D'Orsogna Limited v Zhang
[2019] WADC 73
•7 JUNE 2019
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL
LOCATION: PERTH
CITATION: D'ORSOGNA LIMITED -v- ZHANG [2019] WADC 73
CORAM: DAVIS DCJ
HEARD: 29 MARCH 2019
DELIVERED : 7 JUNE 2019
FILE NO/S: APP 115 of 2018
BETWEEN: D'ORSOGNA LIMITED
Appellant
AND
JING ZHANG
Respondent
ON APPEAL FROM:
Jurisdiction : WORKERS' COMPENSATION ARBITRATION SERVICE (WA)
Coram: ARBITRATOR SOH
File Number : A40355 & A48090
Catchwords:
Worker's compensation - Appeal - Adequacy of reasons - Whether finding open on the evidence before the arbitrator - Turns on own facts
Legislation:
Workers' Compensation and Injury Management Act 1981 (WA), s 247
Result:
Leave to appeal refused
Appeal dismissed
Representation:
Counsel:
| Appellant | : | Ms A R Aria-Retnam |
| Respondent | : | Mr A A Nolan |
Solicitors:
| Appellant | : | Sparke Helmore Lawyers |
| Respondent | : | Simon Walters |
Case(s) referred to in decision(s):
Atanasoska v Inghams Enterprises Pty Ltd [2009] WASCA 17
Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321
BHP Billiton Iron Ore Pty Ltd v Brady [2008] WASCA 250
Catholic Education Office of WA v Granitto [2012] WASCA 266
Derry v Peek (1889) 14 App Cas 337
Hasic v Delmere Holdings Pty Ltd [2010] C8-2010
House v The King [1936] HCA 40; (1936) 55 CLR 499
Leighton Contractors Pty Ltd v Withers [2011] C19-2011
Magill v Magill [2006] HCA 51; (2006) 226 CLR 551
Minister for Immigration & Multicultural Affairs v Al-Miahi [2001] FCA 744
Mount Lawley Pty Ltd v Western Australian Planning Commission [2004] WASCA 149; (2004) 29 WAR 273
Nardi v Department of Education and Training [2006] WACC C32-2006
Norbis v Norbis (1986) 161 CLR 513
Pacific Industrial Co v Jakovljevic [2008] WASCA 60
SNF (Australia) Pty Ltd v Jones [2008] WASCA 121
Suleski v Pilbara Iron Company (Services) Pty Ltd [2018] WASCA 147
Summit Homes v Lucev (1996) 16 WAR 566
Velez Pty Ltd v Tudor [2011] WASCA 218
DAVIS DCJ:
This appeal arises from a decision after arbitration pursuant to the provisions of the Workers' Compensation and Injury Management Act 1981 (WA) (the Act).
The arbitration dealt with two applications – one by the respondent claiming weekly payments of workers' compensation and statutory entitlements, and the other by the appellant, her employer, seeking a refund of workers' compensation payments made to her on the basis that she had capacity for work, or the cause of her incapacity was not a compensable injury.
On 25 October 2018 Arbitrator Soh ordered that both applications be dismissed. He provided written reasons for doing so.
The appellant filed an appeal from this decision, based on two grounds:
1.The arbitrator failed to provide adequate reasons.
2.The arbitrator made a finding that was not open to him on the evidence.
For the following reasons this appeal must be dismissed.
Background to this appeal, including the arbitrator's reasons
On 2 June 2015 the respondent claimed she had injured her knee at work on 28 May 2015 when she struck her right knee on a stainless steel tub (the incident). She subsequently made a claim for workers' compensation.
On 16 June 2015 the appellant's insurer accepted liability for a contusion or bruising of the right knee and started paying weekly payments of workers' compensation.
The respondent underwent an MRI of her knee on 1 October 2015 which found a meniscal tear which had not been present on prior imaging.
Subsequently the appellant obtained medical evidence which indicated both that the meniscal tear was not consistent with the incident, and that the respondent had suffered from problems with her right knee before the incident – something which had not been disclosed by the respondent in her workers' compensation claim forms or to the specialist medical practitioners who had reviewed her in respect of her claim.
On 23 December 2016, the appellant filed an application for conciliation (Application No. A40355) seeking:
1.a suspension, reduction, or cessation of the respondent's weekly payments, pursuant to s 60 of the Act, on the basis that the appellant had a genuine dispute as to liability to make weekly payments;
2.a discontinuance or reduction of the respondent's weekly payments, pursuant to s 62 of the Act, on the basis the respondent had capacity for work, or the cause of the incapacity was not a compensable injury; and
3.an order that the compensation and expenses paid to the respondent be refunded to the appellant on the basis that the respondent was not lawfully entitled to the payments, pursuant to s 71 of the Act.
The s 60 dispute was heard and determined on 31 May 2017. The respondent's workers' compensation payments were discontinued pursuant to orders made by Arbitrator Nunn, who determined that there was a genuine dispute as to the liability to make weekly payments.
The decision on the s 60 application rendered the appellant's s 62 application nugatory. The only issue that remained outstanding in Application No. A40355 was the appellant's application for recovery pursuant to s 71 of the Act. By this time, the respondent had received $121,262.54 by way of weekly payments and statutory expenses.
Section 71 of the Act provides:
71.Payments to unentitled person, recovery of
(1)Where WorkCover WA, the employer, or the insurer has paid compensation or expenses to a worker or dependant and that person was not lawfully entitled to that payment or to any part of the amount of that payment, WorkCover WA, the employer, or the insurer, as the case may be, may apply for an order of an arbitrator that compensation or expenses so paid be refunded, and an arbitrator has jurisdiction to hear and determine such an application and, subject to subsection (3), to make any order in relation thereto or any part thereof as the arbitrator considers appropriate in the circumstances.
(2)Without limiting the orders that may be made under subsection (1), the arbitrator may, instead of making an order for a refund, order any person who the arbitrator determines was liable for the whole or any part of the compensation or expenses to reimburse the person who paid the compensation or expenses.
(3)If the payment of compensation or expenses was in accordance with an order of an arbitrator, the arbitrator hearing and determining an application under subsection (1) may make an order for a refund only if satisfied that the claim for the payment was fraudulent or made without proper justification.
On 25 October 2017, the respondent filed an application for arbitration seeking an order for weekly payments of compensation and statutory expenses pursuant to s 58 of the Act (Application No. A48090).
On 28 June 2018, an arbitration hearing of both applications was held before Arbitrator Soh.
On 25 October 2018, Arbitrator Soh published written reasons for decision (Reasons) and made orders that:
1.Application No. A48090 filed by the respondent for weekly payments of workers' compensation and statutory entitlements is dismissed.
2. Application No. A40355 filed by the appellant for an order of refund of workers' compensation payments and expenses paid to the respondent is dismissed.
The arbitrator found that the respondent had withheld significant or critical information about her past knee conditions: Reasons [85] – [91], [150]. He made specific adverse findings about the credibility of the respondent, finding that she was not a credible witness and that she had deliberately withheld information about her previous right knee discomfort and medical attendances from her workers' compensation claim form and had given the impression to the medical practitioners who saw her that she did not have any past medical history or issue with her right knee at all: Reasons [11], [80] ‑ [91].
The arbitrator found that he was unable to accept the respondent's evidence that there was a specific incident in the workplace on 28 May 2015 which resulted in her knee making contact with a stainless steel tub, and was not satisfied that there was such an incident: Reasons [92]. He was also not satisfied that such an incident, if it had occurred, would have caused a meniscal tear: Reasons [107] - [111].
The arbitrator found that the respondent had no lawful entitlement to compensation payments and expenses: Reasons [114], [116], [121]. Having made that finding, this enlivened the discretion to make an order for a refund sought by the appellant, pursuant to s 71 of the Act.
Before exercising that discretion, the arbitrator correctly observed that the section gave him a broad discretion to make an order refunding any part of the sum of $121,262.54: Reasons [122]. Indeed, that was something contained in the appellant's written submissions for the arbitration hearing (par 113 of those submissions):
113.Effectively an arbitrator has a wide discretion in deciding:
113.1whether or not to make any order at all for repayment under s 71(1); and
113.2the extent of any such repayment/recovery of compensation.
The arbitrator also outlined the relevant criteria in relation to the exercise of the s 71 discretion as set out by Commissioner McCann (as he then was) in Leighton Contractors Pty Ltd v Withers [2011] C19-2011 [8] – [10] and Hasic v Delmere Holdings Pty Ltd [2010] C8-2010: Reasons [122] ‑ [129].
The relevant factors (and this is my summary) include, but are not limited to:
(a)whether the worker obtained other paid employment whilst unlawfully receiving weekly payments;
(b)whether the evidence (such as surveillance footage) reveals that the worker engaged in such strenuous activities as to establish that the worker's presentation to the certifying practitioners was fraudulent;
(c)whether the worker went out of his or her way to maximise the effects of his disability;
(d)whether there was malingering by the worker;
(e)the past or present physical condition of the worker;
(f)the past or present economic or financial condition or circumstances of the worker;
(g)compassionate grounds, such as hardship to the respondent and the scant chance of recovery, although compassionate considerations must be weighed against the fact that the worker received money for which there was no entitlement; and
(h)the employer's own conduct.
The first four factors I have enumerated in [22(a)] to [22(d)] are taken from Commissioner McCann's categorisation of the first three factors as predicating 'some degree of bad faith on the part of the worker', together with Commissioner's McCann's statement that malingering is commonly accepted as a ground for orders pursuant to s 71: Leighton Contractors Pty Ltd v Withers [8(iv)].
From my reading of the Reasons, the arbitrator dealt with these factors under the heading 'Any Evidence of Wrongdoing by the Worker?'
As to the seventh factor I have enumerated in [22(g)], the fact that the worker has received money to which he is not lawfully entitled has been stated to be a paramount factor, but not the paramount factor. It has not been suggested in the authorities that the lack of entitlement cannot be displaced in importance by compassionate and other considerations. The decision-maker should have regard to the total circumstances of the case: Leighton Contractors Pty Ltd v Withers [9]. The arbitrator took these principles into account: Reasons [125] – [126].
The arbitrator went through the factors relevant in this case, in particular the respondent's wrongdoing in omitting or withholding important information about her knee condition from her claim form and from medical specialists (Reasons [155]) and the respondent's financial and social circumstances (Reasons [157] – [173]). He found, on the evidence presented, that the respondent and her family did not live a lavish lifestyle, did not have an abundance of cash savings, and had relatively modest assets: Reasons [171].
The arbitrator noted that the fact that the respondent received workers' compensation payments when she was not lawfully entitled is a paramount consideration, but took into account compassionate factors. He ultimately concluded in his Reasons [180] ‑ [181]:
I have assessed the compassionate factors together with my finding that Ms Zhang engaged in wrong-doing, and also considered that she did not have a lawful entitlement to the workers' compensation payments. It is ultimately a question of overall fairness requiring a balancing of the facts relevant to the particular circumstances of each of the parties.
Given that I am not satisfied on the balance of probabilities that the evidence establishes Ms Zhang to have made a false claim, in my view, it is by the barest of margins that the compassionate grounds tips the scales in favour of not making an order for refund, whether for the entirety of the sum of $121,262.54 or any part of that amount. Whilst a finding of wrong-doing connotes some measure of bad faith on her part, it is also a question of degree. Ultimately on balance, and in the exercise of my discretion, I find that the compassionate and hardship grounds prevails in this case, and that a refusal of D'Orsogna's application under s 71 is the appropriate order in overall fairness after carefully assessing all of the relevant facts and considerations.
The appellant now brings this appeal against the arbitrator's decision not to order a refund of the workers' compensation payments and expenses paid to the respondent. There is no cross-appeal by the respondent.
Principles on a workers' compensation appeal
Under s 247 of the Act, a party may, with the leave of the District Court, appeal against the decision of an arbitrator. The District Court is not to grant leave to appeal unless a question of law is involved: s 247(2).
An appeal will 'involve' a question of law if the arbitrator has made an error of law or an error of mixed law and fact: BHP Billiton Iron Ore Pty Ltd v Brady [2008] WASCA 250 [3]; Atanasoska v Inghams Enterprises Pty Ltd [2009] WASCA 17 [20].
The failure of an arbitrator to give reasons, or adequate reasons, for a decision, is an error of law: Summit Homes v Lucev(1996) 16 WAR 566 (569). This is subject to the provisions of s 213(4) of the Act: Velez Pty Ltd v Tudor [2011] WASCA 218 (Velez v Tudor); Nardi v Department of Education and Training [2006] WACC C32‑2006 [26] - [31].
A finding of fact by an arbitrator in the absence of any supporting evidence is a question of law, and whether there is evidence of a fact is a question of law: Suleski v Pilbara Iron Company (Services) Pty Ltd [2018] WASCA 147 [19]; Minister for Immigration & Multicultural Affairs v Al-Miahi [2001] FCA 744.
However, an arbitrator does not make an error of law merely because he or she finds a fact wrongly or upon a doubtful basis: Atanasoska v Inghams Enterprises Pty Ltd [21]. Nor does an arbitrator make an error of law simply because he or she prefers one version of the evidence or one set of inferences over another version of evidence or set of inferences: BHP Billiton Iron Ore Pty Ltd v Brady [5]. There will be no error of law so long as the inference is reasonably open – even if that inference appears to have been drawn as a result of illogical reasoning: Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321, 356.
An appeal does not 'involve' a question of law merely because a party asserts that it does: BHP Billiton [1], [15], [19]. If a ground of appeal, properly analysed, does not involve a question of law, linguistic gymnastics in the formulation of the ground cannot alter the position: Atanasoska [21].
If no question of law is involved, there is no jurisdiction to grant leave to appeal: Catholic Education Office of WA v Granitto [2012] WASCA 266 [53] ‑ [54].
If a question of law is involved, the grant of leave to appeal lies in the discretion of the court: BHP Billiton [20].
If leave to appeal is granted, then the appeal is to be by way of a 'real review' of the decision. The review is not a hearing de novo and invoking the review procedure does not sweep aside the effect of the decision. The aggrieved party must provide some 'proper basis' for disturbing the decision under challenge. It remains valid unless the appeal judge, on review, is persuaded that the order being reviewed should be altered or discharged: Pacific Industrial Co v Jakovljevic [2008] WASCA 60 [20] ‑ [22], [24], [26] (Wheeler JA, with Pullin JA & Buss JA agreeing); Catholic Education Office (WA) v Granitto [56] ‑ [57], [65].
In Pacific Industrial Co v Jakovljevic [25] it was suggested it is not a necessary precondition to the conduct of a review that an error of law has been held to have occurred. Wheeler JA explained that the appeal judge (in that case, the commissioner) can, and often does, consider in a single hearing both the application for leave and the appeal itself:
If, on such a hearing, it is the commissioner's view that, although a question of law is 'involved', there has been no relevant error of law, that may be a factor which the commissioner will consider relevant to the question of whether leave should be granted. To take an extreme case, should an appellant raise a number of issues which were plainly questions of law, but were equally plainly unarguable, in an attempt to persuade the commissioner to engage in a pure factual review, the commissioner might consider that that was not appropriate, having regard to the legislative focus upon the correction of errors of law as the commissioner's principal, but not only, task.
It was also suggested in BHP Billiton that the proper approach, particularly when the application for leave to appeal and the appeal are heard together, is that the question of leave be dealt with after considering the merits of the proposed grounds of appeal. If the proceedings are conducted in that way, then the court will be in a position at the end of the hearing to either grant leave and uphold or dismiss the appeal or refuse leave to appeal: BHP Billiton [14] (Pullin JA, Wheeler & Buss JJ agreeing); see also Atanasoska [32].
Appeal ground 1 – failure to give reasons
The common law position is that a function of reasons is to provide procedural fairness to a litigant who is entitled to know why he or she has been successful or unsuccessful, and to allow an appeal court to determine whether the decision was based on an appealable error. The reasoning process which led to the result must be disclosed with sufficient certainty to achieve those ends: Mount Lawley Pty Ltd v Western Australian Planning Commission [2004] WASCA 149; (2004) 29 WAR 273 [27]; SNF (Australia) Pty Ltd v Jones [2008] WASCA 121 [32].
This has been modified, however, by the provisions of s 213(4) of the Act, as was discussed by the Court of Appeal in Velez Pty Ltd v Tudor [57] ‑ [70]. Section 213(4) of the Act provides:
(4)The reasons for an arbitrator's decision —
(a)need only identify the facts that the arbitrator has accepted in coming to the decision and give the reasons for doing so; and
(b)need only identify the law that the arbitrator has applied in coming to the decision and give the reasons for doing so; and
(c)need not canvass all the evidence given in the case; and
(d)need not canvass all the factual and legal arguments or issues arising in the case.
It is necessary to look at the reasons as a whole and to determine whether, in the context of the evidence, they give a sense of what was intended in a way that would have met the requirements for reasons: SNF (Australia) Pty Ltd v Jones [32].
This ground of appeal that the learned arbitrator failed to provide adequate reasons is surprising, given that the arbitrator gave comprehensive written reasons spanning 50 pages and containing 182 paragraphs.
The real complaint made by the appellant is that inadequate reasons were given by the arbitrator on two discrete findings:
(a)that there was a scant chance of recovering the monies paid to the respondent; and
(b)that the respondent's family would suffer financial hardship if a refund order was made against her.
The submission made by the appellant that the arbitrator failed to provide adequate reasons focuses on a particular part in [178] of the Reasons:
It is also likely in my view that full recovery of all the paid compensation monies will be scant …
However, it is necessary to set out the whole of what the arbitrator said in the Reasons [178]:
I have taken into account Ms Zhang's wrong-doing by withholding information about her past knee problems, and also the compassionate and hardship factors. Ms Zhang has no current income, and her family is essentially supported financially by her partner Mr Rusul. Their savings and cash assets are limited. Her family's declared household expenses are high when compared to the weekly earnings of Mr Rusul. Ms Zhang has a very young child who is dependent on her and Mr Rusul, as well as another adult son. I find that it is likely that Ms Zhang and her family will suffer financial hardship if a refund order is made against her. It is also likely in my view that full recovery of all the paid compensation monies will be scant, in light of Ms Zhang's current financial circumstances, including her mortgage and loan liabilities.
Before he made those findings, the arbitrator went into considerable detail about the respondent's financial and social circumstances. This included the respondent's partner's income (as the respondent had no current income), the assets they owned, their mortgage and loan liabilities, and that the family expenses (the respondent, her partner and two children) exceeded their income: Reasons [157] ‑ [173]. While at the arbitration hearing there was some cross‑examination about the value of their assets, in particular the family home, the respondent's declared income and family household expenses were not challenged or contradicted at arbitration.[1]
[1] Arbitration hearing ts 65 - 70; Reasons [160], [169].
There was a body of evidence upon which it was open to the arbitrator to make the findings he subsequently did in the Reasons at [178], as I have set out.
It was also submitted that the arbitrator did not set out reasons for finding that the respondent's family would suffer financial hardship. Some emphasis was placed by counsel for the appellant on the following passage in [171] of the Reasons:
I am satisfied on the evidence presented that Ms Zhang and her family do not live a particularly lavish lifestyle, nor do they have an abundance of supply of cash savings. They have relatively modest assets. Whilst D'Orsogna did not argue to the contrary, it pointed out that Ms Zhang nevertheless had the means to purchase a new vehicle in 2016, namely the Ford Ranger.
Counsel for the appellant submitted that having found wrongdoing on the part of the respondent, and also having made adverse findings about the respondent's credibility, the arbitrator should not have accepted her statements about the family income and expenses or made the finding at [171] of the Reasons about the family not having a lavish lifestyle.[2]
[2] Appeal hearing ts 14 - 16; ts 21.
The arbitrator was able to accept part of the respondent's evidence and reject (or form no view) on other parts. The arbitrator was able to make adverse findings about the respondent's credibility in relation to her claim for compensation, but accept the evidence she provided on her social and financial circumstances.
The submissions raised on behalf of the appellant in relation to appeal ground 1, when properly analysed, do not involve a question of law. The essence of the submissions made by the appellant is that the arbitrator came to find facts about the respondent's social or financial circumstances wrongly or upon a doubtful basis. As I have set out in [33] an arbitrator does not make an error of law merely because he or she finds a fact wrongly or upon a doubtful basis. Further, there was unchallenged evidence of the family income and expenses upon which the arbitrator was entitled to act and could make the findings which he did.
In my view, when reading the Reasons as a whole, there is nothing inadequate about them. The basis for the arbitrator's finding that full recovery of all the compensation paid to the respondent will be scant is apparent. The basis for the arbitrator's findings that the respondent's family would suffer financial hardship if a refund order was made against her is also apparent. The appellant has not been deprived of its ability to know how the arbitrator's conclusions were reached and which parts of the respondent's evidence he accepted or rejected.
There is no merit to this ground of appeal. Accordingly, leave should be refused and the ground of appeal dismissed.
Appeal ground 2 – whether the arbitrator's finding was open on the evidence
The particulars to appeal ground 2 are that the arbitrator made a finding that it was not open to him to make on the evidence in two respects:
(a)The Learned Arbitrator erred in law by finding that the worker's demonstrated wrongdoing did not prove that her compensation claim was false or made up. Pursuant to section 71, there is no requirement that a claim be false or made up to enable an order to be made to refund money so paid, only that the monies were paid to a person that was not lawfully entitled to that payment.
(b)The Learned Arbitrator erred in law by failing to find that an order should be made for the refunding of money so paid, given the worker had no lawful entitlement to the weekly payments and expenses that were paid to her.
I found the first part of this appeal ground difficult to understand, but what counsel for the appellant argued at the appeal hearing was that there had been a 'focus' by the arbitrator in the Reasons [148] ‑ [149] on whether fraud had been established by the appellant, when the appellant did not argue that there had been any fraud on the part of the respondent.
I note from the Reasons that the appellant submitted that the respondent had acted with intentional dishonesty with regard to her claim for workers' compensation, or at minimum, had been 'reckless with the truth' by omitting significant information about her previous or pre‑existing knee problems: Reasons [133]. I have read the submissions made by counsel for the appellant in the course of the arbitration hearing. The following exchange between the arbitrator and counsel for the appellant took place:[3]
[3] Arbitration hearing ts 94 - 95.
MR TREASURE: … And so then we come to the section 71 recovery component of the dispute.
ARBITRATOR: Yes.
MR TREASURE: The – as I've alluded to at the start of the submissions, we say it's essentially discretionary assessment. If there's a find of no injury then there's no lawful entitlement and then it becomes a discretionary factor which does include factors such as personal circumstances. But also the authorities establish that honesty or dishonesty is a major factor that needs to be considered.
ARBITRATOR: Do you agree, Mr Treasure that the dismissal of a claim doesn't automatically prove misrepresentation, fraudulent conduct.
MR TREASURE: No.
ARBITRATOR: Things of that nature?
MR TREASURE: And fraud is a very serious allegation, as I alluded at the start, there's two potential circumstances here and that is that there has been intentional dishonesty.
ARBITRATOR: Yes. You made it clear in your cross-examination that - - -
MR TREASURE: Yes.
ARBITRATOR: - - - she – Ms Zhang has deliberately lied - - -
MR TREASURE: Yes
ARBITRATOR: - - - on a number of occasions.
MR TREASURE: And I will – I want to take you to some of that and the alternative to deliberate dishonesty is recklessness as to the truth.
ARBITRATOR: Yes. Do the authorities deal with that second aspect, recklessness?
MR TREASURE: No, it's more a concept of gotten from general credibility, I guess assessments of witnesses. So the legal authorities on section 71 – let me just – say for example the Hasic decision deals with honesty. That doesn't necessarily mean that you have to establish fraud. It's general honesty/dishonesty situations. But I'll explain to you, arbitrator, hopefully in a short time frame, why we say that there has been deliberate dishonesty. And it extends, I guess, in to two main themes, or three probably. The first is that what we say is the exclusion deliberately, in the claim form, and in the claim lodgement process, which involves attending a different doctor to her normal doctor and not reporting the previous condition.
Counsel for the appellant spoke of the respondent's deceit, the respondent's deliberate dishonesty in excluding information in the claim form and a 'conscious decision to lie for the purposes of seeking workers compensation payments'.[4]
[4] Arbitration hearing ts 94 – 95, 98.
It was in this context that the arbitrator remarked in the Reasons [141]:
Overall, D'Orsogna submits that there is ample evidence to establish on the balance of probabilities that Ms Zhang has engaged in fraudulent conduct with respect to her workers' compensation claim. It submits that Ms Zhang has been dishonest, deliberately withheld critical information and that her claim of having suffered a compensable injury on 28 May 2015 is patently false.
It was in the course of looking at the onus of proof in the Reasons [148] to [149], which are the passages now complained of by the appellant, that the arbitrator discussed the onus being on the appellant to establish, on the balance of probabilities, 'the allegation of fraud or wrongdoing' on the part of the respondent. As I read [148] ‑ [149] of the Reasons it is a discussion of the onus of proof, relevant to the submissions made by the appellant that the respondent had been intentionally dishonest (ie, made a false claim for workers' compensation) or at least reckless with the truth.
While the appellant takes objection to the reference to 'fraud', it is understandable that the arbitrator did so in light of the submissions made to him on behalf of the appellant. Those submissions are consistent with the common law test for fraud set out in Derry v Peek (1889) 14 App Cas 337 and adopted by the High Court in Magill v Magill [2006] HCA 51; (2006) 226 CLR 551 [113]. Fraud is proved when it is shown that a false representation has been made (1) knowingly, or (2) without belief in its truth, or (3) recklessly, careless whether it be true or false.
Immediately after discussing the relevant onus of proving 'fraud or wrongdoing' the arbitrator stated that he was satisfied on the balance of probabilities that the respondent deliberately withheld significant or critical information about her past knee condition and medical consultations, and found that such conduct was clearly wrongdoing on her part: Reasons [150]. The arbitrator went on to consider whether, as the appellant had submitted, the respondent had lodged a false workers' compensation claim: Reasons [153] – [155]. The arbitrator was not satisfied that the appellant had established on the balance of probabilities that the respondent had filed a false workers' compensation claim.
In my view the appellant can have no complaint about this part of the Reasons, since the arbitrator was only addressing what the appellant had submitted to him in the course of the arbitration hearing. Further, as the arbitrator observed, the respondent's wrongdoing was still a factor to be taken into account in the exercise of his discretion: Reasons [156].
I do not understand the appellant to have made any complaint about these findings by the arbitrator.
Returning to the words of the first part of this appeal ground, if the appellant's complaint is that the arbitrator erred in failing to find that the respondent's compensation claim was false or made up, then that relates to an alleged error of fact and it does not involve a question of law. If the complaint is that pursuant to s 71 there is no requirement that a claim be false or made up to enable an order to be made to refund monies so paid, only that the monies were paid to a person that was not lawfully entitled to that payment, then again, there was no error of law or an error involving a question of law by the arbitrator about this. The arbitrator did make a finding that compensation was paid to the respondent to which she was not lawfully entitled. Thus, as counsel for the appellant agreed, this aspect of appeal ground 2 fell away.[5]
[5] Appeal hearing ts 33 – 34.
In my view, there is no merit in the first part of appeal ground 2.
Turning now to the second part of this appeal ground, counsel for the appellant explained that this was based on the following: [6]
1.Because of his findings on the respondent's credibility, the arbitrator should not have found that there was a scant chance of recovery.
2.The arbitrator gave insufficient weight to the respondent's wrongdoing.
3.The arbitrator gave insufficient weight to the amount of the workers' compensation which the respondent had received.
[6] Appeal hearing ts 22, 26, 29, 32, 34.
The well-known principles enunciated in House v The King [1936] HCA 40; (1936) 55 CLR 499 are applicable in relation to the exercise of the arbitrator's discretion. Before his decision should be reviewed, it must appear that some error has been made in exercising the discretion, such as acting on a wrong principle, allowing extraneous or irrelevant matters to guide or affect him, mistaking the facts, or failing to take into account some material consideration. Alternatively, if it appears upon the facts that it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure to properly exercise the discretion even though the error may not be discoverable.
In Norbis v Norbis (1986) 161 CLR 513, 518 – 519, Mason and Deane JJ made the following comments elaborating on the principles set out in House:
Because these assessments call for value judgments in respect of which there is room for reasonable differences of opinion, no particular opinion being uniquely right, the making of the order involves the exercise of a judicial discretion. The contrast is with an order the making of which is dictated by the application of a fixed rule to the facts on which its operation depends.
The principles enunciated in House … were fashioned with a close eye on the characteristics of a discretionary order in the sense which we have outlined. If the questions involved lend themselves to differences of opinion which, within a given range, are legitimate and reasonable answers to the questions, it would be wrong to allow a court of appeal to set aside a judgment at first instance merely because there exists just such a difference of opinion between the judges on appeal and the judge at first instance. In conformity with the dictates of principled decision‑making, it would be wrong to determine the parties' rights by reference to a mere preference for a different result over that favoured by the judge at first instance, in the absence of error on his part. According to our conception of the appellate process, the existence of such an error, whether of law or fact, on the part of the court at first instance is an indispensable condition of a successful appeal.
In my opinion the appellant has not demonstrated any error by the arbitrator. Dealing with each of the matters relied on by the appellant:
1.It was open on the evidence for the arbitrator to have found that there was a scant chance of recovery. For the reasons I have already discussed in relation to appeal ground 1 (particularly [47] - [48], [51] and [52] above), there was evidence upon which the arbitrator could make that finding. This is really a complaint about the arbitrator's finding of fact and it does not involve a question of law.
2.The arbitrator did take into account the respondent's wrongdoing. The weight he gave to that in the exercise of his discretion was a matter for him.
3.The arbitrator also gave consideration to the amount of the workers' compensation which the respondent had received. Again, what weight he gave to that factor in the exercise of the discretion was a matter for him.
Having regard to the Reasons as a whole, I am satisfied that the arbitrator acted on the correct legal principles, that he took into account all relevant factors and, while other minds may have weighed the discretionary factors in a different way, there was nothing unreasonable or unjust in the arbitrator exercising his discretion in the way he did.
The appellant is really complaining about the merits of the arbitrator's decision, which is not permitted by s 247 of the Act. Accordingly, leave should be refused and the ground of appeal dismissed.
Conclusions and orders
I am not satisfied that there was any error by the arbitrator involving a question of law. The arbitrator correctly addressed the principles applicable to an application made pursuant to s 71 of the Act, addressed all matters relevant to the exercise of his discretion, made relevant findings of fact which were open to him to make on the evidence, and gave reasons for those findings. He took into account and weighed all relevant matters before exercising his discretion in favour of the respondent. The appellant would have had the arbitrator exercise his discretion in a different manner, but applying the principles in House v King and Norbis v Norbis that does not mean there was an error by the arbitrator.
I therefore refuse leave to appeal and dismiss the appeal. I will hear from the parties on the issue of costs.
I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
DC
Associate to Judge Davis7 JUNE 2019
3
15
1