Issue 11: November 2013

Chep Australia Limited v Strickland [2013] NSWCA 351

1) refusing to allow fresh evidence, and

2) placing weight on Dr McKechnie’s Report.

Basten JA

1. The appellant’s grounds of challenge to the decision of the President of the Commission were misconceived: they failed to come to grips with the need to identify a decision which was erroneous in point of law [2].

2. It was submitted that the President misdirected himself by substituting for the test of "substantial injustice" the question whether the admission of the proffered medical notes would have led to a different result. Whether such a paraphrase of s 352 will demonstrate error in point of law will depend upon the circumstances [6].

3. The President expressly analysed the proffered evidence and its possible effect iftaken into account. The President was satisfied that the medical notes which had not been before the arbitrator “add nothing to the evidence already before the arbitrator. That was a finding of fact that was open to him. Once that assessment had been made, the paraphrase of the statutory test revealed no error of law [7].

Barrett JA (Macfarlan JA agreeing)  

4. There was no dispute that Dr Hedge’s notes were available and could reasonably have been obtained by the appellant. It was for that reason that the President concentrated on the second threshold question (s 352(6)), that is, whether failure to grant leave to introduce the notes into evidence "would cause substantial injustice in the case". That question was approached according to what the President obviously regarded as a paraphrase:

That is, would the admission of the notes at the arbitration have led to a different result? [28]

5. The part of s 352(6) concerning “substantial injustice” does not direct attention to possibilities or potential outcomes. The task is to decide whether absence of the evidence “would cause” substantial injustice in the case. There must therefore be a decision as to the result that “would” emerge if the evidence were taken into account and the result that “would” emerge if it were not. If the result would be the same on each hypothesis, the ends of justice cannot be said to have been defeated by exclusion [31].

6. The power of the appellate tribunal upon such an appeal is a narrow power to correct operative error of fact, law or discretion. The power of the Presidential member to admit further evidence (subject to satisfaction of one of the statutory pre-conditions) was therefore concerned with evidence which, if accepted, would have been likely todemonstrate that the decision appealed against was affected by such error: Northern NSW Local Health Network v Heggie [2013] NSWCA 255 [34].

7. Admission of Dr Hedge’s notes into evidence would have strengthened the case on which Ms Strickland succeeded and not advanced Chep’s unsuccessful case (based on the opposite hypothesis) [43].

Conclusion

8. The President decided that no substantial injustice would be occasioned by continued exclusion of Dr Hedge’s notes. His Honour also decided that neither of the s 352(6) pre-conditions to a grant of leave was satisfied and that the discretion made available by that section did not become exercisable. The President did not err in law by so deciding or by declining to admit Dr Hedge’s notes into evidence [44].

9. The threshold question under s 352(6), whether failure to grant leave to introduce fresh evidence on appeal "would cause substantial injustice in the case", necessarily involves consideration of the “hypothetical” result. That is, the result that “would” emerge in the alternate events that the evidence is or is not taken into account. Where the hypothetical result is the same in both events, it cannot be said that exclusion of the evidence would cause a substantial injustice in the case.

Ground 2

Basten JA

10. The second challenge involved an attempt by the appellant to demonstrate that Dr McKechnie’s opinion, upon which the arbitrator had relied, lacked probative value. The President was satisfied that Dr McKechnie based his opinion upon his “review of the documentation that was forwarded to him”. That finding was not open to challenge [8].

Barrett JA (Macfarlan JA agreeing)  

11. The appellant also sought to establish that Dr McKechnie's opinion was devoid of probative value and that the President therefore erred in law by taking it into account in reaching his decision [50].

12. That submission was evaluated against the statutory background concerning proceedings in the Commission: s 354 of the 1998 Act [51].

13. In State Transit Authority of New South Wales v Chemler [2007] NSWCA 249, Basten JA said:

The precise scope of a provision such as s 354 of [the 1998 Act] will depend upon the circumstances in which its operation arises. No doubt the Commission is required to apply substantive rules of law applicable to its jurisdiction and to comply with rules of procedural fairness, although the content of the latter may be affected by the terms of the provision. [52]

14. Because the rules of evidence do not apply, medical opinions tendered in proceedings in the Commission do not fall to be assessed according to any direct application of provisions in Part 3.3 of the Evidence Act 1995 or “the basis rule” [53].

15. In Onesteel Reinforcing Pty Ltd v Sutton [2012] NSWCA 282 at [82], Basten JA said that nothing in the 1998 Act or the law relating to procedural fairness (which undoubtedly applies) imports into the legally mandated procedures of the Commission limitations on the material that can be considered, derived from the rules of evidence. If the appellant is to succeed on this ground it must show that such reliance entailed failure “to act according to equity, good conscience and the substantial merits of the case” as required by s 354(3) [54].

16. Dr McKechnie’s reports were consistent with Dr Hedge’s notes that supported Ms Strickland’s case. Therefore it could not be postulated that the availability to him of Dr Hedge’s notes would have altered his view [56].

Conclusion

17. In relation to whether the President erred in law by taking into account the opinion of Dr McKechnie, for error to be established on the basis that the evidence relied upon in making a finding lacked probative value, it must be shown that such reliance entailed a failure to “to act according to equity, good conscience and the substantial merits of the case” (s 354(3)). Such an assessment has to be made in in the context of s 352 and in light of the individual circumstances of the case.

(a) had jurisdiction to make an award for the respondent on the worker’s claim for weekly compensation from 1 January 2013, and whether the Arbitrator erred in making an award for the respondent from that date.

Held: The Arbitrator’s determination was revoked in part. 

1. The complaint in this case was that the assessment of the entitlement under s 38 was effectively undertaken by the Arbitrator when he concluded that the worker had no entitlement under s 38 and thus entered an award for the respondent [58].

2. The issue for determination on appeal was not argued before the Arbitrator. The issue of the application of s 38, and the Commission’s jurisdiction was one of general importance and it was therefore in the interests of justice that it be argued and determined on appeal. In addition, given that the issue was not one on which the respondent needed to call evidence, and there was no prejudice to the respondent, it was appropriate that it be argued and determined on appeal notwithstanding that it was not argued before the Arbitrator. [48]-[50] (Metwally v University of Wollongong [1985] HCA 28; 60 ALR 68; Suttor v Gundowda Pty Ltd[1950] HCA 35; 81 CLR 418; Coulton v Holcombe [1986] HCA 33; 162 CLR 1; Board v Moustakas [1988] HCA 12; 180 CLR 491)

3. The Commission has been vested with very broad powers to hear and determine all matters arising under both the 1987 and 1998 Acts [51]. The “exclusive jurisdiction” granted to the Commission pursuant to s 105(1) is qualified by express statutory provisions in s 43(3) and s 44(5) of the 1998 Act. These provisions remove the Commission’s jurisdiction to determine any dispute about a work capacity decision of an insurer and prevent the Commissionmaking a decision in respect of a dispute before it that is inconsistent with a work capacity decision of an insurer (s 43(3)) [52].

4. Section 44(5) prohibits the Commission from making a decision in proceedings concerning a dispute about weekly payments of compensation payable to a worker while a work capacity decision by an insurer is the subject of a review under that section [53].

5. It is clear from the unambiguous terms of s 38 that an entitlement to compensation under that section must be assessed by the insurer, not by the Commission [57].

6. The insurer had not undertaken a work capacity assessment of the worker’s residual capacity for work following the expiration of the second entitlement period (s 32A). In those circumstances, the Arbitrator erred by concluding that the worker had no ongoing entitlement to weekly compensation in the absence of such an assessment. Those rights had not yet been determined. In the circumstances, the Arbitrator should have declined to make any order in respect of the period from 1 January 2013. It followed that this award entered in favour of the respondent had to be revoked [59]-[60].

7. In the absence of jurisdiction to determine the worker’s entitlement under s 38 the appropriate approach is to decline to make any order with respect to the worker’s entitlements from 1 January 2013. Thus, it is open, in the present case, for the worker to pursue her rights, if any, under s 38 in the manner provided in that section [61].

(a) determining that there was no evidence concerning relevant distances nor as to the time taken to walk from the respondent’s premises to the point at which the worker tripped and fell, in circumstances where no submission as to the relevance of such matters had been put by either party and that the subject matters of distance and time had not been raised by the Arbitrator with counsel during the hearing;

(b) failing to inform himself in respect of certain factual matters concerning distance, in accordance with s 354(2) of the 1998 Act;

(c) failing to meet the requirements of s 354(3) of the 1998 Act;

(d) finding that there was no evidence concerning “how luminous or dark Bull Street would have been [at the time the appellant] would have travelled to her car [on the date of injury] if she had not been required to work back”;

(e) failing to find that the worker would have reached the scene of the fall, had she ceased work at 5.00 pm, “most probably during the first half of twilight and at a time where her vision [of] the tree roots would not have been obscured by darkness”;

(f) failing to determine that the appellant’s injury arose out of her employment;

(g) finding that the appellant’s employment was not a substantial contributing factor to the injuries;

(h) finding that, given the absence of a real and substantial connection between the employment and the accident or incident out of which the personal injury arose, the journey was not one to which s 10(1) of the 1987 Act applies, and

(i) failing to find that attendance by the appellant at the respondent’s work premises was an essential element of the appellant’s employment.

Held: The Arbitrator’s determination was confirmed. 

Submissions, Discussion and Findings

1. The worker’s case was that she had been exposed to the risk of tripping in darkness, and that it was dark because she had finished work later than normal. It was argued that her usual finishing time would have been during twilight, not in darkness [40].

2. The worker’s complaint concerned a suggested denial of procedural fairness in that she had been denied an opportunity “to address any asserted deficiency” in the evidence [44]. The Arbitrator’s finding that the evidence did not establish that the worker was exposed to an increased risk by working until 5.50 pm, defeated the very foundation of the worker’s argument, without there being an opportunity afforded to her to deal with the state of the evidence as to time and distance [33], [46]. While this was an error, it was concluded that the appropriate course was to examine the evidence and arguments raised with a view to determining whether the Arbitrator’s conclusions concerning the worker’s entitlement to compensation as claimed had been affected by error (Stead v State Government Insurance Commission [1986] HCA 54; 161 CLR 141) [46]-[47].

Did the Arbitrator err in concluding that the injury did not arise out of employment (s 4(a))?

3. It was not disputed that the worker was required to carry out her duties at the respondent’s premises in Newcastle. That fact, considered with the employer’s requirement that the worker work 50 minutes overtime did not render the necessary journey to her home after work something that was relevantly “incidental” to her employment [49], [52].

4. The risk, and the fact, of tripping by reason of darkness was not a consequence of “special exposure”. The fall and consequent injury may not be taken as having arisen out of the worker’s employment, merely because the fall happened after leaving work 50 minutes later than the usual hour. Such a proposition involves the “but for” test. What was asserted in submissions was that but for working late and leaving in the dark, the fall would not have happened. The “but for” test is not the correct test as to causation: Qantas Airways v Watson (No 2) [2010] NSWWCCPD 38 [53].

5. It could not be said that the subject injury occurred when the worker’s employment brought her to a particular locality where the danger arose: Telstra Corporation Limited v Bowden [2012] FCA 576 [54].

6. The question of causation could not be resolved by contrasting prevailing conditions at normal knock off time and those 50 minutes later. The common sense evaluation of the facts required consideration of other matters [55]. The Arbitrator was correct to conclude that such causal relationship as may be argued was “tenuous” and not sufficient a circumstance to establish that the injury arose out of the employment [56].

Section 9A of the 1987 Act

7. Given the above findings, it was unnecessary to consider questions raised by s 9A of the 1987 Act. However, the following matters were noted [57].

8. The legislature’s intent when enacting s 9A was to remedy “the lack of causal connection with employment”. That was accomplished by the requirement found in s 9A that “the connection of the employment with the injury under either limb [of s 4(a)] was ‘substantial’”: Badawi v Nexon Asia Pacific Pty Ltd t/as Commander Australia Pty Ltd [2009] NSWCA 324; 75 NSWLR 503; 7 DDCR 75 [60].

9. The requirements of s 4(a) were not satisfied on the present facts and it followed that the submissions raised in support of suggested error concerning the application of s 9A were rejected [61].

Did the Arbitrator err in his application of s 10(3A)?

10. The Arbitrator’s finding that the requirements of s 10(3A) had not been met was challenged. The reasoning which led the Arbitrator to that conclusion followed his consideration of the proper construction of s 10(3A). He noted that the term “real and substantial connection” was not defined in the 1987 and 1998 Acts. He had regard to relevant authority and determined that the terms “employment” and “substantial” are to have the same meaning “throughout the legislation”. The term “employment”, it was found, should bear the same meaning as when used in ss 4 and 9A [63].

11. The Arbitrator, relying upon dictionary entries, determined that “real”, in the context of s 10(3A), should be taken to mean “actual” and that the word “connection” should be taken to mean “association” or “relationship” or “link” [64].

12. The Arbitrator was correct in his above findings (Commissioner of Police v Industrial Relations Commission of NSW [2012] NSWCA 439) [68]-[69]. The Arbitrator was also correct to place some reliance upon a dictionary to determine the meaning of words that are not defined in the relevant Act (R v Peters (1886) 16 QBD 636) [70].

13. The term “real” may be used in either a qualitative sense or a quantitative sense (Minister for Immigration, Local Government and Ethnic Affairs v Batey [1993] FCA 75; (1993) 112 ALR 198 (Batey). The Court, in Batey, there identified that “real” may convey “the notion of existence as an actuality”, which construes the term in its qualitative sense. It is in this sense that the term “real” should be construed in the context of s 10(3A). The Arbitrator’s adoption of the dictionary meaning, being “actual”, was correct [70].

14. When considering the term “connection” it was noted that the most apt meaning would involve the concept of “link” [72].

15. Whilst there is a clear distinction between the statutory terms “substantial contributing factor to injury” (s 9A) and “real and substantial connection between employment and the incident etc” (s 10(3A)), both involve a causal element. In the case of s 10(3A) the causal nexus is the connection between the employment and the incident. The term “connection” as appears in s 10(3A) may also encompass some other association with the employment. That issue had not been argued and, given the parties’ approach to the particular facts, it was not necessary to determine that question. Whilst the requirement is that the connection must be “real and substantial” that concept may imply a lesser threshold than “substantial contributing factor” as appears in s 9A. That question had not been fully agitated on this appeal, and therefore no findings regarding that question were made. However, it was noted that, as with s 9A, the requirement of there being a “real and substantial connection” involves a test that goes to causation at least as stringent as that found in s 4(a) (arising out of employment) [73].

16. Any “link” that may arguably exist between employment and the incident was far too tenuous to meet the causal requirement that the subsection requires [74].

17. The legislative intent of Parliament was to abolish entitlement in respect of journey injuries except in those circumstances addressed by s 10(3A) and, so far as may be relevant, s 10(5A) [79]. A proper reading of s 10 demonstrates that there is entitlement in cases of injury received on relevant journeys if, and only if, the requirements of s 10(3A) are met or if s 10(5A) has application [80].

• the matter was merely a medical dispute relating to the extent of Ms Lee’s whole person impairment;
• the meaning and effect of the s 66A complying agreement entered into and whether it prohibited Ms Lee from re-arguing the extent of the s 323 deductible proportion, and
• the referral to an AMS was appropriate.

Section 66A(3) was applied to the circumstances of the matter. That provision provides the Commission with jurisdiction to award additional compensation to that agreed to in a complying agreement in the following circumstances where:

• the agreed degree of permanent impairment is manifestly too low (s 66A(3)(a));
• the worker has been induced to enter into a complying agreement by fraud or misrepresentation (s 66A(3)(b)), or
• since the complying agreement was entered into, there has been an increase in the degree of permanent impairment beyond that so agreed (s 66A(3)(c)).

Held: The Arbitrator’s determination was revoked. 

Was the dispute a medical dispute only?

1. The question was whether the Arbitrator failed to appreciate that one of the “other things” encompassed by the general and undefined concept of “liability” is an issue relating to whether, by operation of a s 66A agreement, a party may be prevented from bringing a claim for further lump sum compensation when the claim now sought to be made was incorporated in or subsumed by a s 66A complying agreement [50].

2. AbouHaidar was distinguished on the basis that that matter concerned a dispute about the increase in the degree of permanent impairment since an assessment by an AMS, which is a medical dispute that fell within the sole jurisdiction of an AMS. In the instant matter, the issue concerned whether Ms Lee was precluded from bringing a further claim by reason of having entered into a s 66A agreement. In other words, the dispute concerned the meaning and effect of the s 66A agreement and was therefore not merely a medical dispute. It was a legal or liability issue falling within the jurisdiction of an arbitrator. It required the Commission to interpret the terms of the s 66A agreement by applying the usual rules of construction of contracts, in the context of the applicable legislation [51].

Did the Arbitrator determine the effect of the s 66A complying agreement?

3. The Arbitrator’s Reasons focussed only on whether Ms Lee was claiming an increase in the degree of permanent impairment beyond the amount previously agreed. She did not consider the effect of the s 66A agreement or whether the current claim could proceed notwithstanding that agreement. That was an error [57].

What was the effect of the s 66A complying agreement?

4. To determine the effect of a complying agreement, it must be interpreted according to the usual principles of contract law [72]-[74] (Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; 219 CLR 165; WDS (Mining) Pty Ltd v Piper [2013] NSWWCCPD 19; Investments Pty Ltd v Lesdor Properties Pty Ltd [2012] NSWCA 184).

5. Construing the agreement by what a reasonable person would understand by the terms of the agreement and having regard to the purpose and object of the transaction and taking into account the nature of the dispute, it was concluded that the objective intention of the parties was to record the resolution of the only matter remaining in issue at the time the agreement was entered into, namely, the extent of any deductible proportion under s 323 [74], [76].

6. There may be circumstances where a complying agreement prevents a later claim for further lump sum compensation, as discussed in CSR Limited v Gonzales [2010] NSWWCCPD 181 and Di Paolo v Cazac Constructions (NSW) Pty Limited [2013] NSWWCCPD 8. Those cases were decided on their own facts and it is clear that the Commission has jurisdiction to award further lump sum compensation following a s 66A complying agreement if it can be established that, since the agreement was entered into, there has been an increase in the degree of permanent impairment beyond that so agreed (s 66A(3)(c)), or if any of the other circumstances in s 66A(3) are satisfied [78].

7. On the facts of the case, Ms Lee could not satisfy the requirements of s 66A(3)(c), or any of the other exceptions under s 66A(3). The current claim was supported by exactly the same assessment Ms Lee had in 2007. It did not support a claim that, since the agreement was entered into, Ms Lee had suffered an increase in the degree of permanent impairment beyond that agreed to on 18 January 2007. Ms Lee was therefore bound by the terms of the complying agreement and was precluded by such agreement (and s 66A) from bringing the current claim, which was based on the same assessment in her possession in 2007 [79], [81]-[82].

8. As the only issue in dispute had been resolved by the complying agreement, there was no dispute to be referred to an AMS [80].

Was the Arbitrator required to determine if the compensation agreed to was manifestly too low?

9. Accepting that the Commission is not bound by strict pleadings, the President was not satisfied that the application of s 66A(3)(a) was properly before the Arbitrator or that it was understood to be a matter requiring determination [90].

10. It was not accepted that it should be inferred that the Arbitrator did not deal with the issue because of her findings on the application of s 66A(3)(c). If that was the way the Arbitrator approached the issue she would have stated so. She did not [91].

11. The President stated that even if he was wrong on that point, he would not have been in a position to re-determine the issue on appeal in any event. The submissions on the issue had not been fully developed. Indeed, no submissions had been made as to the meaning of “manifestly too low” in this statutory context [92].

(a) finding that the employer’s conduct was reasonable;

(b) rejecting the evidence of the treating psychologist, Ms Wild;

(c) failing to find that a false or unfound allegation of misconduct caused the worker’s psychological injury, and

(d) finding that the worker’s credit was not a factor.

Held: The Arbitrator’s determination was confirmed. 

Reasonable conduct

1. The Arbitrator dealt with the question of reasonable conduct by reference to the “entire conduct” (Department of Education and Training v Sinclair [2005] NSWCA 465; 4 DDCR 206) [35]. In doing so, she correctly acknowledged that that question is one of fact where the rights of the employee must be weighed against the objectives of the employer (Irwin v Director General of Education (unreported, Workers Compensation Court of NSW, Geraghty CCJ, 18 June 1998, No 14068 of 1997)) [36].

2. The Arbitrator was correct to find that the first warning was reasonable, and did not amount to bullying as asserted [38]-[39].

3. As the worker was aware of the policy of reporting work-related injuries, her failure to report her back injury within the required time meant she was in breach of it. The Arbitrator’s finding in this regard was not an error [40].

4. The Arbitrator’s acceptance of the respondent employer’s evidence that the word ‘fraud’ was not used and the worker had not been accused of dishonesty, in respect of the incentive payments, was open on the evidence [42], [49]. Viewing the history of the matter as a whole, where two supervisors were concerned about the worker’s performance, had instituted procedures to help her improve, had endeavoured to support her, and had refrained (for reasons of fairness) from issuing formal warnings in the past, the Arbitrator’s finding that the issuing of the warning on this issue was reasonable was open on the evidence [44].

5. It was never argued at the arbitration that the investigation was not reasonable, or that it “cloaked the whole incident in [an] aura of some criminal misbehaviour”, as was submitted on appeal. It was argued that the issuing of the warnings was not reasonable and was heavy handed. The submission on appeal did not identify any error by the Arbitrator and sought to raise an issue never argued at the arbitration and therefore was rejected [46].

6. The worker’s failure to complete OHS checks was “linked to not meeting company deadlines”. This failure continued, despite reminders issued in the past requesting that she adhere to the deadlines. The worker said she had no excuse and accepted the warning [54]. It was open to the Arbitrator to find that the warning was reasonable [55].

7. The two warnings issued on 10 June 2010 dealt with two separate and distinct matters. That reason alone justified them being issued in separate documents [57]. It was not accepted that the issuing of the two warnings on the same day was unreasonable, or done deliberately to put pressure on the worker [61].

Ms Wild’s evidence

8. The Arbitrator’s conclusion that the timeline of events did not support the conclusion that other matters had caused the worker’s psychological condition was consistent with the evidence and was open to her. It was a clear reference to the fact that the worker demonstrated no signs of emotional difficulties until after she received the warnings on 10 June 2010 [70].

9. The Arbitrator further stated that other medical evidence, which focused on the history that the worker had been accused of fraud, did not support the worker’s case. In circumstances where the Arbitrator found that the worker had not been accused of fraud, or any dishonesty, her finding was open and disclosed no error [71].

10. In addition, the Arbitrator said that Ms Wild’s opinion was flawed because she wrongly said that the “other factors” that contributed to the injury occurred prior to any reasonable action with respect to promotion, transfer, performance appraisal, discipline, retrenchment or dismissal. The Arbitrator correctly observed that issues with regard to “discipline” commenced with monthly training meetings in 2009 and this finding had not been challenged [72].

11. In the absence of any reasoned argument this ground of appeal failed [74].

False or unfounded allegations of misconduct 

12. While it was accepted that the worker did not sign off on the incentive spreadsheets for January to March 2010, she provided the information used by the manager who did sign off on those documents [76].

13. By submitting the incentive spreadsheet she was indicating that she had “checked the data” when in fact she had not. That was a breach of company policy that justified a warning. The worker did not dispute that she had breached the policy, but said that she had not done so “willingly or consciously” [78].

14. It followed that the submission that the worker was “accused of false and unfounded allegations of misconduct” was incorrect and rejected. The Arbitrator’s conclusion that the warning was reasonable was open on the evidence and disclosed no error [79].

Credit

15. While the Arbitrator referred to the submission that the worker was “loose with the truth” in relation to the toll records (relevant to work related expenses), she did not base her decision on those records. Though she would have been entitled to rely on this matter as a ground for finding that the worker was not a reliable witness, the Arbitrator made no comment about the worker’s failure to bring documents to the arbitration and made no finding about the worker’s credit “in relation to the reimbursement of her phone bill and toll account” [94].

16. The Arbitrator did not accept that, even if the word “fraud” had not been used, what the worker’s supervisor said could only be interpreted as (an allegation of) fraud. That finding was open on the evidence [98].

17. Having considered the evidence, and having seen and heard the worker give oral evidence, it was open to the Arbitrator to form a view about the worker’s credit and to take that view into account in reaching her conclusion. Her view was that the worker’s “failure to disclose [her previous psychological difficulties] adversely impact[ed] on the credit of [the worker]”. This was a matter that went to the reliability of the worker’s evidence and was a matter (though not the only matter) the Arbitrator was entitled to take into account in assessing the claim [103].

(a) finding that there was a real probability that the injury or a similar injury would have happened anyway, at about the same time or at the same stage of the worker’s life, if he had not been at work on 17 May 2011 or had not been working in that employment, and

(b) determining that employment was not a substantial contributing factor to the injury on 17 May 2011.

Held: The Arbitrator’s determination was confirmed. 

1. The submissions that there was no evidence which would permit the Arbitrator to conclude as he did, and that his conclusion expressed, that the injury would happen in any event, was based upon speculation was rejected [43].

2. While the evidence of a specialist doctor did not expressly associate the presence of degeneration in the knee joint with the occurrence of injury, it was open to inference, having regard to the observation that “tearing of the medial meniscus…would not be classified purely as being degenerative”, that the presence of degeneration was in some manner relevant to the occurrence of the tear [44].

3. Notwithstanding the form of the question put to the specialist doctor, by the insurer, regarding s 9A(2)(d) – the probability that the injury or a similar injury would have happened anyway – his response constituted evidence upon which a conclusion as to such probability could be founded. Such evidence was sufficient to meet the evidentiary burden upon the respondent concerning matters raised by the sub-subsection (Watts v Rake [1960] HCA 58; 108 CLR 158; Purkess v Crittenden [1965] HCA 34; 114 CLR 165; Nominal Defendant v Clancy [2007] NSWCA 349) [47].

4. While the respondent accepted that the subject injury arose in the course of employment (temporal connection), there was no evidence to suggest, as asserted by the worker, that there was a concession by the respondent that the injury arose out of the employment (causal connection) [50]. It was noted that the worker carried the onus to establish that the requirements of s 9A had been met [51].

5. The authorities establish that the test imposed by s 9A is intended to be more stringent than the test or standard created by reference to the concept of the injury arising “out of” employment (s 4) (Badawi v Nexon Asia Pacific Pty Ltd t/as Commander Australia Pty Ltd [2009] NSWCA 324; 7 DDCR 75; Da Ros v Qantas Airways Ltd [2010] NSWCA 89; 8 DDCR 103) [53]-[54].

6. It appeared that the worker suggested that the Arbitrator should have drawn an inference that the injury occurred as explained by the specialist doctor, that is, sudden weight bearing of an unprepared joint. It was then argued that s 9A would be satisfied, given that walking was a requirement of the worker’s employment [56]-[57]. The task before the Arbitrator required evaluation by him of the linkage between employment and injury. The fact that walking was required by the terms of employment, in the Arbitrator’s view, was not sufficient to establish that the worker’s employment had made a contribution to injury that was real and of substance. That conclusion was open to the Arbitrator [58]-[59].

(a) her application of Pt 15 r 15.5 in finding that the appellant’s failure to file a wages schedule was an admission of the wages schedule filed by the worker;

(b) relying solely on the worker’s wages schedule in determining the award, and

(c) failing to consider or adequately consider the nature and content of the appellant’s evidence on wages.

Held: The Arbitrator’s determination was revoked in part. The figures for weekly compensation under s 40 were substituted with new figures agreed on by both parties, and in respect of the claim for weekly compensation from 1 July 2006 to 30 June 2009 an award was made for the respondent employer.

1. It is a denial of procedural fairness to decide a case on a basis not argued (Seltsam Pty Ltd v Ghaleb [2005] NSWCA 208 at [78]; 3 DDCR1; Workers Compensation Nominal Insurer v Al Othmani [2012] NSWCA 45 at [75]). While it was submitted that the worker’s wages schedule was deemed to be admitted, the general conduct of the arbitration clearly indicated that the case would be determined on the evidence and not on the deeming provision [26].

2. Whether overtime was available to the worker, and whether his wages schedule was correct, was the central focus of the evidence and the parties’ submissions. If the Arbitrator intended to determine the case by reference to the deeming provision, she was required to bring that to the parties’ attention and to give them the opportunity to be heard [27].

3. Having conducted a hearing on the merits, having admitted evidence on the wages issue, and having admitted the appellant’s wages schedule, albeit as an “aid” to understanding the appellant’s evidence, it was not open to then rely on the deeming provision [29].

4. As the appellant did not comply with Pt 15 r 15.5, it was necessary that the Commission “otherwise orders” before the matter could be determined on its merits. As the worker did not object to this course it was determined that the deeming provision did not apply and that the quantum of weekly compensation payable be determined by reference to the evidence tendered [31].

5. Though the parties made submissions about the general effect of the evidence, the case ultimately came down to an analysis of the wage records attached to the worker’s Application, which were also tendered by the appellant in an Application to Admit Late Documents. Those records set out, in fortnightly periods, the earnings for the worker and two co-workers for the period from 2005 until June 2010. There was no dispute that the co-workers were comparable to the worker [32].

6. An analysis of the wage records revealed the difference between the worker’s earnings and the comparable employees up to June 2010. Figures for the periods after June 2010 were arrived at, with the consent of the parties, by allowing a three per cent adjustment for each financial year after that date. Both parties agreed with the figures produced, thus eliminating the need for any further analysis of the evidence. Neither side submitted there was any ground for exercising the discretion in s 40(1) of the 1987 Act [33]-[34].