Darren John McCarthy v Patrick Stevedores No. 1 Pty Ltd

Judgment 1BASTEN JA : The appellant, Darren John McCarthy, is aggrieved by a decision of Deputy President Roche of the Workers Compensation Commission, in point of law. He has exercised his right of appeal pursuant to s 353 of the Workplace Injury Management and Workers Compensation Act 1998 (NSW) ("the Workplace Injury Act "). The appeal concerns a decision not to award weekly compensation payments pursuant to s 40 of the Workers Compensation Act 1987 (NSW). The appeal should be dismissed, as demonstrating no error in point of law, for the reasons given by Meagher JA. The following reasons are by way of further explanation of the rejection of the "additional ground" raised by the appellant in written submissions. 2The additional ground alleged that the Deputy President had erred in point of law in considering statements provided by eight witnesses, tendered by the appellant. Although acknowledging that the Commission was not bound to accept that evidence, the appellant submitted that the evidence could not properly be rejected, absent cross-examination of the appellant or the witnesses, to resolve any apparent inconsistencies. In substance, for the reasons explained by Meagher JA, this must have involved at least the cross-examination of the appellant, within whose statements lay a primary inconsistency. 3When invited to formulate the point of law, counsel for the appellant submitted that the rejection of the evidence of the witnesses involved a breach of the rules of procedural fairness. He contended that whether or not the hearing before the Deputy President should have proceeded on the papers, without a formal hearing, was a matter to be determined by the Deputy President pursuant to s 354(6) of the Workplace Injury Act . The Deputy President had, the submission continued, an ongoing obligation to take account of issues as they arose during his consideration of the matter and, if minded to determine the proceeding in a particular way, might be obliged to hold a formal hearing, despite an initial satisfaction that that course was unnecessary. Reliance was placed upon the reasoning of this Court in Hancock v East Coast Timber Products Pty Ltd [2011] NSWCA 11; 8 DDCR 399. 4Acceptance of such a ground, if properly articulated, requires satisfaction of a number of steps. (1) The power of the Commission constituted by a Presidential Member, hearing an appeal from an arbitrator is conditioned on fulfilment of the requirements of procedural fairness: Workplace Injury Act, s 352(1). (2) The content of the duty in any particular case will be affected by the nature and scope of the proceedings, which are governed by the Workplace Injury Act, s 354. (3) Pursuant to s 354(6), a deputy president need not hold a formal hearing if "satisfied that sufficient information has been supplied" to the Commission in connection with the proceedings. That provision is not, however, an exhaustive statement of the circumstances in which a deputy president may properly proceed "on the papers". Thus, even if satisfied that sufficient information is available to the Commission, it may be necessary to hold a formal hearing to accord procedural fairness to one party or both. (4) Where both parties indicate, in their notices of appeal or opposition, that a hearing is not required, that will ordinarily be an important, if not a decisive, consideration for the deputy president; such indications are, in effect, statements that the parties have no further information to supply. (5) Where it should have been reasonably apparent to each party that there were conflicts in the evidential material which might need to be resolved, an indication that an oral hearing was not required would constitute a waiver of any right which might otherwise exist to cross-examine the witnesses of the other party. In such circumstances, a deputy president could generally be satisfied that the appeal could properly be determined without an oral hearing. (6) A formal hearing may nevertheless be necessary in order to accord procedural fairness where the deputy president proposes to determine an appeal on a basis which was not raised by the parties and would not have fallen within their reasonable expectations when indicating that they did not seek an oral hearing: Re Minister for Immigration and Multicultural Affairs; Ex part Miah [2001] HCA 22; 206 CLR 57; Muin v Refugee Review Tribunal [2002] HCA 30; 76 ALJR 966. 5These principles are not, of course, an exhaustive statement, covering all circumstances which may arise in respect of an appeal under s 352 of the Workplace Injury Act . For example, they do not seek to address the situation where one party seeks an oral hearing and the other does not. They are sufficient for present purposes. The resolution of the inconsistencies within the statements of the appellant and between the appellant's statements and the statements of the other witnesses, were clearly matters which the appellant expected to be resolved; nor can there be said to be any reasonable misapprehension as to how they were to be resolved. 6No broader proposition can be extracted from the judgments in Hancock . The passages to which the appellant took the Court appear in the judgment of Tobias JA (with whom Giles JA agreed) and were by way of additional "remarks" raised in the context of statements made by Beazley JA (who delivered the principal judgment) at [104]-[106]. 7The statements at [104] involved an issue which is not presently relevant, because it is not reflected in the subsequent comments of Tobias JA. (It may have been that his Honour intended to refer to [105]-[107].) The concern raised by Beazley JA (expressly obiter) involved submissions that both the appellant and his treating medical practitioner had deliberately withheld information and, in the case of the practitioner, had been influenced by the possibility of private hospital cover for a recommended operation. Her Honour stated that such submissions should not have been made (were "improper") in circumstances where neither the appellant nor the practitioner had had such suggestions put to them, a step which could only have occurred had there been an oral hearing. The respondent did not seek an oral hearing for that purpose (or any other purpose). 8It is in this context that remarks relied upon in the present case, at [125] and [140], referring particularly to the absence of an opportunity for the medical practitioner to provide an explanation for omissions from his report should be understood. There is no obligation to accord procedural fairness to a witness: nor will a judgment be set aside on the basis of a failure to take such a step. The impropriety in issue in Hancock was that of a party in making submissions attacking the integrity of a witness in circumstances where it had not sought to cross-examine. 9So understood, Hancock provides no assistance in the present case. Nor is it necessary to have regard to other comments in Hancock as to the proper manner in which proceedings should be conducted before the Commission. Absent reviewable error, those matters are entirely for the parties to address and the Commission to determine. 10The flexibility conferred on the Commission by these procedures was explained in Aluminium Louvres & Ceilings Pty Ltd v Zheng [2006] NSWCA 34; 4 DDCR 358 at [22]-[25] (Bryson JA, Handley JA and Bell J agreeing). This statement was further endorsed by this Court in Fletcher International Exports Pty Ltd v Barrow [2007] NSWCA 244; 5 DDCR 247 at [78] in the judgment of Mason P (with whom Santow and Tobias JJA agreed). The President went on to state that the Commission "is not a court and is not expected to function as a court": at [91]. Claims of procedural unfairness in not seeking clarification of the appellant's submissions, not holding an oral hearing and in referring to the arbitrator's notes of a teleconference, were cursorily dismissed: at [98]-[103]. 11MEAGHER JA: This is an appeal pursuant to s 353 of the Workplace Injury Management and Workers Compensation Act 1998 ('the WIM Act ') from a decision of Deputy President Roche ('the Deputy President ') delivered on 8 September 2010. The appeal is limited to decisions "in point of law". The Deputy President confirmed a decision of the Workers Compensation Commission constituted by an Arbitrator, Mr O'Moore. That earlier decision was to make an award in favour of the respondent on the appellant's claim for weekly compensation for partial incapacity. 12The appellant started work with the respondent stevedoring company in 1982. On 29 August 1998, the appellant fell onto his buttocks while attempting to sit on a swivel chair in the course of his employment. As a result he injured his back, right leg, left leg and left hip. There was no dispute as to the fact of his injury. In 2002 he claimed weekly compensation for the period from 14 September to 27 November 1998 and for 9 February 1999. That claim was settled in November 2002. The appellant later claimed lump sum compensation in respect of his injury. That claim was settled in March 2005. 13In August 2009, the appellant claimed weekly compensation for partial incapacity for the period from 1 July 1999 pursuant to s 40 of the Workers Compensation Act 1987 ('the 1987 Act '). At the same time he made other claims which were also the subject of the decisions of the Arbitrator and of the Deputy President but which are not the subject of this appeal. 14The essence of the appellant's claim was that before the injury, he was employed as an allocations officer performing clerical duties and duties which required walking and stair climbing. He claimed that as a result of the injury he had been downgraded to the position of a receiving and delivery clerk. He has continued to work in that position. Although the claim for partial incapacity was made from 1 July 1999, the evidence suggested that the average weekly earnings of an allocations officer did not exceed, by any substantial amount, those of the appellant as a receiving and delivery clerk until 1 July 2004. 15The respondent's insurer disputed liability in respect of the partial incapacity claim by a s 74 notice dated 6 October 2009 and then or later served on the appellant's solicitors a copy of his statement dated 16 October 2004 as required by s 117 of the WIM Act. Its grounds for doing so included: "... (b) Mr McCarthy had not suffered any reduction in his earning capacity since 1 July 1999 as a result of his injury, other than during periods for which he had been paid compensation; (c) Mr McCarthy had not suffered any loss of wages since 1 July 1999 as a result of his injury, other than during periods for which he had been paid compensation;" 16The partial incapacity claim was determined by the Arbitrator on 19 May 2010. The evidence before him included two statements of the appellant, the 16 October 2004 and a statement dated 11 November 2009. It also included medical reports and eight statements made in January or February 2010 of persons who had worked with the appellant in or about 1998. 17The appellant's 2004 statement included the following: "13. My occupation is Receiving and Delivery Clerk, currently Grade 4. ... 16. I commenced employment with Patrick Stevedores in 1982 but have held my current position since June 1998. ... 24. At the time of the accident on the 29 August 1998 I was employed by Patrick Stevedores Holdings Pty Limited as a Grade 5 Allocations Clerk. ... 28. NOTE: From 1994 to June 1998 I had been employed by Patrick Stevedores as a Grade 5 Allocation Clerk. ... Due to action by Patrick Stevedores on the 7 th April 1998, a number of employees were stood down, eventually being reinstated as a result of industrial action in May 1998. ... I was reinstated in June 1998 as a Grade 4 Allocation Clerk. ... 101. I believe that my current position of Receiving and Delivery Clerk Grade 4 is directly related to my speaking out against Patrick Stevedores. ... 146. I have not suffered economic loss as a result of my accident but do believe I have suffered economic loss as a result of being demoted to Grade 4 allocations clerk." 18In his 2009 statement, the appellant said - "5. As at 29 August 1998 I was employed by Patrick Stevedores as an allocations officer. My duties in this regard involved data entry, customer service, and other clerical duties, as well as a substantial amount of walking ... and stair climbing, in order to allocate appropriately the human and other resources of Patrick Stevedores. ... 10. In late 1998 or early 1999, Patrick Stevedores downgraded me from my position as an allocations officer to a position as a receiving and delivery clerk. I have continued to work for Patrick Stevedores in this capacity since." 19There was no oral evidence given or sought to be given before the Arbitrator. In the course of argument before the Arbitrator, it was submitted by the appellant that the written evidence of six of the eight lay witnesses, that they recalled the appellant working as an allocations officer at the time of his injury in August 1998, should be accepted as correct. On behalf of the respondent, it was submitted that the appellant's evidence in his 2004 statement, that he had commenced as a receiving and delivery clerk in June 1998, should be preferred and that the evidence of the lay witnesses should be given little weight. It was submitted that it was particularly difficult for someone "to recall 10 years previously whether something occurred" two months before or after August 1998 (the something being the change of duties from allocations officer to receiving and delivery clerk). 20In his decision, the Arbitrator concluded that the appellant had "failed to establish the threshold proof of his pre-injury duties, his duties post injury, and the issues going to proof of economic loss". He ordered that there be an award for the respondent in respect of the claim for compensation for partial incapacity. 21The appellant sought and obtained leave to appeal from the decision of the Arbitrator pursuant to s 352 of the WIM Act. That appeal was "by way of review" of the decision appealed from. In his form of application to appeal, the appellant indicated that the appeal could be "decided solely on the basis of the written application and any written notice of opposition" and stated that he did not seek to rely on fresh evidence or evidence in addition to the evidence received in relation to the decision of the Arbitrator. The respondent also indicated in its notice of opposition to the appeal that it agreed that the appeal could be decided on the papers. 22The Deputy President determined the appeal on the basis of the documents provided and in the absence of any conference or formal hearing. In his reasons, having referred to s 354(6) of the WIM Act which provides that the "Commission may exercise functions ... without holding any conference or formal hearing", he recorded: "22. Having regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submission by the parties that the appeal can proceed to be determined on the basis of these documents, I am satisfied that I have sufficient information to proceed 'on the papers', without holding any conference or formal hearing, and that this is the appropriate course in the circumstances." 23Having considered the documentary evidence and written submissions, the Deputy President concluded: "125. ... I am not satisfied that, as a result of the effects of his injury on 29 August 1998, his duties changed from an allocations officer to a receiving and delivery clerk. On the contrary, based on Mr McCarthy's evidence in his first statement, I am satisfied that his duties changed in June 1998. If I am wrong on this issue, and Patrick Stevedores downgraded Mr McCarthy's duties after 29 August 1998, I am not satisfied that that change came about because of the effects of the injury. In other words, regardless of when the change in duties occurred, I do not accept that Mr McCarthy has suffered an economic loss as a result of his injury." 24The documentary evidence included the statements of the eight lay witnesses. The Deputy President dealt with them as follows: "123. ... However, taking all these matters together greatly weakens the weight that I attach to the lay witnesses' statements. Their evidence does not overcome the inconsistencies in Mr McCarthy's evidence and does not support the allegation that Mr McCarthy has suffered an economic loss as a result of his injury. It is not determinative that the witnesses were not cross-examined. Cross-examination is only allowed in the Commission by leave. ... The fact that the lay witnesses gave their statements 11 years after the event was not controversial and was not a matter that would have required the granting of leave to cross-examine." 25The Deputy President decided the other aspects of the appellant's appeal in his favour. For that reason, he revoked the Arbitrator's determination of 19 May 2010 and made orders including: "1. Award for the respondent employer in respect of the claim for weekly compensation from 1 July 1999." 26The appeal under s 353 of the WIM Act is brought against that award or order.

Misapplication of s 40 of the 1987 Act 30Section 40 of the 1987 Act is the successor to s 11 of the Workers Compensation Act 1926. Each provision has been the subject of much litigation: JC Ludowici & Son Ltd v Cutri (1992) 26 NSWLR 580 at 581-582. 31Section 40 provides: "(1) Entitlement The weekly payment of compensation to an injured worker in respect of any period of partial incapacity for work is to be an amount not exceeding the reduction in the worker's weekly earnings, but is to be bear such relation to the amount of that reduction as may appear proper in the circumstances of the case. (2) Calculation of reduction in earnings of worker - general The reduction in the worker's weekly earnings is (except as provided by this section) the difference between: (a) the weekly amount which the worker would probably have been earning as a worker but for the injury and had the worker continued to be employed in the same or some comparable employment (but not exceeding $1,000), and (b) the average weekly amount that the worker is earning, or would be able to earn in some suitable employment, from time to time after the injury (but not exceeding $1,000)." 32Section 40 requires the ascertainment of the amount described in subsection (1) as the "reduction in the worker's weekly earnings". That amount in turn is the difference between the two weekly amounts described in subsection (2). The first, described in paragraph (a), is the amount which the worker would probably have been earning upon the assumption that he was an uninjured worker still engaged in the same or comparable employment. The second, described in paragraph (b), is the amount which the injured worker is earning or would be able to earn, though injured, in some suitable employment: see Hill v Bryant [1974] 2 NSWLR 423 at 428-429; Cage Developments Pty Ltd trading as Monaro Mix Specified Concrete v Schubert (1981) 2 NSWLR 227 at 230; Australian Wheat Board v Pantaleo (1984) 3 NSWLR 530 at 539; Mitchell v Central West Health Service [1997] 14 NSWCCR 526 at 529-530; Singh v Taj (Sydney) Pty Ltd [2006] NSWCA 330 at [31]-[35]. 33The object of the section is to ascertain the weekly amount which reflects the diminution in the worker's capacity as a result of partial incapacity. The two figures described in subsection (2) establish the worker's weekly earning capacity as it was before and as it became after the injury and the difference between them fixes the ceiling to what may be awarded as compensation: Hill v Bryant at 428-429; JC Ludowici & Son Ltd v Cutri at 590-591. 34The ascertainment of the first amount requires the computation of the probable earnings of the worker, making a number of assumptions. They are that the injury had not occurred, that the worker continued earning "as a worker" and that he so continued, whatever the circumstances may be, in the same or some comparable employment: Australian Wheat Board v Pantaleo at 539. Here "employment" means engagement in the same occupation rather than in a particular task or function: Johnston v Commissioner for Railways (1973) 128 CLR 632 at 639-640. 35That exercise requires more than that the decision maker determine what the worker was earning immediately before the injury occurred. Because the amount to be ascertained is the reduction in the worker's weekly earnings over the period of the claimed incapacity, the decision maker must consider whether, and if so what, employment changes may have occurred after the injury and during that period. As Kirby P noted in Australian Wheat Board v Pantaleo at 540: "[Employment] may change because workers may progress up or down the employment ladder, by reason of seniority in years, additional experience or achievement in added professional or educational qualifications. In these times, especially, as Stephen J pointed out in Johnston's case, it is particularly relevant to refer to structural change in the economy and the need to import flexibility as to the possible career paths of workers, in order to take into account the impact of such change on employment prospects." 36If a consideration of those matters leads to a conclusion that there is a real prospect that but for the injury, the worker would have moved to some other "employment", the question then becomes whether that other employment is "comparable". 37The debate between the parties took place by reference to the position or positions which the appellant held before and after his injury and whether any change was due to the injury. The appellant's case was that at the time of his injury he was an allocations officer and that because of the injury his position changed to receiving and delivery clerk. On this basis, the amount which the appellant would probably have been earning upon the assumption that he was uninjured and in the same employment was the amount earned by an allocations officer whereas the amount which he was earning and is able to earn, though injured, was the amount earned by a receiving and delivery clerk. 38The Deputy President considered whether the appellant had established that there was a change in his position as a result of his injury. He concluded, relying principally on the appellant's evidence in the 2004 statement, that at the time of his injury, the appellant carried out the duties of a receiving and delivery clerk and that this did not change as a result of the injury: [125]. 39The Deputy President also addressed what the position would be if he was wrong in relation to his conclusion that this change had occurred before the injury. Making that assumption, he was not satisfied that any change in duties from allocations officer to a receiving and delivery clerk was due to the effects of the injury. In other words, he was not satisfied that the amount which the appellant would probably have been earning, on the assumption that he was an uninjured worker still engaged in the same employment, would have been other than what he was able to earn as a receiving and delivery clerk: [125]. 40For those reasons, he concluded that the appellant had failed to establish that he had suffered any economic loss as a result of the injury: [127]. In addressing the matter in this way, the Deputy President did not misapply s 40.

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