MEDIUM NEUTRAL CITATION [2002] VCAT 1496

1. The decision of the respondent made 24 April 2001 is set aside.

2. By reason of injuries suffered in a transport accident on 5 November 1999, the applicant suffered total loss of earning capacity for a period of 73 weeks.

3. The applicant's application for payment for loss of earning capacity is remitted to the respondent to be assessed.

4. The respondent pay the applicant's costs of the application, including reserve costs, such costs to be taxed in default of agreement on County Court Scale "B" on a solicitor/client basis on all items reasonably incurred. And I certify for 1 refresher and 2 hours of conference.

For Applicant: Mr D Gibson instructed by Ellis Palmos & Co

1. This is an application to review a decision of the respondent made on 24 April 2001 whereby the respondent found that the applicant has no claim for loss of earning capacity. The claim for loss of earning capacity is for a period commencing on 25 May 2001 and concluding on 5 November 2002. From that period, two weeks is deducted from 9 September 2002 to 16 September 2002 when the applicant did some work at Cluny Hospital. So, in fact, this is a claim for 73 weeks.

2. The applicant was involved in a transport accident on 5 November 1999. The circumstances of the transport accident were that the applicant's vehicle which she was driving was stationary in Lower Heidelberg Road when it was hit in the rear by another vehicle. She allegedly suffered back and left shoulder injury and later (in April) after some hydrotherapy, she allegedly suffered right knee injury. An ambulance took her to the Austin Hospital where she was observed for some five hours. On 8 November 1999, she visited her general practitioner Dr Irene Rose.

3. The applicant was born on 1 September 1951 in Greece and she is currently 51 years of age. In 1970, she migrated to Australia, married in 1971 and had three children. In 1982, she commenced working as a cutter in Slades Knitwear. While in the course of that employment, she suffered injuries lifting some heavy garments and material to a work table. Those injuries consisted of left shoulder, neck, chest and back pain. It is interesting to note the description of those injuries were described in a document before the Accident Compensation Tribunal which the applicant filed on 11 April 1989. In that document she described her injuries as follows :

"1. Injury to the thoracic spine with pain, discomfort and limitation of movement with referred pain into the left breast and left chest.

2. Injury to the left chest, left arm and cervical spine.

4. In May 1987 she returned to work but only worked for one hour. There was then the Accident Compensation proceedings that I referred to and, as a result of those proceedings, the claim was eventually settled where the applicant received between $4000 and $5000.

5. Between 1990 and 1995, the applicant attended her general practitioner on several occasions when she complained of left shoulder, neck and thoracic pain. In 1995, there was reference to back pain in the thoracic region and right shoulder and neck pain. Those complaints were made on several occasions during that period apart from the thoracic pain in the back in 1995 to which I have referred.

6. Between 1989 and 1994, the applicant did not work at all. In 1994 or 1995, the applicant commenced work as a cook with Graceton Nursing Home, initially working for an outside catering organization called Fisher and then working for an outside catering organization called Eurest. I understand that at some time Fisher's catering service was taken over by Eurest. This work initially involved working some five days per week but then weekend work became available which paid much the same as the work of five days a week. On this basis, the applicant began to work on Saturdays and Sundays of each week between 9.00 am and 1.30 pm. That is a total of 6 ½ hours per day on consecutive days. There were occasions when she would work on week days when called upon. This work was continuous and she apparently had very little time off between then and the transport accident save for some occasions which I will mention. This work required the applicant to lift heavy pots of water and food from the bench to the stove, these pots would contain food sufficient for some 30 people. So they were very heavy and apparently the applicant managed to do this job without any difficulty whatsoever in spite of the previous problems of back and shoulder pain that she had suffered.

7. On 29 June 1998, the applicant fainted and, as a result, had a fall at home where she hit her right knee and fractured her sacrum. She was off work for a few weeks. The knee was weak for some time but eventually it resolved and she did not seem to have any further problems until late 1998 when she suffered from tennis elbow. However, that apparently resolved and she returned to work and had no further problems until 27 May 1999. On that day, she was a front seat passenger in a motor vehicle involved in an accident (which accident I do not have particular details of). However, the doctor's notes reveal that she had injuries to her left arm and hand, she had left-sided headaches and shooting pain in the chest and head. Apparently all those injuries recovered fairly quickly and she was able to return to work where she continually worked in the manner that I have described earlier until the date of the transport accident on 5 November 1999. In this accident she suffered injury to her thoracic back and right knee, she also had referred pain in her shoulder and arm.

8. The applicant visited her general practitioner, Dr Irene Rose, who prescribed Panadol and Voltaren. In December 1999, she was referred to an orthopaedic specialist, Mr John O'Brien, who had an MRI conducted which showed that she had a degenerative disc at level T7/8. There is no evidence to show whether or not this disc is related to the transport accident. He also recommended that she have hydrotherapy. She was having the hydrotherapy as a result of injuries she received in the transport accident of November 1999 with Jo Rankin. It is unclear whether at this time her knee injury arose because of the hydrotherapy or the knee injury was there as a result of the transport accident. However, certainly the symptoms of the knee injury did come to light until April 2000. I find that those symptoms either related to the transport accident directly or they related to the transport accident in the sense that it was the transport accident that required the applicant to have the hydrotherapy which caused the knee problem. Apparently she has had some problems with the meniscus of the knee which does require an operation but that operation has not yet taken place. She saw Dr Sutherland in relation to the right knee.

9. The applicant was off work continually from the time of the transport accident until July 2000. At that time, the respondent had engaged an organization called Work Place Initiatives to try and help the applicant back to work and they did try and were successful. She returned to light duties with the same employer Eurest but this time at Bethany Hospital, that being a larger nursing home, and there were a number of people able to assist her in the kitchen, unlike the previous nursing home where she worked where she was the only cook and she only had one person that could assist her. Initially, she started to perform duties at Bethany for four hours work per day. These were increased but the applicant suffered back pain and the days were eventually made non-consecutive days. This was built up to six hours per day, ie, they were gradually increased to six hours per day for two days per week. She was performing work such as cutting sandwiches and putting them on trays, making fruit salad and work of that nature. She was also lifting trays but less than 5 kg. Unfortunately, her employer Eurest in April 2001 decided to terminate her employment. I infer from the surrounding evidence, that her employment was terminated because she was unable to perform the heavy duties required ie lifting of pots and other duties.

10. Just prior to this time in about February 2001, an organization called WISE Employment was looking after her situation and they tried to find her employment. However, she found the Melbourne winter was aggravating the conditions and injuries she received in the transport accident and there is medical evidence to support this. As a result, she decided to travel to Greece for the summer where she was between 21 June and August 2001. WISE attempted to find her employment at numerous places and eventually on 2 September 2002, she started on a trial basis at the Cluny Hospital in Kew. That employment lasted some two weeks where she was working 4.00 pm to 7.00 pm two days per week. However, during that time, she had problems with her thoracic spine, her back in general and her right knee, and in the second week the pain was far worse for her than in the first week. She was told by her employer that they did not want her and it was not working out. Thus, the applicant now claims that she is unable to work as a result of the injuries she received in the transport accident because she no longer has the ability to perform the work which she previously could perform.

11. The legislation which governs this is to be found in the Transport Accident Act 1986. Section 49(1) of that Act reads as follows :

"(1) The Commission is liable to pay to an earner who, as a result of a transport accident -

a weekly payment in respect of that loss after the first 18 months after the accident or after the earner ceases to be entitled to payments under section 44 or 45, whichever last occurs, while that loss continues".

I pause here to say that the applicant was paid her full entitlement to loss of earnings by the respondent.

12. S.49(5) defines "pre-accident earning capacity" as follows :

"In relation to an earner who suffers loss of earning capacity as a result of an injury in a transport accident, means the amount the Commission determines as the weekly amount the earner had the capacity to earn before the transport accident in employment reasonably available to the earner in view of the earner's training skills and experience less such amount as the Commission reasonably considers to be the amount of income tax that would have been payable on that weekly amount under the Commonwealth Income Tax Act 1936"

"If an amount cannot be determined in accordance with the definition of 'pre-accident earning capacity', the amount is deemed to be the amount which is equal to 80 percent of average weekly earnings of all employees for Victoria last published by the Australian Statistician.

14. Section 50 relates to partial loss of earning capacity and Ms Bourke, who appeared for the respondent, says that if her initial submission fails that as the applicant has not demonstrated loss of earning capacity at all, then it should only be partial loss of earning capacity. That section reads as follows :

(1) The Commission is liable to pay to an earner who, as a result of a transport accident-

a weekly payment in respect of that loss after the first 18 months after the accident or after the earner ceases to be entitled to payments under section 44 or 45, whichever last occurs, while the loss continues".

15. Section 50(5) defines "post-accident earning capacity" as follows :

"In relation to an earner who suffers partial loss of earning capacity as a result of an injury as a result of a transport accident, means the amount the Commission determines as the weekly amount (less such amount as the Commission reasonably considers to be the amount of income tax that would have been payable on that weekly amount under the Income Tax Assessment Act 1936 of the Commonwealth as amended and in force for the time being) the earner has the capacity to earn, despite the injury, in employment reasonably available to the person having regard to -

(a) the nature of the injury and the degree of impairment; and

(b) the potential for rehabilitation and the person's ability to undertake rehabilitation; and

(c) the earner's training skills and experience; and

16. Section 52 reads as follows :

"The Commission is not liable to make payments to a person under section 50 if the difference between the earner's pre-accident earning capacity and post-accident earning capacity within the meaning of that section is less than 10 percentum of the pre-accident earning capacity".

17. The applicant has been examined not only by her own doctor, Dr Irene Rose, who has been her general practitioner for a number of years but the applicant attended the clinic at which Dr Rose is a partner for a number of years before that. She has also been examined at the request of her solicitors in relation to this claim by Professor K Myers. At p.4 of that report Professor Myers diagnosed the applicant's problem under the heading "Diagnosis and Prognosis" as follows :

"I consider that the motor vehicle accident has either caused or aggravated a pre-existing problem of degenerative intervertebral disc disease in the low cervical spine and in the mid thoracic spine. There is also probable damage to a medial meniscus and or medial ligament of the right knee".

He then refers to an element of secondary psychiatric disability and to her ability to work. He states :

"She will not be able to cope with heavy work activities that involve prolonged standing and heavy lifting because of the problems in the spine and the knee. In theory, she would be suited to sedentary work activities that would allow her to sit or stand as required without any heavy lifting, but I doubt that such work would be available to her by virtue of her past educational and vocational activities".

18. The applicant was also examined by Dr Baker, on several occasions, at the request of the respondent. In his several reports, he refers to the type of work that she was able to do subsequent to the accident such as sandwich making, preparation of vegetables, sorting cutlery and making up of trays, plating of foods and cereals and making up trays to order, cutting and wrapping of cake, washing up small items. In his report of 14 December 2000, Dr Baker diagnosed the applicant's problems as follows :

"Mrs Tsiavas was involved in a road traffic accident and suffered injuries previously noted. Although I note the recent CT scan reports normal findings I am still suspicious that she has a symptomatic disc at the T7/8 level of the spine".

He then noted that she had presented honestly and was mildly anxious and he noted her returning to work. He further stated as follows :

"I consider Mrs Tsiavas is capable of working her normal hours of employment, provided that the days of work are not consecutive. She can undertake a range of tasks and I can see no reason why she should not lift weights of up to 7.5 kg from floor to bench level. However, she should not undertake this type of lifting on a regular basis. I consider she has a 90% capacity to undertake her pre-injury duties and with further exercise I anticipate that that capacity will continue to improve".

19. In a further report dated 19 April 2001, Dr Baker diagnosed Mrs Tsiavas as having recovered from her injuries "other than continuing problems with her thoracic spine, with radiation of the pain around the left side of the rib cage to the left breast and under the left breast. I continue to suspect that she has a symptomatic disc in her thoracic spine which is resulting in the symptoms, and these symptoms are exacerbated by lifting and bending". He notes that she continued to complain of thoracic spinal pain and that she was upset by not being able to return to work at Graceton Nursing Home where she enjoyed her job. He then notes that she "cannot undertake unrestricted lifting and bending" and that any work she should do should involve lifting, pulling or pushing of weights not in excess of 7.5 kg, no lifting of weights above shoulder height, no repeated bending, opportunity to change position and bending below waist height. He said that "her thoracic spine problems prevent her from returning to pre-accident employment". In spite of the hopes in his earlier report, he then finds that "Mrs Tsiavas is capable of undertaking restrictive duties, as noted in the return to work plan at the Bethany, and I consider that she could undertake 80 -90% of her pre-injury duties". It will be noted in the earlier report that he thought she could undertake 90% of those duties. Obviously, his earlier prognosis turned out not to be right and he also noted that she "appears to have been co-operative in attempting her return to work plan, and there was no significant non physical component to her presentation".

20. The applicant was also examined by Mr Rush at the request of the respondent who saw her on 29 May 2000. Mr Rush found that she had "a full range of motion of the spine with no pain on movement of the cervical spine. Examination of the thoraco-lumbar spine revealed no tenderness in the region of the mid thoracic spine and a good range of movement of the thoraco-lumbar spine with no obvious loss of motion". He then found that, as a result of the road traffic accident on 5 November 1999, "the patient sustained soft tissue injury to the neck and left shoulder from which she has made a full recovery. The patient also sustained non-specific soft tissue injury to the mid-thoracic spine which has caused ongoing mid thoracic back pain and as well intermittent left girdle pain. There are no other injuries or diseases pre-existing the accident aggravating or aggravated by the accident".

21. I pause here to note for a moment that in relation to Dr Baker, Mr Rush and Professor Myers, the applicant failed to give those medical examiners a full or proper history. In fact, in some cases, no history of her pre-existing problems. However, on the basis that the applicant was able to continue with her work in the manner that she had done right up to the transport accident on 5 November 1999, I find that none of those pre-existing problems which she had in any way related to her having to give up the employment.

"As far as I can determine the patient has sustained no severe permanent injury to the spine and I would be hopeful that slowly with the passage of time her present mid thoracic back pain will settle. At the moment because of this pain she is having some difficulty in carrying out her daily activities at home and believes that she would be unable to return to work as a part time cook. If the patient can cope with her work, I think it would be reasonable for her to do so and I do not believe that she will do any harm by engaging in occupational and daily living activities".

In relation to work capacity, Mr Rush stated as follows :

"I believe the patient is currently unable to return to her previous work as a part-time cook which involves a lot of bending and heavy lifting. I do think however that serious consideration should be given to the patient returning to light work which does not involve a lot of bending or heavy lifting or remaining in one position for long periods. If such light work is not available for her as a cook then help through a vocational rehabilitation provider may be of some assistance. I personally believe it would be reasonable for the patient to return to work if suitable light work can be given to her on reduced hours on a trial basis.

I believe that the patient should be able to return to her pre-accident employment within the next six months".

Unfortunately that prognosis has not proved correct.

RELATIONSHIP BETWEEN TRANSPORT ACCIDENT AND INJURIES AND ABILITY TO WORK

23. Ms Bourke's first submission was pursuant to section 52 of the Act that the applicant's post-accident earning capacity within the meaning of that section is less than 10% of her pre-accident earning capacity. In relation to that submission, she relied on the second last report of Dr Baker. However, the last report of Dr Baker in fact said that the earning capacity was between 80% and 90%. So quite clearly even on that evidence, that does not bring the applicant within that section. In any event, Mr Gibson, who appeared for the applicant, has submitted that this is not a section that relates to a medical incapacity as such. The 10% relates to dollar terms because of the medical incapacity, ie, for example, if the patient was earning $100 per week and because of the accident she was able to earn $95 per week then she would come within the section. However, if she was only able to earn $85 per week, clearly that would be 15% of her pre-accident earning capacity then she would not come within the section. I do not have to decide this point because even on the most recent evidence available to Ms Bourke which was referred to in the last report of Dr Baker, he was saying that she was 80% to 90% of her pre-accident earning capacity. Under those circumstances, I find that the applicant's loss of earning capacity is greater than 10% of her pre-accident earning capacity and, as a result, section 52 does not apply.

24. I take the general view that the applicant has lost earning capacity as a result of the transport accident. I have found that the applicant worked solidly apart from the occasions I mentioned for 5 or 6 years prior to the transport accident and was able to do all the duties required of her at Graceton Nursing Home which included lifting the heavy pots. It was only after the transport accident that she was unable to perform those duties. It seems to me that, subsequent to the transport accident, she had a sore back and a sore knee which I find occurred as a result of the transport accident and the injuries she received in that transport accident, ie the November 1999 transport accident. If it was not for that transport accident, the applicant would have been able to continue her work at Graceton where she had previously worked indefinitely. As a result of the injuries which she received in the transport accident, the applicant was unable to continue doing that type of work at all.

25. Ms Bourke has submitted that, under those circumstances, the applicant is fit for some type of work and therefore she has a partial loss of earning capacity pursuant to section 50 and that I should examine the matters in section 50(5) to determine her degree of impairment. The fact is that the applicant has, on all the evidence, used her best endeavours to find employment even at a lesser capacity to what she previously worked. Two employment agencies have assisted her in that regard and it has been to no avail. She has attempted to do lesser work but I find that she is incapable because of her training and vocational experience and lack of skill of doing any lesser work than what she previously did. While she can do work such as putting the sandwiches on trays and making fruit salads etc, but that work is simply not available. If two employment agencies were unable to find the work for the applicant who I find was willing to work, then I can reasonably infer that that the work was not available.

26. Ms Bourke submitted that part of the reason why work was not available was that the applicant did not want to work outside the surrounding suburbs of Ivanhoe and that she only wanted to work for six hours per week. From my knowledge of the metropolitan area of Melbourne, I am aware that there are many factories and other places and hospitals within the surrounding suburbs of Ivanhoe, I note that in the employment agency's report there is no suggestion that work could have been found had the applicant been able to travel a greater distance. Further, I accept that as a result of trauma in the transport accident, the applicant has a fear of travelling greater distances, and, as a result of the transport accident, could not travel the greater distances in any event. I do not accept the fact that it is the applicant's area restriction in looking for employment that has in any way made it more difficult for her to find work.

27. Ms Bourke also suggested that it was the limited hours per week which the applicant was willing to work that made it difficult for her to find employment. The applicant's evidence seemed to suggest that she was willing to work on two days per week for six hours per day. There is no evidence that had the applicant been only willing to work 6 hours per day for 1 day or even 6 hours for 5 days, she would have been in any better position to find work than what she has. In my view, it would have made no difference. Having made those findings, I accept what Professor Myers has had to say on page 4 of his report, which I have referred to above, and which I will again repeat :

"She will not be able to cope with heavy work activities that involve prolonged standing and heavy lifting because of the problems in the spine and the knee. In theory, she would be suited to sedentary work activities that would allow her to sit or stand as required without any heavy lifting, but I doubt that such work would be available to her by virtue of her past educational and vocational activities".

28. I agree with what Dr Myers said and I agree that his doubt is very well founded. I find that such work is not available to the applicant by way of her past educational and vocational training. Thus I find that the applicant has a total incapacity for work as a result of the transport accident.

29. Ms Bourke has also suggested that the period of time while the applicant was in Greece, that is between 21 June and August 2001, should be deducted from any weeks that the applicant is entitled to receive benefits. Ms Bourke said that during this time the applicant was having a holiday on the sunny beaches of Greece which is something that anyone would like to do. I agree it is a very desirable activity. However, on the whole of the evidence, I cannot be satisfied that if the applicant was in fact in Melbourne, she would have been able to find work or would have been any more successful in finding work than she was subsequently. I noticed that she worked for two weeks subsequent to her return to Cluny Hospital but was put off. I infer that her sacking there was due to her inability to perform the duties as a result of injuries she had in the transport accident and I also note that the employment was only a trial period. Therefore, there is no evidence to suggest that had she been in Melbourne during that time, her efforts to find work would have been any more successful than what they are at the moment.

30. I note that, at the outset of this hearing, it was agreed that should I find the applicant to have a loss of earning capacity, then the matter should be referred back to the respondent to assess the amount.

31. My decision will be that I will set aside the decision of the respondent. I will remit the matter to the respondent for assessment of 73 weeks loss of earning capacity between 25 May 2001 and 5 November 2002 excluding the weeks of 2 September 2002 to 26 September 2002.

32. Subsequent to giving a decision in this matter in favour of the applicant, Mr Gibson, who appeared for the applicant, has requested that there be costs on Scale "B" on a solicitor/client basis and in order to support that offer he has handed me an offer of compromise which is dated 11 November 2002. The substance of the offer of compromise is that the applicant offered to accept that she is entitled to a loss of earning benefits for a period of 25 May 2002 to 19 July 2002 being a total of 60 weeks in accordance with section 49 and 50 of the Act and it then offers to accept costs on County Court Scale "A" including reserved costs. Section 112(2) of the Victorian Civil and Administrative Tribunal Act 1998 reads as follows :

"If this section applies and unless the Tribunal orders otherwise, a party who made an offer referred to in sub-section (1)(a) (and I find that the offer as made falls into that section) is entitled to an order that the party who did not accept the offer pay all costs incurred by the offering party after the offer was made".

33. In my view, the word "all" does not mean all costs that are incurred, it means "all reasonable costs" that are incurred. In any event, those words do not take away matters of discretion which otherwise might be in the Tribunal and I refer to the recent case of the Court of Appeal in the matter of Coyle. However, in this particular instance, this is a jurisdiction where the applicant is reviewing a statutory entitlement to which I found she is entitled. It is not a huge amount of money which she will be receiving, the calculations have not been done, but it will not be very large sums. Unless a full amount of costs are awarded in this matter, the applicant will be left out of pocket and could conceivably even be left worse off than if the proceedings had not been commenced. Under those circumstances, I believe that I should exercise my discretion and give costs on Scale "B" on a solicitor/client basis. To do otherwise would leave the applicant in a financial position of worse than what the legislature otherwise intended and I will make that order accordingly.