Issue 7: July 2013

Atomic Steel Constructions Pty Ltd v Tedeschi [2013] NSWWCCPD 33

(a) wrongly concluded that a mistake by a legal adviser will not give rise to a ground for reconsideration;

(b) took into account irrelevant matters;

(c) failed to address whether it would be unjust to the insurer not to set aside the consent orders, but only considered whether it was unjust to the worker;

(d) gave no reasons for her statement that she was satisfied that the final settlement “was appropriate in the circumstances according to the substantial merits of the case”, and

(e) failed to set aside the consent orders.

Mistake by a legal adviser

1. It was submitted that the Commission has power to set aside consent orders made without the authority of counsel, even though counsel had apparent authority and the other side acted in good faith (Sorcevski v Steggles Pty Ltd (1991) 7 NSWCCR 315 (Sorcevski) at 336D). Contrary to the view of the Arbitrator, it was also submitted that Hurst v Goodyear Tyre & Rubber Co (Australia) Ltd [1953] WCR 29 (Hurst) was not a barrier to the orders being set aside because it concerned mistakes about the preparation and running of a case, not the settlement of it on terms that were beyond instructions [40].

2. The Arbitrator’s statement that a mistake or oversight by a legal adviser would not give rise to a ground for reconsideration failed to have regard to the context in which that statement was made in Hurst. In that case, the issue was not one concerning a settlement that went beyond counsel’s instructions, but concerned a failure in the preparation and presentation of a case, and a lengthy delay in bringing subsequent proceedings for relief [53].

3. The Arbitrator also failed to have regard to the principles discussed in Sorcevski, where it was held that a party (in that case, a worker) was not bound by the assent of her counsel, even though it was within his ostensible authority and the other party acted on it in good faith [54].

4. It followed that, having regard to the principles in Sorcevski, and the context in which Hurst considered the relevance of a mistake by a legal adviser, the fact that counsel mistakenly signed consent orders that were beyond his instructions was not, in itself, determinative of whether relief should be granted [55].

Irrelevant Matters

5. It was submitted that the Arbitrator erred in taking into account several matters that were irrelevant to the issue before her [56]. Those matters which are discussed below, did not have any relevance to the issue before the Arbitrator [59] and she erred in considering them [63].

6. The power to set aside consent orders under s 350(3) of the 1998 Act is discretionary. It is accepted that a decision-maker will err in the exercise of such a power if (among other things) he or she takes into account irrelevant matters or fails to take into account relevant matters (House v The King [1936] HCA 40; 55 CLR 499 at 505) [58].

7. The question was whether it was in the interests of justice that the consent orders be set aside and the employer be allowed to contest the claim. The delay of Atomic in obtaining instructions had no bearing on that issue and was irrelevant [59].

8. Similarly, the possibility of a lack of preparation for the conciliation and arbitration, and the possibility that the insurer could have done more to resolve the matter, were also irrelevant to whether the consent orders should be set aside. As far as the settlement was concerned, there was no issue about the preparation of Atomic’s case. The insurer provided instructions to settle on a basis that was not consistent with the consent orders ultimately filed. There was no suggestion that it could, or should, have done more [60].

9. It was also irrelevant to say that the insurer had made no attempt to contact the worker’s solicitor and come to a fresh agreement. After becoming aware of the mistake, Atomic’s solicitors acted promptly in writing to the Commission and to the worker’s solicitors on the next day seeking to have the consent orders set aside. That was appropriate and it was not to the point that the insurer did not seek to come to a fresh agreement. That was especially so in circumstances where the worker had already indicated that the written offer he made during settlement was “final” [61].

10. While it was possible that the mistake may not have occurred if Atomic’s solicitor had attended the arbitration, it was difficult to see how that was relevant to the issue of whether the consent orders should be set aside. Any number of different scenarios might have avoided the mistake. The Commission had to deal with the facts as they were, not as they might have been. The fact that Atomic’s counsel did not have an instructing solicitor present during settlement was unfortunate but was not something that disentitled Atomic to the relief it sought [62].

Injustice to the Insurer 

11. It was submitted that the Arbitrator erred in only considering injustice to the worker and failing to consider injustice to the insurer/employer [64].

12. In exercising the reconsideration power, the Commission must take into account fairness to all parties, not just one side. To the extent that the Arbitrator failed to consider any potential injustice to Atomic (or the insurer) if the consent orders were not set aside, she erred [68].

Merits of the Case

13. It was submitted that the merits of the case and the interests of justice favoured the consent orders being set aside because they provided for a payment of $91,845, which was well in excess of the maximum value of the worker’s claim ($70,102.85), as particularised in his amended wage schedule. It was added that the Arbitrator gave no reasons for her statement that the final settlement “was appropriate in the circumstances according to the substantial merits of the case” [69].

14. Before the Arbitrator could conclude that the settlement was appropriate, she had to consider all the evidence, including the quantum of the claim and the terms of the consent orders. She did not do that. She merely made a broad assertion that the settlement was “appropriate in the circumstances according to the substantial merits of the case”. She said nothing about the settlement, or the evidence, that led her to that conclusion. Moreover, the parties had made no submissions on whether the settlement was appropriate [74].

15. The merits of the case strongly favoured the consent orders being set aside because they involved a settlement that exceeded the maximum compensation claimed by the worker. This was confirmed by the fact that the orders provided for the payment of compensation for two periods when the worker conceded he had no entitlement to weekly compensation [75].

16. No submissions were made as to why a settlement that included two substantial periods during which the worker had no entitlement to weekly compensation should be considered appropriate according to the substantial merits of the claim. A determination of the claim on its merits could not have resulted in an award in the terms in the consent orders. Therefore, if the consent orders were to stand, the worker would have received a windfall of at least $24,480. It was not in the interests of justice that that be allowed [76].

17. The argument about the excessive value of the settlement compared to the value of the claim made was not put to the Arbitrator, and a party is not entitled to establish error by relying on appeal on a point not argued below (Brambles Industries Ltd v Bell [2010] NSWCA 162; 8 DDCR 111). However, the failure to put to the Arbitrator the calculations put on appeal did not go to the establishment of error by the Arbitrator. It went to the merits of the claim and whether it was in the interests of justice that the consent orders be set aside. Having otherwise established error Atomic was entitled to put the calculations as to the value of the claim compared to the value of the settlement. The fact that these figures were not raised until later was relevant to costs [78].

Should the consent orders be set aside

18. It was submitted that, notwithstanding the earlier submission on the merits, it was not necessary to consider the ultimate merits of the claim. It was contended that, since the compromise resulted from a mistake, and to enforce it would deprive Atomic of the chance to have its case heard on the merits, that was injustice enough to warrant the granting of the relief sought. It was added that, as the award had been paid, there was no prejudice to the worked if the consent orders were set aside [79].

19. The discretionary power conferred by the reconsideration power is in “extremely wide terms” (Hardaker v Wright & Bruce Pty Ltd [1962] SR (NSW) 244 at 248). However, the distinction between the existence of the reconsideration power and the occasion of its exercise, and that courts should not lose sight of the general rule that the public interest requires that litigation should not proceed interminably was noted (Street CJ in Hilliger v Hilliger (1952) 52 SR (NSW) 105). Nevertheless, as Street CJ further observed, it is clear that the legislature intended to leave with certain tribunals the power of reviewing any decision to see “that justice is done between the parties” [83].

20. Consent orders made by the Commission will only be set aside in exceptional circumstances (Sorcevski) [84]. The common law authorities provide a guide as to the circumstances in which consent orders should be set aside, but must be considered with caution because of the different factual circumstances considered in those cases and because of the different legislation involved [85].

21. The submission that Atomic suffered an injustice merely by being deprived of the chance of having the case heard and determined, and that the ultimate merits of the claim are irrelevant was not accepted. As Fraser JA observed in Broadbent v Medical Board of Queensland [2010] QCA 352 (Broadbent), the mere fact that a lawyer lacks actual authority to compromise litigation does not constitute injustice that justifies the setting aside of the consent orders. Much more is required. If that were the test, then (arguably) any mistake in the preparation of consent orders could result in those orders being challenged [101].

22. While it was not necessary to conduct a full hearing on the “ultimate merits” of the worker’s claim, it was necessary to consider, at least at a prima facie level, the general merits of the claim, the circumstances of the settlement, the potential quantum of the claim and the quantum of the settlement [102] (Sorcevski applied).

23. Lewis v Combell Constructions Pty Ltd (1989) 18 NSWLR 528 (Lewis) and Broadbent were distinguished. Lewis concerned an application by the plaintiff that judgment not be entered in the terms of the offer of compromise [105]. Broadbent did not concern a claim for damages or workers compensation benefits, but involved an application for leave to appeal a finding of unsatisfactory professional conduct [106].

24. It followed that the settlement involved a payment of a significant sum that, on the merits, the worker had no entitlement to receive and could not have recovered, even if he had complete success with his claim, because the worker’s offer exceeded the potential value of his claim [110].

25. It was not necessary to consider the merits of the claim in any further detail, but there remained an issue as to probable earnings but for injury. Further evidence was needed on that issue before any concluded view could be expressed as to the worker’s ultimate entitlement [111].

Conclusion

26. The Arbitrator erred in finding that a mistake by a legal adviser could not support a reconsideration application, considering irrelevant matters, failing to consider injustice to the insurer, and in failing to give reasons as to why the settlement was appropriate in the circumstances [112].

27. In the exceptional circumstances of this case, it was in the interests of justice that the consent orders be set aside (save as to costs), and that the worker’s claim for weekly compensation be determined on its merits, because:

(a) the orders involved payments well in excess of the maximum compensation the worker claimed, as particularised in the amended wage schedule;

(b) Atomic’s solicitors acted promptly and properly when the mistake was discovered, and

(c) the award having been paid, there was only minimal prejudice to the worker. [113]

28. The appellant employer was ordered to pay part of the respondent worker’s costs of the appeal, due to the failure to comply with Practice Direction No 6 and the fact that issues argued by the appellant at the oral hearing had little in common with the submissions initially filed, or with the submissions made to the Arbitrator [119].

I accept [the worker’s] injury in the form of binaural hearing loss resulted in serious and permanent disablement for the purposes of s 261(4) of the 1998 Act. As a consequence, his failure to make a claim within the period required by s 261 is not a bar to the recovery of compensation. Given the view I have formed as regards the operation of s 261(4) in the current matter, it is unnecessary that I deal further with the dispute going to the applicability of s 261(6) of the 1998 Act.

The Senior Arbitrator found that the noise induced deafness “materially contributes” to the disablement as found and that the disablement “results, in the relevant sense, from the noise induced deafness that constitutes injury in the current claim”.

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

(a) failing to make any finding as to when the worker first became aware that he had received an injury within the meaning of s 261(6) of the 1998 Act;

(b) failing to find that the worker first became aware that he had received an injury on 3 July 1995;

(c) failing to make any determination as to the date by which the worker was required to make a claim for compensation against the appellant for the purpose of s 261(1) of the 1998 Act;

(d) failing to find that the worker’s claim should have been brought within six months after 3 July 1995 as required by s 261(1) of the 1998 Act;

(e) finding that the worker’s failure to make a claim within the time required by s 261(1) of the 1998 Act was occasioned by ignorance;

(f) finding that the worker’s claim was in respect of an injury resulting in serious and permanent disablement;

(g) failing to draw a Jones v Dunkel inference in respect of the worker’s failure to adduce particular evidence, and

(h) holding that the worker’s evidence that he was unaware of the obligation to make a claim within six months of injury was “unchallenged evidence”.

It was further suggested that the Arbitrator’s determination was vitiated on the grounds of apprehended bias.

Held: Arbitrator’s determination confirmed

Apprehended Bias

1. The reasons given by the Senior Arbitrator for his refusal to recuse himself was not the subject of scrutiny, but rather, what was required was an application of relevant principle to the facts which were said to demonstrate such apprehended bias [53].

2. When dealing with a dispute, an Arbitrator of the Commission must abide by the rules of procedural fairness (South Western Area Health Service v Edmonds [2007] NSWCA 16; 4 DDCR 421 (Edmonds)) [54].

3. The relevant test concerning suggested apprehended bias was stated by the plurality in Johnson v Johnson [2000] HCA 48; 201 CLR 488 at [11], omitting footnotes:

It has been established by a series of decisions of this Court that the test to be applied in Australia in determining whether a judge is disqualified by reason of the appearance of bias (which, in the present case, was said to take the form of prejudgment) is whether a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial and unprejudiced mind to the resolution of the question the judge is required to decide. [56]

The evidentiary issue

4. In determining whether the test of apprehended bias is satisfied, consideration of what might be apprehended by the fair-minded lay observer is required [67]. The lay observer in the present case was taken to have witnessed the events which took place at the teleconference. It was reasonable to assume that such observer was aware that the teleconference was a preliminary step in proceedings. That person would also have a general understanding of the objectives of such a teleconference which include, as appears in the Commission’s Practice Guideline, to “explore resolution of the dispute” and “to clearly identify the issues remaining in dispute and to ensure the matter is ready for the next phase”. It is incumbent upon the Arbitrator to explain to the parties the nature of the procedure and its objectives, and further that the lay observer would be aware of the general circumstances concerning the litigation [69].

5. The appellant was wrong in suggesting that there was a requirement to consider the nature of the Commission’s jurisdiction and its procedures to determine whether the Senior Arbitrator’s conduct was “justified”. However that was not to say that the nature of the proceedings had no relevance (Minister for Immigration & Multicultural Affairs v Jia [2001] HCA 17; 205 CLR 507) [74]. There is an obligation upon an arbitrator to “use his best endeavours to bring the parties to a settlement acceptable to all of them before determining any dispute” to identify issues and “practical” solutions and to “clarify and reduce issues” (Edmonds) [75].

6. The material before the Commission demonstrated that the Senior Arbitrator had perceived the nature of the defence likely to be raised in the proceedings, the probable deficiency of the worker’s evidence concerning such likely defence and the circumstance, being late service of the s 74 notice, that had given rise to silence in the worker’s case on that subject [76].

7. It was not accepted that the fair-minded lay observer might apprehend that the Senior Arbitrator might be bias as suggested. It was also not accepted that there would be a perception that the Senior Arbitrator “assisted” or “advised” the worker. The Arbitrator had no knowledge as to the existence, or otherwise, of any relevant evidence. His granting of leave to supplement evidence was made to ensure the likelihood that relevant issues were addressed (see also s 354(3)) [77].

The costs issue

8. The appellant submitted that the worker’s application to resolve a dispute should proceed to hearing without there being any supplementary evidence, or otherwise proceedings should be discontinued [82]. The Senior Arbitrator foreshadowed the potential adverse cost consequences on the respondent if he was forced to discontinue the proceedings [64]. It was suggested that the Senior Arbitrator’s approach demonstrated that he had “favoured” Mr Eastham over the appellant in a manner as was considered by the Court of Appeal in Overseas Ltd v Grdovic (1998) 16 NSWCCR 373; 43 NSWLR 527 [83].

9. It was not proven that the fair-minded bystander might have reached the view that the Senior Arbitrator might so favour the worker by making the comments regarding the costs issue. It was noted that, the Commission has very limited power to dismiss proceedings (s 354(7A)) and that no application had been made by the appellant that such order be made. The evidence merely indicated that the appellant asserted that the proceedings should be discontinued. The worker, the moving party, had the only discretion to discontinue and he preferred to maintain his application [84].

Construction and application of s 261 of the 1998 Act

10. A proper reading of s 261 as a whole demonstrates that Parliament has prescribed requirements concerning the making of a claim together with provisions which would excuse, in particular circumstances, non-compliance. The onerous requirements concerning the making of a claim may be excused in an appropriate case by the application of s 261(4) or, quite independently of that subsection, a worker may not be held bound by the terms of s 261(1) if proof of those matters prescribed by s 261(6) are established. An injured worker may place reliance upon s 261(6) in circumstances where awareness of injury postdates the occurrence of the injurious event. The existence of that subsection does not preclude a worker from reliance upon the terms of s 261(4) [87].

11. A finding of ignorance was made and that the worker was entitled to the benefit of s 261(4).

12. The Arbitrator, properly determined that “it is unnecessary that [he] deal further with the dispute going to the applicability of s 261(6) of the 1998 Act”. The Senior Arbitrator had earlier acknowledged that matters relevant to that subsection had been raised on behalf of the worker. The fact that such arguments had been advanced on his behalf did not preclude a consideration by the Senior Arbitrator of the relevance or otherwise of s 261(4) at the outset of his determination of the dispute [89]. It followed that the appellant’s argument that error was demonstrated by the failure of the Senior Arbitrator to find that the worker first became aware that he had received injury on 3 July 1995 was rejected [90].

13. The worker’s compliance with s 261(1) was excused having regard to the application of s 261(4) to the facts as found. In such circumstances the Senior Arbitrator was correct in concluding that there was no requirement to make a finding as to the date by which the worker was required to make a claim [91].

14. The Senior Arbitrator, contrary to that asserted by the appellant, acknowledged that the worker had not complied with s 261(1) [93].

15. The Senior Arbitrator’s determination that failure to comply with s 261(1) had been occasioned by relevant ignorance involved findings of fact: first, that such ignorance existed and, second, that such ignorance led to non-compliance. The Senior Arbitrator’s findings in this regard were open on the evidence (Zouroudis v Plastic Surfaces Pty Ltd [2005] NSWWCCPD 113 applied) [97].

16. It was acknowledged by the Senior Arbitrator that the worker’s hearing impairment “does not all result from noise induced hearing loss”. The Arbitrator noted the “profound loss in the right ear associated with the tumour, and its surgical removal in 1996” which resulted in a non-hearing right ear [99]. Further, it was correct, contrary to that asserted by the appellant, to take into account the aggregated impairment (Transport Authority v Chemler (2007) 5 DDCR 286) [105].

17. The appellant drew attention to the wording of s 261(4) which makes reference to injury being one “resulting in” serious and permanent disablement. It was put that the Senior Arbitrator “used the incorrect test” when determining that question posed by the terms of the statute. Particular criticism was directed to the Senior Arbitrator’s consideration concerning the question as to whether the subject injury “materially contributed” to that disablement [101].

18. The Senior Arbitrator correctly placed reliance in the course of his reasoning upon the decisions of the High Court in Calman v The Commissioner of Police [1999] HCA 60; 167 ALR 91 and March v E & MH Stramare Pty Ltd [1991] HCA 12; 171 CLR 506 when considering the questions concerning the application of s 261(4). It was noted that, whether a question of causation arises in the context of workers compensation law, or that of the law of negligence, the same principles are relevant (Migge v Wormald Bros Industries Ltd (1972) 2 NSWLR 29). The question as to causation is a question of fact to be determined having regard to the circumstances of the particular case. Presentation of expert evidence is not a requirement of proof of such fact [106].

19. It was open to the Senior Arbitrator to conclude that the worker suffered serious and permanent disablement and that the noise induced deafness materially contributed to that disablement. No error in adopting and applying the concept of “material contribution” when considering the question of causation of the disablement was made out. The finding that the disablement results, in the relevant sense, from the noise induced deafness that constitutes injury in the present claim, was one which demonstrated no error [110].

20. It had been asserted that an inference adverse to the worker should have been drawn by the Senior Arbitrator that the worker’s case would not have been advanced by calling evidence from relevant doctors, his solicitors or the union [111]. The suggested relevance of such “evidence” was raised by the appellant and in those circumstances, no expectation that “missing witnesses” would be expected to be called by the worker rather than the appellant [113]. The Arbitrator was correct to determine that the principle as stated in Jones v Dunkel should not be applied. His reasoning did not, as asserted, have the consequence that there was a reversal of the onus of proof [114].

21. The worker’s evidence that he was unaware of the obligation to make a claim within six months of injury was correctly stated by the Senior Arbitrator to have been “unchallenged evidence”. Not only was the worker not cross-examined on this issue, but there was an absence of direct evidence challenging his assertion of ignorance. There was no suggestion found in the reasons that the Senior Arbitrator concluded that he must accept the worker’s evidence simply because it was unchallenged. Further, the appellant’s assertion that the rule in Browne v Dunn (1894) 6R 67 (HL) had, in the manner suggested, been applied against the appellant was rejected [116].

(a) Mr Arnott was in the course of his employment at the time of his injury;

(b) the injury arose out of Mr Arnott’s employment with Qantas;

(c) Mr Arnott’s employment was a substantial contributing factor to the injury, and

(d) in the application of the decision of the Court of Appeal in Watson v Qantas Airways Limited [2009] NSWCA 322 (Watson) and Qantas Airways Limited v Watson (2) [2010] NSWWCCPD 38 (Watson No 2).

Held: Arbitrator’s determination confirmed

1. In Hatzimanolis v ANI Corporation Ltd [1992] 173 CLR 473, the High Court reformulated the test to be applied in determining whether an employee’s injury could be characterised as occurring “in the course of employment” for the purposes of ss 4 and 9 of the 1987 Act [86].

2. The test requires in the first instance a determination or characterisation of the period or periods of work of the employee as one overall period or episode of work, or two or more; one does not first, before that task, examine aspects of the employer’s attitude to how the period of work is spent. Once the period of work is characterised, the circumstances of work are to be analysed within that framework [87].

3. There was no dispute that from the period when Mr Arnott left Australia until he returned was one overall period of employment. The appeal proceeded on the basis that the injury occurred during an interval in that overall period of employment [88].

4. In determining whether an injury occurred in the course of employment, regard must always be had to the general nature, terms and circumstances of the employment, and not merely to the circumstances of the particular occasion out of which the injury to the employee has arisen (Hatzimanolis at [16]) [89].

5. In order to satisfy either of the two limbs in the test, Mr Arnott needed to establish more than mere authorisation to be in the particular place or to be undertaking the particular activity he was at the time that he was injury. There needs to be a more direct connection with the employer’s enterprise. This involves encouragement or even inducement by the employer:  WorkCover Authority (NSW) v Billpat Holdings Pty Limited & ors (1995) 11 NSWCCR 565 at 593. [91]

6. In Timothy Frederick Kennedy v Telstra Corporation [1995] FCA 1640, Tamberlin J said at [56] that “the principles [in Hatzimanolis] should not be construed too narrowly but rather they should be applied in a common sense and practical manner to accord with the realities of human behaviour”. [97]

7. In Comcare v Mather [1995] FCA 1216; (1995) 56 FCR 456, Kiefel J said at [22] that “encouragement” should not be given a narrow meaning and limited to some positive action in specific terms which might lead the employee to undertake a particular activity or attend at a particular place [98].

8. The Arbitrator identified the factors that established inducement or encouragement by Qantas for Mr Arnott to be in the place he was when he was injured. Those findings were open on the evidence [99].

9. It was relevant that Qantas adopted a procedure in selecting slip hotels by reference to the facilities of the hotel itself and also the external amenities. The Qantas “Onboard Manager Brief” pertaining to Dallas, which was provided to staff, made specific reference to the hotel providing direct and easy access to Sundance Square and its facilities including its restaurants and bars [100].

10. To the extent that Qantas’s submissions focused at all on the question of whether Mr Arnott was induced or encouraged to be at a particular place, it did so simply by submitting that the Arbitrator’s findings were inconsistent with Watson [102].

11. The facts in this case are distinguishable from Watson because in that case the worker hired a car and had travelled for an hour and twenty minutes out of Los Angeles to visit friends. When he was injured Mr Watson was not at a particular place where the employer encouraged or induced him to spend his slip time [103].

12. Qantas submitted that its conduct fell well short of inducing or encouraging Mr Arnott to be at the place he was when assaulted. That submission could not be sustained. Qantas selected the hotel partly because of the amenities surrounding the hotel. He was provided with a meal allowance which he was free to spend at his discretion. It was the unchallenged evidence of Mr Arnott and Mr Broome (senior flight attendant) that Qantas encouraged its crew members to engage in social and recreational activities away from the slip hotel. This evidence was reinforced by various Qantas publications and staff briefings referred to in Mr Broome’s evidence referring to local attractions including the Sundance Square area. A number of staff visited restaurants and bars in Sundance Square during this particular slip period. The Arbitrator was correct to conclude that Mr Arnott and other members of the crew visited that area with the encouragement of Qantas [104].

13. The Arbitrator found that Mr Arnott had not been guilty of gross misconduct. That finding was not directly challenged by Qantas in its grounds of appeal. However, Qantas’s submissions in reply challenged the Arbitrator’s finding, that Mr Arnott was not guilty of misconduct. In breach of Practice Direction No 6, Qantas made no attempt to identify the respects in which error of law, fact or discretion was alleged to have occurred on this question. Contrary to the terms of s 352 of the 1987 Act, Qantas seemed to be seeking a review on that issue. Notwithstanding the failure to comply with Practice Direction 6, Judge Keating considered this issue and, for the reasons explained below, rejected Qantas’s arguments [106].

14. In the proceedings before the Arbitrator, Qantas relied on Dew v Maher [1996] NSWCA 154; 14 NSWCCR 56, to support the gross misconduct submission. In Dew the worker was living and working on a rural property where explosives were used. The worker was injured while on a pig shoot, between periods of work, when he participated in the use of explosives to fashion a bomb which was intended to be detonated as a prank. However, the bomb exploded prematurely resulting in the worker’s injuries. The Court of Appeal held the worker’s conduct amounted to gross misconduct and entered an award for the respondent [108].

15. In Dew, Cole JA (Handley JA and Cohen A-JA agreeing), agreed with Tiver Constructions Pty Ltd v Clair [1992] NTSC 86; (1992) 110 FLR 239 (at 246-248) that the High Court is not to be taken as laying down “a universal proposition of law that whenever gross misconduct occurs during an interval between episodes of work, the employee must be outside the course of employment”. His Honour noted the High Court’s concluding observation in Hatzimanolis that in determining the course of employment, regard had to be had:

to the general nature and circumstances of the employment and not merely to the circumstances of the particular occasion out of which the injury to the employee has arisen.

16. Judge Keating did not accept Qantas’s submissions that by staying at the bar and continuing to drink after his colleagues had left, the worker was on a “frolic of his own”, and his actions were the direct cause of the assault [110]. There was no evidence that Mr Arnott’s intoxication was the direct cause of him being assaulted. The assault was random, and given money was stolen from him, his belief that the assault was motivated by the intention to rob him was credible [111]. Qantas’s theory that because Mr Arnott was intoxicated and alone at the time of the assault, he was more vulnerable to the particular assault was mere speculation [112].

17. Having regard to the general nature, terms and circumstances of the employment, and the circumstances of the particular injury, the Arbitrator was correct to conclude that Mr Arnott’s conduct did not amount to misconduct that took him outside the course of his employment at the time he was injured [113].

18. The following factors established that Mr Arnott was in the course of his employment at the time he was injured:

(a) the crew were paid a daily allowance in cash on arrival at the hotel;

(b) Qantas accepted that crew would venture away from the slip hotel for the purpose of eating, shopping and recreation;

(c) there were no curfews;

(d) there was no prohibition or limitation on the consumption of alcohol;

(e) the injury was sustained while the worker was at a location with the encouragement of his employer;

(f) Mr Arnott had not been notified that he was required for further work before his scheduled return flight, four days after the assault, and

(g) Mr Arnott was the victim of an unprovoked assault [114].

19. The submission that the Arbitrator’s finding that Mr Arnott was engaged in normal (and necessary) day-to-day activities eg eating and socialising with crew members was factually wrong, was rejected. The activity of having a meal and drinks at a local restaurant with fellow workers was, in the circumstances, a normal day-to-day activity. The fact that Mr Arnott’s co-workers had returned to the hotel at least half an hour before he was assaulted did not make it any less so [115].

20. The Arbitrator found on the facts as stated and for the reasons given by her that the only available inference was that the worker’s employment was a substantial contributing factor. Qantas’s grounds of appeal challenged the Arbitrator’s finding on this issue however, that ground of appeal was not further developed in its submissions. No error on this issue was identified [119].

21. Mr Arnott submitted that once it was appreciated Mr Arnott was in the course of his employment at the time of the assault there could be no doubt that employment was a substantial contributing factor: Badawi v Nexon Asia Pacific Pty Limited trading as Commander Australia Pty Limited [2009] NSWCA 324 and Da Ros v Qantas Airways Ltd [2010] NSWCA 89. The assault was something to which he was exposed and would not have otherwise been exposed, as a result of his employment [120].

22. Employment will be a substantial contributing factor to the injury if its contribution was “real and of substance” (Badawi). It is not sufficient that the injury was received in the course of the employment or that it arose out of the employment (see s 9A(3)(a) and Van Wessem v Entertainment Outlet Pty Ltd [2011] NSWCA 214; 9 DDCR 375). [121]

23. In the satisfaction of s 9A it was neither necessary nor appropriate to enquire whether the particular activity was the subject of a specific direction by the employer or was simply a permissible activity chosen by the employee: Badawi at [22]. [122]

24. In the present case the unprovoked assault occurred in the course of Mr Arnott’s employment. It was an incident to which he would not have otherwise have been exposed had he not been in the Sundance Square area, an area where he was encouraged by his employer to visit [123].