Scharrer v The RedRock Co Pty Ltd [2010] NSWCA 365

WORKERS COMPENSATION – whether injury sustained "in the course of employment" – conduct of worker – vehicle provided by employer – employee injured driving home from employer's Christmas party – employee driving in contravention of orders given by employer and under the influence of alcohol – s 14(1), Workers Compensation Act 1987 (NSW) - WORKERS COMPENSATION –"arising out of or in the course of employment" – s 4, s 14(2), Workers Compensation Act 1987 (NSW) - WORKERS COMPENSATION – conduct of worker – whether employee's actions "for the purposes of and in connection with the employer's trade or business" – s 14(1), Workers Compensation Act 1987 (NSW) - WORKERS COMPENSATION – whether employment a substantial contributing factor to the injury – s 9A, Workers Compensation Act 1987 (NSW)

McColl JA, Basten JA and Handley AJA

20 December 2010

Facts:

Ms Scharrer was employed as a sales representative with RedRock, a beverage wholesaler, attending customers in the Sydney metropolitan area. She was provided with a motor vehicle to undertake her duties, and was also entitled to retain possession of the vehicle outside working hours and for personal transport.

On 14 December 2001 RedRock arranged a Christmas party for staff, which Ms Scharrer attended, having driven there directly after completing her duties.  She remained at the party until approximately 2.00am, having consumed alcohol during the course of the party.  RedRock alleged that a director of the company told the worker not to drive that evening as she had been drinking.  At 3.00 am she was involved in a motor vehicle accident whilst driving the staff car and received significant injuries.

A claim for compensation benefits was made by Ms Scharrer and liability accepted by RedRock’s insurer. Compensation was paid up until July 2005, at which time liability was declined.

The Arbitrator determined that the injury arose in the course of employment and that as the injuries suffered caused serious and permanent disability, the disqualifying provisions of s 14 of the 1987 Act did not apply. Continuing weekly compensation and medical expenses were awarded and the worker referred to an AMS.

RedRock appealed the Arbitrator’s determination that Ms Scharrer’s injuries occurred in compensable circumstances. The Arbitrator’s decision was revoked and an award entered for RedRock. O’Grady DP found:

1. Evidence established that Ms Scharrer, while attending the Christmas party organised by RedRock, was in the course of her employment (Cunningham v Tobin [2001] NSWCCR 90 at [27]-[29]). Beyond that point she was entitled to the benefit of the provisions of the Acts if it was established that her intention was to travel home, however her disobedience of her employer’s directions concerning driving and her decision to drive whilst having a blood alcohol reading of 0.124, was conduct that prevented the characterisation of her subsequent conduct up until the point of the accident, as being in the course of employment in terms of s 4 of the 1987 Act. [91]

2. Ms Scharrer failed to establish that she was in the course of employment during the one hour period between leaving the party and the occurrence of injury. [101]

3. She was disqualified from receiving compensation, notwithstanding acceptance that the subject accident occurred whilst on a journey, by reason of the application to the facts of the provisions of s 10(1A) and (1B).

Ms Scharrer also appealed the Arbitrator’s decision, challenging the quantification of her weekly entitlement. However, having regard to the outcome of RedRock’s appeal, leave to appeal was refused.

Ms Scharrer appealed to the Court of Appeal. The issues for determination were:

(a) whether it was open to O’Grady DP to conclude that she was no longer in the course of her employment at the time of the accident;

(b) whether it was open to O’Grady DP “to conclude that when she left the Christmas party, she failed to prove that she embarked and continued until the time of the accident on a journey home, as opposed to a journey for her own personal purposes, so as to be no longer in the course of her employment at the time of the accident” [128];

(c) if the reason she was no longer in the course of her employment was that her blood alcohol reading was above the prescribed maximum and/or that she disobeyed RedRock’s direction not to drive, whether she was nevertheless entitled to compensation pursuant to either s 14(1) or s 14(2) of the 1987 Act because she had suffered serious and permanent disablement.  In order to address b) and c), the following matters of construction were addressed:

(i) “Whether the term ‘injury’, in each subsection of s 14 has the meaning as provided in s 4, and

(ii) Whether the [sic] s 14(1) provides an independent entitlement to compensation in circumstances where the primary entitlement under s 9 is not satisfied?” [129], and

(d) whether O’Grady DP erred in holding that Ms Scharrer’s employment with RedRock was not a substantial contributing factor to the injury sustained by her within the meaning of s 9A of the 1987 Act in that he (a) misdirected himself and/or (b) failed to take material evidence into account.

Held: Appeal dismissed with costs.

1. Ms Scharrer argued that because RedRock had supplied her with a car and had “authorised, encouraged or permitted” her to use the car to drive home after work, it followed that she remained in the course of her employment until she arrived home. Ms Scharrer’s submission that O’Grady DP failed to apply the principles established in Hatzimanolis v ANI Corporation Ltd [1992] HCA 21; 173 CLR 473 was misconceived on the basis that Ms Scharrer’s case “was not a case where [she] was living away from home so as to permit the conclusion that the overall period or episode of work extended beyond the hours required in a particular day” [179] and the work episode concluded when she left the party and failed to establish that she commenced her trip home after leaving the party. [178]

2. Hatzimanolis does not address whether s 14(1) provides an independent entitlement to compensation (per Handley AJA at [198]).

3. Section 14(1) of the 1987 Act, read with its legislative history and judicial interpretation of its predecessors in mind, applies to an injury defined in s 4. [131]-[168]

4. Paragraph (a) is the relevant part of the definition which covers personal injury arising in the course of the worker’s employment.  Jordan CJ said in Tomsett v Southern Portland Cement Ltd (1941) 41 SR (NSW) 126, 130 (which has been applied and followed in Love v Lysaght Works Pty Limited (1956) 57 SR (NSW) 7; Wheeler v Commissioner for Railways [1969] 2 NSWLR 474 CA; and Higgins v Galibal Pty Limited (1998) 45 NSWLR 45 CA):

“…s 7 (2) deals only with cases where, but for some breach of regulation etc the worker would have been acting within the scope of his employment. It does not touch the case where, irrespectively of any prohibition, the thing done would stand outside the scope of his employment.”

5. Handley AJA (at [192]) noted that Ms Scharrer had left the party to follow a personal pursuit, therefore it was said that driving home after the Christmas party was not an “act done by the worker for the purposes of and in connection with the employer’s trade or business” as required by s 14(1).

6. Section 14(2) must also be read in light of its legislative predecessors and it “prima facie denies any entitlement to compensation where ‘it is proved that an injury to a worker is solely attributable to the serious and wilful misconduct of the worker.’  The result does not depend on the judicial exegesis of the scope of the worker’s employment, but on the text of the section.” [194]

7. Basten JA stated (at [159]) that:

s 14(2), consistently with its historical origins, constitutes an exception from the primary entitlement, subject to a qualifying exception in favour of injuries resulting in death or serious and permanent disablement.”

His Honour further stated (at [160]) in relation to the function of s 14(2) that:

s 14(2) started life as a limitation on the primary entitlement in the case of relevant misconduct. When a qualifying exception was made to it, in the case of death or serious and permanent disablement, the appropriate reading required that the primary entitlement to compensation was restored, by disregarding the disqualifying misconduct: it did not create a new form of entitlement. Thus the injury must, at that time, otherwise have arisen out of and in the course of the employment.”

8. Handley AJA stated (at [197]) “Disentitlement in such cases has never depended on a finding that the injury was not received in the course of the worker’s employment. Although misconduct could take the worker outside the course of his employment in some cases, serious and wilful misconduct will disentitle the worker in all cases unless it results in death or serious and permanent disablement”.

9. Basten JA concluded (at [187]) that O’Grady DP did not make a decision in point of law which was legally flawed in a material respect. Agreeing with Basten JA, Handley AJA opined that the finding that the worker failed to establish that she was in the course of her employment during the one hour period between leaving the party and the injury was not legally erroneous and could not be disturbed. [201]

10. There was no need to address the ground of appeal concerning the operation of s 9A as it was found that Ms Scharrer was not in the course of her employment at the time of injury.

11. McColl JA, in a dissenting judgment, found (at [87]) that O’Grady DP erred in law in concluding that Ms Scharrer was not injured in the course of her employment as his sole reason for that decision was because of her s 14(1)(a) and (b) contraventions.  McColl JA found (at [90], [95]) that Ms Scharrer satisfied the requirement that the act was done for the purposes of and in connection with RedRock’s trade or business for the purposes of s 14(1) and that the contribution of her employment was “real or of substance” to the injury.

Smith v Parkes Shire Council [2010] NSWWCCPD 130

Injury; erroneous factual findings; assessment of evidence; weight of evidence; aggravation of disease; s 4(b)(ii) of the Workers Compensation Act 1987; inappropriate use of term “nature and conditions of employment”; alleged denial of natural justice

Roche DP

17 December 2010

Facts:

Mr Dennis Smith commenced work with Parkes Shire Council as a labourer in about 1992.  His duties required him to perform a full range of heavy physical activities. He alleged that he received three injuries in the course of his employment. The first, on 11 April 2001, when he twisted his right knee and lower back; the second on 31 March 2005, when he injured his right knee; and the third when, as a result of the nature of his duties between “1991 [sic] and 1 March 2008”, he suffered an aggravation, exacerbation and acceleration of a disease in his right knee and lower back.

Mr Smith continued with his normal duties until he ceased work on 12 March 2008. He did not submit a claim for compensation in respect of his right knee and lower back until 3 November 2008. He stopped work on 12 March 2008, mainly due to symptoms in his left hand and wrist which were not part of his claim before the Commission.

Mr Smith lodged an Application to Resolve a Dispute on 30 March 2010 in which he claimed compensation of $724 per week from 1 March 2008 to date and continuing, together with lump sum compensation in respect of a 15 per cent permanent impairment of his back and a 30 per cent permanent loss of efficient use of his right leg at or above the knee as a result of the injuries on 11 April 2001. He also claimed lump sum compensation in respect of a three per cent whole person impairment as a result of the condition of his right lower extremity.  He sought a general order for the payment of hospital and medical expenses.

The Arbitrator made an award for the respondent. She found that there was a lack of record of the incident of 11 April 2001; Mr Smith did not attend upon a medical practitioner in respect of back or knee symptoms for “7-8 years”; when he did consult a medical practitioner he failed to report those symptoms for another five months; he did not detail the course of his symptoms; he did not complain of symptoms in his back or right knee to his supervisors; and there was a lack of explanation as to why Mr Smith did not attend a medical practitioner in relation to his injuries.

The issues raised on appeal were whether the Arbitrator erred in:

(a) determining that no injury occurred on 11 April 2001;

(b) determining that no injury occurred as a consequence of the heavy and repetitive nature of Mr Smith’s employment;

(c) dismissing the opinions of Drs Bentivoglio and Huntsdale;

(d) denying the worker natural justice in failing to raise with the parties her dissatisfaction with the worker’s evidence, and

(e) failing to give proper reasons for rejecting Mr Smith’s evidence and failing to give full consideration to that evidence.

Held:  Arbitrator’s determination revoked. Matter remitted to another Arbitrator for determination of the outstanding issues, remit to the Registrar for referral to an AMS.

1. The Arbitrator erred in her approach and conclusions in that she misinterpreted Mr Dumesny’s (Mr Smith’s supervisor’s) evidence, failed to consider properly the evidence as a whole, and placed excessive weight on the lack of complaint and medical attendances between April 2001 and 2008: [84].

Injury on 11 April 2001

2. Mr Dumesny’s evidence confirmed that Mr Smith made an entry in the Council’s Notice of Injury and Treatment Register indicating he had “injured his knee and back”. Although the entry was undated, Mr Smith gave evidence of the date in his statement and consistently asserted 11 April 2001 was the date of injury. Though there was no contemporary corroboration of the date, that was not sufficient to doubt Mr Smith’s credit. Mr Dumesny’s evidence was that Mr Smith was a “hard working employee” who “never caused any grief” to his supervisors. Mr Smith also had an excellent attendance record. This confirmed he was a person of good credit: [85], [86].

3. Mr Smith gave evidence that he reported the incident to his then supervisor, Mr Sutton, and lodged the Notification of Injury form with him. Parkes Council did not tender any evidence from Mr Sutton, and did not explain why it did not do so. The Arbitrator should have considered the lack of evidence from Mr Sutton when weighing whether or not the injury occurred: (Jones v Dunkel [1959] HCA 8; 101 CLR 298): [87].

4. The fact that Mr Smith did not seek medical treatment for his injuries for several years was important, but not decisive. Mr Smith said he did not do so as it was not easy to get medical treatment in Parkes; he tended not to seek medical treatment, and following the April 2001 injury he treated himself with ice and other treatments. Parkes Council’s supervisors’ evidence partly corroborated this evidence when they confirmed it was difficult to get medical treatment in Parkes. Further, Mr Dumesny confirmed that he told Mr Smith to stop work in March 2008. This attested to the fact that Mr Smith tended not to seek medical treatment: [88], [89].

5. The Arbitrator wrongly stated that there was no evidence that Mr Smith sought medical attention for his lower back or right knee before October 2008. The evidence suggested that Mr Smith had x-rays of his right knee in April 2008 (noted in Dr Bentivoglio’s report and in Mr Smith’s statement) and he had a CT scan of his lumbar spine in August 2008. Further corroboration of Mr Smith’s complaints was found in a letter from Parkes Council to Dr Robertson dated 17 March 2008 which referred to Mr Smith attending on the doctor in relation to, amongst other things, his right knee: [91], [92], [93].

6. The Arbitrator placed excessive weight on the lack of detail in Mr Smith’s statements as to the “course of his symptoms” and their extent and duration over the years since 2001. The worker said that he continuously suffered from ongoing pain and stiffness affecting his lower back and “sharp pains” in his right knee from 11 April 2001. His condition deteriorated in 2007 and early 2008. This was consistent with the history given to Dr Huntsdale (orthopaedic surgeon who examined Mr Smith on behalf of GIO). Evidence in a medical history is evidence of the fact:  (Guthrie v Spence [2009] NSWCA 369 at [75]): [96]. Further, Dr Bentivoglio (orthopaedic surgeon who examined Mr Smith at the request of his solicitors), after referring to the history that Mr Smith had no right knee or back symptoms before April 2001 and the radiological investigations, concluded that Mr Smith sustained a medial meniscal tear in the 2001 incident with osteoarthritis secondary to that injury and discal damage to the lower two levels of his lumbar spine. Dr Bentivoglio expressly noted that Mr Smith had not sought medical treatment and that he “elected to live with his back and knee symptoms as they were”:  [99], [100]. Dr Hunstdale reached a similar diagnosis but felt it was “unlikely” that Mr Smith’s pain was related to the 2001 incident, but was “more the nature of his aging”. However, that conclusion was inconsistent with the evidence that Mr Smith was symptom free before April 2001: [101].

Injury on 31 March 2005

7. Mr Smith completed a report of injury form on 31 March 2005 stating that he felt pain in his right knee while getting out of a pit. However no doctor took a proper history of that incident or its consequences. A personal injury is a sudden identifiable physiological or pathological change (Zickar v MGH Plastic Industries Pty Ltd [1996] HCA 31; 187 CLR 301 at 347; Kennedy Cleaning Services Pty Ltd v Petkoska [2000] HCA 45 at [35] and [36]; 74 ALJR 1298; and Austin v Director General of Education (1994) 10 NSWCCR 373).There was no medical evidence that Mr Smith received a personal injury as a result of the incident on 31 March 2005. Therefore, it was not possible to make a finding as to injury in respect of that incident: [103], [104].

Aggravation injury

8. The aggravation injury was pleaded as an aggravation, exacerbation and acceleration of a disease as a result of the “nature and conditions of his employment”. That term is inappropriate and should not be used in pleadings: Toplis v Coles Group Ltd t/as Coles Logistics [2009] NSWWCCPD 70 at [65]. Pleadings should accord with the evidence and should properly identify the duties or circumstances said to have caused the alleged injury. Mr Smith’s duties with Parkes Council required him to engage in heavy and arduous duties such as digging, laying pavers, getting in and out of trenches, and shovelling. He alleged that, as result of those duties, he suffered an aggravation of a disease within the meaning of s 4(b)(ii) of the 1987 Act: [105], [106].

9. Dr Huntsdale concluded that the degenerative lumbar disease and osteoarthritis in the right knee had been aggravated and, to some extent, “contributed to by the type of work” performed by Mr Smith and also as a result of the April 2001 incident. There is an aggravation of a disease if it is made graver or more serious in its effects upon the patient: (Federal Broom Co Pty Ltd v Semlitch (1964) 110 CLR 626 at 637 and 639): [109]. Dr Huntsdale’s opinion was consistent with Mr Smith’s unchallenged evidence that his symptoms deteriorated as a result of his duties: [110].

10. It is open to a tribunal to accept part only of a witness’s evidence (Byers v Civil Aviation Safety Authority (2005) FCA 1751 at [33]): [115].

11. Under s 16 (a) of the 1987 Act, an injury that consists of the aggravation of a disease shall be deemed to have happened at the time of the worker’s death or incapacity, or if death or incapacity has not resulted from the injury, at the time the worker makes a claim for compensation with respect to the injury. Mr Smith’s evidence that his back and right knee symptoms had increased in 2007 and early 2008, and that they contributed to his incapacity on the open labour market in March 2008, was accepted. Therefore the deemed date of injury under s 16(a)(i) was 12 March 2008, the date he stopped work: [116].

Alleged denial of natural justice

12. The submission that Mr Smith was denied natural justice by the Arbitrator failing to raise with the parties her dissatisfaction with Mr Smith’s evidence was not supported by any argument or authority. The rules of natural justice do not require a decision-maker to give a running commentary on the state of the evidence: (SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs (2006) 231 ALR 529; HCA 63 at [48]):  [117].

Gray v Sydney South West Area Health Service (Rozelle Hospital) [2010] NSWWCCPD 125

Section 4 of the Workers Compensation Act 1987, arising out of or in the course of employment; section 10 of the Workers Compensation Act 1987, place of employment; section 9A of the Workers Compensation Act 1987, employment a substantial contributing factor to injury

O’Grady DP

2 December 2010

Facts:

On 11 April 2008, Ms Gray, a nurse employed by Sydney South West Area Health Service (the respondent), walked from her home to Ward 25 of the Rozelle Hospital where she picked up an electric powered bicycle from a colleague and commenced riding it from Ward 25 to Ward 28 (where she worked). On this journey, she fell and sustained significant injury to her left leg.

The hospital was to be relocated to Concord and as she did not have a driver’s licence she required an alternate means of transport to the new location. It was for that purpose that she took possession of the bicycle.

Ms Gray claimed medical expenses and lump sum for whole person impairment. Liability was declined by the insurer on the basis that she was not on a journey within the meaning of s 10 of the 1987 Act and was not in the course of her employment at the time of the injury. In the alternative, if on a journey, injury occurred during a deviation unconnected with her employment. Reliance was also placed upon s 9A of the 1987 Act.

Following the conciliation/arbitration, the Arbitrator entered an award for the respondent.

On appeal, Ms Gray’s primary submission was that the Arbitrator erred in finding that the injury was not received in circumstances arising out of or in the course of employment.  It was also put by Ms Gray that she was on a journey under s 10, as her journey did not end until she arrived at Ward 28. The respondent argued that Ms Gray’s injury did not occur whilst she was on a journey within the meaning of s 10, there was no evidence that the injury occurred in the course of employment and the purchase of the bicycle was for “personal reasons and purpose”.

Held: Arbitrator’s decision revoked; Award for Ms Gray pursuant to s 60 in the sum of $1,708.23 and remitted to Registrar for referral to an AMS for assessment of any permanent impairment to the left leg.

Section 10 – Journey Claim

1. A journey terminates at the boundary of a worker’s place of employment (see Hogno v Fairfax Regional Printers Pty Limited [2009] NSWWCCPD 33, Musumeci v Gem Engines Pty Ltd (2002) 23 NSWCCR 128 and Chawla v Transgrid,an unreported decision of Burke AJ of the former Compensation Court of New South Wales (38010 of 2001, 11 June 2002)).

2. Ms Gray’s journey came to an end as she crossed the boundary of the hospital grounds even though she had not reached the point within the grounds where she reported for duty. The facts in this case were not distinct from the facts in Hogno, Musumeci and Chawla.

Injury

3. The High Court in Hatzimanolis v ANI Corporation Ltd [1992] HCA 21; 173 CLR 473 considered the authorities of Henderson v Commissioner of Railways (WA) (1937) 58 CLR 281 and Humphrey Earl Ltd v Speechley (1951) 84 CLR 126 in relation to s 4 and made the following observation:

Beneficial as the Henderson-Speechley test has proved to be in the law of workers’ compensation, its formulation no longer accurately covers all cases of injury which occur between intervals of work and which are held to be within the course of employment.

4. Mason CJ, Deane, Dawson and McHugh JJ in Hatzimanolis expressed the following view regarding the proper application of s 4:

[T]hat, absent gross misconduct on the part of the employee, an injury occurring during such an interval or interlude will invariably result in a finding that the injury occurred in the course of employment. Accordingly, it should now be accepted that an interval or interlude within an overall period or episode of work occurs within the course of employment if, expressly or impliedly, the employer has induced or encouraged the employee to spend that interval or interlude at a particular place or in a particular way. Furthermore, an injury sustained in such an interval will be within the course of employment if it occurred at that place or while the employee was engaged in that activity unless the employee was guilty of gross misconduct taking him or her outside the course of employment. In determining whether the injury occurred in the course of employment, regard must always be had to the general nature, terms and circumstances of the employment ‘and not merely to the circumstances of the particular occasion out of which the injury to the employee has arisen’, Danvers (1969) 122 CLR 529 at 537.

5. The facts in Ms Gray’s case were to an extent similar to those in Glenbuddah Pty Limited v Williams (1995) 12 NSWCCR 468.  There was a dual purpose for her trip from Ward 25 to Ward 28, being to test ride the bicycle and to travel to Ward 28 to commence her shift.

6. Ms Gray’s conduct was conduct within the course of her employment.

7. For an injury to arise out of employment, there must exist a causal nexus between the employment and the injury (Smith v Australian Woollen Mills Ltd (1933) 50 CLR 504 (at 517-518)) and a commonsense approach should be adopted when applying the phrase “arising out of employment” (Badawi v Nexon Asia Pacific Pty trading as Commander Australia Pty Ltd [2009] NSWCA 324; 7 DDCR 75 at [73]).

8. There was a causal relationship between Ms Gray’s employment and the occurrence of the injury.

Section 9A

9. Whether employment was a substantial contributing factor to the injury required separate consideration.

10. “[I]t is not sufficient to find that the injury arose out of ‘employment’ and to thereby be able to conclude that the employment concerned was a ‘substantial contributing factor’. Such a reasoning process is expressly proscribed by s 9A(3).” (Badawi at [85])

11. Each of the matters listed in s 9A(2) must be applied to the facts.

12. Ms Gray intended to use the bicycle as a means of transport to her new place of work at Concord and at the time of the injury she was riding the bicycle to Ward 28 to commence work. Her employment was a substantial contributing factor to her injury.

Department of Corrective Services v Weekes [2010] NSWWCCPD 127

Injury, s 4 of the1987 Act; application of Hatzimanolis v ANI Corporation Ltd[1992] HCA 21; 173 CLR 473

Keating P

9 December 2010

Facts:

Mr Weekes works for the Department of Corrective Services as a dog-handler. In September 2007, he was required to attend a dog-training course at the Wellington Correctional Centre near Dubbo with seven other officers.

During the period of the course, Mr Weekes was provided with accommodation and was entitled to a meal allowance. On Saturday 22 September 2007, Mr Weekes alleged that he was encouraged by two senior officers to join them and other employees for dinner and drinks. This, Mr Weekes said, was consistent with his experience on similar courses when he was encouraged to socialise after hours with other officers. This included having drinks after the classes finished for the day and eating their meals together.

In the company of senior officers, he and his colleagues attended the Dubbo Bowling Club, where they consumed drinks and an evening meal. The group left the bowling club and proceeded to a local hotel, arriving there soon after 9.30 pm. Whilst at the Pastoral Hotel, several fights broke out between Mr Weekes, his colleagues and patrons at the hotel.

At about 1.48 am on Sunday 23 September 2007, Mr Weekes was seen punching a patron, after which he was escorted off the premises by hotel security staff.

After being removed from the hotel, Mr Weekes started to walk back to his motel. He received a telephone call from one of his colleagues in the hotel to inform him that the group were intending to catch a taxi back to the motel. Walking back to the hotel to re-join his colleagues Mr Weekes was assaulted and severely injured. At least one of his assailants was a person involved in the earlier fracas in the hotel.

Mr Weekes alleged that his injuries arose in the course of his employment. He made a claim for weekly compensation and lump sum compensation. The Department declined liability on the basis that, during an interval between his duties and whilst at the Pastoral Hotel on the evening of 22 September 2007, Mr Weekes engaged in conduct that was not induced or encouraged by the employer. The attendance at the hotel was “for personal reasons” unconnected with his employment. Mr Weekes’s employment was not a substantial contributing factor to the injuries sustained on 23 September 2009, pursuant to s 9A of the 1987 Act.

The Arbitrator found that the worker suffered an injury within the meaning of s 4 of the 1987 Act. She also found that Mr Weekes’s employment was a substantial contributing factor to the injury.

The Department appealed.

Held: Arbitrator’s determination revoked and award entered for the employer.

1. The question on appeal was whether the injury sustained by Mr Weekes occurring between actual periods of work was within the course of employment applying the principles set out by the plurality inHatzimanolis v ANI Corporation Ltd [1992] HCA 21; 173 CLR 473.

2. In Hatzimanolis, the High Court reconsidered the principles to be applied to the determination of injuries sustained during an overall period of work, but not directly arising out of employment duties.

3. The reformulated test in Hatzimanolis requires in the first instance a determination of the characterisation of the period or periods of work as one overall period or episode of work, or two or more periods or episodes of work (Watson v Qantas Airways Ltd [2009] NSWCA 322 (Watson)).

4. In determining whether an injury occurred in the course of employment, regard must always be had to the general nature, terms and circumstances of the employment, and not merely to the circumstances of the particular occasion out of which the injury to the employee has arisen (Hatzimanolis at [16]).

5. Mr Weekes carried the onus to prove that the employer expressly or impliedly induced or encouraged him to spend the interval or interlude at a particular place or in a particular way (Hatzimanolis).

6. Whether the worker’s activities were so incidental to what was induced or encouraged by the employer was a question of fact and degree (McMahon v Lagana [2004] NSWCA 164 at [38] (McMahon).

7. Mr Weekes was encouraged by senior officers Barlow and Smith jointly to go out for dinner and drinks with other members of the unit. Having regard to the senior positions that Barlow and Smith occupied, this amounted to express inducement or encouragement on the part of the employer to join the group of officers for dinner and drinks after completing their duties on 22 September 2007.

8. There was no evidence from Mr Weekes concerning any discussions of any form of inducement or encouragement by the Department or any of its senior officers for Mr Weekes to attend the Pastoral Hotel at around 9.30 or 10.00 pm on 22 September 2007 and stay on until the early hours of the next morning, by which time, on his own admission, he was moderately intoxicated. Nor is there any evidence of inducement or encouragement by senior officers to any of his seven colleagues to go to the Pastoral Hotel after having a meal and drinks at the bowling club.

9. Mr Weekes’s submission that, once it was established that there was express or implied encouragement to spend the evening “dining, drinking and socialising with his co-workers as a team-building exercise … then his attendance was within the course of his employment on the Hatzimanolis test for as long as the gathering lasted” was without merit because:

(a) the evidence was that Mr Weekes was encouraged to join the group for “dinner and drinks”, not a drinking session that lasted until the next morning;

(b) Mr Weekes would only be in the course of employment during an interval in an overall period or episode of work if the injury was sustained at a place or whilst engaged in an activity by virtue of the employer’s inducement or encouragement, and

(c) Mr Weekes offered no evidence of any inducement or encouragement by the employer or its senior officers regarding his attendance at the Pastoral Hotel. The evidence from his colleagues was that they understood their attendance at the hotel to be part of a social get-together, a decision they arrived at collectively, without any involvement by senior offices.

10. Mr Weekes’s submission that there was implied encouragement to move to the Pastoral Hotel because the two senior officers “did not object” to going to the hotel, and indeed they joined in, was rejected. This did not establish that those officers singularly or jointly induced or encouraged Mr Weekes to attend at the hotel, and/or to drink to the point of intoxication and engage in unruly behaviour into the early hours of the following morning.

11. Kirby ACJ (as he then was) said in WorkCover Authority (NSW) v Billpat Holdings Pty Ltd (1995) 11 NSWCCR 565 (Billpat) at 593:

[M]ere authorisation is not enough to cast the protective net of the Workers Compensation Act. To give the very substantial protections which that Act affords, there needs, according to the majority opinion in Hatzimanolis, to be a more direct connection with the employer’s enterprise. This involves encouragement or even inducement by the employer.

12. In going to the Pastoral Hotel at about 9.30 pm, and staying there drinking alcohol until 1.48 am the following morning, and engaging in physical altercations with the patrons at the hotel, Mr Weekes could not, on any view, be seen as so incidental to what was induced or encouraged by the employer as to be within that inducement or encouragement (McMahon at [38]).

13. Mr Weekes was not still in the course of his employment when he was assaulted in the vicinity of the Pastoral Hotel in the early hours of the morning on Sunday 23 September 2007.

Abou-Haidar v Consolidated Wire Pty Ltd [2010] NSWWCCPD 128

Claim for additional lump sum compensation; injury conceded; whether any need to establish deterioration since initial claim

Roche DP

10 December 2010

Facts:

Mr Abou-Haidar injured his neck and thoracic spine in the course of his employment on 6 August 2005 when he and another worker unrolled lengths of wire, and also as a result of doing work that required him to sit at a bench with his neck constantly bent forward.  He claimed lump sum compensation for 16 per cent whole person impairment assessed by Dr Guirgis as follows:

(a)       seven per cent for the cervical spine, reduced to six per cent because of a pre-existing condition;

(b)       seven per cent for the thoracic spine, reduced to six per cent because of a pre-exiting condition;

(c)       nil per cent for the lumbar spine;

(d)       two per cent for the right knee, and

(e)       two per cent for the left knee.

At a teleconference on 6 November 2006, the parties agreed on the body parts injured and the matter was referred to an AMS for assessment of  whole person impairment from injuries to the “cervical spine and thoracic spine” as a result of the “nature and conditions of employment together with injury on 6 August 2005”.

On 6 December 2006, the AMS issued a MAC which assessed the worker to have a six per cent whole person impairment as a result of the injury to his cervical spine and a nil whole person impairment as a result of the injury to his thoracic spine.

Mr Abou-Haidar filed an Application to Resolve a Dispute on 29 October 2007 claiming “FURTHER DETERIORATION Lump Sum Compensation” in respect of a four per cent whole person impairment, $10,000 for pain and suffering, and unspecified medical expenses. He relied on a report of Dr Guirgis dated 16 October 2009 which assessed him as having a 20 per cent whole person impairment made up as follows:

(a) seven per cent for the cervical spine (including two per cent for the effects on his daily living activities);

(b) five per cent for the thoracic spine;

(c) five per cent for the lumbar spine’

(d) two per cent for the right knee, and

(e) two per cent for the left knee.

The issues were:

(a) did the worker injure his left and right knees in the circumstances pleaded?

(b) did the worker injure his lumbar spine in the circumstances pleaded?

(c)  is the Commission required to remit this matter to the Registrar in any event for referral to an AMS for assessment of the thoracic spine?

The Arbitrator made an award for the respondent. He found that Mr Abou-Haidar had not injured his lumbar spine or either knee. In respect of the “deterioration issue as to the thoracic spine”, he held that Mr Abou-Haidar had not established “any relevant deterioration in his condition” and declined to remit the matter to the Registrar for referral to an AMS.

The Arbitrator acknowledged that an AMS assessment of nil impairment at a certain date was not binding for the future, that injuries deteriorate, and “where they do an applicant has a right to seek a further assessment”. He noted that in 2006, Dr Guirgis had assessed a six per cent whole person impairment as a result of the condition of the thoracic spine in 2006 but only a five per cent impairment in 2009. Therefore, Mr Abou-Haidar had failed to establish a relevant deterioration.

The main issue on appeal was whether the Arbitrator erred in finding that a claimant has to establish a deterioration in his or her condition before he or she can claim further lump sum compensation.

Held: Arbitrator’s determination revoked. Matter remitted to another Arbitrator for a telephone conference for referral to an AMS.

1. Neither the 1998 Act nor the 1987 Act refer to claims for additional lump sum compensation because of the deterioration of a worker’s condition, or because of an increase in a previously assessed and compensated whole person impairment. However, the WorkCover Guidelines make express reference to a worker being entitled to re-apply for “further evaluation of the condition” if it deteriorates at a later time (cl 1.24 and 15.10 of the WorkCover Guidelines). Such claims must be made under s 282 of the 1998 Act and the WorkCover Guidelines: [48].

2. The Arbitrator’s task was to determine injury and other liability issues. Once that was done, the question of the extent of any whole person impairment as a result of the injury was a matter for the AMS. Consolidated submitted that the position was different for a claim for additional lump sum compensation compared to an initial claim for compensation. There is nothing in the legislation that provides any direct or implied support for that submission. It was not for the Commission to determine, as a threshold issue, whether Mr Abou-Haidar had demonstrated that his condition had deteriorated before the matter could be referred to an AMS for further assessment. A worker must make a claim under s 282 and support that claim with a whole person impairment assessment in the proper form from a WorkCover trained assessor: [55].

3. Section 105 gives the Commission jurisdiction, “subject to” the 1998 Act, to “examine, hear and determine all matters arising under” the 1998 Act and the 1987 Act. The Commission has jurisdiction to determine liability issues. Once those issues were determined, the Commission had no jurisdiction to determine medical disputes that came within the terms of s 319. A claim for further or additional lump sum compensation as a result of an alleged increased impairment since a previous assessment or award, where there is no dispute as to injury, is such a medical dispute.  Mr Abou-Haidar did not have to establish a prima face case of a deterioration before his claim could be referred to an AMS for assessment and, to the extent that E v Sydney South West Area Health Service (Concord Hospital) [2009] NSWWCCPD 108 suggests the contrary, it is not consistent with the legislation: [57].

4. It was not accepted that the result in this matter would result in no limitation as to the number of applications for additional lump sum compensation brought by a worker.  The right to have a claim referred to an AMS is restricted to claims that comply with the claims procedure and the WorkCover Guidelines, and are supported by assessments provided by WorkCover trained assessors.  A worker who brought a claim that was frivolous or vexatious, fraudulent or without proper justification would be liable to an adverse costs order (s 341): [58].

5. The insurer did not dispute whether Mr Abou-Haidar had made a proper claim for lump sum compensation and raised no liability issue. It disputed whether there had been a deterioration.  The question of deterioration is not strictly relevant and certainly not determinative of a later claim for whole person impairment.  An assessment of whole person impairment is not based on a worker’s subjective complaints of deterioration, but depends on an objective assessment based on the American Medical Association’s Guides to the Evaluation of Permanent Impairment (5^th ed) and the WorkCover Guidelines: [60].

6. The question was: was Mr Abou-Haidar’s whole person impairment as a result of an accepted injury to his thoracic spine? An AMS must determine that question: [61].

7. Referral of the matter to an AMS was not contrary to the Commission’s objectives of providing a fair and cost effective system for the resolution of disputes under the Workers Compensation Acts (s 367). When liability is determined, or not in issue, the Commission must refer properly made claims for permanent impairment compensation to an AMS for assessment. If a claim was made without proper justification and the AMS made the same assessment as previously made, an employer may have grounds to make an application for costs under s 341(4): [65].

8. There is no estoppel in a changing situation (The Doctrine of Res Judicata by Spencer Bower, Turner and Handley, 3^rd edn, 1996, at page 102, O’Donel v Commissioner for Road Transport & Tramways [1938] HCA 15; 59 CLR 744; Dimovski; Hamersley Iron Pty Ltd v The National Competition Council [2008] FCA 598 at [114] to [116]; Prisk v Department of Ageing, Disability and Home Care (No 2) [2009] NSWWCCPD 13 at [55]). A claim for additional lump sum compensation is such a situation: [66].

Livaja v Concept 2001 Pty Limited [2010] NSWWCCPD 126

Proof of injury; sufficiency of reasons for Arbitrator’s determination

O’Grady DP

8 December 2010

Facts:

In the course of Mr Livaja’s employment with Concept 2001 Pty Limited (the respondent), as a junior process worker, he received a laceration when a sharp instrument came into contact with his right hand during an altercation with his supervisor.

He claimed compensation benefits and was paid up until mid 2007 when liability for alleged injuries to the right arm and shoulder was declined.

A lump sum payment was made to Mr Livaja after MACs were issued firstly in respect of his right hand, and also an assessment of his capacity for work resulting from an alleged psychiatric injury.  Mr Livaja then sought orders in respect of weekly compensation. The Arbitrator delivered her determination orally following the arbitration and issued a Certificate of Determination that made an award in favour of the respondent in respect of s 66 for the right upper extremity (although there was no application made by Mr Livaja for lump sum compensation) and an award in favour of Mr Livaja for s 40 payments in the sum of $65 from 25 June 2007 to 20 August 2007 and $40 from 21 August 2007 to date and continuing.

Mr Livaja submitted that the arbitrator erred in finding that he did not receive injury to his right shoulder and failed to provide sufficient reasons for her determination.

Held: Arbitrator’s decision confirmed, however, Order 1 was revoked and replaced with “Award in favour of the respondent in respect of the applicant’s allegation of right shoulder injury”

Reasons

1. There is an obligation upon Arbitrators to give reasons for decisions and such reasons should be sufficient to enable a party to exercise their right of appeal: Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 per Mahoney JA at 270.

2. “Reasons need not necessarily be lengthy or elaborate” as stated by Meagher JA in Beale v GIO (NSW) (1997) 48 NSWLR 430 at 433.  His Honour stated that there are three fundamental elements of a statement of reasons which may be useful to consider: a judge should refer to relevant evidence; material findings of fact and any conclusions or ultimate findings of fact reached should be set out, and the reasons should be logical and understandable. [67]

3. The Arbitrator’s brief reasons lacked precision, and were expressed in a way that did not provide a clear understanding of her evaluation of the evidence and the relevance of that evidence to her ultimate conclusion. It was necessary to review the evidence as a whole to determine the correctness or otherwise of the Arbitrator’s ultimate conclusion in relation to Mr Livaja’s alleged right shoulder injury.

Right shoulder injury

4. Mr Livaja was unable to satisfy the onus upon him to establish the occurrence of injury to the shoulder.  The following matters were taken into account when so concluding:

(a) his statement made in April 2008 made no suggestion of any injury to the right shoulder;

(b) the claim form dated 9 June 2006 made no reference to symptoms in the right shoulder;

(c) the right shoulder was not referred to in the notes/reports of the large number of doctors who treated Mr Livaja in 2006 (with the exception of a fleeting reference by one doctor);

(d) EMG nerve conduction studies demonstrated no abnormality involving the shoulder joint;

(e) Mr Livaja’s qualified expert did not record such symptoms in his first report, and his second report was reliant on an inconsistent and amplified history given to him by Mr Livaja which was not corroborated by other evidence, and

(f) the expert medical evidence was contradictory in terms of the findings on physical examination contained inconsistency concerning report by Mr Livaja of the involvement of his right shoulder and contained various accounts of the circumstances of the injury.

Al Othmani v Massoud and anor [2010] NSWWCCPD 129

Deemed worker, intention to create legal relations; contract of employment, Schedule 1 clause 2 of the 1998 Act

McFee ADP

10 December 2010

Facts:

Mr Al Othmani rented a house to live in from Raymond Massoud and Antoine Massoud. The house had a number of defects which required attention and repair.

There was conflicting evidence from the Massouds and Mr Al Othmani. Mr Al Othmani alleged that he was employed by the Massouds to undertake some of the repair work pursuant to an agreement that Mr Massoud would pay him $1000.

Whilst cleaning leaves from the roof, Mr Al Othmani fell to the ground through sheeting. He sustained a severe back injury which resulted in paraplegia.

The Massouds were joined as first respondent. Proceedings were also commenced against the Uninsured Liability – Agent for New South Wales WorkCover Scheme (WorkCover) as the second respondent because the first respondent was uninsured.

WorkCover issued a s 74 notice disputing Mr Al Othmani’s entitlement to workers compensation on the basis that he was not a worker or a deemed worker. The Massouds were not represented.

At the arbitration, the Arbitrator found that Mr Al Othmani did not discharge the onus of proof that there was:

(a) a contract of employment with the first respondent, and therefore he was not a worker, or

(b) a contract to perform work, and therefore he was not a ‘deemed worker’ pursuant to the provisions of Sch 1 cl 2 of the 1998 Act.

Mr Al Othmani appealed.

Held: Arbitrator’s determination revoked and a finding of deemed worker made.

1. The parties acknowledged that Mr Al Othmani was not a worker as defined in s 4 of the 1998 Act.

2. Schedule 1 cl 2 of the 1998 Act is in essentially the same terms as the former Sch 1 cl 2 of the 1987 Act. A provision to the same effect was s 6(3A) in the Workers Compensation Act 1926 (the 1926 Act).

3. Humberstone v Northern Timber Mills [1949] HCA 49; 79 CLR 389 and Scerri v Cahill (1995) 14 NSWCCR 389 were relied on in relation to the proper construction of Sch 1 cl 2 of the 1998 Act.

4. Ormwave Pty Ltd and Anor v Smith (2007) NSWCA 210 (Ormwave), and the authorities considered by Beazley JA at [68]–[75] in that matter, confirmed that it is not necessary, in determining whether a contract has been formed to identify either a precise offer or a precise acceptance, nor a precise time at which an offer or acceptance could be identified. (see also Brambles Holdings Limited v Bathurst City Council (2001) 53 NSWLR 153; [2001] NSWCA 61, Thompson v White & Ors (2007) NSW ConvR 56-171; [2006] NSWCA 350 at [99]; Brooker v Friend & Broker Pty Ltd & Anor [2006] NSWCA 385 per McColl JA at [135] ff; Industrial Rollformers Pty Ltd & Anor v Ingersoll-Rand (Australia) Ltd [2001] NSWCA 111 at [137] per Giles JA).

5. Whether a contract existed, and the intention to create legal relationships, must be determined objectively.

6. For there to be a contract, there must be an intention to create legal relations and mutuality or contractual consensus. In Lindeboom v Goodwin (2000) 21 NSWCCR 297 at 303, Campbell CJ cited Jones v Padavatton (1969) 1 WLR 328 per Salmon LJ at 332:

Did the parties intend the arrangement to be legally binding? This question has to be solved by applying what is sometimes (although perhaps unfortunately) called an objective test. The court has to consider what the parties said and wrote in the light of all the surrounding circumstances, and then decide whether the true inference is that the ordinary man and women, speaking or writing thus in such circumstances, would have intended to create a legally binding agreement.

7. A contractual arrangement can be inferred from the conduct of the parties, there being no need to isolate offer, acceptance and consideration.

8. When a person intends to offer his services for reward, belief by the person to whom he offers his services that the offer was gratuitous does not prevent a contract arising.

9. Whatever Mr Massoud intended regarding payment, he conducted himself so that another (Mr Al Othmani) may reasonably have inferred the existence of an agreement to be paid for services performed and to be performed. The conduct showed a tacit understanding or agreement.

10. It was found on appeal that it was more probable than not that Mr Massoud offered to pay the appellant $1,000 to fix all the defects in the house, having already incurred $500 for an electrician, and the potential cost of a plumber, roofer, cleaner and gardener.

11. Alternatively, whatever he intended, Mr Massoud behaved in a manner that it was to be reasonably inferred that there was an agreement that the appellant would carry out the work and be paid, which agreement was the most probable explanation for the appellant performing the work, prior to, and on the accident day.

12. The work exceeded $10 in value and was not incidental to a trade carried on by the appellant. The appellant neither sublet nor employed workers in the performance of the contract. Accordingly, the provision of Sch 1 cl 2 of the 1998 Act was established.

13. Mr Al Othmani was a worker as defined in Sch 1 cl 2 of the 1998 Act, deemed to be employed by the first respondent.