Dewcard Australia Pty Limited v El Hajje
[2006] NSWWCCPD 194
•23 August 2006
WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:Dewcard Australia Pty Limited v El Hajje [2006] NSWWCCPD 194
APPELLANT: Dewcard Australia Pty Limited
RESPONDENT: Talal El Hajje
INSURER:QBE Workers Compensation (NSW) Limited
FILE NUMBER: WCC13967-05
DATE OF ARBITRATOR’S DECISION: 9 March 2006
DATE OF APPEAL DECISION: 23 August 2006
SUBJECT MATTER OF DECISION: ‘Judicial Observation’ – procedural fairness; Adequacy of Reasons.
PRESIDENTIAL MEMBER: Acting Deputy President Deborah Moore
HEARING:On the papers
REPRESENTATION: Appellant: Bartier Perry, Solicitors
Respondent: Keddies Litigation Lawyers
ORDERS MADE ON APPEAL: 1. Paragraphs 1, 2 and 4 of the decision
of the Arbitrator dated 9 March 2006 are revoked.
2. Paragraphs 3 and 5 of that decision are confirmed.
3. The matter is remitted to another Arbitrator for determination of the outstanding issues in accordance with these reasons.
4.Dewcard is to pay the costs of the appeal.
BACKGROUND TO THE APPEAL
Talal El Hajje (‘Mr El Hajje) was employed by Dewcard Australia Pty Limited (‘Dewcard’) as a product manager/delivery driver. He claimed that on 1 May 2002 whilst making a delivery to a store, he was unloading boxes and suffered an injury to his back and both legs.
On 18 August 2005, Mr El Hajje lodged an ‘Application to Resolve a Dispute’ in the Commission seeking weekly benefits compensation, medical, hospital or related expenses, and permanent impairment/pain and suffering compensation pursuant to the provisions of the Workers Compensation Act 1987 (‘the 1987 Act’) and the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’).
Weekly payments of compensation and medical and related expenses were made to Mr El Hajje for all periods of incapacity from 1 May 2002 when liability was denied by QBE Workers Compensation (NSW) Limited (‘QBE’) by correspondence dated 18 September 2003. Weekly payments of compensation ceased on 29 October 2003.
The matter was listed for a Teleconference on 27 October 2005. On that occasion, Mr El Hajje’s claim for permanent loss compensation was referred to Dr James Bodel, an ‘Approved Medical Specialist’.
Dr Bodel provided a ‘Medical Assessment Certificate’ (‘the MAC’) dated 23 November 2005 wherein he assessed Mr El Hajje as having 11% Whole Person Impairment’.
At a further Teleconference on 8 February 2006, the parties agreed that the MAC resolved the permanent impairment dispute, but no agreement could be reached between the parties on the outstanding issues.
The matter proceeded to conciliation/arbitration hearing on 3 March 2006. On 9 March 2006 a ‘Certificate of Determination’ with an accompanying ‘Statement of Reasons’ was issued. The decision of the Arbitrator was as follows:
“1.The Respondent pay the Applicant weekly payments of compensation of $500.00 per week under s.40 of the 1987 Act from 30 October 2003 to date and continuing.
2.The Respondent pay the Applicant’s s.60 of the 1987 Act expenses upon the production of accounts or receipts.
3.The Respondent pay the Applicant lump-sum compensation of $14,000.00 in accordance with s.66 of the Workers Compensation Act 1987 for 11% Whole Person Impairment due to injury [on] 1 May 2002.
4.The Respondent pay the Applicant additional lump-sum compensation of $17,500.00 pursuant to s.67 of the 1987 Act. Such sum to be apportioned as to 50% in respect of past pain and suffering and 50% in respect to future pain and suffering.
5.That the Respondent pay the Applicant’s costs as agreed or assessed.”
Although date stamped 4 March 2006 by the Commission, an ‘Appeal Against Decision of Arbitrator was filed by Dewcard on 4 April 2006. The grounds of appeal listed are extensive, and many are by way of comment on the Arbitrator’s decision, but in summary, Dewcard submits that the Arbitrator erred in law in the following respects:
·The Arbitrator’s findings in relation to the section 40 award of the
1987 Act were against the weight of evidence.
·The Arbitrator’s determination in respect of the section 67 award was excessive and against the weight of evidence.
·The Arbitrator’s ‘observation’ of Mr El Hajje influenced his determination and was not drawn to the parties’ attention during the conduction of the arbitration hearing.
·The Arbitrator erred in failing to properly consider all of the evidence and give adequate reasons.
Mr El Hajje filed ‘Submissions in Reply’ to Dewcard’s appeal on 28 April 2006. Essentially, Mr El Hajje submits that no errors have been made by the Arbitrator and that the decision ought be confirmed.
ON THE PAPERS REVIEW
Dewcard submits that the appeal is suitable for a determination ‘on the papers’. Mr El Hajje’s submissions are silent on this point.
Section 354 of the 1998 Act governs procedure before the Commission. Specifically, section 354(6) provides that: “If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”
I note at this point that both parties were advised by letter from the Commission dated 6 June 2006 that no transcript of the proceedings on 3 March 2006 is available due to technical problems in the Commission resulting in the loss of considerable data. The Arbitrator’s ‘Statement of Reasons’ does not indicate that any oral evidence was taken from Mr El Hajje or indeed any other witness at the arbitration hearing. No further submissions have been made by the parties on this point.
Notwithstanding that problem, having carefully read the Arbitrator’s reasons, all of the evidence before him, and the lengthy submissions by both parties on appeal, I am satisfied that I have sufficient information within the meaning of section 354 of the 1998 Act and in accordance with Practice Direction 1 to proceed ‘on the papers’, and to determine the particular grounds of appeal raised by Dewcard, and that this is the appropriate course in the circumstances.
LEAVE TO APPEAL
The amount at issue on appeal satisfies the criteria set out in section 352(2) of the 1998 Act. The appeal was filed within the time limits prescribed by section 352(4) of that Act.
Leave to appeal is granted.
SUBMISSIONS, EVIDENCE AND FINDINGS
The ‘Judicial Observation’ Error
I propose to deal with this issue at the outset, because the absence of a transcript in these circumstances is of some significance.
The absence of a transcript can be a serious impediment to the ‘review’ process that is required to be undertaken on appeal. In Fraternity Bowling & Recreation Club Limited v Sartor [2004] NSWWCCPD 47 (‘Sartor’) the Commission noted at [15] that:
“The absence of a transcript of the Arbitration may be fatal to the conduct of a fair review on appeal where no written reasons have been provided. The task of the Presidential Member is to ‘review’ the Arbitrator’s decision, wherever it is possible to do so, either ‘on the papers’ or after an oral hearing. Where an Arbitrator has erred in making the decision, it may not be possible for a Presidential Member to proceed to substitute a new decision (in accordance with section 352 of the 1998 Act) if the evidence on appeal is inadequate. This has frequently occurred because … it was not properly recorded in the arbitral proceedings. In these circumstances, to grant leave for fresh evidence to be given on appeal can lead to the review becoming a complete second hearing of the dispute … this is not the intention of the statutory scheme. The particular circumstances of each case will influence the course of the review.”
In Sartor, not only was there no transcript of the oral evidence, but there was no transcript of the Arbitrator’s ex tempore decision and part of the Commission’s file was missing. In those circumstances, the review process could not be properly or fairly conducted.
In the present case, the Arbitrator’s detailed written reasons include a list of the “documentary evidence” from both parties before the Commission. There is no reference to any oral evidence have been given. However, the Arbitrator noted that (paragraph 34) “Both parties made oral submissions on the questions of weekly payments and pain and suffering compensation at the Arbitration hearing”. There is no sound recording of those submissions.
That is of considerable significance in determining whether or not the Arbitrator’s ‘observations’ of Mr El Hajje the details of which I shall refer to shortly, were drawn to the attention of the parties, and whether or not they were given an opportunity to make submissions on that issue.
Neither party in their submissions on appeal has indicated that there was any discussion with the Arbitrator on this point at any stage of the proceedings. I considered issuing a direction to the parties to make further submissions as to what, if anything, was said in relation to the Arbitrator’s ‘observation’ of Mr El Hajje, but given the time that has elapsed since the Arbitrator’s determination, I do not consider that further submissions based upon the parties’ recollection of the proceedings would be of assistance.
In Rohloff v Diacut Pty Limited (In Liquidation) [2005] NSWWCCPD 17, no oral evidence was given at the arbitration but written reasons were provided by the Arbitrator. The Commission determined in that case that a fair review could be conducted without a transcript.
In Aluminium Louvres & Ceilings Pty Limited v Zheng [2006] NSWCA 34, the Court of Appeal per Bryson JA stated at [32]:
“In the present case, for reasons which were not explained, there was no compact disc or sound recording of the Arbitration hearing and the evidence given there. This is a serious shortcoming, because it greatly impedes the right of appeal and the due exercise of the powers of the Presidential member under s.352; and also impedes the conduct of a further appeal under s.353. According to circumstances, the absence of a sound recording could fairly readily lead a Presidential member to a decision to require a re-hearing, although that result would not be automatic.”
A decision must therefore be made depending upon the circumstances of each case. In this case, written reasons have been provided by the Arbitrator. There is no information from either party to suggest that there was either any discussion or submissions made to the Arbitrator on this point at the hearing on 3 March 2006 which may have been transcribed. Indeed, Dewcard’s submissions suggest that it was entirely unaware of any observation of or conversation with Mr El Hajje by the Arbitrator until his ‘Statement of Reasons’ was delivered. In those circumstances, I propose to proceed on the basis that neither party was apprised of the Arbitrator’s ‘observation’ of Mr El Hajje, and its impact on the Arbitrator’s determination.
The ‘Arbitrator’s Determination’
In summarising the submissions made on behalf of Mr El Hajje in relation to his claim for pain and suffering compensation, the Arbitrator noted at paragraph 43 “Mr El Hajje also pointed out his presentation at the conciliation and arbitration hearing where, he submits, it was obvious he was in extreme discomfort and pain.”
Under the heading ‘Findings and Reasons’, the Arbitrator stated at paragraph 52 of his reasons the following:
“I have also had the opportunity to observe Mr El Hajje through both the conciliation and arbitration phases and found him to be, without complaint, seemingly in severe discomfort and considerable pain. Mr El Hajje was unable to sit for any length of time and needed to get up and pace to relieve his symptoms. I also observed Mr El Hajje sitting in an unusual way on the seats in the Commission’s waiting area. Upon him noticing me, Mr El Hajje voluntarily explained that he finds sitting astride two seats rather than in one allows his spine to be in the gap between which [sic] does not put any painful pressure on his spine. I note that similar presentations must have been made before Dr Bodel who described them as ‘fairly dramatic’ and before Dr Mills who said he demonstrated ‘exaggeration’. I personally found Mr El Hajje credible and indeed, no attack was made against his integrity at the hearing and therefore, I do not agree with the description of his presentation as exaggeration although it was fairly dramatic.”
The Submissions on Appeal
In its submissions on appeal, Dewcard states as follows:
“At paragraph 52, the Arbitrator relates to his private conversation with the Respondent worker in the absence of the Appellant employer’s legal representative and has based his decision giving weight to what the Respondent worker had informed the Arbitrator. With due respect, this conversation does not form part of the evidence and the Arbitrator erred in having taken it into account when making his determination. It is also in breach of the laws of natural justice and causes prejudice to the Appellant who was unaware of what the Respondent Worker had voluntarily explained to the Arbitrator in regard to this condition in the absence of the Appellant’s legal representative. The Arbitrator erred in firstly speaking to the Respondent worker in the absence of the Appellant and secondly, by taking that part of the information into consideration in coming to his conclusion.”
The issue of ‘judicial observation’ was dealt with by the Court of Appeal in Kappos v State Transit Authority [1995] 11 NSWCCR 386. In that case, the trial judge stated that the worker’s credit was significant to her claim and that one would expect some sign or phenomenon consistent with the lower limb symptoms and serious spinal injury of which she complained. The medical evidence on the issue as to whether the worker suffered an ongoing incapacity as a result of her injuries was inconsistent. The trial judge said that her observation that the worker was pregnant at the time of the trial could explain the worker’s presentation in court. No evidence was led of the worker’s pregnancy.
The Court of Appeal noted that Judges may take into account the demeanour of witnesses and this may include their behaviour in the court outside the witness box (see Government Insurance Office (NSW) v Bailey [1992] 27 NSRLR 304) (‘Bailey’). However, Sheller JA, with whom Clarke JA and Meagher JA agreed, said:
“… great care must be taken by judges in assessing what weight, if any, is to be given to their observations about witnesses outside the witness box. Those observations may turn out to be very misleading. Generally, it is desirable, if the judge regards the observations as relevant, that the parties be apprised of the precise nature of the observations and the use the judge has in mind to make of them.”
Sheller JA, quoting from Bailey and the decision of Clarke JA in that case then said:
“His Honour’s observations of the respondent before the trial commenced raises a more difficult question, particularly insofar as his Honour did not disclose the fact that he had observed the respondent’s difficulties while she was sitting in the back of the court and thereby enable counsel for the appellant to attempt to deal with the situation which has arisen. The rule which should be applied in these circumstances is a flexible one based upon considerations of fairness and justice.”
Sheller JA then went on to note the judgment of King CJ in Angaston & District Hospital v Thamm [1987] 47 SASR 177 at 178 – 179 as follows:
“It is clear, however, that where the judge makes observations of the actions or demeanour of a party, which actions and demeanour are not observable by counsel, and makes use of those observations in a way which has a significant influence upon his decision of the case, he is required in justice, before making such use of those observations, to make those observations and the possibility of him using them in the course of his judgment known to counsel at a stage of the hearing at which counsel still has an opportunity of dealing with them in a proper and effective way.”
This, Sheller JA noted, “… is a matter of fair play and commonsense.”
In the present case, Mr El Hajje “... rejects the Appellant’s submissions that the Arbitrator’s decision was based entirely on his discussions with the Respondent during an intervening break.” Mr El Hajje goes on to submit that, in relation to paragraph 52 of the ‘Statement of Reasons’:
“This item should be read in context to the preceding and proceeding items. In the Respondent’s submission, there was no conversation between the two parties – the Respondent merely volunteered to the Arbitrator why he was positioned in such a way as he was on the seat. Item 52 of the determination is primarily an account of the Arbitrator’s observations of the Respondent, in context of the evidence before him. The Arbitrator’s observations should be permitted to be taken into account …”
This is true to the extent that the Arbitrator was entitled to take into account his observations of Mr El Hajje particularly in the process of the conciliation/arbitration hearing in line with the decisions to which I have referred. The difficulty is however as Dewcard points out, that it was “unaware” of what Mr El Hajje had “voluntarily explained” to the Arbitrator.
The real issue to determine is whether or not the Arbitrator’s statements were merely passing observations not relevant to the matter at issue or whether they were fundamental to his ultimate decision.
The Arbitrator’s reference to Dr Bodel’s report was accurate. Dr Bodel stated “I note that this gentleman does have a fairly dramatic presentation but he does have pathology which is consistent with an ongoing source of pain.”
The principal difficulty is with the Arbitrator’s statement that: “I personally found Mr El Hajje credible …” In the absence of oral evidence given by Mr El Hajje, that statement appears to reflect the Arbitrator’s conversation with Mr El Hajje and his observation of him in the Commission’s waiting area.
The significance of the Arbitrator’s statement, not only in relation to the claim for section 67 benefits, but to the weekly payments claim, is found in paragraph 53 of the ‘Statement of Reasons’ where the Arbitrator said:
“I am satisfied that Mr El Hajje is partially incapacitated but I have grave doubts that he would be able to find meaningful suitable employment in the open labour market having regard to his documented and observed low tolerances for pain and discomfort.”
It seems on the face of it, then the Arbitrator was indeed influenced not only by his observation of Mr El Hajje at the hearing, but also his conversation with and observation of him in the Commission waiting area.
In those circumstances, regrettably, there must be a new hearing.
The Other Grounds of Appeal
In view of my decision in the preceding paragraph, it is not necessary for me to deal with these issues however, it is appropriate that some comment be made.
Whilst the Arbitrator’s ‘Statement of Reasons’ is thorough and well presented, it is unfortunate that his remarks as to his observation of and conversation with Mr El Hajje appear to have significantly influenced his decision. There is no doubt that there was considerable evidence to support the Arbitrator’s ultimate finding that Mr El Hajje “… is partially incapacitated …” Dr Bodel considered that Mr El Hajje had fairly significant pathology with a right sided disc prolapse at the L4/5 level of his lumbar spine with wasting of the right calf and sensory loss in the L5 distribution on the right. It seems that it was not really disputed by Dewcard that Mr El Hajje was partially incapacitated. Indeed, it was Dewcard’s submission that Mr El Hajje’s general practitioner had certified him as being fit for suitable duties for periods ranging from eight hours per week to 20 hours per week. Dewcard relied on vocational assessments suggesting that Mr El Hajje was capable of employment as a retail manager.
The Arbitrator’s determination that “… I have grave doubts that he [Mr El Hajje] would be able to find meaningful, suitable employment in the open labour market …” appears to be founded on his “… documented and observed low tolerances for pain and discomfort”. Again, it is the Arbitrator’s reference to his “observation” that seems to have impacted on his determination that Mr El Hajje was severely restricted in his capacity for employment.
The Arbitrator ultimately determined that, Mr El Hajje’s probable earnings being $560.00 per week, that he “… does have a capacity to earn an average amount of $60.00 per week …”, hence his award under section 40 at the rate of $500.00 per week.
Whilst the Arbitrator’s determination as to Mr El Hajje’s capacity for employment was not necessarily against the weight of the medical evidence, it appears to reflect an acceptance of other ‘evidence’, namely observation of and conversation with Mr Hajje, which was not properly ‘evidence’ before the Commission.
I take a similar view in relation to the claim for section 67 benefits. Although no reference is made by the Arbitrator to his observation of or conversation with Mr El Hajje in paragraphs 60 – 64 of his ‘Statement of Reasons’ dealing with the claim pursuant to section 67, he nonetheless stated at paragraph 63 “… I have considered all the available evidence that suggests the degree and duration of Mr El Hajje’s pain and suffering”. That suggests that he has taken into account his earlier comments as to Mr El Hajje’s “credibility” and his apparent “severe discomfort and considerable pain”.
Dewcard also submits that the Arbitrator has failed to provide adequate reasons for his decision. It is clear law that a failure to provide adequate reasons for a decision constitutes an error of law (see Soulemezisv (Dudley) Holdings Pty Limited [1987] 10 NSWLR 247) (‘Soulemezis’). Commission Arbitrator’s have a statutory obligation to provide adequate reasons for a decision. Nonetheless, the Commission is not a court and its objectives are to provide a fair and cost effective process for resolution of disputes between parties. Proceedings are conducted with as little formality and technicality as the proper consideration of the matter permits. As Deputy President Fleming said in Mayne Health Group v Sandford [2002] NSWWCCPD6:
“The content of ‘Statements of Reasons’ for decision reflect this process and should not on review be ‘construed minutely and finely with an eye keenly attuned to the perception of error:’ … To succeed on the ground of inadequacy of reasons it must be established that not only are the reasons inadequate but that the inadequacies sufficiently demonstrates that the Arbitrator has failed to exercise his or her statutory duty to fairly and lawfully determine the Application.”
Nonetheless, as Mahony JA said in Soulemezis:
“A Judge is not required to make a finding in respect of every fact leading to the final conclusion of fact … nevertheless a Judge must distinguish between the essentials and the peripherals … reasons are necessary as an incident to a judicial decision to provide a sufficient explanation of why an order is made. The Judge is to apprise the parties of the broad outline and constituent facts of the reasoning upon which he or she has acted … It is necessary that the essential grounds upon which the decision rests should be articulated.”
In the present case, I am of the view that the Arbitrator has adequately set out the “essential grounds” upon which his decision was based. It is regrettable that those grounds include ‘evidence’ that was not properly before the Commission.
CONCLUSION
The Arbitrator has erred in law by failing to apprise the parties of the precise nature of his observations of and conversations with Mr El Hajje and the use he made of that ‘evidence’. This amounts to a denial of natural justice and procedural fairness such that a re-hearing is required.
DECISION
1. Paragraphs 1, 2 and 4 of the decision of the Arbitrator dated 9 March 2206 are
revoked.
2. Paragraphs 3 and 5 of that decision are confirmed.
3. The matter is remitted to another Arbitrator for determination of the outstanding
issues in accordance with these reasons.
COSTS
The appeal has been successful in part due principally, regrettably, to the Arbitrator’s conduct at the hearing. However, Mr El Hajje was primarily successful in proceedings before the Arbitrator in that his claim for section 66 entitlements was agreed. In addition, it seems clear that the principal issue in dispute between the parties was only as to the quantum of Mr El Hajje’s entitlements.
In all the circumstances, it seems just and fair, having regard to the objectives of the Commission, that Dewcard should pay the costs of the appeal.
Deborah Moore
Acting Deputy President
23 August 2006
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF DEBORAH MOORE, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
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