Welcome to the December 2011 issue of the Edwards Michael Lawyers eBulletin.

WCC President considers Operational Instruction for payments overseas

In Allens Arthur Robinson Corp Advisory Pty Limited v. Weavers [2011] NSW WCC PD 71, President Keating was required to consider whether the Commission had jurisdiction in circumstances where an insurer informed a worker who had relocated to China that payments of weekly compensation would only be made on production of medical certificates. The worker maintained that such certificates were extremely difficult to obtain in China and commenced proceedings seeking Orders under Section 53 of the Workers Compensation Act 1987. The primary issue was whether there was a dispute in relation to the claim, given that the insurer had accepted liability but was insisting on medical certification before making payments, pursuant to the Workcover Operation Instruction.

His Honour found that CGU had no legal right to impose a condition that payments of compensation would only be paid on production of medical certificates:

“The Operational Instructions do not have statutory force and are no more than an administrative direction. CGU disputed liability by imposing a condition it had no statutory power to impose.

An administrative direction has less weight than a guideline made under the legislation. It does not have statutory force and is no more than a guide or recommendation”.

His Honour held that once the Commission had jurisdiction, the Arbitrator was entitled to make Orders under Section 53 pursuant to Section 53 of the 1987 Act.

His Honour urged some restraint in relation to his comments regarding the Operational Instruction:

“This case is exceptional and should not be interpreted as condoning deliberate non-compliance with the Guidelines or Operational Instructions. In the usual case, workers will be able to obtain medical certificates and they should do so”.

His Honour also confirmed that Clause 11 of the Guidelines provides a basis for insurers to require ongoing medical certification as to capacity, indicating that the worker’s difficulty obtaining such certificates in China provided a basis for the dispute, and thus the jurisdiction of the Commission.

Court of Appeal Clarifies Procedural Fairness in the Workers Compensation Commission

The Court of Appeal has upheld an appeal by the New South Wales Police Force in relation to a Presidential finding that a worker was not afforded procedural fairness.

In Winter v. NSW Police Force [2010] NSW WCC PD 121, Deputy President Roche determined that a worker was denied procedural fairness in relation to an adverse credit finding on an issue that he did not have a reasonable opportunity to answer because the Arbitrator prematurely terminated cross-examination. The Arbitrator had decided against the worker, partly on the basis of credit issues which were ultimately unexplored by virtue of termination of cross-examination by Counsel for the NSW Police Force after objection by Counsel for the worker.

The Court of Appeal disagreed. In NSW Police Force v. Winter [2011] NSW CA 330 Campbell JA determined as follows:

“The obligation to accord procedural fairness requires that a party be given notice of the case that is put against him or her, and a reasonable opportunity to put evidence and submissions before a tribunal concerning that case”.

Contrary to the finding of deputy President Roche, Campbell JA concluded that the exchange of documents between parties would have been sufficient to notify the worker that there was a dispute in relation to whether he suffered from a mental condition of sufficient seriousness to warrant classification as a “psychological injury”; whether the reason for absence from work was a psychological injury; and whether there was any ongoing incapacity.

Whilst His Honour accepted that the exchange of documentation would not have been sufficient to inform the worker that no diagnosis of PTSD had been made on a critical date, His Honour was satisfied that oral submissions by Counsel for the NSW Police Force would have provided sufficient notice of that issue. Further, His Honour was of the view that it was actions of the worker’s Counsel that terminated cross-examination and on that basis there was no denial of procedural fairness.

Work Injury Damages: Court of Appeal allows cost of funds management

A roof tiler who suffered head injuries as the result of a fall, resulting in short-term memory loss and inability to manage his own financial affairs, has recovered an award of $108,280.00 for funds management in the District Court.

An appeal to the Court of Appeal on the basis that funds management fees are not damages for “future economic loss due to deprivation of earning capacity” was unsuccessful. In Workers Compensation Nominal Insurer v. Gary Luke by his Tutor Matthew Charles Luke [2011] NSW CA 251, Acting Justice Handley noted that Section 151G was unambiguous in terms of past economic loss, but that future economic loss does not mention “future loss of earnings”. Rather, it permits an award of damages for future economic loss due to deprivation of earning capacity. His Honour stated:

“The deprivation of the Plaintiff’s earning capacity created, or caused, a need for fund management with its attendant cost which did not exist while his earning capacity was intact and he was receiving wages. It can also be said that the award of a substantial lump sum, which he would never have otherwise possessed, created or caused that need. In either case the loss was ‘due to’ the deprivation of the Plaintiff’s earning capacity.”

The Court of Appeal ultimately accepted that the cost of fund management ought be awarded on the basis of the average figure for life expectancy in the life tables.

Common Law: No Expert Evidence to Support Employer and Contributory Negligence Deductions

n Varga v. Galea [2011] NSW CA 76 the Court of Appeal upheld an appeal against findings of 25% liability for an employer and a further 25% contributory negligence in Common Law proceedings brought by a Working Director.

Mr Galea sustained injuries as the result of the negligent operation of a concrete pouring boom, causing him to be thrown over a wall from which metal bars were protruding in circumstances where he had been working on top of the wall, resting one foot on a scissor lift, without a harness.

Mr Varga sued the party responsible for operating the concrete pouring boom but not his own company.

In the District Court, Balla DCJ found that on the basis of a failure to provide a harness, the employer was 25% responsible for the Plaintiff’s injuries and the Plaintiff was 25% contributorily negligent. Accordingly, the Plaintiff was awarded 75% of damages under the Civil Liability Act plus 25% of Work Injury Damages (Section 151Z(2) WCA), less 25% for contributory negligence.

In the Court of Appeal, McColl JA was critical of the absence of expert evidence in relation to how a safety harness might have operated in the circumstances:

“It required a technical explanation of the nature of safety harnesses, where one might have been safely attached to the scissor lift, and how it would have functioned in the circumstances”.

Her Honour decided that it was not open to the District Court Judge to conclude that the employer was negligent or that Mr Galea was contributorily negligent. The deductions were therefore overturned and Mr Galea was entitled to 100% of damages assessed under the Civil Liability Act.

Supreme Court Upholds Medical Appeal Panel DRE Findings

In Cortese v Cumberland Ford Pty Limited [2011] NSW SC 1260, a worker unsuccessfully attempted to challenge the findings of a Medical Appeal Panel that a classification of DRE II was appropriate, instead of DRE III.

The worker attempted to submit fresh evidence pursuant to Section 327(3)(b) of the Workplace Injury Management Act 1998 in the form of a report of Dr J Bodel post-dating the Medical Assessment Certificate. The basis for the application to admit the report was that Dr Bodel “could not have envisaged that his initial report would be misinterpreted in the way the AMS is said to have misinterpreted it”.

Adamson J found, firstly, that the report of Dr Bodel had not been misinterpreted and, secondly, that fresh evidence should not be admitted “if all it does is to restate evidence given before on the basis that if it had been put a different way it would have been accepted”.

His Honour cautioned against applying an unnecessarily high standard to administrative decisions:

“The reasons of an administrative decision-maker (especially one who is not a Judge) are not to be ‘construed minutely’ and finely with an eye keenly attuned to the perception of error….A court should exercise restraint lest it mistakes looseness in language for errors of substance”.

Ultimately, His Honour determined that the worker had failed to establish any relevant error and he dismissed the proceedings.