Appeal Case Summaries

The Hills Shire Council v Podesta [2023] NSWPICPD 10

WORKERS COMPENSATION – section 11A of the 1987 Act – whether action taken by the employer with respect to discipline was reasonable – adequacy of reasons – section 294 of the 1998 Act and rule 78 of the 2021 Rules

Parker SC ADP

9 March 2023

Facts

The respondent worker was employed by the appellant as a trades assistant. In 2016, he was promoted to workshop team leader. In mid-2017, Mr Gallahar was appointed workshop co-ordinator. Shortly after his appointment, conflict emerged between him and members of the workshop, including the respondent.

In mid-2020, six of the eight members of the workshop team, including the respondent, submitted a formal grievance about Mr Gallahar. On 20 August 2020, Mr Colburt, group manager of the appellant, arranged a mediation at which the respondent expressed some of his grievances, which were denied by Mr Gallahar.

On 23 September 2020, Mr Colburt met with workshop staff and advised them that Mr Gallahar had raised a number of issues about the workshop’s practices. He informed the staff that the appellant would investigate the issues. On 25 September 2020, Mr Gallahar resigned from his employment with the appellant. From about that time, the respondent took on some purchasing duties.

In around October 2020 there was a restructure and a new team leader, Mr Zanetic, was employed. In November 2020, shortly after his appointment, an anonymous letter was left on Mr Zanetic’s desk which contained the following words: “We sacked the last guy, look out or you will be next.” On 17 November 2020, Mr Edgar, the appellant’s general manager, called a meeting of the workshop employees. Two days afterwards, there was an unauthorised stoppage by members of the workshop staff. On 25 November 2020, letters were sent to workshop staff, including the respondent, notifying them of interviews to be conducted by an external investigator about the note and other workshop practices.

On 4 December 2020, the respondent was interviewed by the external investigator. On 24 December 2020, the respondent took annual leave until early February 2021. On 20 January 2021, the respondent consulted Dr Singh who recorded for the first time a history of stress at work and at home. The respondent attended a second interview with the external investigator on 5 February 2021. On 7 February 2021, the respondent consulted Dr Singh, who recorded a history that the respondent felt stressed and unable to go back to work. The doctor gave the respondent a certificate of unfitness for work.

On 12 March 2021, the appellant wrote to the respondent inviting him to respond to allegations based on the investigator’s report. The respondent made a claim for workers compensation on 13 March 2021.

The Member ultimately determined that the respondent sustained a psychological injury arising out of or in the course of his employment with the appellant. The Member held that the respondent’s injury was not wholly or predominantly caused by reasonable action taken by the appellant in respect of discipline. The appellant was ordered to pay the respondent weekly compensation and expenses pursuant to s 60 of the 1987 Act. The employer appealed.

The issues on appeal were whether the Member erred in:

(a) incorrectly identifying and applying the legal principles to be applied to the determination of the issue of reasonableness under s 11A of the 1987 Act (Ground 1);

(b) failing to give sufficient reasons for finding that the actions of the appellant at the meeting were not reasonable (Ground 2);

(c) failing to apply the proper legal test to the issue of reasonableness of the conduct of the investigation following the meeting (Ground 3);

(d) failing to give sufficient reasons for finding that the actions of the employer in conducting the investigation were not reasonable (Ground 4);

(e) failing to give sufficient weight to the opinion of Dr Kaplan based on his viewing of the surveillance material (Ground 5);

(f) failing to give sufficient weight to the respondent’s financial records in relation to the issue of work capacity (Ground 6), and

(g) refusing to grant the appellant leave to cross-examine the respondent worker (Ground 7).

Held: The Certificate of Determination dated 23 March 2022 was confirmed.

Ground 1

1. Acting Deputy President Parker SC observed that the Member incorrectly quoted the passage by Geraghty CCJ in Irwin v Director General of Education (Compensation Court of NSW, Geraghty CCJ, 18 June 1998, No 14068 of 1997, unreported) (Irwin). The appellant submitted that this led the Member to misdirect herself as to the correct legal principle (test) to be applied when determining whether the appellant’s action was “reasonable action”. The appellant submitted that the Member focused on the “object of the employment” rather than on the balancing of the rights of the employee against the objective of the employer (in holding the investigation and undertaking the disciplinary action). ([82])
2. The Acting Deputy President held that, although the Member incorrectly recorded the quotation from Irwin, he was not persuaded that the Member erred in the application of the correct legal principle. Parker SC ADP noted that the Member referred to Department of Education and Training v Sinclair [2005] NSWCA 465; 4 DDCR 206 and Northern NSW Local Health Network v Heggie [2013] NSWCA 255; 12 DDCR 95. The Acting Deputy President rejected the submission that the Member did not balance the rights of the worker with the objective of the employer in conducting the investigation. He also was not persuaded that the Member substituted “appropriate” for the test of “reasonable action”. ([83]–[86], [97])
3. Acting Deputy President Parker SC accepted the respondent’s submission that the Member had not formed her conclusion on the basis of a single blemish. She had articulated multiple instances of Mr Edgar’s oppressive behaviour at the meeting, each of which she had found on the evidence, and in addition, she had found other instances of unreasonable conduct particularly with respect to the failure to provide the respondent with appropriate advance notice of the very serious matters the subject of further investigation. ([96])
4. The Acting Deputy President concluded that the Member’s finding that the appellant failed to discharge the onus of establishing on the balance of probabilities that the respondent’s injury was wholly or predominantly caused by reasonable action taken or proposed to be taken with respect to discipline was soundly based. Ground 1 was dismissed. ([98])

Ground 2

5. The appellant complained that the Member failed to give sufficient reasons for her findings that:
   

   (a) the actions of Mr Edgar at the meeting on 17 November 2020 were not appropriate;

   (b) to suggest that someone in the workshop was responsible for leaving the letter or note was not reasonable, and

   (c) to draw an analogy with the Claremont Street killings was not appropriate. ([106])

6. The Acting Deputy President observed that the requirement to provide reasons is an obligation with respect to the reasons for the determination. It is not an obligation to provide extensive reasons for each subordinate finding leading to the ultimate conclusion. ([109])
7. Acting Deputy President Parker SC was of the view that the Member satisfied the requirements of r 78 of the 2021 Rules. Her conclusion with respect to Mr Edgar’s response to the denial by the workshop staff that they had placed the letter on the desk and Mr Edgar’s reference to the Claremont Street killing were evaluative conclusions open to the Member on the evidence. The requirement of r 78 is that the reasons for the ultimate determination need to be briefly stated. It is not a rule that requires the tribunal to give detailed reasons for intermediate findings. Furthermore, the Member’s conclusion as to what was appropriate conduct at the meeting by Mr Edgar seemed to be an evaluation available on the basis of the evidence. Ground 2 was dismissed. ([111]–[112])

Ground 3

8. The letter of 25 November 2020 advised the respondent and others that the investigation was “into various alleged inappropriate practices that may constitute breaches of Council’s Code of Conduct and policies and procedures” including the recent incident of the threatening letter. The external investigation report said that the investigation included investigation into the authorship of the letter, but also:

   “... allegations were presented, [in] relation to the misappropriation of council property, such as tyres and equipment, inappropriate extending of regular morning tea and lunch breaks, inappropriate behaviour towards female staff members, the existence of pornography in the workplace, the presumed theft of 4 jerry cans and overt and belligerent resistance to any form of workplace change.

   It was also alleged that staff at the workshop were order[ing] or bill splitting in direct contravention of Council’s Purchasing Guidelines and Code of Conduct. There was also an allegation of a set of brake pads being wrongfully ordered and then stolen from the workshop on and after the 11 June 2020.” ([124])

9. The Member said that the allegations and concerns involved serious matters, some potentially criminal. The respondent was not given any notice of the intention to investigate those matters prior to the first interview. That factual finding was not challenged. The Member said that she found it “improbable” that the additional matters raised at the interview had never been discussed with the respondent as he claimed. However, the onus was on the appellant to establish the reasonableness of its action including “fairness” to the worker. ([125]–[126])
10. The Member concluded that the respondent was not given sufficient notice of the range of topics to be the subject of the investigation. She came to that conclusion because of “the serious nature of the matters under investigation, and the potential implications for [the respondent]”. In the circumstance, in effect the Member concluded that Irwin required that the respondent be treated fairly and the appellant failed to do so. Parker SC ADP accepted the respondent’s submission that “it was for the employer to bring evidence to demonstrate that it was appropriate that the rights of the worker to advance notice of the meeting’s agenda should be suppressed in order to protect the objectives of the employer. No such evidence was brought.” The appellant had failed to demonstrate error on the part of the Member and Ground 3 was dismissed. ([127]–[133])

Ground 4

11. The Acting Deputy President again noted that the obligation to give reasons is controlled by s 294 of the 1998 Act and r 78 of the 2021 Rules. In his view, the Member’s reasons set out the material facts as found by her. The Member furthermore identified the applicable law, whilst the reasons at [191]–[210] demonstrated the reasoning process that led the Member to the conclusions she reached. These complied with s 294 and r 78. ([136]–[137])
12. Furthermore, to the extent that Soulemezis v Dudley (Holdings) Pty Limited (1987) 10 NSWLR 247 imposes an obligation additional to that provided for in the Act and the Rules, the appellant did not identify which aspects of the investigation into the conduct and practices of the workshop staff that the Member found not to be reasonable required additional reasons to those presently provided for in the reasons. Ground 4 was dismissed. ([138])

Grounds 5 and 6

13. Parker SC ADP held that the appellant’s submissions in relation to Grounds 5 and 6 were really a restatement of the submission made to the Member that the material should have caused the Member to conclude that the respondent had recovered his capacity for employment by 1 December 2021. However, in the Acting Deputy President’s view, the appellant had not established error. ([162])
14. The appellant made complaints in two categories, firstly the claimed failures to provide proper and sufficient reasons for discounting the evidence of Dr Kaplan in his report of 1 December 2021 and the surveillance material, and secondly, the failure to attach sufficient weight to the activity demonstrated by the financial records. ([163])
15. The appellant submitted that the findings made by the Member were unclear with respect to the surveillance material, to which it said the Member failed to give proper weight. In relation to the financial records, it submitted that the Member failed to recognise that “the existence of evidence that supports a finding that the level of activity of a worker is greater than the history that he or she has given to doctors about his or her level of activity will potentially affect the evidentiary weight to be given to the medical opinion”. Further, the Member misunderstood the import of the financial records. The appellant submitted the records showed the respondent to be engaging in a level of activity that was inconsistent with his claimed level of work capacity. It was said the Member did not address the effect of the financial records on the issue of his work capacity. ([167])
16. The Acting Deputy President held that when the statement of reasons was considered in its entirety, the Member had regard to all of the evidence bearing upon the respondent’s capacity, including the surveillance evidence and the material from the financial records. The weight she gave to the material may not have been the same as the weight another Member might have given to the material, but that did not show error. Furthermore, the reasons provided in the conclusory paragraph had to be considered in the context of the overall comprehensive consideration of the evidence. The final conclusory paragraph was not the entirety of the Member’s consideration of the issues of capacity and credibility. Grounds 5 and 6 were dismissed. ([168]–[170])

Ground 7

17. The Member declined to give leave to cross-examine the respondent because she said the events proposed to be cross-examined upon post-dated the respondent’s employment with the appellant and the respondent’s credibility was already in dispute. It was noted that the parties’ dispute involved s 11A “reasonable disciplinary action” and the appellant’s capacity for employment. ([177]–[178])
18. Acting Deputy President Parker SC found that the Member’s refusal to grant leave to cross-examine did not affect the final result. The proposed cross-examination on the surveillance and financial records went to the respondent’s credibility and capacity. He observed that the respondent was correct that there was no impediment on the appellant in making submissions to the Member on the respondent’s credibility or his capacity for work. Absent cross-examination, the appellant was free to put its case at its highest and to assert the respondent was an unreliable witness whose evidence could not be accepted, and furthermore, that he had fully recovered his capacity for work. Ground 7 was dismissed. ([179]–[182])

UPVC Window Solutions Pty Ltd v Workers Compensation Nominal Insurer (icare) [2023] NSWPICPD 11

WORKERS COMPENSATION – ‘worker’ – consideration of Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd [2022] HCA 1; 398 ALR 404; ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2; 398 ALR 603; application of those authorities where a contract is oral – Secretary, Attorney-General’s Department v O’Dwyer [2022] FCA 1183; s 9B of the 1987 Act in respect of a ‘stroke injury’ – consideration of De Silva v Secretary, Department of Finance, Services and Innovation [2015] NSWWCC 279 and associated decisions; section 352(5) of the 1998 Act; credit findings and cross-examination in the Commission – Aluminium Louvres & Ceilings Pty Ltd v Zheng [2006] NSWCA 34; New South Wales Police Force v Winter [2011] NSWCA 330; State Rail Authority of NSW v Earthline Constructions Pty Ltd [1999] HCA 3; 73 ALJR 306; 160 ALR 588; Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110; Schedule 1, cl 2 of the 1998 Act – ‘deemed worker’ – application of Humberstone v Northern Timber Mills [1949] HCA 49; 79 CLR 389; Scerri v Cahill (1995) 14 NSWCCR 389 and associated authorities – consideration of the phrase ‘incidental to a trade or business regularly carried on’; application of Dranichnikov v Minister for Immigration & Multicultural Affairs [2003] HCA 26; Wang v State of New South Wales [2019] NSWCA 263

Snell DP

14 March 2023

Facts

Mr Markey (the second respondent) was involved in an incident on 30 November 2020 whilst performing work activities at the Somersby factory premises of the appellant, UPVC Window Solutions Pty Ltd (UPVC). UPVC manufactured and fitted PVC windows and doors for sale to the general public and builders. Mr Markey was assisting Mr Clark (a director of UPVC) in unloading a plastic door profile from its packaging when he was struck by the item. On the morning of 3 December 2020 Mr Markey was unable to get up from bed. He was taken to Gosford Hospital where he was kept for 17 days. He was told he had suffered a stroke.

It was common ground that UPVC did not hold a policy of workers compensation insurance. A claim was made on the Nominal Insurer (the first respondent), which accepted liability for the claim. The Nominal Insurer issued a notice under s 145(1) of the 1987 Act for the recovery of $21,852.59 which represented compensation paid on the claim up to 21 May 2021. UPVC sought determination pursuant to s 145(3) of its liability in respect of the payment concerned.

The Member accepted that Mr Markey was employed by UPVC on 30 November 2020 when he suffered injury to the base of his skull, which resulted in a stroke injury within the meaning of s 9B of the 1987 Act, together with injury to the right thumb. The Member found that the employment gave rise to a significantly greater risk of suffering the stroke injury than had Mr Markey not been employed in employment of that nature. She found that Mr Markey had no current work capacity until at least 26 May 2021 and required medical treatment until that date. She found the Nominal Insurer had paid weekly compensation and medical expenses consistent with the list of payments attached to the s 145 notice issued on 9 June 2021. She determined that UPVC was liable to reimburse the sum described in the s 145 notice. UPVC appealed.

The issues on appeal were whether the Member erred in:

(a) law and fact in finding that Mr Markey was a worker within the meaning of s 4 of the 1998 Act: Reasons [121]–[151] by misapplying the correct test to determine worker status and thus taking into account irrelevant matters. The Member should have concluded as a matter of law and fact that Mr Markey was not a worker (Ground 1);

(b) (as an alternative to (a)) should it be concluded the correct test was applied, the Member erred, as a matter of fact and law, in properly considering and weighing the evidence in determining that Mr Markey was a worker within the meaning of s 4 of the 1998 Act: Reasons [136]–[151]. The Member should have concluded as a matter of law and fact that Mr Markey was not a worker (Ground 1(a));

(c) law and fact in finding and concluding that Mr Markey was a deemed worker within the meaning of Clause 2, Schedule 1 to the 1998 Act: Reasons [152]–[153] by misapplying the test to determine deemed worker status and the question of trade and or business. The Member should have concluded as a matter of law and fact that Mr Markey was not a deemed worker (Ground 2);

(d) law and fact in her construction and application of s 9B of the 1987 Act: Reasons [183]–[194] by failing to properly consider and apply the correct test set by s 9B, the evidentiary onus established by s 9B and whether the evidence submitted was sufficient to discharge the onus of the worker. The Member ought to have concluded that s 9B operated to preclude payment of compensation with respect to the stroke injury (as found) (Ground 3);

(e) law in concluding that the medical evidence relied upon by Mr Markey was sufficient to justify a conclusion that he had full incapacity because of the alleged thumb injury with the consequence being that the appellant was liable to the Nominal Insurer with respect to the s 145 notice as it concerns compensation payable for the thumb injury: Reasons [197]–[198]. The Member should have concluded that there was insufficient evidence to support incapacity associated with the thumb injury (Ground 4), and

(f) fact and law in concluding that the appellant was liable to meet the s 145 notice issued by the Workers Compensation Nominal Insurer: Reasons [206] (Ground 5).

Held: The Certificate of Determination dated 6 April 2022 was confirmed.

Ground 1

The Member’s credit finding

1. UPVC raised an issue with respect to the status of the Member’s credit finding in the absence of cross-examination. Snell DP observed that there is no right to cross-examine in the Commission. The Deputy President noted that it was not only Mr Markey’s credit that was in issue. The Member referred to the first meeting between Mr Markey and Mr Clark, noting the contract was entirely oral and that the evidence of these people differed dramatically as to what was said. The Member noted it was not possible to form a clear picture of the conversation “without accepting the evidence of one in preference to the other”. The Member correctly noted that, in Mr Markey’s statement dated 28 September 2021, he responded to and disagreed with much of Mr Clark’s evidence. ([88]–[96])

   (Aluminium Louvres & Ceilings Pty Ltd v Zheng [2006] NSWCA 34 and New South Wales Police Force v Winter [2011] NSWCA 330 applied)

2. Snell DP observed that it is necessary to read the Member’s reasons as a whole. The adequacy of her reasons needed to be assessed in the light of the corroborative evidence to which she referred. The Member’s reasons for making the credit finding were briefly expressed but were adequate to explain why she preferred the evidence of Mr Markey to that of Mr Clark. UPVC did not challenge the finding by reference to the principles in Fox v Percy [2003] HCA 22; 214 CLR 118. The Deputy President held that the Member’s credit finding was open to her and UPVC had not demonstrated error within the meaning of s 352(5) of the 1998 Act in this regard. ([97])

   (Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110 applied)

   The recent High Court decisions and the contract at issue in the current matter

3. Deputy President Snell set out an extensive discussion of the High Court decisions of Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd [2022] HCA 1; 398 ALR 404 (Personnel Contracting) and ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2; 398 ALR 603 (Jamsek). He observed that it was common ground that unlike the contracts in Personnel Contracting and Jamsek, the contract involving UPVC and Mr Markey was oral. It was not submitted that the contract was a sham or that it was subsequently varied. ([98]–[109])
4. In Secretary, Attorney-General’s Department v O’Dwyer [2022] FCA 1183 (O’Dwyer) Goodman J dealt with whether the approach taken by the High Court in Personnel Contracting and Jamsek is “limited to written contracts or extends to oral contracts ... or to contracts which are partly written and partly oral”. Deputy President Snell accepted Goodman J’s analysis in O’Dwyer at [32]–[33], that the reasoning in Personnel Contracting and Jamsek extends to oral contracts. This was consistent with the reasoning of the plurality in Personnel Contracting and with the reasons of Gordon and Steward JJ in the same case. The reasons of Gordon J in Personnel Contracting state that recourse to conduct may be necessary to identify the point at which a contract, which was not wholly in writing, was formed and the contractual terms that were agreed. This does not involve variation of a contract but rather identification of its formation and terms. ([110]–[112])
5. Deputy President Snell held that in the present matter, the Member’s approach to determining the issue of ‘worker’, in the circumstances of this case, was consistent with the decisions in Personnel Contracting, Jamsek and WorkPac Pty Ltd v Rossato [2021] HCA 23. He did not accept UPVC’s argument that the Member erred as alleged in misapplying the test going to the ‘worker’ issue. Ground 1 failed. ([118]–[131])

Ground 1(a)

6. UPVC’s submissions on this ground referred to whether sufficient weight was given by the Member to the evidence going to whether Mr Markey conducted a business. UPVC sought to re-agitate issues that were dealt with at first instance regarding the indicia. The primary argument put forward under this ground was one that Mr Markey was running a business prior to his engagement with UPVC, and thus it was likely that he continued to do so. UPVC argued that Mr Markey contracted with it on that basis. This argument was made at first instance. The Member dealt with it in her reasons at [140] to [141]. The Member dealt with the fact that Mr Markey had advertised and invoiced prior to August 2020. She dealt with the fact that Mr Markey did some other (limited) work during the period when he worked at UPVC. The Member concluded that Mr Markey was not working as a contractor whilst engaged with UPVC. She gave reasons for this. She considered the relevant evidence going to the indicia. Importantly, she concluded at [150] to [151] that Mr Clark exercised control over the work performed by Mr Markey with UPVC, and that Mr Markey was “working in the business of UPVC and not in his own business”. ([159]–[161])
7. Deputy President Snell further held that the Member clearly engaged with the evidence going to whether Mr Markey conducted a business. Her findings did not indicate error of the sort referred to in Workers Compensation Nominal Insurer v Hill [2020] NSWCA 54, at [20]. The various discrete arguments presented under Ground 1(a) were not, in any event, persuasive on their merits. The Member’s reasons at [140] were plainly true. It does not flow that, because a person previously worked as a self-employed contractor, the person will not later be engaged by a different entity pursuant to a contract of employment. The facts, in any individual circumstance, will require consideration on their merits. ([162])

(Shellharbour City Council v Rigby [2006] NSWCA 308 applied)

8. UPVC’s arguments were rejected by the Member. What the factual circumstances demonstrated was the exercise of control by UPVC. The plurality in Personnel Contracting said: “this Court in Stevens and indeed in Zuijs [v Wirth Brothers Pty Ltd [1955] HCA 73] itself, emphasised that it is the right of a person to control the work of the other, rather than the detail of the actual exercise of control, which serves to indicate that a relationship is one of employer and employee.” UPVC had not, in Ground 1(a), demonstrated error within the meaning of s 352(5) of the 1998 Act. Ground 1(a) failed. ([163]–[164])

Ground 2

9. Ground 2 asserted that the Member misapplied the test in cl 2 of Sch 1 of the 1998 Act. The issue on appeal was whether there was error within the meaning of s 352(5) of the 1998 Act in the first instance decision. UPVC did not cite any authority in support of its argument dealing with cl 2 of Sch 1, save for a reference to part of the observations of Steward J in Personnel Contracting at [204]. Clause 2 of Sch 1 (or any equivalent provision) was not at issue (or indeed referred to) in Personnel Contracting. ([175]–[176])
10. There could be no serious issue that Mr Markey was a party to a contract with UPVC to perform work; that the work exceeded $10 in value and that Mr Markey had neither sublet the contract nor employed workers in the performance of it. The onus was on Mr Markey to establish each of the elements described in Scerri v Cahill (1995) 14 NSWCCR 389 at 399D–F, including that at ‘3’: that work was not incidental to a trade or business regularly carried on by the applicant in his own name or under a business or firm name. This was the requirement of cl 2 on which UPVC’s submissions focused. ([177]–[178])
11. Deputy President Snell found that it was open to the Member to make the factual finding which she did on the issue. He noted the Member’s finding on this issue was made in the alternative, in the event that she had erred in her primary finding on the ‘worker’ issue. The Deputy President agreed with the Member’s conclusion that Mr Markey “did not regularly carry on a trade or business” at the relevant time. The Member’s decision on this point was a finding of fact. UPVC had failed to make out relevant error. Ground 2 failed. ([188]–[189])

(Pasqua v Morelli Constructions Pty Ltd [2009] NSWWCCPD 153, and Amalgamated Pest Control v Chaaya [2015] NSWWCCPD 53 applied)

Ground 3

12. UPVC submitted there was no medical evidence dealing specifically with the application of s 9B of the 1987 Act. ([190])
13. Deputy President Snell observed that it was common ground that s 9B applied. The reference in UPVC’s submissions to “the liability which attached to UPVC should the exemption be found to be met” was inappropriate. The liability provisions of the workers compensation legislation are not interpreted or applied differently depending on the financial or insurance situation of the employer. The Deputy President accepted that Mr Markey carried the onus of satisfying s 9B, a proposition that no party disagreed with. ([201])
14. Section 9B of the 1987 Act draws a distinction between the ‘injury’ in respect of which compensation is payable (injury within the meaning of s 4 of the 1987 Act) and a ‘heart attack injury’ or ‘stroke injury’ (which are terms defined in subcl (2) of the section). On the plain words of s 9B(1), the ‘injury’ in respect of which s 9B must be satisfied is that pursuant to s 4 of the 1987 Act, in respect of which compensation is otherwise payable. This was consistent with Secretary, Department of Communities and Justice v Galea [2021] NSWWCCPD 1 at [111]. In the circumstances of the present case, that was the injury on 30 November 2020 when Mr Markey, whilst in the course of his employment, was struck by the 5.8 metre plastic door profile that whipped when it was being removed from packaging. In most instances the ‘stroke injury’ or ‘heart attack injury’ at issue will also be the injury pursuant to s 4. These will be cases where the s 4 injury “consists of” the ‘heart attack injury’ or ‘stroke injury’. There will be circumstances where this is not so. Section 9B had application in the current matter because the injury pursuant to s 4 of the 1987 Act “results in or is associated with” the ‘stroke injury’, having regard to the causation finding in the reasons at [168]. It followed that satisfaction of s 9B in the circumstances required Mr Markey to prove that the nature of the employment concerned gave rise to a significantly greater risk of Mr Markey suffering the s 4 injury which occurred on 30 November 2020. That was not a specifically medical issue. ([205])
15. UPVC’s submissions were critical of the Member’s finding in the absence of expert medical evidence dealing with the topic. The Member dealt with s 9B, in the circumstances, by reference to the lay evidence and the risks of the employment concerned when Mr Markey sustained the s 4 injury. This was consistent with the test in s 9B and the factual circumstances. The Member made a factual finding, regarding the risk to which Mr Markey was exposed in the employment and the comparative element, in her reasons at [193]–[194]. ([206])
16. The comparative assessment was that required by the section, comparing the risk of injury in the employment concerned with that if Mr Markey had not been employed in employment of that nature. Snell DP held it was open to the Member to make the factual finding which she did on this issue. Given the nature of the comparative risk being assessed, the Deputy President could not see this assessment would have been assisted by additional medical evidence. None of the parties sought to adduce such evidence. The Member was entitled to have regard to the evidence which was relevant to the level of risk. The Member’s finding was one of fact that was properly open to her. ([207])
17. UPVC argued that the Deputy President’s earlier decisions in De Silva v Secretary, Department of Finance, Services and Innovation [2015] NSWWCC 279 (De Silva), Renew God’s Program Pty Ltd v Kim [2019] NSWWCCPD 45 (Kim) and Secretary, Department of Communities and Justice v Galea [2021] NSWWCCPD 1 (Galea) were wrongly decided. It argued the term ‘the nature of the employment’ in s 9B required consideration of “the class of employment as opposed to the employment engaged in by the worker”. UPVC submitted the phrase should be construed to mean “the inherent character” or “a kind of class usually distinguished by fundamental or essential characteristics”. The phrase ‘the nature of the employment concerned’, and the nature of the test in s 9B, were discussed in De Silva at [56] to [73] and [86] to [106]. On the statutory construction point, Snell DP adhered to the reasoning in the earlier decisions in De Silva, Kim and Galea. ([208]–[209])

Grounds 4 and 5

18. UPVC submitted the s 145 notice sought recovery in respect of payments that related to both the stroke injury and injury to the right thumb. It submitted no medical certificates of incapacity were submitted in respect of the thumb injury and medical records showed a significant history of hand injuries. UPVC stated the Member’s finding that there was an injury to the thumb was not challenged on appeal. ([210])
19. UPVC submitted that “no medical certificates of incapacity were submitted in respect of the thumb injury”. It referred to s 44B of the 1987 Act, which makes provision for the supply of certificates of incapacity to an insurer. It submitted Mr Markey’s certificates did not refer to the thumb injury and thus the Member could not find there was incapacity in that regard. UPVC referred to no authority for this assertion, which was wrong. The Deputy President observed that the Commission is not precluded from making findings of incapacity (or awarding compensation) in the absence of medical certificates. ([221])
20. UPVC was “a person on whom a notice has been served” within the meaning of s 145(3). UPVC applied to the Commission for a determination as to its liability consistent with s 145(3). The Commission was empowered to make a determination together with awards or orders in accordance with s 145(4). The notice dated 9 June 2021 had probative force consistent with s 145(5). UPVC submitted in Ground 5 that both the Member’s decision and the s 145 notice should be set aside. There was no viable reason advanced in support of this submission. ([222])
21. Snell DP noted there was no authority advanced for the submission that, as Mr Markey’s certificates did not refer to the thumb injury, the Member could not find there was incapacity. The evidence regarding incapacity (resulting from the multiple injuries sustained in the work incident) was sufficient to support the findings. There is no principle that the injury to the thumb had to be separately productive of incapacity if it was to be compensable. ([223])
22. UPVC faintly raised an argument that the Member failed to deal with its submission regarding Dr Walker’s opinion and incapacity, and that this constituted jurisdictional error. It was put in terms of “arguably inconsistent”, “failure to do so can give rise to an appealable and jurisdictional error” and submissions put might be “dispositive”. It was not articulated with sufficient clarity to be meaningfully considered. In any event, the Deputy President accepted the submissions by the respondents on this issue. There was ample medical evidence that supported the Member’s findings on incapacity. Dr Walker’s reports did not support a contrary view, and any failure on the Member’s part to refer to the argument would not have affected the result. Grounds 4 and 5 were without merit and failed. ([224]–[225])

(Wang v State of New South Wales [2019] NSWCA 263; Dranichnikov v Minister for Immigration & Multicultural Affairs [2003] HCA 26, and Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 applied)

Fisher v Nonconformist Pty Ltd [2023] NSWPICPD 12

WORKERS COMPENSATION – heart attack injury – whether injury sustained in accordance with section 4 of the 1987 Act – whether employment is a substantial contributing factor to the injury – section 9A of the 1987 Act – consideration of the test in Badawi v Nexon Asia Pacific Pty Ltd t/as Commander Australia Pty Ltd [2009] NSWCA 324 – decision makers not confined to the statutory matters at s 9A(2) – epidemiological studies – Seltsam Pty Ltd v McGuiness [2000] NSWCA 29 referred to – approach to expert evidence – Hancock v East Coast Timber Products Pty Limited [2011] NSWCA 11 applied and considered – alleged error in failure to reply to a clearly articulated argument not established – Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26; Wang v State of NSW [2019] NSWCA 263 applied and considered

Phillips P

22 March 2023

Facts

Mr Clifford (the deceased) was employed as a working director of the respondent, a company which provided contract courier services to Direct Courier (Australia) Services Pty Ltd. He had undertaken this subcontract for a period of about six years prior to 22 January 2016.

On 22 January 2016, the deceased left home on the Central Coast and commenced work at approximately 6 am. At approximately 3 pm, the deceased was driving his van on Richardson Road, Campvale when the deceased’s vehicle left the roadway whilst travelling at about 80 km/h and drove across a grass verge for about 50 m before impacting a steel fence post and a tree.

Attending police officers and medical crews attempted to revive the deceased, but the deceased regrettably passed away at the scene of the accident at approximately 3.45 pm. The cause of death was not the impact of the accident, but rather a heart attack injury (ventricular fibrillation cardiac arrest) which appeared to take place moments prior to the collision.

The deceased’s wife, son and daughter (the first, second and third appellants respectively) pursued death benefits under the 1987 Act, alleging that the heart attack injury was causally related to employment, primarily, the exposure to traffic related air pollution (TRAP), including particulate matter with a diameter of 2.5 micrometres or smaller, an indicator of air pollution (PM2.5), whilst in the course of duties as a courier driver. It was not disputed by the respondent that the three appellants in these proceedings were the sole dependants of the deceased and were entitled to pursue this application.

The Member entered an award for the respondent. The deceased’s wife and children appealed this decision.

The issues on appeal raised by the first appellant were whether the Member erred in:

(a) law by misapplying the legal test pursuant to s 9A of the 1987 Act (Ground 1);

(b) law by applying a more onerous standard of proof (Ground 2);

(c) fact by failing to address Dr Helprin’s opinion (Ground 3);

(d) fact and/or of law by making determinations that were not based on the evidence (Ground 4), and

(e) law by failing to respond to a substantial, clearly articulated argument (Ground 5).

The second appellant relied on the issues raised by the first appellant and raised the following additional issues on their appeal, which were:

(a) failing to provide lawful reasons (Ground 1), and

(b) failing to apply the correct legal test concerning s 9A (Ground 2).

The third appellant relied on the grounds and submissions of the first and second appellants.

Held: The Member’s Certificate of Determination dated 6 May 2022 was confirmed.

The first appellant’s appeal

Ground 1

1. The first appellant submitted the Member failed to undertake the required consideration of what was described as “the mandatory factors listed in sub-section (2)” of s 9A. ([151])
2. The President did not accept that this assertion was a fair reading of the Member’s approach. As was evident from a consideration of the expert medical evidence, the deceased experienced a sudden cardiac event due to arrythmia or ventricular fibrillation. This the Member found to be an injury which arose within the course of the deceased’s employment. Having made this finding, the Member then quite properly turned his mind to the question as to whether the deceased’s employment was in accordance with the statute (s 9A(1)) a substantial contributing factor to the injury as found. Specifically, the Member referred to the test set out in Badawi v Nexon Asia Pacific Pty Ltd t/as Commander Australia Pty Ltd [2009] NSWCA 324 (Badawi) before stating: “It also involves an evaluation of the matters set out in s 9A(2).” ([152])
3. The Member found that the provisions of s 9A(2)(a) and (b) weighed in favour of a causal connection; the provisions of s 9A(2)(d) and (e) the Member found militated against such a connection. The only two provisions where the Member made no specific finding were s 9A(2)(c) and (f), which he found were “largely immaterial”. That was how the Member dealt with the provisions of s 9A(2). The President also observed that a fair reading of the decision, when read as a whole, also revealed that from [102] of the reasons onwards, the Member was reviewing the evidence which was relevant to the factors outlined at s 9A(2). But as the provisions of s 9A(2) provide, and consistent with Badawi, the decision maker can take other matters into account, that are over and above that which is specified in s 9A(2). The respondent quite correctly had pointed to the passage from Badawi at [89] in support of this approach. ([155])
4. The President held that in considering the question of causation for the purposes of s 9A, it was incumbent upon the Member to engage with the scientific material. This the Member did, specifically at [110] and [114]–[125] of the reasons. Ultimately, the Member was not satisfied that these studies provided support for Dr Helprin’s (consultant cardiologist qualified by the appellant) ultimate opinion, meaning the doctor’s opinion was of less weight. The President held that this was precisely the type of first instance finding that sits within the province of the Member. Clearly, from his Honour’s examination of that material, the finding made by the Member about the studies was a conclusion that was available to him as a result of a dispassionate assessment of that evidence. ([160])
5. The President did not accept that the Member was engaged in an enquiry that involved him attempting to identify the sole cause of death, rather based upon the evidence the Member was weighing two competing hypotheses, namely that the cardiac event was either triggered by exposure to TRAP or, as Dr Herman (cardiologist) found, traditional cardio-vascular risk factors. The Member found that the latter hypothesis was more likely, mainly on the basis that the evidence in support of the TRAP proposition was unsatisfactory. Once the Member made the finding regarding the unsatisfactory nature of the appellants’ evidence on this question, the first appellant’s submission based upon that evidence had to fail. Findings need to be read in the context of the entirety of the decision which for relevant purposes commenced at [98] of the reasons, where the Member had appropriately identified the task to be undertaken in identifying the element of substantial contributing factor to the deceased’s injury. A fair reading of the Member’s decision revealed that the Member was not satisfied that there was a substantial contributing factor between the deceased’s alleged exposure to TRAP and his cardiac event. No error in the Member’s approach had been identified. Ground 1 was not established and was dismissed. ([161]–[162])

Ground 2

6. The first appellant asserted that the standard upon which the Member considered he needed to be satisfied was greater than needing to be “comfortably satisfied”. In short, the error said to have occurred in this case was the Member applying a “higher threshold to the standard of proof”, which was greater than that identified by Roche DP in Drca v KAB Seating Systems Pty Ltd [2015] NSWWCCPD 10. ([166]–[167])
7. The President did not consider that the Member had applied a higher burden of proof. Rather, the Member in a carefully reasoned decision was plainly not persuaded as to the existence of a key fact, namely the relationship between TRAP and the deceased’s cardiac arrest, and appeared to have made a “rational choice between competing hypotheses” in the sense in Nguyen v Cosmopolitan Homes [2008] NSWCA 246 in ultimately being persuaded by the opinion of Dr Herman, thus satisfying the balance of probabilities. No error had been established and Ground 2 was dismissed. ([168]–[182])

Ground 3

8. The first appellant asserted that the Member failed to address the reasons provided by Dr Helprin in support of the doctor’s opinion when finding that Dr Helprin’s opinion was “difficult to reconcile with the other evidence in this case” and in the Member’s acceptance of Dr Herman’s opinion. The President noted that the first appellant had not identified those aspects of Dr Helprin’s reasons or “material relevant to the particular issue” which the Member had failed to have regard to and was consequently said to be in error. ([183], [185])
9. His Honour noted that a fair reading of Dr Helprin’s opinions, as the Member quite correctly found, was underpinned by the epidemiological surveys and scientific studies which the Member had at length considered. It was also informed by Mr Prezant’s (occupational hygienist) estimates and calculations. The Member was clearly concerned about the limitations of many of the scientific studies and noted that many of the studies related to conditions in Europe and Asia. The Member was also concerned about the application of these international studies to the Australian situation, specifically, the situation the deceased was exposed to in NSW on the day of his death. Ultimately, the Member was not satisfied with the studies that underpinned Dr Helprin’s opinion, finding: “I have concluded that there is an insufficient basis for Dr Helprin’s opinion of a nexus between pollution and death.” ([187]–[189])
10. A fair reading of the passages leading up to this finding at [126] of the reasons revealed that the Member’s reason for arriving at this finding related to his dissatisfaction with the evidence from the international studies considered by Dr Helprin and Mr Prezant (as well as Mr Prezant’s calculation), who Dr Helprin referred to in supporting his conclusions. Contrary to the first appellant’s assertion, the Member did address Dr Helprin’s opinion and specifically provided reasons as to why he afforded it less weight. This Ground was dismissed. ([190]–[191])

Ground 4

11. The first appellant’s complaint related to how the Member dealt with the evidence of Mr Prezant. The President noted that Mr Prezant’s report was an important element of the first appellant’s case, not only because of his construction and reference of the international studies, but also due to the calculations that he performed. Those calculations estimated that the deceased would have been exposed to a much higher level of particulate matter on the date of his death than had he been working in another calling. It was this estimate which was then deployed to support Dr Helprin’s opinion. The approach that this Commission, and the former Workers Compensation Commission, has taken to the construction and weight to be given to expert evidence is well settled. ([192]–[199])

    (Hancock v East Coast Timber Products Pty Limited[2011] NSWCA 11; 8 DDCR 399 applied)

12. The President observed that the evidence in question in this appeal ground was subject to challenge, both in submissions and in the evidence relied upon by the respondent. The submission in this ground relied upon accepting that the Member entirely discounted Mr Strautins’ evidence. That was how the submission was framed. The President did not accept the proposition that the Member had completely discounted the evidence of Mr Strautins. True it was that he had criticised the evidence describing it as “often confusing and unsupported by reference to the scientific evidence on which he relie[d]”, but his Honour did not place this statement as highly as the first appellant urged on the appeal. In his first report, Mr Strautins raised questions about the approach taken by Mr Prezant, which resulted in Mr Prezant furnishing a detailed report in response. ([206]–[208])
13. The President noted that the Member was not satisfied that Mr Prezant’s evidence was of sufficient quality to provide a satisfactory basis upon which reliance might then be made. As a result, the Member questioned the provenance of Mr Prezant’s quantification of the deceased’s exposure to PM 2.5 on the day of his death. The President held there was no error in this approach. ([210]–[211])
14. His Honour was further fortified in this view by virtue of the fact that this appeal ground was advanced on a very narrow basis which had not been made out, namely, that the respondent’s expert opinion had been entirely discounted and as a result the Member was duty bound to accept Mr Prezant’s view. This was not correct in principle. Further, this appeal ground did not direct attention to any salient aspects of Mr Prezant’s opinion which were unchallenged or could be said to have been established to such a degree that the Member had to accept it. It was clear to the President that in accordance with Hull v Thompson [2001] NSWCA 359, the assumptions upon which Mr Prezant relied, namely the transposition of international studies to Australian conditions, had not been established. This was a rational basis for the Member to reach the conclusion that he did. This ground was dismissed. ([212]–[213])

Ground 5

15. The first appellant’s argument under this ground was really advanced on two bases arising from Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26 (Dranichnikov) and Wang v State of NSW [2019] NSWCA 263 (Wang). The Dranichnikov point was that the Member, in dealing with Dr Helprin’s expert evidence, failed to deal with the aspect of the first appellant’s submission which relied upon Mr Prezant’s calculations. The alternate proposition advanced by the first appellant was that even if the Member did deal with Mr Prezant’s calculations, the Member failed to address the materiality of that issue in the sense referred to in Wang. ([218])
16. After extensively discussing Dranichnikov and Wang, the President did not accept that the Member failed to deal with Mr Prezant’s evidence. Ultimately, at [125]–[126] of the reasons, the Member concluded that Dr Helprin’s opinion was of less weight and that if there was no proper foundation for that opinion, the Member could not draw any lay inferences regarding the asserted connection between pollution and the deceased’s heart attack. Unlike the situation in Dranichnikov, the second argument of the first appellant’s expert case, namely that based upon Mr Prezant’s calculations, was in fact dealt with by the Member. No error of the Dranichnikov type had been established. ([219]–[223], [226]–[227])
17. The President noted that this appeal ground was also advanced on the alternate basis in Wang. His Honour noted that what is necessary was for the Member to engage with the nature and materiality of the argument in the context of the issues in proceedings. In these proceedings, the principal issue revolved around assessing for the purposes of s 9A of the 1987 Act, the increased risk of cardiac arrest associated with exposure to traffic related pollution. The first appellant’s case was predicated upon Dr Helprin’s opinion, which had been based not only upon his own expertise but also scientific studies and Mr Prezant’s calculations of what he estimated the deceased’s exposure to PM2.5 was on the day of his death. The first appellant perhaps placed Mr Prezant’s evidence too highly. ([222], [227]–[228])

(Wang applied)

18. The President accepted the respondent’s submission that there was no established fact (meaning “actual exposure” being proven) and as a result the first appellant’s submission could not be made good. His Honour further considered that the Member had dealt with the materiality of the submission. Whilst it was not dealt with at length, that is not the Member’s duty or obligation. Clearly the Member was not satisfied as to the provenance of Mr Prezant’s calculations as presenting a satisfactory basis to substantiate Dr Helprin’s ultimate opinion. Reading the decision as a whole, the Member went through not only the international scientific studies, but also considered Mr Prezant’s calculations before reaching his ultimate view with respect to Dr Helprin’s opinion. ([231]–[232])
19. Contrary to how the first appellant had advanced this appeal ground, the submissions articulated by the first appellant were dealt with by the Member in terms. The error in the Dranichnikov sense did not arise. Secondly, the Member did deal with the materiality of the submission (Wang). No error as asserted under this ground had been established and Ground 5 was dismissed. ([233]–[234])

The second appellant's appeal

Ground 1

20. The second appellant asserted that there was uncertainty as to whether the Member found that the deceased had suffered an injury notwithstanding what appeared at [97] of the reasons. The second appellant asserted that due to the paucity of the reasons, he did not know whether the application failed due to s 4 or s 9A of the 1987 Act. Further, the second appellant stated that in so far as the Member’s dealing with s 9A was concerned, the reasons supplied did not comply with the minimum required by law. ([236])
21. The President did not accept that there was any uncertainty or doubt about the Member’s finding that an injury occurred to the deceased in the course of his employment. Contrary to the second appellant’s submission, it was clear that injury pursuant to s 4(a) was found. ([240]–[243])
22. With respect to s 9A, the Member dealt with the six factors in s 9A(2). His Honour noted that no issue was taken with the findings themselves, that is, whether they were correct or not, rather the complaint seemed to be that the language of s 9A(2) ought to have been used in terms. This was not the Member’s obligation in terms of giving reasons. How the Member dealt with the factors in s 9A(2) was brief and succinct and met the Member’s obligations to provide reasons as provided for by s 294(2) of the 1998 Act, r 78 of the 2021 Rules, and the authorities of Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247, and Bevan v Bingham & Ors [2023] NSWSC 19. The President did not accept the submission that the Member’s reasons did not comply with the minimum required by law. ([244]–[245])
23. His Honour noted that whilst the Member had not used the precise words “real and of substance”, the net effect of his findings on causation revealed that the Member was not satisfied that causation was established. The President was of the view that the Member had performed a detailed evaluation of the expert evidence and was not satisfied that causation for s 9A purposes had been established. This ground was dismissed. ([250]–[253])

(Badawi v Nexon Asia Pacific Pty Ltd t/as Commander Australia Pty Ltd [2009] NSWCA 324 applied)

Ground 2

24. The second appellant asserted that the remarks at [98] and [99] of the reasons posed the incorrect test. The President was not persuaded that error had been established on the part of the Member with respect to his remarks. ([254])
25. The second appellant asserted that the appellants did not know why they lost the application. The President thought that it was clear from a reading of the decision that the salient findings of the Member were that injury in the course of employment for the purposes of s 4 was established. The Member then proceeded, having found injury, to address s 9A of the 1987 Act as to causation. The Member dealt specifically with the terms of s 9A(2). The Member then found that causation was not established. The President observed that the Member had found that s 9A causation was not established and that was the reason why the appellants failed in their application. This ground was dismissed. ([260]–[262])

The third appellant's appeal

26. The third appellant relied upon and adopted the appeal points advanced by the first and second appellants. Given that the first and second appellants’ appeal grounds had all been dismissed, as a consequence the third appellant’s appeal was also dismissed. ([263])

Askew v Donald Noel Spence t/as Don’s Guttering and Roofing Services [2023] NSWPICPD 13

WORKERS COMPENSATION – whether the appellant was a “worker” within the meaning of s 4 of the 1998 Act – On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (Number 3) [2011] FCA 366 discussed – application of the relevant principles where the contract is oral – Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd [2022] HCA 1; ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2 discussed – JMC Pty Limited v Commissioner of Taxation [2022] FCA 750; Secretary, Attorney General’s Department v O’Dwyer [2022] FCA 1183 applied – section 352(5) of the 1998 Act – requirement to show error – Workers Compensation Nominal Insurer v Al Othmani [2012] NSWCA 45 applied – drawing of inferences – Minister for Immigration, Local Government and Ethnic Affairs v Hamsher [1992] FCA 184 applied

Wood DP

22 March 2023

Facts

On 18 May 2021, the appellant was performing roof repairs on a two-storey residence when he stepped backwards over the guttering and fell approximately four metres to the ground below. He suffered significant injuries. On the day of the injury, the appellant was performing the work through an arrangement with the respondent who operated a roof and gutter repair business.

The appellant made a claim for workers compensation for his injuries, alleging that he was a “worker” as defined in s 4 of the 1998 Act. The respondent asserted that the appellant was conducting his own business and was not a worker within the meaning of the 1998 Act, or a deemed worker within the meaning of cl 2 of Sch 1 to the 1998 Act.

Ultimately, at the arbitration, the appellant discontinued the allegation that he was a deemed worker and proceeded on the basis that he was a worker as defined in s 4 of the 1998 Act. The Member determined that the appellant was not a worker within the meaning of the 1998 Act and entered an award for the respondent. The appellant appealed that decision.

The issues on appeal were whether the Member erred in:

(a) law by misapplying the legal test and not considering whether the relationship between the appellant and the respondent operative at the time of the appellant’s injury was one of service (Ground 1);

(b) law by failing to engage with the submissions made on behalf of the appellant (Ground 2);

(c) fact by drawing inferences that were not available on the evidence (Ground 3), and

(d) law and/or fact by failing to provide adequate reasons for his conclusions (Ground 4).

Held: The Member’s Certificate of Determination dated 6 May 2022 was confirmed.

Consideration

1. This matter proceeded to arbitration after the High Court had handed down its decisions in Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd [2022] HCA 1 (Personnel Contracting) and ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2 (Jamsek) in relation to the approach to be taken in assessing whether a contract to perform work constitutes a contract of service or a contract for services. Those authorities were not the subject of submissions at the arbitration and the Member did not refer to them in his decision. The parties were given the opportunity to make submissions in the appeal as to the application of those authorities to the issue in dispute in this matter. ([82])
2. The appellant submitted that the authorities did not have direct application to this matter because the contracts under consideration in both authorities involved a written contract between the parties and in this matter, there was no written contract. The appellant submitted that the common law principles continued to apply in determining whether or not the appellant was an employee where the contract is an oral contract. The respondent agreed that the decisions did not have application to this matter because there was no written contract in this matter. ([83]–[84])
3. Deputy President Wood did not agree with the parties’ submissions that the High Court decisions had no direct application to this case. ([85])

(JMC Pty Limited v Commissioner of Taxation [2022] FCA 750 (JMC) discussed and applied)

4. The Deputy President noted that the principles of Personnel Contracting and Jamsek as discussed in JMC were considered by Goodman J of the Federal Court in Secretary, Attorney General’s Department v O’Dwyer [2022] FCA 1183 (O’Dwyer) in which the contract was an oral contract. It is apparent that the High Court’s observations in Personnel Contracting and Jamsek should also be applicable, where relevant, to the construction of oral contracts relating to the question of whether the contract is an employment contract. ([86]–[87])

Ground 1

5. The legal test referred to by the appellant was that observed by Bromberg J in On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (Number 3) [2011] FCA 366 (On Call Interpreters). The appellant said that the Member misapplied the test when he rejected the appellant’s submission that the “particular work” meant the actual work performed by the appellant when he was injured and, in the context of having conducted his own business since 1986 or 1987, the appellant was performing the work as a representative of his own business. ([88]–[89])
6. In this case, the manner in which the appellant conducted his business with others was different to the arrangement he had with the respondent. The arrangements with others came about by direct contact with the client in respect of the negotiations to perform the work for the respondent. The specific arrangements between the appellant and the respondent were distinctly different and called for an evaluation of the relationship that existed between them, not that which related to the appellant’s long term business practices. The “particular work” was therefore the work performed under the arrangement with the respondent. ([91])
7. However, the Member proceeded to determine the matter in the alternative by applying the relevant indicia to the terms of the arrangement between the appellant and the respondent in respect of that particular work. Section 352(5) of the 1998 Act provides that an appeal is limited to a determination of whether the decision appealed against was or was not affected by any error of fact, law or discretion and to the correction of any such error. It is thus necessary for any error identified to have affected the Member’s ultimate conclusion. If the Member was wrong to reject the appellant’s submission that the “particular work” was the work performed by the appellant for the respondent, in the context of the Member having determined the issue on an alternate basis, it could not be said that the error had infected his ultimate determination. ([92])

Workers Compensation Nominal Insurer v Al Othmani [2012] NSWCA 45 applied)

8. The appellant submitted that the Member considered the indicia from the perspective of the entirety of the appellant’s business dealings, instead of applying the indicia to the relationship the appellant had with the respondent. This complaint was not made out. It was clear that in his consideration (in the alternative) of the nature of the arrangement between the appellant and the respondent, the Member applied the indicia to the appellant’s evidence as to the arrangements between the respondent and him, and not to the evidence about the work he performed directly with clients obtained by him. It followed that this ground of appeal failed. ([93]–[94])

Ground 2

9. The appellant asserted that the Member failed to give any, or any proper, consideration to the following submissions at arbitration when he determined that the appellant was an entrepreneur in his own business:

   (a) the “particular work” to be considered was the work performed by the appellant for the respondent;

   (b) the facts in this case are similar to Jafarian v Wildfire Interiors Pty Ltd [2021] NSWPICPD 24;

   (c) the engagement of the appellant was consistent with that of a casual employee;

   (d) the appellant did not advertise his work and the signage on his car was irrelevant to the engagement with the respondent;

   (e) the equipment provided by the appellant was the type of equipment any tradesman would use in order to enable him to perform his duties, and

   (f) the appellant did not have the power to delegate the work. ([95])

10. The appellant asserted that the Member’s failure to engage with those submissions had resulted in error in his ultimate determination. ([96])
11. The appellant’s complaint that the Member did not engage with his submissions was not borne out in a consideration of the whole of the Member’s reasons. He was clearly aware of the case put by the appellant and, in his alternative reasons, dealt with the appellant’s submission that the contractual requirements with other entities were not relevant to the question before him. He proceeded to consider the phrase “particular work” and recited the facts in On Call Interpreters. ([99])
12. It was apparent that the Member engaged with the appellant’s submissions that the particular work to be considered was that limited to the work with the respondent and proceeded to consider whether the appellant was acting as an entrepreneur in his own business when engaged by the respondent. It was further apparent that at [95]–[96] of the Member’s reasons, the Member dealt with the appellant’s submissions in relation to the signage on the vehicle and the provision by the appellant of his own tools. The allegation that the Member erred by failing to engage with the appellant’s submissions was without foundation. Ground 2 of the appeal failed. ([100]–[101])

Ground 3

13. In this matter, both parties submitted to the Member in relation to the elements that made up the contractual arrangements between the appellant and the respondent in terms of the rights and obligations of the parties and how the oral contract ought to be construed. The Member firstly determined the question of whether the appellant was an independent contractor or an employee in accordance with the question posed by Bromberg J at [208] in On Call Interpreters. Neither party had submitted that that approach was wrong in terms of the application of Personnel Contracting and Jamsek. ([102])
14. The Member expressed his determination as a “prima facie” conclusion that, in conducting the work for the respondent, the appellant was promoting his own business and that it “may” be inferred that he did so to increase his business. The manner in which the Member expressed that determination suggested that it was not conclusive of the issue. The Member then proceeded to determine the matter on an alternate basis by applying the indica relevant to the terms of the oral contract, in the event that he was wrong in respect of his first determination. In the Deputy President’s view, the matters taken into account by the Member in his alternate determination, about which both parties made submissions, were not inconsistent with the principles enunciated in Personnel Contracting and Jamsek. ([103]–[104])
15. The appellant submitted that the Member drew a number of inferences which were not reasonable and thus the Member drew the wrong conclusions. Deputy President Wood held that it was clear from the Member’s reasons that those facts were the basis for his conclusion that the appellant was operating as an entrepreneur in his own business when performing work for the respondent. The appellant acknowledged the Member’s consideration of those facts but submitted that they did not provide a reasonable basis for his conclusion, and it was not apparent “how” or “why” he reached that conclusion. ([105]–[107])
16. The appellant referred to the evidence that he introduced himself to the client as working for the respondent; the respondent usually contacted the client the day prior to the work being performed, and the appellant was promoted as part of the respondent’s team on the website. The appellant submitted that, on the basis of that evidence, it was not reasonable for the Member to infer that the work the appellant undertook was always for the promotion of his own business. The appellant asserted that that evidence, together with the evidence that the respondent would supply the materials, pointed to the contrary conclusion. ([113]–[114])
17. In order for the appellant to succeed, he had to establish error on the part of the Member and that the error affected the outcome. Even if the Member’s first determination was inconsistent with the High Court authorities of Personnel Contracting and Jamsek, a point which was not raised and which Wood DP did not determine, or was otherwise wrong, in the circumstances in which the Member determined the matter, any error in respect of the first determination could not have affected the outcome. For those reasons, the Member’s ultimate alternate determination was not affected by any such error. ([115])
18. Deputy President Wood did not accept that the appellant had “no role to play” in the arrangement between him and the respondent. The parties had reached an agreement between them, which required the appellant’s acceptance of the arrangement, provision of his own equipment and performance of the actual work, at a time that was convenient to him. It was clear that the terms of the oral agreement between the appellant and the respondent were that the appellant provided his own equipment, and the respondent provided the materials. It may well have been convenient for the parties to attend to those matters in the manner that they did, with the appellant collecting the materials on his way to the job. The Deputy President did not consider that the inference drawn by the Member that it was undoubtedly convenient for the appellant to collect the materials purchased by the respondent rather than purchase them himself was a choice between inferences that should not have been made. ([117])
19. While the fact that the respondent arranged for the provision of the materials was a factor to be considered, it was not determinative, and Wood DP did not consider that the Member erred in the manner required in reaching the conclusion that this evidence was not indicative of an employer/employee relationship. ([118])
20. The appellant pointed to the Member’s observations about the appearance of the appellant on the respondent’s website, and the Member’s conclusion that that evidence was not suggestive of anything more than that he was a sub-contractor who was provided work by the respondent. The appellant submitted that there was no basis in the evidence, and it was not reasonable for the Member to infer and conclude that the presence of the respondent and his son on the website made it more likely that the respondent was nominating the tradesmen who assisted in the completion of the work. ([119])
21. Wood DP held that the Member clearly considered the inclusion of the appellant on the website in the context of the totality of the evidence going to the issue before him and concluded that he could not draw an inference from that evidence that the relationship between the parties was one of employer and employee. That conclusion was open to him. ([121])
22. The appellant submitted that the effect of those errors was that the Member’s consideration of the relevant criteria miscarried because they impacted how the Member viewed the factual circumstances. The Deputy President did not accept that the Member erred in the manner asserted by the appellant, and this ground of appeal failed. ([122])

Ground 4

23. The appellant relied on his submissions made in respect of Ground 2 and submitted that the failure by the Member to deal with appellant’s submissions also constituted error of the kind referred to in Waterways Authority v Fitzgibbon [2005] HCA 57 (Fitzgibbon). That is, that the Member failed to examine all of the relevant material available in the dispute before him. Wood DP noted that the reference to Fitzgibbon was consistent with the appellant’s contention that a failure to consider all of the relevant material was an error of law. ([78], [123]–[124])

The assertion made was dependent upon error being identified under Ground 2, that is, that the Member failed to deal with the appellant’s submissions, which was a complaint that was not made out. The submissions bore no relevance to the asserted ground of appeal, which was a complaint about the adequacy of the Member’s reasons. The appellant pointed to no aspect of the Member’s reasons that were inadequate and nor did he point to any material that the Member overlooked or disregarded. It followed that this ground of appeal had not been made out and failed. ([125]–[126])

State of New South Wales (Fire & Rescue NSW) v Dixon [2023] NSWPICPD 14

WORKERS COMPENSATION – Clause 3 of Pt 18C of Sch 6 to the 1987 Act – method of determination of amount by which compensation payable is to be reduced – State Super SAS Trustee Corporation v Cornes [2013] NSWCA 257 and SAS Trustee Corporation v Pearce [2009] NSWCA 302 discussed and applied

Parker SC ADP

29 March 2023

Facts

The respondent worker was employed by the appellant as a firefighter from 1997 to April 2004 when he was medically retired from the service. He was unable to work as a firefighter from 6 December 2002.

It was undisputed that the respondent suffered a primary psychological injury in the course of his employment with the appellant.

Dr Suman, Medical Assessor appointed by the Commission, issued a MAC dated 8 June 2022, which found the respondent had suffered a 20% whole person impairment.

The issue before the Member was the quantum of the respondent’s entitlement to compensation pursuant to s 67 of the 1987 Act. The Member determined that an appropriate award for pain and suffering was 55% of a most extreme case pursuant to s 67, being the sum of $27,500. There was no appeal from that finding.

The appellant submitted that the transitional provisions contained within Sch 6, Pt 18C, cl 3 to the 1987 Act applied so that a reduction in the award of the compensation was required.

The Member determined that there should be no reduction in the compensation payable pursuant to Sch 6, Pt 18C, cl 3. The appeal challenged this finding.

The issues on appeal were whether the Member:

(a) erred in law and fact by refusing to apply a reduction by virtue of the operation of the transitional provisions within the meaning of Sch 6, Pt 18C cl 3 of the 1987 Act on the basis that there is no lay or medical evidence to do so (Ground 1), and

(b) failed to give adequate reasons (Ground 2).

Held: The Certificate of Determination dated 10 August 2022 was revoked. The matter was remitted for another non-presidential member for re-determination of the remaining issues.

Ground 1

1. Acting Deputy President Parker SC noted that the Member declined to make a reduction because no doctor assessed the functional limitations as required by the PIRS ratings with respect to the events that occurred before 1 January 2002. However, that was to make the reduction dependent on the existence of a pre-existing condition or impairment which was not what cl 3 of the transitional provision required. ([42]–[45])

   (State Super SAS Trustee Corporation v Cornes [2013] NSWCA 257 applied)

2. The transitional provisions require a deduction for any proportion of the permanent impairment concerned that is a “previously non-compensable impairment”. A “previously non-compensable impairment” is a “loss or impairment that is due to something that occurred before the commencement of the amendments ... being loss or impairment that is of a kind for which no compensation was payable under that Division before that commencement.” ([46])
3. In the context of the respondent’s employment as a firefighter from 1997 until he ceased working as a firefighter on 6 December 2002, Dr Cassimatis, treating psychiatrist, was plainly saying that to some extent the events before 31 December 2001 made a contribution to the Post-Traumatic Stress Disorder diagnosed after 1 January 2002. The Member said the medical evidence did not provide a sufficient basis to satisfy the relevant test because he said that the medical evidence had to address the presence of “functional limitations” as required by PIRS. But that was to postulate that the medical evidence was required to establish a pre-existing impairment before a reduction can be made. However the issue to be addressed was whether the events before 1 January 2002 contributed to the impairment. ([51]–[52])
4. The Acting Deputy President held that the Member erred in requiring the medical evidence to address the PIRS and/or functional limitations. The medical evidence was required to address the extent to which the events before 1 January 2002 contributed to the post-traumatic stress disorder diagnosed after 1 January 2002. Although the Member was incorrect in the test he applied to the medical evidence, neither Dr Cassimatis nor Dr Suman in their material adequately addressed the statutory test. ([53]–[54])
5. In SAS Trustee Corporation v Pearce [2009] NSWCA 302, Basten JA said: “Whatever the precise finding made by his Honour under s 323 of the [1998 Act], that finding concerned the proportion of the impairment ‘due to any previous injury’. That is not the same as a finding as to the proportion of an impairment, due to a previous event.” The Acting Deputy President observed that Dr Suman’s MAC illustrated the problem. Under the heading “Deduction (if any) for the proportion of the impairment that is due to previous injury or pre-existing condition or abnormality”, he relied on s 323(2) to reduce the assessment by 10% for the pre-existing condition of ADHD. This was correct, but an additional reduction in the compensation repayable was required by cl 3 because the events before 1 January 2002 contributed to the impairment. ([55]–[57])
6. Acting Deputy President Parker SC held that the medical evidence did not provide proper guidance as to the contribution of the events before 1 January 2002 to the PTSD. That was a medical causation question. In the Acting Deputy President’s view, the parties should be given an opportunity to secure further medical evidence on that issue. ([58])
7. Even on the findings made by the Member, the decision of State Super SAS Trustee Corporation v Cornes [2013] NSWCA 257 meant he should have made a determination as to the reduction required by the transitional provisions. Parker SC ADP held the Member erred in the application of the transitional provisions. Ground 1 of the appeal was established and upheld. ([59]–[61])

Ground 2

8. The appellant submitted that the Member’s reasons failed to explain and provide a rational analysis for concluding that there was insufficient expert and lay evidence to support a reduction based on the transitional provisions. ([62])
9. The obligation on the Member to provide reasons is controlled by s 294(2) of the 1998 Act and r 78 of the 2021 Rules. For the reasons under Ground 1, the Member was in error, however, the reasons provided for his findings on material questions of fact and evidence on which the findings were based. The reasons showed his understanding of the applicable law and demonstrate the reasoning process. The Acting Deputy President was not satisfied that in the circumstances there was a failure to provide reasons in compliance with s 294 of the 1998 Act. Ground 2 was rejected. ([66]–[68])