Issue 6: June 2013

Di Matteo v RDM Ceramics Pty Limited [2013] NSWWCCPD 27

"66 Entitlement to compensation for permanent impairment

(1) A worker who receives an injury that results in a degree of permanent impairment greater than 10% is entitled to receive from the worker’s employer compensation for that permanent impairment as provided by this section. Permanent impairment compensation is in addition to any other compensation under this Act.

Note: No permanent impairment compensation is payable for a degree of permanent impairment of 10% or less.

(1A) Only one claim can be made under this Act for permanent impairment compensation in respect of the permanent impairment that results from an injury.

..."

1. Do the amendments to Division 4 of Part 3 of the Workers Compensation Act 1987 introduced by Schedule 2 of the Workers Compensation Legislation Amendment Act 2012 disallow a worker who has made a claim for permanent impairment compensation prior to 19 June 2012 from making a further claim, in respect of the same injury for permanent impairment on or after 19 June 2012?

A. No.

1. Do the amendments to Division 4 of Part 3 of the Workers Compensation Act 1987 introduced by Schedule 2 of the Workers Compensation Legislation Amendment Act 2012 apply to claims for permanent impairment where the injury occurred before 1 January 2002?

A. Having regard to the answer to question one, it is unnecessary to answer question two.

1. Judge Keating accepted the applicant’s submission that the decision of the Court of Appeal in Goudappel No 2 answered question one raised in these proceedings. The decision was clearly binding on the Commission. It followed that the answer to question one must be answered in the negative.

2. Having regard to the answer to question one, it was unnecessary to answer question two.

“66 Entitlement to compensation for permanent impairment

(1) A worker who receives an injury that results in a degree of permanent impairment greater than 10% is entitled to receive from the worker’s employer compensation for that permanent impairment as provided by this section. Permanent impairment compensation is in addition to any other compensation under this Act.

Note: No permanent impairment compensation is payable for a degree of permanent impairment of 10% or less.

(1A) Only one claim can be made under this Act for permanent impairment compensation in respect of the permanent impairment that results from an injury.

..."

1. The questions of law referred for determination were:

(a) Is cl 11 of Sch 1 of the Workers Compensation Amendment (Transitional) Regulation 2012 invalid?

(b) Do the amendments to Div 4 of Pt 3 of the Workers Compensation Act 1987 introduced by Sch 2 of the Workers Compensation Legislation Amendment Act 2012 apply to a worker injured on or after 1 January 2002, who has made a claim for lump sum compensation pursuant to ss 66 and 67 of the 1987 Act prior to 19 June 2012, so as to disentitle them from making a further claim for lump sum compensation pursuant to s 66 of the 1987 Act on or after 19 June 2012 in respect of additional permanent impairment resulting from the same injury?

(c) Do the amendments to Div 4 of Pt 3 of the Workers Compensation Act 1987 introduced by Sch 2 of the Workers Compensation Legislation Amendment Act 2012 apply to a worker injured on or after 1 January 2002, who has made a claim for lump sum compensation pursuant to ss 66 and 67 of the 1987 Act prior to 19 June 2012, so as to disentitle them from making a further claim for lump sum compensation pursuant to s 67 of the 1987 Act on or after 19 June 2012 in respect of additional permanent impairment resulting from the same injury?

(d) Does s 322A of the Workplace Injury Management and Workers Compensation Act 1998 prevent a worker injured on or after 1 January 2002 and whose injury is the subject of a Medical Assessment Certificate in respect of the degree of permanent impairment in respect of a claim for lump sum compensation made prior to 19 June 2012 from having a further medical dispute in relation to the degree of permanent impairment of the worker as a result of the same injury referred for medical assessment by an Approved Medical Specialist on or after 19 June 2012 for the purpose of a claim for:

(i) lump sum compensation pursuant to s 66 of the 1987 Act;

(ii) lump sum compensation pursuant to s 67 of the 1987 Act, or

(iii) work injury damages?

1. Leave is required for a Question of Law referral to proceed under s 351(1) of the 1998 Act and leave is not to be granted unless the Commission is satisfied that the question involved novel and complex questions of law [14]-[15].

2. At the time the Application was lodged, the questions referred by the Arbitrator concerned complex and novel questions regarding the interaction between the amendments introduced by the 2012 Amending Act and the savings and transitional provisions found in Pt 19H, and the validity and effect of various regulations that had been promulgated since the 2012 Amending Act was passed [16].

3. On 29 April 2013, following an expedited hearing, the Court of Appeal delivered judgment in Goudappel v ADCO Constructions Pty Limited [2013] NSWCA 94 (Goudappel No 2). Basten JA, (Bathurst CJ and Beazley P agreeing), allowed the appeal from the decision in Goudappel v ADCO Constructions Pty Limited & anor [2012] NSWWCCPD 60 (Goudappel No 1) and set aside the answer given in the Commission on 22 October 2012.

4. The Court of Appeal stated:

The amendments to Division 4 of Part 3 of the Workers Compensation Act 1987 introduced by Schedule 2 of the Workers Compensation Legislation Amendment Act 2012 do not apply to claims for compensation pursuant to s 66 which are made before 19 June 2012 in respect of an injury that results in permanent impairment whether or not the claim specifically sought compensation under s 66 or s 67 of the 1987 Act.

5. The Court also held that to the extent that reg 11 of the Workers Compensation Amendment (Transitional) Regulation 2012 sought to prejudicially affect a right to obtain a benefit under s 66, which accrued at the date of injury, the regulation was beyond power and invalid [21].

6. On 27 May 2013, Judge Keating held a telephone conference between the parties. At that conference, there was general acceptance among the parties that the questions of law raised for determination had been answered in Goudappel No 2 [23].

7. The parties no longer required the Commission to determine the questions referred in this application.  In the circumstances, leave was refused [25].

(a) determining that Mr Thoroughgood was relevantly incapacitated in accordance with  s 16 of the 1987 Act, when he changed jobs in 2006;

(b) his consideration and determination of the issue of whether Mr Thoroughgood had given notice of injury and made a claim for compensation in accordance with the requirements of the Act;

(c) considering as evidence a statement of the Delegate of the Registrar;

(d) denying Inghams procedural fairness, by refusing to admit three articles referred to by its medical expert and refusing to allow that doctor to give oral evidence, and

(e) determining the matter on a basis different to that put on behalf of Mr Thoroughgood.

Incapacity

1. The pleading of a deemed date of injury of 10 October 2006, and the concession by the respondent’s counsel at the arbitration that he could not win if there was no incapacity, strongly suggested that the Arbitrator was invited to find a deemed date by reference to the date of incapacity - the date on which Mr Thoroughgood stopped work for Inghams [23]. The worker’s counsel agreed that he relied on no other deemed dated of injury, such as the date of claim on 18 January 2012, or the date on which Mr Thoroughgood requested proper footwear in September 2006 [24].

2. The Arbitrator found that Mr Thoroughgood’s injury caused an incapacity for work between 8 September 2006 and 11 September 2006, and from 10 October 2006, when he ceased employment because Inghams had not provided him with appropriate footwear [26]. The Arbitrator found Mr Thoroughgood to have a partial incapacity for work during those periods.

3. It was accepted that the appellant did not argue the incapacity issue in the way it was presented by counsel on appeal. However, incapacity was in issue at the arbitration because, on the approach taken by the worker’s counsel, it was necessary to determine that issue to decide the deemed date of injury. In that context, the appellant’s solicitor submitted that there was no evidence of incapacity. Thus, the issues of incapacity and the correct deemed date of injury were raised at the arbitration and Inghams was entitled to challenge the Arbitrator’s finding on appeal, albeit on the basis of authorities that were not cited to the Arbitrator [36].

4. The reference to “incapacity” in s 16 is a reference to the incapacity for which compensation is claimed. Accepting that Mr Thoroughgood had an incapacity in the Arnotts Snack Products Pty Ltd v Yacob [1985] HCA 2; 155 CLR 171 sense, he had no economic loss from his incapacity and had not claimed weekly compensation [55]. As he made no claim for weekly compensation (Stone v Stannard Brothers Launch Services Pty Ltd [2004] NSWCA 277; 1 DDCR 701), it followed that the incapacity found by the Arbitrator could not support a deemed date of injury of 10 October 2006. (GIO Workers Compensation (NSW) Ltd v GIO General Ltd (1995) 12 NSWCCR 187; Alto Ford Pty Ltd v Antaw [1999] NSWCA 234; 18 NSWCCR 246; Moran Health Care Services v Woods [1997] NSWSC 147; (1997) 14 NSWCCR 499; P & O Berkeley Challenge Pty Ltd v Alfonzo [2000] NSWCA; 49 NSWLR 481) [73]. It followed that the first ground of appeal succeeded [74].

5. The concession by Mr Thoroughgood’s counsel that he would not win if there was no incapacity was based on an incorrect view of the authorities. It is clear without doubt that a claim for lump sum compensation can succeed if there is no relevant incapacity. To determine the deemed date of injury in such a case one merely looks to the date of claim. As there were several claims for compensation in this matter, it was necessary that the matter be remitted to a different Arbitrator for that question to be re-determined [76].

Notice of Injury and Notice of Claim

6. The Arbitrator was satisfied that Mr Thoroughgood provided notice of injury in accordance with s 254(1) of the 1998 Act. He said that Mr Thoroughgood gave notice of injury to Inghams when he told Ms Holloway that he had swollen feet from standing up all day. As Ms Holloway knew Mr Thoroughgood, by notifying her, he was in effect giving notice of his name and address. His statement also apprised her of the method by which his injury occurred and, because his injury occurred from the type of work he did over a period of time, he provided notice of the date on which his injury occurred [81]-[82].

7. The Arbitrator found that, when Mr Thoroughgood requested Inghams in September 2006 to provide him with appropriate footwear, which he made on the recommendation of his general practitioner Dr Walter, he was making a claim for compensation under s 60 for proposed treatment for his injury in the form of therapeutic treatment given at the direction of his general practitioner [83]. Therefore, in accordance with s 261(3) of the 1998 Act, Mr Thoroughgood had made a claim for compensation under s 66 at that time [84].

Notice of Injury

8. The evidence on notice of injury was in Mr Thoroughgood’s statement of 13 February 2009, where he said that he told Ms Holloway (presumably in or about September 2006) that he had swollen feet from standing up all day. That conversation occurred at work before Mr Thoroughgood stopped working for Inghams and had not been challenged by Ms Holloway. As Ms Holloway knew Mr Thoroughgood, it was not necessary for him to formally give her his name and address. As the legislation expressly provides that notice of injury may be given orally (s 255(2) of the 1998 Act), it was of no consequence that Mr Thoroughgood did not complete a claim form [93].

9. If Inghams felt that the information provided in the verbal notice of injury (the initial notification) was defective, and the missing information was “materially necessary” for it to decide about Mr Thoroughgood’s entitlement to provisional liability, it was under an obligation, within three working days, to inform Mr Thoroughgood that the notification had not been made (Pt 1 r 7.2 of the WorkCover Guidelines issued in December of 2001). There was no evidence that Inghams did that and it was not open to Inghams to claim that Mr Thoroughgood did not give notice of injury [94].

10. The Arbitrator’s conclusion on notice of injury was open and disclosed no error [95].

Notice of Claim

11. Advising Inghams that he had swollen feet from standing up all day, and armed with a certificate from his treating general practitioner that he needed “proper comfo[r]table water proof boots to protect his [f]eet”, as gumboots were unacceptable, and a second certificate from the same doctor stating that working on concrete and in a wet environment makes varicose veins worse, Mr Thoroughgood asked Inghams to provide him with “proper boots”. That was clearly a claim for “medical or related treatment”, namely, therapeutic treatment, at the direction of a medical practitioner under s 59(b) and s 60 of the 1987 Act [104].

12. The fact that Mr Thoroughgood did not make a claim for lump sum compensation within six months of September 2006 was of no consequence. Section 261(3) of the 1998 Act provides that, for the purposes of s 261, a person is considered to have made a claim for compensation when the person makes any claim for compensation in respect of the injury concerned, “even if the person’s claim did not relate to the particular compensation in question”. Therefore, though the claim for medical or related treatment did not relate to the claim for lump sum compensation that was the subject of the current dispute, it was nevertheless sufficient compliance with s 261 [105].

13. The fact that Mr Thoroughgood had not completed a claim form was of no consequence. Though there was no evidence of the cost of the boots sought, it was clear beyond doubt that they would have been less than $5,000. In that situation, a worker “may make the claim verbally” (Pt 2 r 5.7 of the Guidelines) and it does not matter that the claim is not in writing. In any event, the claim was substantially in writing in Dr Walter’s two medical certificates [106].

14. If the claim was defective, because it was not made as required by the Guidelines, it was, in the circumstances, a minor defect in form or style and not a bar to the recovery of compensation (s 260(5); Tan v National Australia Bank Ltd [2008] NSWCA 198; 6 DDCR 363) [107].

15. The wording of Pt 2 r 5.7 of the Guidelines was considered. In addition to allowing a claim to be made verbally (where the claim is only for medical expenses up to $5,000), the Guidelines only require supporting documentation of the amount claimed “for the payment to be made”. It does not require supporting documentation for a claim to be made. Thus, Inghams would have been entitled to require supporting documentation of the amount claimed before it paid the claim. However, that did not arise because it disputed liability for the boots in any event [109].

Statement of the delegate of the Registrar (Ms Lynch)

16. The Arbitrator referred to the decision by Ms Lynch delivered on 25 March 2009. Noting that Ms Lynch’s reasons recounted evidence that was before her, but not before him, the Arbitrator said that that evidence was evidence of the facts to which it related and that he was able to take into account in the proceedings before him because “the rules of evidence do not apply” and he was satisfied that Ms Lynch’s recount of that evidence was “reliable” [110].

17. The appellant submitted that the Arbitrator erred in stating that the rules of evidence do not apply. Relying on s 91 of the Evidence Act 1995, he said that the Arbitrator erred in finding that Ms Lynch’s reasons constituted evidence.

18. Where the rules of evidence do not apply, fairness must guide the weight to be given to evidence (Aluminium Louvres & Ceilings Pty Ltd v Zheng [2004] NSWWCCPD 26 cited in South Western Sydney Area Health Service v Edmonds [2007] NSWCA 16; 4 DDCR 42 (Edmonds) at [93]). The Arbitrator’s statement that the rules of evidence do not apply in the Commission was perfectly consistent with s 354(2) of the 1998 Act and with appellate authority. Section 354(2) states that the Commission “is not bound by the rules of evidence”. In Edmonds, McColl JA expressed it as an “absence of an obligation to abide by the rules of evidence”. It follows that s 91 of the Evidence Act 1995 does not apply to proceedings in the Commission [122].

19. There was no unfairness in the Arbitrator referring to Ms Lynch’s reasons. Those reasons were admitted into evidence without objection and, once admitted, were admitted for all purposes (Walker v Walker [1937] HCA 44; (1937) 57 CLR 630; Jones v Sutherland Shire Council [1979] 2 NSWLR 206, and Albrighton v Royal Prince Alfred Hospital [1980] 2 NSWLR 542). That Mr Thoroughgood intended to rely on them was obvious from the fact that they were attached to the Application. If they contained matters that were seriously in issue, it was open to Inghams to put on evidence in response. It did not do so [124].

20. The only possibly relevant matter in Ms Lynch’s decision that the Arbitrator relied on was the reference to Inghams having Mr Thoroughgood almost immediately investigated by a doctor of its choice, Dr Beiers. As that evidence was not relied upon in upholding the Arbitrator’s finding on notice of injury, it was of no consequence to the outcome of the appeal [127].

21. However, as the Commission is not bound by rules of evidence and, as there was clearly no unfairness to Inghams in the Arbitrator referring to Ms Lynch’s decision, the Arbitrator did not err in referring to the fact that Inghams had sent Mr Thoroughgood to Dr Beiers when he considered the issue of notice of injury [128].

Procedural fairness

22. This ground of appeal originally concerned the refusal to admit into evidence three articles referred to by Dr Potter, qualified by the appellant, in his reports. In the submissions that were ultimately filed, the ground was expanded to include a complaint about the refusal to allow Dr Potter to give oral evidence, after a request was made by the appellant at arbitration [130].

23. The matter was first listed for conciliation and arbitration on 16 August 2012, when the respondent’s counsel sought and was granted leave, over objection, to amend the Application to change the date of injury, the particulars for injury description, and the particulars for how the injury occurred. The Arbitrator then adjourned the matter until 1 November 2012 “to provide Inghams with the opportunity to obtain further medical evidence” [131].

24. The appellant did not comply with the 2011 Rules or Practice Direction No 3 with regard to calling expert evidence and was not entitled to call Dr Potter to give oral evidence without leave. All that happened on 16 August 2012 was that the appellant’s solicitor indicated that he would be “seeking” to call Dr Potter. That did not remove the obligation to comply with the Commission’s Rules [157].

25. Allowing Dr Potter to give oral evidence without the appellant having complied with the Commission’s Rules would have been prejudicial to Mr Thoroughgood (because he would not have known what evidence the doctor was going to give and would not have been in a position to effectively cross-examine the doctor) and the Arbitrator was right to refuse to allow oral evidence from Dr Potter. The Arbitrator addressed any potential prejudice to Inghams from that ruling by allowing an adjournment for a further report to be obtained from Dr Potter, which was done, though outside the time limit the Arbitrator set [158].

26. Dealing with the rejection of the three articles referred to in Dr Potter’s reports, it was not accepted that the rejection involved any procedural unfairness or denial of natural justice to Inghams [160].

27. In exercising discretion on the application to tender the articles referred to in Dr Potter’s report, the Arbitrator had regard to the lateness of the application, which was made during addresses on the third occasion on which the matter had been listed for arbitration, and the prejudice to Mr Thoroughgood, because it would be impossible for him to respond to them [165].

28. The Arbitrator did not err in taking these matters into account. The appellant had every opportunity to serve the articles in time under the Commission’s Rules. No explanation had been offered, either at the arbitration or on appeal, for why the articles were not served in time [166].

29. Given the late attempt to rely on the previously unserved articles, Mr Thoroughgood was clearly prejudiced, as he had no opportunity to have his experts address the full articles, rather than just Dr Potter’s summary of them in his report. To obtain that evidence would have required yet another adjournment in circumstances where the matter had already been adjourned twice [167].

30. Taking all matters into account, in particular the non-compliance with the Commission’s Rules, the lack of explanation for the non-compliance with the Commission’s Rules, the extreme lateness of the attempt to tender the articles, the prejudice to Mr Thoroughgood, the modest amount of compensation involved, and the fact that the missing articles were not the only reason the Arbitrator preferred Mr Thoroughgood’s medical evidence, the Arbitrator did not err in the exercise of his discretion in refusing to admit the articles on 7 December 2012, and that refusal caused no procedural unfairness to Inghams [173].

Determining the matter on a different basis to that put by Mr Thoroughgood

31. Counsel for the appellant submitted that the Arbitrator found “an alternate date [of injury] that was not submitted by” Mr Thoroughgood. Mr Thoroughgood only relied on an injury in or about September 2006, on the basis of “incapacity”, and his counsel’s submissions were confined to that alone. To the extent that the Arbitrator decided the case on an alternative basis to that articulated by the respondent’s counsel, he denied Inghams natural justice and procedural fairness (Inghams Enterprises Pty Ltd v Jones [2012] NSWWCCPD 17) [175].

32. The respondent’s counsel agreed that he did not rely on the date of claim for lump sum compensation (18 January 2012) as the deemed date of injury, and conceded that it was therefore not open to the Arbitrator to make the alternative finding. It followed that, given the way the respondent presented the case, it was not open to the Arbitrator to make an alternative finding for the deemed date of injury [176].

Conclusion

33. Inghams succeeded on only one of its several grounds of appeal, namely, the meaning of incapacity in s 16, and, as a result, the question of deemed date of injury had to be re-determined before a different Arbitrator in light of the reasons in this decision. As the issues of notice of injury and notice of claim have been determined on appeal, they were considered no longer in dispute. The Arbitrator’s findings on injury, substantial contributing factor and last relevant employer had not been challenged on appeal and had not been disturbed. They remained binding according to the usual principles of issue estoppel [185].

34. It was difficult to see how a different deemed date of injury could, in the circumstances of the matter, “change entirely the nature of this case”, as counsel for the appellant submitted at the appeal hearing. However, if the deemed date of injury is amended at the next arbitration, the question of whether there is a need for further evidence to meet that amendment will be a matter for the next Arbitrator [186].

35. While the appellant submitted at the arbitration that there was no evidence of incapacity, it did not do so on basis of the arguments and authorities its counsel relied on in the appeal. That being so, and given that the appeal was otherwise unsuccessful, it was appropriate that Inghams pay part of Mr Thoroughgood’s costs of the appeal [188]-[189].

(a) misinterpreting the consent orders;

(b) finding that Mr Grasa had recovered from his original injury by 25 August 2011;

(c) considering the evidence from Mr Orme (psychologist qualified by the respondent);

(d) failing to base her findings on the evidence;

(e) failing to properly consider the evidence, and

(f) applying the incorrect legal test in determining whether isolation, harassment and bullying occurred at work on 12 September 2011.

Held: The Arbitrator’s determination was revoked and the matter was remitted to a different Arbitrator for re-determination. 

The consent orders

1. The consent orders provided for Mr Grasa to return to his pre-injury duties as a mechanic but at a different location. There was no concession that Mr Grasa was fit to resume his “previous employment” with everything that entailed and the Arbitrator erred in making that statement [20].

2. The Arbitrator’s statement that the agreement for the return to work was “predicated” on the basis that Mr Grasa had suffered an Adjustment Disorder but was now fit to return to work was also incorrect. The respondent never conceded that Mr Grasa had suffered an Adjustment Disorder [21].

3. The consent orders did not confirm that Mr Grasa had recovered from his “original injury”, but merely provided for a return to work at a different location. The acknowledgment in the consent orders that Mr Grasa had no other entitlement to weekly compensation up to 25 August 2011 was only relevant to his entitlements up to that date and, contrary to the Arbitrator’s statement, did not indicate a full recovery from his previous condition [22].

4. Exactly what weight the Arbitrator placed on her finding that Mr Grasa had recovered from his original injury was unclear. However, as the case was based on an aggravation of a pre-existing condition, it was reasonable to conclude that it played some role in her final determination, because it would not have been possible to establish an aggravation injury if there was no pre-existing condition to aggravate. Therefore, if she erred in her understanding of the consent orders, as she did, and if that was a factor in her finding that Mr Grasa had recovered by 25 August 2011, it affected the outcome [23].

Whether Mr Grasa had recovered from his original injury 

5. Even if the consent orders provided support for the Arbitrator’s finding that Mr Grasa had recovered by 25 August 2011, which was not accepted, they did not support a finding that he was in the same condition on 12 September 2011. An issue estoppel only speaks at the date of the order made and only binds the parties as to the issues actually determined; it does not bind them on different issues, such as fitness at a later date (Dimovski) [33].

6. The Arbitrator’s finding that Mr Grasa had recovered by 25 August 2011 was inconsistent with the weight of the evidence. Moreover, by determining that Mr Grasa had recovered by 25 August 2011, the Arbitrator determined an issue never argued by the respondent. Its case was that Mr Grasa had never suffered an injury at any time, not that he had recovered from a previous injury [34].

7. The fact that Mr Grasa had been able to travel regularly to his (holiday) property and do the other things listed by the Arbitrator may well have been relevant to the level of his incapacity, but did not provide a sound basis for concluding that he had made a full recovery [39].

8. It followed that the Arbitrator erred on this issue [40].

Mr Orme’s evidence 

9. After referring to the evidence from Mr Orme, psychologist, the Arbitrator said that she found it difficult to accept that Mr Grasa’s condition was an Adjustment Disorder because of its longevity and the apparent increase after leaving work. This conclusion was inconsistent with Mr Orme’s evidence (which was nothing like the passage attributed to him by the Arbitrator) and appeared to have been based (in part) on an incorrect reading of his evidence [45].

Findings not based on evidence 

10. There was no evidence that the symptoms of an Adjustment Disorder do not “persist for more than six months after the stressor has ended”, as the Arbitrator stated. To the extent that she used that statement as a reason for rejecting Mr Grasa’s medical case, she erred. Her approach was inconsistent with the principles in Strinic v Singh [2009] NSWCA 15; 74 NSWLR 419 [55].

11. The circumstances in which the Commission’s members may rely on general knowledge acquired in their capacity as members of the Commission are quite limited and do not extend to determining issues of “injury” and “causation” in the absence of appropriate expert evidence (Combined Civil Pty Ltd v Rikaloski [2007] NSWWCCPD 181). In Hevi Lift (PNG) Ltd v Etherington [2005] NSWCA 42; 2 DDCR 271, it was held that a judge of the Compensation Court was not entitled to rely upon general knowledge of back impairments derived from his experience in the Compensation Court to infer how, in the absence of any identified factual basis, a specialist formed his opinion so as to conclude the Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305; 52 NSWLR 705 test was satisfied [62].

12. The Arbitrator erred in relying on her own opinion about Adjustment Disorders [63], and it was not open to her to reject Mr Grasa’s medical case because of her own opinion [67].

13. The Arbitrator’s approach involved a breach of the rules of procedural fairness and, though she gave other reasons for rejecting Mr Grasa’s medical case, the Deputy President was not satisfied that her error made “no possible difference to the result” (Stead v State Government Insurance Commission [1986] HCA 54; 161 CLR 141) [69].

Failing to consider the evidence

14. Failing to refer to an important and supportive report, which was inconsistent with the medical opinion of the doctor, qualified by the employer (Dr Roberts) and had been referred to in submissions at the arbitration, was an error that demonstrated that the Arbitrator failed to properly consider the evidence and failed to exercise her statutory duty to fairly and lawfully determine the application (YG & GG v Minister for Community Services [2002] NSWCA 247; Absolon v NSW TAFE [1999] NSWCA 311) [79].

Incorrect legal test

15. The Arbitrator seemed to have approached the events on 12 September 2011 as if it was necessary to determine who caused the obvious friction at work on that day. This followed from her statement that it was “difficult to find any incident which was not in some way provoked by Mr Grasa”. Even if that were so, and no finding on that issue was made on appeal, that would not have prevented a finding that employment was a substantial contributing factor to the injury alleged [87].

16. The issue before the Arbitrator required an objective assessment of the evidence to determine if real events occurred (either in the course of or arising out of the employment) that Mr Grasa perceived as creating a hostile environment, even if his view of those events was not rational and reasonable. Employers take their employees as they find them (Chemler) [88].

17. The Arbitrator’s conclusion that, though Mr Paulisson (Mr Grasa’s work colleague) did seem to stay out of Mr Grasa’s way, that did not “constitute isolation” appeared to have been made on the basis of some kind of objective test of isolation. The correct test is whether Mr Grasa perceived, on the basis of real events, that he had been isolated or treated unfairly. The fact that Mr Paulisson stayed out of his way and Mr Grasa had lunch on his own provided sound basis for Mr Grasa’s perception that he had been isolated [96].

18. Other (contemporaneous) evidence strongly supported Mr Grasa’s complaints that (a number of) real events occurred at work on 12 September 2011 that he perceived as creating a hostile environment and were capable of supporting a finding that he received a psychological injury on that day [98].

(a) her “consideration and determination” of maters in dispute identified as “injury, causation and substantial contributing factor” and “whether [Mr Stevenson] has made a claim for compensation in accordance with the requirements of the Act”;

(b) her factual finding concerning the occurrence of relevant injury on 25 May 2000 and suggested a reversal of the burden of proof, and

(c) her failing to consider “whether the injury was in the nature of a disease process and if so whether the appellant was not the last [relevant] employer”.

Held: The Arbitrator’s determination was revoked in part. It was held that the applicant had complied with the requirements of giving notice of injury and concerning the making of a claim as prescribed by ss 61 and 261 of the 1998 Act.  

Preliminary matter

1. On 13 March 2013, the appellant registered an appeal with the Commission against the medical assessment. Commission records indicated that no determination had been made as to whether that appeal should proceed. This was relevant to the order made on appeal confirming the Arbitrator’s order of remitter.

Fresh or additional evidence

2. Mr Stevenson sought to adduce documentary evidence as fresh or additional evidence on appeal, which he unsuccessfully sought to admit during the Arbitration. That evidence was a letter, dated 11 December 2000, sent by the appellant to Mr Stevenson. The letter stated that “Council has accepted liability for this claim”. The appellant opposed the admission of this evidence.

3. No explanation was given on the latest application for Mr Stevenson’s failure to adduce the evidence earlier, nor was there such an explanation provided to the Arbitrator when he sought to admit the evidence. In those circumstances, the Commission was not satisfied that the document was not available to Mr Stevenson, and could not reasonably have been obtained by him, before the proceedings conducted before the Arbitrator as is required by the terms of s 352(6) of the 1998 Act [20].

4. Bearing in mind that the party seeking leave on appeal was the successful party at first instance, and having regard to the Deputy President’s conclusions with respect to the merits of the appeal generally, it was concluded that the interest of justice did not require that leave be granted to allow the evidence to be admitted (CDJ v VAJ [1998] HCA 67; 197 CLR 172) [23]-[24].

The Arbitrator’s finding as to injury

5. The appellant correctly stated that proof of the occurrence of injury depended upon acceptance by the Arbitrator of the evidence of Mr Stevenson. The Arbitrator dealt with the question of “injury” and the question of Mr Stevenson’s credit as a witness. Following a consideration of Mr Stevenson’s evidence, including his responses in cross-examination, the Arbitrator concluded that he was a witness of truth. The Arbitrator reached that conclusion notwithstanding matters raised on behalf of the appellant concerning apparent inconsistencies as to dates and description of the occurrence of injury. The Arbitrator addressed the evidence and arguments raised on behalf of the appellant and had stated reasons for her acceptance of Mr Stevenson’s evidence concerning the occurrence of injury [49]. (Whiteley Muir & Zwanenberg Ltd v Kerr (1966) 39 ALJR 505)

6. The Arbitrator’s rejection of orthopaedic surgeon, Dr Smith’s opinion, that Mr Stevenson’s degenerate right knee was “non-work related”, was founded, in part, upon her conclusion that Dr Smith did not have a “thorough history”. The Arbitrator also rejected Dr Smith’s view that the “aggravation” of his right knee arthritis which occurred in 2000 had “resolved”. The Arbitrator’s reasoning demonstrated no relevant error and the appellant’s argument that her finding concerning the occurrence of injury was rejected [50].

Notice of injury and making of a claim

7. The relevant injury occurred, as found by the Arbitrator, on 25 May 2000. In those circumstances, requirements as to notice of injury are prescribed by s 61 of the 1998 Act [52]. The Arbitrator, following an assessment of the evidence and a determination as to the credibility of Mr Stevenson’s evidence, accepted that Mr Stevenson had made a report to his then supervisor regarding the injury. That conclusion was one open to the Arbitrator on the evidence. It was suggested by the appellant that the Arbitrator’s reasons demonstrated that she had in some way reversed the onus concerning this matter; that submission was rejected. It was appropriate that the Arbitrator, when evaluating the evidence concerning the matter in dispute, made the observation that there was an absence of evidence concerning the issue presented on behalf of the appellant [54].

8. The evidence established that Mr Stevenson was referred by her general practitioner, Dr Shaw, for conduct of an x-ray, which took place on 1 September 2000. It was open to inference, and on this appeal it was concluded, that the commencement of treatment concerning Mr Stevenson’s right knee injury received in May 2000, occurred on a date prior to the conduct of the x-ray examination. It was Mr Stevenson’s evidence that he had, before pursuing treatment, arranged to lodge a claim through his supervisor for the purpose of obtaining a claim number. Having regard to the date of the x-ray examination it was clear that, should Mr Stevenson’s evidence be accepted, notice of that claim had been made within six months of the occurrence of injury [56].

9. The state of that evidence, together with Mr Stevenson’s evidence, permitted the conclusion that a claim had been made as required by the statute shortly following the subject injury. In those circumstances, Mr Stevenson, having made a claim in 2000, was entitled to the benefit of the provisions of s 261(3) and was thus taken to have complied with his obligations as to making a claim [58].

Causation and employment as a substantial contributing factor 

10. The present facts concerned injury occurring to a worker at his place of work, during working hours whilst performing duties. The injury came about, as accepted by the Arbitrator, by reason of the failure of a ladder causing Mr Stevenson to fall. Those facts established beyond doubt that employment was a substantial contributing factor to injury. The Arbitrator’s conclusion concerning the requirements of s 9A was correct and was not disturbed on appeal [63]. (Van Wessem v Entertainment Outlet Pty Ltd [2010] NSWWCCPD 97; 9 DDCR 351)

Disease

11. No argument concerning the “disease” provisions of the legislation was advanced at the hearing. In the circumstances, the appellant could not raise the issue, with respect to whether the Arbitrator was required to determine whether injury was in the nature of a disease process and, if so, whether the appellant was not the last employer for whom the worker carried out work to the nature of which any such disease is due, on appeal given that it was bound by the manner in which argument was presented before the Arbitrator (Metwally v University of Wollongong (No 2) [1985] HCA 28; 59 ALJR 481). In those circumstances, the arguments advanced concerning this question were rejected [64].

(a) as at 16 December 2008, Mr Back had concurrent employment with Select and Drive;

(b) but for his injury, Mr Back would have continued to work for Drive and Select whenever he was offered work;

(c) Mr Back sometimes worked 11.5 hours per day with Select and sometimes 10 hours per day. Taking an average of 10.75 hours at $20 per hour gave average earnings of $215 per day or $430 per week (for a two day week) with Select;

(d) Mr Back’s “total average weekly earnings” with both employers was $747 per week, which figure was also his probable earnings but for the injury, and

(e) Mr Back’s ability to earn was nil, and he was entitled to the maximum statutory rate payable to an injured worker with no dependants, which amount was proper in the circumstances, and there was no reason to exercise her discretion.

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

(a) finding that Mr Back was engaged in concurrent employment with Select and Drive at the time of the injury;

(b) her calculation of probable earnings but for injury;

(c) determining that Mr Back had no ability to earn;

(d) her assessment of the medical and vocational evidence;

(e) determining Mr Back to be entitled to compensation of $381.40 per week from 3 March 2009 to 31 March 2009 and 1 April 2009 to 21 September 2009, and

(f) determining Mr Back to be entitled to compensation of $747 per week from 22 September 2009 to 14 December 2010.

Concurrent Employment

1. There are four essential features of a contract of employment (The Modern Contract of Employment, Ian Neil SC and David Chin, 2012, Lawbook Co, (Neil and Chin)). Those features are discussed in detail at pages 1–3 in Neil and Chin and may be summarised as follows:

(a) there can be no employment without a contract (Lister v Romford Ice & Cold Storage Co Ltd [1956] UKHL 6; [1957] AC 555 at 587);

(b) the contract must involve work done by a person in performance of a contractual obligation to a second person (Abdalla v Viewdaze (2003) 122 IR 215 at [23]). That is because the essence of a contract of service is the supply of the work and skill of the worker (Humberstone v Northern Timber Mills [1949] HCA 49; (1949) 79 CLR 389 at 404–405);

(c) there must be a wage or other remuneration, otherwise there will be no consideration (Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance [1968] 2 QB 497 at 515), and

(d) there must be an obligation on one party to provide, and on the other party to undertake, work. The obligation required to constitute a contract of employment is that:

the putative employer be obliged to pay the putative employee in accordance with the terms of the contract for services reasonably demanded under it, and that the putative employee be obliged to perform such services. That is as much so where the service consists of standing and waiting as where it is active” (Forstaff Pty Ltd v Chief Commissioner of State Revenue (2004) 144 IR 1 at [91]; see also Wilton v Coal & Allied Operations Pty Ltd [2007] FCA 725; (2007) 161 FCR 300 at [162]). [24]

2. Without more, the mere act of “registering” for work with two labour hire companies, as Mr Back did, did not create concurrent contracts of employment with those companies. It merely meant that Mr Back was available to accept such offers of work as those companies may have made. Select regularly offered Mr Back work between 2 November 2008 and (about) 10 December 2008. He accepted those offers by attending at the time and place directed. On each occasion he attended, a contract of employment was created and he was paid for the work done. Drive offered him no work until 15 December 2008 [30].

3. The only conclusion open on the evidence was that, as at 16 December 2008, Mr Back was employed under a contract of service with Drive but had no contract of service with Select. This was confirmed by Mr Back’s evidence that, if Select required him, he would receive a text message to ring in to get the details about the job. When he did that, he could either accept it or reject it. The text message was effectively an offer of work [34]. It followed that the Arbitrator erred in finding that Mr Back was employed under concurrent contracts of service at the time of his injury [35].

4. Mr Back was clearly a casual worker within the terms of s 43(1)(e). He was a worker whose contracts of service were mainly for separate periods, each of which was of not more than five days in the same industry. He had several serial or successive short-term contracts of employment rather than two concurrent contracts [36].

Earnings

5. The Arbitrator’s finding that the current weekly wage rate, average weekly earnings and probable earnings but for the injury were $747 was not properly explained and was wrong. The only way she could have arrived at that figure was by adding $430 to $317. That result was not supported by the evidence and was not a figure urged by either party. While it may well be that the error resulted from a “slip”, it was not open to correct that error on appeal under the slip rule. The matter had to be properly considered in light of the submissions made on appeal [46].

6. In any event, even if $747 (or $811) was the correct figure for probable earnings but for injury and for average weekly earnings, it was not the correct figure for the current weekly wage rate because it had failed to calculate the “prescribed proportion”, as required by s 42(1)(d) in circumstances where (as in this case) there is no evidence of the award rate. The prescribed proportion is 80 per cent of the average weekly earnings. It followed that Mr Back’s earnings must be re-determined [47].

Ability to earn

7. The employer’s medical evidence (from Dr Blue) was that Mr Back was not significantly incapacitated for work. Dr Blue based his opinion on his assessment that Mr Back presented with contrivance, particularly in view of his hands being calloused. He thought Mr Back was fit to work as a general farm-hand, avoiding excessive lifting, as a retail assistant without restriction, and as a general labourer and a truck driver. He was unable to work as a heavy furniture removalist [77].

8. The Arbitrator gave Dr Blue’s evidence less weight than the medical evidence tendered by the worker because she did not think that the state of the worker’s hands was an indication that he had been involved in activities outside his restrictions. She also noted that there was no evidence that the worker was doing more than he had disclosed [78]. These findings were open and disclosed no error [79].

9. The Arbitrator was perfectly entitled to take into account the fact that Dr Blue had not discussed with the worker the tasks required in the alternative jobs identified as being suitable. Whether the job options identified were suitable required consideration of the physical and intellectual requirements for those jobs. Dr Blue’s failure to discuss those matters with Mr Back was directly relevant to the weight to be given to his report [80].

10. The Arbitrator was well aware that Mr Back had been performing unpaid work on his father’s farm and referred to that fact in her decision. Counsel made no submission at the arbitration in this regard and it is not an error to fail to deal with an issue never put (Brambles Industries Ltd v Bell [2010] NSWCA 162 (Bell)) [81], [100].

11. The submission that the Arbitrator erred in accepting Mr Back’s evidence at “face value” was baseless and was rejected. The Arbitrator had the opportunity of hearing and seeing Mr Back give oral evidence and she accepted him to be a “truthful”, “honest” and “forthcoming witness”. In light of those findings, it was open to her to accept his evidence [83].

12. Whether the vocational assessor consulted Mr Back’s nominated treating doctor, Dr Perera, was not determinative. The fact remained that, as the Arbitrator noted, Dr Perera did not provide a detailed report in which he discussed the physical and intellectual requirements of the various job options suggested, but merely expressed his approval in a summary “tick box” faxed to the insurer that included no examination of the issues. In addition, as the Arbitrator further noted, his opinion pre-dated the opinion from Dr Roberts, orthopaedic surgeon, that Mr Back’s progress was slow and that he should seek alternative careers. These factors entitled the Arbitrator to give his opinion “very little weight” and her conclusion disclosed no error [85].

13. The Arbitrator was not obliged to “adopt” Dr Perera’s evidence as to the suitability of the light duties recommended. Even if she had, that would not have resolved the case because she was required to determine the availability of that work and Mr Back’s prospects of obtaining and retaining such work (Summerson v Alcan Australia Ltd [1994] NSWCC 24; 10 NSWCCR 571; Akawa Australia Pty Ltd v Cassells (2003) 25 NSWCCR 385; Mangion v Visy Board Pty Ltd [1991] NSWCC 1; 8 NSWCCR 175; Cowra Shire Council v Quinn (1996) 13 NSWCCR 175; Nominal Defendant v Livaja [2011] NSWCA 121). She assessed Mr Back’s prospects of obtaining and retaining such work as “virtually nil” [86].

14. The submission that the Arbitrator erred in failing to take into account Mr Back’s employment history was not sustainable. First, counsel for the appellant made no submission at the arbitration about Mr Back’s employment history in the retail industry and the Arbitrator did not err in not referring to a matter that was not put (Bell) [87]. Second, the submission was completely without merit in any event. The evidence dealing with Mr Back’s retail experience was found in two reports, neither of which indicated why he had ceased work in the retail industry as an assistant butcher after one month [88]-[89]. Mr Back did not deal with it in his statement and he was not cross-examined about it. In these circumstances, it was difficult to see what useful submission might have been made about Mr Back’s “retail experience”. Mr Back’s other “employment history” was with Select and Drive in jobs that he was unfit to perform [89].

15. With respect to the position of customer service assistant, which the rehabilitation provider had also assessed as suitable for Mr Back, the Arbitrator accepted Mr Back’s evidence that, as a result of his (intellectual) disability, he would have difficulties using a computer, with customer service, and with handling cash. These reasons provided a valid basis for the Arbitrator’s conclusion [90].

16. The Arbitrator was satisfied that Mr Back could not realistically work in the positions identified by the vocational assessors for any length of time and that he had very little chance of securing employment in those areas given his limitations with driving and steering, and his lack of customer service experience. That finding was also open and disclosed no error [94].

17. Alleged inconsistencies in Mr Back’s evidence were not identified in Drive’s submissions, and the submission that the Arbitrator erred by failing to take them into account was therefore unpersuasive and unhelpful [95].

18. The fact that Mr Back is left-hand dominant was of limited relevance to his capacity to earn and, though counsel did refer to it at the arbitration, as no particular submission was made about it, the Arbitrator did not err in not dealing with it [96].

19. The Arbitrator referred to and considered the evidence of the physiotherapist. As the Arbitrator accepted Mr Back as a truthful witness, it was not necessary for her to say more about that evidence. As there was no evidence of “abnormal illness behaviour”, Drive’s submission that the Arbitrator failed to have regard to this was misleading and false [97]-[98].

20. The submission that the Arbitrator failed to take into account “the absence of evidence in relation to [Mr Back] job seeking” was based on a false assumption that there was no evidence on that point. That submission was incorrect and misleading [99].

21. The absence of a record in Dr Ting’s (Mr Back’s current treating doctor) clinical notes that he complained about his right shoulder since he moved to Queensland in November 2011 was not the subject of submissions at the arbitration and could not be the subject of complaint on appeal (Bell) [101].

22. The submission that Mr Back’s evidence was “unreliable and insufficient” to support a finding that he had no ability to earn ignored the fact that the Arbitrator accepted Mr Back’s evidence as to the restrictions caused by his injury, which made him unfit for his pre-injury employment, and accepted the difficulties he experienced in obtaining employment because of his intellectual disability, difficulties that had not prevented him from obtaining employment with Select and Drive [102].

23. While the Arbitrator erred in making an award of partial incapacity in circumstances where she found Mr Back had no capacity to earn, it was not open on appeal to substitute a finding of total incapacity because such a finding in the present case, where Mr Back had a theoretical capacity to perform some activities, depended on an assessment of his ability to earn in the labour market reasonably accessible to him and an application of the principles in Lawarra Nominees Pty Ltd v Wilson [1996] NSWSC 584; (1996) 25 NSWCCR 206. It was not possible to conduct that assessment on appeal because there was very limited evidence of Mr Back’s attempts to obtain employment in Queensland [106].

Calculation of weekly compensation

24. As the matter had to be re-determined, it was not necessary to deal with the submissions on the calculation of weekly compensation in any detail. However, it was noted that the Arbitrator erred in making an award under s 36, between 22 September 2009 and 14 December 2010, because it exceeded 26 weeks. As Mr Back had been awarded compensation under s 36 for the 11 weeks from 16 December 2008 to 2 March 2009, he was only entitled to compensation under that section for a further 15 weeks [109].

Conclusion

25. The general conduct of the appeal and, in particular, the failure to comply with Practice Direction No 6, was unsatisfactory [112]. The disposition of the appeal was unnecessarily protracted because of the appellant’s conduct. Though the appellant succeeded on the concurrent employment issue, it was ordered to pay the respondent worker’s costs of the appeal [117].

(a) concluding that the deceased worker “was engaged in serious and wilful misconduct which was the cause of his” death, and

(b) giving insufficient weight to evidence in a later statement from Mr Alan Blount.

Serious and wilful misconduct

1. The Deputy President noted the following general principles at [12]-[16]:

(a) the employer carries the onus of proof of establishing serious and wilful misconduct (Johnson v Marshall Sons & Co Ltd [1906] AC 409 (Johnson); Higgins v Galibal Pty Ltd t/as Hotel Nikko Darling Harbour (1998) 45 NSWLR 45 (Higgins));

(b) The phrase “serious and wilful misconduct” comprehends more than negligence, carelessness, or the mere disregard of orders (Johnson; Higgins). Breach of a traffic regulation may or may not be sufficient: a carrier who was injured while alighting from his truck, while it was double-parked on a public street, was found not guilty of serious and wilful misconduct (Thomas v Shelley & Sons Cordial Factory Pty Ltd [1965] WCR 104), but a worker who, having the opportunity to stop, deliberately drove through a red traffic light at high speed was (Levin v Moulhis [1965] WCR 177);

(c) In Johnson, Lord Atkinson observed (at 416–17) that not every violation by a worker of a rule would be regarded as necessarily amounting to serious misconduct. For “serious” to have any force, it must mean:

at least that where the risk of loss or injury resulting to any person or thing from the doing of any particular act is very remote, or where that loss or injury, even if probable, would be trivial in its nature and character, the doing of that act, however wilful, would not amount to ‘serious misconduct’ within the meaning of this statute, unless indeed the indirect influence of the act done on the discipline of the factory is to make every transgression serious.

(d) The word “wilful” imports that the misconduct was deliberate, not merely a thoughtless act on the spur of the moment (Johnson), or something done “with the intention of being guilty of misconduct” (Bist v London & South Western Railway Co [1907] AC 209). The worker must have had knowledge of the risk of injury and, in light of that knowledge, proceeded without regard to the risk (Sawle v Macadamia Processing Co Pty Ltd [1999] NSWCC 26; 18 NSWCCR 109 (Sawle); Whittingham v Ascott Air Conditioning Pty Ltd [2010] NSWWCCPD 36);

(e) The gravity of the conduct is not to be judged from the consequences of the act. As Lord James of Hereford explained in Johnson at 414:

A man may be told not to walk on the grass, he does so, he slips up, and breaks his leg. The consequences are serious, but the conduct is not so.

2. The position is summarised in the following statement by O’Meally CCJ in Sawle at [24]:

Serious and wilful misconduct is conduct beyond negligence, even beyond culpable or gross negligence. In order to establish serious and wilful misconduct, it must be demonstrated that the person performing an act or suffering an omission knows it will cause risk of injury, or acts in disregard of consideration whether it will cause injury. The word ‘wilful’ connotes that the applicant must have acted deliberately. As it seems to me, in order to establish serious and wilful misconduct, a person accused of it must be shown to have knowledge of the risk of injury and, in the light of that knowledge, proceeded without regard to the risk. [17]

3. The Arbitrator’s reference to the “higher onus” was a reference to a submission made by the appellant’s counsel at the arbitration that the respondent had to prove that the deceased was aware not just of the risk of injury, but the risk of death from riding in the manner in which he chose to do and, as the respondent failed to prove that matter, its s 10(1A) defence failed [19].

4. Section 10(1A) states that sub-s (1) does not apply if the “personal injury” is attributable to the serious and wilful misconduct of the worker. The provision requires that the worker be aware of the risk of injury, not the ultimate sequelae of the injury [20].

5. In any event, the Arbitrator found that “such awareness” (that is, the awareness of the risk of death) was “intrinsic in the fact that [the deceased] chose to ride such a powerful machine at such high speed”. It was nonsense to suggest that a motorcyclist, whether experienced or inexperienced, would not be aware of the risk of serious injury (or death) from riding a high-powered bike at double the speed limit on a suburban street [21].

6. It was open to the Arbitrator to find that it was the deceased’s actions (in riding at high speed), not Mr Lynton’s driving, that caused the accident. In any event, as the Arbitrator noted, even if Mr Lynton’s conduct contributed to the accident, that would not have prevented a finding that the personal injury (that caused the death) was attributable to the deceased’s serious and wilful misconduct. That was because, unlike s 14, s 10(1A) does not require that the injury is “solely attributable” to the worker’s serious and wilful misconduct and an accident can be attributable to more than one cause [27].

7. The Arbitrator’s conclusion that the deceased “was well aware of the danger he was in, but chose to ignore it” was open on the evidence and disclosed no error [28].

8. The conduct was serious because the deceased was riding at about double the legal speed limit on a suburban road on a high-powered bike that he was not licensed to ride. Leaving aside that the deceased was not permitted to ride the bike, which, on its own may or may not have amounted to serious misconduct, the speed at which he rode the bike, and the area in which he rode it, carried a substantial risk of serious injury (or death) to himself and others [34].

9. The conduct was wilful in that the deceased deliberately rode at high speed in circumstances where he was riding home via his usual route and was therefore familiar with the road and the speed limit. It followed that it was unlikely in the extreme that he had inadvertently or accidently exceeded the speed limit. The compelling inference was that he deliberately and knowingly road his bike at high speed in circumstances where the “clear inference” was that he was well aware of the risks involved, but chose to ignore those risks [35].

10. The Arbitrator’s conclusions were open and disclosed no error [37].

Mr Blount’s Evidence 

11. The appellant submitted that Mr Blount’s evidence (in his latest statement of three) was that the deceased was not travelling in excess of 120 km per hour and was not engaged in a race with Mr Blount at the time of the accident (which was inconsistent with his earlier statements). It was submitted that this evidence was not challenged in cross-examination. It was also argued that these factors militated against the deceased having the requisite intent and knowledge of the risk of injury and that the Arbitrator did not take this into account [40].

12. There is no rule of law requiring that evidence not challenged in cross-examination must be accepted – a judge (or arbitrator) can reject evidence that has not been cross-examined on if, for example, it was inconsistent with other evidence that he or she accepted, or if it was inherently incredible (Spencer v Bamber [2012] NSWCA 274). That principle is especially applicable in the Commission, where cross-examination is only allowed by leave (Aluminium Louvres & Ceilings Pty Ltd v Zheng [2006] NSWCA 34) and where all evidence must be filed in advance of the hearing (see generally NSW Police Force v Winter [2011] NSWCA 330; Quadi v The Reject Shop (Aust) Pty Ltd [2008] NSWWCCPD 3) [46].

13. There was no basis for an adverse inference to be drawn from Mr Blount not having been summoned for cross-examination. That was especially so where Mr Blount’s statements were inconsistent with each other. In these circumstances, it was for the party seeking to rely on his later version of events to call him to explain the inconsistencies. Moreover, it was wrong to assert that the respondent had not challenged the assertions in Mr Blount’s latest statement [47].

14. The submission that the concession (by counsel for the applicant at the arbitration) that the deceased was travelling too fast “in the circumstances” depended on an acceptance of the assertion that Mr Lynton drove dangerously. The Arbitrator did not make that finding. Moreover, such a finding was not open and would have been contrary to the accepted evidence [57].

15. While it was correct that, after noting the content of Mr Blount’s third statement, the Arbitrator did not refer to it again, he did consider the thrust of the allegation in that statement, namely, that Mr Lynton made his U-turn east of Inglis Road and, therefore, in a dangerous position relative to the hill crest. After a detailed analysis of the evidence, he concluded that Mr Lynton made his U-turn “in the vicinity of the intersection [of Stennett Road] with Inglis Road”. While this was slightly further east than Mr Lynton said in his statement, it was still well clear of the hill crest and was a reasonable and safe position at which to make the turn. Other than the challenge based on Mr Blount’s third statement, the Arbitrator’s analysis and conclusion as to where Mr Lynton made his U-turn had not been attacked [58].

Conclusion

16. The Arbitrator’s conclusions were open on the evidence and were correct. It was clear beyond doubt that the deceased’s personal injury (and death) was attributable to his serious and wilful misconduct in riding his bike at about double the speed limit in a suburban area [59].

(a) made an error of fact in determining that the injury was a leisure activity prior to work;

(b) made an error of law in deciding the question of whether the applicant was directed to trial the SUP, and

(c) made an error of law in deciding that the injury did not arise out of or in the course of employment.

Ground one

1. The submission that the Arbitrator erred by failing to attach sufficient weight to the certificate of Dr Gray (actually signed by Dr Daskopoulos) or by accepting the certificate as decisive in resolving the factual dispute between the parties, particularly as it was accepted as a contemporaneous document, was rejected [83].

2. The most immediate contemporaneous records were the notes of Manly Hospital where the worker was taken immediate after the accident. Those notes recorded the circumstances of the accident but made no reference to the accident being work related or any use of the SUPs as directed by the employer. It was accepted there were reasons for not drawing any adverse inference in relation to such omission as the worker had been in a serious accident and was no doubt more concerned with treatment than a detailed account of any discussions with his employer. He had also received a blow to the head resulting in some degree of amnesia [84]-[85].

3. It was reasonably inferred from the medical certificate that within a matter of days after the accident Mr MacLeod had given a history which was consistent with his evidence.  However, the notation recorded was merely Mr MacLeod’s belief that he had been directed to trial the employer’s SUPs. Whether or not that belief was an accurate statement of the fact was for the Arbitrator to determine [86].

4. The Arbitrator described the notation contained in the medical certificate as “the strongest evidence in favour of Mr MacLeod’s case”. However, it was inferred from the Arbitrator’s decision that he concluded that the certificate alone was not of sufficient weight to tip the balance in Mr MacLeod’s favour in terms of resolving the factual dispute [87].

5. There was no substance to the submission that the Arbitrator incorrectly interpreted Ms Judd’s evidence. Ms Judd stated that she was a friend of Mr MacLeod. On the occasions that she went surfing with him it was at Mr MacLeod’s invitation. She had not previously expressed any interest in purchasing a SUP prior to Mr MacLeod’s invitations. Her evidence could not possibly have led to a conclusion that there was any legitimate expectation that she was a potential purchaser [88].

6. Mr MacLeod submitted that the store manager, Mr Plim’s, evidence (which directly contradicted Mr MacLeod’s evidence) was contradictory and should not have been preferred to Mr MacLeod’s evidence on the critical issue, because on the one hand Mr Plim said that he had dismissed the idea of using trials as a means of enhancing the sale of SUPs, yet on the other hand he provided a trial on one occasion [89].

7. It was not accepted that Mr Plim’s evidence on the issue was contradictory. The Arbitrator correctly concluded that Mr Plim’s use of the SUPs on the occasion referred to was not undertaken with the prospect of a purchase. Firstly, the gentlemen owned their own SUPs. Secondly, the surf was before working hours. Thirdly, they were members of a South Australian paddleboard club. Fourthly, they had free time whilst in Sydney and wished to see parts of Manly by paddleboard. Last, Mr Plim regarded it as a social occasion and has remained friends with one of the gentlemen [90].

8. Mr MacLeod submitted there was another reason for preferring his evidence to Mr Plim’s due to a credit issue in relation to Mr Plim’s evidence. In oral evidence, Mr Plim denied that he was aware that Mr MacLeod had been using the respondent’s SUPs with his friends. However, in his written statement he confirmed that he was aware that the practice had taken place. When the discrepancy was drawn to his attention he readily conceded that he had made an error when giving evidence and agreed that his earlier written statement on the issue was correct, namely, that he was aware that the worker had been using the respondent’s SUPs in the company of his friends. After hearing and seeing Mr Plim give evidence, it was open to the Arbitrator to conclude on balance that the discrepancy did not seriously diminish the weight to be attached to Mr Plim’s evidence [91].

9. It was open to the Arbitrator to find that the party on whom the burden of proof lies in relation to any averment made by him has failed to discharge that burden: Suvaal v Cessnock City Council [2003] HCA 41; 77 ALJR 1449, Rhesa Shipping Co SA v Edmunds (“The Popi M”) [1985] 1 WLR 948 [92].

10. The Arbitrator was correct to conclude that the principles in Hatzimanolis v ANI Corporation Ltd [1992] HCA 21; 173 CLR 473, in the circumstance of this case, did not assist in resolving the critical question concerning any directions given to Mr MacLeod and the trialling of the SUPs [94].

11. In Hatzimanolis, the High Court was concerned with the principles to be applied in circumstances where the worker was injured during an interval occurring within an overall period of work and with activities that were engaged in with the employer’s inducement or encouragement [95].

12. The evidence established that Mr MacLeod was engaged to work six days per week between 9am and 6pm. The accident occurred before normal working hours. The Arbitrator was correct to reject Mr MacLeod’s Hatzimanolis submission on that basis alone. Even if the injury was sustained in an interval between two discrete periods of work it was still necessary for the worker to establish that he was encouraged or induced to engage in that activity by his employer at the time of the accident [96].

13. The evidence relied on by the worker to establish an implied term was the concession by Mr Plim that the use of equipment would be of benefit, Mr Plim’s use of the SUPs with the South Australian gentlemen and the discussions in relation to the demonstration method of selling SUPs [97]. This evidence did not support a conclusion that Mr MacLeod was encouraged or induced to trial SUPs. Although Mr Plim agreed that trialling the equipment would be of benefit there was no evidence that he communicated that to the worker. The evidence was contrary. The Arbitrator’s conclusion that the episode involving the South Australian gentlemen was predominantly a social occasion was open on the evidence [98].

14. The Arbitrator correctly observed that whether the activity engaged in by the worker at the time of the accident was at the direction of his employer, involved an acceptance of the worker’s evidence. It was inferred from the decision that the Arbitrator did not accept the worker’s evidence on this point for two reasons. First, he concluded that the worker only used the SUPs when he was in the company of friends and he was socialising. And second, he concluded that Mr MacLeod had misconstrued his conversation with Mr Plim concerning the use of the SUPs [99].

15. The Arbitrator considered the circumstances which Mr MacLeod alleged supported his evidence. This included the Arbitrator’s acceptance that Mr MacLeod had used the SUPs before his accident but determined that those occasions were socialising. He did not accept that there was any expectation of Ms Judd purchasing an SUP. He acknowledged the significance of the contemporaneous hospital records but was not satisfied that the medical certificate issued at the hospital was decisive in resolving the conflicting version of events. There was no other evidence to support the claim that trialling the SUPs was an express or implied term of employment [100].

16. In circumstances where the Arbitrator had the advantage of seeing and hearing the witnesses give evidence, respect and weight should be given to his to his conclusions; Warren v Coombes [1979] HCA 9; (1979) 142 CLR 531. See also Abalos v Australian Postal Commission [1990] HCA 47; (1988) 171 CLR 167; Devries v Australian National Railways Commission (1993] 177 CLR 472.

Ground three

17. Ground three did not add any additional issues for determination on appeal [104].