Myer Stores Limited v Robert Triming [2000] ACTSC 5 (3 February 2000)

Last Updated: 16 October 2000

Myer Stores Limited v Robert Triming

[2000] ACTSC 5 (3 February 2000)

CATCHWORDS

WORKERS' COMPENSATION - arbitration - duty to give reasons - sufficiency of reasons - partial incapacity - amount of compensation - need to make precise findings in accordance with Schedule 1 to Workers' Compensation Act 1951.

Workers' Compensation Act 1951, s 24, Schedule 1 par 1(c)(i)(ii)

Our Town FM Pty Ltd v Australian Broadcasting Tribunal (No.1) (1987) 16 FCR 465

Public Service Board of New South Wales v Osmond [1986] HCA 7; (1986) 159 CLR 656

In re Poyser and Mill's Arbitration [1964] 2 QB 467

Beale v Government Insurance Office (NSW) (1997) 25 MVR 373

Paterson v AG Moore & Company [1910] SC 29

Calico Printers' Association, Limited v Higham [1912] 1 KB 93

Thompson v Armstrong & Royse Pty Ltd [1950] HCA 46; (1950) 81 CLR 585

Huxtable "A Question Mark Over the Adversary System" (1995) 30 (ll) Australian Lawyer 17

ON APPEAL FROM THE MAGISTRATES COURT

No. SCA 53 of 1999

Judge: Miles CJ

Supreme Court of the ACT

Date: 3 February 2000

IN THE SUPREME COURT OF THE )

) No. SCA 53 of 1999

AUSTRALIAN CAPITAL TERRITORY )

ON APPEAL FROM THE MAGISTRATES COURT

BETWEEN: MYER STORES LIMITED

Appellant

AND: ROBERT TRIMING

Respondent

ORDER

Judge: Miles CJ

Date: 3 February 2000

Place: Canberra

THE COURT ORDERS THAT:

1. The proceedings be remitted to the Magistrate for further consideration of the compensation payable to the worker in accordance with Schedule 1 to the Workers' Compensation Act 1951.

1. This is an appeal from an award of a Magistrate conducting an arbitration under s 24 of the Workers' Compensation Act 1951 (the Workers' Compensation Act) in a claim brought against the present appellant (the employer) by the present respondent (the worker). The award was made on 2 July 1999. It was formally recorded as follows:

"HAVING DULY CONSIDERED THE MATTERS SUBMITTED:

the Court hereby orders and awards as follows:

A. The Court finds:

(i) On 17 April 1999 the applicant, Robert Triming, was injured during the course of his employment with the respondent.

(ii) As a result of the injury, the applicant was and continues to be partially incapacitated for work.

(iii) The applicant is entitled to weekly payments of compensation on the basis that he is partially incapacitated for employment from November 1996 and continuing at the statutory rate provided in the Act.

(iv) The applicant is entitled to payment of his medical expenses in accordance with the Act from the date upon which payment of medical expenses ceased.

B. THE COURT THEREFORE ORDERS AND AWARDS:

(i) That the respondent pay the applicant weekly payments of compensation from 1 November 1996 to date and continuing at the rate of $268.43 as raised.

(ii) The respondent pay the applicant's expenses pursuant to s 11 of the Workers Compensation Act.

(iii) The respondent pay the applicant's costs at two-thirds of the Supreme Court scale together with disbursements in full as agreed or taxed."

2. There are numerous grounds of appeal. They fall under two heads, one, that the Magistrate did not give adequate reasons for his decision, the other that certain findings which led to the findings recorded in the award, notably the finding that the worker was entitled to compensation "at the statutory rate provided in the Act", were not open.

3. The duty to give reasons, or sufficient reasons, for a decision given in the exercise of judicial power is well recognized. It is not so clear in the case of statutory administrative tribunals or arbitrators: see Our Town FM Pty Ltd v Australian Broadcasting Tribunal (No.1) (1987) 16 FCR 465, Public Service Board of New South Wales v Osmond [1986] HCA 7; (1986) 159 CLR 656. One of the policy factors behind an insistence by appeal courts that the duty to give reasons be discharged, is the sense of grievance believed to be felt by a losing party who does not know and cannot understand why the decision is made, and the tendency therefore to erode public confidence in the judicial system; In re Poyser and Mill's Arbitration [1964] 2 QB 467 at 478 and see Huxtable "A Question Mark Over the Adversary System" (1995) 30 (ll) Australian Lawyer 17.

4. The Act does not make provision for the giving of reasons. The Rules relating to arbitrations set out in Schedule 4 r 6A make provision, as commonly encountered, that the procedure of the Magistrates Court, when settling a matter by arbitration, is to be within the discretion of the Court, that the Court is not bound by the rules of evidence and shall act according to equity and good conscience and the substantial merits of the case, without regard to technicalities and legal forms. The fact that the Act vests the arbitral power in the Magistrates Court, which ordinarily exercises judicial power, is a strong indication that, making full allowance for the operation of r 6A, an award should not be made without the giving of reasons, and sufficient reasons at that.

5. What amounts to an adequate statement of reasons varies according to the case. The reasons do not have to be adequate in the sense that they convince the losing party of the correctness of the decision, and they do not have to be infinitely regressive so as to provide at every stage of the reasoning process an answer to the question posed "but why".

6. It has been said that there are three fundamental elements in a statement of reasons: first, reference to relevant evidence but not necessarily in detail, secondly, material findings of fact and ultimate findings of fact reached, thirdly, reasons for making the relevant findings of fact and reasons in applying the law to the facts found: Beale v Government Insurance Office (NSW) (1997) 25 MVR 373 per Meagher JA, who added at 385:

"Those reasons or the process of reasoning should be understandable and preferably logical as well."

7. Nevertheless, it is impossible ultimately to be totally logical where at some stage the decision involves the application of a legal standard essentially in the nature of a value judgment on which reasonable minds may differ. For instance, an example might be whether a course of driving is negligent or whether a sentence is manifestly excessive, or, indeed, whether reasons are adequate or inadequate.

8. At first sight, the contention that the Magistrate in the present case did not give adequate reasons is at odds with the fact that the decision was reserved and that the reasons were contained in a written judgment of some 12 pages. The Magistrate in his reasons set out the nature of the dispute raised on the documents filed by way of application for arbitration on behalf of the worker and the answer filed on behalf of the respondent, went on to outline the facts that were not essentially in dispute, and then identified what he called the "real issue" which contained two questions, namely:

"whether the injury sustained by him in April 1996 is continuing in such a way as to incapacitate him at all, and more significantly from the respondent's point of view, whether the income he is earning from the business precludes him from any entitlements under the Act."

9. The facts not in dispute or otherwise plainly proved are as follows. On 17 April 1996, whilst moving some containers in the course of his employment as a clerk, the worker suffered injury to his back which required bed rest for some short time. Despite the injury and persisting symptoms, he persisted in a plan to abandon work as a clerk and to open a restaurant business in Bathurst to where he and his family would move in order for him to work in the business. His original intention had been to do the bulk of the cooking as well as to manage the restaurant through Aback Pty Limited, a company operated by him and his wife. As it turned out, having suffered the injury, he was able to do the managing but, according to his claim, he could not do the cooking, or could do so little of it that he had to engage another full-time cook. The Magistrate noted that:

"The basis of his claim for compensation is that his loss is equal to the cost of employing that person as cook".

10. On the first of the two questions, which he called the medical issue, the Magistrate referred in a summary way to the medical evidence and remarked:

"The applicant's evidence is clear that he does continue to suffer from pain directly attributable to the incident of the 17^th of April 1996 and that this pain does disable him to such an extent that he is unable to carry out the normal requirements of the work which he had intended to perform in the restaurant at Bathurst.

I am content on the medical evidence to find that the applicant does suffer from an aggravation of a previously asymptomatic back condition and that this aggravation causes such a degree of pain that he is restricted in relation to the work activities in which he can engage."

11. For the purpose of the appeal, it is not put on behalf of the employer that those findings as to the worker's physical incapacity were wrong in the sense that they were not open to be reached by the Magistrate. What was put was that in order to decide the remaining issue of what the Magistrate called "economic loss", it was necessary for the Magistrate to make more precise findings as to the sort of work activities in which the worker could engage. It is convenient to turn to that issue of economic loss.

12. The Magistrate began this part of his reasons with the following:

"The applicant's position was that based upon accounting figures produced by him to the respondent which were examined in detail by Mr Monsted, he is only earning a very limited amount from the business. The applicant's position, which was supported by his wife, was that their return from the business was marginal and certainly well below the figure which he would have earned as income if he had continued in his employment at Grace Brothers."

13. This approach to the question of quantification of the worker's claim by reference to the earnings of the business and the applicant's likely earnings as a clerk if he had continued to be so employed, is in contrast to the earlier statement that the basis of the claim was a loss equal to the cost of employing a cook.

14. Evidence was called on behalf of the employer as to the financial benefits accruing to the worker from his participation in the business. That evidence was given by a chartered accountant, Mr Monsted, who examined the financial records and tax returns of the company through which the business was run, as well as the tax returns of the worker and his wife. Mr Monsted gave evidence that, based upon assumptions about lifestyle, the real earnings of the worker were likely to be higher than those disclosed in the tax return. The worker himself, however, gave evidence to support the truth of his tax returns and the limited nature of the work and leisure activities of which he was capable. The Magistrate concluded from that that the applicant "does suffer an economic loss as a result of the injury".

15. Having reached those conclusions, the Magistrate then returned to the submission that the only proper way to assess the applicant's economic loss was on the basis of the cost of engaging another chef. The Magistrate rejected the submission on behalf of the employer that it was always the worker's intention to engage an additional chef.

16. The Magistrate concluded with the following critical passage:

"Mr Crowe submitted that under the provisions of the Act the applicant would be entitled to a statutory maximum figure based on partial incapacity of about $13,000 per year. This figure was less than the cost of employing a chef to carry out the work that apart from the injury to the applicant would have otherwise been done by the applicant. In those circumstances, as I understand Mr Crowe's submission, he suggested that the appropriate way of dealing with the economic aspect of the applicant's loss was to make an award on the basis that the applicant was entitled to receive the statutory maximum payment as a partially incapacitated worker. This, at the time of Mr Crowe's submissions, was $270.00 per week.

I am satisfied in the circumstances that the applicant is entitled to an award in the terms of Mr Crowe's submissions, namely, that there be payments for partial incapacity at the relevant statutory rate."

17. It was submitted on behalf of the employer in the appeal that the Magistrate's reasoning here is insufficient to indicate how the conclusion is reached that the applicant would be entitled to an award for partial incapacity at the "relevant statutory rate", which, it is common ground, may be taken to mean the maximum rate available under the Act. Nor, so it was submitted, does it appear how the Magistrate arrived at the conclusion that the maximum rate available was less than the cost of employing a chef to do work which the worker would have done if not suffering the incapacity. Nor indeed, so it was further submitted, was there any finding of what the cost was of employing an extra chef.

18. In particular, reliance was placed on par 1 of Schedule 1, of the Workers' Compensation Act, the relevant parts of which are as follows:

"1. The amount of compensation shall be -

...

(c) where the worker is partially incapacitated for work by the injury - a weekly payment during his or her incapacity -

(i) of the amount (if any) by which the weekly amount that he or she is earning, or is able to earn in some suitable employment or business, after the injury is less than his or her weekly pay at the date of the injury, or of the amount of $57, whichever is the less; or

(ii) of the amount (if any) by which the weekly amount that he or she is earning, or is able to earn in some suitable employment or business, after the injury is

less than the weekly amount that would have been payable to him or her under paragraph (b), if he or she had been totally incapacitated;

whichever is the greater."

19. It may be noted that par 1(b) (not reproduced here) sets out mathematical formulae for calculating the amount of compensation payable when the worker is totally incapacitated for work by the injury. It appears to have been common ground at the hearing that the amount payable to the worker if he had been totally incapacitated was some $268.43 immediately after the date of injury increasing to $269.14 at the date of hearing. That appears to be the basis of the Magistrate's reference to the "statutory maximum figure" of $13,000 per year.

20. I agree that, even allowing for the correctness of the Magistrate acting on the agreed basis, that compensation, if for total incapacity, would have been awarded at those rates, it is difficult to see how the Magistrate came to the conclusion under either par 1(c)(i) or par 1(c)(ii) that the worker was entitled to an award of compensation at the statutory maximum figure for partial incapacity.

21. Further, in the absence of the Magistrate making findings as to the weekly amount that the worker was earning, or able to earn, in some suitable employment or business after the injury, it was not open to him to come to any conclusion under either par 1(c)(i) or par 1(c)(ii).

22. Further again, the cost of employing a chef to do the work, or some of the work which the worker would have done but for the injury, was not a test for any of the criteria set down in par 1(c)(i) or par1(c)(ii) and should not have been taken into account.

23. However, at the appeal it was submitted on behalf of the worker that the case before the Magistrate had only ever been conducted on the basis that the worker was entitled to be awarded compensation for the difference between the weekly amount he was earning at the time of injury and the weekly amount he was in fact earning (which by definition would presumably be in a suitable employment or business) at the time of the hearing before the Magistrate.

24. An initial difficulty with that submission is that it is unlikely that par 1(c) is intended to give the worker an entitlement to rely on what he or she is in fact earning when, on the evidence in the arbitration, he or she is capable of earning more in some suitable employment or business. The amount a partially incapacitated worker is earning may be treated as showing prima facie what he or she is able to earn and in the absence of other evidence, it would be open to the fact finder to accept it as establishing what the worker is able to earn. But where there is evidence that the worker is capable of earning in a suitable employment or business more than he or she is in fact earning, that evidence must be considered. The issue was not addressed by the Magistrate, and I am unable to see how it could have been avoided, regardless of how the case was conducted.

25. In any event, an examination of the record indicates that the case presented on behalf of the worker was not restricted in the way now suggested on his behalf. Paragraphs 7, 8 and 10 of the application dated 29 May 1997 include the following:

"7. Average weekly earnings during the 12 months previous to the injury of the applicant if he has been so long employed under the employer by whom he was immediately employed, or if not during any less period during which he has been employed:

$426.10 gross per week

8. Average weekly amount which the applicant is earning or is able to earn in some suitable employment [or] business after the accident:

Nominal amounts between $60.00 and $90.00 per week.

...

10. Amount claimed as compensation:

(a) On going compensation at the rate of our client's weekly pay for a period of 26 weeks and thereafter at the statutory rate.

(b) Payment of medical expenses."

26. The employer's answer dated 23 September 1998 stated as a ground upon which liability to pay compensation was denied:

"That the applicant is able to earn in some suitable employment more than he would have earned had he remained in the employ of the respondent."

27. When the case was opened to the Magistrate counsel for the worker said:

"Our claim, your Worship, is that the extent of his incapacity should be measured as being the cost of that cook which at all material times has been more than the statutory amount of workers compensation so, in essence, our claim is for the - an award of the statutory amount of workers compensation plus an award for the medical - the costs of medical treatment that the applicant has continued to receive and continues to receive at the present time."

28. There is some old law which states that the amount that the worker is able to earn in a business of his own may be ascertained by considering what services he performs and what those services would be worth if, instead of performing them himself, he paid someone else to perform them: Paterson v AG Moore & Company [1910] SC 29, Calico Printers' Association, Limited v Higham [1912] 1 KB 93 at 102. However, those and other authorities, such as Thompson v Armstrong & Royse Pty Ltd [1950] HCA 46; (1950) 81 CLR 585, appear to be directed to the question whether a worker is or is not partially incapacitated. They are of little assistance in applying the precise and particular provisions of par 1(c) of Schedule 1 for the purpose of assessing the amount of compensation payable under the Act. Factors which may be relevant for assessing the value of loss of earning capacity in an action for damages cannot be used to avoid the consequences of those provisions.

29. I therefore conclude that the Magistrate was in error in that:

(a) He did not disclose sufficiently his reasons for concluding that the applicant would be entitled to the statutory maximum figure based on partial incapacity.

(b) He did not make findings in relation to the criteria set out in par 1(c)(i) and par 1(c)(ii) of Schedule 1 to the Workers' Compensation Act.

(c) He took into account for the purposes of par 1(c)(i) or 1(c)(ii) or both the amount paid to a chef employed in the restaurant business conducted by Aback Pty Limited.

30. The proceedings will be remitted to the Magistrate for further consideration of the compensation payable to the worker in accordance with Schedule 1 to the Workers' Compensation Act and in accordance with these reasons.

I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, the Chief Justice.

Associate:

Date: 3 February 2000

Counsel for the appellant: Mr M J Cranitch SC

Solicitor for the appellant: Abbott Tout Harper & Blain

Counsel for the respondent: Mr R Crowe

Solicitor for the respondent: Garry Robb & Associates

Date of hearing: 23 July 1999

Date of judgment: 3 February 2000