Cowra Jockey Club v Murphy
[2013] NSWWCCPD 20
•17 April 2013
| WORKERS COMPENSATION COMMISSION | ||||||
| DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR | ||||||
| CITATION: | Cowra Jockey Club v Murphy [2013] NSWWCCPD 20 | |||||
| APPELLANT: | Cowra Jockey Club | |||||
| RESPONDENT: | Michael Murphy | |||||
| INSURER: | Racing NSW | |||||
| FILE NUMBER: | A1-4395/11 | |||||
| ARBITRATOR: | Ms E Grotte | |||||
| DATE OF ARBITRATOR’S DECISION: | 28 August 2012 | |||||
| DATE OF APPEAL HEARING: | 2 April 2013 | |||||
| DATE OF APPEAL DECISION: | 17 April 2013 | |||||
| SUBJECT MATTER OF DECISION: | Procedural fairness; cross-examination; termination of cross-examination after leave granted to cross-examine; application of principles in Aluminium Louvres & Ceilings Pty Ltd v Zheng [2006] NSWCA 34; 4 DDCR 358; calculation of current weekly wage rate and average weekly earnings for a deemed worker; ss 42 and 43 of the Workers Compensation Act 1987; cl 9 of Sch 1 to the Workplace Injury Management and Workers Compensation Act 1998 | |||||
| PRESIDENTIAL MEMBER: | Deputy President Bill Roche | |||||
| HEARING: | Oral | |||||
| REPRESENTATION: | Appellant: | Mr G J Parker SC, instructed by TurksLegal | ||||
| Respondent: | Mr F Austin, instructed by Gerard Malouf & Partners | |||||
ORDERS MADE ON APPEAL: | 1. Save for paragraph 6 of the determination of 28 August 2012, which certified the matter as complex and is confirmed, the determination is revoked and the matter is remitted to a different Arbitrator for re-determination. 2. Each party is to pay his or its own costs of the appeal. Costs of the first arbitration, and of the second arbitration, are to follow the result of the second arbitration. | |||||
INTRODUCTION
The main issues in this appeal are whether the Senior Arbitrator erred in terminating cross-examination of the worker, having previously given leave for cross-examination, and in calculating the worker’s average weekly earnings by reference to the award for a trainer under the Horse and Greyhound Award 2010 (the Horse and Greyhound Award).
BACKGROUND
The respondent worker, Michael Murphy, has worked as a self-employed horse trainer since April 2002. He has alleged that he injured his back in three separate circumstances. The first incident is alleged to have occurred on 22 October 2006, when a horse he was riding at Cowra Racecourse bucked violently. The second incident occurred on 18 March 2007, when a horse he was riding into the Cowra Racecourse threw itself to the ground, causing him to jump off. Third, and in the alternative, the worker alleged that he injured his back as a result of his general work as a horse trainer at Cowra Racecourse between 22 October 2006 and 18 March 2007.
The claim is against the appellant, Cowra Jockey Club (the Club), on the basis that, at the time of the alleged incidents, Mr Murphy was engaged in riding work in connection with horse racing on the Club’s racecourse. If that is correct, Mr Murphy was deemed to be a worker employed by the Club under cl 9(1)(c) of Sch 1 to the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act).
Mr Murphy ceased work in April 2007. The Club’s insurer, Racing NSW, initially accepted liability for the 18 March 2007 incident, but has always denied liability for the other incidents. It declined liability for the 18 March 2007 incident by notice dated 31 May 2007, on the ground that Mr Murphy had not established any incapacity had resulted from that incident. It has never been disputed that, at the time of the March 2007 incident, Mr Murphy was a deemed worker under cl 9 of Sch 1 to the 1998 Act.
Mr Murphy filed an Application to Resolve a Dispute (the Application) in the Commission on 30 May 2011 claiming weekly compensation from 1 May 2007 to date and continuing, unspecified hospital and medical expenses, and lump sum compensation in respect of the whole person impairment due to his back injuries.
The Club disputed Mr Murphy’s entitlement to compensation on the ground that he had recovered from the effects of the March 2007 incident and that he had not suffered any injury in October 2006 or due to his general work as a horse trainer at the Cowra Racecourse. It also disputed that Mr Murphy suffered any wage loss as a result of his alleged injuries.
Save for a two-page transcript for the arbitration on 25 August 2011, there is no transcript of any of the other proceedings before the Senior Arbitrator. As a result, I have taken the following history from the statement filed by the Club’s solicitor, Ms Fletcher, reports of the outcome of the conciliation/arbitrations prepared by the Senior Arbitrator, and letters from the Club’s counsel, Mr Mansfield, to TurksLegal, all of which I have admitted by consent as additional evidence on appeal.
At a teleconference on 4 July 2011, the respondent accepted liability for the claim for lump sum compensation resulting from the March 2007 injury, but the parties could not agree on the quantum of that compensation. It was agreed that the respondent’s solicitors, TurksLegal, could issue a Notice to Produce on Mr Murphy for production of documents relating to his claim for weekly compensation and his pre and post-injury earnings.
TurksLegal served a Notice to Produce on Mr Murphy by letter dated 7 July 2011. On 11 July 2011, they received a letter from him, in which he acknowledged that he had received the Notice to Produce and $30 conduct money, and added, among other things, that his accountant would be sending an invoice. It is not known if his accountant sent an invoice, but it is agreed that no documents were produced.
The matter was first listed for conciliation and arbitration on 25 August 2011. Mr Austin appeared for Mr Murphy and Mr Mansfield appeared for the Club. The matter could not be resolved and the arbitration commenced. The transcript reveals that the Senior Arbitrator granted Mr Mansfield leave to cross-examine Mr Murphy “in respect of the claim for dependants” (T1.48). There was then a brief discussion about award rates and the Senior Arbitrator adjourned the matter to 1 November 2011.
In a document headed “CON/ARB OUTCOME” dated 25 August 2011, the Senior Arbitrator recorded, among other things, that “[a]fter a short period it appeared that there was a problem with instructions and a difference of opinion emerged between the worker and his legal representatives”. It seems that Mr Murphy wanted his legal advisers to tender evidence of a federal award for trainers, which the Club opposed. The Senior Arbitrator proposed that the matter be adjourned until 1 November 2011 to enable those matters to be “attended to formally”.
Neither party served any further evidence between 25 August 2011 and 1 November 2011. On 1 November 2011, Mr Austin handed to Mr Mansfield a written statement from Mr Murphy, in which he asserted that his three children were dependent on him, and sought to rely on a federal award, which had not been served. Mr Mansfield objected to both documents.
During the conciliation stage of the proceedings on 1 November 2011, Mr Murphy apparently interrupted Mr Mansfield’s attempts to outline the Club’s case. In her “CON/ARB OUTCOME” dated 1 November 2011, the Senior Arbitrator said that the matter could not continue because “the applicant is very disruptive and difficult to manage because of serious psychological problems”.
Following discussions with the parties, and over objection by Mr Mansfield, the Senior Arbitrator determined that the best way to progress the matter was to allow Mr Murphy to put on a further statement, for the Club to respond to it, and then list the matter for a teleconference. She recorded that Mr Mansfield wanted to cross-examine Mr Murphy on the dependency claim and his wages claim; that Mr Murphy claimed that his probable earnings should be calculated on the basis of payment for each horse (about $9,000 per week); and that Mr Austin submitted the Horse and Greyhound Award should apply.
The Senior Arbitrator made the following directions on 1 November 2011:
(a) Mr Murphy was granted leave to file and serve a further statement on dependency and his probable earnings by 15 November 2011;
(b) the Club was granted leave to file and serve any material in reply by 29 November 2011, and
(c) the matter was listed for teleconference on 13 December 2011, when the Club was to indicate if it still wished to cross-examine Mr Murphy and, if so, in respect of which issues, and a decision would be made as to whether to proceed by written submissions.
On 21 November 2011, Mr Murphy’s solicitors filed an Application to Admit Late Documents to which was attached a statement from Mr Murphy dated 16 November 2011 dealing with dependency and his probable earnings but for his injury. That statement asserted that he generally trained 11 horses a day and that, at $121.20 per horse per day (as per information from the Australian Trainers Association), he was entitled to $9,332.40 per week.
At the teleconference on 13 December 2011, the Senior Arbitrator gave leave to the Club to issue a Notice to Produce on H & R Block Cowra, Mr Murphy’s accountants, and listed the matter for conciliation and arbitration on 22 February 2012. Ms Fletcher has stated that she informed the Senior Arbitrator that the Club wished to cross-examine Mr Murphy about his earnings, pointing out the Mr Murphy’s statement alleged earnings of $9,000 (per week) but his tax returns showed no earnings. She also raised the fact that there were outstanding criminal proceedings against Mr Murphy in respect of alleged trespass on racecourses, with the prospect that he might be banned from attending racecourses in NSW.
Ms Fletcher issued a direction on H & R Block Cowra, but no documents were produced in response. Mr Murphy’s solicitors advised by letter that there were no additional documents to be produced.
In respect of the third conciliation and arbitration, on 22 February 2012, Ms Fletcher said that the Senior Arbitrator gave the Club’s counsel leave to cross-examine and it was her understanding that that leave extended to cross-examination on “the issues of injury and wage loss”. Though she was not present at the start of the arbitration, she “attended once the [Senior] Arbitrator determined that the arbitration portion could not proceed as the respondent worker could not be controlled under cross-examination and was being non-responsive to questions”. Ms Fletcher said the Senior Arbitrator advised that the matter was to proceed with written submissions.
The Senior Arbitrator’s “Con/Arb OUTCOME” form for this arbitration records that Mr Murphy was a “difficult person to manage and it was agreed that the way to proceed was by way of written submissions”. In addition, Mr Murphy had been “warned off” all racecourses in NSW and his appeal against that decision was to be heard by the Racing Appeal Board the next day (23 February 2012). The Senior Arbitrator set a timetable for the service of clinical notes from Dr Maclaren (presumably a treating doctor), any further evidence from Mr Murphy in respect of his appeal to the Racing Appeal Board, and submissions from both sides. She also referred the permanent impairment claim in respect of the March 2007 injury to the Registrar for referral to an Approved Medical Specialist (AMS).
An AMS issued a Medical Assessment Certificate (MAC) on 20 March 2012 assessing Mr Murphy to have 12 per cent whole person impairment. After purporting to deduct one-quarter under s 323 of the 1998 Act, the AMS certified Mr Murphy to have nine per cent whole person impairment due to the injury on 18 March 2007. It has been suggested that the arithmetic is incorrect and that a one-quarter deduction should have given a net impairment of eight per cent. I do not know if the MAC has been amended and an award entered, and this needs to be addressed.
On 28 August 2012, the Senior Arbitrator delivered a decision in which she found in favour of Mr Murphy on all issues. She found Mr Murphy to be totally unfit from 1 May 2007 to 26 May 2007 and partially unfit from 27 May 2009 to date and continuing.
In respect of Mr Murphy’s earnings, the Senior Arbitrator rejected Mr Murphy’s claim that, as a trainer, he would have earned $9,332.40 per week but for his injury, which was inconsistent with his assertion in his statement of 18 February 2010 that he had been earning $55,000 per annum, which in turn was not supported by his tax records, which indicated that his business ran at a loss.
The other evidence of his earnings was a letter dated 21 May 2007 from Pam Cooper, office manager with H & R Block, to Racing NSW, in which Ms Cooper said that, at Mr Murphy’s request, she had “extracted from his books of account his Gross Income for the period 1 April 2006 to 31 March 2007”, which was $44,353.22 ($852.95 per week). Mr Murphy’s counsel also relied on, as an alternative submission, cl 13.1 of the Horse and Greyhound Award, which revealed an award rate of $698.20 per week as at 1 January 2010 and $748.80 per week as at 1 July 2011.
The Senior Arbitrator said (at [111]) that, given the lack of certainty as to Mr Murphy’s average weekly earnings at the time of injury, she was satisfied that, having regard to ss 42(1)(d) and 42(8) of the Workers Compensation Act 1987 (the 1987 Act), the “correct approach and best measure of assessing” his average weekly earnings was by “drawing on some comparable employment such as a trainer whose wages were determined pursuant to the Horse and Greyhound Award. (It should be noted that all the Senior Arbitrator’s references, and all the references in this decision, to the 1987 Act are to the terms of that Act prior to the amendments made by the Workers Compensation Legislation Amendment Act 2012 (the Amending Act)).
The award for weekly compensation is in four periods. The first, from 1 May 2007 to 30 October 2007, was compensated under s 36 on the basis that Mr Murphy’s current weekly wage rate was 80 per cent of $698.20 ($558.56). The second, from 1 November 2007 to 26 May 2009, was compensated under s 37, which was calculated to be the lower of either 90 per cent of Mr Murphy’s average weekly earnings ($628.38), or the maximum statutory rate for a worker with a wife and three dependent children. Accepting that his wife and three children were dependent on him, and that the statutory rate in those circumstances was higher than $628.38, the Senior Arbitrator awarded the lower figure of $628.38.
The next two periods were calculated under s 40. The Senior Arbitrator found Mr Murphy’s ability to earn but for the injuries to be the amounts set out in the Horse and Greyhound Award and that his ability to earn was $250 per week. She saw no reason to exercise her discretion to award less than the difference between those two figures.
The Commission issued a Certificate of Determination on 28 August 2012 in the following terms:
“1. Award in favour of the applicant in respect of his claim for weekly benefits compensation as follows:
(a) $558.56 per week pursuant to section 36 from 1 May 2007 to 30 October 2007;
(b) $628.38 per week pursuant to section 37 from 1 November 2007 to
26 May 2009;(c) $448.20 per week pursuant to section 40 from 27 May 2009 to
31 December 2010, and(d) $498.80 per week pursuant to section 40 from 1 January 2011 to date and continuing.
2. The respondent to pay the applicant’s medical and treatment expenses pursuant to section 60 upon production of accounts and/or receipts.
3. The claim for permanent impairment is remitted to the Registrar for referral to an Approved Medical Specialist for assessment whole person impairment in respect of the lumbar spine resulting from injury to the lumbar spine on 22 October 2006 and 18 March 2007.
4. The following documentation is to be included in the material to go to the Approved Medical Specialist:
(a)The documents attached to the Application to Resolve a Dispute and the Reply, and
(b)The applicant’s statement attached to an Application to Admit Late Documents dated 21 November 2011.
5. The respondent to pay the applicant’s costs as agreed or as assessed.
6. I am satisfied that this matter ought to be certified complex in accordance with Schedule 6, Item 4 of the Workers Compensation Regulation 2010 because of complex medical and factual matters, in particuar pertaining to the worker’s earnings. I so certify. I am satisfied that an uplift of 30 per cent is justified, applicable to the costs of both the applicant’s and respondent’s solicitors.
A statement is attached to this determination setting out the Commission’s reasons for the determination.”
The Club has appealed and challenged the whole of the determination.
ISSUES IN DISPUTE ON APPEAL
The issues identified in the amended application filed on14 March 2013 were whether the Senior Arbitrator erred in:
(a) having agreed to allow cross-examination, reversing that decision because of Mr Murphy’s “truculent” failure to cooperate denied the Club procedural fairness (denial of procedural fairness);
(b) applying ss 42(1)(d) and 43 of the 1987 Act, as there was no evidence upon which to calculate Mr Murphy’s weekly earnings and in the calculation of Mr Murphy’s average weekly earnings such that the conclusion as to weekly benefits was erroneous (weekly compensation);
(c) reversing the onus of proof (onus of proof);
(d) accepting Mr Murphy’s evidence when there was no logical or proper basis to do so (accepting Mr Murphy’s evidence);
(e) concluding that Mr Murphy was engaged in riding work in connection with horse racing on the racecourse at the time of his alleged injury “on 22 March 2006 [sic, 22 October 2006]”, and
(f) assimilating riding work in connection with horse racing to track work riding.
Counsel for the Club on appeal, Mr G Parker SC, who did not appear in any of the proceedings before the Senior Arbitrator, did not press grounds (e) and (f) at the oral hearing of the appeal.
References to the transcript below are to the transcript of the oral hearing of the appeal.
PROCEDURAL FAIRNESS
Authorities on cross-examination in the Commission
The seminal authority on cross-examination in the Commission is the judgment of Bryson JA (Handley JA and Bell J agreeing) in Aluminium Louvres & Ceilings Pty Ltd v Zheng [2006] NSWCA 34; 4 DDCR 358 (Zheng). The background facts in Zheng are instructive as to the approach the Commission is to take when a party complains, as the Club has in the present matter, that cross-examination has been unfairly curtailed.
Mr Zheng arrived at work at about 6.50 am (his normal starting time being 7.00 am), turned on the compressor located just outside the factory and walked through the open roller door into the factory. He said he was approached by another employee (Mr Bui) who struck him over the head with a piece of aluminium egg crate. Mr Bui’s version was that he asked Mr Zheng if he could take a piece of egg crate home. Mr Zheng did not reply and allegedly spat in his face. Mr Bui said he instinctively raised his hand and struck Mr Zheng in the head with the piece of aluminium. Mr Zheng swung a bag at him and Mr Bui struck him again.
Bryson JA said (at [10]) that unless Mr Zheng’s account was completely disbelieved, the conclusion that his injury arose out of or in the course of his employment appeared “inevitable”, noting that Mr Zheng had already turned on the compressor before entering the factory, and that Mr Bui had already started work. Therefore, subject to the alleged spitting, the fact that the injury occurred before the ordinary starting time had “only the most nominal part in the question whether the injury arose out of or in the course of the employment, and could not reasonably be seen as a demonstration that the injury was not one arising out of or in the course of Mr Zheng’s employment”.
The best information (noting that, like the present case, there was no transcript of the proceedings before the Arbitrator) was that Mr Zheng was cross-examined for 35 minutes, after which the Arbitrator declined to allow cross-examination to continue.
The Arbitrator found that there was no clear evidence that Mr Zheng provoked the attack or that his conduct disentitled him to claim that his work was a “significant contributing factor” to the injury. The employer’s appeal to a Presidential member was unsuccessful and it appealed to the Court of Appeal, arguing that the Presidential member should have remitted the matter to the Arbitrator with a direction that Mr Zheng’s evidence be taken without the limits on cross-examination the Arbitrator imposed.
The employer argued that it had not been accorded natural justice because cross-examination of Mr Zheng had been limited and the solicitor appearing for it had not been in a position to deal fully with Mr Zheng’s statements. It was submitted that cross-examination would have given an opportunity to explore Mr Zheng’s version, confront him with any internal anomalies and with asserted states of fact which differed from what he said, and “establish factual anomalies which had a bearing on his credit” (at [16]).
The employer claimed that it was never allowed to put its factual basis forward and gave the following subjects with which cross-examination of Mr Zheng could have dealt:
(a) prior to starting work Mr Zheng had spat in another employee’s face unprovoked;
(b) the real cause of the injury was that Mr Zheng spat in Mr Bui’s face and it should be concluded that the employment was not a substantial contributing factor to the injury, and
(c) there was serious and wilful misconduct.
Bryson JA noted that when a claim is made that natural justice had not been accorded, regard must be paid to the legal context in which the decision-maker operates and to the law regulating the conduct of the proceedings. His Honour than set out s 354 of the 1998 Act, which provides, among other things, that proceedings in the Commission are to be conducted with as little formality and technicality as the proper consideration of the matter permits (s 354(1)); that the Commission is not bound by the rules of evidence but may inform itself on any matter in such manner as it thinks appropriate (s 354(2)); that the Commission is to act according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal form (s 345(3)); and that proceedings need not be conducted by formal hearing (s 354(4)).
His Honour noted that s 354, and other provisions (set out at [23] and [24] of the judgment), give the Commission a wider range of discretionary choices about the procedure appropriate for a particular case than existed under earlier legislation. These provisions meant that the “assumptions upon which common law trials are conducted should not be readily carried over when testing contentions that a hearing before an Arbitrator was not conducted in a fair way” (at [25]). His Honour continued at [25]:
“The environment of contestation and the confrontational methods of the common-law trial would not usually be appropriate; there may be issues of kinds which it is appropriate to deal with in that style, and much is left to the discretion of the Arbitrator. The Arbitrator is in a good position to decide on and to impose appropriate controls on the adduction of evidence, by cross-examination or otherwise. The Arbitrator will usually be in a position to perceive whether a wish to pursue an issue has a basis, whether it is a sound basis, whether some issue or line of questions is merely exploratory, or for that matter whether questions are merely the product of inventiveness.”
As in the present case, his Honour said (at [26]) that the Arbitrator was in possession of the material lodged by the parties in advance of the hearing, and was entitled to act on that material. That put her in “a good position to make a judgment about whether treatment or further treatment of any issue or line of inquiry in cross-examination was appropriately to be allowed or to be restricted”.
The main complaint on appeal, and the principal subject of the ruling limiting cross-examination, was exploration of the time of the confrontation in which Mr Zheng was injured. His Honour said that, on any view, that could not have been an important matter and it was “understandable that the Arbitrator regarded it as appropriate to limit questioning and the adduction of evidence”. That was because all the information lodged by the parties suggested that the event happened before the ordinary starting time of 7.00 am. Dealing with this point, his Honour said, at [27]:
“Except in the respect that it could be contended that Mr Zheng took himself out of a course of his employment by spitting on Mr Bui there really was nothing of sufficient apparent substance to justify disputing that the injury arose out of or in the course of employment. In particular the time of the event was not of any importance, and nothing of any real value can have been lost by restricting the opportunity to cross-examine on that subject. The information narrated by the appellant’s solicitor [in the absence of a transcript] was to the effect that the restriction was imposed after he had cross-examined Mr Zheng for about 35 minutes. It must be said that in my view sufficient time was made available for the cross-examiner to reach the subject matters which were important, and that if the opportunity to deal with alleged shortcomings in Mr Zheng’s own conduct, in so far as it was based on the information apparently available, had not been dealt with in that time, and the wish was expressed to continue cross-examination to explore something which does not appear to have had much substance, the intervention which the Arbitrator made was an altogether unremarkable exercise of the discretionary power to control proceedings.” (emphasis added)
His Honour then dealt with absence of a transcript of the proceedings before the Arbitrator, which his Honour noted was a “serious shortcoming” (at [32]) that greatly impeded the right of appeal. According to the circumstances, the lack of a sound recording could “fairly readily lead a Presidential member to a decision to require a rehearing; although that result would not be automatic” (at [32]).
The absence of a transcript in Zheng was overcome by the Deputy President’s acceptance of an unchallenged narrative prepared by the employer’s solicitor, who had appeared at the arbitration, which noted that the Arbitrator had refused to allow the solicitor to ask questions about the time when the incident took place. It was further noted that the Arbitrator’s statement of reasons was “full and detailed” (at [34]).
Of particular relevance to the current appeal, counsel for the employer in Zheng (much as Mr Parker has in the present matter) laid out “extensively the issues which could have been explored by an unrestricted cross-examination of Mr Zheng, the possible outcomes including outcomes which might be produced by favourable answers” and put before the Court authorities which illustrated the importance attributed to cross-examination (at [36]). Dealing with this submission, his Honour said, at [37]:
“An assessment of whether the Arbitrator’s decision should be set aside for want of procedural fairness is no simple matter and could not be disposed of by applying any legal tests susceptible of clear statement relating to entitlement to cross-examine an applicant, or a witness. There is no legal right to cross-examine an applicant or other witness in the Workers Compensation Commission, and decisions whether to allow cross-examination or to limit it are discretionary decisions which must be made in a context of the legislation and practices which the Commission follows, and, at least as importantly, in the context of the facts and circumstances of the case under consideration.”
As the powers of a Presidential member conducting a review (and it is noted that the current appeal is not a review but is restricted to the identification and correction of error) extended to power to re-open consideration of a matter of which an Arbitrator has disposed, and as the manner in which the powers of a Presidential member are to be exercised is itself the subject of the discretion of the Presidential member, his Honour could see no ground upon which it could be doubted that the Presidential member acted within her discretionary powers in disposing of the matter as she did. No rule of law required the Arbitrator not to limit cross-examination and the view that there was no want of procedural fairness was a view the Deputy President could reasonably reach without any error of law.
Mr Parker did not refer to Zheng in his submissions and, notwithstanding that it was referred to in Mr Austin’s written submissions, Mr Parker said at the hearing that he had not read it. I propose to apply to the present case the principles discussed in Zheng.
On which issues did the Senior Arbitrator give leave to cross-examine?
The evidence on this question is unsatisfactory. One would have thought that, as there is no transcript, and as Ms Fletcher was not present at the start of the arbitration on 22 February 2012, a statement would have been obtained from Mr Mansfield setting out the issues on which he sought to cross-examine and what happened at the arbitration. Nevertheless, I must deal with this issue on the evidence presented on appeal, and I note that Mr Austin has made no Jones v Dunkel [1959] HCA 8; 101 CLR 298 submission about the lack of any statement from Mr Mansfield. I should also record that, notwithstanding that he was present during the whole of the proceedings at the third arbitration, Mr Austin has stated that he has no recollection of the events that occurred at that time (T4.1).
The uncontested evidence from Ms Fletcher is that at the teleconference on 13 December 2011 she sought leave to cross-examine on Mr Murphy’s income, pointing out that he had alleged earnings of $9,000 per week but his tax returns showed no earnings. She emphasised that that was the “main issue” discussed at the teleconference and that cross-examination was required to address Mr Murphy’s wage loss.
Mr Parker referred to Mr Mansfield’s letter to TurksLegal on 2 November 2011 where he said that he “assumed you would wish me to cross-examine [Mr Murphy] particularly in respect of income, the 2006 injury allegation and dependancy [sic]”. He added that the matter was to be listed for a further teleconference “at which time [the Club] is requested to make it clear whether the worker will be required for cross-examination”. If not (required for cross-examination), consideration would be given to completing the balance of the matter by way of written submissions, a course that Mr Mansfield said should be rejected.
In his written submissions to the Senior Arbitrator dated 16 May 2012, Mr Mansfield submitted that Mr Murphy’s behaviour had denied the Club the opportunity to question him in respect of the alleged injury in October 2006. This submission, which the Senior Arbitrator summarised as a complaint that the Club had been denied the opportunity to cross-examine Mr Murphy “in respect of his assertions of injury and employment, because of his [Mr Murphy’s] behaviour at the conciliation and arbitration hearings”, implies that Mr Mansfield certainly wanted to cross-examine on injury.
Though it is far from clear, having regard to the above matters, the probabilities favour the conclusion that the Club had sought, and been granted, leave to cross-examine Mr Murphy on injury, wages and dependency.
Why was cross-examination terminated?
It is not disputed that the cross-examination concluded on 22 February 2012 because of Mr Murphy’s conduct, but it is not known how far cross-examination had progressed before the matter was adjourned. Though the exact nature of Mr Murphy’s conduct is unclear, it is not necessary to make a determination on that other than to note the Senior Arbitrator’s observation, recorded at [20] above, that Mr Murphy was a “difficult person to manage”. I note Mr Mansfield’s submission to the Senior Arbitrator that Mr Murphy’s conduct was “consistent prevarication and disruption” which “was systematic and deliberate” has not been disputed by Mr Austin.
It has not been submitted by Mr Austin that the Senior Arbitrator’s statement that “it was agreed that the way to proceed was by way of written submissions” meant that Mr Mansfield had abandoned his desire to cross-examine and Mr Mansfield’s written submissions, where he complained about the fact that the Club had been denied the opportunity to question Mr Murphy in respect of the alleged injury, strongly suggests that he had not.
Did the Senior Arbitrator err in terminating cross-examination?
The evidence
Consistent with the approach in Zheng, the determination of this question requires me to consider the evidence, the matters on which it was sought to cross-examine Mr Murphy, the Senior Arbitrator’s reasons and whether, having regard to the evidence and the issues, the termination of the cross-examination amounted to a denial of procedural fairness.
Mr Murphy gave two statements. In the first, dated 18 February 2010, he said he was riding at Cowra Racecourse on 22 October 2006 when the horse bucked, flipping him into the air, and then bolted for about 200–300 metres with him still on it. It took him 10 minutes or so to get himself back together. When he did, he took the horse back to the stables where he told his wife and mother what happened.
In his second statement, dated 23 April 2010, he said that, as the horse was scheduled for a “slow recovery day”, he rode it onto the track and commenced trotting. After 600 metres, the horse suddenly bucked, dropped its head and then jumped forward. He tried to rein it in but this caused it to buck violently again. It then bolted for about 200–300 metres while he tried to rein it in. As a result of the bucking and jarring, Mr Murphy felt severe disabling pain in his back.
Mr Murphy added that he did not advise the workers compensation insurer that he had an injury at the time as he felt he would recover and he was managing to continue work while taking daily painkillers. Just prior to his 18 March 2007 injury, when his back condition was deteriorating, he rang his workers compensation insurer to advise them about the injury and that he needed to get treatment.
As I understand his evidence, Mr Murphy never claimed to have reported the October 2006 incident to anyone at the Club at or about the time it happened.
Mr Murphy said that, as a result of the 22 October 2006 injury, he was in constant pain and discomfort in his back area. He continued to work and relied on painkillers daily to get through his duties. He saw his general practitioner, Dr Wearne, on 2 March 2007. Dr Wearne’s notes record:
“work involves
mucking out stables
also having to move lots of sand
also jarring while riding
low back pain – can radiate to (L) buttock
better with nurofen”
A CT scan on 7 March 2007 revealed a broad-based circumferential disc bulge at L4/5 with apparent extension into the right neural exit foramen. The radiologist recorded that that was the opposite site of the clinical symptoms, noting that the pain radiated into the posterior left leg.
Clinical notes from Dr Greenwell, general practitioner, for 15 June 2007 record “22.10.06 [Mr Murphy] was injured, horse bucked up he stayed in the saddle and so when the horse came down and jarred his back”. Dr Greenwell felt that the October incident was an exacerbation of an ongoing problem with Mr Murphy’s back caused by his work, which was very physical and hard.
Dr Geoffrey Mutton, Mr Murphy’s treating orthopaedic surgeon, reported on 28 June 2007 that Mr Murphy admitted to having had intermittent troubles with his back over the years, but on 22 October 2006 he was “riding a horse on the racecourse at Cowra, when the horse bucked, flipped him into the air coming down again in the saddle”. The doctor recorded that Mr Murphy continued to work with pain, reducing his workload, but the back pain forced him to stop riding a few months ago. Dr Mutton said that the accident in 2006 probably caused a small annular tear in the L4/5 disc with a small protrusion.
The Senior Arbitrator’s reasons
After setting out a detailed summary of the evidence and submissions, the Senior Arbitrator concluded at [90] that Mr Murphy was “involved in an incident as alleged on the 22nd of October 2006”. She accepted that he did not report it at the time because he believed he would recover. She added that his failure to report it was supported by him continuing to work with pain until after the second incident on 18 March 2007, and that his behaviour after both incidents was “consistent with an attitude of stoicism, which [was] again demonstrated following the incident which was witnessed on 18 March 2007”. She noted that Mr Murphy had expressed concern to his medical examiners about his capacity to continue to carry out his work as a horse trainer, and his continuing to work, despite pain, was consistent with such a concern.
The Senior Arbitrator was satisfied that the injury in October 2006 was a prolapsed disc at L4/5, as demonstrated on the CT scan on 7 March 2007. She was satisfied, on the balance of probabilities, that Mr Murphy sustained an injury to his back while carrying out track riding at the Cowra Racecourse on 22 October 2006 and that he was therefore a deemed worker at the time.
Dealing with the claim that Mr Murphy’s wife and three children were dependent on him, the Senior Arbitrator said (at [115]) that the Club “maintains that it has been denied the opportunity to cross-examine [Mr Murphy] because of Mr Murphy’s difficult demeanour and constant interruptions, and that, as a result it has been unable to challenge Mr Murphy’s claim of dependency”.
She added (at [116]) that there were “difficulties in the conduct of [the] matter” but an inability to cross-examine a witness did not necessarily result in unfair prejudice. She said that the Club had not adduced any evidence that contradicted Mr Murphy’s “claim of dependency” and did not inform the Commission of any material on which it intended to base any contradiction of his evidence. In the absence of any reason not to accept Mr Murphy’s claims (of dependency), the Senior Arbitrator accepted that his wife and three children were dependent on his earnings at all relevant times.
The Senior Arbitrator made no other comment (in her decision) about the cross-examination, or Mr Murphy’s conduct. She said in the “Con/Arb OUTCOME” form that Mr Murphy was a “difficult person to manage and it was agreed that the way to proceed was by way of written submissions”.
The submissions
The essence of Mr Parker’s submission on appeal may be summarised as follows: having agreed to allow cross-examination, the reversal of that decision, because of difficulties with Mr Murphy, and in the absence of evidence that would have discounted the proposition that Mr Murphy’s conduct was “sheer truculence” (T14.26), was not a correct approach and denied the Club procedural fairness.
In support of his position, Mr Parker said the following matters were “germane”:
(i) the incident was said to have occurred at 8.30 am on a Sunday;
(ii) there was no report to the Club;
(iii) there was no attendance upon a medical practitioner at or about the time the injury occurred;
(iv) there was no history to the doctors until March 2007;
(v) there was no evidence from Mr Murphy’s spouse or mother, who were said to have been informed (about the incident);
(vi) Mr Murphy said that at the time he was riding a “breaking in” saddle, in circumstances where he was not authorised to break-in horses and the breaking in of a horse would not satisfy cl 9 of Sch 1 to the 1998 Act;
(vii) there is no record of any medical treatment until March 2007;
(viii) there is no evidence that Mr Murphy’s horse training activities were lessened during the period 22 October 2006 to March 2007;
(ix) Mr Murphy’s demeanour was unsatisfactory: he failed to cooperate with the Senior Arbitrator and the procedure; he failed to produce documents when required to do so and in a timely manner; and, he disrupted the efficient conduct of the proceedings. These matters were directly relevant to his credit, but were not remarked on by the Senior Arbitrator as having relevance to her assessment of him;
(x) the Senior Arbitrator noted that Mr Murphy exaggerated his claims to earnings, which were not supported by evidence, and she rejected all his evidence with respect to average weekly earnings because of “the lack of certainty” (at [111]);
(xi) Mr Murphy has been “warned off” (banned) from all racecourses in NSW, and
(xii) Mr Murphy had a history of discord and disharmony with other users of the racecourse.
Mr Parker said that the above matters bore directly upon the creditworthiness of Mr Murphy’s evidence as to the events of 22 October 2006 and, furthermore, the Senior Arbitrator’s “fact finding miscarried”. There was no basis, so it was submitted, upon which the order for cross-examination should have been reversed “merely because [Mr Murphy] was not prepared to submit to cross-examination”.
Mr Parker made the following additional points:
(a) at the very least, the Senior Arbitrator should have stayed the proceedings until Mr Murphy abided by the Commission’s procedure;
(b) the matter was one in which the Commission should have been favoured by oral testimony and it was difficult to understand the basis upon which the Senior Arbitrator came to the conclusion that Mr Murphy’s evidence should be accepted;
(c) the importance of cross-examination in testing a witness’s evidence should not be understated (Insurance Australia Ltd t/as NRMA v Checchia [2011] NSWCA 101 (Checchia) at [173]–[180]);
(d) the courts have drawn rules as to what inferences may be drawn where there is no cross-examination (Knight v Maclean [2002] NSWCA 314 at [34]; Seymour v Australian Broadcasting Commission (1977) 19 NSWLR 219 at 236), and
(e) where the Club was prevented from cross-examining by Mr Murphy’s behaviour, the absence of cross-examination could not lead to a conclusion that the witness’s evidence should be accepted. The witness’s reluctance to submit to cross-examination should have led the Senior Arbitrator to the contrary conclusion. The proper inference from the behaviour of Mr Murphy in refusing to submit to cross-examination was that the cross-examination would have revealed that he was not a witness of truth to be believed.
Mr Austin submitted that there is no right to cross-examine in the Commission and procedural decisions concerning cross-examination are discretionary “in the facts and circumstances of the case under consideration” (Zheng at [37]). He also referred to the Commission’s Guidelines for the Practice of Conciliation and Arbitration (the Guidelines), which states that cross-examination will be permitted in “very limited circumstances and only if the Arbitrator is of the view that it is necessary to come to a decision”. Under the Guidelines, cross-examination may be allowed where there is contradictory evidence that requires clarification or testing.
Mr Austin added that the decision to allow cross-examination must be viewed at the time it was made and not retrospectively once evidence is adduced and findings made. Even at common law, evidence relevant to a witness’s credibility is not admissible except by specific exception (s 102 of the Evidence Act 1995). Credibility evidence may be adduced in cross-examination, but only where it has substantial probative value (s 103 of the Evidence Act 1995).
In his oral submissions, Mr Austin said that the Club had to show that the decision (to terminate cross-examination) “infected the determination and caused an unfairness or miscarriage of justice” (T42.38). He added that a number of the matters adverted to in Mr Parker’s submissions (listed at [71] above) were of marginal relevance and points (v) and (xii) had no relevance. The key was whether there was evidence upon which the Senior Arbitrator could have found that the injury on 22 October 2006 took place.
Mr Austin said that the evidence in support of the claim was logical and provided a proper basis for the finding made. He referred to Mr Murphy’s two statements and the supporting evidence from Dr Mutton in his report of 28 June 2007 (prepared before legal proceedings were commenced), where the doctor recorded a history of the October 2006 incident. He noted that the Senior Arbitrator referred to Dr Mutton’s evidence at [87]. Mr Austin said that Mr Murphy had no reasons to lie to or mislead a treating doctor like Dr Mutton only three months after the second injury (liability for which was accepted) and it made logical sense that Mr Murphy was being truthful in regard to the first incident.
The matters referred to in the preceding paragraph were matters Mr Austin said the Senior Arbitrator would have considered in determining whether to grant leave to cross-examine on injury.
Discussion and findings
Dealing firstly with cross-examination on the question of whether Mr Murphy sustained an injury on 22 October 2006 in the circumstances he alleged, I agree with Mr Austin that there is no right to cross-examine in the Commission. In the present case, however, I have found that the Senior Arbitrator allowed cross-examination on that issue and the question is, as it was in Zheng, whether she erred in terminating cross-examination.
Unlike Zheng, however, the cross-examination in the present case was (apparently) terminated because of the worker’s conduct, not because the Senior Arbitrator refused to allow Mr Mansfield to put specific questions or explore specific topics. Nevertheless, the nature of the issue on which cross-examination was to be pursued is relevant to determining if there has been a denial of procedural fairness. In Zheng, the Court of Appeal held that the topic on which the solicitor was not permitted to cross-examine, namely, the time of the altercation, could not, on any view, have been “an important matter” because Mr Zheng and Mr Bui had already started work.
Of the matters raised by Mr Parker, the relevance of the fact that the incident is alleged to have happened at 8.30 am on a Sunday was never explained in submissions and is unclear. The lack of evidence from Mr Murphy’s spouse or mother is not a factor on which cross-examination was required: the evidence to ground a Jones v Dunkel submission was and is available in the documents tendered.
The relevance of the fact that Mr Murphy said he was riding on a “breaking in” saddle is also unclear in circumstances where it has never been suggested that he was breaking-in a horse at the time of the incident. The submission that there was no evidence that Mr Murphy’s horse training activities were lessened in the period from 22 October 2006 to March 2007 was incorrect: Dr Mutton recorded that Mr Murphy continued to work with pain after October 2006, reducing his workload.
The submission that Mr Murphy’s demeanour was unsatisfactory, and the other points at (ix) at [71] above, were surprising. If they were directly relevant to his credit, and were matters upon which the Senior Arbitrator should have commented, as Mr Parker submitted, that raises a question of whether the Senior Arbitrator erred in failing to deal with that issue in her reasons, and that is a different issue to whether there was a denial of procedural fairness because the cross-examination was stopped. Mr Parker did not submit that the Senior Arbitrator erred in failing to give reasons.
The fact that Mr Murphy had been “warned off” NSW racecourses was dealt with in the documentary evidence and was not a matter on which he had to be cross-examined. This is not to say that it is not a relevant matter to the assessment of his entitlement under s 40, but it is not a ground for finding a lack of procedural unfairness.
The several references to a history of discord and disharmony between Mr Murphy and other users of the racecourse over the years are of limited, if any, relevance to whether Mr Murphy suffered an injury on 22 October 2006.
The question remains, however, whether the termination of the cross-examination in the circumstances of this case amounted to a denial of procedural fairness. Before answering that question, it is appropriate to consider the authorities on procedural fairness.
As noted in Zheng, when a claim is made that natural justice (procedural fairness) has not been accorded, regard must be paid to the legal context in which the decision-maker operates and to the law regulating the conduct of the proceedings.
The legal context in the present case is that cross-examination in the Commission is only allowed by leave. As Bryson JA noted in Zheng, and I repeat, s 354 of the 1998 Act provides that proceedings in the Commission are to be conducted with as little formality and technicality as the proper consideration of the matter permits (s 354(1)); that the Commission is not bound by the rules of evidence but may inform itself on any matter in such manner as it thinks appropriate (s 354(2)); that the Commission is to act according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal form (s 345(3)); and that proceedings need not be conducted by formal hearing (s 354(4)).
Nevertheless, an Arbitrator in the Commission is subject to obligations of procedural fairness (State Transit Authority (NSW) v Chemler [2007] NSWCA 249; 5 DDCR 286 at [65]; South Western Sydney Area Health Service v Edmonds [2007] NSWCA 16; 4 DDCR 421 at [91]; Fletcher International Exports Pty Ltd v Lott [2010] NSWCA 63 at [42] and [63]; Duinker v St Vincent de Paul Society Aged & Special Services Ltd (Lewisham Nursing Home) [2008] NSWCA 127; 6 DDCR 266 at [33]).
As Gleeson CJ observed in In Re Minister for Immigration & Multicultural Affairs; Ex parte Lam [2003] HCA 6; 214 CLR 1 at [37]):
“Fairness is not an abstract concept. It is essentially practical. Whether one talks in terms of procedural fairness or natural justice, the concern of the law is to avoid practical injustice.”
While many of the points raised by Mr Parker have limited, if any, relevance to the issue of whether Mr Murphy received an injury on 22 October 2006, and several were completely without merit, I have, with considerable reluctance, concluded that Mr Mansfield should have been permitted to cross-examine on injury and, in the circumstances of this case, the termination of cross-examination has resulted in procedural unfairness, or “practical injustice”, to the Club. My reasons are as follows.
The Club has always disputed that any injury occurred on 22 October 2006. It had not been reported to either the Club or the insurer for some months after it happened (not four years as Mr Mansfield submitted to the Senior Arbitrator and Mr Parker repeated on appeal), and Mr Murphy did not see a doctor until March 2007. When he did see Dr Wearne, the history recorded did not refer to the 2006 incident, but referred to mucking out stables, moving sand, and jarring while riding. (I have not overlooked the fact that general practitioner’s notes must be read with caution (Nominal Defendant v Clancy [2007] NSWCA 349 at [55]; Davis v Council of the City of Wagga Wagga [2004] NSWCA 34)).
The matters in the preceding paragraph raise issues about whether the injury occurred in the circumstances Mr Murphy alleged and were matters the Club was entitled to explore in cross-examination. I cannot be satisfied that the inability to cross-examine on those issues, which, it is not disputed, came about because of Mr Murphy’s conduct, would have made “no possible difference to the result” (Stead v State Government Insurance Commission [1986] HCA 54; 161 CLR 141 at 146).
In these circumstances, the Senior Arbitrator erred in terminating (or preventing) cross-examination on the question of injury. In the absence of some evidence that, because of some medical or other condition, Mr Murphy was unable to answer reasonable and relevant questions put to him by Mr Mansfield, it was not appropriate to terminate the cross-examination and conclude the case on written submissions. The cross-examination should have continued and Mr Murphy’s answers and demeanour assessed along with the other evidence.
The Senior Arbitrator also erred when she dealt with the cross-examination issue at [115] and [116] by referring only to the application to cross-examination with regard to dependency. That the application to cross-examine extended beyond that issue is clear from the Senior Arbitrator’s summary of Mr Mansfield’s submissions where she said that he complained he had been denied the opportunity to cross-examine Mr Murphy “in respect of his assertions of injury and employment”.
As to cross-examination about earnings, Ms Fletcher’s stated concern at the teleconference on 13 December 2011 was that the Club wished to cross-examine Mr Murphy about his earnings, pointing out that his statement alleged earnings of $9,000 per week but his tax returns showed no earnings.
On this issue (which is discussed in greater detail below), the Senior Arbitrator found that, given the lack of certainty as to Mr Murphy’s average weekly earnings at the time of his injury, the best approach and best measure of assessing average weekly earnings was by drawing on some comparable employment such as a trainer whose wages are determined pursuant to cl 13.1 of the Horse and Greyhound Award, which provided a rate of $698.20 per week as at 1 January 2010.
The award rate allowed was less than any of the alternative figures advanced by Mr Murphy and cross-examination could not have achieved a better outcome for the Club. I therefore find that the termination of cross-examination was of no consequence as far as Mr Murphy’s earnings were concerned. That is, it made no difference to the result. The Arbitrator rejected the claim of $9,000 and that was the Club’s stated reason for wanting to cross-examine on wages.
As to cross-examination on dependency, the Senior Arbitrator correctly noted that the inability to cross-examine a witness does not necessarily result in unfair prejudice. The main reason for wanting to cross-examine on dependency seems to have been that that claim arose for the first time at the 25 August 2011 arbitration. In other words, it was a late claim that had not been included in the original application. The Club did not advance any other basis, either on appeal or before the Senior Arbitrator, for requiring leave to cross-examine on dependency. In these circumstances, it is difficult to see that the termination of cross-examination on this issue has caused the Club prejudice.
As I have found that the Senior Arbitrator erred in terminating cross-examination on injury, and as that error means that the matter must be re-determined, it is not strictly necessary to deal with Mr Parker’s other submissions. However, I make the following observations about those submissions.
Checchia has no relevance to the issues in the present case. In that case, counsel wished to cross-examine a witness about the tender of cheques that had been dishonoured. It was held on appeal that, as the appellant had documents that supported the proposed line of cross-examination, and as the witness’s credit was in issue (because of the dishonoured cheques), the trial judge had erred in refusing cross-examination on an issue of critical importance. Nothing approaching the credit issue in Checchia arises in the present case.
The reference to rules as to what inferences may be drawn where there is no cross-examination has ignored the fundamental principle that there is no right to cross-examine in the Commission and, more particularly, that the Arbitrator did not base her decision on the failure to cross-examine. Moreover, the rule in Browne v Dunn (1893) 6 R 67 does not apply where, because of an exchange of documents prior to the hearing, all parties are on notice of the evidentiary issues (NSW Police Force v Winter [2011] NSWCA 330 (Winter), applying West v Mead [2003] NSWSC 161; 13 BPR [24,431]).
The submission that the Senior Arbitrator should have stayed the proceedings was misguided. There is no provision in the legislation or the rules for such a stay and this submission was surprising.
WEEKLY COMPENSATION
The legislation and the Senior Arbitrator’s reasons
In determining Mr Murphy’s current weekly wage rate under s 36 of 1987 Act (as it was before passing of the Amending Act), the Senior Arbitrator noted that Mr Murphy presented his case on two alternative grounds. First, that the award rate for a trainer was $121.20 per horse per day, which, having regard to the number of horses he usually had in his stables, came to $9,332.40 per week. Second, and in the alternative, Mr Austin submitted that the current weekly wage rate should be calculated by reference to s 42(1)(d), which states that the current weekly wage rate for a worker to whom sub-ss (a), (b) and (c) of s 42 do not apply is 80 per cent of the worker’s average weekly earnings in respect of the work the worker performed immediately before becoming incapacitated (s 42(8)).
The term “average weekly earnings” is defined in s 42(8) to be:
“the average weekly earnings of the worker determined in accordance with s 43 during the appropriate period before whichever of the following times produces the higher average weekly earnings:
(a) the time of the injury concerned,
(b) the time at which the relevant weekly payment of compensation is due, with the determination under paragraph (b) made on the assumption that the worker had been earning the wage or salary which the worker would probably have been earning if the worker had remained uninjured and continued to be employed in the same or some comparable employment.”
Section 43(1)(a) provides that:
“Average weekly earnings shall be computed in such manner as is best calculated to give the rate per week at which the worker was being remunerated, except that if, because of the shortness of the time during which the worker has been in the employment of the employer or the terms of the employment, it is impracticable at the date of the injury to compute the rate of remuneration, regard may be had to the average weekly amount which, during the 12 months previous to the injury, was being earned:
(i) by a person in the same grade, employed at the same work, by the same employer, or
(ii) if there is no person so employed, by a person in the same grade employed in the same class of employment, and in the same district.” (emphasis added)
As Mr Murphy was not employed under an award, and was a “deemed worker” under cl 9 of Sch 1 to the 1998 Act, the Senior Arbitrator accepted Mr Austin’s submission that s 42(1)(d) applied and his current weekly wage rate was the prescribed proportion (80 per cent) of his average weekly earnings in respect of the work he performed immediately before becoming incapacitated (s 42(8)).
Clause 9(3) of Sch 1 provides:
“(3) For the purposes of assessing the compensation payable to a person to whom this clause applies, the ‘average weekly earnings’ of the person are:
(a)to be calculated in such manner (if any) as may be prescribed by the regulations, or
(b)if the person was not working under contract of service – to be calculated in such manner as the Commission considers to be reasonable in the circumstances.”
It is important to note that the Senior Arbitrator was not referred to s 42(3), which provides:
“For the purposes of subsection (1)(a), if a worker is not remunerated in respect of the work performed by the worker under an award fixing or providing for the fixing of a rate for a weekly or longer period but –
(a) there is such an award under which the worker would be entitled to be remunerated if the worker performed that work under a contract of service – the worker shall be deemed to be remunerated in respect of that work under that lastmentioned award; or
(b) although paragraph (a) does not apply, there is an award fixing or providing for the fixing of a rate for a weekly or longer period which, having regard to the nature of that work, it would be fair and reasonable to apply to and in respect of that work – the worker shall be deemed to be remunerated in respect of that work under that lastmentioned award.”
This subsection is directly relevant to the claim and, surprisingly, neither counsel referred to it at the arbitration or on appeal. Its significance is discussed below at [126]–[127].
In her Reasons, the Senior Arbitrator referred to the following passage from Lloyd v Northern Rivers Charity Racing [2001] NSWCC 49; 22 NSWCCR 577 (Lloyd) at [62]:
“Section 43 is directed at situations where circumstances make it impracticable at the date of injury to compute the rate of the worker’s remuneration. The dominant rule in s 43 is that average weekly earnings, as defined by s 42(8) are to be calculated on the basis of a weekly rate of remuneration at the date of injury. In Perry v Wright (1908) 1 KB 441 Fletcher Moulton LJ described the proper approach to calculating average weekly earnings as:
‘It imposes on the Court the duty of ascertaining what remuneration the workman would receive in a normal week in the employment in which he was engaged at the time of the accident and gives it freedom to do so in the manner best calculated to arrive at a fair result... It is intended that the average weekly earnings should be a real and not an artificial estimate of what rate of remuneration the workman might fairly be held to be enjoying at the date the accident.’”
Dealing with Mr Murphy’s claim that his average weekly earnings should be calculated at $9,332.40 per week, the Senior Arbitrator said (at [110]) that:
(a) such a claim was not substantiated by any other evidence;
(b) there was no evidence that that was what Mr Murphy was earning on average at the time of his injuries;
(c) such a claim was inconsistent with Mr Murphy’s statement dated 18 February 2010 where he claimed he was earning $55,000 per annum (which claim itself was not supported by his tax records, profit and loss statements, or any other financial records), and
(d) the letter from H & R Block indicated that Mr Murphy’s gross income for the period 1 April 2006 to 31 March 2007 was $44,353.22 ($852.95 per week).
She said (at [111]) that, “given the lack of certainty as to what Mr Murphy’s average weekly earnings were at the time of his injury”, she was satisfied that the “correct approach and best measure of assessing Mr Murphy’s average weekly earnings is by drawing on some comparable employment such as a trainer whose wages are determined pursuant to Clause 13.1 of the Horse and Greyhound Award, 2010”. She used the award rate as the basis for all her calculations for average weekly earnings and for probable earnings but for injury.
Submissions
Mr Parker submitted that, based on the Senior Arbitrator’s statement at [111], it was plain that she accepted the submission by Mr Mansfield that there was no evidence of Mr Murphy’s average weekly earnings. He said that she was required to comply with s 43 and she was not at liberty to adopt a “hypothetical alternative basis of calculation”. What is required is a conclusion as to Mr Murphy’s “actual average weekly earnings”. This is not hypothetical, but is designed to produce a figure that “best reveals the applicant’s actual weekly earnings”.
Mr Parker argued that the alternatives in s 43(1)(a)(i) and (ii) are “only available where the Applicant has been engaged in the activity for too short a time to make the calculation impractical” and that was not Mr Murphy’s situation. The provision says nothing about an applicant “who simply cannot demonstrate average weekly earnings”. There was no tax record, profit and loss statement, or other financial record to support a conclusion as to average weekly earnings.
These circumstances, so it was submitted, did not lead to a lack of “certainty” as to average weekly earnings, but demonstrated that Mr Murphy had not proved what his average weekly earnings were. In these circumstances, where there was no material on which to “reasonably make a determination as to average weekly earnings”, Mr Murphy failed “in his proof” and there should be an award for the Club.
Nothing in s 43(1)(a) authorised the Senior Arbitrator to use the earnings of persons other than Mr Murphy in circumstances where Mr Murphy had been engaged in his activities for many years. The alternatives in (i) and (ii) of s 43(1)(a) apply only where it is impracticable, because of the shortness of time or the terms of employment, to calculate the worker’s average weekly earnings. It does not apply in circumstances where Mr Murphy’s oral evidence and documentary evidence is rejected.
At the oral hearing of the appeal, Mr Parker submitted that the Senior Arbitrator erred by failing to apply the statutory formula of “reasonable in the circumstances” (cl 9(3)) and instead adopted a test of “best measure of assessing” Mr Murphy’s average weekly earnings.
Mr Austin submitted that s 43(1)(a) applies not just to circumstances where the period of employment was too short, but also to circumstances where the worker’s “terms of employment” make it “impractical at the date of injury to compute the rate of remuneration”. The words “terms of employment” coupled with “impractical” give a construction of extremely broad import. He said that the principle stated in Lloyd is good law, and courts and tribunals have a duty to base findings on the best available evidence.
Mr Austin argued at the oral hearing that the Senior Arbitrator implicitly found that, as Mr Murphy was self-employed, it would be a matter of conjecture to determine his actual earnings. Further, it is implicit from her findings that his work had some value and, because of the terms of his employment, being self-employed, and his hours and earnings fluctuating, it was impractical to determine his rate of remuneration and “that’s the statutory threshold” (T40.24). He added (at T41.13) that, if the nature of a self-employed worker’s employment makes it impractical to calculate the worker’s income, it is appropriate to have recourse to s 43(1)(a)(i) and (ii).
Discussion and findings
I agree with Mr Parker that the terms of s 43(1)(a)(i) and (ii) do not apply in this case. I also agree that the Senior Arbitrator failed to address the terms of cl 9(3) of Sch 1 when determining Mr Murphy’s average weekly earnings.
The exceptions in s 43(1)(a) only apply in the specific circumstances stated, namely where, “because of the shortness of the time during which the worker has been in the employment of the employer or the terms of the employment” it is impractical at the date of injury to compute the rate of remuneration, regard may be had to the circumstances in sub-s (i) or (ii).
Neither of those circumstances applies in this case. It was not impractical, because of the shortness of the time during which Mr Murphy had been employed, to compute his rate of remuneration at the date of his injuries. Nor was it “impractical” to make such a calculation because of his “terms of the employment”. Because Mr Murphy was self-employed, there were no “terms of employment”.
I do not accept that the Senior Arbitrator made the implicit findings suggested by Mr Austin in his submissions on appeal. She clearly did not. She based her findings on the submission made to her that s 42(d) applied and she was required to consider s 43. She did not consider the terms of cl 9(3) of Sch 1. As neither side drew her attention to cl 9(3), it is hardly surprising that she did not refer to it. While her conclusion may well have been open under cl 9(3), and it may well have been reasonable in the circumstances to rely on the Horse and Greyhound Award, she did not approach the matter in that way.
That does not mean, however, that the Club is entitled to an award in its favour. As Mr Murphy was not working under a contract of service, it is open to calculate his average weekly earnings “in such manner as” the Commission considers “reasonable in the circumstances” (cl 9(3) of Sch 1). In the appropriate case, it would be open to me to re-determine the matter in light of the terms of cl 9(3). However, in view of the other issues involved (both as to earnings and injury) and, as the question of whether Mr Murphy received an injury on 22 October 2006 must be re-determined, it is not appropriate that I re-determine Mr Murphy’s average weekly earnings.
More importantly, however, the parties have overlooked a critical part of the legislation, namely, s 42(3). As is (correctly) observed in the commentary to Mills Workers Compensation New South Wales (at 2888.3), the current weekly wage rate for a worker who is deemed to be a worker for the purposes of the 1987 Act may be derived from an award which fixes an award for the kind of work performed by the independent contractor. Section 42(3) is therefore applicable to applicants who (like Mr Murphy) were self-employed at the time of injury, but are deemed workers under the legislation.
Thus, applying s 42(3), it is tolerably clear that, in determining Mr Murphy’s current weekly wage rate, he is entitled to rely on the award under which he would be remunerated if he had performed his work under a contract of service. The Horse and Greyhound Award would seem to be the appropriate award and that award would apply to determine the current weekly wage rate for periods of total incapacity without resort to s 43 and without resort to the “prescribed proportion” in s 42(8). This gives a higher figure than the figure allowed by the Senior Arbitrator.
In calculating Mr Murphy’s probable earnings but for his injury in the periods of partial incapacity, the alternative methods referred to in Cage Developments Pty Ltd v Schubert (1983) 151 CLR 584; [1981] 2 NSWLR 227 and discussed in Office of the Director of Public Prosecutions v Olsen [2009] NSWWCCPD 26, Nohra v Sydney Plastering & Construction Pty Ltd [2009] NSWWCCPD 48 and Begovic v Tamworth Building Supplies Pty Ltd [2010] NSWWCCPD 61 will apply.
ONUS OF PROOF
Mr Parker submitted that the Senior Arbitrator’s remarks at [115] and [116] (summarised at [67] and [68] above) revealed that she “misconceived the onus of proof” because the proposition that the Club was required to inform the Commission and call evidence to contradict Mr Murphy on any issue was wrong.
This submission was misconceived and missed the point of the Senior Arbitrator’s comments at [115] and [116]. Those comments were directed to whether the inability to cross-examine on dependency caused any “unfair prejudice” to the Club. In the absence of an explanation as to what was to be put to Mr Murphy on the issue of dependency, it was open to the Senior Arbitrator to deal with this issue as she did.
The situation can be readily contrasted to Checchia, where the court was informed of the material counsel wished to use to challenge the witness, it being expressly noted on appeal that “the appellant had documents that supported the proposed cross-examination” (at [178]). Nothing even approaching that appears on the issue of dependency in the present case.
The Senior Arbitrator did not misconceive the onus.
ACCEPTING MR MURPHY’S EVIDENCE
Mr Parker submitted that the Senior Arbitrator’s determination was “fundamentally flawed”, and that her “fact finding miscarried”, because she accepted Mr Murphy’s evidence in circumstances where there was no logical or proper basis to do so and where she rejected his evidence as to his earnings. He supported this submission by saying that, contrary to the Senior Arbitrator’s finding at [90], there was no evidence that Mr Murphy said he did not report the 2006 incident because he thought he would recover. He expressly added that there was no evidence to that effect in Mr Murphy’s statement of 23 April 2010.
As Mr Austin submitted, the Senior Arbitrator referred to the evidence from Dr Mutton, which completely corroborates Mr Murphy’s version of the October 2006 incident, and that her reference to Mr Murphy’s behaviour after both incidents being “consistent with an attitude of stoicism” was open on the evidence presented.
I do not accept Mr Parker’s submissions on this point.
The Senior Arbitrator referred to the evidence, and the parties’ submissions, in detail. It was open to her to accept Mr Murphy’s explanation for why he had not reported the October 2006 incident, namely, because he thought he would recover, to find that he was stoic, and, subject to the procedural fairness issue, to accept his evidence on injury. (I note that, on the failure to report issue, Mr Parker’s submission that there was no evidence to support the finding that Mr Murphy did not report the injury because he thought he would get better was wrong: the evidence is at [7] of Mr Murphy’s statement of 23 April 2010, a statement that Mr Parker expressly referred to in his submissions.)
Whether, as Mr Parker submitted, Mr Murphy’s conduct at the arbitration was such that the Senior Arbitrator should have disbelieved his evidence on injury (and erred in not disbelieving him) raises a separate issue that is not possible to determine without a transcript and, in any event, is not necessary to determine in circumstances where the matter must be re-determined.
Mr Parker’s submissions seem to have assumed that, because the only evidence in respect of the injury on 22 October 2006 was from Mr Murphy (which was in any event incorrect because Dr Mutton corroborates Mr Murphy’s evidence), and because the Senior Arbitrator rejected Mr Murphy’s evidence as to his income, the claim had to fail. That is not correct. As explained by Campbell JA (Bathurst CJ and Tobias AJA agreeing) in Chanaa v Zarour [2011] NSWCA 199 at [86]:
(a) it is not the law that a worker must have corroboration before he or she can succeed;
(b) in the civil law, corroboration is not a technical term or a legal requirement;
(c) the task of a judge is to decide, on the basis of the whole of the evidence (denials and all), what he or she accepts, and
(d) there is no requirement to accept the whole of the evidence of any one witness.
CONCLUSION
For the reasons explained above, but with considerable reluctance, I have concluded that the Club was denied procedural fairness in not being able to cross-examine Mr Murphy on whether he received an injury on 22 October 2006. There are real issues with regard to injury and the Club was entitled to test those issues in cross-examination. Having been given leave to do so, it was not appropriate to terminate cross-examination because of an apparent lack of cooperation by the worker and, in the circumstances of this case, the termination of the cross-examination had the potential to cause a “practical injustice” to the Club.
Though I am not satisfied that the termination of the cross-examination on wages or dependency resulted in any unfairness to the Club, as the matter must be re-determined, the question of the extent of any cross-examination at the next arbitration is a matter for the next Arbitrator, subject to the Guidelines and the principles discussed in Zheng and Winter. Cross-examination will not be at large and must be relevant to the issues in dispute.
DECISION
Save for paragraph 6 of the determination of 28 August 2012, which certified the matter as complex and is confirmed, the determination is revoked and the matter is remitted to a different Arbitrator for re-determination.
COSTS
Each party is to pay his or its own costs of the appeal. Costs of the first arbitration, and of the second arbitration, are to follow the result of the second arbitration.
Bill Roche
Deputy President
17 April 2013
I, KATHRYN CAMP, CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF BILL ROCHE, DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
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