Welcome to the June 2010 issue of the Edwards Michael Lawyers eBulletin.

Appeals from Interlocutory Decisions

No appeal lies to a Deputy President against an interlocutory decision of an arbitrator by operation of s.352(8) of the 1998 Act.  Generally speaking, a decision is interlocutory if it does not finally dispose of the rights of the parties, and it has been held in a number of Presidential Decisions that where the determination of an arbitrator results in the referral of the claim to an AMS, such determination will be regarded as interlocutory and not open to appeal.

Two recent decisions have suggested that an exception to the general principle will exist where a determination is made in relation to injury as a whole or in respect of a particular body part the subject of the referral; see Edmond Diab v Salem Naji (2010) NSWWCC PD 33 and R&E and PD Richards Pty Limited v Eggins (2010) NSWWCC PD 2.  The effect of these two decisions is that an employer may appeal a finding of injury in favour of a worker which results in referral to an AMS.

Further, the recent decision of O’Grady DP in Transley Solutions Pty Limited v Steve Kagiorgis (2010) NSWWCC PD 45 suggested that it may be appropriate to bring an appeal made at an interlocutory “stage” as part of an appeal against the ultimate or final determination made following referral to an AMS and, further, that it may be appropriate for the Commission, if necessary, to extend the time to appeal such decision under Rule 16.2(11).  This decision has to some extent relieved the difficulty of determining whether a decision made at an interlocutory “stage” of proceedings should be the subject of an immediate appeal or whether the appeal should abide the determination by the AMS.

Previously, it was thought that a failure to bring the appeal at the interlocutory stage would preclude any appeal at a later stage by reason of the time limit for lodging an appeal.  This decision makes it clear that in appropriate circumstances an earlier interlocutory decision can be included in an appeal which challenges the final determination based upon a MAC which is conclusively presumed to be correct.


More on AMS v Arbitrator Jurisdictio

The issue of determining the respective jurisdiction of arbitrators and AMS’s remains somewhat unsatisfactory.  The recent decision of Roche DP in Greater Taree City Council v Moore (2010) NSWWCC PD 49 confirmed that the nature of the claim brought in the Commission will determine whether an arbitrator or an AMS has jurisdiction to decide such issues as whether a worker has recovered from an injury and in relation to the nature of the pathology caused by an injury.

In Moore the arbitrator had found that the worker had suffered a strain injury but not a disc injury, that a disc protrusion at L4/5 had pre-existed the injury the subject of the claim, and that the strain injury was a “temporary aggravation” which had resolved within one or two weeks of the injury.  The matter was referred to an AMS, who determined that the worker had suffered a disc injury, although a 40% deduction was made pursuant to s.323.

Roche DP found that, because the only claim before the Commission was for lump sum compensation and there was no issue that an “injury” had been received, it was appropriate for the arbitrator to refer the matter to an AMS notwithstanding the finding of recovery and, further, that the AMS was not bound by the arbitrator’s findings that the injury had been a strain only and had resolved.  In so concluding, Roche DP applied the decision of the Court of Appeal in Haroun v Rail Corporation NSW & Ors (2008) NSWCA 192.

The current position appears to be that in a claim limited to lump sum compensation:

  • An arbitrator has jurisdiction to determine issues of injury prior to referral to an AMS;
    • A determination on an issue of injury may constitute a final determination entitling a dissatisfied party to appeal, even where the effect of the determination is for the matter to be referred to an AMS;
    • It may, however, also be open to a dissatisfied party in these circumstances to delay such appeal until receipt of the MAC and the entry of an award;
  • An arbitrator does not have jurisdiction to determine such issues as the precise nature of the pathology which results from an injury or whether the worker has recovered from an injury; and
  • Any findings to the effect that a particular pathology has resulted from an injury or that a worker has recovered from the injury will not bind the AMS; meaning
    • That it will be open to an AMS to determine whether the pathology results from an injury or whether the effects of an injury have ceased, regardless of the arbitrator’s conclusions on these issues.

The position is, however, different where the claim before the Commission involves s.60 expenses or weekly benefits, in which case the findings of an arbitrator relating to issues such as the pathology which results from injury or whether the worker has recovered will bind the parties and will create an estoppel which will bind the AMS or, should the findings be in favour of the employer, will prevent the matter being referred to an AMS at all.

It remains an incongruous and somewhat unsatisfactory situation that the jurisdiction vested in an arbitrator under the legislation will be informed not by the issues which arise but by the nature of the claim made in the proceedings.


Section 323 Deductible

Section 323 was recently considered in the Supreme Court (Administrative List) by Schmidt J in the decision Cole v. Wenaline Pty Limited [2010] NSW SC 78 (23 February 2010).

The worker sustained an injury as a Farm Labourer in October 2005 whilst manoeuvring a 44 gallon drum of oil and fuel.

A Medical Assessment Certificate of 11% Whole Person Impairment was issued.  On appeal, an assessment of 16% Whole Person Impairment was made by Dr Murray Hyde Page, but was reduced by one half pursuant to s.323 with respect to an earlier injury suffered in 1976, for which the worker had undergone surgery.

An Appeal from Dr Murray Hyde Page’s re-assessment was filed and considered by the Appeal Panel which dismissed the appeal by majority.  An appeal from the Appeal Panel’s Decision was advanced in the Supreme Court (Administrative List).

In essence, the Defendant argued that the majority of the Appeal Panel had assessed the evidence and had concluded that 50% of the impairment was due to the previous injury and it therefore followed that any error involved in the majority assessment was an error of fact, not law, and could not be the subject of an Appeal to the Supreme Court.  Schmidt J rejected the submission.  Her Honour stated:

“It is apparent from the way in which the majority reasoned to its conclusion, that it proceeded on the basis of an assumption.  The assumption was that even though the treatment of the first injury to the Plaintiff’s spine in 1976 had succeeded, with the results to which the dissenting member of the Panel referred, the very fact of the existence of that prior injury, ‘irrespective of outcome’, resulted in an impairment which must have contributed to the impairment which arose after the second injury’.  As the majority explained, it was the view ‘hypothetically’, that if the Plaintiff had been examined before the second injury, given his history, he would have been assessed as suffering from 10% of Whole Person Impairment under AMA 5.”

Her Honour held that the Section does not permit an assessment to be made on the basis of an assumption or hypothesis that once a particular injury has occurred, it will always, “irrespective of outcome”, contribute to the impairment flowing from any subsequent injury.

Her Honour was unable to accept the Defendant’s submission that the Appeal Panel understood and applied the Section to the evidence in the appropriate way.  Section 323 requires that a conclusion be reached as to whether or not any proportion of permanent impairment results from an earlier injury, pre-existing condition or abnormality.  In a case such as this, Her Honour indicated the conclusion must be reached on the evidence as to the actual consequences of the earlier and later injuries, unless the assumption provided in s.323(2) applies (that is, where assessing a pre-existing condition/abnormality would be difficult or costly to determine, then the standard 10% deductible is to be assumed).

The evidence suggested that the degree of impairment before and after the second injury was different.  Why the degree of impairment present after the second injury was found to be due to the previous injury was not explained, other than by reference to the erroneous “assumption”.

Her Honour therefore ordered that the Decision be quashed and the matter referred to the Appeal Panel to be dealt with according to law.


Disease Claims & Self-Insurers

Deputy President O’Grady has rejected an argument by Treasury Managed Fund that a self-insurer is not an insurer for the purposes of Section 18(1) of the Workers Compensation Act 1987.

The Deputy President noted that the purpose of Section 18(1) was to determine “…whether any insurer or which of two or more insurers is liable under a policy of insurance in respect of that compensation (for Disease claims)”.

The Arbitrator who made the initial decision determined that because the employer was a self-insurer and Section 18(1) specifically operates only for the purposes of determining whether “any insurer or which of two or more insurers” is liable, then Section 18(1) can have no application.

The Deputy President held that the fact the employer on the deemed date of injury was a self-insurer, does not prevent the application of Section 18(1) to obtain the limited purpose for which it was enacted.


Dual Insurance

In Zurich Australian Insurance Limited v. GIO General Limited [2010] NSW SC 85 a CTP insurer failed in its attempt to obtain contribution from a workers compensation insurer to damages recovered by a worker.

The worker was a bus driver employed by Tiger Tours, however he commenced proceedings in the District Court only against Caringbah Bus, the owner of the vehicle he was operating at the time of injury.

In the District Court proceedings against Caringbah Bus, the Trial Judge held that both Caringbah Bus and Tiger Tours were joint owners of the vehicle for the purposes of the Motor Accidents Compensation Act.  The CTP insurer argued that this finding gave rise to an obligation for dual insurance, notwithstanding the fact that the worker had not directly sued his employer in the District Court proceedings.

Barrett J disagreed.  His Honour found that questions of dual insurance are only to be answered by reference to actually crystallised liabilities, and that the only actually crystallised liability was that of Caringbah Bus.  His Honour also found that there was no basis to find that the employer had incurred a liability for damages to the worker, and there was therefore no basis for a finding of liability against the employer to which the third party policy would respond.


Costs Issues 1: Exception to the ’12 month’ rule

Clause 9 of Schedule 6 operates to restrict an entitlement to costs where a period of less than twelve months has elapsed between successive resolutions in respect of a particular injury.  The clause will not apply where the Commission or Registrar, on application, orders that the resolutions are to be treated as separate resolutions for the purposes of the calculation or assessment of costs.

Recent Decisions of the Workers Compensation Commission indicate that costs will generally be awarded where the resolutions relate to separate injuries.

In Harvey v Spotless Services Australia Limited [2009] NSW WCC C53 Arbitrator Messenger confirmed that an Applicant will not be entitled to an Order pursuant to Clause 9(2)(b) if a period of less than 12 months has elapsed between each successive resolution in respect of the same injury.  However, the Arbitrator found that the Applicant did not rely on the same date of injury for each resolution and accordingly ordered that the resolutions were to be treated as separate resolutions for the purpose of the calculation or assessment of costs.

In Honeyman v Penrith City Council [2010] NSW WCCPD C06 the Applicant had brought separate claims with respect to injuries sustained to the right ankle and neck.  Both injuries resolved by way of separate Complying Agreements. The Respondent conceded that the Applicant had suffered two separate injuries.  Arbitrator McDermott considered that Clause 9 did “not impinge on the Applicant’s rights where there are separate resolutions to separate injuries”.

On the basis of these Decisions, multiple Costs Orders may be obtained where claims are brought for separate injuries.

Importantly, however, Section 263 of the 1998 Act provides that all permanent impairment claims should “as far as practicable” be brought at the same time, with costs consequences if they are brought separately without good reason.


Costs Issues 2: Table Misfits

The primary object of the Workers Compensation  Amendment (Costs) Regulation 2006 was to establish a new scheme fixing maximum costs for legal or agent services provided in connection with workers compensation matters, providing that no amount is recoverable for costs that are not referred to in the Regulation and that no costs are recoverable unless the matters have been resolved as set out in Schedule 6.

There is a wide discretion in Clause 13 of Schedule 6 allowing for the awarding of costs under Table 3, Item C for proceedings which do not fall within the resolutions contemplated by the Schedule 6 Tables, and this is the only avenue available on the face of the Regulations for costs to be recovered which are not otherwise identified in Schedule 6.

Following the Decision of Uninsured Liabilities- Agent for the New South Wales WorkCover Scheme v Sanford Legal [2009] NSW WCC 108, it appears that there is a further avenue for costs to be recovered.

This Decision involved a costs dispute between two Respondents.  There was an argument as to whether the Costs Applicant was entitled to the costs of a Section 53 Application. The Costs Applicant sought a determination that the injury which gave rise to the worker’s entitlement to weekly benefits “was of a permanent nature” as required by the section.  Table 2 of Schedule 6 does not make provision for the award of costs for such a resolution and accordingly the Costs Respondent argued, unsuccessfully, that the proceedings should be declared “other proceedings”, which would limit the Applicant’s costs to $1,100.00 plus GST under Table 3, Item C.

Arbitrator McDermott acknowledged that the term “other proceedings” clearly applies to proceedings other than those specifically dealt with elsewhere in the Schedule, however the Arbitrator elected not to make such a finding. The Arbitrator examined the nature of the Application and was of the opinion that Section 53 applications were “serious” and capable of giving rise to complex situations, to the extent that the legislature required that these matters be determined by the Commission. The Arbitrator determined that where the legislature has intended that matters should be referred to an Arbitrator and/or Approved Medical Specialist, the proceedings will give rise to an entitlement to the payment of professional fees pursuant to Table 1 of Schedule 6.