Compensation Court of New South Wales CITATION : Davis v State Rail Authority of NSW [2001] NSWCC 170 Kenneth F Davis PARTIES : State Rail Authority of New South Wales Rail Services Australia MATTER NUMBER(S) : 42588 of 1999 JUDGMENT OF: Armitage J at 1 CATCHWORDS: Statutes & Delegated Legislation :- LEGISLATION CITED: CASES CITED: DATES OF HEARING: 31 January 2001 EX TEMPORE JUDGMENT DATE : 01/31/2001 FOR APPLICANT:Mr J Kearney instructed by MRM Solicitors LEGAL REPRESENTATIVES: FOR RESPONDENT:Mr I Roberts instructed by Sparke Helmore appeared for the first respondent. Ms J Chapman instructed by Rankin & Nathan appeared for the 2nd respondent. JUDGMENT: 1. On 7 July 1999 Kenneth Francis Davis filed an Application for Determination in this Court against two respondents, the State Rail Authority of New South Wales and Rail Services Australia. As against the first named respondent the application (paragraph 1) made the following allegations: (i) The nature and conditions of the applicant's employment with the first employer as a construction worker for the period 1/7/87 -30/6/96 (ii) The applicant as a consequence of his work contracted a disease, namely Dupuytren's Disease to which such work was a contributing factor. (iii) Alternatively, or in addition, the said disease was aggravated, accelerated, exacerbated and/or caused to deteriorate by the applicant's work. this being the response to the queries made by the form of application as to the date of injury, the place where it happened, what work was being done at the time of injury and how it occurred. 2. As against the second respondent the Application for Determination made the following allegations: (i) The nature and conditions of the applicant's employment with the second respondent as a construction worker for the period since 1/7/96. (ii) The applicant as a consequence of his work contracted a disease, namely Dupuytren's Disease to which such work was a contributing factor. (iii) Alternatively, or in addition, the said disease was aggravated, accelerated, exacerbated and/or caused to deteriorate by the applicant's work. 3. Against both respondents there was claimed injury to the left and right hands and various periods of total and partial incapacity in paragraph (ii) of the particulars against each respondent, and in paragraph (iii) of the particulars against each respondent the appropriate s 66 lump sums for a claim in respect of 10 per cent permanent loss of use of the left and right hands were claimed, together with s 60 expenses, a s 67 lump sum for pain and suffering and interest. 4. Today I was handed Terms of Settlement between the applicant and the second respondent, Rail Services Australia, in which the applicant was indeed to be paid the appropriate s 66 lump sums for 10 per cent permanent loss of use of the right and left hands together with a lump sum of $12,000 for s 67 pain and suffering together with various consequential orders and a costs order which need not detain me. 5. The applicant thus satisfied then sought leave to discontinue the claim set out above against the first respondent. The first respondent, opposes such leave, but only on the footing that were leave granted, the Court may possibly not have jurisdiction to entertain any costs application it may make against the applicant. I do not think that that view is in fact well-founded, as it is well established by authority that under the Workers Compensation Act 1926 an employer was free to pursue a costs application against a worker under the appropriate provisions of that statute, notwithstanding the claim had been struck out on the application of a worker, (see McClelland v I. D. Hall & Son Pty Ltd (1977) WCR 52) and I think that remains the situation under the present Act, so that jurisdiction of the Court, once enlivened by the application, is not extinguished so far as a costs application by the respondent is concerned, at least by the application being withdrawn by leave by the applicant. Be that as it may, I do not propose to deal with the applicant's application for leave to withdraw the application until I have dealt with the costs application Mr Roberts makes for the first respondent, the State Rail Authority of New South Wales. 6. That application is brought on the following basis. Mr Roberts tendered firstly Exhibit 11, two reports served on his client by the applicant's solicitors, as indicated by the fact that they were addressed to those solicitors, respectively of Associate Professor Gordon Kerridge, orthopaedic surgeon dated 10 November 1998 and Dr Harvey Stern, plastic and reconstructive surgeon, dated 10 February 1999. Mr Roberts says that on histories recorded by those doctors' reports and on the opinions they gave as to the causation of the applicant's condition, the application against his client was brought without proper justification within the meaning of that phrase in s 112(3) of the Workplace Injury Management and Workers Compensation Act 1998, or alternatively, that within s 112(4), part of the application made by the applicant, namely that part made against his client, the first respondent, was made without proper justification. 7. Mr Roberts further tendered as Exhibit 2-2 a letter dated 28 March 2000 to the applicant's solicitors written by the solicitors for the first respondent. It is sufficient to say without quoting that that letter clearly put the applicant's solicitors on notice that the 1st respondent would be seeking its costs of the application on the basis that Dr Kerridge's report established that the worker had a disease of "gradual progression", as the letter put it, and that as the first respondent was not the last employer to employ the worker in employment to the nature of which the disease was due, the application against the first respondent should be withdrawn within 28 days, otherwise, said the first respondent's solicitors, a motion would be filed to strike out the application (which apparently did not occur) and all costs incurred by the first respondent in the proceedings would be sought against the applicant, which indeed has occurred today. 8. Finally, Mr Roberts tendered as Exhibit 33 a letter from the applicant's solicitors to the State Rail Authority, the first respondent, dated 10 June 1999, seeking inter alia any periods (by implication during his employment with the first respondent) during which the applicant had been unable to work as a consequence of his injury. Part of the exhibit also was a reply from the State Rail Authority addressed to the applicant's solicitors, dated 24 June 1999, indicating that there was no actual recorded injury and that the details sought could consequently not be provided. 9. Mr Roberts develops his submission by taking me, firstly, to s 4 of the Workers Compensation Act 1987 ("The Act") which defines "injury" relevantly in this way: In this Act - "injury" - (a) means personal injury arising out of or in the course of employment; (b) includes - (i) A disease which is contracted by the worker in the course of employment and to which the employment was a contributing factor; and (ii) The aggravation, acceleration, exacerbation or deterioration of any disease, within the employment was a contributing factor in the aggravation, acceleration, exacerbation or deterioration; 10. He then takes me to s 15 of the Act which relevantly reads: (1) If an injury is a disease which is of such a nature that it was contracted by a gradual process - (a) the injury shall, for the purposes of this Act, be deemed to have happened - (i) at the time of the worker's death or incapacity; or (ii) if death or incapacity has not resulted from the injury - at the time the worker makes a claim - compensation with respect to the injury; and (b) compensation is payable by the employer who last employed the worker in employment to the nature of which the disease was due 11. He then takes me to s 16 of the Act which relevantly reads: (1) If an injury consists in the aggravation, acceleration, exacerbation or deterioration of a disease - (a) the injury shall, for the purposes of this Act, be deemed to have happened - (i) at the time of the worker's death or incapacity; or (ii) if death or incapacity has not resulted in injury - at the time the worker makes a claim for compensation in respect of the injury; and (b) compensation is payable by the employer who last employed the worker in employment that was a substantial contributing factor in the aggravation, acceleration, exacerbation or deterioration. 12. Mr Roberts then takes me to the reports of Dr Kerridge and Dr Stern and draws attention to the history and conclusion of each doctor expressed in his report. Dr Kerridge in the "history" section of his report records this: Mr Davis is a 50 year old gentleman, a constructor/worker/general hand labourer, working for the Rail Services of Australia under its various and everchanging names for the past 19 years. He was working full-time and is on full duties. He said that in about 1982 while working on the Hawkesbury Bridge he started noticing lumps on the palms of his hands, the right hand initially and then the left. These lumps were in the palm extending into the ring and little fingers. I should mention that he was working quite hard using jackhammers, Jason guns which apparently are needle percussion guns used for stripping the paint and rust from the bridge work. They had to use sledgehammers, picks and shovels as well as the standard wire brushes, the spray guns et cetera. He said that after a couple of hours he finished up having to virtually manually unwind his fingers which had tensed around the handles of such injuries or tools. He noted that the fingers were contracting (the ring and little fingers) and that he saw a doctor but cannot remember who it was. Anyway, it got worse and worse and then he saw Dr King at Umina who referred him to Dr Sterne at Newtown who it would appear diagnosed him as having Dupuytren's contracture and in early November last year he was admitted to Strathfield Private Hospital and the Dupuytren's tissue was removed from the right hand palm and the ring and index fingers. 13. Dr Kerridge's conclusion would appear to be on pages 4 and 5 of his report where he says: So, it all adds up to the fact that I do not think that his work is in any way the cause of his Dupuytren's. However, I do not think there can be any doubt whatsoever that the condition would be aggravated by the type of work that he was doing so far as his hands are concerned. 14. Dr Stern records this history: Kenneth Davis, a 50 year old right-hand-dominant construction worker and spray painter in the employ of the Rail Services Authority presented in my rooms on 22 September 1997 to discuss appropriate treatment for clinically apparent bilateral Dupuytren's contracture of the hands. At the time of presentation the patient explained that he had been made aware of this condition being present in both of his hands for more than ten years, but although the preceding nine or twelve months his condition had been accelerating quite rapidly, he had not previously sought treatment for his condition and had not noticed any similar changes in either of his feet, or in the shaft of his penis. The patient was unaware of any other member of his family having a similar disease state. In the course of the patient's employment over the period of more than ten years the patient had been frequently using brushes and spray guns, as well as high impact tools such as a dogspray hammer, Jason needle guns which the patient described as being similar to a small jackhammer with a high degree of vibratory impact in his hands. 15. The conclusion appears to be at pages 2 and 3 of the report where Dr Stern says: At the time of initial presentation Mr Davis had bilateral manifestation of Dupuytren's contracture of the hands. This condition may have a familiar [sic] component, may occur sporadically, but is well recognised as being associated with heavy manual labour, particularly where it involves repetitive vibratory impacts. 16. And further: I believe it is likely that the nature of Mr Davis's work contributed either to the initial development of his problem in his hands or would have accelerated and exacerbated the progression. 17. Mr Roberts says it is crystal clear on those histories and conclusions that the applicant had been performing work to the nature of which Dupuytren's contracture, being a disease within the meaning of the Act, is due within s 15 or which was a contributing factor to the aggravation etc. of the disease of Dupuytren's contracture within s 16 right up to the date when he saw Dr King and was referred to Dr Stern, which of course took the applicant into his period of employment with the second respondent, Rail Services Australia, which, as the parties appear to agree in their submissions, commenced on 1 July 1996 when the applicant ceased to be employed as a construction worker by the first respondent and commenced to be employed in the same capacity, according to the applicant's own allegations by the first respondent in the Application for Determination, by the second respondent. 18. Mr Roberts says that "incapacity" in s 15 and s 16 means inability to engage in the applicant's pre-injury work. That this is so under s 15, he asserts (correctly, in my view) is established, if it were not earlier, by Bohanna & Appleton v Bohanna (1996) 13 NSWCCR 734 and Alto Ford Pty Ltd v Antaw (1999) 18 NSWCCR 246. Notwithstanding vigorous submissions by Mr Kearney for the applicant that "incapacity" in both sections simply means physical incapacity rather than incapacity for work, following what was said by the High Court in Thompson v Armstrong & Royse Pty Ltd (1950) 81 CLR 505, I am satisfied that Mr Roberts' submissions in this regard are correct. In this connection I so held in Rogers v Spotless Catering Ltd (1970) 14 NSWCCR 436. That case had some rather different facts, however, to the present. 19. In Bohanna's case, however, in which as it happens I appeared for the successful applicant at first instance, the question was directly raised as to what "incapacity" meant in s 15 for the purpose of determining when it occurred, and a finding by the trial judge that incapacity occurred (on the probabilities) when the applicant underwent removal of his eye, the applicant having had no time off before that and it being assumed that he was unable to work during such surgery, was held to be open on the evidence . A similar question under s 15 arose in Alto Ford where Bohanna was followed with the same result, namely that incapacity within the meaning of s 15 occurred when the applicant found himself unable to perform his pre-injury work, which was on motor vehicles (see Sheller JA at par [18] at 254). For these reasons I consider myself bound by authority to hold that incapacity within the meaning of s15 and s 16 would have had to be determined, had this case proceeded, by asking when, if at all, the applicant became unable to perform his pre-injury employment, totally or partially. 20. Mr Kearney further also meets Mr Roberts' submissions by a suggestion made in response to some questions I asked him about matters that I was troubled about that the histories to Dr Kerridge and Dr Stern and their conclusions are nowhere as clear as Mr Roberts would have them. Mr Kearney says that what must be focused on, assuming without agreeing that the second leg of s 4 of the Act is the only part for the definition of "injury" on which the applicant could have relied, is the doctors' conclusions as to either what was the last employment to the nature of which the disease of Dupuytren's contracture was due (s15) or what was the last employment which was a contributing factor, the aggravation etc. of that disease ( s 16). 21. It is invariably true that is the question which must be answered first in any consideration of s 16, because the opening words of s 16(1) require it. Even though s15(1) opens with the requirement that injury be a disease which is of such a nature as to be contracted by a gradual process, and the subsection only goes on in sub par(b) at the end of subs (1) to speak of compensation being payable by the last employer who last employed the worker in the employment to the nature of which the disease was due, it is clearly necessary in the case of s 16 for a worker in order to establish liability in an employer to pay compensation to prove that this employer is the last one which employed the worker in employment to the nature of which the worker's disease is due. 22. Effectively, Mr Kearney says that the histories given by the applicant to Dr Kerridge and Dr Sterne and recorded by them, as quoted above, do not single out the employment of either respondent as being the last involving the matters which both doctors thought productive of an aggravation of the worker's pre-existing disease (Dr Kerridge) or the contraction of the disease or the acceleration, exacerbation of it (Dr Stern). Neither history quoted above, he says, makes it clear that such work was done right up until the applicant presented to Dr King and was referred to Dr Stern. 23. Mr Roberts of course says that the applicant's incapacity commenced when he had his operation at the hands of Dr Stern in 1997, and that this is the "incapacity" referred to in s 15 and s 16, and with that that submission I agree, for reasons I have already set out in relation to what I regard as the proper interpretation of the word "incapacity" quoted in both sections, there being no evidence in the reports of Dr Kerridge and Dr Stern that the applicant was unable to perform any aspect of his pre-injury employment before that time. 24. However, the first question which must be focused on is whether the histories to Dr Kerridge and Dr Sterne, and their conclusions, unequivocally establish firstly the applicant was doing work to the nature of which the disease of Dupuytren's contracture was due (s 15) or which was a contributing factor to the aggravation or acceleration or exacerbation of the disease of Dupuytren's contracture (s16) with the second respondent, that is to say after mid 1996, and whether it is secondly the unequivocal opinion of both doctors that the employment of the second respondent was therefore the last employment to the nature of which the disease was due (s 15) or the last employment which was a contributing factor to the aggravation etc. of the disease (s16). 25. In this context it is to be remembered that the applicant's solicitors had to keep in mind that a Court may accept the opinion of Dr Kerridge that the applicant's condition was not caused in any way by his work but only aggravated by it, so as to invoke only subpar(b) in the second "leg" quoted in the of definition "injury" in s 4 and therefore s 16 of the Act, rather than concluding that the applicant's work was the prime cause of the disease of Dupuytren's contracture so as to invoke subpar (a) of the second "leg" of s 4 and therefore s 15. 26. That possibility would mean that the Court had to look at actual causation in the limited sense of the employment being, on the balance of probabilities, a contributing factor to the aggravation etc. of the condition, rather than the more theoretical question of whether the employment was employment to the nature of which the disease was due within s 15 (1)(b). In that context I think with some reluctance that Mr Kearney is entitled to point to the relative vagueness of the histories obtained by Dr Kerridge and Dr Stern, in that neither makes it clear that the applicant performed work with tools of a type which may have been a contributing factor to causing or aggravating, accelerating or exacerbating his disease right up until the time of his presentation to Dr King and Dr Stern, at which time he had worked for some time with the second respondent. 27. It is highly possible that at trial either Dr Kerridge or Dr Stern or both of them could have been called to give evidence after the applicant had been examined and cross-examined, so that a revised history could be put to either of them with a request that they give their opinions as to the questions posed by s 15 and s 16 of the Act and that, thus interrogated with a more full history before them, either doctor could have given a more precise answer to the questions posed by s 15 and s 16. 28. Mr Roberts however makes the point with some force that the matter could have been clarified before an Application for Determination was issued, Dr Kerridge's and Dr Stern's reports having been available to the applicant before the application was issued, by writing to both doctors enclosing a statement from the applicant or some other form of pertinent detail, with a request that they isolate which employer was responsible for the applicant's condition, or both. Nevertheless the question posed by the words "without proper justification" in s 112 quoted above is whether a prudent attorney with the reports of Dr Kerridge and Dr Stern before him should have joined the first respondent at all, or should have simply joined the second respondent. With some reluctance, I think the histories and conclusions of Dr Kerridge and Dr Stern are sufficiently vague and unproductive of precise answers to the questions posed by s 15 and s 16 as to justify the applicant's solicitors in joining the second respondent. 29. Concerning the words "without proper justification", I agree with what was said by Neilson J. in this Court in Nikolov v BRS (Wholesale) Pty Ltd (2000) 19 NSWCCR 329, that is to say that on dictionary definitions, "without proper justification" means without genuine or real or appropriate justification, rather than without any possible justification. That conclusion appears to be compelled by the addition of the word "proper" before "justification" by the legislature, which seems to imply a higher standard of "justification" than would have been required by the simple word "justification" itself, or by the addition of the word "any" before it. 30. I also agree with that submission of Mr Roberts that the authorities on s 38 sub para (g) of the Workers Compensation Act 1926, particularly Karailias v E B Kenstead Pty Ltd (1974) WCR 304, need to be approached with some caution because the 1926 Act relevantly read simply "the Commission shall not alter the payment of costs by a worker unless it is satisfied that his application was frivolous or vexatious or was made fraudulently or without proper justification", whereas s 112 presently under discussion, while it contains practically identical wording in sub(3) uses the words "subject to this section" at the beginning of subs (3), and then provides in sub(4) that: "if the Court is satisfied that part only of any such application for compensation is frivolous or vexatious, fraudulent or made without proper justification, the Court may order the claimant to pay the costs relating to that part of the application" and in sub(7) sub para (c) that "application for compensation" includes "any proceedings in connection with an application for compensation". Therefore, says Mr Roberts, the ambit of s112(3) is extended to that part of the present application as is made against his client (subs(4)) and includes anything that occurred during the proceedings up to the present time (subs (7)(c)) so as to include the fact that the applicant's solicitors were put on notice when the present application by Exhibit 22, the letter from the respondent's solicitors to the applicant's solicitors dated 28 March 2000 from which I have already quoted. 31. Accepting all Mr Robert's submissions just set out, as I do, I remain of the view that the histories and conclusions of Dr Kerridge and Dr Stern were sufficiently inexactly expressed to create reasonable apprehension in the mind of a prudent solicitor at the time the Application for Determination was issued that liability might be found in the first respondent at trial on the basis that the applicant had not proved that the conditions of s15 and s 16 were satisfied in respect of the employment of the second respondent for reasons already set out. 32. For those reasons, I refuse the first respondent's application for costs against the applicant. I am not to be understood in so doing to be implying that the conduct of the applicant's solicitors was beyond criticism. Indeed, I think that they should have written to Dr Kerridge and Dr Stern seeking further clarification of their opinions after re-interviewing the applicant, but even had they done so and had both doctors then said that it was likely that the employment of the first respondent firstly had not caused and secondly had not contributed to the aggravation etc. of the applicant's condition, it still would have been in my view a proper precaution to join the first respondent against the eventuality that evidence emerging in trial in the applicant's own case, either evidence in chief from him or evidence in his cross-examination and/or oral evidence of Dr Kerridge or Dr Stern, may have implicated the first respondent. 33. The application to discontinue the proceedings by the applicant is opposed by the first respondent only in order to keep its costs application afoot and not for any other reason. In particular no prejudice was urged by it if such leave is granted. It is therefore appropriate now to grant the applicant leave to withdraw the application against the first respondent and I do so. Mr J Kearney instructed by MRM Solicitors appeared for the applicant Mr I Roberts instructed by Sparke Helmore appeared for the 1st respondent Ms J Chapman instructed by Rankin & Nathan appeared for the 2nd respondent DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.