Energy Australia v Butler [2010] NSWSC 487 | Case summary

JUDGMENT 1 HIS HONOUR: The plaintiff, Energy Australia, was the employer of the first defendant, Brian Butler. The first defendant was injured in the course of his employment and applied for compensation under the Workers' Compensation legislation. In 1995 he received a lump sum award for permanent impairment. In 2009 he made a further claim for compensation for permanent impairment. This summons is concerned with what the plaintiff asserts were errors in the process of determining that claim. 2 The first defendant suffered a valgus stress injury to his left knee on 13 July 1981. He was referred to Dr Vote, who treated him. The knee made a reasonable recovery but was never the same and pain was always present. In 1992 the pain became worse and the knee began to lock. The symptoms were aggravated when the first defendant slipped and fell on stairs in October 1992. He returned to Dr Vote who performed an arthroscopy on or about 18 August 1993. He continued to see Dr Vote and underwent physiotherapy. 3 He made an application for an award of compensation for permanent impairment of the knee, as well as for impairment of a wrist which had been injured on another occasion. On 30 June 1995 orders were made in the Compensation Court of New South Wales under the Workers' Compensation Act 1987 awarding him a sum of money under s 66 of that Act in respect of 15 per cent loss of the use of his left leg at or above the knee as well as a sum in respect of pain and suffering and a sum for interest on the award concerning the knee. 4 Unfortunately the knee became worse, and the first defendant underwent a further arthroscopy in about 2000. He was referred to Dr Caldwell, who performed a total knee replacement in April 2002. Although the results were reasonably good, the knee became worse and the first defendant experienced limitation with his mobility and other problems. The wrist for the incapacity of which he had been compensated got worse as well. He made a fresh application seeking compensation for permanent impairment of the leg and the wrist 5 In the application, under the heading Injury Details, particulars were set forth. 6 Under "Date of Injury" there appeared this - 24 July 1977, 30 June 1995 (deemed date) or alternatively 1 October 2008 (deemed date) 7 Under the heading "Date of notice of injury" was the following - On or shortly after 24 July 1977 and various dates including on or shortly after 13 July 1981, on or shortly after 19 October 1992 and 1 October 2008 8 Under the heading "Date of Compensation Claim" there appear this - On or shortly after 24 July 1977 and various dates including on or shortly after 13 July 1981, on or shortly after 19 October 1992 and 1 October 2008 9 Under the heading "Injury Description" appeared: Right hand/wrist and left leg 10 Under the heading "Describe how the injury occurred" appeared this - The Applicant sustained injury to his left knee from performance of heavy and repetitive duties in the course of his employment including specific incidents on 13 July 1981 and 19 October 1992. In earlier proceedings, the Applicant's injury deemed to have a date of injury of 30 June 1995. In the alternative, the Applicant argues a deemed date of injury as the date of lodgement of the permanent impairment claim form. The Applicant sustained injury to his right hand/wrist on 24 July 1977 when he tripped and fell in the course of his employment. 11 In response to the application the Registrar by a delegate prepared a document called Amended Referral for Assessment of Permanent Impairment to Approved Medical Specialist. It was addressed to Dr William Bye, the selected approved medical specialist. It dealt with both injuries. The particulars of the claim for the hand or wrist are of no present interest. The date of injury for the knee is described as 30 June 1995. 12 Dr Bye assessed the claim. He had before him reports of orthopaedic surgeons Dr Marnie and Dr Bentivoglio, who had assessed Mr Butler at the request of his solicitor. Dr Bentivoglio made an assessment in a report of 13 June 2008. Dr Marnie made an assessment in a report of 2 February 2005. He had written reports on 22 and 27 October 1999 as well. Neither Dr Bentivoglio nor Dr Marnie mentioned the award made for wrist and knee in 1995. Neither suggested any deduction to allow for the previously existing impairment underlying the award made in 1995. 13 Dr Bye assessed the permanent percentage loss of function of the left leg at or above the knee as equal to 30 percent. His assessment included this observation - I presume the date of injuries for the left leg at or above the knee is a Deemed Date, 30/6/1995 as his original injuries were in 1981. 14 Under the heading Deduction (if any) for the Proportion of the Impairment that is due to Previous Injury or Pre-existing Condition or Abnormality, Dr Bye said - This does not exist. 15 The Registrar prepared a Medical Assessment Certificate on 29 June 2009. 16 It is implicit in the plaintiff's submissions that Dr Bye's assumption that 30 June 1995 had been adopted as a Deemed Date for the injury to the knee was erroneous. The notion appears to have originated in the first defendant's application, to be repeated in the Registrar's amended referral. An inspection of the sealed order, endorsed by the Registrar, gives no explicit support to a suggestion that the date of the injury to the knee was to be regarded as 30 June 1995. The order contains no statement as to the date of either of the injuries for which it makes provision. 17 The plaintiff appealed. In its application it said that it wished to be present at an oral assessment conference. It furnished written submissions, which contained the following passages intended to demonstrate error, In regard to the loss of the left leg, the Appellant says, firstly, that there needs to be a deduction applied for pre-existing abnormality and secondly, that the Certificate then needs to reflect credit for the payment made for the previous 15% loss. The Approved Medical Specialist is clearly in error in assessing all of the Applicant's loss of use of his left knee as attributable to "injury" on 30 June 1995, without deduction for pre-existing abnormality, particularly as the Approved Medical Specialist has, quite properly, attributed the Worker's left knee injury to the injury sustained in 1981. No Assessment in respect of the Table of Disabilities is available for injury to the leg in 1981, so what was required was for the Approved Medical Specialist to make a deduction (the Appellant says a complete deduction), for pre-existing abnormality, or injury. The Appellant submits that the deduction, which should have been made, ought to have been 100%. This would be consistent with the view expressed, for example, in the report of Dr Marnie dated 27 October 1999, to the effect that, "…the major part of his disability in his left knee is due by way of cause to the fall in 1979" [sic]. In addition, this would be consistent with the views expressed in the report relied on by the Worker from Dr Bentivoglio dated 13 June 2008 (see Page 10), to the effect that, "…all of this gentleman's knee disability relates to the original injury he had to his knee at work in the early 1980's". The Appellant submits, further, that the failure by the Approved Medical Specialist to make a deduction (the Appellant says a 100% deduction), for pre-existing abnormality to take account of the injury in 1981 (such injury not being relied on in this Application), is specifically inconsistent with all of the evidence, including, for example, the Statement of the Applicant dated 11 February 2009 (see, for example, paragraphs 10 and 11) and the reports of Dr Vote dated 29 July 1981 and 13 November 1992 and also (again, by way of example), the report of Karen Stewart of Work Right dated 5 may 1998, wherein is recorded the fact that the Specialist, Dr Vote, considered the requirement for knee replacement surgery inevitable, as early as 1991 (before the injury the subject of the Application). The Appellant submits that in view of this evidence (amongst much other evidence), the deduction required by the Approved Medical Specialist, for pre-existing abnormality, ought to have been 100%, or, un the alternative, very close to 100%, in circumstances where all of the Applicant's problems were attributable to the injury he sustained to his knee in 1981. 18 There is a procedure that has been called a "gateway" whereby, under s 327(4) of the Workplace Injury Management and Workers' Compensation Act 1988 ("the Act") the Registrar needs to be satisfied that at least one of the grounds of appeal has been made out. Unless that is done the appeal can go no further. The Registrar gave a Certificate and an Appeal Panel was appointed. 19 The Panel considered the plaintiff's request to have an opportunity to present oral submissions but decided that it was appropriate to determine the appeal on the papers. In giving its reasons it observed that the appellant had not explained why the matter could not be dealt with on the papers or why the matters raised in its appeal could not be dealt with by its written submissions. The written submissions were dealt with as follows in of the reasons given by the Appeal Panel on 6 October 2009. The references to AMS are to the Approved Medical Specialist, Dr Bye. Those to MAC are to the Medical Assessment Certificate and those to ARD are to the Application to Resolve the Dispute. The AMS assessed the Respondent's loss of his left leg at or above his knee to be 30%, which assessment neither party challenges, and with which, in any event, the Panel agrees. The Appellant's challenge to the MAC with respect to this assessment is, essentially, that the AMS should have found that all, if not most, of this loss was due to the injury on 13 July 1981 and not the injury on 30 June 1995, and to the extent that no deduction was made to reflect that, the Appellant submits the AMS has applied incorrect criteria and the MAC contains a demonstrable error. The Respondent submits in reply, essentially, that the specific incident that occurred on 13 July 9181 forms part of the "performance of the heavy and repetitive duties" he did in his employment that resulted in the injury to his left knee that is the subject of his current claim and that was in earlier proceedings in the Compensation Court "deemed to have a date of injury of 30 June 1995". In other words, the Respondent is saying that all that occurred to his knee in his work, including specific incidents such as that which happened on 13 July 1981, is subsumed within the one injury that either the parties have agreed or the Court has determined was deemed to have happened on 30 June 1995. Matters relating to what constitutes the Respondent's injury or injuries, the pathology of his injury or injuries, whether pre-existing pathology or pathology arising from any earlier injury has been worsened by work events or other factors, whether the pathology of any injury or injuries was healed, whether the Respondent has suffered one or more injuries, and the date or dates on which the Respondent suffered injury or injuries, are matters not within the province of an AMS or Panel. If there is dispute about any such factual matter, an arbitrator must determine that dispute. It is therefore incumbent on the parties to highlight prior to a matter being referred to an AMS exactly what are the factual matters upon which they are in dispute so that they can be determined by an arbitrator. Further, if there is any dispute about whether an estoppel arises from earlier proceedings, then that too must be resolved by an arbitrator, and again it is incumbent on the parties to identify these types of disputes so that they can be determined. It is particularly difficult to decode from the ARD and the Appellant's Reply, whether there was a dispute between the parties with respect to any issue relating to whether the Respondent's pathology in his left knee arising from one injury or more than one injury. That is to say, the Respondent is saying, essentially, that it has either been previously determined or agreed that all work events that have precipitated or worsened a pathology in his knee have been agreed by the parties to constitute an injury falling within the definition of injury contained in s 4(b), and which has been agreed or determined to have happened on 30 June 1995. If that is not the case, then the Appellant should have identified this before the matter was referred to the AMS so the issue could have been resolve. Based on the ARD, and the Certificate of Determination, which only omitted from the proceedings the claim in the alternative the Respondent was bringing, the AMS was correct in the Panel's view to approach the matter on the basis that as all work matters affecting the Respondent's left knee were subsumed within the injury, said to have occurred on 30 June 1995. In other words, that approach is consistent with the ARD, the Reply and the Certificate of Determination. The Panel therefore considered the AMS has issued a MAC that responds to the matter that was referred to him to assess, and the Panel therefore considers the AMS has not applied incorrect criteria and that the MAC does not contain a demonstrable error. 20 The result was that, apart from a minor and uncontentious amendment, the Appeal Panel determined the appeal in accordance with Dr Bye's assessment. 21 At the hearing before me, the first defendant, was represented by counsel. He had previously filed an appearance in which he submitted to the orders of the Court save as to costs. Accordingly, counsel made no submissions as to the merits of the plaintiff's case. The second and third defendants are the Appeal Panel and the Registrar. They each filed a submitting appearance. 22 At the commencement of the hearing Ms Welsh of counsel sought leave to appear as amicus curiae representing the Workcover Authority of NSW, the Administrator of the Worker's Compensation Scheme. The grant of leave was opposed and there was debate about it. I granted leave to the Work Cover Authority to appear by counsel in view of the somewhat unusual circumstance that the first defendant has declined to argue the case on the merits. I allowed Ms Welsh to make submissions about the applicable law although I did not permit her to attempt to persuade to the Court on the merits of the plaintiff's claim. That was because counsel for the plaintiff was present to contend for the orders sought and counsel for the first defendant could, if she had wished, have attempted to persuade the Court against making those orders. No reason was offered why counsel had taken that attitude. As to these matters, see the judgment of Brennan CJ in Levy v Victoria (1996 -1997) 189 CLR 599 at 605. 23 In the summons the plaintiff seeks the following orders - 1. A declaration that the decision of the Medical Appeal Panel (the Second Defendant) dated 6 October 2009, involved error the face of the record and jurisdictional error 2. An order that the decision of the medical Appeal; Panel be quashed. 3. Costs. 4. Such further, or other Order as the nature of the case required. 24 The grounds on which the Plaintiff claims the orders are these- 1. Error by the Appeal Panel in failing to provide the Plaintiff with a Hearing which was sought. 2. Error by the Appeal Panel in not properly exercising the discretion in deciding whether to hold an Assessment hearing. 3. Error by the Appeal Panel in not properly considering the Grounds relied on by the Plaintiff on Appeal to the Appeal Panel in circumstances where the Registrar was satisfied that at least one of the Grounds of Appeal is made out. 4. Error by the Appeal Panel in failing to revoke the Medical Assessment Certificate consistent with the finding of the Registrar and the Grounds relied on by the Plaintiff. 5. Error by the Appeal Panel in including injuries prior to 1 July 1997(and in particular 13 July 1991) in its assessment of a loss of the use under the Table of Disabilities.

Consideration 25 The Appeal Panel determined the appeal by reference only to the written material filed by the plaintiff and the first defendant as appellant and respondent as well as, I suppose, the court record. The Panel was therefore in the position to understand the nature of the dispute, legal and factual, raised by the parties. The Appeal Panel knew that neither side was challenging the AMS's assessment of 30 percent and that the issue they had joined was whether the assessment ought to have incorporated a deduction to allow for the degree of impairment for which the respondent was compensated by the orders of 30 June 1995. The Appeal Panel must have supposed that the parties would expect it to determine that question, whether or not that determination should depend on the answer to the question whether the date of the knee injury was 13 July 1981 or 30 June 1995. Without notice to the parties, however, the Appeal Panel dealt with the matter on a basis not treated in the written submissions of either side, namely that the Panel had no power to deal with what it was being asked to do. These remarks appear in its reasons:- The parties seem to be confusing the functions of an AMS and the functions of an Arbitrator. The Respondent's claim for compensation under s 16 of the 1926 Act is to be determined by an Arbitrator (ss 288 & 375), not an AMS. With respect to the Respondent's claim, because there was a dispute about the degree of the Respondent's loss, the Registrar was bound to refer that particular aspect of the dispute to an AMS to assess before an Arbitrator could determine the dispute about the Respondent's claim for compensation (s 293). In compliance with s 325, the AMS issued a certificate that is binding on the issue of the degree of the Respondent's loss (s 326), which means effectively that this is the only evidence an Arbitrator will consider on that particular issue. In terms of determining the compensation to which the Respondent is entitled, the Arbitrator will no doubt take into consideration any compensation which the Respondent may have already received under s 16 for this injury 26 A party has the right to decline to consent to a hearing on the papers and to make oral submissions to a Tribunal: Ah Dar v State Transit Authority of NSW (2007) 69 NSWLR 468 per Bell J at [63]-[69]. That does not mean, of course, that in a proper case a tribunal may not, subject to the requirements of its statute, determine to deal with a matter without a requested oral hearing. But when a tribunal has been requested to give an opportunity to a party to make oral submissions, it needs to be confident that questions are unlikely to arise that call for oral submissions. And even if it so appears at first, if such questions arise during the course of its consideration the tribunal should be astute to recognise the fact and reconsider its original decision. 27 It seems to me that there were substantial arguments that could have been put before the Appeal Panel which, if correct, were capable of showing that it would be wrong for the Panel to come to the decision it ultimately did. It is unnecessary for present purposes to decide whether such arguments ought ultimately to persuade. It is sufficient to say that they were available but could not be put because an oral hearing had been denied. 28 An argument runs as follows. The source of the error of the AMS and the Appeal panel was a mistaken belief that the first defendant suffered an injury on 30 June 1995. There was no injury on 30 June 1995. The evidence showed that the first defendant had injured his leg on 13 July 1981 and again in November 1992. There was no foundation for his assertion that there was a "deemed" injury on 30 June 1995. Section 323 of the Act required a deduction to be made in the assessment. The section is follows: 323 Deduction for previous injury or pre-existing condition or abnormality (1) In assessing the degree of permanent impairment resulting from an injury, there is to be a deduction for any proportion of the impairment that is due to any previous injury (whether or not it is an injury for which compensation has been paid or is payable under Division 4 of Part 3 of the 1987 Act) or that is due to any pre-existing condition or abnormality. (2) If the extent of a deduction under this section (or a part of it) will be difficult or costly to determine (because, for example, of the absence of medical evidence), it is to be assumed (for the purpose of avoiding disputation) that the deduction (or the relevant part of it) is 10% of the impairment, unless this assumption is at odds with the available evidence. Note. So if the degree of permanent impairment is assessed as 30% and subsection (2) operates to require a 10% reduction in that impairment to be assumed, the degree of permanent impairment is reduced from 30% to 27% (a reduction of 10%). (3) The reference in subsection (2) to medical evidence is a reference to medical evidence accepted or preferred by the approved medical specialist in connection with the medical assessment of the matter. (4) The WorkCover Guidelines may make provision for or with respect to the determination of the deduction required by this section. (5) (Repealed) Note. Section 68B of the 1987 Act makes provision for how this section applies for the purpose of calculating workers compensation lump sum benefits for permanent impairment and associated pain and suffering in cases to which section 15, 16, 17 or 22 of the 1987 Act applies. 29 By s 282 Worker's Compensation Act 1987 Schedule 6 Clause 5 applies. Clause 5 provides as follows:

Energy Australia v Butler

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