East Coast Timber Products Pty Ltd v Hancock (No 2) - [2011] NSWWCCPD 48

WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR FOLLOWING REMITTER FROM THE COURT OF APPEAL
*STATUS: Determined on remitter: see Hancock v East Coast Timber Products Pty Limited [2011] NSWCA 11 and East Coast Timber Products Pty Ltd v Hancock* [2009] NSWWCCPD 123**
CITATION:		East Coast Timber Products Pty Ltd v Hancock (No 2) [2011] NSWWCCPD 48
APPELLANT:		East Coast Timber Products Pty Ltd
RESPONDENT:		Daniel John Hancock
INSURER:		QBE Workers Compensation (NSW) Ltd
FILE NUMBER:		A1-10105/08
ARBITRATOR:	Mr J Hertzberg
DATE OF ARBITRATOR’S DECISION: DATE OF APPEAL HEARING:		26 May 2009 23 August 2011
DATE OF APPEAL DECISION:		1 September 2011
SUBJECT MATTER OF DECISION:		Reasons; procedure on review
PRESIDENTIAL MEMBER:		Deputy President Bill Roche
REPRESENTATION:		Appellant:	Mr J de Greenlaw, instructed by Mulcahy Lawyers
Respondent:	Mr G Egan, solicitor, Lee Sames Egan
ORDERS MADE ON APPEAL:		The Arbitrator’s determination of 26 May 2009 is revoked and the matter is remitted to a different Arbitrator for re-determination of the issues of causation, incapacity and, if necessary, hospital and medical expenses. Costs of the first arbitration and of the second arbitration are to follow the event of the second arbitration. Each party is to pay his or its own costs of the appeal.

BACKGROUND

Mr Hancock started work with East Coast Timber Products Pty Ltd (East Coast) as a labourer in August 1998. His duties required him to stack and sort timber. He alleges that he injured his right knee when he turned and slipped on a “cleat” (an offcut of timber) on Monday 31 October 2005. He says that his leg slipped from under him and that he landed on his backside and twisted his knee as he fell.
After having 2 and 3 November 2005 off work because of his knee, Mr Hancock saw Dr Gak on 4 November 2005 and was certified fit for work from 7 November 2005. He returned to work on that day and continued with his normal duties. His evidence was that he worked as normally as he could, but his knee continued to be sore on most days and was swollen from time to time. He said that his condition progressively deteriorated and he last worked for East Coast on 25 March 2008.
East Coast disputed that Mr Hancock injured his knee at work on 31 October 2005 and, in the alternative, argued that, if he did injure his knee on that day, he recovered from the effects of that injury and any incapacity had resulted from several later non-work related incidents. It relied on evidence from several of Mr Hancock’s workmates to the effect that he did his normal work without complaint for over two years, as well as evidence of the effect of the non-work related incidents.
The Commission listed the matter for conciliation and arbitration on 1 May 2009. Neither side sought leave to call any oral evidence or to cross-examine any of the witnesses. In a reserved decision delivered on 26 May 2009, the Arbitrator found in Mr Hancock’s favour on all issues. The Commission issued a Certificate of Determination in the following terms:
“The Commission determines:
(1) Award for the Applicant under section 36 of the Workers Compensation Act 1987 in the sum of $561.22 per week from 23 March 2008 to 20 September 2008.
(2) Award for the Applicant under section 37 of the Workers Compensation Act 1987 at the maximum statutory rate for a single worker with no dependents from 21 September 2008 to date and continuing.
(3) The Respondent to pay the Applicant's costs as agreed or assessed and I certify the matter as complex and allow an uplift of professional fees for both parties of twenty percent.
A brief statement is attached to this determination setting out the Commission's reasons for determination.”
East Coast appealed. The President, Keating DCJ, confirmed the finding that Mr Hancock had injured his right knee when he slipped on a cleat on 31 October 2005, but found that he had recovered from the effects of that injury within days and that the claimed incapacity from 26 March 2008 was unrelated to the work injury (East Coast Timber Pty Ltd v Hancock [2009] NSWWCCPD 123).
His Honour did so because of a combination of the lay evidence from Mr Hancock’s work colleagues that he did his normal work without complaint for over two years after the incident on 31 March 2005, Mr Hancock’s failure to address a series of intervening incidents, and the lack of any persuasive medical evidence that the condition of his right knee had resulted from the work injury.
His Honour did not accept the evidence from Mr Hancock’s treating orthopaedic surgeon, Dr Summersell, of a connection between the condition and the injury because, relying on the principles in Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305; 52 NSWLR 705 (Makita), it was based on an acceptance of Mr Hancock’s evidence of continuing symptoms since October 2005, which the President did not accept, and it did not refer to the later incidents.
Mr Hancock appealed. In a decision delivered on 15 February 2011, the Court of Appeal allowed the appeal and remitted the matter to the Commission for re-determination in accordance with law (Hancock v East Coast Timber Products Pty Ltd [2011] NSWCA 11; 8 DDCR 399 (the appeal decision).
The Court held that the principle in Makita is that there is no requirement for an exact correspondence between the assumed facts upon which an expert opinion is based and the facts proved in the case. Dr Summersell’s opinion did not have to expressly refer to the subsequent non-work related incidents for there to be a proper foundation for his assessment. A deficiency in one part of an expert’s evidence may be made good by other material.
Tobias JA (Giles JA agreeing) observed that, before a finding adverse to Mr Hancock’s credit was made, he should have been given the opportunity of answering the evidence against him.
On 3 March 2011, the President issued a Direction requiring the parties to provide “written submissions as to the future conduct of the matter”. His Honour directed East Coast, the appellant in the proceedings before the Commission, to file and serve its submissions on or before 17 March 2011 and Mr Hancock to file and serve submissions in response on or before 31 March 2011.
East Coast’s solicitor, Mr Mulcahy, failed to comply with this direction. Mr Hancock’s solicitor, Mr Egan, filed submissions on 31 March 2011. Without the benefit of knowing East Coast’s approach, he submitted that:
(a)     leave to appeal should be refused;
(b)     the appeal be dismissed because the Arbitrator’s decision had not been shown to be wrong (State Transit Authority of New South Wales v Chemler [2007] NSWCA 249; 5 DDCR 286 (Chemler), Sapina v Coles Myer Ltd [2009] NSWCA 71, 7 DDCR 54;
(c)     Dr Summersell’s opinions were properly based and reasoned. Therefore, the causal connection between Mr Hancock’s condition and the work injury was established. That being the case, the only medical evidence before the Commission on the question of incapacity and causation is from Dr Summersell;
(d)     East Coast has the onus of establishing that the Arbitrator’s decision is wrong. As the only evidence on causation and incapacity supports Mr Hancock, it cannot be concluded that the Arbitrator was wrong, and
(e)     if a further hearing was required for the review to proceed, Mr Hancock sought leave to refer the papers to Dr Summersell and/or a medicolegal examiner for further opinion on any issue that may continue to trouble the President or more generally going to causation and incapacity.
Contrary to the President’s Direction, Mr Mulcahy filed submissions on 19 April 2011. He submitted that:
(a)     the President’s decision to grant leave to appeal was not raised in the Court of Appeal and should play no part in the re-determination;
(b)     Beazley JA held (at [101] of the appeal decision) that, correctly applying the principles in Makita, it was a matter for the “trial judge” to determine the weight to be given to Dr Summersell’s evidence and East Coast should be given the opportunity to address that aspect;
(c)     the question of fresh evidence formed no part of the ratio decidendi of the Court of Appeal’s decision. Mr Hancock was alive to “gaps in the evidence” when he appealed to the President and he previously made an application to rely on fresh evidence from Mr Beverley and from CRS. There should be no automatic right of a “second bite of the cherry” simply because of the matter being referred back to the Commission for re-determination in accordance with law, and
(d)     if a further hearing was required, it should be limited to submissions addressing those aspects forming the basis of the matter being remitted to the Commission.
The President listed the matter for a teleconference on 6 May 2011 and informed the parties that, if they had no objection, the appeal would be allocated to me. Neither party objected. He then set a further timetable for submissions. In compliance with that timetable, East Coast filed submissions on 20 May 2011 in which it relied on the submissions it initially filed in support of the appeal on 24 June 2009, in addition to supplementary submissions on injury and causation.
East Coast submitted, “little weight should be afforded to Dr Summersell’s opinion on the question of causation”. It also submitted that, among other things, “the only inference that could arise is that he [Mr Hancock] suffered an injury whilst helping Mr Hindmarsh” move heavy furniture shortly before he ceased work on 26 March 2008. It also referred to the incident on 22 January 2008, when Mr Hancock assisted family members to unload bearers and joists from a truck at his home, and a further incident on or immediately before 21 April 2008, when Mr Hancock again attended at Grafton Base Hospital and reported a history of a swollen right lower leg and increasing pain aggravated recently by “sanding” at home.
It also submitted that Mr Hancock’s failure to address the issues raised in the insurer’s s 74 notice left it open for a Jones v Dunkel [1959] HCA 8; 101 CLR 298 inference to be drawn that the issues raised by that notice that remained unchallenged should “be more readily accepted by the tribunal of fact”. It was argued that Mr Hancock’s evidence suffered from the “significant flaw that he failed to give any or any reliable evidence as to the effect of the several non-work related incidents that occurred after October 2005”. It concluded that Mr Hancock had not established that any incapacity commencing on 26 March 2008 resulted from an injury sustained on 31 October 2005, and the Arbitrator’s determination should be revoked and an award entered for the employer.
East Coast made no submissions as to how the appeal should proceed.
Mr Egan filed submissions in response on 2 June 2011 in which he made the following points:
(a)     East Coast had not raised any Jones v Dunkel point in the appeal before the President and should not be permitted to do so now;
(b)     before “disrupting” the arbitral decision, the Presidential member must be satisfied that the original decision is wrong (Chemler). It was not sufficient that the Presidential member would reach a different conclusion or would take an alternative view of the facts, if the original decision were reasonably open to the Arbitrator. A review is not a chance to re-hear any case without penalty;
(c)     East Coast’s case on appeal was essentially a repeat of the arguments below, which were fully and properly considered by the Arbitrator. The appeal has identified no evidence or reasoning which demonstrates the Arbitrator’s decision was wrong, but merely argues, as if in a hearing de novo, for a different result without demonstrating where the Arbitrator went wrong;
(d)     subject to the admission of additional evidence, the matter could be determined on the papers;
(e)     on the basis of the “assumed” or “accepted” facts, Dr Summersell concluded that, if the injury occurred as found by the Arbitrator as a matter of fact, then it was the cause of Mr Hancock’s current condition (including the instability of his knee causing falls), and
(f)      the Arbitrator’s decision had not been proven to be wrong and the appeal should be dismissed and the Arbitrator’s award confirmed.
In addition, Mr Egan sought leave to tender the following additional evidence:
(a)     reports from Dr Hyde Page dated 2 July 2009, 7 July 2009 (x2), 18 August 2009, 16 September 2009 and 25 May 2011;
(b)     statements from Mr Hancock and his mother dated 27 May 2011;
(c)     a letter from Lee Sames Egan to Dr Summersell dated 6 May 2011 and his response dated 23 May 2011, and
(d)     two handwritten statements from Mr John Hancock, the worker’s father, bearing fax date 31 May 2011.
On 17 June 2011, Mr Mulcahy filed a 26-page document in reply to Mr Egan’s submissions. In view of the length of these submissions, I will only refer to a few of the more salient points in it:
(a)     the grounds of appeal were principally directed towards the Arbitrator giving a “disproportionate amount of weight” to certain evidence or not giving sufficient weight to certain evidence. At [46] and [47] of his Statement of Reasons (Reasons), the Arbitrator did not advert to why that evidence should be accepted in preference to any other;
(b)     inherent in original grounds of appeal, is the fact that the Arbitrator “failed to make findings on critical issues fundamental to his ultimate determination”. A party is entitled to have a determination made that one person’s evidence was preferred to any other witnesses’ evidence on critical issues so that there is an understanding as to the reasoning behind the decision (Soulemezis v Dudley (Holdings) Pty Ltd (1987) NSWLR 247 (Soulemezis);
(c)     the Arbitrator failed to give reasons as to (why he accepted) some evidence over other evidence, he placed a disproportionate amount of weight on the evidence given by Mr Hancock and insufficient weight on the chronology of events leading up to Mr Hancock ceasing work on 25 March 2008, and failed to take into account significant matters that were not given sufficient or any consideration. In light of these matters, the Arbitrator erred in his determination and had he not erred a different decision should have been reached;
(d)     East Coast did not “challenge” the admission of the further statements from Mr Hancock, his parents, or the correspondence between Lee Sames Egan and Dr Summersell, but took “issue as to the admission of the ‘new’ evidence from Dr Hyde Page”. Notwithstanding that Mr Mulcahy did not “challenge” the admission of the further witness statements, the submissions set out lengthy reasons why the statements should not be admitted, which “should be taken into account in considering the submissions below”;
(e)     Dr Hyde Page’s reports were objected to on the ground that if he had a different history, his “opinion as to causation may well have been very different”. Essentially, it was submitted that there was no certainty that there would be a different decision if the reports were admitted on appeal;
(f)      the further witness statements failed to address the “very issue Justice Tobias referred to”;
(g)     the “evidentiary gap” raises the very real possibility that Mr Hancock injured his knee on 3 November 2005. However, the difficulty with such an inference is that the worker has acknowledged that he did not attend work on 3 November 2005. If that is correct, the injury would not be a compensable injury as it did not occur at work;
(h)     the evidence in the additional statements is such that the evidence given by East Coast’s witnesses “should be more readily acceptable as being truthful” and it is open for inferences to be drawn against Mr Hancock’s interests, and
(i)      certain matters in Mr Hancock’s statement have not been investigated by East Coast and were not the subject of the arbitration or the first appeal.
On the question of whether the appeal should be heard on the papers, the submissions were confusing and unhelpful. It was said that the additional evidence Mr Hancock had sought to tender “only further places the Respondent Worker’s credit in issue”, yet there was no application to cross-examine him. The submissions added:
“It is unrealistic to expect that a matter dealt with at first instance where there is no cross-examination of witnesses would, on appeal, be heard with witnesses being cross-examined, despite the Appellant Employer having no opportunity to respond to the fresh evidence sought to be relied upon by the Respondent Worker, other than through submissions.”
By letter dated 22 June 2011, Mr Egan advised that:
(a)     he had no objection to Dr Hyde Page’s reports being sent to Dr Bodel for his comment;
(b)     he withdrew his previous submission that the appeal could be conducted on the papers, and
(c)     he gave notice that he sought leave to cross-examine two of East Coast’s witnesses, Mr Hindmarsh and Mr Hyde.
In light of the parties’ confusing and generally unhelpful submissions on how the appeal should proceed, I listed the matter for teleconference on 18 July 2011 to determine that matter. I informed the parties that it was only in the most exceptional circumstances that a s 352 review would be conducted as a hearing de novo. In eight years, the Commission has only once conducted a review as a hearing de novo (Griffin v Qantas Airways Ltd [2010] NSWWCCPD 22).
Before the amendments to s 352, which apply to Arbitrators’ decisions on and after 1 February 2011, the usual practice in s 352 appeals was to hear submissions (either in writing or in an oral hearing) on whether the Arbitrator’s decision was wrong and, if it was, to re-determine the matter. It was not necessary to establish error in the Arbitrator’s decision before a Presidential member could intervene. The appeal was usually conducted on the evidence that had been before the Arbitrator. However, if the Arbitrator’s decision was wrong, and there were significant credit issues, the matter would usually be remitted for a further arbitration on such issues that remained to be determined at the conclusion of the appeal and, subject to complying with the legislation and the rules, the parties were permitted to tender such further evidence at the second arbitration as was necessary.
In view of the general credit issues involved in the present matter, which Tobias JA referred to in the appeal decision, I felt it would be inappropriate for me to review and re-determine all issues without holding a hearing de novo and hearing oral evidence. That posed a practical difficulty because Presidential appeals are heard in Sydney and the witnesses in the present matter live in the country.
A further impediment to the matter proceeding as a hearing de novo was that, while East Coast consented to the admission of the worker’s additional lay evidence, it submitted that that evidence caused it significant prejudice because it had no opportunity of responding to it, and it objected to the additional expert evidence from Dr Hyde Page. For the matter to proceed as a hearing de novo, all relevant evidence would have to be admitted.
In these circumstances, I proposed, subject to hearing from the parties, that the matter proceed on the narrow issue of determining if the Arbitrator’s decision was wrong and, if it was, to remit the matter to a different Arbitrator for re-determination (T9–10, 18 July 2011). Mr Egan did not oppose that course and agreed that if further “examination needs to occur it probably is best it [is] done at an Arbitral stage” (T10.42, 18 July 2011). Mr Mulcahy indicated he wished to proceed on the basis I outlined (T11.51, 18 July 2011). On that basis, I listed the matter for oral hearing on 23 August 2011.

On 23 August 2011, Mr de Greenlaw, of counsel, appeared for East Coast and Mr Egan appeared for Mr Hancock. After some preliminary discussions, the parties agreed to proceed on the basis discussed at the teleconference on 18 July 2011. The ground of appeal identified was that the Arbitrator had erred in failing to give adequate reasons for his decision. Mr Egan opposed the appellant relying on that ground and argued that it had not been raised as an issue until East Coast filed its submissions on 17 June 2011.
That was correct. However, as the ground raised a legal point and it was discussed at the teleconference on 18 July 2011, and as I gave Mr Egan leave to file additional submissions at the conclusion of the oral hearing, I do not believe there was any prejudice to Mr Hancock and I allowed East Coast to argue that the Arbitrator erred in failing to give reasons for his decision.
The appeal proceeded on the basis that, if the “no reasons” ground were upheld, the matter should be remitted to a further arbitration before a different Arbitrator. In that event, both sides will be free to tender such additional evidence as they consider appropriate, having regard to the issues that remain in dispute and the observations by the Court of Appeal.

PRELIMINARY MATTERS

Leave to appeal

Notwithstanding that the monetary thresholds in s 352(2) are satisfied, and the appeal was lodged in time, Mr Egan submitted that leave to appeal should be refused because:
(a)     East Coast’s arguments are a repeat of the arguments presented before the Arbitrator;
(b)     the appeal has identified no evidence or reasoning which demonstrates that the Arbitrator’s decision was wrong. Alternatively, there is no evidence, argument or reasoning which demonstrates that there is a correct or preferred view that should be substituted;
(c)     the appeal is so weak that it is bound to fail, and
(d)     as there was no oral evidence called before the Arbitrator, there is nothing to be gained by remitting the matter, as all material remains before the Presidential member.
I do not accept the above submissions.
The President’s decision to grant leave to appeal was not the subject of challenge in the Court of Appeal.
The appeal is a review under the terms of s 352 as it stood before the amendments introduced on 1 February 2011 in the Workers Compensation Legislation Amendment Act 2010. My task is to conduct a review on the merits to determine whether the original decision was wrong and to decide the true and correct position (Chemler). Whether the Arbitrator has erred is relevant, but error does not define the task on review (Cook v Midpart Pty Ltd [2008] NSWCA 151).
East Coast has submitted that the Arbitrator erred in failing to give reasons for his decision and failed to make findings on critical issues fundamental to his ultimate determination. These are matters that must be determined in the course of the review and, as the thresholds in s 352 are satisfied, I am comfortably satisfied that this is an appropriate case in which to grant leave to appeal.
I grant leave to appeal.

ISSUES IN DISPUTE

While East Coast identified six “grounds of appeal” in its initial s 352 appeal lodged on 24 June 2009, they were not so much grounds of appeal as general complaints that the Arbitrator had not given sufficient weight to its evidence and disproportionate weight to Mr Hancock’s evidence.
In submissions filed on 17 June 2011, the grounds of appeal were refined to be “principally” directed towards the Arbitrator:
(a)     giving a “disproportionate amount of weight” to certain evidence or not giving sufficient weight to certain evidence;
(b)     failing to state why he accepted some evidence in preference to other evidence;
(c)     failing to make findings on critical issues fundamental to his ultimate determination, and
(d)     placing insufficient weight on the chronology of events leading up to Mr Hancock ceasing work on 25 March 2008 and failing to take into account significant matters that were not given sufficient weight or any consideration.
At the oral hearing before me, Mr de Greenlaw ultimately relied on only one ground, namely, that the Arbitrator failed to give reasons and failed to make findings on critical issues fundamental to his ultimate decision.

FRESH EVIDENCE

In view of the way Mr de Greenlaw presented the appeal, and as I am not in a position to conduct a hearing de novo, it is not necessary or appropriate for me to consider that additional evidence sought to be relied on by Mr Egan.

THE ARBITRATOR’S DECISION

The Arbitrator identified the issues for determination to be:
(a)     did Mr Hancock hurt his knee in a fall at work on 31 October 2005?
(b)     if Mr Hancock did fall and hurt his knee at work on 31 October 2005, has that fall been the cause of ongoing problems with the knee and any incapacity past and continuing?
(c)     if Mr Hancock sustained injury to his knee arising out of and in the course of employment causing incapacity, is that incapacity total or partial?
(d)     what is Mr Hancock’s entitlement, if any, to weekly benefits compensation?
On the first issue, the Arbitrator referred to Mr Hancock’s evidence that he turned and slipped on a bit of cleat and twisted his right knee as he fell. After briefly referring to the evidence, the Arbitrator said, at [22]:
“There is direct evidence from the Applicant of the fall and a statement from a co-worker that the Applicant told him about it at the time. He told his mother and saw a doctor as soon as he could. On the evidence I am satisfied on the balance of probabilities, that the Applicant did have a fall at work (‘the fall’) on 31 October 2005 and find accordingly.”
On the second issue, he referred to the evidence and said (at [45]) that he had to adopt a commonsense approach in weighing the evidence to determine whether the knee injury resulted from the work incident. At [46] he said:
“It is clearly not the case that the Applicant’s problems with his knee developed only after the non-work incidents in 2008. He sought medical treatment at Grafton Base Hospital and from his general practitioner in 2007 and after radiological examination disclosed the medical findings that I have set out above. Because of his condition he was referred to an orthopaedic specialist which took some time and he was subsequently diagnosed with the injury for which he ultimately had surgery in June 2008. The Applicant clearly has to overcome the problems in the evidence that he had not recorded the injury and that his co-workers, apart from Mr Hyde, were unaware of it or any consequence. However the Applicant’s clear evidence is that the knee became progressively worse over time and that he was afraid for his job position if he disclosed it. Ultimately he had to seek medical assistance.”
He concluded at [47]:
“I accept the Applicant’s evidence and am also persuaded by the medical evidence particularly from Dr Summersell and his opinion that the condition as he diagnosed was likely to have been caused by the work injury. I am satisfied on the balance of probabilities that as a consequence of the work injury on 31 October 2005 the Applicant sustained an injury to his knee which resulted in a medial meniscus tear and cruciate injury. There is sufficient evidence to satisfy me that the Applicant’s current condition is causally connected to the fall on 31 October 2005 and I find that the Applicant sustained injury to his right knee arising out of and in the course of his employment and that his current condition is as a consequence of that work injury.”

SUBMISSIONS

Mr de Greenlaw submitted that, while the Arbitrator referred (at [27]) to the incident on 22 January 2008, when Mr Hancock’s symptoms became worse at work and while he was helping his family unload timber, and (at [28]) to the incident in late March 2008 when Mr Hancock’s symptoms became worse, he made no reference to Mr Hancock attending the Bulgarr Ngaru Aboriginal Medical Centre on seven occasions between April 2007 and September 2007 and making no complaint about his knee.
While the Arbitrator referred (at [27]) to problems with Mr Hancock’s knee progressing by late October 2007, he made no determination of what injury caused it.
The Arbitrator referred to the injury (at [46]) and to the worker having been referred to Dr Summersell on 7 December 2007. However, at that stage, the only pathology was a ganglion and there was no opinion that it arose from the work injury. The ganglion was not the condition for which Mr Hancock had surgery.
Though the Arbitrator referred to the problem Mr Hancock had to overcome of not having “recorded the injury” and that his co-workers, apart from Mr Hyde, were unaware of it or any consequences from it, he did not deal with those issues specifically, but merely concluded that he accepted Mr Hancock’s evidence and was persuaded by the medical evidence, particularly from Dr Summersell, that as a consequence of the injury on 31 October 2005 Mr Hancock sustained an injury to his knee which resulted in a medial meniscus tear and a cruciate injury.
Mr de Greenlaw relied on the following statement by McHugh JA (as his Honour then was) in Soulemezis, at 281B:
“If, for example, the only issue before a court is whether the plaintiff sustained injury by falling over, a simple finding that he fell or sustained injury would be enough, if the decision turned simply on the plaintiff’s credibility. But, if, in addition to the issue of credibility, other matters were relied on as going to the probability or improbability of the plaintiff’s case, such a simple finding would not be enough.”
He submitted that, while the Arbitrator referred to the lack of a report of injury and the fact that co-workers were unaware of any problem, he failed to consider the following matters:
(a)     the inconsistencies in Mr Hancock’s statements. In his first statement, dated 28 May 2008, Mr Hancock said that the injury occurred on 3 November 2005, that he had the following day off and saw Dr Gak on that day, who gave two days off. He said he returned to work on Monday 7 November 2005 and told Jamie Ferguson what had happened the previous Thursday and told the manager, Tom Kluyver. In his second statement, dated 31 October 2008, Mr Hancock said the injury occurred on 31 October 2005 and that he spoke to Mr Ferguson and Mr Kluyver on 1 November 2005;
(b)     Dr Summersell referred to the injury as a medial meniscus tear, but the Arbitrator made no determination that that injury occurred on 31 October 2005, and no determination of how the original injury was related to the condition Dr Summersell diagnosed;
(c)     the difference in the pathology revealed in the radiological investigations in 2007 compared to those in 2008. The ultrasound on 26 March 2008 showed greater and different pathology compared to the ultrasound on 10 October 2007, which suggested the presence of a ganglion;
(d)     why Mr Hancock’s evidence should be preferred to the evidence of the other lay witnesses, three of whom were Mr Hancock’s friends;
(e)     other than the incident on 22 January 2008 when Mr Hancock was lifting timber and the incident when Mr Hancock was moving furniture, the Arbitrator made no reference to the intervening incidents;
(f)      why Mr Hancock stopped work at 4.00 pm on 25 March 2008. This was said to be important because the furniture moving occurred on 23 or 24 March 2008;
(g)     the weight he placed on the evidence called by East Coast versus that called by Mr Hancock;
(h)     the credit of the witnesses;
(i)      the two days of sanding done by Mr Hancock in April 2008, which prompted him to attend Grafton Base Hospital on 21 April 2008;
(j)      the fall referred to in the Grafton Base Hospital notes of 21 April 2008;
(k)     the fall noted by Dr Black on 14 April 2008 in the Bulgarr Ngaru Aboriginal Medical Centre notes, and
(l)      the Arbitrator accepted Dr Summersell’s opinion, which depended on an acceptance of Mr Hancock’s history, but he failed to consider the other issues before determining whether Mr Hancock’s history was correct.
Mr Egan submitted that:
(a)     the failure to give reasons does not go to the fundamental ground of whether the Arbitrator’s decision is correct;
(b)     East Coast had called no medical evidence;
(c)     Dr Bodel’s report is not in evidence and an adverse inference should be drawn against East Coast because of its failure to tender it;
(d)     as there was no medical dispute, the Arbitrator either accepted or rejected the worker’s evidence;
(e)     the intervening incidents were of little or no consequence;
(f)      whether what happened on 31 October 2005 was an incident or an injury is immaterial;
(g)     referring to the further events to suggest an intervening cause was pedantic. Whether the worker’s symptoms were due to the work injury or due to the rigours of life was a question of fact depending on the evidence;
(h)     the suggestion of an intervening cause was raised by East Coast before the Arbitrator but not in the s 74 notice and should not be allowed on appeal;
(i)      the Arbitrator provided a thorough summary of the events, as he saw the evidence, and he concentrated on the positive events not on the evidence of the co-workers. He was not required to concentrate on the evidence of the co-workers;
(j)      Mr Hancock told the Grafton Base Hospital in 2007 and in 2008 of the work injury;
(k)     the pathology in 2007 was not different to the pathology in 2008, it was a “work in progress” and the investigations were an attempt to get to the bottom of it;
(l)      Mr Hancock had been referred to Dr Summersell in 2007, but could not get to see him until 2008;
(m)   the MRI of 1 May 2008 showed an osteochondral injury and Dr Summersell provided the clinical correlation between that finding and the injury in October 2005;
(n)     it is difficult to criticise the Arbitrator for not dealing with everything when Dr Summersell was the only doctor on the point;
(o)     the Arbitrator made a clear finding of injury at [47] where he said he accepted Mr Hancock’s evidence and was satisfied on the balance of probabilities that “as a consequence of the work injury on 31 October 2005 the Applicant sustained an injury to his knee which resulted in a medial meniscus tear and cruciate injury”;
(p)     the Arbitrator analysed the evidence and noted the positive observations of the co-workers of problems Mr Hancock had from time to time. The absence of corroboration by the co-workers should not trouble the Commission because there is positive corroboration from others;
(q)     the Arbitrator should have referred to Mr Hancock’s change in date of injury, but this point was not taken by the employer at the arbitration. Mr Hancock explained the wrong date at [41] of his second statement where he said that he incorrectly stated that the injury occurred on “4 November 2005 because that was the date on the certificate from Dr Gak”;
(r)      there is no need for reasons for preferring one side over the other. There is no evidence to dispute the injury, just evidence that they did not know about it;
(s)     with regard to the credit issues, East Coast had the opportunity to cross-examine, but did not do so. Therefore, any credit issue, if it can be pressed at all, must be a minor concern in the context of the evidence as a whole;
(t)      the Commission must look at all of Dr Summersell’s evidence. Once that is done, a Jones v Dunkel inference is available because of the unexplained absence of a report from Dr Bodel, and
(u)     it is not enough that a Presidential member would come to a different conclusion. The original decision must be wrong.
In written submissions filed with leave after the oral hearing of the appeal, Mr Egan made the following additional points:
(a)     the Arbitrator noted (at [23]) that, apart from Mr Hyde, none of the other co-workers recalled Mr Hancock having any difficulty working or with his knee following the fall. He added that, after returning to work, Mr Hancock said he worked as normally as he could, but his knee continued to be sore most days, some days worse than others, and that it swelled up from time to time;
(b)     the Arbitrator referred to “further incidents” at [28] of his decision;
(c)     the Arbitrator further summarised the evidence of the co-workers at [37] – [43];
(d)     the evidence from the co-workers was silent on the issue of injury. They also failed to observe any symptoms when Mr Hancock had attended at Grafton Base Hospital in 2007 because of his knee;
(e)     the Arbitrator noted (at [14]) the worker’s evidence of the fall and made a finding at [47] that he accepted that evidence, and
(f)      none of the co-workers gave evidence of the mechanism of injury.

DISCUSSION AND FINDINGS

The failure to provide adequate reasons constitutes an error of law and may be a ground to set aside an Arbitrator’s decision. It is not disputed that Arbitrators have a statutory and common law obligation to provide adequate reasons for their decisions (s 294(2) of the 1998 Act; Pt 15 r 15.6 of the Workers Compensation Commission Rules 2011 (the Rules); Absolon v NSW TAFE [1999] NSWCA 311 (Absolon)).
Relevantly, Pt 15 r 15.6 of the Rules provides that:
“(1) A statement of the Commission’s reasons referred to in section 294(2) of the 1998 Act is to include:
(a) the findings on material questions of fact, referring to the evidence or other material on which those findings were based, and
(b) the Commission’s understanding of the applicable law, and
(c) the reasoning processes that lead [sic] the Commission to the conclusions it made.
(2) Without limiting subrule (1), the reasons set out in a statement referred to in subrule (1) are to be stated sufficiently (in the opinion of the Commission) to make the parties aware of the Commission’s view of the case made by each of them.”
To succeed in having the decision set aside on this ground, the appellant must demonstrate not only that the reasons are inadequate, but that their inadequacy discloses that the Arbitrator has failed to exercise his statutory duty to fairly and lawfully determine the application (YG & GG v Minister for Community Services [2002] NSWCA 247; Absolon; ADCO Constructions Pty Ltd v Ferguson [2003] NSWWCCPD 21).
The standard by which the adequacy of reasons must be determined is relative to the nature of the decision itself and the decision-maker (Mayne Health Group t/as Nepean Private Hospital v Sandford [2002] NSWWCCPD 6). An Arbitrator’s reasons should be read as a whole and it is not for a Presidential member on appeal to comb through the Arbitrator’s findings and reasons in search of error (Beale v GIO (NSW) (1997) 48 NSWLR 430 at 444; Minister for Immigration and Multicultural Affairs v Liang [1996] HCA 6; 185 CLR 259). It is not necessary for an Arbitrator to refer to every piece of evidence (Yates Property Corporation Pty Ltd (in liq) v Darling Harbour Authority (1991) 24 NSWLR 156; Ainger v Coffs Harbour City Council [2005] NSWCA 424).
In Soulemezis, McHugh JA stated at 280:
“If an obligation to give reasons for a decision exists its discharge does not require lengthy or elaborate reasons: Ex parte Powter; Re Powter (1945) 46 SR (NSW) 1 at 5: 63 WN 34 at 36. But it is necessary that the essential ground or grounds upon which the decision rests should be articulated. In many cases the reasons for preferring one conclusion to another also need to be given.” (emphasis added)
McColl JA’s comments in Hevi Lift (PNG) Ltd v Etherington [2005] NSWCA 42; 2 DDCR 271 at [100] are also relevant:
“The primary judge must state generally and briefly the grounds which have led him or her to conclusions concerning disputed factual questions and to list the findings on the principal contested issues. Although it is not necessary that the judge refer to all the evidence, ‘[w]here nothing exists but an assertion of satisfaction on undifferentiated evidence the judicial obligation has not been discharged’: Soulemezis, at 259, per Kirby P.”

The starting point in any analysis of whether an Arbitrator has failed to give adequate reasons is to look at the issues in dispute and the submissions made by the parties at the arbitration. If a matter was not argued, it is not open to complain on appeal that the Arbitrator failed in his or her duty to give reasons dealing with that matter (Brambles Industries Ltd v Bell [2010] NSWCA 162; 8 DDCR 111).
East Coast’s solicitor, Mr Mulcahy, submitted at the arbitration that Mr Hancock had not reported the injury of 31 October 2005 and “he knew he had to report an injury to claim worker’s compensation” (T12.55). He also failed to obtain a WorkCover medical certificate and it “was not followed up at all” (T13.2). When pressing the point about the lack of report of the injury (which was not an accurate submission), the Arbitrator interrupted Mr Mulcahy and the following exchange took place:
“ARBITRATOR: I don’t think that’s an issue raised, is it, by way of compensation?
MR MULCAHY: Well, all right. Well, where I’m going to with that is that whatever happened on 31 October was trivial in nature.”
Though the question of whether Mr Hancock injured his knee in a fall at work on 31 October 2005 was an issue in dispute, Mr Mulcahy made no other submissions on that issue. Rather, he submitted that it was a “trivial incident” (T13.51) and that it was not brought to the employer’s attention by placing it in the injury book. Significantly, as Mr Egan submitted, he made no submission about the different dates of injury in Mr Hancock’s two statements.
Mr Mulcahy focused on Mr Hancock’s work until October 2007 and the attendances at Grafton Base Hospital at that time and in early 2008. He submitted that something had happened on 22 January 2008 and that Mr Hancock returned to work and then stopped at 4.00 pm on 25 March 2008. He noted that Mr Hancock produced a non-WorkCover certificate from Dr Barrell, which was inconsistent with “having had the workplace injury on 31 October 2005, which is the cause of all the problems in the applicant’s submission” (T14.7). He submitted, “[s]omething significant happened in the week of 7 April 2008” (T15.40), which was something that “added on to whatever the problems were” (T15.43). He then referred to the sanding activity and said (at T16.10):
“There’s a definite break in any possible causal connection between something in October 2005, where you’ve got two years’ work following, and some significant problems which are recorded at Grafton Base Hospital on 21 April 2008 requiring multiple investigation. All right.”
Mr Mulcahy then submitted on the difference in Dr Summersell’s two reports dated 6 May 2006, the lack of mention to the employer that the absence from work was connected to an injury two-and-a-half years earlier, the evidence of the co-workers, and said (at T18.18):
“In the respondent’s submission, there’s no causal connection between whatever happened on 31 October or 4 November 2005 and any incapacity commencing 26 March 2008.”
He submitted that, taking a commonsense approach to causation, it was far more likely that something else happened – be it unloading the truck in January 2008 or a fall or sanding for two days or moving furniture – that caused Mr Hancock’s problem (T19.30).
On the issue of whether Mr Hancock injured his knee on 31 October 2005, the Arbitrator:
(a)     set out the relevant evidence from Mr Hancock as to the circumstances of the injury;
(b)     referred to the corroborative evidence from the worker’s mother about the circumstances of the injury;
(c)     noted the lack of a formal report of injury, but added that Mr Hyde, a co-worker, confirmed that the worker mentioned to him that he had slipped on some timber on the floor at work and that he had seen him wear a knee guard on occasions;
(d)     noted Dr Gak’s record in his clinical notes that Mr Hancock said on 4 November 2005 that he needed a clearance to go back to work as from Monday 7 November “following right knee injury at work”, and
(e)     concluded that, on the balance of probabilities, he was satisfied that Mr Hancock injured his knee when he fell at work on 31 October 2005.
Given the submissions made by Mr Mulcahy at the arbitration, the Arbitrator’s reasons adequately dealt with the issue of whether Mr Hancock injured his knee when he fell at work on 31 October 2005. It follows that, on the question of injury, I do not accept Mr de Greenlaw’s submission that the Arbitrator did not deal with the worker’s failure to formally record the injury. He did so by referring to and accepting the evidence from Mr Hancock, and the corroborative evidence from Mr Hancock’s mother, Mr Hyde, and the notes from Dr Gak. That was the basis for his decision on that issue. As Mr Mulcahy made no submissions about the inconsistent dates in Mr Hancock’s statements, it is not open to argue that the Arbitrator erred in failing to give reasons about that inconsistency.
The more contentious issue, and the one to which Mr de Greenlaw’s submissions were primarily directed, is the nature and extent of the injury received in the fall, and the related issue of whether Mr Hancock’s current condition (and incapacity) resulted from the fall. Though Mr Mulcahy did not take the Arbitrator to the radiological evidence in any detail, he did refer to something significant having happened in the week of 7 April 2008 and to a definite break in the causal chain. That clearly raised causation and required the Arbitrator to deal with that issue and to give reasons why he felt that Mr Hancock had established that his condition in 2008 had resulted from the injury on 31 October 2005.
It is correct that the Arbitrator made no finding that the medial meniscus tear, which Dr Summersell diagnosed in 2008, had occurred on 31 October 2005. He did not have to. What he had to explain was that the pathology diagnosed by Dr Summersell had resulted from the 2005 fall. Dr Summersell based his conclusion on an acceptance of Mr Hancock’s history of continuing and increasing symptoms since the 2005 fall in circumstances where he did his normal labouring duties for over two years and where he experienced significant knee symptoms in several other incidents.
On this critical issue, the Arbitrator did not explain why he preferred Mr Hancock’s evidence to the evidence of several other lay witnesses, three of whom were Mr Hancock’s friends. He merely said (at [47]) that he accepted Mr Hancock’s evidence and that he was persuaded by the medical evidence, particularly from Dr Summersell. That statement did not explain his reasoning process and did not adequately deal with the contentious issue of causation, which depended heavily on the reliability of Mr Hancock’s evidence of having had continuous and increasing symptoms since the October 2005 fall. As observed by Kirby P in Soulemezis, “where nothing exists but an assertion of satisfaction on undifferentiated evidence the judicial obligation has not been discharged”.
It is correct, as Mr Egan submitted, that the failure to give reasons does not go to the fundamental ground of whether the Arbitrator’s decision is correct. However, in view of the credit issues involved, and given the observations of Tobias JA in the appeal decision about the credit issues and the gaps in the evidence, I am not in a position to determine if the Arbitrator’s decision on causation is correct or incorrect without conducting a hearing de novo. It follows that the matter must be remitted to another Arbitrator for the causation issue to be re-determined in the light of such evidence as the parties present at the further arbitration.
As the finding on causation and on the nature and extent of the injury will directly affect the assessment of incapacity, it is also necessary that that issue be re-determined.
I have not overlooked East Coast’s failure to call medical evidence but, for the reasons given above, I am not in a position to conclude that, notwithstanding the Arbitrator’s failure to give adequate reasons on the causation issue, the conclusion he reached on that issue was true and correct. In view of the history of this matter, it is not a case where, on review, I can fairly re-determine the causation and incapacity issues.
I do not accept Mr Egan’s submission that the intervening incidents were of little or no consequence. Given the close temporal connection between the furniture incident in March 2008 and Mr Hancock ceasing work at the end of his shift on 25 March 2008, that incident, at the least, was significant in determining causation and incapacity.
I make the following observations about Mr Egan’s additional submissions:
(a)     I do not agree that reference to the intervening events was pedantic. Without expressing any concluded view, those events were clearly relevant to the causation issue and the Arbitrator failed to deal with them;
(b)     it may be that the Arbitrator concentrated on the positive events, as Mr Egan submitted, but a proper determination of the causation issue required him to assess and weigh the several competing versions of Mr Hancock’s condition and activities after 2005. Rather than doing that, he merely said he accepted Mr Hancock’s version;
(c)     I do not accept that East Coast is prohibited from arguing that Mr Hancock’s problems resulted from the intervening incidents. Causation was always in issue in the case and was argued at the arbitration without objection. The intervening incidents went directly to that issue;
(d)     it is correct that Mr Hancock told Grafton Base Hospital in 2007 and 2008 of the work injury. However, that fact does not determine the causation issue;
(e)     even if it is correct that the pathology in the 2007 radiology is no different from the 2008 radiology, and I express no concluded view on that contentious question, in view of the other issues involved, that does not determine the appeal in Mr Hancock’s favour;
(f)      that Mr Hancock had been referred to Dr Summersell in 2007 is not determinative;
(g)     the acceptance of Dr Summersell’s clinical correlation between the MRI findings and the 2005 injury was obviously important and is entitled to appropriate weight. However, it is dependent upon an acceptance of Mr Hancock’s history of continuing knee pain since the October 2005 fall, a rejection of the evidence from East Coast’s several lay witnesses, and a finding that the intervening incidents were either of little or no consequence. Though the Arbitrator said he accepted Mr Hancock’s evidence, he did not explain why he did so in light of the intervening incidents which, on one view, were the reason he stopped work in 2008, and he did not weigh the competing evidence of the several lay witnesses;
(h)     whether there is a need to give reasons for preferring one side over another depends on the circumstances. Where, as in this case, there was a significant dispute about the continuing effect of the injury on 31 October 2005, it was necessary for the Arbitrator to weigh the competing versions, consider the relevance of the intervening incidents, and give reasons why he reached his conclusion;
(i)      I do not accept that any credit issue in the case must be a “minor concern”, and
(j)      regardless of whether it is open to a Presidential member to reach a different conclusion to that reached by the Arbitrator without first finding that the Arbitrator’s decision is wrong, because of the issues involved and the evidentiary gaps referred to by the Court of Appeal, I am not able to conclude that, despite the inadequate reasons, the Arbitrator’s conclusion on the causation issue is true and correct.

CONCLUSION

In all the circumstances, I am satisfied that, on the causation issue, the Arbitrator’s failure to give reasons demonstrates that he failed to fairly and lawfully determine the application. I am not in a position to re-determine that issue and the matter must be remitted to a different Arbitrator for that purpose. It follows that the Arbitrator’s finding on incapacity, which depends on a positive finding on causation, must also be re-determined. The finding that Mr Hancock injured his knee on 31 October 2005 is confirmed, but the nature and extent of that injury, and the consequences following from it, must be re-determined. For the purpose of costs, the second arbitration is to be treated as a separate resolution.

DECISION

The Arbitrator’s determination of 26 May 2009 is revoked and the matter is remitted to a different Arbitrator for re-determination of the issues of causation, incapacity and, if necessary, hospital and medical expenses.
Costs of the first arbitration and of the second arbitration are to follow the event of the second arbitration.

COSTS

Each party is to pay his or its own costs of the appeal.

Bill Roche

Deputy President
1 September 2011

I, PENELOPE FLEMING, CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF BILL ROCHE, DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.

ASSOCIATE