Department of Ageing Disability & Home Care v Kelly - [2013] NSWWCCPD 15

WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
*Status: Appeal to the Court of Appeal allowed – Kelly v Secretary Department of Family and Community Services [2014] NSWCA 102*
CITATION:		Department of Ageing Disability & Home Care v Kelly [2013] NSWWCCPD 15
APPELLANT:		Department of Ageing Disability & Home Care
RESPONDENT:		Wendy Kelly
INSURER:		QBE Workers Compensation (NSW) Limited
FILE NUMBER:		A1-4926/12
ARBITRATOR:	Ms J Scott
DATE OF ARBITRATOR’S DECISION:		2 October 2012
DATE OF APPEAL HEARING:		7 March 2013
DATE OF APPEAL DECISION:		25 March 2013
SUBJECT MATTER OF DECISION:		Section 9A of the Workers Compensation Act 1987; factual error; irrelevant consideration leading to error of law.
PRESIDENTIAL MEMBER:		Deputy President Kevin O'Grady
HEARING:		Oral
REPRESENTATION:		Appellant:	Mr P A Barnes, instructed by Gair Legal
Respondent:	Mr R G Hanrahan, instructed by Leitch Hasson & Dent
ORDERS MADE ON APPEAL:		1. The orders made in paragraphs one, two and three of the Arbitrator’s Certificate of Determination dated 2 October 2012 are revoked and the following orders are made in their place: “1. Award for the respondent. 2. No order as to costs.” 2. No order as to costs of this appeal.

BACKGROUND

Ms Wendy Kelly has been employed by the Department of Ageing, Disability and Home Care for the past 20 years. During the past seven years her occupation has been that of a Disability Support Worker at a group home located at Orange, New South Wales.
On 9 January 2012 Ms Kelly, in the course of her employment, attended premises in Nile Street, Orange, in the company of a fellow worker, Mr Alan Venner, for the purpose of picking up two clients.
Whilst waiting outside the premises for the clients to arrive a co-worker, Mr Mischa Paunovic, walked towards Ms Kelly. There had been a long history of bitter disputation between members of the Kelly and Paunovic families. Ms Kelly alleged that at that time Mr Paunovic addressed her in an aggressive and intimidating manner. It is not disputed by the appellant that as a result of the encounter between Ms Kelly and Mr Paunovic, Ms Kelly suffered a “psychiatric or psychological reaction” (T22.45). The expert medical evidence establishes that, since the incident, Ms Kelly has suffered from a Major Depression. There is some disagreement between the experts as to whether that condition demonstrates melancholic features. It is not in dispute that Ms Kelly has, since 28 January 2012, been totally incapacitated for work in terms of s 33 of the Workers Compensation Act 1987 (the 1987 Act).
Ms Kelly claimed compensation benefits and was paid, on a provisional basis, weekly compensation between 31 January 2012 and 24 April 2012. Liability was then declined by the appellant’s insurer. A notice advising Ms Kelly of that declinature, dated 11 May 2012, was given by the insurer in accordance with the provisions of s 74 of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act). The reasons for the insurer’s decision to dispute the claim were enumerated in that notice as follows:
“_∙ You have not suffered an injury contracted in the course of employment and to which the employment was a contributing factor within the definition of ‘injury’ pursuant to s 4 of the Workers Compensation Act 1987.
· Your employment was not a substantial contributing factor to your injury as required pursuant to s 9A of the Workers Compensation Act 1987.
· As such, you have no entitlement to benefits of weekly compensation as defined in Division 2, Part 3 of the Workers Compensation Act 1987 and no entitlement to medical expenses pursuant to s 60 of the Workers Compensation Act 1987.”
The dispute concerning Ms Kelly’s claim came before Arbitrator Jennifer Scott for determination on 28 August 2012. The Arbitrator reserved her decision on that day and a Certificate of Determination, accompanied by a statement of the Arbitrator’s reasons (Reasons) was issued on 2 October 2012 in which the following orders were made:
“The Commission determines:
1. The respondent reinstate the applicant’s sick leave entitlement from 9 January 2012 to date and continuing for all sick days taken in relation to her injury on 9 January 2012.
2. The respondent pay the applicant’s section 60 of the Workers Compensation Act 1987 expenses on production of accounts, receipts or HIC notice.
3. The respondent pay the applicant’s costs as agreed or assessed.
A brief statement is attached to this determination setting out the Commission’s reasons for the determination.”

PRELIMINARY MATTERS

Having regard to the terms of the orders made by the Arbitrator, which concern “reinstatement of sick leave entitlement”, and the nature of the orders sought by Ms Kelly in her Application concerning ongoing weekly compensation, a telephone conference was conducted on 24 January 2013.
It became clear during the course of that teleconference that the orders as made did not properly reflect the nature of the relief as sought in the proceedings, that is, an order in respect of weekly payments. It was thus clear that, regardless of the outcome of the appeal, orders amending those made by the Arbitrator would be necessary.
The parties also informed the Commission that at the hearing before the Arbitrator:
(a) the only issue raised in defence of the claim was founded upon s 9A of the 1987 Act, that is, that Ms Kelly’s employment was not a substantial contributing factor to the injury;
(b) the appellant accepted that the injury had arisen out of and in the course of Ms Kelly’s employment, and
(c) that as a result of the subject injury Ms Kelly was and remained totally incapacitated.
At that teleconference, the parties’ attention was drawn to the passage by Parliament of the Workers Compensation Legislation Amendment Act 2012 and the relevance of that Act to entitlement of a claimant to weekly compensation as from 1 January 2013. The parties each indicated that, given the circumstances, time was needed to consider that legislation and to prepare submissions.
Having regard to the need to clarify argument as advanced concerning the liability issue raised by the appellant’s reliance upon s 9A, and the need to provide supplementary submissions relating to the nature and extent of the Commission’s jurisdiction, should the appeal fail, concerning orders as to ongoing entitlement to weekly compensation, a decision was made to appoint a hearing of the appeal.

ISSUE IN DISPUTE

The issue in dispute in the appeal is whether the Arbitrator erred in finding that Ms Kelly’s employment was a substantial contributing factor to the subject injury.

HEARING

The appeal hearing was conducted on 7 March 2013 at which time each party was represented by counsel. A transcript (TA) of those proceedings has been produced. A Direction to the parties had been made prior to that hearing in the following terms:
“1. The parties are directed to inform the Commission of any agreement that may be reached with respect to the respondent worker’s pre-injury average weekly earnings and the quantum of any deductible amount in terms of s 35 of the Workers Compensation Act 1987. In default of agreement the parties are required to seek leave to adduce evidence on appeal relevant to the aforementioned matters.
2. Submissions are invited from the parties concerning the relevance, if any, of the appellant’s concession concerning the respondent worker’s total incapacity in terms of s 33 of the Workers Compensation Act 1987. Particular attention is drawn to the passage of the Workers Compensation Legislation Amendment Act 2012 including, but not limited to, the provisions of s 37 and the relevant transitional provisions of that Act. Such submissions may address the question of the existence or otherwise of the Commission’s jurisdiction to make findings and orders relevant to a worker’s entitlement to weekly compensation from 1 January 2013.”
The submissions put and agreements reached between the parties concerning matters relevant to quantification of any entitlement to weekly compensation are, where relevant, addressed below.

THRESHOLD MATTERS

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

THE ARBITRAL PROCEEDINGS

The proceedings before the Arbitrator were recorded and a transcript (T) has been produced and made available to the parties. The Arbitrator noted (at [6] of Reasons) that there was no dispute that Ms Kelly had “suffered psychological injury and has been incapacitated for work”. Having regard to the matters raised both at the teleconference and the hearing, it is clear that the incapacity conceded was total incapacity within the meaning of s 33 of the 1987 Act.

The evidence before the Arbitrator

The documentary evidence tendered on behalf of the parties was noted by the Arbitrator at [11] of Reasons. The transcript reveals that objection was taken by Ms Kelly’s counsel to a written statement signed by Mr Paunovic dated 4 December 2011 which was attached to the appellant’s Reply. Tender of that document, which I note pre-dates the subject injury, was rejected by the Arbitrator. I note that a written statement signed by Mr Paunovic dated 4 March 2012 was tendered by Ms Kelly.
The evidence of Ms Kelly is found in a written statement made by her to an insurance investigator on 2 March 2012. The circumstances of the incident which occurred on 9 January 2012 was described by Ms Kelly between [27] and [29] of that statement as follows:
“27.   On the 9 January 2012 I was working day shift with a work colleague, Alan Venner. Alan and I were required to take Intellectually Challenged Residents out into the field in a work vehicle. Before Alan and I were required to complete our shift that day, which was around 3.00pm, we were required to pick up two (2) residents from Post School Options that is located in Nile Street, Orange. As it turned out, we arrived early at the Nile Street address at approximately 2.45pm and parked the vehicle outside the building. I then exited the vehicle and sat on a fence that was located outside the building. Alan Venner stood approx. 1-2 metres from where I was sitting.
28.    As I was sitting on the seat, I saw a person walking towards me, however I didn’t take that much notice at the time but as this person walked closer, I realised the person was Mischa Paunovic. Mischa then walked straight up to me and leaned down to where I was seated. Misca [sic, Mischa] stood directly in front of me and was leaning over the top of me, so that his face was only about 6-inches from my face. At first Misca [sic, Mischa] said nothing, he just stared at me, which appeared to be a long time, however it was probably only about 10-seconds or so. Then all of a sudden in an aggressive intimidating tone of voice Mischa said, he said, “How are you going Wendy?”. At the time Mischa was talking to me, I noticed that both of his hands were kind of shaking, which made me worry even more. I said, “Get Lost”, I don’t even think that I even looked him in the face. Mischa then stared [sic, started] to laugh in my face and said, he said, “So that’s all you have got to say?” or words to that affect [sic, effect]. Mischa just continued laughing for a short time before he walked off.
29.    The reasons why Mischa was at the same building as I was due to the fact that he also had to collect some residents who were visiting the same building. After Mischa had collected his residents, he exited the building and walked over to the area where I was still seated. Mischa then stood directly in front of me again, he was only a short distance from me and said in a threatening tone of voice. He said, “I’ll be seeing you again real soon Wendy.” I took Mischa’s words to be threatening and intimidating. The reason being is that I am not a direct friend of Mischa, I don’t associate with him outside of work hours and I have nothing to do with him. These two conversation [sic, conversations] were witnessed by Alan Venner. I had no reason to be seeing Mischa soon or in the future.”
Ms Kelly further stated that:
(1)     there had been conflict between her daughter, Megan, and Mr Paunovic;
(2)     the incident which occurred on 9 January 2012 was reported by Ms Kelly to her superior, Mr Ray Franks, and she had attended the local Police Station and the Chamber Magistrate at the Orange Courthouse. An apprehended violence order against Mr Paunovic was subsequently made by the Local Court;
(3)     Ms Kelly sought medical treatment from her general practitioner, Dr Zeshan Shaikh. A WorkCover medical certificate stating that Ms Kelly was unfit for work from 30 January 2012 was issued by Dr Shaikh. Since that time Ms Kelly has experienced fear and anxiety and has remained off work, and
(4)     an email dated 16 January 2012 was received by Ms Kelly from Ms Susan Herbertson, acting manager accommodation and respite and residential unit nurse manager, stating that steps were to be taken to speak to Mr Paunovic and that his performance would be monitored. That email is in evidence and includes the following:
“management will be monitoring Mr Paunovic’s performance to ensure his compliance with the Code of Conduct in the future”.
Ms Kelly tendered in evidence a copy of the appellant’s Code of Conduct dated February 2011 which, it is stated, provides “a framework to guide [the] actions, behaviour and decision making” of those employed by it.
An application by the appellant seeking leave to cross-examine Ms Kelly was granted by the Arbitrator. That evidence is recorded in the transcript (between T3 and T22). Further short evidence was given by Ms Kelly later in the proceedings (between T30 and T34). The Arbitrator summarised that oral evidence (at Reasons [12-14]) as follows:
“12    The oral evidence she gave was:
(a)Mrs Kelly denied swearing at the co-worker on 9 January 2012 and denied phoning him and abusing him in October 2011. She denied having a prior dispute with the co-worker, and stated that her daughter Megan had a dispute with the co-worker’s wife.
(b)Mrs Kelly denied being diagnosed with depression in 2005, but admitted that she was upset, nervous and anxious about having to sell her house in 2005. She did not remember taking anti-depressants in 2004, 2005 and 2009. Nor did she recall the mental health care plan referred to in the GP clinic notes in 2009. She stated that her previous anxieties had not prevented her from working. I note the treating GP clinic notes clearly indicate that Mrs Kelly had been prescribed various anti-depressants.
(c)Mrs Kelly acknowledged that she had not worked directly with the co-worker for 15 years.
13.     I asked Mrs Kelly a few questions in order to clarify her contact with the co-worker, both during working hours and outside working hours. In response to contact outside working hours, she responded: ‘I cannot recall the last time I saw him [the co-worker] outside of work’. In response to contact during working hours, she said: ‘it all depends on our shifts, our paths cross two to three times a month at that venue, plus at other venues’.
14.      I asked Mrs Kelly whether she had come across the co-worker since 9 January 2012. She responded: ‘no, it has changed, they moved him so I wouldn’t be made to go to places where he would be’.”
A statement made by Mr Paunovic to the insurance investigator dated 4 March 2012 was tendered by Ms Kelly. The circumstances of the incident as described by Ms Kelly are not admitted. It was stated by Mr Paunovic that he jovially addressed Ms Kelly in response to which he alleges that she swore. Mr Paunovic states that he attended a meeting with Ms Herbertson and others after the incident. It was stated that he was then advised “that it was found I had not breached the Code of Conduct in any way” and that “no disciplinary action or measures” were to be taken and that he was advised that “I have absolutely no case to answer and the matter now has been fully resolved”.
A statement made by Mr Ray Franks, Acting Co-ordinator Accommodation and Respite, is in evidence. Mr Franks stated that the actions of Mr Paunovic which were reported to the appellant by Ms Kelly had been witnessed by Mr Alan Venner who alleged that Mr Paunovic’s conduct at the relevant time was “intimidating” and had caused Ms Kelly to be “upset”. Steps had been taken to conduct an interview between Mr Paunovic and Ms Herbertson and her colleague, Chris Jacobs. Mr Franks understood that steps were taken by the appellant to arrange pick up activities to ensure “there could be no accidental interaction between [Ms Kelly and Mr Paunovic]”.
A statement by Ms Herbertson, dated 13 March 2012, is in evidence. An email had been received from Mr Venner by Ms Herbertson reporting the events witnessed by him that were the subject of Ms Kelly’s complaint concerning the conduct of Mr Paunovic. That email is in evidence. Ms Herbertson stated that Mr Venner’s communication “supports [Ms Kelly’s] account”.
Ms Herbertson conducted an interview with Mr Paunovic in the company of two other employees, one of whom was nominated by Mr Paunovic. At that meeting Ms Herbertson informed Mr Paunovic that his actions, which he accepted would have been “seen as intimidating”, were a breach of the Code of Conduct and that his “performance regarding compliance” was to be monitored.
A decision was made to “rotate [Mr Paunovic] to another Group Home to minimise the risk of contact and further allegations”.
Ms Herbertson stated that she had no knowledge of “conflict or ongoing issues” that Ms Kelly may have had with any other staff member prior to 9 January 2012. It was further stated “I believe that the circumstances that led to Wendy Kelly’s alleged injury could have been prevented had staff members acted in a professional manner as per the Code of Conduct”.
Ms Kelly relied upon the content of reports from her general practitioner, Dr Shaikh, dated 3 February 2012; Dr Michael C St. J Prior, her treating psychiatrist dated 13 April 2012, Dr Ben Teoh, consultant psychiatrist dated 10 August 2012 who had been qualified by her solicitors for the purpose of providing an opinion, and a report of Dr Andrew Robertson, psychiatrist, dated 16 March 2012 who had examined Ms Kelly at the request of the appellant’s insurer. The expert medical witnesses each consider that, as a result of the incident occurring on 9 January 2012, Ms Kelly suffers from the condition of major depression which has caused ongoing incapacity for work.
The appellant tendered in evidence a great many of the documents tendered on behalf of Ms Kelly. Also in evidence was an updated report by Dr Robertson dated 22 August 2012 and the clinical notes produced by Dr Shaikh’s practice and by Dr Prior.
Dr Robertson in his latter report confirms his earlier diagnosis of Major Depression with melancholic features. The observation is made at page five of the report that “[Ms Kelly] is clearly not improving” and that she is not fit for her pre-injury duties.
The clinical notes of Dr Shaikh include notations concerning the prescription of anti-depressant drugs, which subject was the basis of some cross-examination of Ms Kelly and subsequent submissions.
The balance of the documents before the Arbitrator are not directly relevant to the issues raised on appeal and need not be summarised.

Submissions before the Arbitrator

It was put by the appellant’s counsel that Ms Kelly should fail in her application because “the employment does not substantially contribute to a random act or a coincidental act [involving] a dispute between third and fourth parties” (T22).

It was accepted by the appellant that Ms Kelly “had a psychiatric or psychological reaction to [the incident]” (T22.48). It was also accepted that the incident had occurred in the course of Ms Kelly’s employment. I note that, since the hearing, it has been made clear that no argument was advanced before the Arbitrator that the injury was not received in circumstances arising out of that employment. That, I note, was not entirely clear from the manner in which the argument was advanced before the Arbitrator.
The appellant relied upon those authorities mentioned between T25 and T27. It was put (at T25) that “the strength of the causal linkage between the employment concerned and the injury is the question in issue”.
It was put that ss 4 and 9A “require independent satisfaction”.
The argument concerning s 9A was put in the following terms:
“So, in this case, we say that non-substantial contributing factor is the coincidence or the randomness of the occurrence between the two people - two people who haven't worked together for 15 years. It is mere coincidence that on this particular day they happened to be both at a certain place waiting to pick up clients that they were going to transport.”
and later:
“In this case we say the relative contributing factors are the randomness of the occurrence, the coincidental nature of it, and the fact that there was a long standing interpersonal feud between aggrieved first, second, third and fourth parties.”
In the course of argument, counsel put that there were inconsistencies between matters stated by Ms Kelly to the various medical practitioners and the content of her statement, as well as apparent conflict between her evidence of not, in the past, having taken anti-depressant medication when contrasted with the content of the clinical notes. When pressed as to the relevance of these matters by the Arbitrator, counsel suggested that, given the “confusion” in the evidence, “there seems to be no clear linkage between what occurred on that day and employment being a substantial contributing factor” (T28).
Counsel for Ms Kelly challenged the appellant’s argument that the incident was a “random” event with no relevant relationship to employment. It was put:
“It’s certainly not a haphazard or coincidental event. It’s an event which has occurred in the course of [Ms Kelly’s] employment which a co-worker deliberately took on and which has been acknowledged by him, according to the evidence, as being in breach of the employer’s Code of Conduct.”
Attention was given in the course of argument to the provisions of s 9A(2) of the 1987 Act. With respect to s 9A(2)(d) it was argued that “this [injury] happened in a way which arises out of the connection with work and it would not necessarily have happened without that connection”. It was put that the other matters raised for consideration by s 9A(2) would either be irrelevant to the present facts or tend to support a conclusion that employment was a substantial contributing factor to the injury. The evidence supported the proposition that work was an occasion of “increased frequency of contact” between Ms Kelly and Mr Paunovic.
Counsel submitted that, concerning the factual circumstances of the incident, Ms Kelly’s version of events should be preferred to that of Mr Paunovic. The evidence of Mr Venner as found in the email sent by him was, it was argued, to be accepted as a more reliable statement of events as they occurred than as is found in his subsequent statement.
In reply, counsel for the appellant made reference to the decision in Badawi v Nexon Asia Pacific Pty Ltd t/as Commander Australia Pty Ltd [2009] NSWCA 324; 75 NSWLR 503; 7 DDCR 75 (Badawi). It was put that, on the present facts, employment itself would not be found to be a substantial contributing factor to the subject injury.

The Arbitrator’s decision

Following a summary of the relevant facts, the Arbitrator noted that it was not disputed that Ms Kelly “had suffered psychological injury and has been incapacitated for work” (at Reasons [6]). It was also noted by her that the appellant “claims” that Ms Kelly’s “employment is not a substantial contributing factor to [the subject injury]” (at [7] of Reasons). The issues for determination were stated (at [9] of Reasons) to be:
“(a) Whether the injury arose out of or in the course of employment with the respondent;
(b) Whether employment is a substantial contributing factor to the injury.”
I repeat, in passing, that the matters noted at [9(a)] were, on this appeal, said not to have been in issue at the hearing before the Arbitrator.
Following a short summary of submissions put by each party, the Arbitrator proceeded (from [20] of Reasons) to consider whether the requirements of s 9A had been satisfied. Following reference by her to relevant authority including the decision in Badawi, the Arbitrator concluded (between [24] and [26] of Reasons):
“24. In the circumstances, I am satisfied that [Ms Kelly’s and Mr Paunovic’s] mutual employment with the respondent and their respective duties have materially contributed to the injury. It was not co-incidental that both were at [Nile Street]. As part of their normal duties, they are required to provide services to clients that attend this Centre. Section 4 is therefore satisfied.
25. For employment to be a ‘substantial contributing factor’ to the injury for the purposes of section 9A the causal connection must be ‘real and of substance’. Counsel for the applicant provided compelling submissions that employment was the key connection between the parties, it provided the opportunity, the time and the place for the confrontation, as well as a Code of Conduct for employees to manage their behaviour and conflict; and despite being aware of the conflict prior to this incident, it took no action until after the injury. Section 9A is therefore satisfied.
26. I note that the parties agree that Mrs Kelly is totally incapacitated. As this incapacity arises out of her employment and employment is a substantial contributing factor to the injury, she is entitled to recover her sick leave.”
The Arbitrator proceeded to make the orders which are noted at [5] above.

SUBMISSIONS, DISCUSSION AND FINDINGS

As earlier noted, the parties agreed that the subject injury fell within the statutory definition found in s 4 of the 1987 Act which, relevantly, provides:
“4 Definition of ‘injury’
In this Act:
injury:
(a) means personal injury arising out of or in the course of employment,
… ”
The only issue in dispute concerned the question as to whether Ms Kelly’s employment was a substantial contributing factor to the subject injury in terms of s 9A of the 1987 Act which provides:
“9A   No compensation payable unless employment substantial contributing factor to injury
(1)     No compensation is payable under this Act in respect of an injury (other than a disease injury) unless the employment concerned was a substantial contributing factor to the injury.
(2)     The following are examples of matters to be taken into account for the purposes of determining whether a worker’s employment was a substantial contributing factor to an injury (but this subsection does not limit the kinds of matters that can be taken into account for the purposes of such a determination):
(a)the time and place of the injury,
(b)the nature of the work performed and the particular tasks of that work,
(c)the duration of the employment,
(d)the probability that the injury or a similar injury would have happened anyway, at about the same time or at the same stage of the worker’s life, if he or she had not been at work or had not worked in that employment,
(e)the worker’s state of health before the injury and the existence of any hereditary risks,
(f)the worker’s lifestyle and his or her activities outside the workplace.
(3)     A worker’s employment is not to be regarded as a substantial contributing factor to a worker’s injury merely because of either or both of the following:
(a)the injury arose out of or in the course of, or arose both out of and in the course of, the worker’s employment,
(b)the worker’s incapacity for work, loss as referred to in Division 4 of Part 3, need for medical or related treatment, hospital treatment, ambulance service or workplace rehabilitation service as referred to in Division 3 of Part 3, or the worker’s death, resulted from the injury.
(4)     This section does not apply in respect of an injury to which section 10, 11 or 12 applies.”
The appellant enumerates five “grounds of appeal” and has provided two separate lengthy sets of written submissions in support. It must be said that the first four “grounds” fail to meet the requirements of Practice Direction No 6. Those grounds complain of error of fact and law; that the decision was against the weight of evidence; that there was error by reason of reliance upon unsupported and unsubstantiated evidence, and that there was error in the Arbitrator’s application of s 9A. There has been a failure, as is required by the Practice Direction, to properly identify the suggested errors. Further, the written submissions do not direct attention to any particular “ground” but, rather, appear to represent a generalised criticism of the Arbitrator’s conclusions and, in some respects, her reasoning.
The second set of submissions dated 5 December 2012 suffer the same shortcomings as found in the earlier document. Having regard to the manner in which the appeal was there presented, an attempt to elucidate relevant issues on appeal was made at the hearing.
It is suggested by the appellant that error on the part of the Arbitrator concerning application of the provisions of s 9A is demonstrated in the following respects:
(a)     her conclusion that employment was a substantial contributing factor to the injury was based upon only a “temporal connection” between employment and the occurrence of injury;
(b)     her suggested failure to take into account the weight of the evidence as to the coincidental nature of the meeting between Ms Kelly and Mr Paunovic, and
(c)     her suggested disregard of relevant evidence concerning the background of a significant personal dispute unrelated to employment.
Before attempting to deal with matters raised in argument concerning s 9A, it is convenient to consider the decision in Badawi, in which the Court of Appeal has elucidated the proper construction of the section. The judgment of the plurality (Allsop P, Beazley and Cole JJA) includes (at [48]) a convenient summary of matters concerning the operation of the section which is as follows:
“The following propositions distilled from Mercer in respect of the operation of s 9A have been accepted as correct and can be taken to be uncontroversial:
(1)     The strength of the causal linkage between the employment concerned and the injury is the question in issue: Hevi Lift (PNG) Ltd v Etherington [2005] NSWCA 42; 2 DDCR 271 at [106] 299 per McColl JA (Mason P and Beazley JA agreeing).
(2)     The fact of the injury arising out or in the course of employment is relevant but not determinative of itself: Chubb Security Australia Pty Ltd v Trevarrow [2004] NSWCA 344 at [36] per Santow JA (Beazley and Ipp JJA agreeing).
(3) Both s 4 and s 9A require independent satisfaction: McMahon v Lagana (t/as The Vessel Nimble II) [2004] NSWCA 164; 4 DDCR 348 at [25] 355 and [33] 356 per Hodgson JA (Santow JA and Stein AJA agreeing) and Larson v Commissioner of Police [2004] NSWCA 126; 3 DDCR 365 at [38] 378 per Tobias JA (Mason P and Santow JA agreeing).
(4) Section 9A requires that the employment concerned be “a substantial contributing factor to the injury”. The use of the indefinite article admits of the possibility of other and possibly non-employment related substantial contributing factors: Department of Education and Training v Sinclair [2005] NSWCA 465; 4 DDCR 206 at [49] 216 per Spigelman CJ (Hodgson and Bryson JJA agreeing); and Dayton at [22] per Giles JA.
(5)     Although the strength of the linkage between the employment and injury is the question in issue, the determination is an evaluative one, leaving a broad area for the personal judgment of the trial judge: Hevi Lift at [105]-[106] 299 per McColl JA (Mason P and Beazley JA agreeing).
(6)     Being an evaluative matter involving questions of impression and degree, a finding as to relative contributing factors is a finding of fact: Haider v J P Morgan Holdings Aust Ltd [2007] NSWCA 158; 4 DDCR 634 at [56] 646 per Basten JA (Giles and McColl JJA agreeing); WorkCover Authority of NSW v Walsh [2004] NSWCA 186 at [99]; McMahon v Lagana at [32] per Hodgson JA (Santow JA and Stein AJA agreeing), Dayton at [22] per Giles JA and Murray v Shillingsworth [2006] NSWCA 367 at [65] per Einstein J.
(7) The phrase ‘employment concerned’ in s 9A(1) bears the same meaning as ‘employment’ in the phrase ‘arising out of or in the course of employment’: Mercer at [13] 745 and Federal Broom at 632-633. We agree.”
It was made clear in the judgment of the plurality (at [83]) and that of Basten JA (at [113]) in Badawi that Mercer should not be followed where it was there stated “that the test of substantial contributing factor in s 9A was not ‘as stringent’ as the test of ‘arising out of’ employment”.
An argument is advanced by the appellant that the only “evaluative exercise” undertaken by the Arbitrator, when addressing the requirements of s 9A, concerned the undisputed facts that Ms Kelly and Mr Paunovic were both employed by the appellant and that each was working “at the same location when a confrontation took place”. It is put that those “factors related solely to a temporal connection and do not address any causative element” (written submissions [3], 30 October 2012). This argument is supplemented by assertions that:
(a)     the Arbitrator’s finding that Ms Kelly and Mr Paunovic were more likely to be in contact as a result of their respective work duties, than outside of work, was against the weight of the evidence;
(b)     the subject incident “involved purely personal issues and did not in any way relate to their duties or their professional relationship within the workplace”;
(c)     there was insufficient evidence to support a finding that Ms Kelly and Mr Paunovic “regularly attended the same location”, and
(d)     Ms Kelly had failed to discharge the onus upon her to prove that employment was a substantial contributing factor to her injury.
The written submissions include assertions that Ms Kelly’s credit as a witness was “in issue” in the proceedings and that her evidence was “affected” by those matters.
Emphasis in the course of argument is placed upon “the personal and significant family conflict between [Ms Kelly’s] daughter and [Mr Paunovic’s] wife”. It is put that the dispute came into the workplace by reason of a meeting between the two that was “coincidental”. It was made clear at the hearing, when this argument was raised in exchanges with counsel, that the “coincidental” or “random” nature of the encounter is said to demonstrate the absence of employment being a contributing factor that is real and of substance.
The appellant asserts that the Arbitrator has (at [13] of Reasons) misstated the evidence of Ms Kelly given at the hearing concerning contact between her and Mr Paunovic. Complaint is made that Ms Kelly’s evidence on this “issue” went beyond an enquiry or clarification of the evidence and extended to the Arbitrator “suggesting answers by way of leading questions” and that such questioning was founded upon “assumptions not supported by the evidence”.
A further complaint is made concerning the evidence elicited by the Arbitrator’s questioning of Ms Kelly concerning the frequency or otherwise of contact with Mr Paunovic, being that the appellant had “no opportunity of adequately responding” to such evidence.
It is argued that the evidence suggests that Ms Kelly and Mr Paunovic had had no relevant contact in the course of work “other than the incident on 9 January 2012”.
The appellant cited relevant authority, including the decision of the Court of Appeal in Van Wessem v Entertainment Outlet Pty Ltd [2011] NSWCA 214; 9 DDCR 355 in support of the contention that “the fact an injury has occurred in the course of employment merely establishes a temporal connection”. Such, it is argued, does not determine whether or not employment is a substantial contributing factor to the injury.
It seems that error is suggested on the part of the Arbitrator given her reliance upon the evidence of breach by Mr Paunovic of the Code of Conduct. It is put that such alleged breach “does not provide evidence as to the issue of employment being a substantial contributing factor to the injury”.
Ms Kelly argues that:
(a)     the occurrence of coincidence as argued by the appellant does not negate the existence of a causal relationship between the employment and the occurrence of injury. The time and place of the employment “gave rise to the unacceptable conduct of [Mr Paunovic]” as found by the Arbitrator. It is argued that employment was, thus, correctly found to be a substantial contributing factor to the injury;
(b)     when considering whether the “causal connection [between employment and injury] is both real and substantial” the Arbitrator correctly concluded, as a matter of “impression” that the injury was compensable;
(c) the question raised by the appellant as to her credit as a witness was not an issue to be considered, concerning the matters raised by s 9A for the Arbitrator’s consideration;
(d)     the Arbitrator was correct, having regard to the evidence, to conclude that contact between Mr Paunovic and Ms Kelly was more likely at work than outside work;
(e)     the evidence does not support a conclusion that the incident concerned “a personal dispute involving the worker and Mr Paunovic”;
(f) the Arbitrator’s conclusion that s 9A had been satisfied was correct having regard to the behaviour of Mr Paunovic which constituted “a significant breach of professional duties” on his part, a breach which “required disciplinary action”, and
(g)     the acknowledgement by Ms Herbertson that Mr Paunovic’s behaviour was in breach of the Code of Conduct and that action was taken to minimise risk of further contact between Mr Paunovic and Ms Kelly, supports the factual conclusion reached by the Arbitrator that employment was a substantial contributing factor to the injury. Failure by the appellant to tender a transcript of the interview with Mr Paunovic which was referred to in Ms Herbertson’s evidence permits, as was put to the Arbitrator, an inference that the respondent’s case would not be assisted by such tender.
The balance of submissions put on this appeal address the evidence generally and appear to restate Ms Kelly’s case as put to the Arbitrator. Matters touched upon include the argument that the evidence supports a conclusion that the respondent “was aware of a prior incident of intimidation involving Mr Paunovic and Ms Kelly’s daughter” and that the evidence of Mr Venner, where the version of events given by Ms Kelly is corroborated should be preferred to his later statement to the investigator, which must be noted was recorded but not signed, in which he resiled from the earlier version. It is again asserted that the crossing of the paths of Ms Kelly and Mr Paunovic “was a cause [of injury] in fact. Had it not been for the employment the event would likely not have occurred”.

Consideration

The Arbitrator’s finding concerning the employment being a substantial contributing factor to Ms Kelly’s admitted injury was one of fact. The manner in which argument has been presented on behalf of the appellant does not draw any distinction between suggested error of fact and suggested error of law. If factual error is to be made out it is necessary that the appellant establish, as stated by Barwick CJ in Whiteley Muir & Zwanenberg Ltd v Kerr (1966) 39 ALJR 505 (at 506), that:
“… material facts have been overlooked, or given undue or too little weight in deciding the inference to be drawn: or the available inference in the opposite sense to that chosen by the trial judge is so preponderant in the opinion of the appellate court that the trial judge’s decision is wrong.”

If it be the case that the submissions which I have attempted to summarise assert error of law it is necessary that the appellant establish, as stated by Hodgson JA in McMahon v Lagana [2004] NSWCA 164; 4 DDCR 348 (at [34]):
“… that the facts as found were so compelling that one can infer there was an error of law in interpretation of the provision; or that [the decision maker] applied an incorrect criterion, or took into account an irrelevant consideration in reaching her conclusion”.
The Arbitrator’s finding which is challenged on this appeal is found at [25] of Reasons where, upon acceptance of those submissions put on behalf of Ms Kelly it was stated:
“… [the employment] was the key connection between the parties, it provided the opportunity, the time and place for the confrontation, as well as a code of conduct for employees to manage their behaviour and conflict; and despite being aware of the conflict prior to this incident, [the appellant] took no action until after the injury. Section 9A is therefore satisfied”.
The authorities summarised by the Arbitrator between [20] and [22] of Reasons establish, among other matters, that the phrase “substantial contributing factor” involves a causative element which is to be inferred from the facts as a matter of common sense. Further, that causal connection must be real and of substance.
The Arbitrator found (at [24] of Reasons) that Ms Kelly’s and Mr Paunovic’s:
“mutual employment with the respondent and their respective duties have materially contributed to the injury. It was not coincidental that both were at [Nile Street]. As part of their normal duties, they are required to provide services to clients that attend this Centre. Section 4 is therefore satisfied”.
Such finding was made notwithstanding the appellant’s acceptance that the injury arose both out of and in the course of the employment. Such concession was proper and was no doubt made having regard to the undisputed facts noted by the Arbitrator.
The Arbitrator’s conclusion concerning employment being a substantial contributing factor to injury appears to have been founded upon the following matters:
(a)     both Ms Kelly and Mr Paunovic were employed by the same employer and were carrying out their respective duties at the same location when the confrontation took place (at [23] of Reasons);
(b)     although their respective family members were in dispute, Ms Kelly was more likely to be in contact with Mr Paunovic as a result of their respective work duties, than outside of work (at [23] of Reasons);
(c)     the employment was the key connection between the parties, it provided the opportunity, the time and the place for the confrontation (at [25] of Reasons);
(d)     a Code of Conduct established by the appellant had been breached (at [25] of Reasons), and
(e)     the employer was aware of “the conflict” between the families and took no action until after the injury (at [25] of Reasons).
The Arbitrator had also taken into account, where relevant, those matters which are enumerated in s 9A(2) (at [19] of Reasons). Considerable emphasis was placed by the Arbitrator upon the fact that employment afforded the opportunity for Ms Kelly and Mr Paunovic to “cross paths”.
It is my view that the matters relied upon by the Arbitrator clearly permitted a conclusion that there was a causal nexus between the employment and the injury. That, again, no doubt explains the appellant’s concession concerning injury arising out of the employment. However I am of the opinion that the facts as found do not permit a conclusion, as reached by the Arbitrator, that the employment was a substantial contributing factor to the injury.
The appellant is correct in its submission recorded at [35] above that “the strength of the causal linkage between the employment concerned and the injury is the question in issue”. Whilst it was accepted by the Arbitrator that the “respective family members” were in dispute, no evaluation of that fact in the context of causation was made by the Arbitrator in the course of her reasoning. In my view, there can be no doubt that the fact of the family dispute was a substantial cause of the injury. However, as is established on the authorities, there may be more than one substantial cause in any given factual circumstance.
The matters taken into account have been noted at [69 (a)-(e)] above. I am of the view that those matters, either alone or in combination, did not permit the conclusion that employment was a substantial contributing factor to the injury. Addressing each matter dealt with by the Arbitrator in turn:
(a)     the fact that both Ms Kelly and Mr Paunovic were employed by the same employer and were performing that work at the same location at the relevant time may be seen as causative only in the sense that “but for” the mutual employment and their presence at Nile Street there would be no occasion for injury. Such may not, in my view, be seen as a substantial contributing factor to the occurrence of injury. In so concluding, I do not intend to infer my acceptance of the appellant’s varied submissions concerning the incident being a “random” event or a “coincidence”. Ms Kelly is correct to argue that coincidence does not negate the existence of a relevant causal link. However, it is my view that such causal link may not permit an inference that the employment was a substantial contributing factor to the injury;
(b)     upon an acceptance that Ms Kelly and Mr Paunovic were more likely to come into contact with each other as a result of their respective work duties than they were outside of work, such is an incident of the employment which gives rise merely to the occasion of the injury. Such a chance encounter cannot alone be characterised as a substantial contributing factor to the injury;
(c)     the Arbitrator characterised the employment as being the key connection between the parties. That fact provided the opportunity, the time and the place for the confrontation. Again, the Arbitrator is addressing circumstances that give rise to the occasion of injury. Such is, as argued by the appellant, merely a temporal element. In my view, such may not be seen as a substantial contributing factor to injury;
(d)     the Code of Conduct may be seen as an element of the employment which, as stated by Lord Shaw in Thom v Sinclair [1917] AC 127; 33 TLR 247, includes “the nature, conditions, obligations or incidents of the employment”. The code regulates behaviour of the appellant’s workers. However, one needs to distinguish between the existence of a code and conduct in breach of the code. In the present case such conduct in breach, not being relevant to the employment but rather related to a private dispute, does not, in my view, constitute an element of Ms Kelly’s employment.
(e) the appellant’s awareness of “conflict” between the families of Ms Kelly and Mr Paunovic, and its failure to act was relied upon by Ms Kelly before the Arbitrator, as demonstrated by the content of the transcript, to have been limited to those circumstances addressed by s 9A(2)(b) (T39.15-26). Given argument as recorded, an attempt was made at the hearing of the appeal to clarify Ms Kelly’s position concerning this matter, particularly given that Ms Kelly’s counsel stated: “I am not suggesting that [the appellant] ought to have had foreknowledge in order to avoid [the crossing of paths] because I don’t think that’s possible” (T39.15-18).
The following was put to counsel at the hearing of the appeal (TA12):
“DEPUTY PRESIDENT: …it's not really clear as to whether reliance was placed upon the employer's knowledge of the dispute. The submissions seemed to skirt around it somewhat, with respect. Was it contended that that have any relevance to ‑‑
MR HANRAHAN: Well not from my part.
DEPUTY PRESIDENT: ‑‑ the 9A issue or ‑‑
MR HANRAHAN: Not from my part. I was attempting to persuade the Arbitrator that the circumstances here constituted one of possibly more than - or possibly constitute a substantial contributing factor and that there may have been others. Indeed it can't be ignored that the background and lead up to these circumstances involved a dispute between the parties in a different capacity.”
Emphasis was subsequently placed by counsel upon Ms Kelly’s “mere presence” at that location which created “the opportunity to have [Mr Paunovic’s] personal feelings to spill out into the workplace”.
Having regard to the manner in which argument was advanced before the Arbitrator, I consider that the Arbitrator has erred in drawing an inference that the failure to act on the appellant’s part did more than lead to the creation of a temporal connection between the employment and injury. The mere fact that an “opportunity” was afforded Mr Paunovic to vent his apparent anger may not, in my view, permit a conclusion that employment was a substantial contributing factor to the injury.
It is my opinion that the Arbitrator has erred in that she has given undue weight to those matters addressed in [73(a), (b), (c) and (e)] in drawing the inference that employment was a substantial contributing factor to Ms Kelly’s injury. I further conclude that the Arbitrator’s reasoning concerning the suggested relevance of the Code of Conduct demonstrates that an irrelevant consideration had been taken into account, namely breach of the code in respect of a non-work related matter, and constitutes error on her part. Those errors have plainly affected the Arbitrator’s decision: s 352(5). In the circumstances the Arbitrator’s determination must be revoked.
I consider that it is appropriate, and in accordance with legislative intent, that a decision in place of that of the Arbitrator be made on this appeal. Whilst the appellant’s arguments concerning ‘coincidence’ and the relevance of Ms Kelly’s credit as a witness are not accepted, I find on this appeal that the evidence does not permit an inference that Ms Kelly’s employment was a substantial contributing factor to the injury. Appropriate orders appear below.

DECISION

The orders made in paragraphs one, two and three of the Arbitrator’s Certificate of Determination dated 2 October 2012 are revoked and the following orders are made in their place:
“1. Award for the respondent.
2. No order as to costs.”

COSTS

No order as to costs of this appeal.

Kevin O'Grady

Deputy President
25 March 2013

I, KATHRYN CAMP, CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF KEVIN O'GRADY, DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.

ASSOCIATE