De Silva Muirs Pty Ltd formerly Higgins Muirs Pty Ltd v Mackenzie

[2007] NSWWCCPD 240

WORKERS COMPENSATION COMMISSION

DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR

CITATION:De Silva Muirs Pty Ltd formerly Higgins Muirs Pty Ltd v Mackenzie [2007] NSWWCCPD 240

APPELLANT:  De Silva Muirs Pty Ltd formerly Higgins Muirs Pty Ltd

RESPONDENT:  Deborah Mackenzie

INSURER:Allianz Australia Workers Compensation (NSW) Ltd

FILE NUMBER:  WCC5700-07

DATE OF ARBITRATOR’S DECISION:          10 September 2007

DATE OF APPEAL DECISION:  7 December 2007

SUBJECT MATTER OF DECISION: Leave to appeal, preliminary or interim orders of an interlocutory nature; section 352(8) of the Workplace Injury Management and Workers Compensation Act 1998

PRESIDENTIAL MEMBER:  President Greg Keating, DCJ

HEARING:On the Papers

REPRESENTATION:  Appellant:      Vardanega Roberts

Respondent:   Lyons Barnett Kennedy

ORDERS MADE ON APPEAL:  Leave to appeal is refused.

The Appellant Employer is to pay the Respondent Worker’s costs of the appeal.

BACKGROUND TO THE APPEAL

1.On 17 September 2007 De Silva Muirs Pty Ltd formerly Higgins Muirs Pty Ltd (‘the Appellant Employer/Muirs’) sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Workers Compensation Commission (‘the Commission’) against a direction, dated 10 September 2007.

2.The Respondent to the Appeal is Deborah Mackenzie (‘the Respondent Worker/Ms Mackenzie’).

3.On 6 April 2005, Ms Mackenzie was injured in a motor vehicle accident during a journey to her place of employment.

4.Ms Mackenzie suffered injuries to her head and right ankle. A claim for workers compensation benefits was made and liability was accepted for weekly payments.

5.On 24 May 2007 Ms Mackenzie made a demand for benefits pursuant to section 66 of the Workers Compensation Act 1987 (‘the 1987 Act’) in the following terms:

1.   Nervous system – 5% WPI

2.   Lower extremity – 6% WPI

Benefits were also claimed pursuant to section 67 of the 1987 Act.

6.In support of the claim for lump sum benefits Ms Mackenzie served a medical report from Dr Peter Conrad dated 23 March 2007 and a supplementary report of that date which dealt with the assessment of impairments.

7.It is conceded that at all relevant times Dr Conrad was a general surgeon. He was qualified to make assessments of orthopaedic impairments but was not qualified to assess permanent impairment in respect of the head injuries.

8.On 23 July 2007 Muirs served a notice under section 74 of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’). Muirs denied liability. The denial was in the following terms:

“We do not accept that your claim for lump sum compensation has been ‘duly made’ in accordance with any, or all, of the requirements of section 281 and 282 of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’): the WorkCover guidelines for the evaluation of permanent impairment: and/or the WorkCover guidelines for claiming compensation benefits.”

9.In particular Muirs relied on:

(a)the failure to submit a completed permanent impairment claim form, and

(b)reliance on the report of Dr Peter Conrad in circumstances where Dr Conrad was not “suitably qualified” to provide an assessment of mental status impairment.

10.Muirs filed a Reply in the Commission on 17 August 2007, but took no steps to arrange any medical assessment of Ms Mackenzie prior to the telephone conference.

11.On 10 September 2007 a telephone conference was conducted before an arbitrator. Both parties were represented. Ms Mackenzie sought and was given leave to discontinue the claim in so far as it related to the mental status impairment but pressed the claim for lump sum compensation in respect of the orthopaedic injuries. Ms Mackenzie sought to have the Arbitrator refer the claim for compensation for orthopaedic injuries for binding medical assessment of Whole Person Impairment by an Approved Medical Specialist (‘AMS’) relying upon Dr Conrad’s report.

12.Muirs objected to the course proposed by Ms Mackenzie relying on a section 74 notice which denied liability.

13.Muirs contended that the matter should proceed to a conciliation and arbitration conference for a determination on “the issue as to whether the claim was duly made”.

14.The Arbitrator refused Muirs’ request for a formal hearing and elected to proceed ‘on the papers’.

15.The Arbitrator made no referral to an AMS for assessment of the orthopaedic injuries.

16.The Arbitrator did not issue a Certificate of Determination, but directed that the Commission issue a Direction to the parties in these terms:

“1.That the Applicant discontinue [sic] claim for Whole Person Impairment of nervous system.

2.That [sic] issue of whether the claim for Whole Person Impairment in respect of the Applicant's right lower extremity [sic] proceed on the papers.

3.That the Applicant file and serve submissions by 24 September 2007.

4.That the Respondent file and serve submissions by 8 October 2007.”

17.The Direction was issued to the parties by facsimile transmission on 13 September 2007.

18.Submissions for Ms Mackenzie were received at the Commission on 19 September 2007.

19.No submissions were filed by Muirs, notwithstanding the Direction for Muirs to file and serve submissions by 8 October 2007.

THE DECISION UNDER REVIEW

20.In its application to appeal, Muirs described “the decision appealed against” in the following terms:

“interlocutory decision of Arbitrator in respect of:

(a)failure to dismiss these proceedings as misconceived or lacking in substance pursuant to section 354(7A) of the Workplace Injury Management and Workers Compensation Act 1998 (‘the WIM Act’);

(b)or in the alternative, failure to dismiss these proceedings for want of due dispatch pursuant to rule 15.8 of the Workers Compensation Commission Rules 2006 (‘the Rules’), and

(c)ordering that these proceedings be determined solely upon the papers pursuant to section 354(6) of the WIM Act.” (emphasis added)

21.Whilst the Direction issued by the Commission as referred to in paragraph [16] above was the only document issued following the teleconference, there is no dispute between the parties that at the teleconference the Arbitrator declined the Appellant’s application that he dismiss the proceedings and also made the decision that he would determine the matter on the papers after receipt of further submissions by the parties. The timetable for the filing and serving of these submissions was set out in the Direction.

ISSUES IN DISPUTE

22.The issues in dispute in the appeal are whether the:

1. Direction of the Arbitrator of 10 September 2007 is an interlocutory direction for the purposes of section 352(8);

2. monetary threshold in section 352(2) has been met;

3. Arbitrator erred at law in failing to dismiss the proceedings pursuant to section 354(7A) of the 1998 Act;

4. Arbitrator erred at law in failing to dismiss the proceedings for want of due dispatch pursuant to Part 15 rule 15.8 of the Workers Compensation Commission Rules 2006, and

5. Arbitrator erred in determining that the issue before him could be determined solely on the papers pursuant to section 354(6) of the 1998 Act, contrary to the submission of Muirs.

REVIEW

23.A Presidential member’s powers in conducting a review pursuant to section 352 of the 1998 Act, were discussed in The King Island Company Limited v Deery [2005] NSWWCCPD 1. Byron DP said:

“A Presidential Member on appeal has a specific and limited role in the review of a decision of an Arbitrator. The review is not a rehearing. The Presidential member is not dealing with the matter de novo and is not arriving at a fresh decision based on all of the evidence available at a later time (Coal & Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194; Builders Licensing Board v Sperway Constructions (Sydney) Pty Ltd (1976) 135 CLR 616). The powers of the Presidential Member to revoke the decision pursuant to section 352(7) of the 1998 Act and to substitute a new decision in its place, are exercisable only where it is demonstrated that the decision of the Arbitrator is affected by some legal, factual or discretionary error (Allesch v Maunz (2000) 203 CLR 172). Alternatively, the Presidential Member may remit the matter back to the Arbitrator concerned, or to another Arbitrator, for determination in accordance with any decision or directions made.” (at [19])

24.In Aluminium Louvres & Ceilings Pty Limited v Zheng [2006] NSWCA 34 (‘Zheng’), it was confirmed that the review process was broader than correction of error of the kind identified in House v The King. Bryson JA said at:

“A review is a different process to an appeal and the matters which may be considered and the manner in which they may be considered are somewhat wider. See Boston Clothing Co Pty Ltd v Margaronis (1992) 27 NSWLR 580 at 584 (Kirby P). An attack, on review or otherwise, on an Arbitrator's discretionary decision in controlling procedure may be based on the test stated in House v. R (1936) 55 CLR 499 at 504 - 505; but that is not the only basis on which the Presidential member may act. The powers of a Presidential member on review are somewhat wider and extend to power to reopen consideration of a matter of which an Arbitrator has disposed; the manner in which the powers of the Presidential member are to be exercised is itself the subject of discretion of the Presidential member.”

25.McColl JA in South Western Sydney Area Health Service v Edmonds [2007] NSWCA 16 (‘Edmonds’) at [134] quoted this passage with approval.

26.The nature of a review was further considered by the Court of Appeal in State Transit Authority of New South Wales v Fritzi Chemler [2007] NSWCA 249 where Spigelman CJ said at [28] and [30]:

“28. The concept of a review on the merits is wider than the concept of an appeal in a judicial context. There is a well established line of authority on the use of the terminology of ‘review’ instead of ‘appeal’ with respect to the workers compensation system in this State which establishes the breadth of a review on the merits.

30. A Presidential member exercising a power to review a decision must decide whether the original decision is wrong or, as it is often put in the context of administrative appeals on merits, must decide what is the true and correct view. If s/he does so decide then s/he should substitute his or her own views, unless it is an appropriate case to remit. The power to remit is not constrained in the manner for which the Appellant contends.”

27.Before an Arbitrator’s decision will be revoked on appeal it must be demonstrated that the decision contains, or has resulted from, an error of fact, law or discretion.  The error must be such that, but for it, a different decision should have been made (see Snow Confectionary Pty Ltd v Askin [2004] NSWWCCPD 56; Section 294 of the 1998 Act; YG & GG v Minister for Community Services [2002] NSWCA 247; Absolon v NSW TAFE [1999] NSWCA 311).

28.I intend to apply the above principles in the matter before me.

ON THE PAPERS

29.Section 354(6) of the 1998 Act provides:

“(6)If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”

30.Having regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submission by both parties that the appeal can proceed to be determined on the basis of these documents, I am satisfied that I have sufficient information to proceed ‘on the papers’, without holding any conference or formal hearing, and that this is the appropriate course in the circumstances. 

PROCEEDINGS BEFORE THE ARBITRATOR

Absence of Transcript

31.There is no transcript of the conduct of the teleconference of 10 September 2007. That is not unusual, it is rare in my experience for a transcript to be taken of the conduct of telephone conferences.

32.It has been held that the absence of a transcript is not fatal to the process of review. However, it is for the Presidential member to determine whether the review may fairly and properly take place in the absence of such transcript. The absence of a transcript has been held by Bryson JA in Zheng, as a “serious shortcoming”. He went on, at paragraph 32, to say that:

“…it greatly impedes the right of appeal in the due exercise of powers of the Presidential member under s. 352 and also impedes the conduct of a further appeal under s. 353. According to the circumstances, the absence of a sound recording could fairly readily lead a Presidential member to a decision to require a rehearing; although that result would not be automatic.”

33.In this matter I have been assisted by the submissions of the parties which provide an extensive account of what took place at the telephone conference. There is no contest as to what took place at the teleconference. I am satisfied that the absence of transcript will not inhibit the appeal proceeding.

Conduct of the Teleconference

34.The teleconference took place on 10 September 2007. Both parties were represented.

35.Muirs took issue with Ms Mackenzie’s claim submitting that it was defective in that it made a claim for lump sum compensation for impairments to the nervous system and to the lower extremity. The claim was supported by a report of Dr Peter Conrad. It was agreed by all the parties at the telephone conference that Dr Conrad was not suitably qualified to make an assessment in respect of impairment of the nervous system but he was qualified to make an assessment of impairment to the lower extremity.

36.In view of the alleged deficiencies in Ms Mackenzie’s claim, Muirs argued that the matter should be discontinued or dismissed.

37.According to Muirs’ submissions on appeal, the Arbitrator suggested to Ms Mackenzie that there was “a problem” with her evidence and invited Ms Mackenzie to consider her position. Ms Mackenzie then sought leave to discontinue the claim in so far as it related to the nervous system/mental status impairment claim. She requested the claim in respect of the lower extremity be referred for a binding assessment by an AMS relying upon Dr Conrad’s report.

38.Muirs objected to the course proposed by Ms Mackenzie on the basis that she had failed to provide all relevant particulars in accordance with the requirements of section 282 of the 1998 Act. Muirs submitted that the proceedings could not be referred to an AMS for assessment of Whole Person Impairment in circumstances where they had denied liability in respect of the entire claim in accordance with the section 74 notice served on the worker on 23 July 2007.

39.Muirs submitted that the matter should not be referred to an AMS for assessment of Whole Person Impairment in circumstances where they “had not been afforded the opportunity to obtain medical evidence in response to a duly made claim”.

40.Muirs submitted that the proceedings should be determined at a conciliation/arbitration conference (in particular on the issue of whether the claim had been duly made).

41.The Arbitrator refused Muirs’ request for hearing, and according to Muirs’ submissions, he asserted that there would be “no prejudice” to the insurer should he elect to determine the matter on the basis of written submissions and in the absence of any medical evidence obtained on behalf of the Appellant insurer.

42.Apparently the Arbitrator refused to include a notation in the Direction that Muirs had requested that the matter be listed for a hearing and that their application had been refused.

The Direction made by the Arbitrator

43.The Arbitrator made a direction in four parts, as detailed in paragraph [16] above:

1.       He gave leave to the Applicant to discontinue the Whole Person Impairment of nervous system.

2.       He directed that the issue of whether the claim for Whole Person Impairment in respect of Ms Mackenzie’s right lower extremity proceed ‘on the papers’.

3.       He directed Ms Mackenzie to file and serve submissions by 24 September 2007.

4.       He directed Muirs to file and serve submissions by 8 October 2007.

44.The first notation granting leave to Ms Mackenzie to discontinue that part of the claim which related to lump sum compensation for Whole Person Impairment of the nervous system is not under challenge. Essentially what is under challenge is the Arbitrator’s decision to permit the balance of the matter to proceed to determination ‘on the papers’, over Muirs’ objections.

Section 367 – Objectives of the Commission

45.Section 367 provides:

“367 Objectives of Commission

(1) The Commission has the following objectives:

(a) to provide a fair and cost effective system for the resolution of disputes under the Workers Compensation Acts,

(b) to reduce administrative costs across the workers compensation system,

(c) to provide a timely service ensuring that workers’ entitlements are paid promptly,

(d) to create a registry and dispute resolution service that meets worker and employer expectations in relation to accessibility, approachability and professionalism,

(e) to provide an independent dispute resolution service that is effective in settling matters and leads to durable agreements between the parties in accordance with the Workers Compensation Acts,

(f) to establish effective communication and liaison with interested parties concerning the role of the Commission.

(2) In exercising their functions, the members of the Commission must have regard to the Commission’s objectives.”

LEAVE TO APPEAL

46.Before proceeding to deal with an appeal the Commission must determine whether the Application meets the requirements of section 352 of the 1998 Act.

Time

47.The appeal was lodged within 28 days of the Arbitrator’s direction in compliance with section 352(4) of the 1998 Act.

Interlocutory decision

48.Section 352 is in these terms:

“352 Appeal against decision of Commission constituted by Arbitrator

(1) A party to a dispute in connection with a claim for compensation may, with leave of the Commission constituted by a Presidential member, appeal to the Commission as so constituted against a decision in respect of the dispute by the Commission constituted by an Arbitrator.
(1A) An appeal is to be made by application to the Registrar. The appeal is not to proceed unless the Registrar is satisfied that the requirements of this section and any applicable Rules and regulations as to the making of the appeal have been complied with.

(2) The Commission is not to grant leave to appeal unless the amount of compensation at issue on the appeal is both:

(a) at least $5,000 (or such other amount as may be prescribed by the regulations), and
(b) at least 20% of the amount awarded in the decision appealed against.

(3) If the Commission refuses to grant leave to appeal, the Commission must state reasons for the refusal in writing to the parties.
(4) An appeal can only be made within 28 days after the making of the decision appealed against.
(5) An appeal under this section is to be by way of review of the decision appealed against.
(6) Evidence that is fresh evidence or evidence in addition to or in substitution for the evidence received in relation to the decision appealed against may not be given on an appeal to the Commission except with the leave of the Commission.
(7) On appeal, the decision may be confirmed or may be revoked and a new decision made in its place.

Alternatively, the matter may be remitted back to the Arbitrator concerned, or to another Arbitrator, for determination in accordance with any decision or directions of the Commission.
(7A) Section 345 of the Legal Profession Act 2004 applies to and in respect of the provision of legal services in connection with an appeal to the Commission under this section in the same way as it applies to and in respect of the provision of legal services in connection with a claim or defence of a claim for damages referred to in that section.

Note: Section 345 of the Legal Profession Act 2004 prohibits a law practice from providing legal services in connection with a claim or defence unless a legal practitioner associate responsible for the provision of those services believes, on the basis of provable facts and a reasonably arguable view of the law, that the claim or defence has reasonable prospects of success.

(8) In this section, “decision” includes an award, interim award, order, determination, ruling and direction, but does not include any award, order, determination, ruling or direction of an interlocutory nature prescribed by the regulations.” (emphasis added)

49.Section 352 was amended by the Workers Compensation Legislation Amendment (Miscellaneous Provisions) Act 2005 which inserted into the Act section 352(8) in the terms described above.

50.Under Schedule 6 Part 18J clause 5 of the Workers Compensation Act 1987 (‘the 1987 Act’) the above amendments to section 352 “apply in respect of a claim for workers compensation made before the commencement of these amendments”. In this matter the claim for compensation was made on 24 May 2007. Section 352 became operative on 1 November 2006 and therefore applies to these proceedings.

51.Regulation 200B of the Workers Compensation Regulations 2003 is in these terms:

“For the purpose of section 352(8) of the 1998 Act, all preliminary or interim orders, determinations, rulings and directions of an interlocutory nature are prescribed.”

52.The distinction between a ‘final’ and ‘interlocutory’ order has been said to be “not an entirely satisfactory one” (Southern Cross Exploration NL an others v Fire and All Risks Insurance Company Ltd and others[No 2] (1990) 21 NSWLR 200 per Kirby P (as he then was) at 206 (‘Southern Cross’)).  Justice Kirby then noted the words of Lord Denning MR in Salter Rex & Co v Ghosh [1971] 2 QB 597 at 601 that the distinction between final and interlocutory orders was so uncertain that “the only thing for practitioners to do is to look up the practice books and see what has been decided on the point”. His Honour added at 207:

“Thus, no golden thread of logic runs through the cases.  There are common features in the rulings.  But it is futile to look for an entirely coherent system, notwithstanding the importance of the classification for the appellate rights of the party seeking to contest an order which falls on one side of the line, or another.

The principal point to be noted in at least the recent decisions of the High Court of Australia on this question, is that the focus of attention is upon the legal effect of the order under examination, not its practical consequence.”

53.His Honour quoted from Gibbs J (as he then was) in Licul v Corney (1976) 50 ALJR 439 at 443-444 where his Honour said that the established view in Australia was that what is interlocutory:

“…depends on the nature of the order made; the test is: Does the judgment or order, as made, finally dispose of the rights of the parties?”

54.The Appellant in its list of authorities cites Fletchers International Exports Pty Ltd v Regan [2004] NSWWCCPD 7 (‘Regan’). Although cited in the list of authorities the significance of the case is not specifically addressed in the submissions. In Regan the Commission was addressing itself to the monetary threshold referred to in section 352(2). At [27] Deputy President Fleming said:

“While a decision of an Arbitrator may not concern an ‘award’ of compensation (as in Mawson), the appeal must nonetheless affect an “amount of compensation at issue on the appeal” to pass the threshold test in section 352(2)(b). Purely procedural decisions, such as a decision to adjourn a telephone conference (Tagg v International Flavours and Fragrances (Australia) Ltd [2003] NSW WCC PD 5), a decision in relation to costs only (Grimson v Integral Energy [2003] NSWWCC PD 29), and a decision to schedule a further telephone conference (Falcon v Narellan Enterprises Pty Limited [2003] NSW WCC PD 34) do not meet this threshold criterion. The decision must have a real capacity to put the amount of compensation, determined by reference to the decision or the claim (Sheridan v Coles Supermarkets Australia Pty Limited [2003] NSWWCC PD 3), in issue in the appeal (as in the case of the filing of a ‘Reply’ (ADCO Constructions Pty Ltd v Ferguson [2003] NSWWCC PD21)).”

55.Muirs’ reliance on Regan is misplaced. The issue under consideration in Regan was the application of the monetary thresholds in relation to the granting of leave. The comments by the Deputy President in Regan in relation to “interlocutory decisions” were relevant to the application of section 352 as it then was, and were made before the amendments to section 352(8), which prevent the granting of leave to appeal from decisions of “an interlocutory nature”.

56.I am of the view that the procedure adopted by the Arbitrator was entirely consistent with the objectives of the Commission (see paragraph [45] above). I am of the view that the order made by the Arbitrator was clearly a preliminary or interim order of an interlocutory nature and it has not disposed of, or determined, any rights of the parties.

57.Section 354 of the 1998 Act is in these terms:

“354 Procedure before the Commission

(1) Proceedings in any matter before the Commission are to be conducted with as little formality and technicality as the proper consideration of the matter permits.

…

(6) If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.

(7) An assessment or determination is to be made by the Commission having regard to such information as is conveniently available to the Commission, even if one or more of the parties to the assessment or determination proceedings does not co-operate or ceases to co-operate.

…”

58.In Fletcher International Exports Pty Limited v Burrow & Anor [2007] NSWCA 244 (13 September 2007) the Court of Appeal, in considering the submission that there had been a miscarriage of justice or a denial of procedural fairness in the decision of the Acting Deputy President to “deal with the matter on the papers”, noted that:

“91.The Commission is not a court and is not expected to function as a court…

92. The arguments that the Deputy President’s discretion miscarried extended in places to an allegation that procedural fairness was denied in the process.

93. The employer submits that the Presidential member failed to give any or any adequate weight to the nature and complexity of the case. Had she done so, she would have opted for oral argument with the advantage of questioning and interaction which it offers

94. This submission amounts to no more than complaint about the outcome of the   exercise of the discretion. Under the section, the power is enlivened if the Commission “is satisfied that sufficient information has been supplied”. The Presidential member addressed this matter and declared that she was thus satisfied. This conclusion was well open and it has not been shown to be erroneous in fact.”

59.It is clear from the procedure adopted by the Arbitrator at the teleconference that he had not finally decided any of the relevant liability issues, or any issues for that matter that could finally determine the parties’ rights. Any decision was clearly the subject of further submissions and consideration by the Arbitrator.

60.For the foregoing reasons I am satisfied that the direction of the Arbitrator was interlocutory and therefore leave to appeal must be refused.

OTHER GROUNDS OF APPEAL

61.In light of my decision that the Arbitrator’s determination was of an interlocutory nature it is not necessary to determine if the monetary thresholds (section 352(2)) have been satisfied, nor is it necessary to determine the other grounds of appeal raised which go to the merits of the appeal.

DECISION

62.Leave to appeal refused.

COSTS

63.The Appellant Employer is to pay the Respondent Worker’s costs of the appeal.

His Honour Judge Greg Keating

President

7 December 2007

I, MEALNIE CURTIN CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF HIS HON. JUDGE GREG KEATING, PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.

ASSOCIATE