Monsma v Masonic Homes Inc and Elderly Citizen Homes of SA Inc [2003] SAWCT 133

2 The following matters were outstanding and proceeded to a further hearing on 17 October 2003. The evidence being that taken at the earlier hearing.

2 The quantification of the applicant's rights flowing from s 43.

(i) The applicant injured her left knee on 21 January 1990, 18 March 1990 and 5 December 1993.

(iii) She returned to work with restrictions in late February 1995.

(v) She commenced work with ECH on 1 November 1999.

(vi) She suffered a further injury to her left knee on 17 December 2000 whilst at home.

4 I held that MMH not ECH should compensate her. It was clear from the evidence in my judgment that the applicant never recovered from the knee disability she suffered at MMH. It is clear also from the evidence that after February 1995 she was partially incapacitated for her pre-injury employment.

5 Average weekly earnings set by s 4 is the average amount the worker could reasonably be expected to have earned for a week's work if the worker had not been disabled.

2 The section allows an examination of past earnings as evidence.

7 S 4 (9) imports into the calculation the notion of a "relevant date" ie the date of the commencement of the period of the worker's incapacity, or the date of the commencement of the last such period in cases of separate periods. The relevant date is on the face of it only applicable when ss 4(2)(a), 4(2)(b) and 4(7)(a) are under consideration.

8 The twelve month average is enabling not mandatory. It is also significant in a s 4(7)(a) situation where there is an Award rate.

9 I simply advert to those difficulties because the Act is not clear. Some date must always be the relevant date.

10 It is permissable to set the average weekly earnings by reference to s 4(1) standing by itself, after deciding the amount "the worker could reasonably be expected to have earned... if not disabled". Ie the 12 month average is a fall back position.

11 A number of dates present themselves from which to set the "relevant date". They are:-

5 December 1992 mentioned in par 4 of the judgment.

After each of the incidents the applicant returned to work.

On 21 September 1993 she underwent surgery. This led to total incapacity. She returned to work permanently under the umbrella of the Functional Capacity Evaluation in early 1995.

12 The chrondoplasty of 21 September 1993 was the significant and outstanding date of the commencement of incapacity that has continued.

13 It is known from TB 408 a document from MMH that the average weekly earnings on 15 September 1993 was determined at $626.89 per week.

14 The worker is prima facie entitled to 80 per cent of that figure as adjusted. It is not clear on the evidence in what classification or grade the worker was employed at that date.

15 It is known that on 20 April 1995 she was appointed to the grade of clinical nurse level 2, fourth year.

16 That is not the end of the matter. She is entitled to such adjustments as are provided for in both s 38 and particularly s 39. See Somerset v Schefenacker Vision Systems Pty Ltd [2001] SAWCT 124. There Gilchrist J examined the impact of s 39(2)(a)(i) on longstanding disability. I respectfully agree.

17 If the worker would have had the benefit of a "change in the rate of remuneration payable... to workers engaged in the kind of employment" she may be under-compensated by simply taking 80 per cent of the $626.89 figure if the increases were not factored into the Average Weekly Earnings.

18 It may well be that in the nursing profession workers are entitled to annual salary increments as their expertise and length of service broadens. At TB 407 Masonic Homes Inc state that the position of the worker at the time of leaving ie 2 April 1999 was registered nurse (CNC) level 2, fourth year. That is not necessarily the same as the s 39(2)(a)(i) position.

19 I do not know what the true position is because there is no evidence. No s 39 reviews ever occurred.

20 To enable me to reach a conclusion I order that the proper officer of MMH file a schedule setting out the grade and classification of the applicant as at:-

This should be confirmed by an affidavit and be filed in the Tribunal and served on the other parties eight working days after the delivery of this judgment.

21 It will be open to the worker to submit that the figure to which she is entitled is not limited to 24.5 hours per week because had she not been injured she may well have worked more hours.

22 Mr Kernot went further, and submitted that given the fact that the work provided in the last period of employment ie up to March 1999 in Barossa and Gambier Wards was not suitable employment, the worker in theory was entitled to 80 per cent of the difference between what she would have earned had she not been injured, and what she in fact earned in her two employments after March 1999 (see s 35(1)(b)(ii)).

1 a The judgment has not decided whether the applicant was partially incapacitated, or totally incapacitated.

(i) that WorkCover Corporation v Marina (1996) 185 LSJS 230 and NAD Gibson v Griffin Press P/L JD 69/1999 mandate that the relevant date must be 17 December 2001.

(ii) certificates of incapacity were submitted after 1994. Hence a fresh period of incapacity started on 17 December 2001, but the judgment does not in any event make findings sufficient to come to that conclusion.

(iii) If 17 December 2001 is the relevant date. Therefore s 4(2)(b)(i) the average weekly earnings over the previous twelve months (which in fact is $441.80 per week) should be used.

(iv) There has been no finding that the worker has been totally incapacitated since 17 December 2000.

(v) If 17 December 2000 is the "relevant date" the applicant is entitled to 100 per cent of her then average weekly earnings for the first twelve months and 80 per cent thereafter.

(vi) There might be substance in the 1993 date, if prescribed medical certificates had been furnished since 1993.

(i) I am not bound by the text and the parameters of the judgment. I am bound by the admissible evidence in the case.

(ii) As to the input of Marina. Contrary to Mr Saies' submission that does not assist MMH.

Page 7:- "the period of incapacity begins when it is determined that the worker is incapacitated". True it is that in Marina's case prescribed medical certificates were submitted continuously. (However note that the period was quite short) But as to the proposition that the submission of prescribed medical certificates is a condition precedent to the establishment of compensable incapacity, is to prefer form to substance.

The very purpose of a prescribed medical certificate is to put the compensating authority on notice that incapacity exists. If the compensating authority knows ex aliunde of the existence of the incapacity, proferring prescribed medical certificates is otiose.

The judgment in this case makes it crystal clear that after the Functional Capacity Evaluation in 1994, the ambit of the applicant's duties was governed by the recommendations of that Evaluation. Ie MMH proceeded on the basis that the applicant had a partial capacity. MMH knew of the applicant's incapacity. In par 14 of the judgment it is remarked that Mrs Pratt, the applicant's supervisor considered the work assigned to the applicant actually complied with the recommendations of the Functional Capacity Evaluation. MMH's case was conducted on the very basis that the work was "suitable employment", and because it was suitable employment the applicant had breached mutuality in resigning or abandoning her employment.

25 In my view the non submission of prescribed medical certificates in this case is quite irrelevant. The presentation of prescribed medical certificates is at best some form of evidence of asserted incapacity and no more. That much is clear from the decision of the Full Tribunal in WCC v Gibson [2000] SAWCT 33.

26 Gibson v WCC [1999] SAWCT 99 may have supported the proposition that the average weekly earnings should be set as at 17 December 2000 ie the date of the last injury. But that decision was overturned by the Full Tribunal reported at [2000] SAWCT 33 which applied Marina's case.

27 If the manner in which the incapacity is asserted was critical to the issue - and in my view it is not - it is difficult to imagine a more effective method of asserting incapacity than the employer actually arranging a Functional Capacity Evaluation of the injured worker and thereafter providing duties suitable to the worker's capacity as found - and then acknowledging as Mrs Pratt did, that it considered the duties so assigned and so provided, as being within the ambit of the Functional Capacity Evaluation. Whether they were or not is of course a quintessential question of fact. The judgement held that they were not.

28 The issue that arises hereafter is whether the applicant was obliged to formally notify MMH during the period April 1999 to December 2000 that she was still asserting partial incapacity.

29 I am of the view that she did not. She had asserted partial incapacity up until April 1999. MMH acted on that assertion. It had not provided suitable duties. It acknowledged that it was obliged to provide suitable duties. Even after April 1999 MMH was on notice certainly constructively - and probably actually, of the applicant's partial incapacity.

30 The applicant may well have been entitled to the benefit of s 35(2)(b) for some of the time since April 1999 but the evidence does not go far enough to enable me to decide that. She may well have been partial deemed total after April 1999.

31 The quantification of her weekly payments thereafter should at least have been calculated in accordance with s 35(1)(b)(ii) ie 80 per cent of the difference between the worker's notional weekly earnings and the weekly earnings the worker is earning in suitable employment.

32 MMH did not, even after the Tribunal became seized of the matter but particularly between April 1999 and December 2000 take the opportunity of arranging a medical examination whether pursuant to s 39, s 53(2) or Rule 22. If MMH complains of its ignorance of the applicant's physical condition it was an ignorance generated by its own inaction. Whatever the reason, the inexorable logic of the Act applied to the facts in this case leads to the conclusion that the worker is entitled to:-

a April 1999 to December 2000: weekly payments calculated in accordance with s 35(1)(b)(ii).

b From December 2000 weekly payments calculated in accordance with s 35(b)(i) "in a case of total incapacity the worker is entitled to weekly payments equal to 80 per cent of the worker's notional weekly earnings."

c That the applicant is currently totally incapacitated was accepted during the trial.

33 The evidence of Mr Henningsen, the treating orthopaedic surgeon (tr 97) "I do not consider Ms Monsma fit to return to her pre-injury duties."

"She has a very significant disability in the left knee".

35 The cross-examination of both medical witnesses by Mr Saies was extensive. Extensive submissions running to 45 pages concluded the matter. Not once was the proposition raised, that the applicant was currently in any condition other than that put by Mr Henningsen. The unchallenged evidence in the case is that the applicant is not fit for her pre-injury duties.

36 Hence I reject Mr Saies' submission that because MMH takes the view that the applicant is not totally incapacitated and it is only prescribed medical certificates submitted after 17 December 2003 to MMH that assert that total incapacity then (and on this Mr Saies agrees tr 236) MMH is not bound by the total incapacity finding. MMH as I repeat has not attempted to put itself into a position of controverting that last prescribed medical certificate by obtaining its own independent medical opinion.

37 The real problem in setting the average weekly earnings is that only MMH has the required information as to what the applicant's grade of employment and earnings would have been in April 1999 and December 2000 had she not been injured.

38 I would have thought that a discussion of those figures would have been essential to any advice on risk tendered to MMH and hence easily obtainable. Apparently this did not occur.

39 I would have thought that as the case was adjourned from 28 July 2003 to 17 October 2003 - or from the date of judgment 29 September 2003 to 17 October 2003 to take submissions on this very point, that the Tribunal would have been furnished with necessary evidence. That evidence was not forthcoming.

40 Mr Kernot submits that the calculation is governed by Riley v WorkCover Corporation [2000] SAWCT 183. If so that gives a current entitlement of $21,172.60. The formula is:-

= 25.065% of the prescribed sum ie $106800 = 26759.81 less paid 5587.20 Balance = $21172.61

Ie a current disability of 30 per cent and the previous assessment according to the determination of 3 April 1995 (TB 235) of eight per cent loss. That determination was based on the 1989 prescribed sum.

1 1989 on any version is the wrong year. It was part of Mr Saies' case that there was no injury in 1989. There are cases that can be made for 1992 or 1993.

The determination itself asserts that the primary injury was in 1994. However one thing is certain and that is that it was not 1989. Hence the applicant (who was unrepresented at the time) has been paid less than the amount to which she was entitled. That underpayment however will be rectified when the Riley formula is applied.

2 The 30 per cent disability assessment was made by Mr RJ Bauze on 4 July 2001.

42 Both orthopaedic surgeons say (and this was not disputed) that the condition of deterioration in the knee is progressive. An assessment over two years old may well undercompensate the applicant.

43 Mr Saies submits that Mr Kernot's calculation is correct but cannot be accepted because:-

1 There has been no adequate finding to ground the assertion that the increase in the level of permanent residual disability between 1994 and 2000 is due to the incident of 17 December 2000.

44 Mr Saies did not favour me with his client's views as to what if any increase there was - although he concedes (tr 238):-

45 To say that I find that this approach is unhelpful is an understatement. The findings on the evidence is the only basis on which I can decide the issue.

46 I accept Mr Kernot's submission that the application of Riley's case is determinative of the issue. As it would be unfair to the applicant to delay the assessment any longer (she has been waiting almost three years) I fix the quantum of compensation to which she is entitled at $21172.60

47 Because this sum does not carry interest, I order it to be paid within seven days.

48 The third point agitated was the question of costs.

"you have sustained a secondary disability whilst working at ECH. The walking on hard floors whilst working at ECH over the preceeding six months establishes a probable cause. It arose out of employment and employment (with ECH) contributed to your disability.

The previous injury with Masonic Homes is not the current disability it is the prior disability.

You should therefore lodge your claim with ECH as they were your employer at the commencement of the incapacity on 17 December 2000".

(iv) Determination by ECH to reject claim on the grounds that:-

"your duties at ECH have not contributed to your current left knee condition nor aggravated the pre-existing degeneration".

50 Both matters wound their way through the Tribunal until the reached the Chamber list in April 2002. Judicial conciliation followed. That was adjourned and was ultimately unsuccessful. The chamber judge cleared the matter for listing on 5 March 2003. It was given a priority listing.

51 The statement of issues, raised the question of whether the worker had allegedly breached the obligation of mutuality with MMH as points nine and ten in a twelve point issues document.

52 The determination admitted an injury in 1994. The determination did not raise the issue of breach of mutuality.

53 Both matters proceeded in tandem through the chamber list. No consolidation order was sought or made. No order for separate trials was sought or made. The trial proceeded as if technically a sequence order had been made to the effect that the evidence in one trial was to be the evidence in the other.

54 Procedurally, the applicant was cross-examined by Mr Saies and then Mr Walsh.

55 The applicant's medical expert was cross-examined by both respondents.

56 The ECH medical expert was cross-examined by the applicant and Mr Saies.

57 MMH did not arrange a medical examination nor tender any medical evidence of its own - suprisingly in the light of the determination that conceded an injury in 1994 and the assertion that the current disability was the responsibility of a later employer.

58 The cross-examination by Mr Saies occupies 56 pages of transcript. Of the great variety of questions, less than ten per cent were directed to the issue of breach of mutuality.

59 Not one question was directed to the worker in cross-examination about her work at ECH even though that was the specific ground relied upon in the MMH determination:-

"Therefore it is our belief that you have sustained a secondary disability while working at ECH".

60 This passage appears at tr 56 and is unchallenged: "Chris Rakeo rang me and advised me that ECH would be responsible for a second injury (Chris Rakeo being from MMH)"

61 There is no dispute that the applicant should recover her costs.

62 The relevant statutory provisions are:- s 88F "Subject to this Act the costs of proceedings before the Tribunal are in the discretion of the Tribunal".

63 S 95: A party (other than the relevant compensating authority) is entitled, subject to this part and to the limits prescribed by Regulation to an award against the relevant compensating authority of the party's reasonable costs (thereafter follows limitation proceedings that are not apposite)

(d) if the dispute is about a compensable disability and the employer from who's employment the disability arose or is alleged to have arisen is not the applicant - the employer

(e) a person who has a direct interest in the dispute and has notified the Registrar

65 S 85: The Tribunal must act according to equity, good conscience and the substantial merits of the case without regard to technicalities and legal forms.

Bench If there are separate proceedings surely the worker gets the costs of a separate proceeding.

Bench Well if they're not separate proceedings then I should deal with the costs between virtually joint defendants.

Mr Saies Yes precisely but there is just no power to apportion that's my point I accept that you can do no more than make an order for costs in favour of the worker against both compensating authorities. I don't think that I can put it any simpler than that.

67 I am of the view that ECH is a "party to the dispute" within the meaning of S 89(d) and 89(e). The dispute in its widest form is whether the knee disability is compensable and if so by whom and to what extent (including s 43 and s 32 issues).

68 Dispute 2482/01 nominates Masonic Homes as the respondent.

69 ECH is a party by virtue of s 89(e) because that is precisely what the text of the MMH determination asserts.

70 ECH is a party by virtue of s 89(e) because it has an interest in the outcome of the dispute narrowly defined, even though no formal notice was given to the Registrar.

71 In this case s 85 should be applied ie whatever the ambit of that section, it applies in its narrowest to procedural matters and the failure to give notice to the Registrar is such a matter because:-

(i) On one view ECH was brought into the matter at the instigation/invitation/suggestion of MMH

(ii) MMH knew of ECH's involvement from the inception of the proceedings in the Tribunal since 10 April 2001 and at no time suggested that it was disadvantaged by the procedure adopted.

72 I agree with Mr Saies that the practical way of dealing with this matter is to treat the respondents as joint respondents. The alternative of treating the costs issue as divisible between the two separate disputes is cumbersome and productive of further delays for the worker and the ultimate resolution of this matter.

73 I propose to treat the respondents as if they were joint respondents to one dispute.

74 I therefore order that the respondent MMH pay the costs of the worker against both respondents.

75 Mr Walsh submits that his client should also have an order against MMH because ECH has the locus standi of a party. The "relevant compensating authority" in s 95 is MMH. None of the limiting factors in s 95 apply. The whole of the liability for compensating the worker is the responsibility of MMH.

77 Supreme Court Rule 101 gives some guidance - see generally Judge Lunns commentary.

78 In Supreme Court Rule 101.01.22 there is authority that if the defendants are jointly liable the court in its discretion may order one defendant to pay the costs of another (Martin v Stratman (No 2)) JUD No 3700 161192 per Cox J.

79 Here, as ECH were not liable, it might be thought that the above rule would apply afortiori.

80 Rule 101.01.60 sets out the nature of Bullock and Sanderson orders. There is no scope for a Bullock order here.

81 A Sanderson order (Sanderson v Blyth Theatre Co (1903) 2KB 533) is an order that the unsuccessful defendant pay the costs directly to the successful defendant.

82 "A Sanderson order ... will only be made if the causes of action against the various defendants are substantially connected or dependant upon each other (Micarone v Perpetual Trustees (Aust) Ltd (No 2) 1991 9 SASC 533" (F.C.)

83 There is no reason why the principles outlined above should not guide me in exercising discretion invested in me by s 88F and s 85.

85 I therefore rule that MMH pay the costs of the respondent ECH.

86 If I was constrained to rule that ECH pay the costs of the applicant in dispute 5303/01 ie to treat that, as an entirely separate dispute, by parity of reasoning I would hold that MMH was a party to that dispute, and exercised its rights as a party, and I would make a Sanderson order against MMH.

1 Average weekly earnings: The respondent shall disclose to the Tribunal and to the solicitors for the applicant the factual material to establish:-

A To what grade would the applicant have progressed:

B What would have been her notional weekly earnings as at:-

C That the above information be reduced to a schedule verified by affidavit filed in the Tribunal and served on the applicant's solicitors and counsel within eight working days from the publication of this judgment. If the parties cannot agree on the figures I will hear further submissions on the material.

2 In regard to the s 43 entitlement of the applicant:-

A I order MMH to pay to the applicant the sum of $21172.61 within seven days.

A I order that MMH pay the applicant's costs in the proceedings against MMH and ECH. They should be assessed or taxed as one matter.

B I order that MMH pay the costs of ECH to be assessed or taxed.

88 Finally I leave this phase of the matter with an emphasis that I am quite concerned about bringing this longstanding matter to a close. The applicant has had no compensation since December 2000, nearly three years. She urgently needs a major operation on her knee.

89 The material on which the AWE is based should have been available when the case commenced in June 2003 and at the very latest on 17 October 2003.

90 Finally MMH should have been aware of the s 43 problems ie that the determination of 3 April 1995 proceeded on a false premise of the wrong prescribed sum.

Parties are advised that if a party wishes to appeal against any part of this decision which is appealable pursuant to s 86(1) of the Act such appeal must be filed with the Registrar in accordance with the form titled Notice of Appeal within 14 days of the delivery of this decision and must be served on all parties.