Al Othmani v Massoud
[2010] NSWWCCPD 129
•10 December 2010
| WORKERS COMPENSATION COMMISSION | ||||||
| DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR | ||||||
| STATUS: Confirmed in Court of Appeal - Workers Compensation Nominal Insurer v Adnan Al Othmani [2012] NSWCA 45 (22 March 2012) | ||||||
| CITATION: | Al Othmani v Massoud and anor [2010] NSWWCCPD 129 | |||||
| APPELLANT: | Adnan Al Othmani | |||||
| FIRST RESPONDENT: | Raymond Tannous Massoud and Antoine Massoud | |||||
SECOND RESPONDENT INSURER | Uninsured Liability-Agent for New South Wales WorkCover Scheme Uninsured | |||||
| FILE NUMBER: | A1 7269/09 | |||||
| ARBITRATOR: | Ms C Rimmer | |||||
| DATE OF ARBITRATOR’S DECISION: | 3 March 2010 | |||||
| DATE OF APPEAL DECISION: | 10 December 2010 | |||||
| SUBJECT MATTER OF DECISION: | Deemed worker, intention to create legal relations; contract of employment, Schedule 1 clause 2 of the Workplace Injury Management and Workers Compensation Act 1998 | |||||
| PRESIDENTIAL MEMBER: | Acting Deputy President Lorna McFee | |||||
| HEARING: | 6 and 24 September 2010 | |||||
| REPRESENTATION: | Appellant: | Mr Gornley SC instructed by Koutzoumis Lawyers | ||||
| First Respondent Second Respondent: | No appearance Mr Dodd instructed by DLA Phillips Fox | |||
| ORDERS MADE ON APPEAL: | Paragraph (1) of the Arbitrator’s determination of 3 March 2010 is confirmed. Paragraphs (2) and (3) of the Arbitrator’s determination of 3 March 2010 are revoked and the following orders made:
| |||
BACKGROUND TO THE APPEAL
The appellant, Adnan Al Othmani, who is 36 years of age, suffered injury on 24 June 2006. He fell through sheeting (also referred to as a pergola) on a roof of a house to the ground. As a result of the fall, Mr Al Othmani sustained a severe back injury which resulted in paraplegia.
On 10 September 2009, Mr Al Othmani lodged an Application to Resolve a Dispute (the Application) in the Commission, in which he alleged that his employers were the house owners, Raymond Tannous Massoud (Mr Massoud) and Antoine Massoud, who were joined as first respondent. Proceedings were also commenced against Uninsured Liability – Agent for New South Wales WorkCover Scheme (WorkCover) as the second respondent because the first respondent was uninsured.
Mr Al Othmani notified the first respondent of the injury and made a claim for compensation on 24 March 2009.
WorkCover issued a s 74 notice disputing Mr Al Othmani’s entitlement to workers compensation on the basis that he was not a worker or a deemed worker.
The Commission listed the matter for conciliation and arbitration on 11 December 2009. Mr Al Othmani and WorkCover were represented. Oral evidence from Mr Al Othmani and Mr Massoud was taken and lengthy written submissions provided.
The Arbitrator identified the issues in dispute to be:
(a) whether the applicant was a worker as defined in s 4 of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act) employed by the first respondent;
(b) whether the applicant was a worker as defined in Sch 1 of the 1998 Act deemed to be employed by the first respondent;
(c) whether the applicant sustained an injury in the course of his employment with the first respondent;
(d) whether the applicant’s employment with the first respondent was a substantial contributing factor to his injury within the meaning of s 9 of the Workers Compensation Act 1987 (the 1987 Act);
(e) if the applicant succeeds in terms of the issues above, what is the quantum of compensation that he is entitled to?
At the arbitration hearing only the “worker” issue (at (a) above) was the subject of determination. An agreement noted for referral to an Approved Medical Specialist (AMS) and subsequent determination of the claim for weekly benefits, medical expenses, domestic assistance and permanent impairment, in the event that Mr Al Othmani succeeded.
The Arbitrator found that Mr Al Othmani did not discharge the onus of proof that there was a contract of employment with the first respondent, and therefore he was not a worker. She also found that Mr Al Othmani did not discharge the onus of proof that there was a contract to perform work, and therefore he was not a ‘deemed worker’ pursuant to the provisions of Sch 1 cl 2 of the Workplace Injury Management and Workers Compensation Act 1998.
The Arbitrator entered an award in favour of the first and second respondents.
The Commission issued a Certificate of Determination on 3 March 2010 in the following terms:
“1. By consent, amend the name of the Second Respondent in the Application to Resolve a Dispute from “Workers Compensation Nominal Insurer” to “Uninsured Liability Scheme – Agent for the NSW WorkCover Scheme”.
2. Award for the Respondents.
3. No order as to costs.”
LEAVE TO APPEAL
Monetary threshold
Before proceeding to deal with the appeal, the Commission must determine whether the application meets the requirements of s 352 of the 1998 Act.
It is not disputed that the monetary thresholds in s 352(2) of the 1998 Act are satisfied.
The appeal was lodged within 28 days of the Arbitrator’s decision in compliance with s 352(4) of the 1998 Act.
I grant leave to appeal.
ON THE PAPERS REVIEW
Section 354(b) of the 1998 Act provides:
“(b) if the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or hearing.”
Different minds have different impressions. Having read the evidence, I expected the submissions to be overwhelmingly concerned with the question of the application or otherwise of the ‘deemed worker’ provisions and an analysis of the relevant evidence as to the existence of a contract. I was concerned by the discursive treatment accorded to these matters and, accordingly, a formal hearing of submissions was held on 6 and 24 September 2010.
Mr J Gormley SC appeared for the appellant and Mr J Dodd of counsel appeared for WorkCover. Notwithstanding significant attempts by the solicitors for the appellant and WorkCover to secure the attendance of Mr Massoud, and service of appropriate Notice of Hearing by the Commission, neither Mr Raymond Massoud nor Mr Antoine Massoud appeared.
ISSUES IN DISPUTE
The issue in dispute is whether the Arbitrator erred in finding that the appellant was not a worker or a deemed worker when he suffered injury.
EVIDENCE
The documents considered by the Arbitrator at [10] were:
(a)two unsworn and undated statements of the appellant;
(b)statement of the appellant dated 29 September 2008 obtained by WorkCover;
(c)statement of Mr Massoud dated 23 September 2008 obtained by WorkCover;
(d)unsworn and undated statement of Mr George Hajjar;
(e)statement of Mr Hajjar dated 23 September 2008 obtained by WorkCover, and
(f)pleadings relating to the appellant’s action for damages in the District Court of NSW.
The Arbitrator also heard the evidence of Mr Al Othmani and Mr Massoud, which is on transcript.
I propose setting out sections of statements obtained by WorkCover, which are in record of interview format, and note in summary relevant sections of the unsworn and undated statements and the transcript evidence.
Appellant’s Evidence
The WorkCover statement of the appellant dated 29 September 2008 was obtained in the presence of legal representatives and an interpreter (who translated the questions and answers) relevantly states:
“(a) I first spoke to Raymond Massoud about renting 5 Theo Street, Liverpool about one week before the accident. This discussion took place with Raymond Massoud at Raymond Massoud’s house around the corner from 5 Theo Street, Liverpool.
(b) Raymond Massoud showed me the house at 5 Theo Street, Liverpool. It was in bad condition but clean. We talked about the rent. The rent was I think about $150. He did not ask for a bond because it was a private contract. We had a contract. I am not sure when it was filled out, maybe the first or second meeting.
(c) Before moving in when I was discussing the rent with Raymond Massoud we did not talk about any maintenance requirements because the house looked clean.
(d) Prior to moving into 5 Theo Street, Liverpool, I did not have any experience in roof awning repairs or maintenance.
(e) When I moved into 5 Theo Street, Liverpool the condition seemed okay. After about two days or so we noticed some problems.
(f) The first problem was with the electricity. We noticed this about the second day when the lights were flickering. We called Raymond Massoud and he called the electricity company. The electricity company came and turned the electricity off and said no one was to touch it until it was fixed. Raymond Massoud then organised for an electrician to come and fix the problem. Another thing was when my wife was having a shower; she could feel the electric shock through the water. That was why the electricity had to be turned off.
(g) Another problem I called Raymond Massoud about was about spiders in the house. I then did pest control.
(h) We also had a problem with the telephone. I called Telstra and we paid about $300 to fix the phone.
(i) When I called Raymond Massoud about the problems he said the house was very old.
(j) I contacted George Hajjar to come and fix the taps. The water was not coming out properly. George then came and fixed them. I contacted him because he lived nearby.
(k) When I spoke to Raymond Massoud and told him about the leaking taps it was in a face to face conversation. This took place about three or four days before the accident at 5 Theo Street, Liverpool. Only Raymond Massoud and I was at the house at the time. We spoke in Arabic.
(l) I told Raymond Massoud the house is very old and every day there is a new problem. Raymond Massoud said ‘don’t worry you will fix it and I will give you $1000’. No one witnessed this conversation. I had told Raymond how much the taps will cost and how much it will cost for someone to fix them. George ended up coming with me to buy new parts to fix the taps and then George came and fixed them. I did not pay George any money, he is my friend.
(m) We didn’t talk about the roof at this stage but I told him the house had many problems.
(n) When it was raining on Thursday or Friday before the accident, the water came in from the roof through the chimney. On the following morning I rang Raymond and he came to the house and I showed him the leaking roof. I asked him if he could fix it. He said no he could not.
(o) This conversation took place on Thursday 22nd June or Friday, 23rd June 2006 at 5 Theo Street, Liverpool. He said you fix whatever you want to fix and I will give you the money. Only Raymond and I was present at this time. He told me he could get a ladder for me. I then told George Hajjar and he said he would come and help. Raymond Massoud then came and brought a ladder.
(p) The awning was very dirty and had lots of leaves on it. Because of the rain the day before all the dirt had come down onto the ground. I told Raymond Massoud it was very dirty on the awning and he told me to clean it and he would give me the money.
(q) George Hajjar came to 5 Theo Street on that day during the morning. I first went to his home and woke him up, then he came to 5 Theo Street. When George Hajjar came to 5 Theo Street, the ladder had not been brought by Raymond yet. George Hajjar made no comment about the ladder.
(r) I cannot remember where Raymond Massoud put the ladder when he brought it over during the morning.
(s) The awning was very dirty and it all looked the same. I did not notice that some of the sheets were different to the others.
(t) Raymond Massoud told me I could clean the awning and he brought me the ladder so I could get onto the awning.
(u) When I went up onto the awning I took a long handled broom with me. I climbed up the ladder that Raymond Massoud brought, this was an aluminium long ladder. I can’t remember what part of the house I placed the ladder on and climbed up on the awning.
(v) I can’t remember how long I had been on the awning when I fell. George Hajjar was outside sitting under the awning at the time.
(w) I was sweeping the leaves and dirt off the awning. My back was facing the garden and I was facing the street. I was sweeping the debris back towards the roof area. I felt my leg went through the awning and I lost my balance and fell through the awning onto the concrete floor. I landed on my bottom.”
The two unsworn and undated statements contain, in most respects, the same material. The second appears to be merely an expanded form of the first. I have recorded at [35] the differing versions in the statements and the WorkCover statements.
The transcript of the appellant’s evidence discloses:
(a) “there was an extensive amount of dirt that needed to be cleaned” [T7.27(h) and T28.123];
(b) that the laundry and backyard and pergola needed cleaning;
(c) that Mr Massoud said “fix everything” that he had said that before and “he confirmed that on Saturday” (the accident day);
(d) that Mr Massoud knew of work already performed by the Appellant and the costs he had incurred;
(e) that Mr Hajjar did not hear the conversation;
(f) that the cleanliness defects were not revealed initially on the pre-rental inspection;
(g) that the appellant had started cleaning the backyard and moved the wood, and
(h) a rejection of Mr Massoud’s denial of the conversations.
Evidence of Mr Massoud
The WorkCover statement of Mr Massoud dated 23 September 2008 was obtained without the services of an interpreter and records, relevant to the issues:
“(a) I operate the business TRM Formwork, we subcontract to other builders.
(b) I purchased the property 5 Theo St Liverpool in 2001 for investment purposes.
(c) The property was purchased in my name and my son Antoine Massoud. When we purchased it, there was single fibro dwelling located on the property. The front of the house had a flat asbestos roof.
(d) I have known George Hajjar for about 5–6 years as I had worked with him down in Wollongong for a builder.
(e) Before Adnan Al Othmani moved in there were no inspections carried out. The previous tenants had not made any complaints about the property.
(f) At the time Adnan and his family moved in we had allowed the building insurance on the property to lapse.
(g) We did not have any discussion about the maintenance on the property. Even though there were no discussions on the maintenance, I would have carried out any minor repairs where needed. In the case of major works I would have called in a qualified tradesman.
(h) The previous tenants had not complained about leaves in the gutters or rear awning. I did not carry out any work in this area.
(i) After Adnan Al Othmani moved in, I recall after a few days I sat down and explained to him the residential tenancy agreement, which outlined the bond and weekly rent. He was happy with the weekly rental of $150 per week and a $450 bond.
(j) At 9am that day Adnan Al Othmani turned up at my house and asked me about borrowing a step ladder. I asked him “what for”. He explained that he wanted to clean up the roof.
(k) I told him “it is not your job to go up on the roof” I then said that I did not have a step ladder. After a while he insisted that he needed a step ladder. I told him that there was nothing wrong with the roof and that he was not to go up there.
(l) He then started to whinge about not having a ladder. I told him that he was not experienced in climbing roofs and that it was not his job to climb the roof. He then said “if you won’t let me how about I ask my friend who is experienced”. I then said “if you can get George to help I will get the step ladder from next door”.
(m) He then said “I will try and get George”. I then said “If you get George I will get the step ladder from next door”.
(n) He left my property and went to George’s place and asked for his help and after about 30–40 minutes he retuned [sic, returned] to my property and said that George was already there. I told him that I would follow him back, he walked back to the property. At that stage I cannot recall why he needed George.
(o) There was no discussion about any payments for cleaning the awning. I then got the step ladder and walked to the property and then met George Hajjar and Adnan Al Othmani.
(p) I said hello to George and left the step ladder. The ladder was aluminium and not extendable. I then left them alone and walked home. There was no discussion about any payments.
(q) The time was now about 11am, I recall about 20 minutes later George Hajjar came to my place and said that Adnan had fallen off the roof. George was very worried.
(r) I quickly ran to the property 5 Theo St Liverpool. I then observed Adnan Al Othmani lying outside the back door on the concrete floor under the fibre glass sheet. He was crying in pain, he appeared to [be] seriously injured.
(s) I recall whilst waiting for the ambulance I asked George Hajjar what he was doing here he advised that me that Adnan Al Othmani had contacted him to look at [the] leak in the chimney, this was the first knowledge I had that the chimney was leaking.
(t) After the accident I went to NRMA and took out a policy on the property 5 Theo St Liverpool. This policy did not cover the event which occurred before midday on 24th June 2006.
(u) I visited Adnan hospital on about four occasions. On one occasion he then started to blame himself for the accident. He said “If I listened to you I would not have fallen”. During these visits there was no mention of any arrangement where Adnan Al Othmani was to be paid for any fixing or repairing on the property.
(v) I first became aware of his possible claim when I received a letter from his solicitor on 10th June 2007 or thereabouts.
(w) I deny that I had a conversation with Adnan Al Othmani offering him $1000 to clean up the house located at 5 Theo St Liverpool.
The transcript of Mr Massoud’s evidence discloses:
(a) the constant assertion that the house was a good clean house and that the appellant had inspected it prior to his tenancy;
(b) a reluctant concession that leaves were on the pergola;
(c) that the appellant started complaining as soon as he moved in, and an overhanging branch was removed by Mr Massoud;
(d) that the appellant and his family moved out because of the electrical and power issues;
(e) that an electrician was engaged by Mr Massoud;
(f) that no complaint of spiders was made to him;
(g) that the appellant complained about the leaking taps but not the chimney leak (prior to the accident);
(h) that he thought the appellant was lying and that the chimney did not leak, as “I see nothing” when he went on the roof with Mr Hajjar, and
(i) that he knew of his responsibilities as a landlord.
Evidence of Mr Hajjar
The WorkCover statement dated 23 September 2008, obtained from Mr Hajjar, records:
“(a) I am 62 years of age.
(b) I have worked in maintenance area for most of my life.
(c) I first met Raymond Massoud about 6 years ago when working in Wollongong. I know him as he does framework. He use to live around the corner at a different property. Liverpool. He lived at the area for about 5-6 years.
(d) I first met Adhan [sic, Adnan] Al Othmani when he first moved into a granny flat on my property. He moved in at around 2003 and moved out in early June 2006. He did not work and survived on Centrelink benefits. He was a refugee from Iraq. He did not speak much English; I spoke with him in Arabic.
(e) He moved into 5 Theo St Liverpool in early June 2006. He moved out from the granny flat at my place. He was a very good tenant, he always kept the place clean.
(f) I had no knowledge of the arrangements between Adhan [sic] Al Othmani and Raymond Massoud.
(g) I recall after Adnan Al Othmani moved in he rung me and said that there was a leak in the sink and bathroom, I said “I will come and fix it for you”. I then went [to] 5 Theo St Liverpool and fixed the leak. I did this [as] a favour for Adham [sic] Al Othmani.
(h) On another occasion Adnan Al Othmani rung me again and said please ring your brother in-law as he was having problems with the power at the property at 5 Theo St Liverpool.
(i) I told him that he was unavailable and that he should call the owner for him to fix the problem. On the same day he told me that the electricity commission was coming out.
(j) He advised that the power was going to be cut off and it was dangerous to use. I was then told that the owner had arranged an electrician to fix the problem.
(k) A few days later he told me that he now had a leak from the chimney and asked me if I could fix it. This was on 24th June 2006. The weather was fine and good.
(l) I recall the events of 24th June 2006. I recall Adnan Al Othmani rung me in the morning and told me “there is leak in the chimney”. I said “Okay I will come over”. I arrived there about 11am. When I arrived he was fit and well, he had been working on the garden.
(m) I then said to Adnan Al Othmani “how am I going to get up on the roof”. He then said that Raymond was coming with a ladder. Raymond arrived there about 5 minutes later and left. I did not ask him why he was doing this. I was unaware of any conversations between Adnan Al Othmani and Raymond Massoud.
(n) Adhan [sic] did not say anything about cleaning leaves from the roof.
(o) Raymond had left a long step ladder which was extendable. It was [in] good condition. I then took the ladder to the laundry. I then accessed the roof from outside the laundry and walked to the main part of the roof. The cover of the roof was made of asbestos.
(p) I then went to check the leak. I then took off the old silicon and then went down from the roof and told Adnan Al Othmani that I had to wait for the mould to dry.
(q) In that time he then took a broom and made his way to the rear of the house and climbed up on the extension ladder and walked on the flat section of the roof and started to clean leaves from the roof area. This section of the roof was made up of skylight sheets and corrugated iron. He did this of his own choice. I did not instruct him. He did not ask me about what he was going to do.
(r) He was up on the roof for about 5 minutes. I heard him cleaning and rustling leaves. I then went to check on the Adnan Al Othmani and then took up three steps onto the extendable ladder and then saw Adnan Al Othmani fall through the skylight fibreglass sheet. He fell on to his bottom. I then run to him straight away. He asked for “help”. I then ran for help and went to Raymond Massoud who lives around the corner. I did not have a mobile phone on me. Adhan [sic] said that he was cleaning the roof and walked on the fibre glass sheet and did not know it was fibreglass.
(s) I told Raymond that Adnan Al Othmani had fallen down from the roof.
(t) After the accident I went back onto the roof and with some silicon and fixed the leak in the chimney. After I did this Raymond Massoud came back to the property at 5 Theo St Liverpool and took the ladder home.
The unsigned and undated statement of Mr George Hajjar is consistent with the above account.
Mr Hajjar was not required for cross examination.
THE ARBITRATOR’S REASONS
At [14] to [70], the Arbitrator set out in detail the evidence, seeking to isolate what, if any, contractual arrangements existed between the appellant and Mr Massoud.
The Arbitrator then conducted an analysis of inconsistencies in the evidence of the appellant, Mr Massoud and Mr Hajjar, and referred to the inconsistencies identified in the written submissions provided after the arbitration hearing.
The Arbitrator accepted at [72] that “there were some minor inconsistencies in Mr Massoud’s evidence”, but found that “these were in the main in respect of matters that are not critical in the determination of the issues in this case”.
Those inconsistencies primarily related to:
(a) whether there was an inspection of the property prior to the tenancy;
(b) when Mr Massoud was informed about the leak in the roof (or chimney);
(c) Mr Massoud’s assertion that the premises were in good condition, including the condition of the chimney and the absence of leaves on the roof (pergola), and
(d) the type of ladder provided by Mr Massoud.
At [77], the Arbitrator found that the inconsistencies identified between Mr Massoud’s evidence and that of the appellant and Mr Hajjar were, “in the main, of minor or collateral importance”.
The Arbitrator had earlier at [59] determined that inconsistencies in the appellant’s (three) statements and his oral evidence were significant, that this was a matter of some concern, and indicated that his evidence should be treated with caution because:
“The account given in the WorkCover statement suggests that the Applicant was offered $1,000 by Mr Massoud to fix leaking taps and problems three to four days before the accident and before any discussion of a leak in the roof. Statement 1 suggests that 3 or 4 days before the accident the Applicant spoke to Mr Massoud about the leak in the chimney and Mr Massoud told him that if he fixed the taps and the chimney and cleaned the pergola he would pay him $1,000. Statement 2 suggests that although the Applicant was told to fix the leak and clean the pergola three or four days before the accident, the offer of $1,000 to clean the pergola and fix the leak was only made on the day of the accident, that is, 24 June 2004. The WorkCover Statement does not refer to any agreement to clean the pergola roof. Two of the statements, Statement 1 and the WorkCover Statement, suggest that the work the Applicant was to perform for reward included fixing leaking taps yet the Applicant in cross-examination agreed that the taps had been fixed before he had the problems with the chimney and the offer of payment for certain work was made. In response to questioning by Mr Doak, the Applicant agreed that he had then had a conversation with Mr Massoud about the leak in the roof and getting that fixed and at that time Mr Massoud offered to pay him to do certain work. Finally, there are differences as to when the offer of payment was made; the WorkCover Statement and statement 1 suggest that the offer of payment was made three or four days before the accident whereas statement 2 suggests that the offer was made on the day of the accident. In his oral evidence the Applicant agreed that the conversation about being paid to fix the leak in the roof, cleaning the pergola and do other work happened a “day earlier” and was confirmed on the day of the accident These inconsistencies concerning when the agreement was made and for what services, are not, in my view, insignificant given the issues to be determined in this case.”
In addition, at [78] the Arbitrator considered that “it is inherently improbable that Mr Massoud would have offered such a large sum” ($1,000) to the appellant, “in circumstances where he did not know the nature and extent of the problem”, and that the inspection prior to the tenancy negated any obligation of Mr Massoud to carry out work.
At [80], after considering the degree of inconsistency in the appellant’s evidence “concerning the details of the alleged contract and after taking into account the inherent improbability that Mr Massoud would offer $1,000 to do certain work”, the Arbitrator preferred the evidence of Mr Massoud and found that there was no contract of employment and that the appellant was not a worker nor a deemed worker.
SUBMISSIONS ON APPEAL
Prior to oral submission, the appellant filed written submissions, which in summary:
(a) challenge the Arbitrator’s finding at [77] that the inconsistencies identified between Mr Massoud’s evidence and that of the appellant and Mr Hajjar were minor or of collateral importance;
(b) submit that these inconsistencies should be viewed as a whole as well as on an individual basis;
(c) submit that the Arbitrator did not consider the totality of these inconsistencies, and
(d) submit that the totality of these inconsistencies creates grave doubt as to the credibility of the evidence of Mr Massoud as a whole.
The written submissions annexed to the appeal were in most respects identical to the submissions advanced to the Arbitrator.
Written submissions accompanying the Notice of Opposition filed on behalf of WorkCover contend that:
(a) the appellant has not identified error in the Arbitrator’s finding concerning the inconsistencies in his evidence;
(b) in the event of a less favourable view of Mr Massoud’s evidence, any evidence of an alleged employment is vague, inconsistent, and uncorroborated and improbable, and
(c) the Arbitrator, having had the advantage of seeing the witnesses, was in a position to evaluate the reliability of the evidence and her credibility findings should not be disturbed.
On 6 September 2010, Mr Gormley SC for the appellant submitted that:
(a) the Arbitrator wrongly confined her consideration as to whether a contract existed to a determination concerning the $1,000 promise of payments for certain work;
(b) notwithstanding her rejection of the $1,000 payment, the only reasonable inference that could have been drawn as to why the appellant carried out the work was the existence of a contractual arrangement between the appellant and Mr Massoud, inferred from the conduct of the parties, which must be assessed objectively;
(c) her analysis of the evidence on credit contains no process of reasoning that discloses why the inconsistencies in the appellant’s evidence were significant, whereas the inconsistencies in Mr Massoud’s evidence were insignificant, and
(d) the Arbitrator did not base her findings on demeanour and therefore the appeal was not constrained by limitations on appellate review of credibility-based findings as her findings were an objective assessment of consistencies of statements and she:
(i)isolated the contents of each conversation alleged by the appellant;
(ii)failed to take into account all the evidence as to conduct of both parties;
(iii)failed to properly weigh competing versions by reference to probative value, provenance, or an alternative explanation;
(iv)made a factual error (when she found that Mr Massoud did not inspect the roof).
At the outset, counsel for WorkCover objected to the submissions not having been raised in the written submissions annexed to the grounds of appeal.
Accordingly, I allowed an adjournment until 26 September 2010 for WorkCover to prepare submissions in reply and to enable the parties to conduct further inquiries to secure Mr Massoud’s attendance at the next hearing.
The appellant filed amended grounds of appeal. These alleged that the Arbitrator:
(a) did not correctly assess the evidence on credit and consistency, and
(b) did not consider whether the appellant was a deemed worker and whether there was a contract, after preferring Mr Massoud’s evidence on the promise of a payment of $1,000.
The submissions in reply by WorkCover were that:
(a) there was no failure to properly weigh the evidence and that I should not be distracted by unsigned statements, provenance and Browne v Dunn (1894) 6 R 67; 7 C & P 48 issues;
(b) that the case now advanced by Mr Gormley was different to that advanced before the Arbitrator and impermissible;
(c) that any review with a conclusion different to that of the Arbitrator would involve a reversal of credit findings inconsistent with the principles enunciated in Percy v Fox [2001] NSWCA 100, and
(d) that no error in the Arbitrator’s decision is demonstrated.
No objection as to the adequacy of the amended grounds of appeal was taken, and nor did counsel for WorkCover seek to raise any further matter in response when given further opportunity to do so.
FRESH EVIDENCE
The Affidavit of Gary Koutzoumis dated 22 September 2010 and the Affidavit of Paul Flocco dated 23 September 2010 were tendered by consent. The Affidavits outline the attempts to secure the attendance of Mr Massoud at the hearings on 5 and 24 September 2010.
I note that:
(a) the appellant’s solicitor, Mr Koutzoumis, contacted the solicitor who previously represented Mr Massoud and was informed that there had been no contact with Mr Massoud since late 2008 and that fees were unpaid, and
(b) the solicitor for WorkCover, Mr Flocco, conducted company searches, retained a licensed commercial agent to attempt service of a summons on Mr Massoud on several occasions (which attempts were unsuccessful), forwarded mail to the last known address and to Mr Massoud’s daughter, but received no response from Mr Massoud.
DISCUSSION
The issues for consideration in this appeal distilled from the submissions are:
(a) whether the Arbitrator applied the wrong test in her determination that there was no agreement between the appellant and Mr Massoud, that the appellant would work for payment, and failed to consider all the evidence;
(b) whether the Arbitrator’s reasons were inadequate; and
(c) whether, in view of the Arbitrator’s apparent acceptance of Mr Massoud as a truthful witness, a finding based on credit can or should be revoked on review.
Nature of review by Presidential member
Determination of this matter has significant consequences the appellant is a paraplegic with a young family. Mr Massoud is uninsured. Accordingly, I propose referring to the authorities on the nature of the review I can undertake. In the matter of State Transit Authority of NSW v Chemler [2007] NSWCA 249, Spigelman CJ (with Basten JA and Bryson AJA in agreement) said at [30]:
“A Presidential member exercising a power to review a decision must decide whether the original decision is wrong or, as it is often put in the context of administrative appeals on merits, must decide what is the true and correct view. If s/he does so decide then s/he should substitute his or her own views, unless it is an appropriate case to remit.”
In Akora Holdings Pty Ltd v Ljubicic [2008] NSWCA 339, Basten JA (with whom Hodgson JA and Campbell JA agreed) rejected, in terms, the proposition that demonstration of error in the Arbitrator’s decision was a necessary precondition for intervention. At [6], his Honour said:
“On 12 February 2007, the Commission issued a certificate recording the determination of the arbitrator terminating the award (and hence the compensation payments) from 6 October 2004. An appeal from the decision was available to a Presidential member, pursuant to s 352 of the Workplace Injury Management and Workers Compensation Act 1998 (NSW) (‘the Workplace Injury Act’). Such an appeal was described as being ‘by way of review of the decision appealed against’: s 352(5). Further evidence could be received by the Commission on appeal, but only by leave; s 352(6). The nature of such a review has been the subject of consideration in this Court on a number of occasions; see Cook v Midpart Pty Ltd trading as McDonalds Forster [2008] NSWCA 151 at [10] (Allsop P, Ipp and Bell JJA agreeing). There is no requirement for the Presidential member to identify an error of law, or probably a specific error of any kind, in order to intervene.”
In Sapina v Coles Myer Limited [2009] NSWCA 71, Allsop P and Hoeben J stated at [56]–[58]:
“56. The Chief Justice in Chemler at [30] used the expression ‘true and correct view’. In the context of merits review of administrative decisions the phrase ‘preferable or correct decision’ has developed a currency and lineage: Drake v Minister for Immigration and Ethnic Affairs [1979] AATA 179; (1979) 24 ALR 577; 46 FLR 409 at 589; 419. Given the Chief Justice’s reference to ‘merits review’ at [28], we would not take his language at [30] as intended to be other than synonymous with the ‘preferable or correct decision’ as long-used and well-understood decision of the task of a body undertaking merits review: Aronson, Dyer and Groves Judicial Review of Administrative Action, 3rd Ed (2004) at 158; and Denn v Midland Brick Co Pty Ltd [1985] HCA 26; (1985) 157 CLR 398 at 419. We will use the form of words used by the Chief Justice in this sense.
57. Whilst the new regime of dealing with workers’ compensation claims must be examined in its own statutory context, it is important to appreciate that the legislature has used a phrase that had in the prior regime, a tolerably settled meaning. Section 36 of the Compensation Court Act used the phrase ‘review the decision’. Subsections s 352(1) and (5) of the WIM Act make clear that the ‘appeal’ is to be by way of review of the decision. The notion of ‘review of a decision’ had been clearly held in the context of former legislation and the WIM Act to be wider that an appeal strictly so-called and encompassing a reconsideration beyond correction of error. The decision under appeal is not to be ignored, but the task of the Presidential member is, as Spigelman CJ said in Chemler, ‘to decide whether the original decision is wrong [that is to] decide what is the true and correct view’. This requires the Presidential member to decide for himself or herself these matters. That does not mean that there must be a de novo hearing in each case. Cases such as Watson, Boston Clothing, Litynski and AGL v Samuels made plain that this was not so under s 36 and the terms of ss 3, 352(7) and 354 make clear that no such broad ranging factual enquiry afresh is necessarily required. The terms of the WIM Act, ss 3 and 354 and the width of the powers in s 352(7) make clear that the Presidential member has a wide choice available as to how he or she undertakes the task of deciding for himself or herself what is the true and correct decision. As Allsop P said in Cook v Midpart, error (or lack of it) by the Arbitrator will or may be relevant to the task of the Presidential member, but it does not define the task. There is, however, an important difference in the nature of the tasks of (a) coming to the view that an Arbitrator’s view was reasonable and (b) deciding for oneself that the view of the Arbitrator is the true and correct one. In a field where evaluation of injury and evidence of incapacity can lead to different views, both or all which could be reasonably held, it is important that the parties have available to them the skill and judgment of the Presidential member reaching his or her own view on the questions involved in the decision.
58. Just as error of the Arbitrator may be relevant, so might be the advantages of the Arbitrator in seeing witnesses. Nothing we have said, and none of the cases to which we have referred, necessarily requires the Presidential member to rehear the case or to recall all the witnesses. The approach of the Presidential member as to how he or she goes about reaching his or her own decision will be a matter for him or her within the confines and freedoms of s 354.”
Accordingly, WorkCover’s submission to the effect that intervention is impermissible in this matter because no error in the Arbitrator’s decision is demonstrated is misconceived. My task is to decide what is the true and correct decision. Identification of error is not a precondition to intervention. A decision whether the Arbitrator’s decision is wrong or not is required.
Wrong test
The implicit acknowledgment by the parties that the appellant was not a worker as defined in s 4 of the 1998 Act meant that the issue for the Arbitrator’s determination was whether the appellant was a deemed worker under Sch 1 cl 2 of the 1998 Act.
The contents of this clause are in essentially the same terms as the former Sch 1 cl 2 of the 1987 Act. A provision to the same effect was s 6(3A) in the Workers Compensation Act 1926 (the 1926 Act).
In Humberstone v Northern Timber Mills [1949] HCA 49; 79 CLR 389, Dixon J said that the intention of s 6(3A) of the 1926 Act, the equivalent of Sch 1 cl 2, was that:
“A person conducting a business in the course of which he contracted to perform work should himself carry the risk of personal injury as one of the hazards of his business, while the man who worked under a contract but only for the employer or without any general trade or business or outside his trade or business, should, like an ordinary employee, be insured by the Act against the risk of injury at work.”
In Scerri v Cahill (1995) 14 NSWCCR 389, Bainton AJA said that:
“On its proper construction, clause 2 of Schedule 1 requires an applicant who relies on it to establish each of the ingredients, both positive and negative, to identify the relevant ‘work’. What he must establish is:
(a) that he was a party to a contract with the respondent to perform work;
(b) that work exceeds $10 in value;
(c) that the work is not work incidental to a trade or business regularly carried on by the applicant in his own name or under a business or firm name; and
(d) that the applicant has neither sublet the contract nor employed workers in performance of it.”
In regard to the first matter to be established – a contract – the Arbitrator was concerned that the appellant’s evidence was inconsistent as to when an agreement was made and for what services. Where there is no identifiable offer of employment raised in the discussions between the appellant and Mr Massoud, Mr Gormley SC referred extensively to Ormwave Pty Ltd and Anor v Smith (2007) NSWCA 210 (Ormwave) and the authorities considered by Beazley JA at [68]–[75], which I propose to outline:
“68. It is not necessary in determining whether a contract has been formed to identify either a precise offer or a precise acceptance, nor a precise time at which an offer or acceptance could be identified. As Stephen J explained in MacRobertson Miller Airline Services v Commissioner of State Taxation (Western Australia) [1975] HCA 55; 133 CLR 125 at 136:
‘This doctrine, of the formation of contracts by offer and acceptance, encounters difficulties when sought to be applied, outside the realms of commerce and conveyancing, to the everyday contractual situations which are a feature of life in modern urban communities.’
69. In Brambles Holdings Limited v Bathurst City Council (2001) 53 NSWLR 153; [2001] NSWCA 61 Heydon JA (as his Honour then was) also observed that ‘[o]ffer and acceptance analysis does not work well in various circumstances’. He referred to the decision of MacRobertson Miller Airline Services v Commissioner of State Taxation (Western Australia) at 136-140 by way of example. Heydon JA then undertook a detailed analysis of the authorities: see [71]-[80] of his Honour’s judgment.
70. It is not necessary for present purposes to review all the authorities to which his Honour referred. However, the comments of McHugh JA (Hope and Mahoney JJA concurring( in Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR 11, 110 at 11,117-11,118, are particularly apt. His Honour said:
‘It is often difficult to fit a commercial arrangement into the common lawyer’s analysis of a contractual arrangement. Commercial discussions are often too unrefined to fit easily into the slots of “offer”, “acceptance”, “consideration” and “intention to create a legal relationship” which are the benchmarks of the contract of classical theory. In classical theory, the typical contract is a bilateral one and consists of an exchange of promises by means of an offer and its acceptance together with an intention to create a binding legal relationship … it is an error “to suppose that merely because something has been done then there is therefore some contract in existence which has thereby been executed”. Nevertheless, a contract may be inferred from the acts and conduct of parties as well as or in the absence of their words. The question in this class of case is whether the conduct of the parties viewed in the light of the surrounding circumstances shows a tacit understanding or agreement. The conduct of the parties, however, must be capable of proving all the essential elements of an express contract.
…
Moreover, in an ongoing relationship, it is not always easy to point to the precise moment when the legal criteria of a contract might have been fulfilled. Agreements concerning terms and conditions which might be too uncertain or too illusory to enforce at a particular time in the relationship may by reason of the parties’ subsequent conduct become sufficiently specific to give rise to legal rights and duties. In a dynamic commercial relationship new terms will be added or will supersede older terms. It is necessary therefore to look at the whole relationship and not only at what was said and done when the relationship was first formed.’ (citations omitted)
71. This approach to the formation of contract is not new. Heydon JA also referred to Brogden v Metropolitan Railway Co (1877) 2 AppCas 666 at 682 where it was recognised that:
‘…although there has been no formal recognition of the agreement in terms by the one side, yet the course of dealing and conduct of the party to whom the agreement was propounded has been such as legitimately to lead to the inference that those with whom they were dealing were made aware by that course of dealing, [and] that the contract which they had propounded had been in fact accepted by the persons who so dealt with them.’
See also Thompson v White & Ors. (2007) NSW ConvR 56-171; [2006] NSWCA 350 at [99]; Brooker v Friend & Broker Pty Ltd & Anor [2006] NSWCA 385 per McColl JA at [135] ff; Industrial Rollformers Pty Ltd & Anor v Ingersoll-Rand (Australia) Ltd [2001] NSWCA 111 at [137] per Giles JA.
72. The sometimes artificiality of precise analysis of contract formation in terms of offer and acceptance was recognised by Heydon J in Magill v Magill (2006) 226 CLR 551; [2006] HCA 51, where his Honour again observed at [210] that
‘The law often develops doctrines which are useful tools of analysis in standard instances, even though they are difficult to employ in other instances. An illustration is the doctrine of offer and acceptance in relation to contract formation. That works in many factual circumstances. The fact that it does not work well, and can only be applied with some artificiality, in other sets of circumstances, has not been seen as a reason for its wholesale abandonment.’
73. The last reference in this passage from Magill was to the comments of Ormiston J in Vroon BV v Foster’s Brewing Group Ltd [1994] 2 VR 32 at 82-83. In that case, Ormiston J cited with approval the comments of McHugh JA in Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd. He also cited with approval the statement of Cooke J in Meates v Attorney-General [1983] NZLR 308 at 377:
‘…I would not treat difficulties in analysing the dealings into a strict classification of offer and acceptance as necessarily decisive in this field, although any difficulty on that head is a factor telling against a contract. The acid test in the case like the present is whether, viewed as a whole and objectively from the point of view of reasonable persons on both sides, the dealings show a concluded bargain.’
74. Ormiston J then said at 81:
‘… I am prepared to accept … that agreement and thus a contract can be extracted from circumstances where no acceptance of an offer can be established or inferred and where the most that can be said is that a manifestation of mutual assent must be implied from the circumstances. In the language of para. 22(2) of the Second Re-statement on Contracts: “A manifestation of mutual assent may be made even though neither offer not acceptance can be identified and even though the moment of formation cannot be determined”.’
75. The effect of these and similar authorities was summarised in Anson’s Law of Contract (27th Ed, 1998, at 28) (referred to by Heydon JA in Brambles Holdings Limited v Bathurst City Council at [73]):
‘… It would be a mistake to think that all contracts can thus be analysed into the form of offer and acceptance or that, in determining whether an exchange does give rise to a contract, the sole issue is whether the communications match and are identical. The analysis is, however, a working method which, more often than not, enables us, in a doubtful case, to ascertain whether a contract has in truth been concluded, and as such may usefully be retained.’”
Mr Gormley’s submission, which I accept to be correct, is that the existence of a contract, and the intention to create legal relationships, must be determined objectively.
At [44] to [48], the Arbitrator correctly identified the necessary inquiry as to the existence of a contract by reference to an objective assessment of the state of affairs between the parties.
Consistent with Ormwave, the Arbitrator noted that it was not necessary to identify a precise offer, or a precise acceptance, nor a precise time at which an offer or acceptance could be identified.
Nevertheless, in that apparent endeavour, the Arbitrator, at [59], proceeded to isolate the contents of each alleged conversation:
| WorkCover Statement | $1,000 to fix taps and problems three to four days before the accident. |
| Statement 1 | $1,000 to fix taps, chimney leak and clean pergola, three to four days before the accident. |
| Statement 2 | Fix chimney leak and clean pergola, day of accident for $1,000, complained of chimney leak three to four days before. |
Of significance to the Arbitrator were inconsistencies as to when an agreement was made and for what services. She noted the following:
(a) that the appellant’s WorkCover statement made no reference to cleaning the pergola;
(b) that the appellant in cross examination agreed that the taps had been fixed before the problems with the roof and an offer of payment was made;
(c) whereas the WorkCover statement and Statement 1 suggest that the work for reward included fixing the taps;
(d) that there were different versions as to when the offer of payment was made. The WorkCover statement and Statement 1 refer to three to four days, and Statement 2 refers to the day of the accident;
(e) that the appellant’s oral evidence referred to a conversation a “day earlier” concerning the work which was confirmed on the day of the accident.
The Arbitrator noted the inconsistency between Mr Massoud’s WorkCover statement and his oral evidence concerning when he was told about a leak in the chimney, or whether he was told about cleaning the roof, and inconsistencies as to the ladder type. However, because he denied consistently, in his statement and oral evidence, any offer to pay $1,000 to the appellant to fix the chimney leak, clean the pergola and carry out other work on the property, his evidence was preferred.
The Arbitrator confined her analysis to a $1,000 payment for certain work, that is, minor chimney repair, cleaning and tidying.
For there to be a contract, there must be an intention to create legal relations and mutuality or contractual consensus.
At [78] and [79] of the Statement of Reasons, the Arbitrator considered that there was no contract to carry out work for $1,000. The Arbitrator accepted that the intention of Mr Massoud was not to pay the appellant, that he did not know the nature and extent of the work undertaken and, it may be inferred, he did not intend to enter into a legal relationship.
Implicitly, she accepted that work was performed on the property by the appellant, and that he expected payment (she made no finding that he was a volunteer) and, it may be inferred, he believed he had entered into a legal relationship.
From this conflict between intention and expectation, her implicit conclusion was that there was no mutual arrangement to perform work for payment and, it may be inferred, no mutual intention to enter a legally binding relationship.
In my opinion, the Arbitrator, when considering whether the appellant and Mr Massoud intended to enter into a legal relationship, applied a subjective text and did not objectively determine the matter by reference to all the circumstances. She found no agreement to pay $1,000 and considered the matter no further.
In Lindeboom v Goodwin (2000) 21 NSWCCR 297 at 303, Campbell CJ cited a useful statement as to how the objective assessment is to be made, which is found in Jones v Padavatton (1969) 1 WLR 328 per Salmon LJ at 332:
“Did the parties intend the arrangement to be legally binding? This question has to be solved by applying what is sometimes (although perhaps unfortunately) called an objective test. The court has to consider what the parties said and wrote in the light of all the surrounding circumstances, and then decide whether the true inference is that the ordinary man and women, speaking or writing thus in such circumstances, would have intended to create a legally binding agreement.”
It is relevant to observe (in the circumstances of this case) that, when a person intends to offer his services for reward, belief by the person to whom he offers his services that the offer was gratuitous does not prevent a contract arising.
In Crowe v Tumut Turf Club [1958] 32 WLR (NSW) 50, Wall J said:
“Further, it is my view that the evidence establishes that the respondent accepted this offer (for services). The fact that its intention in accepting the applicant’s offer may not have coincided with the applicant’s in making it seems to be beside the point. The situation would be covered by the principle enunciated by Blackburn J, in Smith v Hughes [1817] LR 6 QB 597 at 607:
‘If whatever a man’s real intention may be, he so conducts himself that a reasonable man would believe that he was assenting to the terms proposed by the other party, and that the other party upon that belief enters into the contract with him, the man thus conducting himself would be equally bound as if he had intended to agree to the other party’s terms.’
And also by Pollock, CB, in Cornish v Abington [1859] 4 H & N 549 at 556:
‘If any person, by a course of conduct or by actual expressions, so conducts himself that another may reasonably infer the existence of an agreement … whether the party intends that he should do so or not, it has the effect that the party using that language or who has so conducted himself, cannot afterwards gainsay the reasonable inference to be drawn from his words or conduct.’”
The Arbitrator applied the wrong test in seeking to determine whether there existed a contract, and whether the parties intended to enter a legally binding agreement, by confining her consideration to the conflict in evidence regarding the $1,000 payment and Mr Massoud’s knowledge of the work to be performed. She applied a subjective test, and that error affects not only that question of intention, but also the implicit finding that there was no mutual or contractual consensus. She failed to objectively assess the statements and oral testimony of the parties in the context of their relationship and their conduct.
As a consequence, I find that her decision is wrong and will consider the evidence and decide what is the true and correct decision shortly.
Inadequate reasons
At [59], the Arbitrator considered that the inconsistencies in the different statements and the oral evidence of the appellant were a matter of concern and should be treated with caution, whereas, at [72], she found that, although there were minor inconsistencies in Mr Massoud’s evidence, these were in respect of matters not critical in the determination of the case.
The inconsistencies have been outlined by me at [55] to [57]. The comparison of inconsistencies in the evidence of the respective witnesses and consequential findings reveals the Arbitrator’s approach, which was to assess the evidence confined to the question of whether there was an offer to pay $1,000 for certain work. This approach, might I say, was encouraged by counsel for both parties in their submissions.
The analysis of the evidence so confined was a careful explanation and reveals no significant inadequacy.
However, as I have found, having rejected the appellant’s assertion that there was an offer to pay $1,000, the Arbitrator was obliged to then consider and engage in an objective assessment of whether or not a contract existed, by analysing the conduct of the parties in all the circumstances. Her failure to weigh and consider this evidence, and make findings on this issue, which she had identified at the outset at [44] to [45], necessarily involved a decision by her that this matter did not need to be addressed and, in that sense, her reasons are inadequate.
The Arbitrator did not determine whether a contract existed on “an objective assessment of the state of affairs between the parties”, in accordance with the authority Ermogenous v Greek Orthodox Community [2002] HCA 8, to which she referred and to the issue she identified.
The consequences of her implicit decision not to address the issue is a failure to exercise the jurisdiction conferred on her by statute and, in doing so, the Arbitrator erred in law: see Goodwin v Commissioner of Police [2010] NSWCA 239, Basten JA at [21] to [22].
Having found against the appellant on the offer to pay $1,000, this was not the end of the matter. The conduct of the parties, and the sequence of events in the context of their relationship, required analysis in order to determine the contract issue.
Credit findings
The submission that the Arbitrator’s credit findings were not significantly based on demeanour, I did not understand to be put with much conviction by Mr Gormley SC.
The Arbitrator, at [80], clearly stated that, where there was a direct conflict of evidence, she preferred the evidence of Mr Massoud, finding that the appellant’s “responses were sometimes unconvincing or contradictory, especially in regard to making of the alleged offer of employment”, that is, the $1,000 offer to pay.
In the present case, whilst the Arbitrator did not make an express finding as to the appellant’s credit, having heard the parties give oral evidence, she implicitly accepted Mr Massoud.
Without question, the Arbitrator’s findings are entitled to respect. However, they do not prevent me from drawing my own inferences and conclusions from the evidence, subject to the principles stated in Fox v Percy [2003] HCA 22; (2007) 214 CLR 118, and similar cases; see Whisprun Pty Ltd v Dixon [2003] HCA 48.
Having regard to the authorities, I do not accept Mr Dodd’s submission that I cannot interfere with findings of fact made by an Arbitrator where credit was in issue and the witness whose credit was challenged gave oral evidence.
Whilst the Arbitrator’s credibility assessment was reasonably open because of her confined approach, in view of my findings above, the reasons (going beyond credibility) indicated a failure to determine all relevant issues (see Whisprun [98] and Gray v Motor Accident Commission [1998] HCA 70 [105]). She failed to conduct an objective assessment of the evidence and, accordingly, her credit findings can be reviewed.
It is further contended by Mr Gormley SC that appellate intervention is available because the rejection of the appellant’s evidence was:
(a) not derived from the oral evidence of the appellant alone and was also based on a comparison of three statements, and
(b) flawed by factual error.
Proceedings in the Commission are governed by s 354 of the 1998 Act and Pt 15 r 15.2 of the Workers Compensation Commission Rules 2010 (the Rules). Section 354 gives the Commission discretion in the manner in which proceedings are to be conducted. It is prescribed that they are to be conducted with as little formality and technicality as the proper consideration of the matter permits.
The Rules provide for logical, probative and relevant evidence, not speculative, unsubstantiated or unqualified assumptions or opinions.
Mr Gormley SC submits that, notwithstanding the consent admission of the appellant’s unsigned and undated statements, these statements were not adopted by the appellant, and the Arbitrator therefore should have treated that evidence with caution, noting provenance, and whether cross-examination was conducted on relevant issues.
The complaint is not pursuant to the rule in Browne v Dunn, that the appellant was not given the opportunity to deal with that evidence in the unsigned and undated statements. It is properly conceded that the Commission is not bound by the rules of evidence and cross-examination is limited.
The contention is that the Arbitrator ought not have engaged in the exercise of comparing the evidence as if it were of equal probative weight and, in the event that the contents of unsigned statements were not put to the appellant, that evidence had little or no value.
I accept that proposition, and propose to reach my own conclusions on the evidence. The observation must be made, however, that the conduct of the hearing and the approach taken by the Arbitrator, which approach was encouraged by both parties, provide no basis to assert lack of procedural fairness.
As to the Arbitrator’s finding that Mr Massoud did not go up on the roof, I disagree with Mr Dodd’s contention that the erroneous finding is of no consequence. The Arbitrator’s specific finding [at 78] was that Mr Massoud “did not know the nature and extent of the problem”, when it is apparent that he conducted his own inspection of the roof and had knowledge of its state.
A further erroneous finding is disclosed at [59], where the Arbitrator found that the “WorkCover statement does not refer to any agreement to clean the pergola roof”, whereas the appellant’s WorkCover statement records:
“[T]he awning was very dirty and had lots of leaves on it. Because of the rain the day before all the dirt had come onto the ground. I told Raymond Massoud it was very dirty and he told me to clean it and he would give me the money.”
In determining the existence of a contract or the intention to create legal relations, Mr Gormley’s analysis of the evidence, which I accept, is as follows:
(a) The relationship between the appellant and Mr Massoud was a legal relationship based on a residential lease; it was not a social, family or business relationship;
(b) Defects in the house were the subject of demands by the appellant;
(c) Mr Massoud conceded that he had legal obligations to respond to those demands;
(d) The defects were numerous: obstructive tree branches; electrical and power problems; spider infestation; tap and water-flow problems; debris and leaves on the roof (pergola); a leaking chimney; a dirty laundry; and gardening requirements, including wood removal;
(e) The appellant wanted the defects and repairs attended to, and complained consistently to Mr Massoud;
(f) Cleaning of the pergola was necessary;
(g) Mr Massoud provided his ladder to the appellant;
(h) Mr Massoud inspected the roof;
(i) Mr Massoud issued instructions, directions concerning the work to be performed;
(j) Work was performed on the roof by the appellant and Mr Hajjar;
(k) An arrangement existed which benefited both landlord and tenant;
(l) There was no requirement to pay Mr Hajjar, an experienced tradesman;
(m) The appellant expected to be paid for his services, although Mr Massoud did not expect to pay.
(n) Work on the roof to fix the chimney leak had a value of more than $10 (Mr Massoud in evidence conceded that, in the absence of Mr Hajjar, he would incur the cost of a roofer).
(o) The appellant conducted no trade or business, and nor did he sublet or employ workers.
As I understand the evidence, the following additional observations must be made:
(a) Mr Massoud’s constant assertion in oral evidence that there was nothing wrong with the house is inconsistent with:
(i)the unchallenged evidence of the appellant regarding the work he performed on the days prior to his accident and on the day of the accident;
(ii)the appellant’s payment of $300–$400 to Telstra;
(iii)the appellant’s payment for taps and materials and pest control materials;
(iv)the work performed by Mr Hajjar to help fix the taps;
(v)Mr Massoud’s concession in cross-examination that the electrical and power faults required the appellant and his family to move out;
(vi)Mr Massoud’s direction to Energy Australia to cut the power;
(vii)Mr Massoud’s payment of $500 to an electrician;
(viii)the removal, by Mr Massoud, of tree branches from the front of the property;
(ix)Mr Massoud’s concession that the house was “too old”.
(b) Mr Massoud’s reluctant concession that there was debris on the pergola/roof and a possible chimney leak (noting his oral testimony that he inspected the roof) and his instruction that only Mr Hajjar was to go on the roof are inconsistent with the WorkCover statement that:
(i)he provided a ladder to the appellant on his request as “he wanted to clean up the roof”;
(ii)when he provided the ladder (which according to Mr Hajjar was an extension ladder), Mr Massoud could not recall why the appellant needed Mr Hajjar;
(iii)that whilst waiting for the ambulance he asked George Hajjar “what he was doing here”;
(iv)that George’s advice that the appellant had asked him to look at the leak in the chimney was the first knowledge Mr. Massoud had that the chimney was leaking.
(c) The differing accounts in the appellant’s three statements regarding the $1,000 offer must be assessed in the context that:
(i)the WorkCover statement, Statement 1 and his oral evidence are relatively consistent as to details. Significantly, $1,000 was offered before the day of the accident to fix the problems complained of by the appellant and confirmed on the day of accident;
(ii)two statements are unsigned and undated. Accordingly, fairness must guide the weight to be given to the different version in Statement 2. The explanation for the omission of reference to an offer before the day of the accident was not addressed in cross-examination and must be treated with caution;
(iii)the appellant paid for various materials and for Telstra, and undertook not insignificant work to the house in the days before his accident. The functioning and cleanliness of the house had been addressed by the appellant, matters relevant to an offer for payment of services;
(iv)Mr Massoud agreed in cross-examination that the appellant had complained to him about the taps and he knew that the appellant subsequently asked George Hajjar to help him fix the problem;
(v)the imprecise recollection as to when conversations occurred and the content of those conversations is understandable after several years. Nevertheless, the appellant’s evidence concerning the work he performed was unchallenged;
(vi)Mr Massoud’s inspection of the roof would have disclosed to him the necessary work to be performed, so that he knew the nature and extent of the work to be performed on the day of the accident;
(vii)Mr Massoud conceded that he did not want to pay for the cost of a roofer to inspect and/or fix the chimney;
(viii)Mr Massoud conceded responsibility for defects and any preliminary inspection prior to the tenancy commencing did not negate that responsibility;
(ix)Mr Massoud knew that George was a competent tradesman for whom he would incur no cost;
(x)Mr Massoud subsequently attempted to obtain insurance.
When considering all the circumstances, I do not accept that $1,000 is an improbable amount. The house was not properly habitable. The appellant’s complaints were constant. Mr. Massoud had already incurred the cost of an electrician. The appellant had paid for Telstra and for taps and had performed repair work with Mr Hajjar’s assistance, which work was inevitably the responsibility of Mr Massoud as owner. The most plausible explanation for the appellant’s conduct is his expectation to be paid.
Mr Massoud knew that Mr Hajjar was a good tradesman. He knew that he would otherwise incur the cost of a tradesman on each occasion of a complaint. He had been told by the appellant the cost of the taps and the repair cost, according to the appellant’s WorkCover statement. It is unlikely that he did not offer to pay the appellant.
Mr Massoud inspected the roof himself. He knew the potential cost of a tradesman. He provided a ladder to the appellant to perform work on the roof. His inspection, at the very least, would have revealed the leaves and debris, if not the requisite chimney repair.
I do not accept that he instructed only Mr Hajjar to go on the roof. That assertion cannot be reconciled with the contents of his WorkCover statement.
Contrary to the Arbitrator’s finding at [59], that cross-examination established that the offer to pay $1,000 was made after the taps were fixed, I find that the appellant’s oral evidence is consistent with the premise contained in the WorkCover statement and Statement 1 that, as a consequence of an earlier conversation, the appellant expected to be paid $1,000 if he did all the work, including the tap repair, cleaning the house, laundry, yard and pergola, and the chimney leak repair, which offer was confirmed on the day of the accident.
Mr Massoud’s denial of those matters is a probable consequence of his uninsured status.
In any event, a contractual arrangement can be inferred from the conduct of the parties, there being no need to isolate offer, acceptance and consideration.
Whatever Mr Massoud intended regarding payment, he conducted himself so that another (the appellant) may reasonably infer the existence of an agreement to be paid for services performed and to be performed. The conduct shows a tacit understanding or agreement.
During oral submissions, Mr Dodd did not advance objective assessment of the parties’ conduct to the contrary, except to assert that the appellant was a volunteer, his primary contention being the failure to raise this matter before the Arbitrator.
I have considered the authorities to which I was referred, Autohaus Five Dock Pty Ltd (wrongly sued as McMillan Prestige Pty Ltd) v Germanos [2007] NSWWCCPD 86; Catholic Health Care Limited v Perkins [2008] NSWWCCPD 22 and reject the contention that this legal issue was not argued before the Arbitrator.
Although Mr Gormley graciously accepted full responsibility for the fact that the primary focus of the argument before the Arbitrator was “a promise of $1,000”, the legal argument before me deals with the intention to create legal relations, which issue is specifically addressed in the written submissions provided by the appellant to the Arbitrator dated 3 February 2010.
It is there recorded:
“In examining this issue, it is submitted that the surrounding circumstances must be taken into account, specifically that the subject premises was an investment property owned by the first respondents, the applicant was the tenant of the premises and that the works being undertaken involved the repair of the premises with this background, it is submitted that the Commission would have no hesitation in reaching the conclusion that there was an intention to create legal relations, there already being legal relations in place between the parties.”
The Arbitrator was obliged to consider this submission and she failed to do so.
The omission of reference in the filed Notice of Appeal and annexed submissions was cured by the amended grounds of appeal.
Mr Dodd was afforded ample opportunity to meet the argument presented on the first day of oral submissions. He made no application to rely on fresh evidence or recall any party. Mr Dodd had adequate opportunity to address the issue in regard to any aspect he chose.
There is no new argument, merely one formerly briefly presented, now fully articulated.
The detail of the relationship and the parties’ conduct was fully canvassed in the evidence.
Mr Dodd’s characterisation of the appellant as a volunteer is, in my opinion, without basis. The assertion was made without reference to evidence capable of supporting the proposition and seems to rely on an assessment of motivation.
Motivation does not exclude an intention to create legal relations. Looked at objectively, as I am required to do, the arrangement between the appellant and Mr Massoud was a commercial arrangement. There was an advantage to the appellant, repair of his defective rental accommodation which, as a consequence, ensured a financial benefit to the owner, Mr Massoud, that is, the continuance of rent payments. The defects I have referred to support the view that the matters to be addressed were all of the nature that Mr Massoud was obliged to deal with under the lease.
The work was not voluntary in the sense outlined in Teen Ranch Pty Ltd v Brown (1995) 11 NSWCCR 197.
On my review of the evidence and authorities, I have come to the conclusion that it is more probable than not that Mr Massoud offered to pay the appellant $1,000 to fix all the defects, having already incurred $500 for an electrician, and bearing in mind the adverse consequences for him, the potential cost of a plumber, roofer, cleaner and gardener, and possible loss of a tenancy.
Alternatively, whatever he intended, Mr Massoud behaved in such a manner that it is to be reasonably inferred that there was an agreement that the appellant would carry out the work and be paid, which agreement is the most probable explanation for the appellant performing the work, prior to, and on the accident day.
The work exceeded $10 in value and was not incidental to a trade carried on by the appellant. Notwithstanding the fact that Mr Hajjar provided some assistance, the appellant neither sublet nor employed workers in the performance of the contract. Accordingly, the provision of cl 2 Sch 1 of the 1998 Act is established.
I therefore find on 24 June 2006, the appellant, Mr Al Othmani was a worker as defined in Sch 1 cl 2 of the 1998 Act, deemed to be employed by the first respondent.
OTHER MATTERS
I note that proceedings were commenced against the Workers Compensation Nominal Insurer c/- WorkCover Authority of New South Wales, as second respondent because the first respondent was uninsured.
The solicitors acting for WorkCover filed a Reply identifying the second respondent as Uninsured Liability Scheme – As Agent for the NSW WorkCover Scheme.
In her formal orders, the Arbitrator, by consent, amended the second respondent’s name accordingly.
By amendments to the 1987 Act that took effect on 1 July 2007, section 154A established a Workers Compensation Nominal Insurer. On and from that date, the Nominal Insurer assumed the assets, rights and liabilities of the Uninsured Liability and Indemnity Scheme (see Regulation 247B of the Workers Compensation Regulation 2003).
The Nominal insurer is a legal entity (section 154A(2)(a) and may take proceedings and be proceeded against in the name of the Workers Compensation Nominal Insurer (section 154A(2)(b).
Therefore, the Nominal Insurer is the entity to be joined in proceedings where an employer is alleged to be uninsured. WorkCover acts for the Nominal Insurer (section 154C(1).
This was not a matter before me on appeal and I have therefore not disturbed the consent order in paragraph (1) of the Arbitrator’s determination. However the parties may need to clarify the name of the second respondent when it is relisted for hearing on remitter.
DECISION
Paragraph (1) of the Arbitrator’s determination of 3 March 2010 is confirmed.
Paragraphs (2) and (3) of the Arbitrator’s determination of 3 March 2010 are revoked and the following orders made:
1.The matter is remitted to a different arbitrator for determination of all outstanding issues in accordance with the reason in this decision.
2.The second respondent is to pay the appellant’s costs of the first arbitration.
COSTS
The second respondent is to pay the appellant’s costs of the appeal as agreed or assessed.
Lorna McFee
Acting Deputy President
10 December 2010
I, MELANIE CURTIN, CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF LORNA MCFEE, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
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