Issue 5: May 2012
On Appeal
Welcome to the 5th issue of ‘On Appeal’ for 2012.
Issue 5 – May 2012 includes a summary of the April 2012 decisions.
These summaries are prepared by the Presidential Unit and are designed to provide
a brief overview of, and introduction to, the most recent Presidential and Court of
Appeal decisions. They are not intended to be a substitute for reading the
decisions in full, nor are they a substitute for a decision maker’s independent
research.
Please note that the following abbreviations are used throughout these summaries:
ADP
AMS
Commission
DP
MAC
Reply
1987 Act
1998 Act
2003
Regulation
2010
Regulation
2010 Rules
2011 Rules
Acting Deputy President
Approved Medical Specialist
Workers Compensation Commission
Deputy President
Medical Assessment Certificate
Reply to Application to Resolve a Dispute
Workers Compensation Act 1987
Workplace Injury Management and Workers Compensation Act 1998
Workers Compensation Regulation 2003
Workers Compensation Regulation 2010
Workers Compensation Commission Rules 2010
Workers Compensation Commission Rules 2011
Level 21 1 Oxford Street Darlinghurst NSW 2010 PO Box 594 Darlinghurst 1300 Australia
Ph 1300 368018 TTY 02 9261 3334 www.wcc.nsw.gov.au
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Table of Contents
Court of Appeal Decisions:
Workers Compensation Nominal Insurer v Al Othmani [2012] NSWCA 45 ..................... 3
WORKERS COMPENSATION - Workers Compensation Commission - Arbitrator's
decision - Review of decision by Presidential member - Nature of review prior to 1
February 2011 - Whether Presidential member bound to apply the principle in Fox v
Percy - Whether breach of procedural fairness by Presidential member - Error of law
- Whether error of law material to decision of Presidential member - Whether 'worker'
within definition in 1998 Act. .............................................................................................. 3
Presidential Decisions:
Murie v Schindler Lifts Australia Pty Ltd [2012] NSWWCCPD 22 .................................... 7
Application to extend time to appeal; boilermaker’s deafness; evidence required to
establish “employment to the nature of which the injury was due”; s 17 of the
Workers Compensation Act 1987 ...................................................................................... 7
Sydney South West Area Health Service v Palau [2012] NSWWCCPD 20 ...................... 9
Application to strike out pre-filing statement; s 151DA of the Workers Compensation
Act 1987............................................................................................................................ 9
Rasia v University of Sydney (No 3) [2012] NSWWCCPD 21 .......................................... 11
Reconsideration; s 350(3) of the Workplace Injury Management and Workers
Compensation Act 1998 .................................................................................................. 11
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Workers Compensation Nominal Insurer v Al Othmani [2012] NSWCA 45
WORKERS COMPENSATION - Workers Compensation Commission - Arbitrator's decision Review of decision by Presidential member - Nature of review prior to 1 February 2011 Whether Presidential member bound to apply the principle in Fox v Percy - Whether breach
of procedural fairness by Presidential member - Error of law - Whether error of law material
to decision of Presidential member - Whether 'worker' within definition in 1998 Act.
Bathurst CJ, McColl JA and Handley AJA
22 March 2012
Facts:
Mr Al Othmani rented a house from Mr and Mrs Massoud. Mr Al Othmani alleged that he
was employed by the Massouds to undertake some repair work to the house.
Whilst cleaning leaves from the roof of the pergola, Mr Al Othmani fell to the ground through
sheeting and sustained a severe back injury which resulted in paraplegia.
The Massouds were not insured for workers compensation liability.
The only issue before the Arbitrator was whether Mr Al Othmani was a worker within the
definition of that term in s 4 of the 1998 Act or within the extended definition in cl 2(1) of
Sch 1 to the 1998 Act. Mr Al Othmani’s case was that there was an agreement with Mr
Massoud that he would carry out repair work to the house and that he would be paid $1,000
for the work. Mr and Mrs Massoud denied that any contract existed.
The Arbitrator found in favour of Mr and Mrs Massoud and the Workers Compensation
Nominal Insurer.
Mr Al Othmani appealed under s 352 of the 1998 Act. As the Arbitrator’s decision was issued
prior to 1 February 2011, the amendments to the appeal provisions introduced by the
Workers Compensation Legislation Amendment Act 2010 did not apply. On appeal, McFee
ADP found that Mr Al Othmani was a worker as defined in cl 2 of Sch 1 to the 1998 Act,
deemed to be employed by Mr and Mrs Massoud.
The Workers Compensation Nominal Insurer appealed to the Court of Appeal. The issues for
determination were (at [30]):
(a) whether the Presidential member failed to apply the principle established in Devries v
Australian National Railways Commission (1993) 177 CLR 472 (Devries);
(b) whether the Presidential member erred in deciding the case on the basis of a ground
which had been expressly abandoned by Mr Al Othmani below, namely that the
contract for the performance of work was based on a promise by Mr and Mrs
Massoud to pay him $1,000, without notice or the opportunity to address the point
(denial of procedural fairness);
(c) whether the Presidential member misdirected herself in law by failing to apply the
statutory test, namely was the agreement a contract for the performance of work
exceeding $10 in value;
(d) was the contract found by the Presidential member a contract for the performance of
work within the meaning of Sch 1 cl 2 of the 1998 Act, and
(e) whether the Presidential member erred in point of law by misconstruing the decision
under review in that she mistakenly concluded that:
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i. the Arbitrator had applied a subjective test rather than an objective
test in determining whether the Massouds had entered into a contract,
and
ii. it was an error for the Arbitrator to have failed to decide the case by
reference to the question whether a contract for the performance of
work should be inferred otherwise than according to classical offer and
acceptance theory when this was not propounded and not open on the
evidence.
Held: Appeal dismissed with costs
Bathurst CJ and McColl JA
Ground (a)
1.
In conducting a review under s 352 prior to its amendment on 1 February 2011, the
Presidential member was not constrained as a matter of law in reaching her conclusion
by cases such as Devries and Abalos v Australian Postal Commission [1990] HCA 47;
(1990) 171 CLR 167. She was entitled to conduct her own review and reach her own
conclusions [57]. The nature of a review under s 352(5), as it then stood, did not
require the identification of error but rather the formation of a view as to the preferable
or correct decision and did not require the same restraint in dealing with credit findings
as imposed on an appellate court conducting a rehearing [49]–[50].
2.
The nature and degree of informality of the review procedure provided for in s 354 of
the 1998 Act supports this [51]. However, if there was no evidence to support the
decision of the Presidential member or it was one which no reasonable person could
reach, then there may be an error of law [52].
3.
The Presidential member concluded that it was more probable than not that Mr
Massoud offered Mr Al Othmani $1,000 to fix all defects. Contractual relationships can
be inferred from the conduct of the parties and offer and acceptance analysis is not
always sufficient or necessary to determine whether a contract exists, but it is
necessary to find consideration [71]
Ground (b)
4.
A decision based on a point not raised by the parties or the Commission would
constitute a denial of procedural fairness and be susceptible to challenge under s 353
[75]: Seltsam v Ghaleb [2005] NSWCA 208; (2005) 3 DDCR 1 at [159]; Escobar v
Spindaleri (1986) 7 NSWLR 51 at 60-61; Amaca Pty Limited v Doughan [2011]
NSWCA 169 at [33].
5.
However, in this case, the argument based on the alleged contract to pay $1,000 was
not abandoned. Senior counsel for Mr Al Othmani made it clear at the outset of the
Presidential hearing that the contract said to be able to be implied from the conduct of
the parties was an alternative to the contract to do work for $1,000 [75]–[77]. There
was no denial of procedural fairness.
Grounds (c) & (d)
6.
The contractual relationship found to exist by the Presidential member led to the
conclusion that Mr Al Othmani fell within the definition of “worker” in cl 2 of Sch 1 [81].
From the Presidential member’s factual conclusion that there was an agreement to pay
$1,000 for fixing all defects, it was inferred that the work had a value in excess of $10
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[82]. It was not work incidental to a trade carried on by Mr Al Othmani and he neither
sublet nor employed workers in the performance of the contract. Accordingly, the
requirements in Sch 1 cl 2 of the 1998 Act were established.
7.
It was submitted that the Presidential member did not take into consideration the
obligations of Mr Al Othmani as tenant. Not all of the defects in the property were the
responsibility of the tenant under s 26 of the Residential Tenancies Act, for example,
the leaking roof [83].
Ground (e)
8.
Contrary to the conclusion reached by the Presidential member, the Arbitrator clearly
understood the question of whether a contract had been entered into involved an
objective assessment of the relationship between the parties. To make that
assessment it was necessary for the Arbitrator to determine whether, on the facts, an
agreement existed. That is what she did. There was no legal error in her approach
[90].
9.
The Presidential member also erred in concluding that the Arbitrator erred in failing to
consider the alternative contract propounded on appeal (it was suggested that even if
there was no agreement to pay Mr Al Othmani $1,000, the work must have been done
pursuant to some form of agreement). Neither of the parties contended that the
alternative contract came into existence. There was no error of law involved in the
Arbitrator failing to consider a contract that neither of the parties contended before her
had come into existence [91].
10.
However, the errors by the Presidential member did not infect her ultimate conclusion
[92]: see Basten JA in Akora Holdings Pty Limited v Ljubicic [2008] NSWCA 339. The
Presidential member’s review and conclusions were not dependent on the
identification of error by the Arbitrator [93]–[98].
Handley AJA
11.
Handley AJA, in a dissenting judgment in relation to ground (a), said (at [124]) that:
“… the decisions of this Court between 1991 and 1994 on the comparable
provision in the Compensation Court Act establish that credibility findings by the
decision maker, who heard and saw the relevant witnesses, are binding on the
reviewing tribunal without that advantage, unless they can be set aside or
outflanked.”
12.
Handley AJA referred to Watson v Hanimex Colour Services Pty Ltd (1991) 8
NSWCCR 190, Boston Clothing Co Pty Ltd v Margaronis (1992) 27 NSWLR 580,
Australian Gaslight Co v Samuels (1993) 9 NSWCCR 616 and Litynski v Albion Steel
Pty Ltd (1994) 10 NSWCCR 287 [106]–[123].
13.
“Invoking the review procedure does not automatically displace the credibility findings
of the primary decision maker. They remain valid and ‘part of the material’ on which
the review must be conducted, unless the Presidential member can properly set them
aside” (at [126]).
14.
The Presidential member misread the Arbitrator’s reasons and as a result erred in
finding that the Arbitrator “failed to objectively assess the statements and oral
testimony…” [141]–[150]. The Arbitrator relied on objective matters, the conduct of the
parties, the sequence of events and the relationship of the parties [156].
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15.
The Arbitrator made one error of fact [172] but her findings on credit were not
otherwise contrary to established facts, or glaringly improbable and therefore did not
entitle the Presidential member to reverse the credit findings [171]–[175].
16.
Handley AJA found that the Presidential member erred in disregarding the Arbitrator’s
credit findings which remained binding on her and was of the opinion that the appeal
should have been allowed and the decision of the Arbitrator restored [176]–[178].
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Murie v Schindler Lifts Australia Pty Ltd [2012] NSWWCCPD 22
Application to extend time to appeal; boilermaker’s deafness; evidence required to establish
“employment to the nature of which the injury was due”; s 17 of the Workers Compensation
Act 1987
Keating P
19 April 2012
Facts:
Mr Murie was employed by Schindler Lifts Australia Pty Ltd (Schindler) as a fitter and
machinist. He claimed that, as a result of exposure to loud noise while installing and
repairing lifts on a daily basis, including on construction sites, he suffered from industrial
deafness and a hearing impairment.
On 1 October 2010, Mr Murie made a claim pursuant to s 66 of the 1987 Act for whole
person impairment of six per cent. This claim was refused by the insurer on the grounds that
there was no work-related whole person impairment and Schindler was not considered to be
“a noisy employer”.
The dispute came before the Commission on 24 November 2011. The Arbitrator determined
that Mr Murie had failed to satisfy the onus of establishing that his employment had the
tendency, incidents or characteristics of the type that could give rise to industrial deafness
and made an award in favour of Schindler.
An appeal of the decision of the Arbitrator was filed 26 days out of time.
Mr Murie argued that the late appeal was due to exceptional circumstances:
(a) Christmas break when his solicitor’s firm operated on skeleton staff;
(b) unavailability of Counsel, and
(c) absence of a sound file and/or transcript of the arbitral proceedings.
Mr Murie further argued that should leave be refused, he would lose the right to the
compensation claimed, which amounted to a demonstrable and substantial injustice (per
Pt 16 r 16.2 (12) of the 2011 Rules).
Schindler argued that there were not exceptional circumstances, and that Mr Murie had
failed to show that any substantial injustice would be caused by the refusal to grant an
extension of time.
Held: Application to extend time to appeal refused
1.
Mr Murie failed to establish that exceptional circumstances caused the late lodgement
of his appeal. No satisfactory explanation was provided as to why the period between
3 January 2012 (return to work by staff) and 25 January 2012 (last day on which to
appeal) was insufficient time in which to lodge an appeal, or instruct alternative
counsel to advise. The argument that no appeal could be made until the transcript had
been received was rejected. It was noted that Practice Direction 6 specifically allows
further submissions to be lodged 28 days following the provision of the transcript,
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negating the argument that the unavailability of a transcript was a bar to lodging an
appeal [35]–[44].
2.
The merits of the appeal were then considered to determine whether Mr Murie would
suffer any substantial or demonstrable injustice if leave to appeal was refused (Gallo v
Dawson [1990] HCA 30 per McHugh J at [2]) [32], [45].
3.
In determining that Mr Murie had not discharged the burden of proof that the
characteristics of his employment gave rise to the injury suffered, the Arbitrator
considered Mr Murie’s written statements, oral testimony and the reports of Dr Raj.
The Arbitrator accepted the evidence of Mr Murie notwithstanding its inconsistencies.
However, the Arbitrator concluded that the evidence of Dr Raj was unhelpful as he had
not been given access to the worker’s statements nor obtained an accurate history of
the nature (volume) and extent (duration) of Mr Murie’s exposure to noise: Dawson
t/as The Real Cane Syndicate v Dawson [2008] NSWWCCPD 35. It was open to the
Arbitrator to give Dr Raj’s reports little or no weight and the decision to do so disclosed
no error [60], [62], [63], [66].
4.
The appeal had no reasonable prospects of success, and therefore did not establish
that Mr Murie would experience demonstrable or substantial injustice should the right
to appeal be refused [70].
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Sydney South West Area Health Service v Palau [2012] NSWWCCPD 20
Application to strike out pre-filing statement; s 151DA of the Workers Compensation Act
1987
Keating P
4 April 2012
Facts:
Ms Palau was a registered nurse at Bowral Hospital. In the course of her employment on 10
March 2004 she observed a visitor struggling to assist a patient towards the shower area. As
she attempted to help, the patient reacted violently and as a result of this Ms Palau stretched
awkwardly, and injured her back. She has been incapacitated since June 2004 and in April
2005 she submitted to an L3/4 spinal fusion.
A complying agreement pursuant to s 66A of the 1987 Act was entered into by Ms Palau and
her employer (the defendant) in respect of a 22 per cent whole person impairment under
s 66 of the 1987 Act.
On 1 December 2010, Ms Palau’s solicitors made a claim for further lump sum
compensation under s 66 in the sum of $40,000 in respect of a 16 per cent additional whole
person impairment and sought an additional $15,000 for pain and suffering pursuant to s 67.
A pre-filing statement was served on the defendant on 6 December 2010 and a pre-filing
defence was served on Ms Palau on 19 January 2011. The defendant wholly denied liability
in respect of the work injury damages claim.
On 20 July 2011, the defendant advised that an appointment would be arranged for Ms
Palau to be “re-examined by an independent medical examiner as allowed by the guidelines”
to address alleged deficiencies in Ms Palau’s medical evidence. This further examination
was not arranged by the defendant. No further steps were taken by either party to advance
the matter prior to the filing of the defendant’s Application to Strike Out a Pre-filing Statement
seeking an order that the pre-filing statement be struck out under s 151DA(3).
In a Notice of Opposition to Strike Out a Pre-filing Statement, the claimant sought an order
that the defendant’s Application to Strike Out a Pre-filing Statement be refused.
Held: The application to strike out the pre-filing statement was dismissed.
17.
Section 280B of the 1998 Act prohibits the worker from recovering damages in respect
of an injury from the employer liable to pay compensation under this Act unless and
until any permanent impairment compensation and pain and suffering compensation to
which the worker is entitled in respect of the injury has been paid [39].
18.
Subsection 280B(2) provides that the worker is not prevented from claiming damages
before the question of permanent impairment compensation has been resolved and
paid [39].
19.
Section 151A of the 1987 Act prevents the recovery of any additional compensation to
which the worker may be entitled after damages are recovered [39].
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20.
Section 280B prohibits Ms Palau from resolving the claim until the dispute in respect of
her claim for additional whole person impairment and pain and suffering compensation
is resolved and paid [40].
21.
The defendant’s submission that Ms Palau failed to prosecute her claim for work injury
damages was rejected on the basis that if Ms Palau’s medical evidence is accepted,
her condition has deteriorated significantly and she should be given the opportunity to
recover further compensation prior to pursuing her work injury damages claim [41].
22.
It was reasonable for Ms Palau to delay pursuing her claim given the defendant’s
request for her to undergo a further medical examination, as the outcome of this may
have assisted in resolving the dispute and avoiding further litigation [42]–[43]. She
submitted that she intended to pursue her claim immediately once the further claim for
s 66 and s 67 compensation was resolved. It was recommended that Ms Palau
promptly make application to resolve the dispute pursuant to Pt 7 of Ch 7 of the 1998
Act [45].
23.
The submission that the alleged absence of liability evidence in support of the
allegations of breach of duty of care provided grounds for striking out the pre-filing
statement was rejected [44].
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Rasia v University of Sydney (No 3) [2012] NSWWCCPD 21
Reconsideration; s 350(3) of the Workplace Injury Management and Workers Compensation
Act 1998
O’Grady DP
4 April 2012
Facts:
This matter was the third occasion on which Mr Rasia made an application to a Presidential
member; the first occasion being an appeal from the decision of an Arbitrator; the second
occasion being a reconsideration of that appeal determination. In his third application, Mr
Rasia sought to revoke O’Grady DP’s order dismissing his earlier application seeking
reconsideration.
In support of the second reconsideration application Mr Rasia sought to admit new evidence
which, he argued, supported the conclusion that the Arbitrator had erred in his
determination. If successful, he requested that the matter be remitted for de novo hearing
before a different arbitrator.
The respondent sought an order dismissing the application for reconsideration.
Held: Application for reconsideration refused.
5.
Leave to admit the new evidence presented by Mr Rasia was refused. A portion of the
evidence sought to be admitted could not be described as “fresh evidence” and
insufficient explanation was provided as to why it was not available at the arbitral
proceedings. The remainder of the documentary evidence was not relevant to the
reconsideration application. [15]-[22]
6.
Mr Rasia’s submissions focused mainly on suggested error on the part of the
Arbitrator. [24] No arguments were made raising any issue as to the correctness or
otherwise of the reasoning expressed for the decision made concerning the earlier
application for reconsideration. [23]
7.
The appeal in this matter was conducted by way of review as provided by s 352(5) as
it stood before amendment by the Workers Compensation Legislation Amendment Act
2010. O’Grady DP made reference to the decision of Bathurst CJ (with whom McColl
JA agreed) in Workers Compensation Nominal Insurer v Al Othmani [2012] NSWCA
45 which (at [50]) which concerned the breadth of a Presidential member’s power of
“review” in respect of an Arbitrator’s findings based wholly or in part on credit. Nothing
stated by the majority gave rise to a need to reconsider the earlier conclusions
reached by O’Grady DP. [25]
8.
As there was no evidentiary material or submission before the Commission upon
which any reconsideration of the first reconsideration application could be founded, the
application for reconsideration was refused. [26]
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