Ballina Shire Council v Knapp - [2018] NSWWCCPD 35

DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
Status: Appeal to the Court of Appeal allowed – Ballina Shire Council v Knapp 2019 NSWCA 146
CITATION:	Ballina Shire Council v Knapp [2018] NSWWCCPD 35
APPELLANT:	Ballina Shire Council
RESPONDENT:	Joshua Knapp
INSURER:	StateCover Mutual Ltd
FILE NUMBER:	A1-5818/17
ARBITRATOR:	Mr R Bell
DATE OF ARBITRATOR’S DECISION:	11 April 2018
DATE OF APPEAL DECISION:	27 August 2018
SUBJECT MATTER OF DECISION:	Section 74 of the Workplace InjuryManagement and Workers Compensation Act1998 – requirement to notify issues in dispute; “serious and wilful misconduct” – s 10(1A) of the Workers Compensation Act 1987 (the 1987 Act); Johnson v Marshall Sons & Co Ltd [1906] AC 409, Sawle v Macadamia Processing Co Pty Ltd [1999] NSWCA 26;18 NSWCCR 109 applied; s 4 of the 1987 Act – “arising out of or in the course of employment”; Higgins v Galibal Pty Ltd t/as Hotel Nikko Darling Harbour (1998) 45 NSWLR 45, Kavanagh v Commonwealth [1960] HCA 25; 103 CLR 547; Henderson v Commissioner for Railways (WA) [1937] HCA 67; Hatzimanolis v ANI Corporation Ltd (1992) HCA 21; 173 CLR 473; Nunan v Cockatoo Docks & Engineering Co Ltd (1941) SR (NSW) considered and applied; “gross misconduct”
PRESIDENTIAL MEMBER:	Deputy President Elizabeth Wood
HEARING:	On the papers
REPRESENTATION:	Appellant:	Haille Paine
Respondent:	Bourke Love Lawyers
ORDERS MADE ON APPEAL:	1. The Certificate of Determination dated 11 April 2018 is confirmed. 2. The matter is remitted to the Arbitrator to deal with the claim for weekly payments.

INTRODUCTION

Mr Knapp brought proceedings for weekly benefits and treatment expenses flowing from a motor vehicle accident on 5 July 2014. Mr Knapp suffered severe injuries and required long term hospital admission and continuing rehabilitation.
Mr Knapp was the “at-fault” driver in the collision with an oncoming vehicle. The two passengers in the oncoming vehicle were fatally injured. The police investigations concluded that the accident occurred because, while driving and just prior to the incident, Mr Knapp had been using his mobile telephone. Mr Knapp had no memory of the accident, but on the basis of mobile telephone records and police crash investigations, he pleaded guilty to charges of dangerous driving causing death.
Mr Knapp alleged that the injuries occurred while he was travelling from his home to the worksite. He asserted that the injury was a personal injury arising out of his employment (s 4 of the Workers Compensation Act 1987 (the 1987 Act)) and that the injury occurred on a journey to which s 10(1) of the 1987 Act applied.
Ballina Shire Council (the Council) disputed the claim for compensation. The issues in dispute were identified in a notice pursuant to s 74 of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act) dated 28 November 2014[1] and a Dispute Review Notice dated 29 December 2017.[2] The issues were:
(a)    whether Mr Knapp suffered injury arising out of or in the course of his employment (s 4(a) of the 1987 Act);
(b)    whether the injuries occurred on a periodic journey (s 10(1) of the 1987 Act) for which there was a real and substantial connection between the employment and the accident (s 10(3A) of the 1987 Act);
(c)    whether Mr Knapp was guilty of gross misconduct, taking him outside the scope of his employment;
(d)    whether the injury was attributable to serious or wilful misconduct (s 10(1A) of the 1987 Act), and
(e)    whether weekly payments and treatment expenses were payable.
[1] Application to Resolve a Dispute (ARD), p 56.
[2] Application to Admit Late Documents (ALD), dated 2 January 2018.
The Arbitrator determined the matter on the basis of written submissions provided by both parties. He found in favour of Mr Knapp and ordered the Council to pay Mr Knapp’s treatment expenses pursuant to s 60 of the 1987 Act, with leave for the parties to apply if any issue as to the weekly payments was unable to be resolved.

BACKGROUND

Mr Knapp was employed by the Council as a plant operator. He usually worked Monday to Friday and would travel to his workplace at Evans Head. At the time of the accident, he was living in a caravan park at Evans Head but was working at Alstonville.
On 5 July 2014, he was scheduled to work overtime as a traffic controller with a different crew at Ballina. Billy Gibson was the supervisor on that crew and had approved his overtime.
On that day, it appears Mr Knapp left his home at about 6 am to travel either to the works depot or to the worksite. Because of the locality of the accident, it is likely that he was travelling directly to the worksite and that he was behind schedule. The speed his vehicle was travelling was estimated to be 111 kilometres per hour, in a 100 kilometres per hour speed zone.
Police investigations disclosed that Mr Knapp lost control of his vehicle, which turned in a sharp right-hand direction across to the other side of the road and into the oncoming vehicle. Mr Knapp was thrown from his vehicle which split into two parts and both vehicles caught fire. The occupants of the oncoming vehicle died before the fire erupted. Mr Knapp was airlifted to the Gold Coast Hospital by Westpac helicopter.
The incident was witnessed by Colin McLeod, a truck driver who had been travelling behind the car hit by Mr Knapp and who narrowly escaped involvement in the incident.

ON THE PAPERS

Section 354(6) of the 1998 Act provides:
“(6) 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 formal hearing.”
Both parties advise that in their view, the matter can be determined on the papers that are before me.
I note Practice Directions Nos 1 and 6; the documents that are before me, and the submissions by the parties that the appeal can proceed to be determined on the basis of these documents. I am satisfied that I have sufficient information to proceed ‘on the papers’ without holding any conference or formal hearing and that this is the appropriate course in the circumstances.

THRESHOLD MATTERS

There is no dispute between the parties that the threshold requirements as to quantum and time pursuant to ss 352(3) and 352(4) of the 1998 Act have been met.

THE EVIDENCE

Mr Knapp

Mr Knapp provided a statement dated 3 November 2017.[3]
[3] ARD, pp 134–144.
Mr Knapp said he commenced work with the Council in February 2003. He described the various duties he performed over the years. From 22 May 2013, he had been slashing grass on the road side or on vacant Council properties. He described his normal route to work and attached a Google map showing that route.
Mr Knapp said that he had volunteered to do overtime on 5 July 2014 with Mr Gibson’s crew. He said on the morning of 5 July 2014 he left home and was travelling to work which he was expected to start at 6.30 am. He thought that he left home shortly before 6.00 am. Mr Knapp said that he could not recall anything about events of that morning as he was suffering from retrograde and post traumatic amnesia. He was aware, however, that he was involved in a motor vehicle accident between 6.15 and 6.30 am.
Mr Knapp commented that if he had been taking his normal route to his usual work, he would not have been travelling on the Pacific Highway between Wardell and Ballina, as he would have turned west at Wardell.
Although Mr Knapp does not remember anything of the incident, he said he knows and profoundly regrets that two people were killed in the incident. He said he was severely injured and was immediately taken to Gold Coast Hospital where he remained until 18 September 2014. He listed the extensive injuries he received.
Following discharge from Gold Coast hospital, he spent three weeks in Ballina Hospital. He was then transferred to the Ballina Hospital Rehabilitation Unit, where he remained until 15 March 2015. He described the ongoing effects of the injury, including that his right arm was amputated in 2016 and that both legs were unstable. He had difficulty walking, negotiating stairs and getting in and out of cars.
Mr Knapp said that in February 2015, he received a Court Attendance Notice to answer two charges of dangerous driving causing death. He pleaded guilty, was sentenced and served 12 months of his sentence in Silverwater gaol, which had a hospital attached.
Mr Knapp acknowledged that the Police facts sheet indicated he had made a telephone call to Mr Gibson (the supervisor) on his work phone at 6.10.42 am that lasted 56 seconds, and a further call lasting three seconds at 6.17.05 am. He assessed that at that time he was approximately 15 minutes from the work site, where he was due to commence work at 6.30 am.
He admitted that his car was not enabled with Bluetooth and that he would have had to look at the telephone to make and end both calls. He also conceded that he would have held the telephone to his ear.
Mr Knapp referred again to the Police facts sheet that the accident was caused by distraction and inattention to the road as a result of using a mobile telephone. He said that he cannot definitely say that was the reason he lost control of the vehicle, but conceded that it was most likely the case.
Mr Knapp said that on 9 October 2017 his solicitor drove him past the accident site, but that this did not prompt his memory.

Mr Gibson

Mr William (Bill) Gibson provided a statement dated 5 September 2014.[4]
[4] ARD, pp 74–79.
At the time of the accident, Mr Gibson was employed as the Roads Construction Foreman at the Council and worked out of the Southern Cross Drive Ballina Depot. He said he knew Mr Knapp as a work colleague, and did not socialise with him other than at work functions.
Mr Gibson said that Mr Knapp worked out of a different depot (the Alstonville Depot), but would be offered overtime with Mr Gibson’s crew when Mr Gibson did not have sufficient workers from his own crew. Mr Gibson said Mr Knapp was a keen and reliable worker, who would generally do traffic control for him but occasionally would drive the road roller.
Mr Gibson confirmed that Mr Knapp was scheduled to work overtime with Mr Gibson’s crew on Saturday 5 July 2014. On that occasion, it was arranged that Mr Knapp would meet Mr Gibson and the other staff at the Southern Cross Drive Depot at 6.30 am.
Mr Gibson also provided a short further statement to Police confirming the above arrangements for Mr Knapp to work overtime that day.[5]
[5] ARD, pp 228–229.
Mr Gibson added that on the morning of 5 July 2014, he arrived at the depot at 6.25 am. He arranged to get the equipment for the day organised. He got into his truck and noticed there were two missed calls from Mr Knapp with no message left. Mr Gibson tried to return Mr Knapp’s calls but the call went straight to the message bank.
Mr Gibson said that by 6.45 am Mr Knapp had not turned up, so he assumed Mr Knapp had slept in and would meet them at the work site. Eventually, as Mr Knapp did not turn up, he made arrangements for another employee to take his place.

Mr Witchard

In a statement dated 1 September 2014,[6] Mr Paul Witchard (Mr Knapp’s immediate supervisor) confirmed that Mr Knapp was employed by the Council to operate plant machinery and that on occasions Mr Knapp would do overtime. He said that there were two possible routes Mr Knapp could have taken to work and that the location of the accident on 5 July 2014 was consistent with one of those routes.

Mr McLeod

[6] ARD, pp 69-73.

Mr McLeod provided a statement which was recorded in hand writing, signed and dated 13 July 2014.[7] He said that on 5 July 2014 he was driving his truck in a southbound direction. The weather was good and the road was dry. The traffic was not heavy. He said he was travelling about two or three truck lengths behind another vehicle and he was travelling at approximately 85 kilometres per hour.
[7] ARD, pp 218–223.
Mr McLeod said that he saw a car coming from the opposite direction until it was about 10 or 15 metres away from the vehicle travelling southbound in front of Mr McLeod. Mr McLeod said that the oncoming car suddenly veered across into the southbound lane and struck the right hand of the front of the vehicle in from of him. Mr McLeod said that it appeared as though the northbound vehicle steered very harshly to the right. The two cars collided and then separated and he managed to avoid them by steering between them. He stopped further up the road where it was safe to do so and rang triple zero.
A typed Police version of the statement was also annexed to the ARD.[8]

Mr Pandelakis

[8] ARD, pp 224–225.

Mr Clint Pandelakis was interviewed by police and signed a statement on 18 May 2015.[9] He said that at about 6.00 am on 5 July 2014, he was driving south on the Pacific Highway near Ballina. He said he did not notice any traffic ahead of him at that time. He could not recall the weather conditions at the time, but thought there may have been very slight drizzle and the road was damp.
[9] ARD pp 226–227.
As he continued south he saw a bright orange flash ahead of him. As he approached, he noticed an injured man on the road who appeared to be alive. He rang triple zero. He said emergency services arrived about five to ten minutes later. He provided his details to a police officer before he left the scene.

Senior Constable Fogarty

Senior Constable Mark Fogarty of the Far North Coast Crash Investigation Unit provided a detailed statement of his investigation into the accident with supporting photographs and documentation.[10]
[10] ARD, pp 156–189.
Senior Constable Fogarty provided details of his training, experience and expertise as a crash investigator.
He said that at about 6.35 am on 5 July 2014, he was travelling to Ballina to commence his rostered shift at the Crash Investigation Unit. He heard a broadcast on the Police radio of a fatal collision approximately 8 kilometres south of Ballina. He travelled directly to the scene, arriving at 6.55 am, at which time a number of paramedics were transferring a person into the Westpac helicopter.
Senior Constable Fogarty described the position of and significant damage to the two vehicles involved in the collision and the state of the two deceased occupants of one of the vehicles. He observed that the tyres on Mr Knapp’s vehicle were in good condition.
Senior Constable Fogarty said that the road consisted of one single lane going north and another southbound. The lanes were divided by clearly marked double white unbroken lines. There were also white fog lines on the edges of the roadway on each side and the road was in good condition. The sign-posted speed limit was 100 kilometres per hour.
Senior Constable Fogarty noticed that further south down the Pacific Highway there were tyre marks, described as “yaw marks”, along the northbound lane and on the western grass shoulder. He explained that “yaw marks” occurred when a vehicle travels too fast for the level of friction between the tyre and the surface, and the vehicle’s wheels commence to rotate, causing the rear tyres to slip sideways and leave arc shaped marks. Senior Constable Fogarty described the position of the debris from the accident which was spread out across the accident site.
From the “yaw marks”, the position of the debris and the location of gouge and scrape marks in the southbound lane, Senior Constable Fogarty was able to conclude that Mr Knapp’s vehicle had been travelling northbound, when the passenger side of his vehicle left the road and went onto the grass shoulder. The vehicle commenced to rotate clockwise over the double white lines into the southbound lane, where the impact with the southbound vehicle occurred.
He said he and Senior Constable Lanyon performed three “skid tests”, which were forwarded to a collision reconstruction analyst for the purpose of estimating the speed Mr Knapp’s vehicle was travelling.
Mr Knapp’s vehicle was conveyed to the Police holding yard where it was inspected and no mechanical defects or component failure had been found.
Senior Constable Fogarty said that Mr Knapp was blood tested and a blood alcohol analysis was performed by Dr Judith Perl of the NSW Police Clinical Forensic Medicine Unit. He said that in her expert certificate report, Dr Perl said that she could not form a firm opinion that any of the drugs detected in Mr Knapp’s system would have affected his driving ability, although it was likely there would have been some impairment due to alcohol. Based on the blood results and on elimination rates, she said that Mr Knapp’s blood alcohol content would have been within the range of 0.036g/100ml and 0.078g/ml, but most likely to have been 0.05g/ml.
Senior Constable Fogarty observed that two of the three drugs found in Mr Knapp’s system were administered by paramedics prior to him being conveyed to hospital.
Senior Constable Fogarty examined the telephone records of both Mr Gibson and Mr Knapp. He noted that there was a 56 second call from Mr Knapp’s work telephone to Mr Gibson’s telephone at 6.10.42 am. A further call was made from Mr Knapp to Mr Gibson at 6.17.05 am.
The NSW Police Computer Aided Dispatch records revealed that a triple zero emergency call was received from Mr Pandelakis at 6.19.41 am and the triple zero emergency call made by Mr McLeod was received at 6.19.42 am.
On the basis of the time Mr McLeod’s phone call was received and the distance Mr McLeod travelled before making the call, Senior Constable Fogarty estimated that the collision occurred between 6.17.09 am and 6.18.04 am.
Senior Constable Fogarty said that the toxicology results from both occupants of the other vehicle returned a negative result for the presence of drugs and alcohol.
Examination of the tyre marks revealed that Mr Knapp’s vehicle was travelling at an estimated speed of at least 111 kilometres per hour at the time of the incident.
On the basis of all of the investigations, Senior Constable Fogarty concluded that the collision most likely occurred as result of Mr Knapp using or being distracted by his mobile telephone. He further concluded that it was not possible to eliminate the effect of alcohol as a potential contributing factor.

The District Court Statement of Agreed Facts

A Statement of Agreed Facts dated 17 June 2016 was handed up in the District Court proceedings which largely accorded with the statements and Senior Constable Fogarty’s investigation.[11] Relevantly it was agreed that:
[11] ARD, pp 152–155.
(a)    the legal speed at the site of the crash was 100 kilometres;
(b)    Mr Knapp was travelling at a minimum speed of 111 kilometres;
(c)    On the day in question, Mr Knapp made two phone calls to Mr Gibson, one at 6.10.42 am and the other at 6.17.05 am;
(d)    The collision occurred between 6.17.09 and 6.18.41 (between four seconds and one minute 37 seconds after Mr Knapp last used his mobile telephone to call Mr Gibson), and
(e)    that the Police case was that Mr Knapp was driving in a dangerous manner in that:
(i)Mr Knapp was distracted by his mobile telephone and was inattentive to the road, and
(ii)Mr Knapp was travelling at least 11 kilometres per hour in excess of the sign-posted speed limit.

Sentencing Judgment

The Council relied on the District Court sentencing judgment of Wells J delivered on 6 October 2016.[12] Her Honour observed that in determining the appropriate sentence, close attention had to be paid to the degree of moral culpability. The matters that needed to be taken into account included the extent and nature of injuries inflicted, the number of people put at risk, and the degree of speed and the length of exposure to the risk.
[12] Reply to ARD (Reply), pp 25–39.
The sentencing Judge said that where the event occurred, the nature of the road and the traffic that could be expected all aggravate the seriousness of the offence. Her Honour noted that there was no suggestion of intoxication or substance abuse, or erratic, aggressive or competitive driving.

She observed that there was a combination of causative factors, namely use of a mobile telephone at high speed and travelling on a major single carriageway highway amid other road users. She concluded that the momentary inattention fell within the middle of the range of moral culpability.[13]
[13] Reply, pp 34–35.
A large bundle of medical evidence was attached to the ARD which detailed the extensive medical treatment provided to Mr Knapp. As those documents are not relevant to the issues on appeal, it is not necessary to discuss their contents.

THE ARBITRATOR’S REASONS

The Arbitrator summarised the issues to be determined as identified in the s 74 notice, reproduced at [4] above. He noted the content of the written submissions.
The Arbitrator firstly dealt with the issue as to whether, at the time of the injury, Mr Knapp was on a periodic journey from his place of abode to his place of employment where there was a real and substantial connection between the accident and the employment (s 10(3A) of the 1987 Act). The Arbitrator reasoned that Mr Knapp was injured because he was using his mobile telephone to contact his work supervisor and so that fact provided the necessary connection to satisfy s 10(3A) of the 1987 Act. He said that it was not necessary to establish a direct causal connection to the employment and referred to the presidential decisions in Namoi Cotton Co-Operative Ltd v Easterman[14] and Dewan Singh and Kim Singh t/as Krambach Service Station v Wickenden[15] (both relied on by Mr Knapp) and Field v Department of Education and Communities,[16] relied on by both parties.
[14] [2015] NSWWCCPD 29.
[15] [2014] NSWWCCPD 13.
[16] [2014] NSWWCCPD 16 (Field).
The Arbitrator added that Mr Knapp was calling on his work phone, provided to him for that purpose. He took into account Mr Knapp’s evidence that even though he did not recall what had happened, the only explanation as to why he was calling his supervisor at that hour was that he intended to tell him he was running late, or would go straight to the work site. Further, there was no reason for him to go to the depot first, as he had all of his gear with him and it was more convenient to have his car at the worksite at the end of the day.
The Arbitrator determined it was highly likely that the two missed calls were for the purpose of advising the supervisor of one of the above explanations. This was particularly so because of the time of the calls and because Mr Gibson and Mr Knapp were not friends but were just work colleagues. The Arbitrator said that the logical inference was that the calls were about work.
The Arbitrator applied the principle in Field, that is the “relatively broad” meaning of real and substantial connection, and concluded that there was a sufficient connection to satisfy s 10(3A) of the 1987 Act.
The Arbitrator then turned to the issue of whether the injury was caused by serious and wilful misconduct pursuant to s 10(1A) of the 1987 Act. He summarised the Council’s submissions as encompassing three elements, namely using a mobile telephone while driving, speeding and the presence of alcohol in Mr Knapp’s bloodstream.
The Arbitrator reviewed the relevant authorities. He said the decision by Deputy President Roche in Karim vPoche Engineering Services Pty Ltd[17] provided a useful guide to the proper application of the section, namely that:
(a)    the onus on proving serious and wilful misconduct rests on the respondent;
(b)    ‘serious and wilful misconduct’ is more than carelessness, negligence or disregard for others;
(c)    where the risk of loss or injury is remote, or if probable, trivial, it will not ordinarily be serious misconduct, and
(d)    the gravity of the conduct is not to be judged by its consequences.[18]
[17] [2013] NSWWCCPD 24 (Karim).
[18] Karim, [12]–[16] .
The Arbitrator also referred to Deputy President Roche’s summary,[19] where the Deputy President quoted from the decision of O’Meally CCJ in Sawle v Macadamia Processing Co Pty Ltd[20] as follows:
“Serious and wilful misconduct is conduct beyond negligence, even beyond culpable or gross negligence. In order to establish serious and wilful misconduct, it must be demonstrated that the person performing an act or suffering an omission knows it will cause risk of injury, or acts in disregard of consideration whether it will cause injury. The word ‘wilful’ connotes that the applicant must have acted deliberately. As it seems to me, in order to establish serious and wilful misconduct, a person accused of it must be shown to have knowledge of the risk of injury and, in the light of that knowledge, proceeded without regard to the risk.”[21]
[19] Karim, [17].
[20] [1999] NSWCC 26; 18 NSWCCR 109 (Sawle).
[21] Sawle, [24].
The Arbitrator referred to Mr Knapp’s submissions that the Council could not raise, for the first time in submissions, that alcohol was a factor in the misconduct. Mr Knapp relied on s 289A(1) of the 1998 Act, which provides that a dispute cannot be referred for determination unless it concerns only matters previously notified as disputed. The Arbitrator said that it was too late to bring the new issue, but noted the exception provided in s 289A(4), that inclusion of a new issue may be permissible if it is in the interests of justice to allow it.
The Arbitrator formed the view that it was not necessary to consider whether it was a new issue because it was not an element that carried any weight in the respondent’s case. The evidence from Dr Perl was limited to that reproduced by Senior Constable Fogarty and in the Arbitrator’s view was “at best inconclusive. It is expressed as a range from below the legal limit to somewhat above that legal limit.”[22] The Arbitrator said that Senior Constable Fogarty formed the view that alcohol was not a factor in the accident and that the District Court sentencing judgment also noted that alcohol was not a causative factor.
[22] Knapp v Ballina Shire Council [2018] NSWWCC 94 (Reasons), [32].
The Arbitrator added that there was no evidence that alcohol was a causative factor to the risk of injury or that Mr Knapp was aware that he had alcohol in his system from the previous night. He said that the authorities require that a worker had knowledge of the risk of injury from the conduct and the Council could not establish that there was serious and wilful misconduct on the part of Mr Knapp by driving with alcohol in his system. The Arbitrator said that:
“There is also no imperative in terms of the interests of justice with the issue of alcohol the respondent raises, and I leave the issue to one side.”[23]
[23] Reasons, [33].
The Arbitrator reiterated that the consequences of the conduct are not a factor to be considered. He noted the submission put by the Council that Mr Knapp’s actions were “deliberate” and that this was the expression used by the District Court in the sentencing matter. The Arbitrator considered however that the term used for the purpose of criminal conduct is different to how it should be used in the jurisdiction of the Commission. Applying Sawle and Karim, he said that the term “deliberate” refers to an act by a person aware of the risk of injury but who proceeds regardless of the risk.
The Arbitrator reviewed the facts in Karim, and took into account the observation of Deputy President Roche that it would be a nonsense to suggest that a motorcyclist riding a powerful motorcycle at twice the speed limit in a suburban street would not be aware of the risk of serious injury. The Arbitrator also considered the facts in Levin v Moulhis,[24] which involved a taxi driver who was injured by speeding through a red traffic light despite having the opportunity to stop. Judge Conybeare found that the injury was solely attributable to his serious and wilful misconduct.
[24] [1965] WCR 177 (Levin).
The Arbitrator said that in the context of the above authorities, the word “deliberate” meant that beyond the performance of the act there had to be knowledge of the risk and a conscious decision to proceed regardless of the risk.
The Arbitrator compared the facts of Karim to Mr Knapp’s conduct and concluded that the action of speeding at 11 kilometres above the limit and using a mobile phone did not reach the standard of serious and wilful misconduct. He said there was no evidence that Mr Knapp was aware of the speed he was travelling, or that he comprehended any risk attached to travelling at that speed and using his mobile phone.
The Arbitrator referred to the judge’s comment in the sentencing matter that use of mobile phones while driving is a well-known issue for driver safety, however the penalty was similar to many other driving offences. He said it was not possible for the Council to establish Mr Knapp was conscious of the risk and then deliberately ignored it. The Arbitrator considered that the facts of this case could not be compared to Karim or Levin, but were more akin to Thomas v Shelley & Sons Cordial Factory Pty Ltd,[25] where the worker double parked his car and was injured while alighting from the vehicle.
[25] [1965] WCR 104.
Referring to Sawle, the Arbitrator observed that the conduct must be beyond culpable or gross negligence. The injured worker must be shown to have had knowledge of the risk and in the light of that knowledge, proceeded to exceed the speed limit while using a mobile telephone without regard to the risk.
The Arbitrator said that Mr Knapp may well have not given thought to the risk attached to driving “slightly over the speed limit”[26] while using his mobile telephone. He said the evidence did not establish misconduct beyond negligence, culpable negligence or gross negligence and the Council had not discharged the onus of proof.
[26] Reasons, [44].
The Arbitrator then turned to the issue of whether Mr Knapp was guilty of gross misconduct, sufficient to take him outside the course of his employment. The Council maintained that the conduct of speeding, running late, consuming alcohol in the hours beforehand and using his mobile telephone was independent of Mr Knapp’s contract of employment and constituted gross misconduct.
Noting the Council relied on Hatzimanolis v ANI Corporation Ltd,[27] the Arbitrator extracted from the judgment the following passage:
“regard must always be had to the general nature, terms and circumstances of the employment ‘and not merely to the circumstances of the particular occasion out of which the injury to the employee has arisen’.”[28]
[27] [1992] HCA 21;173 CLR 473 (Hatzimanolis).
[28] Hatzimanolis, [16].
The Arbitrator further noted Mr Knapp’s submission that whether “gross misconduct” took Mr Knapp out of the course of his employment is a question of fact, relying on WorkCover Authority (NSW) v Whaling.[29] He took into account the submissions that the telephone calls could only have been made in relation to work related matters and the journey was for the purposes of attending work. Mr Knapp submitted that even though the conduct was illegal, that was insufficient to take him out of the course of his employment, relying on Vinidex Pty Ltd v Campbell.[30]
[29] (1998) 16 NSWCCR 527.
[30] [2012] NSWWCCPD 6 (Campbell).
The Arbitrator discussed the facts in Campbell, which involved an injury occurring while colleagues in a factory were skylarking by riding over the factory floor on a plastic board towed by a forklift. He noted the conclusion reached was that despite the fact that the behaviour constituted serious and wilful misconduct and/or gross misconduct, the conduct did not take the worker outside the course of his employment.
Relying on Hatzimanolis and Campbell, the Arbitrator determined that having considered that the consumption of alcohol was not a component of the conduct, the actions of using his mobile telephone and speeding were not sufficient to take Mr Knapp outside his employment because:
(a)    it was necessary for Mr Knapp to travel to the depot or worksite;
(b)    the telephone used on the day of injury was issued by the Council, and
(c)    contact with the supervisor was for work purposes.
The Arbitrator further determined that those actions did not constitute gross misconduct for the same reasons he gave that they did not constitute serious and wilful misconduct under s 10(1A) of the 1987 Act. He said that it bore no comparison with the conduct in Campbell, or in Dew v Maher,[31] where the worker was injured while performing a prank with explosives designed to frighten the passengers of a motor vehicle.
[31] (1996) 14 NSWCCR 56.
The Arbitrator concluded that Mr Knapp suffered a personal injury in the course of his employment pursuant to ss 4(a) and 10(1) of the 1987 Act. He further concluded that the entitlement to weekly compensation and treatment expenses pursuant to s 60 of the 1987 Act flowed as a matter of course from the above conclusions.
The Arbitrator summarised his findings as follows:[32]
(a)    Mr Knapp suffered injuries arising out of or in the course of his employment on 5 July 2014;
(b)    Mr Knapp suffered personal injuries whilst on a periodic journey to work on 5 July 2014 within s 10(1) (and s 4(a)) of the 1987 Act and for which there was a real and substantial connection between his employment and the accident out of which the personal injuries arose;
(c) Mr Knapp’s injury was not attributable to serious and wilful misconduct within s 10(1A) of the 1987 Act;
(d)    Mr Knapp was not guilty of gross misconduct taking him outside the scope or course of his employment;
(e)    Mr Knapp is entitled to the benefit of the weekly compensation provisions of the Acts from 5 July 2014 to date. These are to be dealt with by way of further conciliation and/or arbitration if required, and
(f) Mr Knapp is entitled to s 60 of the 1987 Act expenses for the compensable injury.
[32] Reasons, [57]–[62].
The Certificate of Determination issued on 11 April 2018 records:
“1. Respondent to pay the applicant’s s 60 of the Workers Compensation Act 1987 expenses on production of accounts/receipts/Medicare Notice of Charge.
2. Leave to the parties to apply within 28 days in regard to capacity and the applicable weekly compensation rates should agreement not be reached.”

GROUNDS OF APPEAL

The Council alleges six grounds of appeal as follows:
(a)    Ground 1: The Arbitrator erred by failing to take account, or adequate account, of the totality of the worker’s conduct that resulted in the accident;
(b)    Ground 2: The Arbitrator erred by failing to allow the Council to raise alcohol consumption as an issue;
(c)    Ground 3: The Arbitrator erred by misunderstanding the relevance of consumption of alcohol;
(d)    Ground 4: The Arbitrator erred in the application of the relevant authorities to the facts in this case;
(e)    Ground 5: The Arbitrator erred in finding the injury was not attributable to gross misconduct and in relying on the same grounds advanced in respect of serious and wilful misconduct to find that the injury was a personal injury within the meaning of s 4(a) of the 1987 Act, and
(f) Ground 6: The Arbitrator erred in finding that Mr Knapp was entitled to treatment expenses pursuant to s 60 of the 1987 Act.

LEGISLATION

Section 4 of the 1987 Act provides:
“Definition of ‘injury’ (cf former s 6 (1))
In this Act:
injury
(a)     means personal injury arising out of or in the course of employment,
(b)     includes a disease injury, which means:
(i) a disease that is contracted by a worker in the course of employment but only if the employment was the main contributing factor to contracting the disease, and
(ii) the aggravation, acceleration, exacerbation or deterioration in the course of employment of any disease, but only if the employment was the main contributing factor to the aggravation, acceleration, exacerbation or deterioration of the disease, and
(c)     does not include (except in the case of a worker employed in or about a mine) a dust disease, as defined by the Workers' Compensation (Dust Diseases) Act 1942, or the aggravation, acceleration, exacerbation or deterioration of a dust disease, as so defined.”
Section 10 of the 1987 Act relevantly provides:
“Journey claims (cf former s 7 (1) (b)-(d), (f), (g))
(1)     A personal injury received by a worker on any journey to which this section applies is, for the purposes of this Act, an injury arising out of or in the course of employment, and compensation is payable accordingly.
(1A) Subsection (1) does not apply if the personal injury is attributable to the serious and wilful misconduct of the worker.
(1B) A personal injury received by a worker is to be taken to be attributable to the serious and wilful misconduct of the worker if the worker was at the time under the influence of alcohol or other drug (within the meaning of the Road Transport Act 2013), unless the alcohol or other drug did not contribute in any way to the injury or was not consumed or taken voluntarily.
(1D) Subsection (1) does not apply if the personal injury resulted from the medical or other condition of the worker and the journey did not cause or contribute to the injury.
(2)     Subsection (1) does not apply if:
(a) the injury was received during or after any interruption of, or deviation from, any such journey, and
(b) the interruption or deviation was made for a reason unconnected with the worker's employment or the purpose of the journey,
unless, in the circumstances of the case, the risk of injury was not materially increased because of the interruption or deviation.
(3)     The journeys to which this section applies are as follows:
(a) the daily or other periodic journeys between the worker's place of abode and place of employment,
…
(3A) A journey referred to in subsection (3) to or from the worker's place of abode is a journey to which this section applies only if there is a real and substantial connection between the employment and the accident or incident out of which the personal injury arose.
…”
Section 74 of the 1998 Act relevantly provides:
“Insurers to give notice and reasons when liability disputed
(1) If an insurer disputes liability in respect of a claim or any aspect of a claim, the insurer must give notice of the dispute to the claimant.
(2) The notice must contain the following:
(a) a concise and readily understandable statement of the reason the insurer disputes liability and of the issues relevant to the decision (indicating, in the case of a claim for compensation, any provision of the workers compensation legislation on which the insurer relies to dispute liability),
(b) such other information as the regulations may prescribe.
…”
Section 289A of the 1998 act provides:
“Further restrictions as to when a dispute can be referred to Commission
(1)     A dispute cannot be referred for determination by the Commission unless it concerns only matters previously notified as disputed.
(2)     A matter is taken to have been previously notified as disputed if:
(a) it was notified in a notice of dispute under this Act or the 1987 Act after a claim was made or a claim was reviewed, or
(b) it concerns matters, raised in writing between the parties before the dispute is referred to the Registrar for determination by the Commission, concerning an offer of settlement of a claim for lump sum compensation.
(3)     The Commission may not hear or otherwise deal with any dispute if this section provides that the dispute cannot be referred for determination by the Commission. However, the Commission may hear or otherwise deal with a matter subsequently arising out of such a dispute.
(4)     Despite subsection (3), a dispute relating to previously unnotified matters may be heard or otherwise dealt with by the Commission if the Commission is of the opinion that it is in the interests of justice to do so.”

SUBMISSIONS

The Council’s submissions

In this Appeal, the Council does not contest the Arbitrator’s finding that there was a real and substantial connection between the accident and the employment.

The Council acknowledged that it bore the onus of establishing that the conduct was serious and wilful misconduct and that the conduct requires more than mere negligence or the mere disregard of others. The Council further acknowledged that the authorities establish that:
(a)    the conduct must be more than a spur of the moment, thoughtless act;
(b)    it is insufficient if the risk of injury was unlikely, or if likely, trivial, and
(c)    the gravity of the act cannot be judged by its consequence.
The Council submitted that Mr Knapp relied on his own illegal conduct to satisfy s 10(1) of the 1987 Act, which enlivened s 10(1A).
Further, the test in s 10(1A) (whether the injury is attributable to the serious and wilful misconduct) is a lesser test than that required by s 14(2), which requires the injury to be “solely attributable to” the conduct.

Ground 1: The Arbitrator erred by failing to take account, or adequate account, of the totality of the worker’s conduct that resulted in the accident

The Council alleges that the Arbitrator failed to consider the totality of Mr Knapp’s conduct which was (as it submitted in the proceedings before the Arbitrator):
(a)    manually using a mobile telephone which required using one hand to hold the telephone and the other to periodically dial the number;
(b)    taking his eyes off the road to do so;
(c)    driving over the speed limit while driving with one hand; speeding on a narrow highway in damp conditions, and
(d)    possible impairment in driving due to ingestion of alcohol the previous evening.
The Council asserts that the totality of that conduct constitutes serious and wilful misconduct.

Ground 2: The Arbitrator erred by failing to allow the Council to raise alcohol consumption as an issue

The Council acknowledges that the insurer is required to put a worker on notice of the issues in dispute and the reasons for denying liability.
It submits however, that it is not necessary to recite every allegation of fact it relies on in support of the issues or reasons given.
The Council further submits that the requirements of s 74 of the 1998 Act should be read in a less restrictive way as the Court of Appeal considered in Wilkinson v Perisher Blue Pty Ltd[33] in relation to the construction of s 318 of the 1998 Act.
[33] [2012] NSWCA 250 (Wilkinson), [214] and [219].
In any event, the Council contends, the notice issued pursuant to s 74 of the 1998 Act comprehensively states the matters in dispute, the reasons for disputing liability, and the documents taken into account by the decision maker.
The Council maintains that the Arbitrator erred in finding the issues of serious and wilful misconduct and gross misconduct were not squarely raised in the s 74 notice. The Arbitrator ought to have allowed the evidence of Mr Knapp’s alcohol consumption.

Ground 3: The Arbitrator erred by misunderstanding the relevance of consumption of alcohol

The Council contends that the evidence of the alcohol consumption the evening before the accident was one of the factors relevant to Mr Knapp’s conduct.
The Council says that the Arbitrator erred in relying on the sentencing judge’s finding that alcohol was not a relevant factor. The error is said to be because the consumption of alcohol was not included in the agreed facts handed up to her Honour, even though the police had evidence of some alcohol content in Mr Knapp’s blood.
The Council submits that even if that factor was not of itself causative of the accident, it was part of the totality of the conduct.

Ground 4: The Arbitrator erred in the application of the relevant authorities to the facts in this case

The Council says that the established authorities dealing with journey claims and serious and wilful misconduct are old and no longer reflect public standards.
The Council relies on an extract from the decision of Geraghty CCJ in Schinnerl v Commissioner of Police,[34] wherein his Honour observed:
“Different ages and cultures approve different standards of conduct, condemn different acts of misconduct. What was once judged foul language is now chic, even compulsory on the ABC. What Oscar Wilde was imprisoned for is now protected by legislation. ‘Gross misconduct’ is a movable feast, though some acts remain grossly inappropriate - selling illegal drugs, accepting bribes, assaulting a member of the public, for example.”
[34] (1995) 11 NSWCCR 278.
As an example, the Council cites a 1967 Compensation Court decision of Read vYellow Express Carriers[35], where Conybeare J concluded that the injured worker, who drank three schooners of beer within a little over two hours, was not affected by alcohol when he was injured while driving home afterwards.
[35] [1967] 41 WCR 95 (Read).
The Council relies on the following passage:
“The evidence plainly shows that the applicant was unaffected by his drinking that evening and when he arrived at the street intersection, he looked to his left rather than his right … The applicant has failed to show any reasons other than his own default for the accident.”[36]
[36] Read, p 97.
The Council contends that “[t]he judgment suggests an extraordinary proposition by today’s standards, that had the worker in fact been drunk, the Court may have accepted that the accident was not the worker’s own default.”[37]
[37] The Council’s submissions on appeal, [30].
The Council refers to Mr Knapp’s sentence hearing and the remarks made by Wells J that:
“[Mr Knapp] must be sentenced though with respect to the objective seriousness and his moral culpability which can still be high even where someone does not intend what occurred…the Courts need to impose sentences that would deter other people from acting in the way that this offender has acted … The Government goes to great lengths in advertising campaigns regarding the dangers of engaging in distracting behaviour whilst driving a vehicle, in particular the use of mobile phones. It is all too prevalent, and as indicated, far too dangerous to be doing it along the Pacific Highway in the circumstances in which this offender did [emphasis added].”[38]
[38] 2015/00001359 R v Joshua Benjamin Knapp Sentence (Sentence), pp 13–14; Reply pp 37–38.
The Council submits that the Arbitrator erred in equating the conduct of using a mobile telephone to double parking or breaking other road rules. It submits that in applying contemporary standards, the worker must have been aware of the risk of injury and proceeded to act without regard to the risk. The Council further refers to the remarks of Wells J that the act of using the mobile telephone was not momentary and was a deliberate act.[39]

Ground 5: The Arbitrator erred finding the injury was not attributable to gross misconduct and in relying on the same grounds advanced in respect of serious and wilful misconduct to find that the injury was a personal injury within the meaning of s 4(a) of the 1987 Act

[39] Sentence, pp 11–12.

The Council asserts that if Mr Knapp is guilty of gross misconduct, that is sufficient to take him outside the course of his employment. It relies on Hatzimanolis as authority for that proposition.
The Council submits that Mr Knapp’s conduct was independent of the Council. There was no evidence that the Council directed or encouraged him to speed, drink alcohol in the hours before attending work, or use a mobile telephone without pulling over. The Council did not encourage him to leave insufficient time to arrive at work by the start time.
The Council maintains that the whole of the conduct should be taken into account, and relies on its submission made with respect to the previous grounds of appeal as supportive of Mr Knapp being guilty of gross misconduct.

Ground 6: The Arbitrator erred in finding that Mr Knapp was entitled to treatment expenses pursuant to s 60 of the 1987 Act

The Council submits that should the appeal succeed on either the ground of serious and wilful misconduct or gross misconduct, the Arbitrator’s order in respect of s 60 expenses should be set aside.
The Council submits that the appeal should be allowed, the Arbitrator’s decision ought to be revoked and an award in the Council’s favour entered in lieu of that decision.

Mr Knapp’s submissions

Mr Knapp submits that the appeal identifies no error of fact, law or discretion.

As to Ground 1 - the totality of the conduct

Mr Knapp refers to the Arbitrator’s summary of the facts and submits that the Arbitrator analysed the facts. He gave as examples the Arbitrator’s discussion of the evidence of the police expert, Senior Constable Fogarty (whose conclusion was that the accident occurred because of driver distraction), the remarks from the sentencing judge, and the connection between the phone calls and Mr Knapp’s employment.
Mr Knapp contends that the Arbitrator dealt with all of the elements of the alleged misconduct.

As to Grounds 2 and 4 - alcohol consumption

Mr Knapp advises that his submissions on the two grounds are dealt with together because that is the manner in which the Arbitrator dealt with them.
He submits that at no point in the notice dated 29 December 2017 issued pursuant to s 74 of the 1998 Act was there any issue raised as to Mr Knapp’s alcohol consumption.
Mr Knapp submits that it is relevant that the notice was issued after proceedings had been commenced and a Reply filed, so that the Council was aware of the case it had to meet. The only conduct raised in the notice was the use of the mobile telephone and travelling at a speed in excess of the speed limit.
Mr Knapp relies on Mateus v Zodune Pty Ltd t/as Tempo Cleaning Services[40] as authority for the proposition that the notice issued pursuant to s 74 must state in plain language the reasons given for disputing liability and the issues relevant to the dispute. He submits that if speed and use of the mobile telephone were given as reasons for raising the issue of serious and wilful misconduct, then alcohol ought also to have been raised.
[40] [2007] NSWWCCPD 227; 6 DDCR 488 (Mateus).
Mr Knapp submits that the failure to allow the Council to rely on alcohol consumption is “probably” an issue of discretion. He says that the Council made no submissions as to the discretionary factors that would work in its favour at first instance, and has not explained how the exercise of that discretion miscarried.
Mr Knapp further submits that the Arbitrator did, in any event, deal with the issue in a “hypothetical sense” by finding that there was a paucity of evidence that Mr Knapp’s driving was impaired by the consumption of alcohol. Mr Knapp says that there was no certainty as to the blood alcohol concentration and there was no evidence (expert or otherwise) to support a safe conclusion that at the relevant time his ability to drive was affected by alcohol.
Further, there was no evidence adduced from Mr Knapp as to his consumption of alcohol and its effects on his driving and no application to cross examine him about those matters was made.

Ground 3 (wrongly stated in the submissions as ground 4) - application of authorities

Mr Knapp submits that the Council asserts the Arbitrator erred in his application of the authorities by equating the use of mobile phones to “double parking” and breaking other road rules. He contends that when read in context and as a whole, the Arbitrator did not equate the conduct to those matters, but said the conduct was more commensurate with such offences than with Karim or Levin.
Further, Mr Knapp submits that nothing turns on whether he made one or two phone calls. Neither was answered and that fact does not raise or lower the degree of wilfulness or of whether the conduct was deliberate.

Ground 5 - gross misconduct

Mr Knapp submits that the points raised in respect of this ground do not raise an argument that the Arbitrator has erred in the application of Hatzimanolis. Mr Knapp repeats his submission made at first instance (which the Arbitrator adopted), Mr Knapp contends that the submission that the conduct was independent of the employment ignores the requirement in Hatzimanolis that “regard must always be had to the general nature, terms and circumstances of the employment”.
Mr Knapp says that none of the four elements identified by the Council take Mr Knapp outside of the course of his employment.
Mr Knapp concludes that the Arbitrator correctly analysed and dealt with the Council’s arguments in a logical manner.

Ground 6 - s 60 expenses

Mr Knapp contends that the Council has identified no error in the order to pay treatment expenses pursuant to s 60, but instead identifies what would flow from a successful appeal.
In summary, Mr Knapp submits that the appeal should be dismissed and the Arbitrator’s decision affirmed.

The Council’s submissions in reply

In reply to Mr Knapp’s submissions, the Council submits that the failure to allow it to rely on alcohol consumption was not a discretionary issue. It submits that the notice issued pursuant to s 74 raised the issue of serious and wilful misconduct within the meaning of s 10(1A) of the 1987 Act.
The Council says that Mr Knapp did not raise s 10(1B) of the 1987 Act and that on the evidence Mr Knapp could not do so because his own evidence supported that his driving was impaired. The Council refers to the evidence of Senior Constable Fogarty who discussed the evidence of Dr Judith Perl. Dr Perl’s opinion (extracted by Senior Constable Fogarty from her report) was that “it is likely there would have been some impairment due to alcohol.”
The Council acknowledges that the evidence was insufficient to establish a breach of the drink driving legislation, but says it is relevant for the purposes of s 10(1A) of the 1987 Act.
The Council maintains that the Arbitrator erred in dismissing its submissions.

DISCUSSION

It is convenient to deal with Ground 2 before proceeding to determine the remaining grounds, which to some degree are dependent on whether the Council can rely on its submissions in respect of alcohol as a factor to be considered.

Ground 2: The Arbitrator erred by failing to allow the Council to raise alcohol consumption as an issue

The Council contends that the notice issued by it pursuant to s 74 of the 1998 Act comprehensively states the matters which are in dispute and the reasons it has for disputing liability.
The Council’s written submissions provided to the Arbitrator assert the following facts:
(a)    it was dark when the accident occurred and there was no street lighting;
(b)    there was evidence that Mr Knapp may have had a blood alcohol concentration of between .03mg per 100 ml and .078mg per 100 ml, with most likely being .05mg per 100 ml, leading to some impairment in his ability to drive at the time of the accident;
(c)    the Police Reconstruction Analyst assessed that Mr Knapp had been driving at a speed of between 111 and 120 kilometres per hour in a 100 kilometre zone at the time of the accident;
(d)    there was a slight bend in the road, the road was narrow and it was damp, and
(e)    Mr Knapp, who did not have Bluetooth in his car, was using his mobile telephone.
The Council described what Mr Knapp would have been required to do to make the call while driving. There was no evidence to support that description, which may or may not be correct, as to the manner in which the call was made. I note however that Mr Knapp conceded that as he did not have a Bluetooth facility, he would have held the telephone to his ear with one hand.
The Council submitted to the Arbitrator that all of those facts together constituted the serious misconduct, which was wilful. The wilfulness was emphasised because Mr Knapp chose to make two telephone calls.
The Arbitrator summarised the Council’s case as consisting of an allegation that three elements constituted the serious and wilful misconduct – speed, using the mobile telephone and having alcohol in his system. The Arbitrator accepted Mr Knapp’s submission that the issue of alcohol had not been raised in the notice issued pursuant to s 74 of the 1998 Act, or at any stage prior to submissions. Referring to s 289A(1) of the 1998 Act, and the authorities relied on by Mr Knapp,[41] he determined that it was “too late to raise this issue”.[42]
[41] Mateus; Department of Corrective Services v Bowditch [2007] NSWWCCPD 244; 6 DDCR 174; Irvin v LA Logistics Pty Ltd [2010] NSWWCCPD 40.
[42] Reasons, [29]–[30].
The Arbitrator noted s 289A(4) of the 1998 Act provided for an exception to the exclusion of an issue if it were in the interests of justice. He considered the evidence contained in the statement of Senior Constable Fogarty, which included extracts from Dr Perl’s blood alcohol analysis. The Arbitrator formed the view that the evidence was inconclusive, as it was expressed as a range from below the legal limit to above that limit. He observed that Senior Constable Fogarty and the District Court did not consider alcohol to be a factor. He concluded that there was no probative evidence that alcohol was a factor and also that there was no evidence Mr Knapp had knowledge that he had alcohol in his system at the time. He said that the lack of knowledge negated the “deliberate” or “wilful” component of serious and wilful misconduct. It was also not in the interests of justice to allow the late issue.
An Insurer does not satisfy the obligations imposed upon it by s 74 of the 1998 Act by leaving the worker to work out exactly what issues are raised and disputed. It is immaterial that documents may have been attached to the s 74 notice that go to the issue.[43]
[43] Mateus, [45].
The first s 74 notice (dated 28 November 2014)[44] issued by the insurer disputed liability on the basis that it formed the view that there was no real and substantial connection between the employment and the injury (s 10(3A) of the 1998 Act). The Insurer issued a second notice dated 29 December 2017 which was filed with the Commission under an Application to Admit Late Documents dated 2 January 2018. That notice raised for the first time the issue that the injury was alleged to be attributable to serious and wilful misconduct pursuant to s 10(1A) of the 1987 Act, and gross misconduct that took Mr Knapp out of the course of his employment.
[44] ARD, pp 56–58.
The reasons provided for the dispute were that the Police facts sheet, the Statement of Agreed Facts tendered in the District Court proceedings and the sentencing remarks of Wells J all concluded that the accident occurred because Mr Knapp used his mobile telephone while driving in excess of the speed limit. The insurer concluded that “those actions together” amounted to gross misconduct or, in the alternative, that Mr Knapp’s actions in driving in excess of the speed limit, on a single lane carriageway, and deliberately using his mobile telephone amounted to serious and wilful misconduct.
Alcohol consumption, and the effect it may have had on Mr Knapp’s driving ability was not raised at all in either of the notices. Had it been raised, no doubt it would have alerted Mr Knapp to consider his position with respect to the sufficiency of the evidence and whether it would have been prudent to at least obtain the full report of Dr Perl to examine her conclusions. He may have thought it necessary to put those conclusions to his own expert. The purpose of the requirement to give notice of issues and reasons for doing so is to address the injustice of raising a matter without the opportunity for the worker to respond. This is the same injustice about which Mr Knapp complains.
I do not accept that the insurer’s notice squarely raised all issues that Mr Knapp needed to address. In those circumstances, it is incumbent upon the Council to satisfy the Commission that it is in the interests of justice to allow the late issue (alcohol consumption) to be raised (s 289A(4) of the 1998 Act). To allow the issue to be raised is an exercise of discretion. As set out in Mateus, the relevant factors to be taken into account in the exercise of the discretion are:
“(a)    the degree of difficulty or complexity to which the unnotified issues give rise;
(b)    when the insurer notified that it wished to contest any unnotified issue/s;
(c)    the degree to which the insurer has otherwise fulfilled its statutory obligation to notify the worker of its decision disputing liability;
(d)    any prejudice that may be occasioned to the worker, and
(e)    any other relevant matters arising from the particular circumstances of the case.”[45]
[45] Mateus, [38].

Deputy President Roche added that the following matters should also be considered:
“(a)   a decision by an insurer to dispute a claim for compensation should not be made lightly or without proper and careful consideration of the factual and legal issues involved;
(b)    any insurer seeking to dispute an unnotified matter is seeking to have a discretion exercised in its favour and, accordingly, must act promptly to bring the matter to the attention of the Commission and all other parties;
(c)    any unreasonable or unexplained delay in giving notice of an unnotified matter will be relevant to the exercise of the discretion;
(d)    in exercising its discretion, the Commission may have regard to the merit and substance of the issue that is sought to be raised;
(e)    in assessing prejudice to the worker, it will be significant to consider when and in what circumstances the worker was first made aware of the unnotified issue that is sought to be raised;
(f)    though it will be relevant to the exercise of the discretion to keep in mind that the Commission must act according to equity, good conscience and the substantial merits of the case, those matters will not be determinative, and
(g)    the general conduct of the parties in the proceedings will also be relevant to the exercise of the discretion. (emphasis in original)”[46]
[46] Mateus, [48].
Despite Mr Knapp’s (undated) submissions directed to the Arbitrator that the Council’s notice pursuant to s 74 did not raise alcohol consumption, the Council made no attempt to respond to that point or defend its position. The Council made no submissions to the Arbitrator (or in this appeal) as to why the discretion ought to be exercised in its favour in the event that s 289A of the 1998 Act prevented the Council from raising the issue in its primary submissions.
The Council was content to let the matter proceed to determination, with a COD being issued on 11 April 2018, some three weeks later.
I do not accept that Wilkinson provides any assistance to the Council. It involved a different section of the 1998 Act (s 318) and is a provision relating to claims for work injury damages. The purpose of the provision is distinct from the requirements that an insurer has to meet to properly inform a worker of the reasons for disputing liability.
Applying the principles in Mateus, the Council provided no explanation for the delay in notifying the issue, Mr Knapp would clearly have been prejudiced if the issue was allowed to be raised and there is little evidence to support the argument that alcohol was, on the balance of probabilities, a factor contributing to the accident, It was appropriate for the consumption of alcohol to be excluded in the consideration of Mr Knapp’s conduct. In the circumstances, the Council has not identified any error on behalf of the Arbitrator in the exercise of his discretion to exclude the consumption of alcohol as a factor in his consideration of Mr Knapp’s conduct. This ground of appeal fails.

Ground 1: The Arbitrator erred by failing to take account, or adequate account, of the totality of the worker’s conduct that resulted in the accident

The Council contends that the Arbitrator erred by not looking at the totality of the conduct, that included using one hand to hold the telephone, which meant he only had one hand on the steering wheel. At the same time, he was exceeding the speed limit by at least 11 kilometres per hour, which indicated he was travelling at a total speed of at least 111 kilometres per hour while driving around a slight bend in the road, with one hand, and being distracted by using a hand held mobile telephone.
The Council also asserts that the road was narrow and damp and Mr Knapp’s driving ability was possibly impaired by alcohol.
Senior Constable Fogarty described the section of the highway as being a single lane highway with no structural divider. The only separation between the north bound and south bound cars was the double white line painted on the road.
The witness evidence that the road was damp was equivocal. Mr McLeod had been travelling immediately behind the southbound car involved in the collision. He provided a contemporaneous statement to Police, observing that the road was dry and in good condition. Mr Pandelakis, who arrived at the scene shortly after the vehicles caught fire, provided a statement ten months after the event. He said that he could not remember the weather details at the time, but there may have been some light rain and the road was wet.
Senior Constable Fogarty observed that the road was in good condition. Given Senior Constable Fogarty’s thorough investigation and report of the crash scene, it might be expected that he would have added to his observations that the road was damp, if that was in fact the case. He made no such observation and he did not include the road conditions as a relevant factor in the cause of the accident.
It is not open to conclude that the road was damp. It is not a factor to consider in respect of Mr Knapp’s conduct. The effect, if any, of the blood alcohol content has also been excluded as a factor. Although the Arbitrator has failed to consider the submission that the road was damp, it has not affected his conclusion and cannot amount to error.
It is apparent, however from his reasons that the Arbitrator has not appreciated the Council’s submission that the whole of the conduct should be considered. The Council submitted that the context in which the injury occurred was relevant. That is, the risk of the injury occurring was set in circumstances where Mr Knapp was travelling at speed, on a single lane highway without a dividing structure, at the same time as using a hand held mobile telephone. Those factors were clearly set out in the second notice issued pursuant to s 74 and were matters raised by the Council in its submissions.
In his consideration, the Arbitrator summarised Mr Knapp’s conduct as “[u]sing a mobile phone while driving slightly above the speed limit”.[47] While the Arbitrator noted the evidence before him, I do not accept Mr Knapp’s submission that the Arbitrator analysed and dealt with all the elements of the conduct. The entirety of the speed at which Mr Knapp was travelling was relevant, not just that he was “slightly” over the speed limit. Mr Knapp was using his mobile telephone, that by his own admission required him to take one hand off the wheel at the same time as being distracted by the use of his telephone.[48] These are material facts that the Arbitrator was required to take into account in making his evaluative judgment as to whether Mr Knapp’s behaviour constituted serious and wilful misconduct.
[47] Reasons, [42].
[48] Mr Knapp’s statement, ARD p 140, [64].
As Barwick CJ said in Edwards v Noble:[49]
“In any appeal against a finding of fact, whether or not by way of rehearing, however much the appellate court may be in an equal position with the trial judge as to the drawing of inferences, in my opinion, the appellate court ought not to reverse the finding of fact unless it is convinced that it is wrong. If that finding is a view reasonably open on the evidence, it is not enough in my opinion to warrant its reversal that the appellate court would not have been prepared on that evidence to make the same finding. Merely differing views do not establish that either view is wrong. But in deciding that its own view is right and that of the primary judge wrong, the nature of the ‘fact’ found by the primary judge is a matter for consideration.” [50] (emphasis added)
[49] [1971] HCA 54; 125 CLR (Edwards v Noble).
[50] Edwards v Noble, [17].
The Arbitrator gave no explanation as to why he considered only the facts of driving “slightly” above the speed limit and using his mobile telephone in making his findings. He failed to take into account factual matters that were put to him in submissions and were facts in evidence before him – that is, that Mr Knapp was travelling at a relatively high speed, on a two-way carriageway without barriers and, while making a telephone call, took one hand off the wheel. The Arbitrator was required to take those matters into account and in failing to do so has fallen into error in making his evaluative judgment of the conduct.[51]
[51] Northern NSW Local Health Network v Heggie [2013] NSWCA 255; 12 DDCR 95, [171].
As this ground of appeal established error on the part of the Arbitrator, the Arbitrator’s findings are revoked. It is not necessary, therefore to consider the remaining grounds of appeal. Where an Arbitrator’s findings are revoked, it is generally desirable that the Presidential member hearing the appeal re-determine all issues.[52] In the interests of a timely resolution, it is appropriate for me to re-determine the matter.
[52] Chubb Security Australia Pty Ltd v Trevarrow [2004] NSWCA 344; 5 DDCR 1.

CONSIDERATION

For the reasons expressed by me at [141]–[156] in relation to the issue as to the contribution of Mr Knapp’s alcohol consumption, the allegation made by the Council that the effect of alcohol consumption was a component of Mr Knapp’s conduct is excluded from consideration.
It is also noted that on this appeal, the Council concedes that there was a real and substantial connection between Mr Knapp’s employment and his injuries in accordance with s 10(3A) of the 1987 Act. On appeal, there is no issue that Mr Knapp’s injury arose out of or in the course of his employment. The dispute is whether Mr Knapp’s conduct constituted serious and wilful misconduct pursuant to s 10(1A) of the 1987 Act, or the conduct constituted gross misconduct, taking him outside the course of his employment.
There is no dispute about Mr Knapp’s culpability for the collision, which arose as a result of his conduct and caused the extensive injuries for which Mr Knapp seeks compensation. The Council did not seek to rely on s 14(2) of the 1987 Act. Section 14(2) provides that if the injury suffered is solely as a result of serious and wilful misconduct, compensation is not payable, unless the injury has resulted in death or serious and permanent disablement. Given the extent of Mr Knapp’s injuries, it is appropriate that no reliance has been placed on the disentitling provision of s 14(2) of the 1987 Act.
Therefore, the following issues require determination:
(a)    the identification of the actions constituting the conduct that resulted in the injury;
(b) whether that conduct constituted serious and wilful misconduct pursuant to s 10(1A) of the 1987 Act so as to disentitle Mr Knapp to benefits pursuant to s 10(1) of that Act;
(c)    in the alternative, whether Mr Knapp suffered a personal injury either arising out of or in the course of his employment, and if so,
(d)    whether the conduct was gross misconduct, taking him out of the course of his employment.

What constituted the conduct?

The facts in this case establish that on the date of injury, Mr Knapp was travelling to work and was running behind schedule. He was scheduled to work Saturday overtime with a different road crew and was scheduled to commence at 6.30 am.
The Police investigation established that he was driving at between 111 kilometres per hour and 120 kilometres per hour at the time of the incident (at least 11 kilometres over the sign-posted speed limit), and it was not yet daylight. The road on which Mr Knapp was travelling was the Pacific Highway and he was heading in a northerly direction. The accident occurred at a location where the road curved slightly to the right. There was no structural divider between the north bound and south bound lanes, which were both single lanes.
Immediately prior to losing control of his vehicle, Mr Knapp was using a hand held mobile telephone. Mr Knapp’s car collided with the oncoming vehicle.
The Police evidence established that prior to the impact, the motor vehicle driven by Mr Knapp had no structural or mechanical defects. The conclusion reached by the Police Crash Investigator, Senior Constable Fogarty, was that:
“[the] collision most likely occurred as a result of driver distraction on behalf of [Mr Knapp] due to use of or distraction by his mobile work telephone. Affectation due to the consumption of alcohol on behalf of [Mr Knapp] can also not be eliminated as a possible contributing factor to the circumstances of the collision occurring.”[53]
[53] Senior Constable Fogarty’s statement, ARD p 186, [85].
For the reasons discussed above, the allegation that alcohol consumption made a “possible” contribution has been excluded as an issue in these proceedings.
On the evidence before me, the fact that it was not yet daylight is immaterial. There is no evidence that it played a part in the sequence of events that lead to the collision.
I accept the Council’s submissions that the conduct must be looked at in its entirety. That includes the circumstances in which the accident occurred, particularly the road on which Mr Knapp was travelling and the speed of his vehicle. The entirety of the conduct includes each of those factors.

Did the conduct constitute serious and wilful misconduct?

The phrase “serious and wilful misconduct” comprehends more than negligence, carelessness, or the mere disregard of orders.[54] The person performing the act must:
(a)    know that it will cause injury, or
(b)    act with disregard as to whether it will cause injury, and
(c)    proceed in any event without regard to the risk.[55]
[54] Johnson v Marshall Sons & Co Ltd [1906] AC 409 (Johnson); Higginsv Galibal Pty Ltd t/as Hotel Nikko Darling Harbour (1998) 45 NSWLR 45 (Higgins)
[55] Sawle, [24].
Not every breach of a law or rule by a worker would necessarily be regarded as serious misconduct. As Lord Atchison observed in Johnson, the word “serious” must mean:
“… at least that where the risk of loss or injury resulting to any person or thing from the doing of any particular act is very remote, or where that loss or injury, even if probable, would be trivial in its nature and character, the doing of that act, however wilful, would not amount to ‘serious misconduct’ within the meaning of this statute, unless indeed the indirect influence of the act done on the discipline of the factory is to make every transgression serious.”[56]
[56] Johnson, [416]–[417].
The serious nature of Mr Knapp’s conduct is reflected in the description of the driving as “dangerous” driving in the criminal charges that were laid against him. While those charges encompass the consequences of the conduct (death or grievous bodily harm), which are not to be considered here, the legal descriptor is relevant to the manner in which Mr Knapp was driving when the collision occurred. As Wells J said:
“The driving in a manner dangerous element of the offence is due to the distraction and inattention that was caused by his use of the mobile phone in combination with the excessive speed …” [57]
[57] Sentence; Reply, p 27.
The fact that the distraction and inattention occurred while Mr Knapp was speeding on a main highway where there was oncoming traffic is, as Wells J said in her sentencing remarks:
“quite different from a situation of driving done on a quiet country road at low speed where there was expected to be no or very little traffic … [Mr Knapp was] travelling very fast and potentially dangerously in the circumstances where there were ... expected to be a number of other vehicles also … It is particularly relevant to take that speed into account, even though it was not much over the limit … the road itself being a single lane busy highway where the margin for error, if a driver is not paying attention is negligible.”[58]
[58] Sentence; Reply, p 34.
The risk of injury flowing from Mr Knapp’s conduct in those circumstances was at least probable and on any view likely to cause significant injury.
The Council submits that the seriousness of the conduct should be considered according to contemporary social standards and I accept that proposition. What may have been seen as the accepted norm decades ago is now regarded as a serious offence, such as failure to wear seatbelts, absence of child restraints and the use of mobile telephones while driving. It can fairly be said that using a hand held mobile telephone while travelling at speed and over the speed limit is by current standards, a serious matter.
Through police advertising campaigns, the risk of injury from both speeding and from using a hand-held telephone is well publicised and must be regarded as “common knowledge”. As a road user and licensed driver, the risk of injury must have been apparent to Mr Knapp, or at least he must have proceeded to act without regard as to whether it would cause injury. To determine otherwise would be contrary to current awareness of road safety.
It is unlikely in the extreme, and contrary to the evidence, that Mr Knapp had inadvertently or accidentally used his mobile telephone while driving at speed. Mr Knapp relies on the two attempted telephone calls to satisfy the requirement in s 10(3A) of the 1987 Act, that there was a real and substantial connection between the injury and his employment. Mr Knapp, as an experienced driver, would also have been aware of the risk of injury if speeding and proceeded to speed without regard to that risk. The deliberate nature of his conduct was not challenged by him in the sentencing proceedings.
Mr Knapp had the choice to pull off the road at a convenient place in order to make the call to his supervisor. He chose not to do so. Mr Knapp made a conscious (deliberate) decision to use his mobile telephone while driving at speed and over the speed limit and ignored the risk of serious injury. The inference drawn from the facts is that Mr Knapp’s actions constitute wilful misconduct.
I am satisfied that Mr Knapp’s actions constituted serious and wilful misconduct in accordance with s 10(1A) of the 1987 Act. By virtue of that section, Mr Knapp is disentitled to the benefits of s 10(1) of the 1987 Act.

Did Mr Knapp suffer a personal injury arising out of or in the course of his employment?

Mr Knapp’s written submissions to the Arbitrator contended that the fact that Mr Knapp made the telephone calls to his employer for work purposes clearly satisfied “the causal rather than the temporal limb of s 4”.[59] That is, the injury arose out of the employment, rather than in the course of employment.
[59] Mr Knapp’s undated submission, [42].
In its submissions to the Arbitrator with respect to s 4, the Council sought to rely on its submissions going to the issue as to whether there was a real and substantial connection with employment. That is, that there was “little evidence” to support a finding that the telephone calls pertained to work related matters.
The Council did not raise an issue or make any submission to the Arbitrator in relation to whether employment was a substantial contributing factor to the injury pursuant to s 9A of the 1987 Act. The Council added that Mr Knapp’s conduct amounted to gross misconduct, which took him out of the course of his employment.
The issue raised by the Council is that the conduct took Mr Knapp out of the course of his employment. That position assumes that but for his conduct, he was in the course of his employment in the first place.
The Council asserts Hatzimanolis is authority for the proposition that if the worker is guilty of gross misconduct, it is sufficient to take him outside of the course of his employment. I do not accept that submission.
In Higgins, Priestley JA observed:
“The reason why Hatzimanolis is cited in ‘course of employment’ cases such as the present is the reference made in the joint reasons to ‘gross misconduct’ as taking the worker out of what would otherwise be ‘the course of employment.’ The passage in the joint reasons (at 484) commencing ‘Moreover, Oliver and the cases …’ … has at times been used to justify the submission that gross misconduct will always take a worker out of the course of employment. I do not think the passage supports such a submission, for the reasons explained by the Court of Appeal of the Northern Territory in Tiver Constructions Pty Ltd v Clair (at 247) … with which I respectfully agree.
An example of the way in which the idea of ‘gross misconduct’… works in cases involving s 9 but not s 14 is Dew v Maher. In that case the respondent worker was, in the view of Cole JA (at 64) with whom the other members of the court agreed, injured in the course of his employment, ‘subject to the consequence of gross misconduct’. Cole JA considered (at 65) the various factual aspects of the employment in that case before concluding that the worker’s injury was suffered in the course of his employment whilst engaged in an activity incidental to it. However, because the worker’s injury-connected conduct (the making of a bomb) was, in Cole JA’s view, gross misconduct, that gross misconduct took the worker out of the course of employment in which he otherwise was.”[60]
[60] Higgins, p 54.

Following the approach taken in Higgins and the cases referred to within that authority, it is incorrect to say that if someone is guilty of gross misconduct, they cannot be in the course of employment. The proper approach is to first determine whether the worker suffered a personal injury arising out of or in the course of his employment. If it is alleged that the worker’s conduct constituted gross misconduct, then an evaluative assessment of that notion is required before a consideration of whether the gross misconduct was of such a nature that it took the worker out of the course of his employment.
The notion of “gross misconduct” does not appear in the New South Wales workers compensation legislation. As Priestley JA said in Higgins, the idea of gross misconduct is a “judicial gloss” and not a statutory concept.[61]
[61] Higgins, p 54.
The issue raised by the Council begins with an assumption that Mr Knapp was in the course of his employment when he suffered injury, rather than the injury having arisen out of the employment. The phrases “in the course of employment” and “arising out of employment” are distinct concepts.
In Kavanagh v Commonwealth[62] Dixon J observed:
“Repeatedly the contrast had been made between the effect of the words ‘out of’ and the effect of the words ‘in the course of’. Whatever language was chosen to institute the contrast the first expression was treated as requiring a causal connexion between the employment or its incidents and the second as requiring that the pursuit of the employment should be an accompanying condition. I have seen nothing to suggest that within the expression ‘in the course of the employment’ there had been discovered any element of causal relation with the employment and its incidents. To prescribe that element was considered to be the work of the words ‘arising out of’.”
[62] [1960] HCA 25; 103 CLR 547, [9].
The distinction between the concepts of s 4 of the 1987 Act was further discussed in Tarry v Warringah Shire Council[63] where the equivalent provision of the Workers’ Compensation Act1926 was considered. Justice of Appeal Samuels observed:
“I agree with what my brothers have said. As my brother Glass has indicated, the argument presented by Mr Adrian Cook for the employer in support of the learned Commissioner’s conclusions tends to obscure the distinction which exists between the two ingredients contained in the definition of ‘injury’ in s 6(1) of the Act. The first, that is, the concept of arising out of, plainly involves the notion of causality, but the second does not. This has been clearly pointed out by Fullagar, J in Kavanagh’s Case, 103 CLR at 558. Hence it is only the second which requires the necessity that the injury should occur while the worker was engaged in his employment or in something incidental to it. Accordingly, it cannot be right to determine matters which arise under the first leg of the definition by debating questions of the scope of employment. The question which we have to determine is to be answered by enquiring whether there was a causal connection between the employment and the injury.”
[63] [1974] WCR (NSW) 1 (Tarry).
The first task, therefore, is to determine the basis of the connection to Mr Knapp’s employment.
For the injury to have occurred in the course of employment, what is required is that the worker was doing something that he or she was reasonably required, expected or authorised to do in order to carry out his or her duties.[64] If the injury occurs during an interval or interlude between an overall period of work, it will be within the course of employment if, expressly or impliedly, the worker was induced or encouraged to spend that time at the particular place or in a particular way.[65]
[64] Henderson v Commissioner of Railways (WA) [1937] HCA 67.
[65] Hatzimanolis.
In Comcare v PVYW,[66] the High Court added:
“The starting point in applying what was said inHatzimanolis, in order to determine whether an injury was suffered in the course of employment, is the factual finding that an employee suffered injury, but not whilst engaged in actual work. The next enquiry is what the employee was doing when injured. For the principle inHatzimanolisto apply, the employee must have been either engaged in an activity or present at a place when the injury occurred. The essential enquiry is then: how was the injury brought about? In some cases, the injury will have occurred at and by reference to the place. More commonly, it will have occurred while the employee was engaged in an activity. It is only if and when one of those circumstances is present that the question arising from theHatzimanolis principle becomes relevant. When an activity was engaged in at the time of injury, the question is: did the employer induce or encourage the employee to engage in that activity? When injury occurs at and by reference to a place, the question is: did the employer induce or encourage the employee to be there? If the answer to the relevant question is affirmative, then the injury will have occurred in the course of employment.”
[66] [2013] HCA 41, 303 ALR 1, per French CJ, Hayne, Crennan and Kiefel JJ, [38].
The phrase “arising out of employment” requires a causal connection with the employment. Causation is a question of fact and requires consideration of whether the particular job caused or to some extent materially contributed to the injury.[67] It is sufficient to have arisen out of the employment if it is established that the fact of being employed in the particular job caused, or contributed to the injury.[68]
[67] Nunan v Cockatoo Docks & Engineering Co Ltd (1941) SR (NSW) 119.
[68] Badawi v Nexon Asia Pacific Pty Ltd t/as Commander Aust Pty Ltd [2009] NSWCA 324.
Before consideration of the effect of Mr Knapp’s conduct on his entitlements, it is convenient to review the facts in some of the authorities dealing with “arising out of employment”.
In Davis v Mobil Oil Australia Ltd,[69] the Court of Appeal held that a worker who refused a direction by his supervisor suffered injury arising out of his employment because the argument that ensued involved work related matters.
[69] (1988) 12 NSWLR 10; 4 NSWCCR 8.
In Kassim v Busways Blacktown Pty Ltd[70] Judge Neilson of the Compensation Court of New South Wales held that the injury did not occur in the course of employment because the worker had taken himself out of his employment when he assaulted a passenger. The injury did, however, arise out of his employment because the provocation from the passenger arose out of the relationship of bus driver and passenger.
[70] [2003] NSWCC 6; 25 NSWCCR 450.
In Tarry, even though the worker had taken himself out of his employment by engaging in a physical fight, the injury was considered to have arisen out of his employment because it was about work matters. Hutley JA said:
“It does not follow that the injury did not arise out of the employment because in the course of what he was doing the deceased was doing acts which were not in accordance with his duties as a foreman. It is, of course, misconduct in a foreman to settle matters of responsibility by engaging in fisticuffs with a man under him. That, however, has really nothing to do with the question.
The facts proved and established by his Honour show that the injury from which he died was directly and unbrokenly connected with his employment …” [71]
[71] Tarry, p 6.
Mr Knapp was running late for work, was speeding, and attempted to make two telephone calls on his work telephone for work purposes. The connection between Mr Knapp’s injuries and his employment were succinctly summarised by the Arbitrator as:
(a)    Mr Knapp was required to travel to the depot or worksite;
(b)    he had been issued with a mobile telephone, and
(c)    the calls were made on that telephone, and the calls were for work purposes.[72]
[72] Reasons, [51].
Those factors establish a causal, rather than a temporal connection with employment. It cannot be said that Mr Knapp’s injuries resulting from his actions in making the two phone calls occurred in the course of his employment.
Mr Knapp’s injuries arose out of his employment as there was a direct causal link with his employment. He had no other reason to telephone his employer, he was using his work telephone and the only available inference is that the calls were to discuss employment matters.
It is clear from the above authorities that if the injury arose out of employment the misconduct is irrelevant, even when the misconduct is such that it takes the worker outside of the course of his employment.

CONCLUSION

For all of the above reasons, I am clearly satisfied that Mr Knapp’s conduct was both serious and wilful, and that he was aware his conduct carried a risk of serious injury in accordance with s 10(1A) of the 1987 Act. I am further satisfied that Mr Knapp’s injuries were attributable to that conduct. Accordingly, compensation pursuant to s 10(1) of the 1987 Act is not payable.
I am not satisfied that Mr Knapp was in the course of his employment when the injury occurred. Even if he were, and his conduct took him outside the course of his employment, that does not operate to break the clear causal connection (sufficient to satisfy the test of “arising out of”) between the injuries and his employment.
I am satisfied that Mr Knapp’s injuries arose out of his employment pursuant to s 4(a) of the 1987 Act.
For the above reasons, therefore, Mr Knapp’s injuries are compensable and the Certificate of Determination is confirmed.

ORDERS

The Certificate of Determination dated 11 April 2018 is confirmed.
The matter is remitted to the Arbitrator to deal with the claim for weekly payments.

Elizabeth Wood

Deputy President

27 August 2018