Bowthorpe v Fred Clark Australia (a division of McIlwraith Pty Ltd) [2001] NSWCC 96

Compensation Court of New South Wales

CITATION : Bowthorpe v Fred Clark Australia (a division of McIlwraith Pty Ltd) [2001] NSWCC 96 Barry Bowthorpe PARTIES : v Fred Clark Australia (a division of McIlwraith Pty Ltd) MATTER NUMBER(S) : 46344 of 1999 JUDGMENT OF: Neilson J at 1 CATCHWORDS: Elements of Workers Compensation :- LEGISLATION CITED: CASES CITED: DATES OF HEARING: 24/04/2001 EX TEMPORE JUDGMENT DATE : 04/24/2001

FOR APPLICANT: Mr De Meyrick instructed by Turner Freeman appeared for the applicant. FOR RESPONDENT: LEGAL REPRESENTATIVES: Mr P Rickard instructed by Abbott Tout appeared for the respondent (QBE). Mr J Pearce instructed by Hickson Wisewoulds appeared for the respondent (Allianz). Mr S Hickey instructed by Connery & Partners appeared for the respondent (Royal).

JUDGMENT: 1. The originating process in this matter was filed on 3 July 2000. It nominated as the sole insurer of the respondent MMI Workers Compensation (NSW) Limited which is now known as Allianz Australia Workers Compensation (New South Wales) Limited. It alleged that that insurer covered "the whole period of claim". In par (i)(a) the following material appears: Nature and conditions of the applicant's employment with the respondent from in or about 1974 to on or about 30 September 1997. Under the question "How did the injury occur?" the following answer is given:

As a result of the nature and conditions of the applicant's employment with the respondent. 2. The relief claimed in the initiating process was a lump sum under s 66 for a 10 per cent loss of efficient use of the left arm below the elbow together with expenses under s 60. An answer was filed on behalf of the respondent by Messrs Hicksons Wisewoulds on 14 September 2000. Earlier, that firm had written to the applicant's solicitors on 5 September a letter, Exhibit AA, on this application. The substance of the letter is this: We advise that Allianz Australia Workers Compensation (NSW) Limited insured the respondent, Fred Clark Australia (a Division of McIlwraith Davey Pty Ltd) from 31 March 1988 to 31 December 1999. As your client claims injury as a result of the nature and conditions of his employment since 1974 it appears that prior insurers will need to be joined to these proceedings. We are not aware of the identity of the early insurers. Please advise us of your intentions in this regard. 3. I must say at this stage that the Workers Compensation Act speaks of injury and speaks of disease. It does not speak of "nature and conditions". I have had cause in many judgments to point out that the words are not terms of art. They have been referred to by the Court of Appeal as "quaint". I have repeatedly referred to them as "cant". 4. I had cause to comment on the use of the phrase "nature and conditions of employment" as long ago as Mirkovic v David's Holdings Pty Ltd (1995) 11 NSW CCR 656. A worker must allege either injury or disease. He can, of course, allege both. The letter from Messrs Hicksons Wisewoulds to the applicant of 5 September 2000 clearly refers to an allegation of injury prior to 31 March 1998. The applicant clearly wished to proceed with that allegation because on 8 November 2000 a document entitled "first amended application for determination" was filed nominating four insurers of the respondent in the following order: The Insurers' Guarantee Fund in respect of National Employers' Mutual General Association Limited, QBE Workers Compensation (New South Wales) Limited, Royal and Sun Alliance Workers Compensation (New South Wales) Limited albeit that insurer's title was misstated and again MMI Workers Compensation (New South Wales) Limited. 5. The application for determination states that each of the insurers was at risk for the whole period of the claim. That clearly was not the case as the insurers indemnified the respondent consecutively not concurrently. On 18 January 2001 Mr David Maxwell Scarlett of Messrs Hunt and Hunt filed an appearance on behalf of the first nominated insurer of the respondent, effectively National Employers' Mutual General Insurance Association Limited. Messrs Hunt and Hunt did not file an answer but did file a notice of motion on the same date seeking in the alternative that the proceedings be struck out, that the applicant pay the respondent's costs or in the alternative proceedings against the first insurer be struck out. That application was returnable on 13 February 2001 but was adjourned until 6 March 2001. On that day the learned registrar made the third order sought by Messrs Hunt and Hunt and struck out the proceedings against National Employers' Mutual General Insurance Association Limited. He also made an order that that insurer not be liable to pay any costs of proceedings. This matter is listed for hearing before me today. 6. The applicant seeks an adjournment but I have not yet entertained that application which is made by motion of which notice has been given to the insurers but which has not been yet formally filed. There is before me an application by the respondent in the interests of QBE Workers Compensation (New South Wales) Limited that the proceedings against it be struck out and that the applicant pay the costs of the respondent in that interest. This application has been joined by Royal and Sun Alliance Workers Compensation (New South Wales) Limited which seeks the same orders in its favour. 7. The evidence before me consists of an affidavit of Annabelle Mary Duffy sworn on 23 April 2001 which essentially annexes three medical reports, two of which were served upon the respondent in the interests of QBE by the applicant. Those are reports of Dr Lionel Chang of 12 May 1998 and Dr Ian Collins of 20 September 1999 together with a report of Dr Andrew Chan, a consultant general surgeon qualified by the solicitors for QBE and which report bears the date 31 January 2001. It is to be noted at this stage that QBE was at risk between 30 June 1977 and 31 March 1984 and that the Royal and Sun Alliance Workers Compensation (New South Wales) Limited was at risk between 31 March 1984 and 31 March 1986. It is apparent therefore that the two insurers making the current application were at risk between 1977 and 31 March 1986. 8. Dr Lionel Chang was a treating doctor. He first saw the applicant on 5 November 1997. The applicant gave the doctor a history of suffering chronic trauma over the years which required him taking workers compensation leave. It is not clear what the doctor means by chronic trauma; whether he means trauma over a long period of time or trauma persisting for a long time, I do not know. However, the disabilities were alleged to be tennis elbow; that is, lateral epicondylitis and boilermaker's deafness. When the applicant presented to Dr Chang on 5 November 1997 the applicant presented with a ganglion which he told the doctor had been present for "Over five years" but because it was so small and not causing symptoms the applicant had not bothered to seek leave from work or seek treatment. 9. The applicant went on to tell the doctor that "About a month or two" before the applicant saw the doctor on 5 November 1997 the applicant pulled a plastic sheet and experienced pain in both wrists. Eventually Dr Chang admitted the applicant to Holroyd Private Hospital where ganglion excision surgery was performed. Eventually Dr Chang certified the applicant as fit for normal duties from 1 May 1998. Dr Chang expressed the view that if the applicant had any residual symptoms in the wrist and they became permanent the applicant would have a 10 per cent "permanent disability assessment of the left hand at or below the level of the elbow". That appears to be an expression of a 10 per cent loss of efficient use of the left arm below the elbow which of course is the claim made in the originating process. That also is a claim made in the first amended application for determination filed on 8 November 2000 which is the latest pleading filed by the applicant. 10. The applicant's solicitors have qualified Dr Ian Collins, a physician. The applicant gave Dr Collins a history that in 1997 he was pulling plastic sheets over for about two days and developed pain in his wrists. The doctor then went on to recite the history of the applicant's ganglion. Dr Collins, under the heading "Present Condition" obtained a history of the applicant's experiencing discomfort in the left shoulder. The applicant told Dr Collins that he had had that trouble "since late 1998". As far as the ganglion on the left hand was concerned Dr Collins did not believe there was any permanent loss of efficient use of the left arm below the elbow because the applicant's ganglion had been successfully removed and there had been no recurrence. However, the doctor thought otherwise concerning the applicant's left arm because of the condition of his shoulder. He thought the applicant had a 12 per cent loss of efficient use of the left arm at or above the elbow and a 10 per cent loss of efficient use of the right arm at or above the elbow. 11. The doctor's diagnosis that the shoulder condition was of "rotator cuff disease". He felt the problem was "chronic degeneration of the shoulder cuffs" which might be occupational in nature. In another section of his report the doctor changed the possibility to a probability stating that the applicant's shoulder condition was "probably occupational in nature". The report of Dr Chan does not deal with the applicant's shoulder history in any detail but commences the history with the applicant's experience of pain in his hands after pulling plastic sheets "around 1997". The history reported by Dr Chang appears to be more likely to be accurate than the subsequent histories. The applicant appears to have first noticed a ganglion in or about 1992. The condition required no treatment, no time loss and remained asymptomatic until about one or two months prior to 5 November 1997. As far as the applicant's shoulder condition was concerned, he first noticed symptoms in late 1998 and the diagnosis is of disease. 12. It is usually impossible for the court to find an injury if there be no symptoms. There is no suggestion of any symptoms in either the applicant's shoulders or left or right hands or wrists prior to 1992. The insurers who move the court ceased to be at risk in 1986. Furthermore, the only diagnosis proffered for the shoulder condition is a disease for which only the last insurer can, in law, be liable under s 18 of the Act. Furthermore, it is highly likely that the same process, the same categorisation of the ganglion, would be made; that is, it is highly likely that a gradually developing ganglion in an arm would be held to be a disease. One need only consider decision of his Honour Judge Burke in Perry v Tanine Pty Ltd t/as Ermington Hotel & Ors (1998) 16 NSWCCR 253. Accordingly, there is no evidence to suggest any injury prior to 1992 and furthermore, the evidence suggests most likely that the process going on is a disease. There does not appear to be any cause of action available against the two insurers who move the court that the claim against them be dismissed. I accordingly accede to that application. 13. Both insurers seek costs against the applicant on the basis that the claim against them was frivolous or without proper justification. When I look at the medical evidence and consider the law there is no justification at all, let alone any proper justification, for bringing proceedings against the two insurers who moved that the proceedings against them be dismissed. If the applicant had turned his mind to the question of whether he had sustained any injury; that is, any sudden onset pathology prior to 1986 the answer would be no. If he turned his mind to whether his conditions were to be categorised as disease then he would realise it was only necessary to join the last insurer of the respondent and not insurers in the dim distant past. Accordingly, I have no hesitation in finding claims made against the respondent in the interests of QBE Workers Compensation (New South Wales) Limited and Royal and Sun Alliance Workers Compensation (New South Wales) Limited were brought without proper justification. 14. It appears to me that this situation occurred because the worker's legal advisers just thought about "nature and conditions" without thinking about the law. They therefore applied the lore. This happens so frequently that a line has to be drawn in the sand and I have drawn it. If the applicant is disadvantaged by the costs orders which I am about to make he has his remedy against those who may have led him astray. I dismiss the claims made against the respondent in the interests of QBE Workers Compensation (New South Wales) Limited and Royal and Sun Alliance Workers Compensation (New South Wales) Limited and in that regard I make an award for the respondent in respect of allegations of injury during the periods between 30 June 1977 and the 31 March 1986. 15. I order the applicant to pay the costs incurred by QBE Workers Compensation (New South Wales) Limited and by Royal and Sun Alliance Workers Compensation (New South Wales) Limited. I should add that the applicant ought to have been well on notice that such a stance would be taken by the two insurers who have moved the court today in view of the stance taken by the first insurer National Employers' Mutual General Insurance Association whose stance was successfully accepted by the registrar when he made his decision on 6 March 2000. Mr De Meyrick instructed by Turner Freeman appeared for the applicant. Mr P Rickard instructed by Abbott Tout appeared for the respondent (QBE). Mr J Pearce instructed by Hickson Wisewoulds appeared for the respondent (Allianz). Mr S Hickey instructed by Connery & Partners appeared for the respondent (Royal).