Crown Glass & Aluminium Pty Limited v Ibrahim - [2005] NSWCA 195

No judgment structure available for this case.

CITATION:
Crown Glass & Aluminium P/L v Ibrahim [2005] NSWCA 195

HEARING DATE(S):
23 May 2005

JUDGMENT DATE:

30 June 2005

JUDGMENT OF:
Tobias JA at 1; McColl JA at 57; Campbell AJA at 145

DECISION:
1) Appeal allowed in part; 2) Orders 1(1) and 1(2) made by Walker DCJ on 3 June 2004 be set aside; 3) Order 1(3) made by Walker DCJ on 3 June 2004 be varied by deleting therefrom the date "1 October 2000" and substituting in lieu thereof the date "30 November 2001"; 4) Otherwise appeal dismissed; 5) The appellant to pay the respondent's costs of the appeal.

CATCHWORDS:
WORKERS COMPENSATION - Employee assaulted outside his home - Whether injury occurred in the course of employment - Whether at the time of assault employee carrying sum of money for purpose of paying wages - EVIDENCE - Appeals - Question of law - Circumstances in which finding of fact can reveal error of law - Conflicting evidence concerning source of the sum of money - Employee's primary evidence regarding source of money altered as a result of cross-examination - Whether evidence as accepted by primary judge could properly base his finding of fact that employee had money on him when assaulted - Whether primary judge's conclusion of fact involved a form of rationalisation in order to enable a finding in employee's favour which was otherwise unsupported by evidence

LEGISLATION CITED:
N/A

CASES CITED:
Woods v Multi-Sport Holdings Pty Limited (2002) 208 CLR 460
Holland v Jones (1917) 23 CLR 149
Azzopardi v Tasman UEB Industries Limited (1985) 4 NSWLR 139
Randwick Municipal Council v Manousaki (1988) 66 LGRA 330
McPhee v S Bennett Limited (1935) 52 WN (NSW) 8
So v So [2004] NSWCA 67
Ambulance Service of New South Wales v Daniel (2000) 19 NSWCCR 697
Suvaal v Cessnock City Council (2003) 77 ALJR 1449

PARTIES:
Crown Glass & Aluminium Pty Limited
Ali Ibrahim

FILE NUMBER(S):
CA 40527/04

COUNSEL:
A: P W Neil SC / H J Halligan
R: C A Evatt / M R Rollinson

SOLICITORS:
A: Edwards Michael Lawyers, Sydney
R: Carters Law Firm, Auburn

LOWER COURT JURISDICTION:
Compensation Court

LOWER COURT FILE NUMBER(S):
CC 1500/02

LOWER COURT JUDICIAL OFFICER:
Walker J

CA 40527/04
CC 1500/02

TOBIAS JA
McCOLL JA
CAMPBELL A-JA
Thursday 30 June 2005

CROWN GLASS & ALUMINIUM PTY LIMITED v ALI IBRAHIM

The respondent was a director of the appellant company, which carried on the business of shop-fitting. The respondent claimed that he was in the course of his employment when he suffered injuries resulting from an assault outside his home. The respondent's case at trial was that, having gone home in order to prepare wages for himself and other employees of the appellant company, he was assaulted and robbed of a sum of $8,000 in cash which was to be used for the purpose of paying those wages.

A critical issue at trial was whether the respondent did in fact have $8,000 of the appellant's money on his person when he was assaulted. The source of the sum of money became a key point of contention. The respondent's primary evidence was that he withdrew the cash in question from the bank on the day of or the day before the assault. Upon being presented, in the course of cross-examination, with bank records that established that this was not the case, the respondent gave an alternative explanation as to the source of the cash, namely, that it had been obtained direct from clients for whom the appellant was performing work.

The primary judge, noting that the respondent was "in an industry where tax avoidance is endemic" (that is, the building industry), found that the respondent was obtaining payment for work in cash and paying wages out of those cash receipts. Hence his Honour accepted, on the balance of probabilities, that at the time of the assault the money in question was in the respondent's possession in the form of cash payments from clients. This finding underpinned his Honour's ultimate finding that the respondent was in the course of his employment at the time of the assault.

On the appeal, the appellant submitted:

(a) that his Honour's finding that the relevant cash had been obtained by the respondent, not from the bank but from clients for whom the appellant was performing work, involved a form of rationalisation in order to enable a finding in the respondent's favour which was otherwise unsupported by the evidence; and

(b) that the appellant was denied procedural fairness as it was not given any opportunity to put submissions as to whether his Honour was entitled to take judicial notice of the fact that tax avoidance in the building industry was endemic.

HELD by Tobias JA (Campbell AJA agreeing, McColl JA dissenting) dismissing the appeal:

(1) The only question which could arise on the appeal was whether there was evidence which, if fully accepted, could properly base the trial judge's primary finding that the respondent had a substantial amount of cash on him at the time he was assaulted ([40]).

Ambulance Service of New South Wales v Daniel (2000) 19 NSWCCR 697 applied

(2) The above question should be answered in the affirmative. The respondent gave evidence in cross-examination that he must have obtained the cash from customers for whom he was performing a job. That evidence was accepted by the primary judge and that acceptance was not open to challenge, even if it could be described as perverse ([37], [40], [41]).

Azzopardi v Tasman UEB Industries Limited (1985) 4 NSWLR 139; Randwick Municipal Council v Manousaki (1988) 66 LGRA 330 applied

(3) Once the above evidence was accepted by the primary judge, there could be no doubt that it formed the evidentiary base for his primary finding that the respondent had the relevant cash in his possession when assaulted ([41]).

(4) Thus, the primary judge's finding did not, contrary to the submission of the appellant, involve a form of rationalisation in order to justify a finding in favour of the respondent which was otherwise unsupported by the evidence. For the foregoing reasons, the contrary was the case ([48]-[50]).

(5) The primary judge's reference to the respondent being in an industry where tax avoidance was endemic was made in the context of his finding, which was supported by the respondent's evidence, that a substantial part of the business was conducted for cash. It did not form an evidentiary basis for that finding ([48]).

CA 40527/04
CC 1500/02

TOBIAS JA
McCOLL JA
CAMPBELL A-JA
Thursday 30 June 2005

CROWN GLASS & ALUMINIUM PTY LIMITED v ALI IBRAHIM

Judgment

1 TOBIAS JA: The appellant is a company of which the respondent was a director. It allegedly carried on the business of shop-fitting. The respondent claimed that in the course of his employment by the appellant, he suffered injuries resulting from a motor vehicle accident on 24 September 1999 and an assault outside his home on 5 November 1999.

2 The respondent received weekly payments of workers compensation from the appellant's insurer up to and including 29 November 2001. By Further Amended Application for Determination filed in the Compensation Court of New South Wales on 28 October 2002, he sought weekly payments in the sum of $1,500 from 29 November 2001 and continuing together with s 66 lump sum compensation and s 60 expenses.

3 The respondent's compensation claim was heard by Walker DCJ in the District Court of New South Wales who found in his favour and, on the basis of his total incapacity, awarded him weekly compensation as and from 24 September 1999 being the date of his motor vehicle accident. His Honour also awarded the respondent lump sum compensation under s 66 in respect of the permanent loss of efficient use of various parts of his body, lump sum compensation under s 67 in respect of pain and suffering and his medical expenses pursuant to s 60.

4 The appellant conceded before the primary judge that the respondent was injured on the way to work when he was involved in a motor vehicle accident on 24 September 1999 but put in issue whether he was injured in the course of his employment when he was assaulted outside his home in Marrickville on 5 November 1999. It is against his Honour's finding that he was so injured that the appellant appeals to this Court.

The respondent's case at trial on the assault issue

5 The primary judge described (at [58]) the respondent's evidence with respect to this issue in the following terms:

"The applicant's evidence is that he had visited Sydney Glass at Bankstown to transact business about lunchtime on the 5th November 1999. It was his eventual intention to go back to the building site at Pagewood after that. However, on the way he intended to visit his home, have lunch to make up the wages and see his wife who had recently had a child. While he was at Sydney Glass he received a telephone call from his manager Paul Francis who told him he had lost the key to the company utility and asked him to bring in the spare key. The applicant's evidence is that the spare key was at his home. He then left Bankstown to drive home to Marrickville for those four purposes. On the way he may have received a call on his mobile from Francis telling him not to worry about the key. He continued on and eventually parked his care in the lane adjacent to his home at Marrickville where he was then assaulted and robbed by 3 men."

6 Furthermore, the respondent gave evidence that he worked from his home preparing the payroll, quoting for jobs and carrying out booking and administrative tasks. Relevantly, his evidence in support of his case that his injuries were sustained in the course of his employment was, firstly, that he had been advised by his manager, Mr Francis, as to the amount of the wages of the appellant's employer which were required to be paid on Friday 5 November 1999; secondly, that on the Thursday and/or on the Friday he had obtained (to use a neutral term) cash in the sum of $8,000 for that purpose and, thirdly, that he was robbed of the $8,000 when he was assaulted outside his home to which he was returning in order to prepare the payroll for himself, Mr Francis and several other employees. In this respect he gave evidence that his salary was $1,500 per week; that of Mr Francis was approximately $1,200 per week and that of the other employees was between $700 and $800 per week. He also gave evidence that part of the $8,000 was intended for payment for some work for the appellant being carried out by a glass company.

The appellant's case at trial

7 It would be fair to say that at trial the appellant put nearly everything in issue. In particular, it put in issue the respondent's credibility and whether, when he was assaulted (which was conceded), his injuries arose in the course of his employment with the appellant. In particular, the appellant identified as "significant credit issues" the respondent's allegation that he carried out work at home for the shop-fitting business including making up the wages and his failure to produce evidence to corroborate the money trail in the appellant's bank account to establish that it was conducting a genuine shop-fitting business as he alleged and paying wages to people who were in fact his employees.

The primary judge's findings

8 The appellant had raised at trial what his Honour referred to as "a plethora of credit issues", submitting that the Court could not accept anything the respondent said as truthful or, alternatively, that he was such an unsatisfactory and unreliable a witness that nothing he said could be relied upon without corroboration. Accordingly, a great deal of his Honour's judgment was taken up with resolving those credit issues.

9 His Honour found (at [19]) the respondent "a most difficult witness" who had no appreciation of the adversarial system of justice and who was convinced that he was entitled to express his point of view about his case by being unresponsive to questions put to him. However, his Honour recognised that English was the respondent's second language and although his colloquial English was comprehensible, his syntax and vocabulary were at times "barely adequate". Importantly, he was a person who had had no schooling and his self-expression was extremely poor.

10 The primary judge also noted (at [19]) that

"many of [the respondent's] inconsistent statements flowed from [his] habit of reconstructing events on the basis of what would have been the case rather than his actual recollection."

very ordinary indeed

11 However, at least so far as the respondent's evidence with respect to his medical condition was concerned, his Honour found (at [19]-[28]) that he was

"not a liar seeking to manipulate the facts to his misconceived forensic advantage"

12 His Honour then turned to the issues concerning the respondent's business activities, two of which are presently relevant:

(a) Whether the respondent through the appellant was in fact conducting a shop-fitting business or whether the substantial sums passing through the appellant's bank account had a more sinister connotation; and

(b) Whether the respondent had $8,000 of the appellant's money on his person when he was assaulted.

13 With respect to (a) above, the primary judge found (at [25]) that although the business was poorly run, there was no evidence that it had nothing to do with shop-fitting or that it was a front for something else. The appellant's bank account revealed a healthy cash flow in and out of the business during the period of its operation during which, according to his Honour's calculation, approximately $83,000 had been banked. Further, the appellant's cheque butts recorded payments to many suppliers of building materials which his Honour found could be expected to be used by shop-fitters.

14 The primary judge then turned to the critical wages issue. At [26] he noted the respondent's contention that one of the reasons why he visited his home on 5 November 1999 was to make up the appellant's payroll. His evidence was that during the assault the $8,000 in cash that he was carrying for that purpose was stolen. Given that the appellant hotly disputed these matters, it is appropriate at this point to record the exchanges in the evidence relevant thereto.

15 The only evidence led in chief from the respondent with respect to this issues was in the following exchange (Black 14 U-X):

"Q. Did you have any monies on your person

A. Yes I did.

Q. How much.

A. I had $8,000.

When

A. I can't recall. Some of it that day or the day before. If you look at the bank statement it could tell you about some cash cheques being drawn out from it. I can't recall the day. I did get some money that morning and the day before too.

Q. What was that money for.

A. Paying wages and paying some of the glass that I ordered." (emphasis added)

when

16 Nevertheless, the source of the $8,000 was the subject of a deal of cross-examination. At Black 66 the respondent agreed that at the beginning of November, Mr Francis received a salary and the appellant company engaged several other workers at that time. He said that some of those employees were getting $700, some $800; some paid their own tax and some he paid tax for. He said:

"The people working casual I was just paying them cash and they were paying their own tax."

17 When the respondent was asked (at Black 66-67) how he knew that he had $8,000 and not $10,000 or $20,000 at the time of the assault, he responded:

"I know myself because I pulled out from the bank that day a cash cheque, I had drawn it myself. The day before I done a cash cheque and we draw that money. I can't recall what days but I'm always prepared for Friday. These people work and I must go back there and give them their pay."

18 At Black 67 the respondent was asked whether he visited the bank on 5 November to which he responded:

"As I said I can't recall. I told you before I must have pulled out some money. I think I did that day and the day before. I'm not sure, I can't recall on that but I did pull out some money. Either that day or that day and the day before or either the day before and on that day."

"Q. You say you might have visited the bank on more than one occasion cashing cheques, two or three in number, in order to get the payroll together.

A. Probably teller machines sometimes I used to pull out cash."

19 The respondent was then cross-examined by reference to the appellant's bank statements which revealed that on 3 November there were two cash deposits of $3,000 and $5,000 and a further cash deposit on 4 November of $5,000 – a total of $13,000. He was then asked to explain why it would be that if he had that amount of cash in his hand on 3 and 4 November, he would have gone to the bank on 4 November and taken out cash for the payroll. He responded (at Black 73):

"A. Okay, well probably on those days I put the cheques in, or put cash deposit into my account, probably because of cheques I had to write out for previous things or other things. I am not denying it, yes I did have the cash.

Q. Where did the cash come from?

A. Of course, from work."

20 After saying that a Mr Haddad for whom he was doing work had given him cash cheques, he was asked whether Mr Haddad had given him two different lots of cash, one of $3,000 and one of $5,000, to which he responded:

"A. I'm not saying that, I can't recall who gave me that money but I was working, it was working money. I suppose it must have come from Mr Haddad or from another job I have done."

"Q. "$13,000 in two days and you have no recollection where it came from?

A. Why not, if I've done a job somewhere and someone pulled in the cash?

Q. Which job?

A. I can't recall."

21 The following further exchange took place (at Black 74) which is of some importance:

"Q. In any event, you have told us that the $8,000 you had when you were assaulted was all cash.

A. Yes.

Q. You say all of that came from the bank account.

A. I'd say so, yes.

Q. Is that a yes

A. Where else could it come from?

Q. That is what I am asking.

A. Yes, the bank or a job I must have done and can't recall and got cash for it.

Q. Do you remember going to the bank and taking cash out for the payroll that ultimately got robbed.

A. Yes, got the bank?

Q. Yes to get the cash which was stolen off you. Do you recall going to the bank to get the cash which was stolen off you on 5 November.

A. No I can't recall what day I did that. The same day, the day before. I can't recall but I did have cash on me.

HIS HONOUR

Q. You say you knew you had $8,000 on me.

A. Where else would I get it.

Q. How do you know it was $8,000.

A. Because I had it on me.

Q. Do you remember it was $8,000.

A. Yes.

Q. Did you count it.

A. No I had it ready because I had workers I had to pay and I have made up – Paul rang me up that day and told me how much – no sorry Thursday night he rang me and told me how much I had to have for wages and how much I had to have for a glass company to pay for polishing some edges on glass. So that's why I had this $8,000 on me. Some of it for wages and some …"

22 A little later in his cross-examination the respondent said that at the time he was working three or four jobs and that the money in question came from the business. There then followed this exchange (Black 80):

"HIS HONOUR

Q. Did you tell me that, that you got this money out of the bank account.

A. Where else can I get it? It is either from the bank or from a job that I've done."

MR JOSEPH

Q. You told his Honour before that at least most of it came from the bank which you went to on either Thursday or Friday.

A. So I committed a crime here for not getting that money? I can't recall what I done a few weeks ago. What I'm saying is it probably came out from a bank or from a job that I done."

23 It was clear from the appellant's bank statements and cheque butts that, as his Honour found (at [31]), the respondent did not draw $8,000 cash from the bank at the relevant time. In other words, there was no evidence to support his assertion that he withdrew cash cheques totalling $8,000 either on 4 November and/or 5 November. According to the butts of the cheques paid at that time, two were drawn in favour of what appeared to be suppliers in the amounts of $4,000 and $3,000 respectively. His Honour suggested that those butts may not have truly recorded the payee's names and the cheques may have been drawn to cash as the respondent suggested they could have been. However, it is clear that his Honour was not prepared to so find.

24 After noting that Mr Joseph SC, then trial counsel for the appellant, drew upon these facts to raise the question as to whether the respondent was paying a workforce at all and, indeed, whether the business was genuine, his Honour responded in the following terms:

in an industry where tax avoidance is endemic

25 His Honour said (at [35]) that he came to this conclusion after considering "the following evidence". There followed some six items of which the second referred to some of the passages in the evidence which I have set out above. His Honour's relevant reasoning process then continued:

"(3) It is clear from the applicant's language that he was reconstructing the manner in which he obtained the $8,000 he says he had on his person when assaulted on 5 November 1999. The only two facts that he consistently asserts are his recollection of Mr Francis telling him that the wages bill was $8,000 and his recollection that he had sufficient cash on him to pay the wages bill including his own drawings at that time.

(4) It is of interest that the major cheques drawn on the 4th and 5th November 1999 add up to $8,000 which does raise the question of whether the payees mentioned on the cheque butts were genuine. However, the fact that only one week's wage bill during the several months the business operated was drawn by cheque strongly suggests that Mr Ibrahim was paying his wages using cash he had collected from clients for whom he was performing work.

…

(6) I have concluded on the balance of probabilities that the applicant was, as he admitted, obtaining payment for work in cash and paying the wages out of those cash receipts."

26 The primary judge then concluded in the following terms:

"36. Given that I accept on the facts that the business was genuine it follows that employees had to be paid and it was highly likely that Mr Ibrahim as the boss with control over the funds would have cash on his person on Fridays when wages are normally made up.

37. My findings of fact do not reflect well on the manner in which the applicant operated his business. However the issue in this instance is whether he had cash on his person at the time of the assault and I find on the balance of probabilities that he did."

27 His Honour reiterated these findings when dealing with the question of whether the assault had occurred during the course of employment. He said (at [72]):

"I have previously decided on the facts that Mr Ibrahim did make up wages for himself and his employees on Fridays and that notwithstanding the fact that on the face of the banking records he had drawn no funds that on the balance of probabilities the monies for the wages was in his possession in the form of cash payments from clients."

The submissions on the appeal

28 The appellant submitted that his Honour made no express finding that at the time of the assault the respondent had $8,000 in cash on his person although it accepted that in the context of finding that the shop-fitting business was genuine, he implicitly found that he had that amount of cash on him when he was robbed. In any event it is clear from [37] of his Honour's judgment (extracted at [26] above) that he made an express finding on the balance of probabilities that the respondent had cash on his person at the time of the assault, it being implicit that it was $8,000 or thereabouts.

29 Nevertheless the gravamen of the appellant's submission was that both in chief and in cross-examination the respondent gave evidence that the source of the money was a cash cheque or cheques whereas it was established by the bank records that that was not so. Accordingly, it was submitted that his Honour should have found that that was the end of the matter. Instead, his Honour deliberately found for the respondent upon a basis which, firstly, was not part of the respondent's case at trial and, secondly, involved a form of rationalisation in order to enable a finding to be made in the respondent's favour notwithstanding that it was not supported by the evidence. The rationalisation referred to was his Honour's finding that the cash in question had been obtained by the respondent, not from the bank by way of cash cheques, but from clients for whom the appellant was performing work and who had then paid him in cash.

30 The submission of the appellant is best articulated in [17] of its written submissions:

"At paragraph 82 his Honour made clear that the fundamental fact underpinning his finding that the Respondent was in the course of his employment when assaulted was the fact that he had gone home to make up the wages [Red 31V]. That finding is only open on the basis that the Respondent had $8,000, or at least a substantial amount of cash on him, at the time he went home. Once the Respondent's evidence as to the source of the cash had been exposed in cross examination as an impossibility the only finding open, consistent with the evidence and with logic, is that the Respondent had no significant amount of cash on his person at the time he went home; hence he did not go home to make up the wages and hence he was not in the course of his employment when assaulted."

31 The appellant further submitted that the primary judge had underpinned that finding by reference (in [34]) to the fact, of which he must have taken (at least implicitly) judicial notice, that the respondent was "in an industry where tax avoidance is endemic". It was submitted that it was no part of the respondent's case at trial that the cash of which the respondent was robbed and which he intended to use to pay wages had its source in cash received by him directly from customers and which he had not banked.

32 Reference was made to the observation of Callinan J in Woods v Multi-Sport Holdings Pty Limited (2002) 208 CLR 460 at 511 [165] that:

"… judges are not free to apply their own views and to make their own enquiries of social ethics, psychology and history without requiring evidence or other proof."

33 Further, it was submitted that insofar as his Honour purported to take judicial notice of what was endemic in the building industry, tax avoidance in that industry was not a matter of notoriety sufficient to enable judicial notice to be taken of it: Holland v Jones (1917) 23 CLR 149 at 153. However, in that passage Isaacs J said that the relevant principle

simpliciter

34 Judges do not live in a social vacuum and most adult persons would have, in their lifetime, come across tradesmen who offer a discount for cash and particularly so with respect to work performed by small operators in the building industry. I would have thought that the fact that those operators in the building industry conduct a not insubstantial part of their business for cash would be so generally known that most ordinary people might be reasonably presumed to be aware of it. This was particularly so in 1999 before the introduction of the Federal Government's goods and services tax which was designed, also a matter of notoriety, to minimise if not eliminate the cash economy.

35 In answer to the appellant's submissions, the respondent submitted that there was evidence that was open to his Honour to accept that the $8,000 in question was sourced in cash received by the respondent from his customers at the time. That there was evidence to this effect is undoubted. Nevertheless, the appellant submitted that it was only when the respondent realised that the appellant's bank records would not substantiate his primary evidence, that he obtained the money from cash cheques, that he suggested an alternative source being cash received from "a job I must have done and can't recall".

Was there an error of law?

36 It was common ground that the appeal to this Court from the decision of the primary judge was confined to a question of law. The relevant principles as to what constitutes a question of law were articulated by Glass JA, with whom Samuels JA agreed, in Azzopardi v Tasman UEB Industries Limited (1985) 4 NSWLR 139 at 155-157. They were summarised by Clarke JA, with whom Hope and McHugh JJA agreed, in Randwick Municipal Council v Manousaki (1988) 66 LGRA 330 at 333-334. In both those cases reliance was placed upon the following statement of Jordan CJ in McPhee v S Bennett Limited (1935) 52 WN (NSW) 8 at 9 where his Honour said (omitting citations):

"The question whether there is any evidence of a particular fact is also a question of law. But if there is evidence of the fact, the question whether that evidence ought to be accepted in whole or in part, or ought to be accepted as sufficient to establish the fact, is itself a question of fact and not a question of law, unless, of course, there is some law which provides that the particular evidence, when given, is to be taken to establish the fact."

37 Furthermore, perverse or unreasonable findings of fact do not constitute errors of law: Azzopardi at 155-157; Randwick Municipal Council v Manousaki at 333; cf Hill v Green (1999) 48 NSWLR 161 at 209-210. That proposition is only subject to the exception that the court will correct perverse or unreasonable applications of the law to the facts found: Azzopardi at 157; So v So [2004] NSWCA 67 at [31]. However, the present is not such a case. Although the appellant challenges the primary judge's ultimate finding of fact that the respondent's injuries arose out of the course of his employment, the success of the challenge depends upon the appellant's attack upon his Honour's primary finding of fact (which underpinned his ultimate finding of fact) that, at the time of the assault, he had in his possession $8,000 in cash which he intended to use for the purpose of paying himself and the appellant's employees. In this context, in Azzopardi Glass JA observed (at [156]):

"A finding of fact in the Commission may nevertheless reveal an error of law where it appears that the trial judge has misdirected himself i.e. has defined otherwise than in accordance with law the question of fact which he has to answer. A possibility of this kind exists with ultimate findings of fact but not with respect to primary findings of fact such as whether the applicant suffered injury on a particular date. Further, an ultimate finding of fact, even in the absence of misdirection, may reveal error of law if the primary facts found are necessarily within or outside a statutory description and a contrary decision has been made."

38 The finding in the present case which is assailed by the appellant is not of that character: what is challenged is his Honour's primary finding of fact, not his ultimate finding of fact and there is no suggestion that he had defined otherwise than in accordance with law the question of fact which he had to answer. It is only if the appellant can undermine that primary finding of fact that his Honour's ultimate finding of fact can be successfully attacked.

39 In Ambulance Service of New South Wales v Daniel (2000) 19 NSWCCR 697 at 711 ([46]), Hodgson CJ in Eq (with whom Sheller and Beazley JJA agreed on this point) noted that in Glass JA's judgment in Azzopardi

"a clear distinction was drawn between the situation where the finding of fact in question is made in favour of a person bearing the onus of proof, and a situation when the finding of fact is made against the person bearing the onus of proof. In the former situation, the question is not whether there is any evidence at all on the point, but rather whether the evidence on the point is sufficient, in the sense that it is evidence, which if fully accepted could properly base the finding of fact."

So v So

40 The present case is one where what is challenged is a finding of fact made in favour of a person bearing the onus of proof, namely, the respondent. Accordingly, the only question of law which can arise is whether the evidence accepted by the primary judge was evidence that could properly base the finding of fact. In other words, given the primary finding of fact that the respondent had a substantial amount of cash on him at the time he was robbed, was there evidence which, if fully accepted, could properly base that finding? In my opinion, the only answer to that question is yes.

41 It may be argued that that evidence was implausible coming as it did after it was put to the respondent that the appellant's bank records did not support his primary evidence that he obtained the relevant cash from his bank by way of cash cheque and/or use of the automatic teller machine. He then gave evidence that he must have obtained the cash direct from customers for whom he was performing a job. As I have said, it could well be contended (and no doubt was so argued before the primary judge) that that evidence was implausible given the circumstances under which it was elicited. Nevertheless, it was accepted by the primary judge and that acceptance is not open to challenge even if it could be described as perverse. Once accepted, there could be no doubt that it provided an evidentiary base for his Honour's finding that the respondent had that cash in his possession when he was assaulted. The contrary was not contended.

42 Accordingly, his Honour's acceptance of that evidence supported his finding that the respondent had cash on his person at the time of the assault for the purpose of paying wages to the appellant's employees. That was a finding of fact which did not give rise to any question of law.

43 The appellant nevertheless submitted, firstly, that it was no part of the respondent's case at trial that the source of the cash (of which he was robbed) was from the customers for whom he was performing work and, secondly, that the appellant was denied procedural fairness as it was it was not given any opportunity to put submissions as to whether his Honour was entitled to take judicial notice of the fact that tax avoidance in the building industry was endemic.

44 As to the first of these matters, I repeat my observation that the evidence led on behalf of the respondent in chief did not seek to elicit the source of the $8,000: rather, the respondent was only asked when he had obtained the money. It is true that he gave an unresponsive answer to the extent to which he said that his bank statements "could tell you about some cash cheques being drawn out from it". As his Honour observed when dealing with his impressions of the respondent's evidence, the latter had a habit of reconstructing events on the basis of what would have been the case rather than his actual recollection. Nevertheless, there is no doubt that in cross-examination it was sought to pin the respondent down to his evidence that the cash came from the bank and then to confront him with the bank statements, the purpose of this cross-examination being to diminish, if not destroy, the respondent's credibility. It is in the context of that line of questioning that on a number of occasions the respondent gave evidence that the money could only have come either from the bank or from a job that he had done.

45 Furthermore, before the primary judge, Mr Joseph SC, trial counsel for the appellant, in support of his submission that the respondent was not carrying on a genuine business and/or that he had no cash upon him at the time of the assault, submitted (at Black 145) that:

"the source of the money is just unidentified. He says originally to you that he went to the bank. There is absolutely no doubt about that."

46 Trial counsel for the respondent, in his reply to Mr Joseph's submissions, referred (at Black 164-5) to the fact that his client had been asked a lot of questions as to where the money had come from. He submitted to the primary judge that it was never put to the respondent that he was not running a glass and aluminium business. The following exchange then took place:

"HIS HONOUR

There was certainly a pretty big cash flow about this period of time.

MR SMITH

He says he has done pretty successfully. He has got a Westfield contract.

HIS HONOUR

He has got Mr Haddad as a client who gives him lots of money.

MR SMITH

He was paying him cash, he says, and he already got Westfield. My friend never put to him -

HIS HONOUR

This is the building industry.

MR SMITH

Well, it is, you know – there have been many a royal commission – We say it was never put to him and if my friend had any evidence at all that he was not running such a business, surely it is up to him to call it. It is not up to us to corroborate a story which is not challenged in that direct form."

47 It is clear from the above exchange that his Honour, noting that the respondent was working in the building industry, observed, in effect, that he was obtaining "lots of money" from Mr Haddad, a client, who as the respondent's counsel pointed out, was paying him in cash. It was in that context that his Honour referred to the building industry. In my opinion it is clear from that exchange that Mr Smith on behalf of the respondent was making the case, given the bank records, that the cash the respondent had on him at the time he was robbed came from Mr Haddad or someone of his ilk. In my opinion, senior trial counsel for the appellant could not have been caught by surprise by that submission. He certainly had the opportunity to respond to it as he was heard in reply but confined himself to submissions relating to medical issues: see Black 174-5.

48 In any event, in my opinion his Honour's reference in [34] of his judgment to the respondent being in an industry where tax avoidance is endemic was a statement made in the context of his finding, which was supported by the respondent's evidence, that a substantial part of his business transactions were conducted for cash. On my reading of his Honour's judgment, it did not form the, or an, evidentiary basis for that finding. Further, it did not, contrary to the appellant's submission, constitute some form of rationalisation on the part of the primary judge to justify a finding in favour of the respondent which was otherwise unsupported by the evidence. The contrary is the case. No doubt other judges may have taken an entirely different view as to the respondent's credit and may well have rejected evidence which the primary judge accepted, but that possibility or probability does not give rise to a question of law.

49 We were referred in this respect to the statement of Callinan J in Suvaal v Cessnock City Council (2003) 77 ALJR 1449 at 1475 [149] where his Honour said:

"I agree with Giles JA that the Master's explanation of the accident was no more than 'a rationalisation of what occurred … from final overload before the [appellant] went into the potholes'. The principle that findings by judges of first instance are owed much deference because of the judge's advantage over appellate courts by reason of seeing and hearing the witnesses can have little useful application to a case in which the judge has found in favour of a party who was a witness, a version which he has not only not given but which he has also resolutely and repeatedly rejected."

50 The point being made by Callinan J is that it is not open to a trial judge to adopt as a matter of rationalisation a conclusion of fact in favour of a party which is unsupported by, or contrary to, the evidence of that party. The primary judge has made no such error in the present case.

51 In my opinion, the challenge by the appellant to his Honour's primary finding of fact that the respondent was robbed of a substantial amount of cash and that that cash was in all probability obtained by him directly from one or more of his customers should be rejected.

52 The appellant in its written submissions also challenged his Honour's finding that respondent was earning and being paid an average salary of $1,500 per week by the appellant. In this respect the primary judge (at [160]) stated that the appellant did not contest the respondent's wages schedule which indicated that he was earning that amount. There is no doubt that this was challenged but only in the context of the appellant's submission to his Honour that the respondent was not carrying on a genuine business in the appellant's name. In chief (Black 12), the respondent gave evidence that he paid himself $1,500 per week and cross-examination on this was confined to the following exchange (Black 65-6):

"Q. What was your salary?

A. $1,500.

Q. Every week?

A. Yes.

…

Q. You had a salary, Mr Francis had a salary and there were three or four other workers engaged by the company at that time.

A. In October, yes.

Q. Beginning of November?

A. Yes, sir."

53 In oral argument, senior counsel for the appellant appreciated the force of the foregoing and, in essence, implicitly but properly conceded that this challenge to his Honour's finding could not succeed.

54 Finally, the primary judge awarded the respondent weekly benefits as and from 24 September 1999 notwithstanding that he only claimed such payments from 29 November 2001. This was because, as his Further Amended Application for Determination made clear, the respondent had received weekly payments up to that date. Although the respondent submitted that no point was taken below that the claim went beyond the pleadings, in my opinion his Honour was in error, given that the respondent had received weekly payments up to 29 November 2001, in awarding the respondent weekly compensation as and from 24 September 1999.

55 Accordingly, Order 1(1) and 1(2) made by the primary judge on 3 June 2004 should be set aside and Order 1(3) should be amended by deleting therefrom the date "1 October 2000" and substituting in lieu the date "30 November 2001".

Conclusion

56 In my opinion the following orders should be made:

1) Appeal allowed in part.

2) Orders 1(1) and 1(2) made by Walker DCJ on 3 June 2004 be set aside.

3) Order 1(3) made by Walker DCJ on 3 June 2004 be varied by deleting therefrom the date "1 October 2000" and substituting in lieu thereof the date "30 November 2001".

4) Otherwise appeal dismissed.

57 McCOLL JA: I have had the advantage of reading Tobias JA’s judgment in this matter. I cannot, with respect, agree with his Honour’s conclusion. In my opinion, the appellant was denied procedural fairness in the manner in which the primary judge determined whether the respondent was injured in the course of his employment.

Background

58 The respondent was assaulted on 5 November 1999. He sought compensation benefits from the appellant in respect of (inter alia) the injuries he claimed to have suffered as a result of that assault by a Further Amended Application for Determination filed in the New South Wales Compensation Court on 28 October 2002.

59 The hearing of his application commenced on 16 October 2003 in the Compensation Court of New South Wales before his Honour Judge Walker. The matter was adjourned, part heard, on 17 October 2003. The hearing resumed before his Honour on 13 February 2004. By that stage the Compensation Court had been abolished (s 4(2), Compensation Court Repeal Act 2002) and the matter continued before his Honour as a Judge of the District Court of New South Wales pursuant to s 7 of the same Act. Judgment was reserved on 13 February 2004 and delivered on 3 June 2004. His Honour made an award in favour of the respondent the details of which are set out in Tobias JA’s judgment.

60 The appellant appeals on a number of grounds. The appeal to this Court is confined to errors of law: cl 8(2)(a), Compensation Court Repeal (Transitional) Regulation 2003 which continued the operation of s 32 of the Compensation Court Act 1984 limiting appeals to errors of law on the part of the primary judge: see Hevi Lift (PNG) Ltd v Etherington [2005] NSWCA 42 at [6].

61 The appellant challenges the primary judge’s conclusion that the respondent was assaulted in the course of employment. Its principal complaints are that the primary judge

(a) impermissibly took judicial notice of the "fact" that tax avoidance is endemic in the building industry and did not give the appellant an opportunity to call evidence or put submissions in this respect;

62 The appellant’s fundamental case, therefore, is that it was denied procedural fairness in that the primary judge resolved the case on bases which it was not given the opportunity to address. A denial of natural justice in this respect would constitute an error of law: Escobar v Spindaleri (1986) 7 NSWLR 51; Yates Property Corporation Pty Ltd (In Liq) v Darling Harbour Authority (1991) 24 NSWLR 156 at 186 per Handley JA. Such an error may only be reviewed on appeal if it vitiated the ultimate decision: Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 at 153, 155 and 157 per Glass JA with whom Samuels JA agreed; Yates Property Corp Pty Limited (In Liq) v Darling Harbour Authority (at 177); Minister Administering the Crown Lands Act v Deerubbin LALC (1998) 43 NSWLR 249 at 254 – 255; Terrace Towers Holdings Pty Ltd v Sutherland Shire Council [2003] NSWCA 289; (2003) 129 LGERA 195 at [30]; Miller v Commissioner of Police NSW [2004] NSWCA 356 at [26]; Hevi Lift (PNG) Ltd v Etherington (at [63]).

Statement of the case

63 In order to appreciate the appellant’s complaints it is necessary to consider closely both how the case was conducted and the primary judge’s reasons.

64 Before the primary judge the respondent’s case was that he had incorporated the appellant in 1999 and, through it, carried on business renovating shops and “doing shopfronts in glass and aluminium”.

65 The respondent gave evidence that on 5 November 1999 he was working at Westfield Shopping Centre and attended Sydney Glass at Bankstown at about 1.00 pm. He left Bankstown to go to his home originally, he said, because one of his employees, a Mr Francis, telephoned him and informed him that he had lost the key to the business’s utility. The respondent said he would go home to pick up a spare key. On his way home Mr Francis called him and told him that the key had been found. The respondent said he decided, nevertheless, to return home. At trial, he gave various reasons for this decision. One was that he wanted to visit his wife who had recently given birth. He also said that he was going home to prepare wages as 5 November 1999 was a Friday.

66 He arrived at his home at about 2.00 pm and pulled up in Robert Lane, Marrickville. He said that as he was getting out of his car he was assaulted by three people wearing hats and sunglasses. He was punched on the head and hit about four or five times with a baseball bat. A gun was placed to his head whilst the assailants carried out a search. He said that at the time he was carrying $8,000 in cash which the assailants stole.

67 It is convenient to outline the appellant’s approach at trial. The arguments advanced were pursued both in cross-examination of the respondent and by reliance upon contemporaneous documents.

68 The appellant put in issue at trial whether the assault occurred in the course of the respondent’s employment. The appellant’s case was that the assault had nothing to do with the respondent’s business, if he was conducting one. Indeed, the appellant asserted that the respondent’s business was a sham.

69 The appellant argued (inter alia) that the respondent’s evidence that he had $8,000 in cash on him, which was stolen during the assault, was fabricated in order to explain the assault.

the injured worker understands and was made aware of the requirements of the [Workers Compensation] Act

for any reason connected with the payroll

put it your way, that’s okay

71 The appellant also relied on the fact that the respondent had not told an investigator apparently engaged by (presumably) the appellant’s workers compensation insurer that he was carrying cash for wages at the time of the assault. The respondent had also not told the police investigating the assault that he was carrying, and was robbed of, cash. At first, he had, in fact, told the police to “get lost” and only mentioned the cash “late in the piece”.

72 Mr Joseph SC, who appeared for the appellant at trial, also sought to demonstrate that the respondent’s story that he was carrying cash when assaulted was false because the source of the money could not be identified.

73 The respondent’s evidence of the source of the $8,000 varied. He was asked in chief when he had obtained the money and said that he could not recall but added, unresponsively, that:

"If you look at the bank statement it could tell you about some cash cheques being drawn out from it …".

74 He said the money was for "paying wages and … some of the glass that I ordered".

75 In cross-examination he said, at first, that it was correct that he was lodging all credits and taking all monies (expenses) out of the appellant’s National Bank account. When it was put to him however that he was not paid in cash, he said that he did get cash for “some jobs” but could not recall whether he was getting cash in October 1999.

76 Later when asked in cross-examination how he knew he was carrying $8,000 when he was assaulted, he said:

"A. I know myself because I pulled out from the bank that day a cash cheque I drawn it myself. The day before I drew a cash cheque and we draw [sic, presumably this was ‘withdrew’] that money. I can’t recall what days but I am always prepared for Friday. These people work and I must go back and give them their pay.

I wrote a cash cheque for myself

77 Subsequently, the respondent gave the following evidence, again in cross-examination:

You say all of that came from the bank account

I’d say so, yes

Yes, the bank or a job I must have done and can’t recall and got cash for it

No I can’t recall what day I did that. The same day, the day before

I can’t recall but I did have cash on me

Paul rang me up … and told me how much I had to have for wages and how much I had to have for a glass company to pay for polishing some edges of glass.

where I’ve got to pay wages or pay things, yes

78 Subsequently, while still under cross-examination the respondent repeated that he had either got the money "from the bank or from a job that I done".

79 When pressed, he could not recall any job for which he had been paid in cash. In one answer, he at first did not accept that a Mr Haddad gave him cash then said "[the cash] must have come from Mr Haddad or from another job I have done". Mr Haddad was not called.

80 In the course of oral submissions before the primary judge when counsel for the respondent, Mr Smith, was addressing the question whether the assault had taken place in the course of employment, the following exchange took place:

"His Honour: There was certainly a pretty big cash flow about this period of time.

Mr. Smith: He says he has done pretty successfully. He has got a Westfield contract.

His Honour: He has got Mr Haddad as a client who gives him lots of money.

Mr. Smith: He was paying him cash, he says, and he already got Westfield. My friend never put to him -

His Honour: This is the building industry.

Mr Smith: Well it is you know – there have been many a royal commission …"

81 Counsel for the appellant made submissions in reply, but made no reference to his Honour’s remark concerning the building industry.

The primary judge’s reasons

82 The primary judge noted that Mr Joseph raised "a plethora of credit issues" with which he argued the Court should deal on either of two core bases:

(a) the Court could not accept anything the respondent said as truthful, or

83 His Honour dealt first with credit issues relating to the respondent’s health. The appellant challenged the respondent’s credit in this respect by reference to inconsistencies between his evidence concerning his pre-assault medical condition and objective medical evidence which pre-dated the assault.

84 The primary judge concluded that the applicant’s evidence concerning medical histories was "not always reliable" and that in making his determinations he should seek corroboration before making a finding in the respondent’s favour on a medical issue.

85 Insofar as the respondent’s professed business activities were concerned, one of the principal issues the primary judge dealt with as a matter of credit was whether the respondent had $8,000 of the appellant’s money on him when he was assaulted. This issue did not only go to credit. It was critical to the respondent’s claim that he carried out work at home for his business including making up wages. It was also critical to the appellant’s argument that the assault had not taken place in the course of the respondent’s employment.

86 Mr Joseph pointed to "the unreality of [the respondent’s] claims about his alleged assault" including:

87 The primary judge summarised the respondent’s bank records ([29]–[32]) and concluded:

"31. This evidence would suggest that the applicant did not draw, as he said, $8,000 cash at the relevant time – unless of course the cheque butts do not truly record the payee’s name and the cheques were indeed drawn for cash as the applicant suggests they could have been."

88 The primary judge then observed that of the cheque butts in evidence between 7 July 1999 and 24 March 2000, only two related to wages. One was a cheque for $414.00 which made out to the Commissioner of Taxation and the other a cheque for $4,000 made out to "wages". Mr Joseph relied upon those facts, his Honour noted, to "raise the question as to whether the [respondent] was paying a workforce at all and indeed whether the business was genuine".

89 His Honour then said:

the applicant in an industry where tax avoidance is endemic, was conducting a substantial part of his business transactions in cash notably the payment of himself and his employees

35. I have reached this conclusion on the balance of probabilities after considering the following evidence:

(1) The bank statements, cheque butts, taxation returns and insurance documents all strongly suggest that the respondent company was engaged in the building industry. The respondent insurer who employed investigators to protect its interests and who obtained statements from the applicant which noted details of significant business transactions such as the major project for the East Gardens jeweller and the visit to Sydney Glass has not put evidence before the Court from clients building suppliers or alleged employees to substantiate its claim that the business was a sham.

some revealing admissions

· At T2, 24.8 he admitted he had cash in his hands on 3rd and 4th November 1999.

· At T2, 24.10 he said 'Okay, well probably on those days I have put cheques in, or put cash deposit into my account probably because of cheques I had to write out for previous things or other things. I’m not denying it, yes I did have the cash'.

· At T2, 24.21 the following exchange took place:

'Q. And on 3 November you say he (ie Mr Haddad gave you two lots of cash?

A. Yes and what is wrong with that?

Q. Are you saying that on the same day he gave you two different lots of cash, one of $3000 and one of $5000.

A. I’m not saying that, I can’t recall who gave me that money but I was working, it was working money. I suppose it must have come from Mr Haddad or from another job ive done'.

· At T2, 25. Joseph SC pinned the applicant down even further:

'Q. In any event you have told us that the $8000 you had when you were assaulted was all cash?

A. I’d say so yes

Q. Is that a yes?

Q. Do you recall going too the bank to get the cash which was stolen off you on 5 November?

A. No I can’t recall what day I did it. The same day the day before. I can’t recall but I did have cash on me.'

(3) It is clear from the applicant’s language that he was reconstructing the manner in which he obtained the $8000 he says he had on his person when assaulted on 5 November 1999. The only two facts that he consistently asserts are his recollection of Mr Francis telling him that the wages bill was $8000 and his recollection that he had sufficient cash on him to pay the wages bill including his own drawings at that time.

the fact that only one week’s wage bill during the several months the business operated was drawn by cheque strongly suggests that Mr Ibrahim was paying his wages using cash he had collected from clients for whom he was performing work

(5) The applicant’s accountant Mr Barakat initially denied any knowledge or professional relationship with the applicant and refused to come to court. Eventually he admitted knowing the applicant but denied having any business records in his possession. Neither party put before the Court any evidence from the Liquidator concerning the state of the respondent company books.

obtaining payment for work in cash and paying the wages out of those cash receipts

36. Given that I accept on the facts that the business was genuine it follows that employees had to be paid and it was highly likely that Mr Ibrahim as the boss with control over the funds would have cash on his person on Fridays when wages are normally made up.

My findings of fact do not reflect well on the manner in which the applicant operated his business

90 At a later stage in his judgment when dealing with another credit issue concerning the fact that $63,000 was deposited into the appellant’s bank account at a time when the respondent was said to be on light duties, the primary judge noted the respondent’s evidence:

extra tax that’s been paid from the cheques to the accountant

pay the tax

91 His Honour then said:

with the possible exception of the tax reference

92 Insofar as the appellant sought to challenge the respondent’s credit on matters related to his business activities, it is a fair summary of his Honour’s judgment to say that he did not expressly resolve that issue adversely to the respondent.

93 Having dealt with the credit issues the primary judge turned to consider the question whether the assault occurred in the course of the respondent’s employment. In dealing with Mr Joseph’s submission that the respondent’s story about the assault had “an air of unreality about it”, his Honour noted that submission was relevantly based on the proposition that:

"(a) The applicant has not proved from the bank records that he drew the cash for the wages he said he was going to make up. The story about the cash is really about explaining why he was assaulted as otherwise it made no sense for robbers to be waiting for him with guns and a baseball bat in the lane beside his home.

(b) The applicant’s evidence that he drew a cheque for the wages is demonstrably wrong.

(c) There is no corroboration of the applicant’s evidence that he used his home as an office. There is not one business record produced to the court to establish any office work going on, no books of account, wages records, invoices, quotations, job designs or specifications."

94 His Honour considered the law on course of employment, then dealt with the wages issue. In this respect, he said:

notwithstanding the fact that on the face of the banking records he had drawn no funds that on the balance of probabilities the monies for the wages was in his possession in the form of cash payments from clients

95 This was a reference to his Honour’s conclusion in the credit section of his judgment at [34] – [37] which I have set out above.

96 Subsequently, his Honour referred again (at [77]), to the fact that he had found that the respondent "was using cash payments made to him by clients to make up his wages".

97 Taking all the evidence into account, the primary judge concluded (at [79]) that one of the reasons the respondent had for going home on 5 November 1999 was to make up the wages. Accordingly, his Honour rejected Mr Joseph’s submission that the assault had an air of unreality about it and held that the assault occurred in the course of the respondent’s employment with the appellant.

Arguments on appeal

98 Mr P Neil SC, who appeared for the appellant with Mr H Halligan on appeal, submitted that the primary judge’s finding that the respondent was assaulted while on his way home to prepare wages was critical to his finding that the respondent was in the course of his employment at the time of the assault. He argued that that finding was only open on the basis that the respondent had $8,000 or a substantial amount of cash on him at the time he went home and that he was using that cash to pay wages. Mr Neil pointed out that the respondent had not made any admission that he was paying wages out of cash receipts of the business and argued that a finding that he was, was not open on the evidence.

99 Mr Neil argued that once the respondent’s evidence as to the source of cash had been exposed in cross-examination as impossible, the only finding, consistent with the evidence, was that the respondent did not have a significant amount of cash on him at the time he returned to his house, hence had not gone home to make up his wages and hence was not in the course of his employment when assaulted.

100 Mr Neil contended that the primary judge’s finding that the respondent worked in an industry where tax avoidance was endemic was critical to the inference he drew that the respondent was paying himself and his employees in cash for tax avoidance reasons. He submitted that, without expressly saying so, the primary judge had taken judicial notice of the fact that tax avoidance was endemic in the shop-fitting business. He argued that it was not a notorious fact of which judicial notice could be taken, that tax avoidance was endemic in the building industry. He also contended that by resorting to judicial notice without forewarning the parties the primary judge had deprived the appellant of the opportunity to put submissions first, as to whether his Honour was entitled to take judicial notice of that "fact" and, secondly, if he was entitled to do so, the use he could make of that "fact" in the circumstances of the case.

101 In his written submissions, Mr Neil observed that wages are a tax deductible expenditure of the business and that the primary judge had not explained how the payment of wages in unrecorded cash could achieve a tax avoidance purpose.

102 Mr Neil also argued that the primary judge’s finding that the respondent had cash on him for wages when assaulted and, was in the course of his employment was "merely his own rationalisation of what occurred", was not based on the evidence and, indeed, was contrary to the evidence. He submitted that the primary judge had created a new case with which the appellant had no opportunity to deal: cf Suvaal v Cessnock City Council [2003] HCA 41; (2003) 77 ALJR 1449 per Gleeson CJ and Heydon J (at [36]) per Callinan J (at [149]).

103 Mr Evatt submitted that the primary judge’s finding that the respondent was carrying cash for wages when he was assaulted was reasonably open on the evidence. He argued that while the respondent’s evidence concerning the source of the cash "did change and [was] not definite", there was, in fact, evidence that the $8,000 in cash was not necessarily the proceeds of cash cheques but was "probably, or possibly, also in part from ATM withdrawal(s)" or other "cash from work", or from "a job I must have done and got cash for", or "work that we’ve done".

104 Mr Evatt also contended that the primary judge had not definitely rejected the cash from cheques explanation, merely observed that it was contradicted by the cheque butts at the crucial time and then concluded that the cheque butts were not necessarily accurate.

105 Mr Evatt argued that it was accurate for the primary judge to summarise the respondent’s evidence as an "admission" that some substantial part of the $8,000 was cash that had been received from customers and had not been banked. He also contended that the primary judge’s inference that tax avoidance was a probable motive for paying wages out of cash that was received from customers was reasonably open. Mr Evatt’s written submissions asserted:

"If customers pay in cash, wages and other expenses are paid from the cash and only any balance remaining is then banked, it can be represented that this balance was the only income ever received. If the only record of many expenses is incomplete or inaccurate cheque butts, it is possible to claim deduction for the expenses against this balance."

106 Mr Evatt contended that the primary judge’s finding concerning the source of the $8,000 was not made without forewarning to the parties, referring to his Honour’s observation during oral submissions that "[t]his is the building industry".

107 Mr Evatt acknowledged that it was not the respondent’s case at trial that he was receiving money or making payments of wages out of cash in order to avoid tax. He queried, however, whether the primary judge had made any such finding.

Consideration

108 The passages from his Honour’s judgment which I have set out demonstrate that he:

(a) rejected (at [31], [35]) the respondent’s evidence that the $8,000 was drawn from his bank account;

(b) accepted the respondent’s evidence that he was carrying $8,000 cash which came from “a job that I’d done” (the “cash from jobs case”);

(c) was only able to reach the last conclusion by the following process of reasoning, which was either expressly or implicitly set out in his judgment:

(i) the respondent was engaged in the building industry;

(iii) the use of cash in the building industry is a method of tax avoidance;

(iv) the appellant’s bank records showed only one wages cheque drawn in several months; this strongly suggested the respondent was paying his wages using cash;

(v) the respondent was receiving cash from jobs which he was not banking;

(vi) the respondent was paying wages using the cash he had received from jobs but not banked;

(v) the respondent carrying on business in the manner recorded in the last three sub-paragraphs because he was engaged in the tax avoidance endemic in the building industry.

109 Although the primary judge accepted that the respondent was "reconstructing the manner in which he obtained the $8,000" (at [35] (3)), this could only have been true to a limited extent. The appellant’s bank records were available. The respondent was cross-examined on what they disclosed. When confronted with the proposition that they did not support his principal explanation that the $8000 came from a cash cheque drawn on the bank account, the respondent resorted to the cash from jobs explanation.

110 The bank records demonstrated, to the primary judge’s satisfaction (see [31] and [35] (4)), that the respondent’s principal explanation for the source of the $8,000 could not (to put it neutrally) be accepted. It might have been thought that this conclusion would have reflected adversely on the respondent’s credit. His Honour appears to have avoided making an adverse credit finding in this respect because he concluded that the respondent was reconstructing the manner in which he had obtained the $8,000.

111 It is apparent that the primary judge regarded the cash from jobs case as a bald assertion which required "corroboration" or, some sort of rationale, in order to command acceptance. He sought that corroboration, in my view, because he had already rejected one explanation the respondent had given. It was consistent with the approach he had taken to the respondent’s medical history, that the primary judge would then look for corroboration for the cash from jobs case. Such an approach also reflected acceptance, albeit not expressly stated in this context, of the appellant’s two core credit attacks.

112 The primary judge clearly regarded the absence of wages cheques as inadequate, alone, to support the cash from jobs case. That may have been because, although again his Honour did not expressly so state, the absence of wages cheques was equally consistent with the appellant’s case that the respondent’s business was a sham.

113 Accordingly his Honour looked, in my view, for "corroboration" or a rationale for the cash flow jobs to the theory that the respondent was carrying cash because he was engaged in tax avoidance. I say “theory” because, as Mr Evatt conceded, not surprisingly the respondent did not advance a case at trial that he was carrying cash or paying wages from cash because he was engaged in tax avoidance.

114 In the ordinary course one might have thought that a process of ratiocination, one step of which was premised on the proposition that the respondent was engaged in an illegal activity, would have given pause for thought concerning his credibility. His Honour does not appear to have considered this, commenting merely (at [37]) that his "findings of fact [did] not reflect well on the manner in which the applicant operated his business". Mr Evatt suggested that that observation was made in relation to the manner in which the respondent conducted his business by putting much, but not all, of his cash in the bank, the absence of information on cheque butts and the failure to produce books. In my view that submission was ingenuous. Paragraph 37 appeared at the conclusion of his Honour’s analysis of the reasons he was able to accept the cash from jobs case. It was clearly a summation of, among other matters, his Honour’s conclusion that the respondent was engaging in tax avoidance.

115 This analysis is supported by a later passage in the judgment where the primary judge referred (at [43]) to the respondent’s evidence that he paid tax. His Honour was not prepared to accept that evidence (see [44]). Once again, it might have been thought, that his Honour’s rejection of this aspect of the respondent’s evidence would have cast doubt upon the respondent’s credibility and, therefore, on the cash from jobs case. Be that as it may, his Honour’s conclusion that the respondent’s statement he was paying tax was not credible, supports the proposition that he had concluded the respondent was engaged in tax avoidance.

116 The primary judge’s acceptance (at [37]) of the cash from jobs case, albeit contained in the credit section of his judgment, was the sheet anchor of his conclusion that the respondent was in the course of employment when he was assaulted. His Honour relied (at [72]) upon his acceptance of the cash from jobs case when he considered the course of employment issue. At this stage his Honour also considered (at [73]-[76] the appellant’s argument that the earlier inconsistent versions of the assault recorded in the claim form and related to the insurance investigator were to be preferred to the carrying cash case which later emerged. He dealt with those versions (at [77]) again, by relying upon his acceptance of the cash from jobs case. After referring to other arguments which do not require consideration, his Honour concluded (at [89]) that the assault occurred in the course of the respondent’s employment.

117 It is plain, in my view, that the primary judge was only able to reach his conclusion that the assault took place in the course of employment because he had accepted the cash from jobs case, a finding which critically depended upon the respondent being engaged in tax avoidance. That finding, in turn, depended upon the premise that tax avoidance was endemic in the building industry presumably (although the primary judge did not advert to this factor) at the time the respondent was assaulted. Whether or not the latter premise was open to his Honour, a matter with which I deal below, there was no evidence that the respondent was engaged in tax avoidance.

118 I cannot agree with Tobias JA (at [48]) that the primary judge’s reference (at [34]) to tax avoidance did not form "the, or an, evidentiary basis" for his finding that the respondent was carrying cash for wages when assaulted and, therefore, was injured in the course of his employment. There would have been no reason for his Honour’s reference to tax avoidance had it not been intended (as, in my view, it in fact did) to provide an evidentiary basis for his conclusion in favour of the respondent.

119 The primary judge’s conclusion lacked an evidentiary foundation in a critical respect. This was an error of law, which vitiated the ultimate decision.

Judicial notice

120 I turn to the question whether the primary judge was entitled to take judicial notice that tax avoidance is endemic in the building industry.

121 This appeal was argued on the basis that it concerned the common law doctrine of judicial notice. However it should be noted that the continued application of that doctrine in New South Wales is in some doubt as a result of Gattellaro v Westpac Banking Corp [2004] HCA 6; (2004) 78 ALJR 394, a case to which neither party referred. In that case, Gleeson CJ, McHugh, Hayne and Heydon JJ said (at [17]) that "[i]n New South Wales there would appear to be no room for the operation of the common law doctrine of judicial notice, strictly so called, since the enactment of the Evidence Act 1995 (NSW), s 144". This statement was no doubt expressed in qualified terms because Westpac had conceded (see [15]) that the majority in the Court of Appeal had not been entitled to deploy the doctrine of judicial notice in the manner it did. In the light of that concession Gleeson CJ, McHugh, Hayne and Heydon JJ said (at [16]) that it was not necessary to deal with the judicial notice question in detail.

122 Section 144 of the Evidence Act 1995 provides:

144 Matters of common knowledge

(b) capable of verification by reference to a document the authority of which cannot reasonably be questioned.

(3) The court (including, if there is a jury, the jury) is to take knowledge of that kind into account.

(4) The judge is to give a party such opportunity to make submissions, and to refer to relevant information, relating to the acquiring or taking into account of knowledge of that kind as is necessary to ensure that the party is not unfairly prejudiced."

123 The High Court held in Gattellaro v Westpac Banking Corp, applying s 144, that it was not open to the Court of Appeal to conclude that Westpac had a standard form guarantee. Gleeson CJ, McHugh, Hayne and Heydon JJ said (at [18]):

a

it has not been demonstrated that the majority of the Court of Appeal gave the Gattellaros an opportunity to make submissions, and to refer to relevant information, relating to the acquiring or taking into account of the knowledge in question as was necessary to ensure that they were not unfairly prejudiced

124 Kirby J agreed (at [69]) that the majority in the Court of Appeal was in error in its use of the doctrine of judicial notice. He did not express an opinion as to the relative relationship between the common law doctrine of judicial notice and s 144.

125 It is not necessary to explore the question whether s 144 has, in fact, displaced the common law doctrine of judicial notice as, in my view, the same result would be achieved in this case whichever be applied. It is pertinent, however, to outline the basic tenets of the common law doctrine which, in any event, provide the background to s 144: CIC Insurance Ltd v Bankstown Football Club Ltd [1997] HCA 2; (1997) 187 CLR 384 at 408 per Brennan CJ, Dawson, Toohey and Gummow JJ.

126 The classic Australian exposition of the doctrine of judicial notice is found in Isaacs J’s judgment in Holland v Jones (1917) 23 CLR 149, a case concerned with the question whether evidence was required of the identity of the Minister of Defence, proof of whose consent in writing to institute a prosecution for contravention of the War Precautions Act 1914-1916 (Cth) and the Regulations thereunder was essential to the proceedings’ validity. A Police Magistrate had concluded that the necessary consent was established "by reading the document in which it was said to be contained, and by saying ‘I am satisfied that the signature ‘G F Pearce’ following upon the words ‘I consent to this prosecution’ appearing on the face of the information is the signature of G F Pearce whom I know to be the Minister for Defence and whose signature as such Minister I have seen on many informations which have come before me": Holland v Jones (at 152). He convicted the accused who appealed on the basis (inter alia) that there was no evidence of the consent in writing of the Minister for Defence.

127 Isaacs J (with whose judgment Barton ACJ concurred) rejected that argument as based upon a misconception of what was meant by “judicial notice”. His Honour (at 152) identified the doctrine of judicial notice as operating in the area where:

where justice is thereby better served

.

128 According to his Honour (at 153):

wherever a fact is so generally known that every ordinary person may be reasonably presumed to be aware of it

simpliciter

The basic essential is that the fact is to be of a class that is so generally known as to give rise to the presumption that all persons are aware of it

129 Applying that principle, his Honour concluded (at 154) that "it would be mere idle affectation for an Australian Court not to 'know' - more particularly in war time - who is the Minister for Defence".

130 In Munro v Tooheys Ltd (1991) 29 FCR 74 at 91, Beaumont J (quoting E M Morgan, Some Problems of Proof under the Anglo-American System of Litigation, at p 61) said "the party seeking judicial notice 'has the burden of convincing the judge that (a) the matter is so notorious as not to be the subject of dispute among reasonable men or (b) the matter is capable of immediate accurate demonstration by resort to readily accessible sources of indisputable accuracy' ". Applying that test his Honour held that "the question of drinking habits in the community is not a matter of this kind. It is not something so notorious or so demonstrable that evidence of it is not necessary …".

131 It might be accepted that tax evasion and avoidance takes place in the building industry. The 2003 Final Report of the Royal Commission into the Building and Construction Industry – Reform - National Issues Part 3 makes that plain: see At the same time the Report also observed (Volume 9, ch 16, [3]) that "views vary about the extent of tax evasion and avoidance …".

132 It is questionable, in my view whether the bald assertion employed by his Honour (tax avoidance is endemic in the building industry) is a matter which "every ordinary person may be reasonably presumed to be aware of" or not be the subject of dispute or not be reasonably open to question.

133 It is not necessary to resolve this nice question because the primary judge was not entitled to take judicial notice of this "fact" in reaching his conclusion that the respondent was assaulted in the course of employment without giving the parties an opportunity to deal with its significance in the circumstances of the case. As Isaacs J said in Holland v Jones judicial notice can be used to determine controversies "where justice is thereby better served". In like vein, in Woods v Multi-sport Holdings Pty Limited [2002] HCA 9; (2002) 208 CLR 460 at [163], Callinan J said:

"It would be unfair and entirely unsatisfactory for [the losing] party to learn, after the event, for the first time, that he or she lost because the Court resorted to extrinsic, allegedly notorious facts with which he or she had no opportunity to deal."

134 Section 144 (4) also requires a judge intending to take matters of common knowledge into account to give a party "such opportunity to make submissions, and to refer to relevant information, relating to the acquiring or taking into account of knowledge of that kind as is necessary to ensure that the party is not unfairly prejudiced". As Gattalero v Westpac Banking Corporation demonstrates, failure to afford the parties that opportunity means the Court could not make use of judicial notice.

135 Mr Evatt relies upon the exchange between the primary judge and Mr Smith during the course of addresses in which the primary judge said, "this is the building industry" as adequate forewarning to the appellant that his Honour may infer that tax avoidance was a probable motive for paying wages out of cash.

136 Whatever that elliptical remark was intended to convey to Mr Smith, it was not a matter which his Honour took up with Mr Joseph (who by that stage had addressed in chief). Mr Joseph did not address it in reply. I accept, as Tobias JA has said (at [47]) that the appellant was on notice of the cash from jobs case.

137 I do not accept that the exchange between the primary judge and Mr Smith was appropriate to put the appellant on notice of the use his Honour intended to make of his passing reference to this being "the building industry".

138 The significance of his Honour’s reliance on the tax avoidance theory can be seen from his Honour’s approach to the bank accounts. His Honour treated the absence of wages cheques drawn from the bank account as some evidence supporting the proposition the respondent was paying wages from cash he had collected from jobs. If this is correct then the fact wages cheques had not been drawn for the several months during which the respondent said his business was operating, would, on his Honour’s findings reveal systemic tax avoidance. The proposition that the respondent was engaged in such conduct would, had it been part of the respondent’s case, have elicited detailed cross-examination and raised further issues about his credibility. Furthermore, his Honour does not appear to have entertained the proposition, to which I have earlier referred and which, in my view, was an available inference, that the rarity of wages cheques supported the appellant’s case that the respondent was not carrying on the business for which he contended.

139 Other issues which might have been canvassed at trial include the credibility of the tax avoidance theory having regard to matters such as those the appellant raised concerning the tax deductibility of wages. Conversely, as Mr Evatt submitted, consideration would have to be given to the misrepresentation inherent in understating income in order to minimise tax. None of these matters were explored because the tax avoidance case was not raised or argued below.

140 In my view the appellant has established that the primary judge erred in law in using judicial notice without notice to the parties.

141 I also accept the appellant’s submission that the primary judge’s conclusion depended upon a rationalisation which lacked evidentiary foundation. It was not the respondent’s case that he was carrying cash to pay wages because he was engaged in tax avoidance. This was "an entirely new case with which the losing party had no testimonial or other evidentiary opportunity to deal": Suvaal (at [36]). That, too, constituted an error of law.

Conclusion

142 I do not think it appropriate, as Mr Neil submitted, that this outcome means there be a judgment for the appellant. The respondent should not be deprived of the opportunity to have his case considered on a basis he advances rather than one devised by the primary judge.

143 Finally, I observe that nothing in this judgment should be read as acceptance of the proposition that the respondent was engaged in tax avoidance. As I have said the factual basis of that inference was not explored at trial.

Orders

144 I would make the following orders:

(1) Appeal allowed

(3) Matter remitted to the District Court of New South Wales for rehearing on the application for compensation in relation to the assault.

Suitors' Fund Act

145 CAMPBELL A-JA: I agree with Tobias JA.

**********

Citations

Crown Glass & Aluminium Pty Limited v Ibrahim [2005] NSWCA 195

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Statutory Material Cited

1

So v So [2004] NSWCA 67

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CITATION:	Crown Glass & Aluminium P/L v Ibrahim [2005] NSWCA 195
HEARING DATE(S):	23 May 2005
JUDGMENT DATE:	30 June 2005
JUDGMENT OF:	Tobias JA at 1; McColl JA at 57; Campbell AJA at 145
DECISION:	1) Appeal allowed in part; 2) Orders 1(1) and 1(2) made by Walker DCJ on 3 June 2004 be set aside; 3) Order 1(3) made by Walker DCJ on 3 June 2004 be varied by deleting therefrom the date "1 October 2000" and substituting in lieu thereof the date "30 November 2001"; 4) Otherwise appeal dismissed; 5) The appellant to pay the respondent's costs of the appeal.

CATCHWORDS:	WORKERS COMPENSATION - Employee assaulted outside his home - Whether injury occurred in the course of employment - Whether at the time of assault employee carrying sum of money for purpose of paying wages - EVIDENCE - Appeals - Question of law - Circumstances in which finding of fact can reveal error of law - Conflicting evidence concerning source of the sum of money - Employee's primary evidence regarding source of money altered as a result of cross-examination - Whether evidence as accepted by primary judge could properly base his finding of fact that employee had money on him when assaulted - Whether primary judge's conclusion of fact involved a form of rationalisation in order to enable a finding in employee's favour which was otherwise unsupported by evidence
LEGISLATION CITED:	N/A
CASES CITED:	Woods v Multi-Sport Holdings Pty Limited (2002) 208 CLR 460 Holland v Jones (1917) 23 CLR 149 Azzopardi v Tasman UEB Industries Limited (1985) 4 NSWLR 139 Randwick Municipal Council v Manousaki (1988) 66 LGRA 330 McPhee v S Bennett Limited (1935) 52 WN (NSW) 8 So v So [2004] NSWCA 67 Ambulance Service of New South Wales v Daniel (2000) 19 NSWCCR 697 Suvaal v Cessnock City Council (2003) 77 ALJR 1449
PARTIES:	Crown Glass & Aluminium Pty Limited Ali Ibrahim
FILE NUMBER(S):	CA 40527/04
COUNSEL:	A: P W Neil SC / H J Halligan R: C A Evatt / M R Rollinson
SOLICITORS:	A: Edwards Michael Lawyers, Sydney R: Carters Law Firm, Auburn

LOWER COURT JURISDICTION:	Compensation Court
LOWER COURT FILE NUMBER(S):	CC 1500/02
LOWER COURT JUDICIAL OFFICER:	Walker J