimate question of whether section 9A is satisfied is a question of fact and a matter of impression and degree (see Giles JA in Dayton at )) .
(3) A determination of whether the employment concerned was a substantial contributing factor to the injury must be decided on the totality of the evidence. It is not purely a medical question .
(4) The examples given in section 9A(2) are illustrative but they are not determinative (see Supair Pty Limited v Sweeney  NSWCA 319).
(5) The Arbitrator considered and weighed all of the evidence. He expressed the relevant principles and correctly applied them. His findings were open to him on the evidence.
Confirmed Arbitrator’s decision.
(ii) Journey claim
- March 2009
- Mr Hogno was injured after he arrived at work and parked in the work car park. He twisted his right knee as he was alighting from his car. His claim for compensation failed on the basis that the injury was not sustained whilst he was on a periodic journey, and, whilst the Arbitrator found that he was injured during the course of his employment, his employment was not a substantial contributing factor to the injury.
- Mr Hogno appealed that decision.
Held on appeal:
(i) Journey/section 10
(1) ‘Place of employment’ is not defined in the 1987 Act.
(2) Referred to Deputy President Roche in NSW Police Force v Cox  NSWWCCPD 20 at , where he observed that ‘place of employment’ is often not a fixed geographical location. Depending on the terms of the contract of employment, a worker’s place of employment can be anywhere the employer requires the worker perform his duties, or, engage in activities that are incidental to those duties .
(3) In the absence of any evidence to the contrary, inference was drawn that when Mr Hogno arrived at his place of employment on 22 May 2006, it was for the purpose of undertaking his duties as required and that that was always his intention (see Vetter v Lake Macquarie City Council  202 CLR 439; 178 ALR 578 the High Court at  and ), .
(4) Burke J in Chawla v Transgrid (11 June 2002) (Matter no. 38010/01 unreported Burke CCJ) (‘Chawla’) held:
“Absent any definition of either ‘place of abode’ or ‘place of employment’ I would think general principle would indicate the legal boundaries of their property as defining their ambits.”
(5) The President confirmed the Arbitrator’s finding that Mr Hogno, having sustained injury after he crossed the boundary of his place of employment, was not injured on a journey within the meaning of section 10(3)(a) of the 1987 Act. (see Chawla and Musumeci v Gem Engines Pty Ltd (2002) 23 NSWCCR 128 (‘Musumeci’) and .
(ii) Substantial contributing factor/section 9A
(6) The fact that an injury occurs in the course of or arising out of employment may be relevant to whether section 9A is satisfied but it is not determinative (see Supair Pty Ltd v Sweeney (2000) 20 NSWCCR 514 per Meagher J at ) .
(7) The term “employment” in section 9A extends to matters that are incidental to the contract of employment (see Stanton-Cook v TAFE Commission (NSW) (1999) 17 NSWCCR 632, Stewart v New South Wales Police Service (1998) 17 NSWCCR 202, Chubb Security Australia Pty Ltd v Trevarrow  NSWCA 344and Muscat v Woolworths Ltd (2000) 20 NSWCCR 16) -.
(8) Found that the activity being undertaken by Mr Hogno at the time of his injury, that is, getting out of his car in the staff car park with the intention of proceeding from the car park to commence duties, was an activity that was incidental to his employment .
(9) The strength of the causal link between the incidental work activity and the injury must be sufficiently substantial to satisfy the test in section 9A (Mercer) .
(10) What constitutes a “substantial contributing factor” is a question of fact to be determined on the basis of the evidence in the particular case: Dayton v Coles Supermarkets Pty Ltd (2000) 19 NSWCCR 526 .
(11) Section 9A(2) provides a series of examples of matters to be taken into account for the purpose of determining whether a worker’s employment was a substantial contributing factor to the injury. To discharge the obligation of determining if employment is a substantially contributed to injury, consideration should be had to the examples identified in section 9A(2) .
(12) Found Mr Hogno’s employment was a substantial contributing factor to his injury because:
- Although Dr Millons’ opined that Mr Hogno’s employment appeared to be a substantial contributing factor, at least in temporal terms. His opinion was a relevant piece of evidence, but the resolution of the section 9A issue is not purely a medical question and must be decided on the overall evidence. (see Awder Pty Limited t/as Peninsular Nursing Home v Kernick and another  NSWWCCPD 222) .
- The Employer called no evidence to establish that the injury would have happened anyway at about the same time, or at about the same stage of the Worker’s life, if he had not been at work .
- The Employer relied, in its section 74 notice, on a number of reports from Dr Sage. None of Dr Sage’s reports were attached to the Employer’s Reply or tendered in evidence. No explanation has been offered by the Employer for the failure to rely on Dr Sage’s evidence to establish its defence. The available inference that the reports of Dr Sage would not have assisted the Employer’s case was drawn. See Atlas v Bulli Spinners Pty Ltd (1993) 9 NSWCCR 378; Jones v Dunkel  HCA 8; (1959) 101 CLR 298 .
(13) The Commission has a discretion to determine “by whom, to whom and to what extent costs are to be paid” (see section 341 of the 1998 Act) but a successful employer should not be ordered to pay the costs of an unsuccessful worker unless the employer has:
been guilty of misconduct;
by its lax conduct, in effective invited the litigation, or
unnecessarily or unreasonably protracted the proceedings.
(See Oshlack v. Richmond River Council  HCA 11(1998) 193 CLR 72 and
Sydney Opera House Trust v Sykes  NSWWCCPD 227 at )
Orders: Decision revoked and substituted new decision.
(i) Employer fails on section 11A defence
ADP Anthony Candy
12 March 2009
- Ms Milovanovic commenced employment with ISS Property Services Pty Ltd (‘ISS’) in 1995 as a cleaner working in the NRMA building. In early 2006 her employ came under new management.
- The new management implemented changes. On 28 November 2006 she was given a letter informing her that her hours of work had changed from 3 ¼ to 3 hours per night.
- On 29 November 2006 Ms Milovanovic became upset over the condition of the vacuum cleaner she was using and left work early. She consulted the doctor and was certified unfit for work for 2 days.
- On 4 December 2006 Ms Milovanovic received a warning letter from the Employer, which was prepared on 29 November 2006, which referred to her shouting, screaming and smashing equipment.
- On 7 December 2006 Ms Milovanovic refused to accept the letter handed to her at work regarding her transfer to work in a new building. The letter was subsequently posted to her.
- On 12 December 2006 Ms Milovanovic attended at the NRMA building for work, signed on and collapsed. She was taken to hospital and had not returned to work since this incident.
- The Employer did not dispute injury or ‘substantial contributing factor’. The primary issue before the Arbitrator was the application of the section 11A defences.
- The Arbitrator found that none of the actions taken or proposed to be taken by the Employer were reasonable, therefore he was not required to consider by which of those actions the Worker’s injury was wholly or predominantly caused.
Issue in Dispute:
- The primary issue on appeal was whether the Arbitrator was correct in determining that the Employer could not rely on section 11A of the 1987 Act to defeat the Worker’s claim.
- The Employer, also relied on grounds of appeal relating to the adequacy of the reasons; treatment of the evidence; and exercise of discretion in relation to adverse findings as to credit.
(1) Section 11A of the 1987 Act - reasonableness - considered that the Court of Appeal in Commissioner for Police v Minahan  NSWCA 239 where Foster AJA at , with whom Sheller and Santow JJA agreed, referred with approval to a passage in the reasons for judgment of Geraghty J in Irwin v Director General of School Education (unreported 18 June 1998) which had been relied on by the trial judge is as follows:
“The question of reasonableness is one of fact, weighing all the relevant factors. The test is less demanding than the test of necessity, but more demanding than a test of convenience. The test of ‘reasonableness’ is objective, and must weigh the rights of employees against the objective of the employer. Whether an action is reasonable should be attended, in all the circumstances, by a question of fairness.”
(2) The Arbitrator dealt fully with the evidence and stated with sufficient clarity the basis on which he reached his conclusions.
(3) The Arbitrator erred in certain of his factual findings, which were fundamental to his decision on the application of section 11A.
(4) The Presidential member redetermined the matter finding:
- that the reduction in the Worker’s hours was reasonable action taken with respect to provision of employment benefits;
- instructing of the Worker in the proper performance of her duties was reasonable;
- the conclusion by the Arbitrator that the Worker was required to use faulty equipment was made without sufficient evidentiary basis;
- however the Employer’s action in relation to the issuing of the letter of reprimand following the events of 29 November 2006 was not reasonable nor was the sending to the Worker a letter regarding her transfer in the circumstances of this case.
(5) The evidence supported a finding that all of the events at work after 16 October 2006 had a cumulative effect on the Worker, however, of particular significance were the letters relating to discipline and transfer which the Employer did not put in evidence.
(6) The evidence however did not support a finding that the reasonable actions of the Employer were the predominant, much less the sole cause of the Worker’s injury: accordingly the Employer fails on the section 11A defence and the Worker is entitled to compensation as awarded by the Arbitrator.
Orders: Confirmed but for the reasons given in the decision of the Acting Deputy President
(ii) “Reasonableness” in terms of section 11A
ADP Kevin O’Grady
20 March 2009
- Mr Sarmiento was employed by Service Corporation Pty Ltd as a cleaner between 1 May 2006 and 18 April 2007.
- It was alleged that between mid 2006 and 18 April 2007 he was subjected to harassment and victimisation which included numerous incidents of humiliation by his supervisor in the presence of co-workers and alleged unfair criticism of his work performance. It was also alleged that his duties were changed when relocated from one to other buildings resulting in a significant increase in workload.
- On 23 February 2007 and 20 March 2007 Mr Sarmiento’s employer gave him written warnings concerning his work performance. On 18 April 2007, a meeting took place at which time Mr Sarmiento was given notice of termination of his employment. During the meeting Mr Sarmiento collapsed and was taken to hospital by ambulance. He had not worked since.
- The Arbitrator found that Mr Sarmiento suffered from a major depressive disorder, which constituted a psychological injury (at ) and that his employment was a substantial contributing factor to the injury (at  and ).
- The Arbitrator however found that the Employer’s actions concerned performance appraisal and dismissal and were reasonable in terms of section 11A (at  – ).
- An award was made for the Employer.
Issue in Dispute on appeal:
- The Worker appealed the Arbitrator’s findings as to “reasonableness” in terms of section 11A.
(1) The Arbitrator correctly referred to the Court of Appeal decision in Department of Education and Training v Geoffrey Sinclair  NSWCA 465 (‘Sinclair’), where Spigelman CJ (with whom Hodgson JA and Bryson JA agreed) said at :
“… having regard to the context of the legislative scheme and its purpose, it is necessary to understand s11A to mean that the employer is not liable where, to the extent that the employment contributed to the injury, that contribution was wholly or predominantly caused by reasonable action taken with respect to … discipline.”
(2) The question of reasonableness is a question of fact (see Richie v Department of Community Services (1998) 16 NSWCCR 727) .
(3) The appeal was limited to a challenge to those factual conclusions, which led the Arbitrator to a finding that the Employer’s actions were reasonable .
(4) Spigelman CJ in Sinclair noted at :
“…such actions usually involve a series of steps which cumulatively can have psychological effects. More often than not it will not be possible to isolate the effect of a single step. In such a context the “whole or predominant cause” is the entirety of the conduct with respect to, relevantly, discipline. ”
(5) The Arbitrator’s manner of approach to the evaluation of the evidence and her conclusions of fact were open to her and the ADP expressed agreement with such conclusions.
(6) The Worker’s evidence, including the aspects that were said not to be directly contradicted, required evaluation by the Arbitrator in the context of the evidence as a whole. The Arbitrator addressed the evidence in its entirety and her conclusions of fact were open to her on the evidence .
(7) The argument by the Worker that the Employer’s alleged failure to provide assistance to him or in the alternative to reduce his workload demonstrated unreasonableness on the part of the Employer was without merit having regard to the conclusions as to the reasonableness of the actions of the Employer overall .
Orders: Decision confirmed
(i) Ability to earn – self-employed worker – application of Cage Developments Pty Ltd v Schubert
Section 40(2)(b) of the 1987 Act, proper method to adopt when worker is self-employed, application of the principles in Cage Developments Pty Ltd v Schubert (1983) 151 CLR 584 (‘Schubert’).
11 March 2009
- Mr Olsen was a solicitor who developed a psychological injury as a result of his employment with the DPP. He ceased working for the DPP in March 2003 on medical grounds.
- Liability was accepted and Mr Olsen was paid weekly compensation by consent at the maximum rate under section 40. Rehabilitation was of limited assistance and, at his own expense, he completed a sole practitioner’s course. In November 2005 he started his own business which eventually came to be called “AMC Lawyers”.
- For the financial year ending 30 June 2007, AMC’s gross income was $172,735.00. After expenses, it’s gross operating profit was $362.00. For the 2008 financial year, its gross income was $256,255.00 and it’s gross operating profit was $3,356.00.
- Allianz declined liability for the claim from 20 May 2008 on the grounds that Mr Olsen’s average weekly earnings exceeded the section 35 maximum and he therefore had no entitlement to a section 40 benefit, and that he was no longer incapacitated as a result of his psychological condition. The decision was based on his 2006/2007 tax return which Allianz alleged reflected average weekly earnings of $1,630.09 per week, and a medical report.
- Mr Olsen’s ARD sought weekly compensation in the sum of $631.80 per week (maximum statutory rate for a worker with a dependant spouse and two dependant children) from 21 May 2008 to date and continuing.
The Arbitrator’s decision:
The Arbitrator ordered the DPP to pay Mr Olsen weekly compensation as claimed. He rejected Allianz’s calculation of Mr Olsen’s average weekly earnings as it failed to take into account AMC’s business costs and the billings of other fee earners. The Arbitrator found that Mr Olsen’s capacity to earn was akin to a graduate solicitor in a small firm in the Newcastle/ Hunter Valley area in the region of $800.00 per week.
Issues on appeal were whether the Arbitrator:
- misdirected himself as to the extent of “matters well within the general knowledge and experience of the Commission”;
- erred in finding Mr Olsen was able to earn $800 gross per week as equivalent to a graduate solicitor in a small firm in the Newcastle/Hunter area, and
- entering an award on that basis.
(1) The Commission is a specialist tribunal that has the power to use its general knowledge of conditions of employment and rates of pay. It has great flexibility in its proceedings in that it is not bound by the rules of evidence and may inform itself on any matter (section 354(2) of the 1998 Act). The Commission is to act according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms (section 345(3) of the 1998 Act) .
(2) Therefore, Mr Olsen’s failure to tender evidence as to the rates of pay for solicitors in the Newcastle region did not prevent the Arbitrator from making a determination on that issue .
(3) There is more than one method for the calculation of post injury earnings under section 40(2)(b) of the 1987 Act when a worker is engaged in his or her own business (J & H Timbers v Nelson (1972) 126 CLR 625 at 633 (‘Nelson’) and (‘Schubert’). But whichever approach is adopted, it would not be appropriate to ignore the worker’s labour (physical and mental) in the business, as the Arbitrator did  and .
(4) The first method requires a determination of the net remuneration being received by the worker for his or her labour. This is done by examining the business accounts and making all proper allowances for overhead expenses, cost of materials and other labour, maintenance and depreciation of plant, return on capital invested and the like (Glass JA (Reynolds JA agreeing) at 230G in Schubert in the Court of Appeal, citing Gibbs J at 652 and Windeyer J at 643 in Nelson). 
(5) The second method requires a calculation of the worth of the worker’s labour to the business, but without reference to the business accounts. This second method has three possible approaches:
(i) a determination may be made of the cost to the business of employing someone to do the reduced work the worker is performing (Glass JA (Reynolds JA agreeing) in Schubert at 231A).
(ii) it may be determined by reducing from the cost of employing someone whose work capacity is unimpaired the cost of supplementing the reduced efforts of the applicant so as to produce for the business the services of one fully capable worker (Glass JA in Schubert at 231, citing Barwick CJ in Nelson at 631-632).
(iii) “determine what his work would have been worth in wages if he had been employed by another to do the work” (per Barwick CJ in Nelson at 631). 
(6) The fact that Mr Olsen was working meant that his actual earnings were prima facie evidence of his ability to earn (per Jordan CJ in Aitkin v Goodyear Tyre & Rubber Co (Aust) Ltd (1945) 46 SR (NSW) 20 .
(7) However before determining whether it was appropriate to look outside Mr Olsen’s earnings with AMC, it was necessary, “as a first step” (per Beazley JA in Pira Pty Ltd t/as Langdon & Bartley v Tucker (1996) 14 NSWCCR 26 at  - ), to determine what his earnings were with that company. The appropriate method/s to adopt in determining his earnings were those discussed in Schubert and Nelson. 
(8) The Arbitrator did not apply any of the methods set out in Schubert or Nelson, but assessed Mr Olsen's notional earnings to be $800.00 per week, akin to a graduate solicitor. It was unrealistic to calculate the value of Mr Olsen's labour to the business by reference to a graduate solicitor or paralegal, as such a figure did not reflect Mr Olsen’s experience, his duties and responsibilities, or his hours of work. 
(9) It was only if Mr Olsen was able to earn more than the figure given by one of the methods set out in Schubert or Nelson that it would be appropriate to consider his theoretical or “notional” (per Kirby P in JC Ludowici & Son Ltd v Cutri (1992) 26 NSWLR 580) ability to earn. 
In the absence of more detailed evidence and submissions on the issues relevant to the application of section 40(2)(b) calculation methods in Nelson and Schubert, the matter was remitted to a different arbitrator to re-determine Mr Olsen’s entitlement to weekly compensation, if any.
(ii) Discretion – step 4 of Mitchell
Nature of ‘review’ pursuant to section 352 of the 1998 Act – respondent to appeal seeks to improve his position; section 40 of the 1987 Act - application of the steps in Mitchell v Central West Area Health Service (1997) 14 NSWCCR 526 (‘Mitchell’); discretionary factors in section 40(1) of the 1987 Act.
27 March 2009
- Mr Owers claimed weekly compensation from 28 May 1997 on a continuing basis, and lump sums in respect of loss of use of the arms and pain and suffering. He alleged two injuries, the first on 4 April 1995 when he injured his right arm pulling on sewer rods, and the second on 9 November 1995 when he injured his left arm lifting a manhole surround.
- Mr Owers stated he ceased work as a sewer attendant with the Council in 1997 due to ongoing weakness in the arms and left shoulder pain. Attached to the Reply was a resignation signed by the worker stating that “due to financial and domestic problems” he was resigning effective from 20 May 1997. Mr Owers denied having financial problems at the time, but conceded signing the resignation, although it was not in his writing. He did not explain why it was worded as it was or why he’d signed if it was inaccurate.
- After ceasing work for the Council, Mr Owers looked after his children, and undertook various jobs from 2001. He eventually found permanent work as a maintenance supervisor at a nursing home, and as a caretaker/ maintenance supervisor at a retirement village, which continued.
- The Council disputed incapacity, causation, dependency and the rate at which compensation should be paid (if any). Occurrence of injury was not disputed.
The Arbitrator’s decision:
- Consent Orders were made for payment of lump sums in respect of 10% of the right arm, and 18% of the left arm.
- The Arbitrator made an award for Mr Owers in respect of the weekly compensation claim under section 40.
Issues on appeal:
- The Appellant employer argued that:
(i) the Arbitrator failed to properly apply section 40 in compliance with the Court of Appeal decision of Mitchell.
(ii) there should not have been any award for the period 1 July 1997 to 30 June 2001, as the true reason Mr Owers was not in employment during this period was that he was looking after his children.
(iii) the Arbitrator’s discretion should have been exercised to reduce the award to nil during this period.
(iv) the upper limb of the section 40 equation was calculated at too high a figure, and Mr Owers’ ability to earn in some suitable employment (the lower limb of the equation) was too low, having regard to occupations for which he was fit.
- Mr Owers argued that the section 40 award should be increased.
(1) Mr Owers’ (Respondent worker) argument for an increased weekly award was properly before Snell ADP and formed part of the review process in which he was required to engage. Procedural fairness had been observed as the employer had an opportunity (of which it availed itself) to respond to the worker’s argument. This was consistent with Roche DP’s approach in Ecowize North Pty Ltd v Ballard  NSWWCCPD 179 (at ).
(2) Step 1 of the Mitchell test - Calculation of the upper limb of the section 40 equation (section 40(2)(a)) involves assuming a worker would have continued in the same or some comparable employment; the exercise is a hypothetical one: Australian Wire Industries Pty Limited v Nicholson (1985) 1 NSWCCR 50; Singh v TAJ (Sydney) Pty Ltd (2006) 4 DDCR 557 
(3) The Arbitrator correctly took gross earnings in the 1996/97 group certificate, deducted the sum of $3,547.56 (being payment of long service leave) from that, and divided the figure by the number of weeks worked during 1996/97 arriving at $952.38 per week. This figure was used as the basis for probable earnings but for injury, during the whole period of the weekly claim. .
(4) There was no evidentiary basis to adopt the increase of 3% per annum as submitted by Mr Owers. A 1% per annum increase was applied to the figure at  (Goktas v Goodyear Australia Pty Ltd  NSWWCCPD 1) .
(5) Step 2 of the Mitchell test - There may well have been other motivations for Mr Owers’ cessation of work on 20 May 1997, ie to look after his children, but this was not inconsistent with the existence of incapacity at that time. 
(6) Given the nature of the injury, the heavy nature of the work, the subsequent payments of lump sum compensation for permanent loss of use of the arms, and the proper concession by the Council that Mr Owers carried an impairment by dint of his injuries, the appropriate finding was that there was a partial incapacity in the relevant sense, from 1 July 1997 (applying Arnotts Snack Products Pty Ltd v Yacob (1985) 155 CLR 171. 
(7) Applying the decision of Burke J in Mangion v Visy Board Pty Ltd (1992) 8 NSWCCR 175, expressly adopted by Handley JA in Cowra Shire Council v Quinn (1996) 13 NSWCCR 175, a “weighted average” was used, having regard to availability of work in the accessible labour market. There was no reason, on the medical evidence, why Mr Owers could not carry out work on a full-time basis. Weighting the average more towards the figure for work as a caretaker, having regard to the fact that some available positions as process worker would be unsuitable, and therefore less frequently available, Mr Owers’ ability to earn in some suitable employment was assessed at $750.00, as at the time of a vocational assessment report. 
(8) The weekly figure of $750.00 represented Mr Owers’ ability to earn in some suitable employment based upon description of wage rates as at 25 August 2008. As the weekly claim spanned many years, the figure was adjusted to reflect movement in wage rates. Adopting the approach taken at  above, 1% per annum was applied to derive figures from 1997/8 to 2008/09. 
(9) Step 3 of the Mitchell test – calculate the difference between probable earnings if not for injury (section 40(2)(a), figure at ), and ability to earn in some suitable employment (section 40(2)(b), figure at ) for the various financial years. 
(10) Step 4 of the Mitchell test (discretionary factors) – requires a determination of “whether and to what extent the reduction calculated as above bears ‘such relation as to the amount of that reduction as may appear proper in the circumstances of the case’ (section 40(1))”.
(11) The Arbitrator halved the arithmetical difference for the period 1 July 1997 to 30 June 2001 as Mr Owers was not in any employment during this time and he was “not satisfied the evidence on balance is suggestive of any dedicated attempt to find employment particularly between 1 July 1997 and 30 June 2001”. Reduction on the discretionary basis, for this reason, was an error, applying Mitchell. 
(12) There have been cases where compensation payable to female workers, who would not have been working for a period due to childbirth, feeding and caring for infants, has been reduced for discretionary reasons (Hurst v Illawarra Area Health Service (2000) 21 NSWCCR 82 Wrigley Co Pty Ltd v Holland (2002) 23 NSWCCR 463). It is difficult to identify any rationale for treating a male worker who engages in full time care of an infant in any different fashion to a female worker. Reduction on this basis would have been appropriate if Mr Owers’ had withdrawn from the workforce to mind his children. However the evidence did not support that conclusion. Therefore discretionary factors did not require a reduction in the arithmetical difference arrived at in . 
The Arbitrator’s determination was revoked and a new decision made in its place with different (higher) figures in respect of section 40.
Section 55 of the 1987 Act and section 74 of the 1998 Act
18 March 2009
- On 25 June 1996, Mr Seddon settled a claim against the NSW Police Force for lump sum compensation in respect of an injury to his right shoulder and associated pain and suffering. He was declared by his treating orthopaedic surgeon to be unfit for normal duties as a police officer so in August 1997 he retrained as an environmental consultant and commenced his own business.
- His shoulder symptoms continued and on 22 May 2003 he settled a claim for further loss of use of the right arm, additional pain and suffering and an award for weekly compensation at the rate of $150.00 per week from 1 July 1996 to 22 May 2003 and $195.00 per week from 23 May 2003 to date and continuing.
- Over time, Mr Seddon’s right shoulder deteriorated and he developed symptoms in his neck. His ARD on 11 August 2008 claimed further lump sum compensation and an increase in weekly compensation from 23 May 2003 to date and continuing at the maximum statutory rate for a worker with a dependent spouse and two dependent children.
- The Police Force did not serve a section 74 notice but it’s Reply filed 2 September 2008 requested a teleconference to address liability issues including, among other things, whether Mr Seddon suffered any permanent loss as a result of his work injury, whether he had any ongoing incapacity, and whether the probable and actual earnings were as alleged.
The Arbitrator’s decision:
Although the ARD did not specifically say so, Mr Seddon sought a review of weekly payments under section 55 of the 1987 Act based on a change of circumstances, but it was unclear what change of circumstances he sought to rely upon. If it was a change in his medical condition, he had not made out a case for a change of circumstances until a determination by an AMS. If it was a change in earning capacity or an increase in comparable wages, there was no evidence of that in the ARD. The weekly compensation claim was therefore dismissed and the lump sum component of the claim was referred to an AMS.
Main issues on appeal were whether:
- The evidence established a change of circumstances
- The Police Force’s insurer was required to file a section 74 notice.
(1) Section 55 requires a review of the circumstances between the date of the original award and the date on which the review is sought, and a determination on whether there has been any change in that period. It was not appropriate to restrict the review to an examination of a change in the workers medical condition. 
(2) The Respondent Employer failed to file a wages schedule. Based on the worker’s wages schedule, Mr Seddon’s earnings were below the May 2003 level, establishing that there had been a change of circumstances .
(3) A treating doctor recorded in May 2003 that Mr Seddon had been working in his environmental consultancy for “about 20 hours per week because of his shoulder injury and disability”. Evidence in a medical history is evidence of the fact (see Paper Coaters Pty Limited v Jessop  NSWCA 1). Mr Seddon said in his statement of June 2008 that he only averaged two to three hours’ work per day. This is clear evidence of a deterioration in Mr Seddon’s earning capacity 
(4) It therefore follows that since 22 May 2003, there had been a relevant change of circumstances that justified a review of Mr Seddon’s consent award of weekly compensation. 
(5) Despite the ARD being poorly drafted and incorrectly seeking a review from 23 May 2003, because the Commission had an obligation to act according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms (section 354(3) of the 1998 Act), it was not appropriate that the ARD be dismissed without Mr Seddon being given the opportunity of amending his claim to clarify the date from which he alleged he was entitled to a review because of a change of circumstances .
(6) Section 74 applies where an insurer disputes liability in respect of a claim for compensation, which can only be made by a worker. A claim by a worker for additional weekly compensation under section 55 of the 1987 Act, and a claim for additional lump sum compensation, are both claims for compensation. The provisions of section 74 of the 1998 Act therefore apply. 
(7) No section 74 notice is required where the employer needs a section 55 review because in such an application the employer is not making a claim for compensation (see Pages Hire Centre Kogarah v Chapman  NSWWCCPD 9). 
The Arbitrator’s decision was revoked and the matter remitted to a different Arbitrator to determine Mr Seddon’s application for review and claim for additional lump sum compensation.
Section 65A of the 1987 Act
Psychological injury; section 65A of the 1987 Act; causation
27 March 2009
- Ms Cannon suffered a back injury whilst working as a process worker for The Healthy Snack People, and was paid lump sum compensation for 6% WPI as a result of that injury. She returned to work on suitable duties. She alleged that while she was on suitable duties she developed a psychological injury as a result of “harassment, bullying and verbal abuse” in the course of her employment. She claimed 17% WPI as a result of her psychological injury.
- The respondent disputed liability under sections 4 and 9 and denied all of the worker’s allegations.
The Arbitrator’s decision
The Arbitrator determined that Ms Cannon suffered a psychological injury (severe anxiety) that arose out of and in the course of her employment, because it was directly related to her undisputed back injury. She also found that the psychological injury was a secondary psychological injury under section 65A and therefore Ms Cannon had no entitlement to lump sum compensation for her psychological injury. In the alternative, if Ms Cannon suffered a primary psychological injury, the “events which gave rise to the applicant’s distress and anxiety and her psychological injury were reasonable actions of the employer which related to discipline and work performance as matters set out in section 11A”.
Issues on appeal were whether the Arbitrator erred:
- in finding that the worker suffered a secondary psychological injury under section 65A of the 1987 Act;
- in finding that the employer’s actions were reasonable under section 11A, and
- in failing to take into account the evidence available on injury and in misdirecting herself as to its effect.
(1) It was not open to find that Ms Cannon’s psychological condition was a secondary psychological injury. 
(2) The employer’s argument was essentially that “but for” the physical injury Mrs Cannon would not have been on suitable duties and the events said to have caused the psychological injury would not have occurred. However the “but for” test is not the correct test of causation. The mere fact that an injury would not have occurred “but for” the original injury is not enough to establish a causal connection for legal purposes (per McHugh J in Chappel v Hart (1998) 195 CLR 232;  HCA 55 at ) 
(3) In workers compensation cases the test of causation is that set in Kooragang Cement Pty Ltd v Bates (1994) 35 NSWLR 452 where Kirby P (as his Honour then was) (Sheller and Powell JJA agreeing) said at 463-4 that “what is required is a commonsense evaluation of the causal chain.” 
(4) Saying that a psychological injury that results from harassment while on suitable duties would not have happened “but for” the physical injury ignores the fact that the harassment (if it occurred) was an event that was “extraneous or extrinsic” (Bennett v Minister of Community Welfare (1992) 176 CLR 408, McHugh J at 428) to the original back injury. It was not part of the “series of events” that have followed from the back injury and it was not part of the causal chain. 
(5) Section 65A is intended to prevent the double recovery of lump sum compensation in circumstances where a worker suffered a physical injury and, as a consequence of that physical injury (the pain/ discomfort/ loss or impairments caused by that injury), developed a secondary psychological condition. It does not prevent the recovery of lump sum compensation in circumstances where, as a result of a physical injury, a worker is placed on suitable duties and, as a result of an “extraneous or extrinsic” event, such as harassment or bullying while on those duties, develops a psychological injury. 
(6) It was conceded that Ms Cannon suffered from a psychological condition but her evidence that she was harassed at work was largely uncorroborated, with no lay witness statements tendered in support of her allegations. Her medical evidence provided limited corroboration and the one doctor who did record harassment had a history so inaccurate it did not provide a “fair climate” for the acceptance of his opinion (Paric v John Holland Constructions Pty Ltd  2 NSWLR 505 at 509-510; Brady v Commissioner of Police (2003) 25 NSWCCR 58 at 76). 
(7) Section 11A of the 1987 Act only applies where the whole or predominant cause of the psychological injury was the employer’s action with respect to transfer and/or demotion and/or promotion and/or performance appraisal and/or discipline, and/or retrenchment and/or dismissal of the worker and/or the provision of employment benefits to the worker was reasonable. The Arbitrator incorrectly approached the section 11A issue as if any reasonable action by the employer came within section 11A.  and .
(8) Section 11A first requires a determination of whether the injury was wholly or predominantly caused by one or other of the specific actions listed in that section. Once that is determined, the next question is whether the employer’s conduct with respect to the action(s) that were the whole or predominant cause of the psychological injury were reasonable. The onus of proof to establish the defence rests with the employer (Ritchie v Department of Community Services  NSWCC 40; (1998) 16 NSWCCR 727; Department of Education and Training v Sinclair (2005) 4 DDCR 206). 
(9) Some confusion arose because of the unsatisfactory nature of the insurer’s section 74 notice. It was insufficient compliance with section 74 for the insurer to say, (as an alternative defence), that there was a dispute as to “whether any psychological injury that you suffer from was due to reasonable action taken or proposed to be taken by The Healthy Snack People Pty Ltd pursuant to section 11A”. A clear and precise statement of the reason the insurer disputed liability and the issues relevant to the decision to dispute liability was necessary. If an insurer relies on a defence under section 11A it must identify the factual basis on which it intends to rely as grounding that defence. That is, it must indicate, in clear and plain language, exactly which action or actions it alleges were the whole or predominant cause of the psychological injury and the issues relevant to the decision. 
The Arbitrator’s decision was revoked. An award was made for the Respondent as Ms Cannon failed to prove injury under section 4. In the alternative, her psychological condition was unrelated to her employment.
Leave to appeal – monetary threshold
Monetary threshold – MAC results in award less than $5,000 – leave to appeal refused
2 March 2009
- Mr Petiquin claimed lump sum compensation for injury as a result of the nature and conditions of employment, with multiple insurance interests involved.
- On 4 April 2008 the Arbitrator found injury in the form of aggravation of a disease with a deemed date of injury, such that any compensation payable would be payable by Toll as the last (self) insurer on risk. The matter was referred to an AMS for WPI assessment.
- Toll appealed the Arbitrator’s finding on injury. The AMS assessed 0% WPI, and Mr Petiquin appealed the MAC.
- The Registrar advised the parties that because the medical appeal was likely to be dealt with shortly, and having regard to the threshold in section 352 of the 1998 Act, it was preferable to deal with the MAC appeal first, the outcome of which would clarify whether section 352 was met. This course of action was not objected to by any of the parties.
- The MAP revoked the MAC and issued a replacement MAC dated 17 November 2008 with an assessment of 2% WPI.
- The Registrar issued a COD on 10 December 2008 ordering payment of the sum of $2,500.00 in respect of 2% WPI. The identity of the Employer in the COD was mistakenly described as Toll Stevedoring Pty Ltd rather than Toll Pty Ltd but it was clear from the date of injury in the COD that it related to injuries as found by the Arbitrator. The misdescription was apparently a slip.
- The Registrar then invited Toll to discontinue the arbitral appeal. Toll responded that it was instructed to seek review of the MAP decision either to the Supreme Court or by reconsideration under section 378 of the 1998 Act, and that the COD of 10 December 2008 was incorrect, apparently a reference to the misdescription of the Employer’s name. Toll did not request correction of the obvious error, pursuant to section 298 of the 1998 Act.
(1) Leave to appeal was refused under section 352 of the 1998 Act. The replacement MAC was binding and led to the final COD of 10 December 2008. As the amount of compensation awarded was $2,500.00, the threshold of $5,000.00 in section 352(2) of the 1998 Act was not met. 
(2) The parties’ rights were not determined until a valid MAC was issued and orders made for the payment of lump sum compensation (Ozblue Constructions Pty Ltd v Lang  NSWWCCPD 3, Roche DP at ). Because the final COD had been issued, its contents could not be ignored in determining whether section 352 had been met .
(3) Toll to pay the costs of the other parties to the appeal.
There may have been force in the second respondent’s argument that the decision of 4 April 2008 was interlocutory in nature but the parties did not approach the question of leave on this basis .