Electrolux Home Products Pty Limited v Richey & Email Limited
[2006] NSWWCCPD 242
•22 September 2006
WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
Reported Decision: Electrolux Home Products Pty Ltd v Richey and Email Ltd (2006) 6 DDCR 426
CITATION: Electrolux Home Products Pty Limited v Richey & Email Limited [2006] NSWWCCPD 242
APPELLANT: Electrolux Home Products Pty Limited
FIRST RESPONDENT: Janette Ann Richey
SECOND RESPONDENT: Email Limited
INSURERS:Allianz Australia Workers Compensation (NSW) Limited (Second Respondent)
Smorgon Steel Manufacturing (Second Respondent)
GIO Workers Compensation (NSW) Limited (Appellant’s second insurer)
Self Insurer (Appellant)
FILE NUMBER: WCC11001-05
DATE OF ARBITRATOR’S DECISION: 16 January 2006
DATE OF APPEAL DECISION: 22 September 2006
SUBJECT MATTER OF DECISION: Reckoning of time; section 352(4) of the Workplace Injury Management and Workers Compensation Act 1998; procedural fairness; refusal to permit cross-examination
PRESIDENTIAL MEMBER: Acting Deputy President Michael Snell
HEARING:On the papers
REPRESENTATION: Appellant: Leitch Hassan Dent (Self Insurer)
Abbott Tout (GIO)
First Respondent: McIntosh McPhillamy & Co
Second Respondent: Goldbergs (Allianz)
Sparke Helmore (Smorgon)
ORDERS MADE ON APPEAL: The decision of the Arbitrator dated 16 January 2006 is revoked and the matter is remitted to another Arbitrator for determination afresh in accordance with these reasons.
No order as to costs of the appeal.
BACKGROUND TO THE APPEAL
On 14 February 2006 Electrolux Home Products Pty Limited (‘Electrolux’) in its interests as a self insurer (the Appellant) sought leave to bring an “Appeal Against Decision of Arbitrator’ in the Workers Compensation Commission (‘the Commission’) against a decision dated 16 January 2006.
There were two employers involved in the matter, the other employer being Email Limited (‘Email’). Each of those employers had two insurers. All of the insurance interests were separately represented. The only party nominated as a Respondent to the appeal is the Worker, Janette Ann Richey (‘the Worker’). Although not named in the Application to Appeal, each of the other insurance interests was given notice of the appeal, and the opportunity to make submissions. Each of them did so. The other insurance interests, which effectively are all Respondents to the appeal, are Allianz Australia Workers Compensation (NSW) Limited (‘Allianz’) and Smorgon Steel Manufacturing (‘Smorgon’), insurers of Email Limited, and GIO Workers Compensation (NSW) Limited (‘GIO’), the other insurer of Electrolux.
The proceedings related to allegations of injury with both of the employers, allegedly caused by the ‘nature and conditions’ of the Worker’s employment, between 24 February 1997 and 19 February 2001 (with Email), and between 19 February 2001 and 5 May 2005 (with Electrolux). The injuries alleged were to the Worker’s neck, back, right leg and both arms. The relief claimed was weekly compensation payments from 5 May 2003 to date and continuing, medical expenses pursuant to section 60 of the Workers Compensation Act 1987 (‘the 1987 Act’), and substantial lump sums (totalling $84,707.00) pursuant to sections 66 and 67 of the 1987 Act.
The matter proceeded to arbitration hearing on 17 January 2006. The Worker and the four insurers were legally represented. According to the Appellant’s submissions in favour of review, each of the four insurance interests made application that the Worker be cross-examined, and such applications were refused (at [14]). The Worker, in her submissions, deals with matters arising from this, and does not take issue with the Appellant’s assertion that such applications were made, and refused. Counsel for the Appellant, at the arbitration hearing, made reference to two of the insurance interests having made application that the Worker give oral evidence. The Worker’s legal representative did not cavil with this statement at the arbitration hearing. There does not appear to be any serious issue that application was made, by at least some of the insurance interests, at the arbitration hearing, that the Worker be cross-examined. There does not appear to be any serious issue that such application was refused by the Arbitrator.
The application/s to cross-examine, and the Arbitrator’s ruling and any related reasons for the ruling, are not in the transcript of the arbitration hearing. It would be desirable for such applications, and consequential rulings, to be recorded and transcribed, as they form part of the conduct of the arbitration hearing, which may need to be considered on appeal, as has occurred in this matter.
The Arbitrator dealt with the matter on the basis of the documentary material relied upon by the parties, after hearing submissions on behalf of all parties.
THE DECISION UNDER REVIEW
The ‘Certificate of Determination’, dated 16 January 2006 records the Arbitrator’s orders as follows:
“1. That the Second Respondent pay the Applicant weekly compensation pursuant to Section 40 of the Workers Compensation Act 1987 as follows:-
From 5 May 2003 to 30 September 2003 at the rate of $310.90 per week.
From 1 October 2003 to 30 March 2004 at the rate of $317.20 per week.
From 1 April 2004 to 30 September 2004 at the rate of $323.00 per week.
From 1 October 2004 to 30 March 2005 at the rate of $328.90 per week.
From 1 April 2005 to 29 September 2005 at the rate of $334.10 per week.
From 1 October 2005 to 19 December 2005 at the rate of $340.90 per week.
From 20 December 2005 to date and continuing at the rate of $340.90 per week.
Such weekly payment to continue in accordance with the provisions of the Act.
2. The matter is referred to an Approved Medical Specialist to be appointed by the Registrar to determine the Applicant’s entitlements under Section 66 and 67 of the Workers Compensation Act 1987.
3. That the Second Respondent pay the Applicant’s costs as agreed or assessed.
4. The matter is certified as complex for the purposes of the assessment of costs.”
ISSUES IN DISPUTE
Whilst the award was expressed as being against the “Second Respondent” (Electrolux), the nature of the findings made in the Arbitrator’s Reasons, pursuant to the ‘disease’ provisions in section 16 of the 1987 Act, were such that the award fell to be paid by the self insurer. The issues in dispute in the appeal fall into two areas.
As against the Worker, the Appellant claims:
(i)The Arbitrator erred in failing to permit cross-examination of the Worker.
(ii)The Arbitrator erred in making an award in the Worker’s favour, given the inconsistencies between the Worker’s statement of 9 September 2005, her histories to medical practitioners for the purposes of her claim, and inconsistent histories to be found in other medical evidence.
(iii)The Arbitrator erred in how he approached the issue of the Worker’s credit, given the inconsistencies between her statement, and other available evidence.
(iv)The Arbitrator erred in how he approached the application of section 9A of the 1987 Act, having regard to the medical evidence, and the inadequate medical histories on which those doctors supporting the Worker’s case based their opinions.
(v)The Arbitrator erred in assessing the quantum of the award pursuant to section 40 of the 1987 Act, in that the Worker’s ability to earn after the injury, in some suitable employment, for the purposes of section 40(2)(b), exceeds the sum found by the Arbitrator.
As against the other insurance interests, the Appellant claims:
(i)Having made a finding the matter was governed by section 16 of the 1987 Act, the Arbitrator should have found a different deemed date of injury, in the employ of Electrolux, at a time when the GIO was the insurer at risk.
(ii)The nature of the ‘injury’ finding made by the Arbitrator was more consistent with a finding of injury due to the ‘nature and conditions’ of employment, rather than with an application of the ‘disease’ provisions in section 16. The finding on ‘injury’ should be properly viewed as a finding based upon ‘nature and conditions’, rather than disease, and apportionment between the insurers pursuant to section 22 of the 1987 Act should then occur.
In opposition to the appeal, the Worker submits the appeal was filed outside the twenty-eight day period provided in section 352(4) of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’) and should be dismissed for this reason. Alternatively, the Worker submits she is entitled to maintain the award made in her favour, regardless of which of the insurance interests may be liable for payment. The other insurance interests make no submissions in respect of those parts of the appeal challenging the award in favour of the Worker. The other insurance interests resist the appeal in so far as it seeks to have liability, by way of apportionment or otherwise, attached to them.
ON THE PAPERS REVIEW
Section 354(6) of the1998 Act provides:
“(6) 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.”
No party seeks to adduce fresh evidence. Having regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submission by all parties that the appeal can proceed to be determined on the basis of these documents, I am satisfied that I have sufficient information to proceed ‘on the papers’, without holding any conference or formal hearing, and that this is the appropriate course in the circumstances.
LEAVE
Before proceeding to deal with an appeal the Commission must determine whether the application meets the requirements of section 352 of the 1998 Act.
The quantum of the past weekly compensation awarded greatly exceeds the sum of $5,000.00 prescribed in section 352(2)(a) of the 1998 Act. The whole of that award is at issue in the appeal. In addition, the appeal has the real potential to put in issue the compensation to which the Worker is entitled, from the Appellant, in her claims pursuant to sections 66 and 67 (see Fletchers International Exports Pty Limited v Regan [2004] NSWWCCPD 7). The requirements of section 352(2) are satisfied.
Section 352(4) of the 1998 Act provides:
“(4)An appeal can only be made within 28 days after the making of the decision appealed against.”
Rule 77 of the Workers Compensation Commission Rules 2003 (‘the Rules’) provides (in part):
“(1)A party to any proceedings applying for leave to appeal under section 352 of the 1998 Act against a decision of an Arbitrator must lodge the application within 28 days after the making of the decision, or within such extended time for making the appeal as may be ordered under sub-rule (8).
(2)For the purposes of sub-rule (1), a decision is made, in respect of a dispute, when the Commission issues a certificate as to the determination of the dispute as required by section 294(1) of the 1998 Act.”
In the current matter, the certificate of determination was issued on 16 January 2006. The Application to Appeal against Decision of Arbitrator was filed on 14 February 2006.
Section 36(1) of the Interpretation Act 1987 provides:
“(1)If in any Act or instrument a period of time, dating from a given day, act or event, is prescribed or allowed for any purpose, the time shall be reckoned exclusive of that day or of the day of that act or event.”
Part 3 of the Rules contains provisions relating to time which are not relevant for current purposes.
Due to the operation of section 36 of the Interpretation Act 1987, the date on which the decision is taken to have been made, 16 January 2006, is excluded from the calculation of twenty-eight days within which an appeal may be filed in compliance with section 352(4). Thus it will be seen the appeal was filed on the twenty-eighth day, and is within the time prescribed. Accordingly, I reject the Worker’s submission the appeal was “not lodged within the required time frame and should be dismissed”.
EVIDENCE AND SUBMISSIONS
It was common ground amongst the medical practitioners reporting in the matter, that the Worker suffered from degenerative problems at many of the sites of her symptoms. In her case, Dr Burgess diagnosed cervical and lumbar spondylitis, and thought these problems were permanently aggravated by her work with the two relevant employers (report 8 November 2002 at P.7). After examining ultrasound studies of her shoulders he also described “wear and tear” in her shoulders. Dr Morgan described her as having “degenerative changes affecting her left shoulder, her cervical spine, her lumbar spine and a proven carpal tunnel syndrome”. He said her degenerative changes had been “aggravated by her work at Email over the years” (report 14 December 2004 at P.4). Those doctors reporting to the various insurance interests expressed similar views as regards the underlying diagnosis, although formed various opinions regarding whether there was ongoing aggravation of the problems caused by work with the two relevant employers.
In his Reasons, after summarising the medical evidence, the Arbitrator recognised the approach urged by the employers’ interests:
“24. The Respondents further submit that the Applicant’s medical condition is of a constitutional nature and that her present medical condition would have eventuated in any event at this time of her life. Their contention is that her condition may have been aggravated by her work at the respondent’s plant but that any aggravation had long since stabilised and her present condition is a result entirely of the constitutional degenerative disease from which she had previously suffered.”
The Arbitrator described Dr Morgan’s report of 14 December 2004 as summing up the “evidence of disease”, and continued:
“These conditions are described as a disease of gradual onset by the majority of medical practitioners and is (sic) corroborated by the X-ray evidence.
As indicated in the Applicant’s 33 paragraph Statement her employment has contributed to the aggravation of the disease process through the long term nature and conditions of her employment with the respondents. I accept that she has suffered an injury for the purposes of section 4 of the 1987 Act and that that injury is in the form of an aggravation of a disease for which her employment has been a substantial contributing factor to that aggravation.” (at [29])
DISCUSSION AND FINDINGS
Given the nature of the diagnosis accepted by the Arbitrator, which was consistent with the medical evidence, clearly an essential consideration, in deciding whether there had been an aggravation of a disease, and whether such aggravation was ongoing, was the level of the Worker’s symptoms, before, during and after her work with the two relevant employers. There was, on the documents relied upon by the various parties, obvious room for dispute as regards the extent and duration of symptoms suffered by the Worker, before she commenced with the earliest of the employers, Email, on 24 February 1997. The Worker’s statement dated 9 September 2005 dealt with this topic at [31]:
“Prior to working at Email Limited I was fit and healthy and used to be able to do anything. There was some minor incidents of back pain with my previous employer, however this completely resolved before I started at Email Limited, and I did not have any problems with my neck, shoulders, arms legs or ankles. After working at Email Limited and doing repetitive work all day, every day, I eventually began to suffer from a considerable amount of pain…”
Most of the doctors reporting in the case recorded histories of some minor aches and pains prior to the Worker’s employment at Email. Dr Morgan recorded “She had had minor aches and pains in her back prior to this history.” Dr Burgess relevantly recorded:
“She suffered from backache in 1994 working for Orange City Council but had no time off. She attended a doctor at that stage and had an x-ray but she cannot remember what the report was but she has the x-rays with her. Once again she feels that this backache was brought on when she slipped doing some cleaning and had gone away within a month.
She hurt herself again in 1996 cleaning for Orange City Council when hefting a vacuum cleaner caused low lumbar backache. She is not sure whether she had an x-ray on this occasion. She had no time off work. This particular pain took around six weeks to settle down and she subsequently took Naprosyn and analgesia for a further two months or so before the pain subsided almost completely, with a background of just enough discomfort remaining to remind her to be careful. She says that she was able to cope with all the housework and everyday activities without undue stress or any significant symptoms.”
Dr D’Cowdery recorded a history “her shoulders were symptom free before March 1998, but she suffered occasional backache before September 1997”. Dr Meachin recorded:
“She mentioned injuring her right knee while working for the Orange RSL Club and this settled down with anti-inflammatories.
Whilst working for the Orange City Council about eight years ago she injured her back. She attended the chiropractor and was off work for a few weeks. She said that her back settled down.”
Dr O’Keefe recorded:
“She has had episodes of back pain, whilst employed as a cleaner for Orange City Council in 1995 and 1996 and thinks her back was x-rayed at the time but cannot remember any further details. Apart from that she has had a hysterectomy and varicose vein operations. She suffers from sinus problems and hayfever.”
Dr Bliss recorded a past medical history of varicose veins, a hysterectomy and breast abscess. He recorded no history of prior problems of an orthopaedic nature.
Against this background, documents relied upon by the employers included notes from the practice of the Worker’s general practitioner, Dr Holmes. There are various entries of an orthopaedic nature. In particular, on 14 February 1994 he records “Joint pains getting worse…check x-rays knees wrists LS spine Ref J Carter.” The employers also relied upon the report of Dr Carter, rheumatologist dated 20 April 1994, which records in part:
“Thank you for asking me to see this lady who certainly has generalised aches and pains involving mainly the knee, the lower back and the wrists. She has been suffering from this for about five years and said that it occurred at work when she was employed as a cook with general duties at the local bistro. On one occasion she slipped down and landed on her right knee and her left on a second occasion and she had subsequent swelling and needed anti-inflammatories. The swelling persisted on and off for about a week but it, in fact, seemed to subside initially and she had a reasonable result from this. She did, however, notice that she was having low back pain with bending and was getting aching in the wrists and the arm muscles on occasions. She said that a lot of her duties entailed lifting weights and she was, of course, on her feet for most of the time. She worked there for about five years or so and over that time worked full time, part time and on a casual basis so this was certainly not a full time occupation. She has ceased work there for two years and from what I can gather her symptoms really have changed very little. She is getting some help from Orudis which she takes with the evening meal.”
The notes of Dr Holmes’ practice record the ongoing prescription of Orudis on various occasions in 1994, 1995 and 1996. There are also consultations recorded on 12 August 1996, 23 September 1996, and 30 September 1996, and a phone call on 1 October 1996, relating to a work related back injury whilst cleaning at the Civic Theatre, ultimately said to have occurred on 23 June 1996. As at 12 August 1996 there was a history of using Orudis daily. On 23 September 1996 the note includes “Pain extends from neck down to lower back”. The entry for 30 September 1996 includes “Ongoing problems – has seen chiropractor 3 times – continuing treatment. Still taking Orudis SR 200”. Next to that entry in the notes is the notation “W/C Orange City Council”. This is within six months of the Worker’s commencement of employment with Email in February 1997.
The opinion of an expert witness, such as a medical practitioner, may be deprived of weight, or become inadmissible, if the factual basis on which the opinion is based is not established (see Makita Australia Pty Ltd v Sproules (2001) 52 NSWLR 705). An acceptance of the prior history he had recorded was an important part of the reasoning process of Dr Burgess in supporting the Worker’s case:
“Despite the presence of degenerative changes in the affected areas of her spine at the time of injury, this lady had no significant troubles with any of these various areas until she had been in the job at Email for eighteen months.” (report 8 November 2002 at P.7.3)
Thus there was clearly a potentially significant credit issue, going to the Worker’s history of injuries and symptoms, before she commenced with Email. Resolution of this issue was important, in deciding whether the Worker’s case, that she had an ongoing aggravation of her condition resulting from her employment with the two relevant employers, should be accepted. Against this background certain of the employment interests (perhaps all of them) sought, and were refused, leave to cross-examine the Worker. The Appellant submits this amounts to a denial of procedural fairness. It is submitted the Worker’s credit should not have been accepted in the circumstances, and she should not have received an award of compensation.
The parties made submissions before the Arbitrator raising the prior medical histories, and dealing with the extent to which these were inconsistent with the case the Worker sought to make out. In dealing with the issue, the Arbitrator referred to the various histories, including that taken by Dr Carter in 1994. He also referred to a number of the entries in the notes of the general practitioner. He dealt with the issue as follows:
“25.The Respondents submit that the Applicant’s credit must be a factor when considering her claim as she has stated in her Statement that prior to commencing work at Email she was fit and healthy and used to be able to do anything. This Statement has to be read in the light of her medical records and it would appear that she had complained of many incidents of back pain and pain to her neck, shoulders, arms, legs and ankles prior to the commencement of her employment.
26. I am not persuaded that the inconsistencies between the Applicant’s Statement as to her health prior to commencing at Email and the history of complaints demonstrated in the clinical notes are sufficiently serious as to disentitle her claim for compensation benefits on the basis of credit alone. The Applicant was not called to give evidence in these proceedings nor were the Respondents given the opportunity to cross-examine the Applicant and in those circumstances it makes it difficult to assess the credit of the Applicant.
The totality of the lay and medical evidence is sufficiently strong to make a finding in favour of the Applicant on credit which includes acceptance of the fact that her present impairments have increased since commencing heavy process work with the Respondents and preclude her from further employment as a process Worker.”
In Kojima v Australian Chinese Newspapers [2000] NSWSC 1153 O’Keefe J, in considering an appeal from the Small Claims Division of the Local Court, reviewed a number of the appellate authorities dealing with the extent to which it may amount to a denial of procedural fairness to deny a party an oral hearing, or the right to cross-examine. His Honour said:
“31.Similarly, the requirements of natural justice may not confer on a party the right to cross-examine in a given case. Beveridge v Dontan PtyLimited (1990) 23 NSWLR 13, which was concerned with a reference pursuant to Pt 72 of the Supreme Court Rules, makes this clear. The Referee, in accordance with the Rules of Court, accepted written statements signed by the makers of the statements. The unsuccessful party moved to have the Referee’s report returned for further consideration on the basis that the Referee denied natural justice to such party by depriving it of the benefit of an oral hearing and of the opportunity of cross-examining one of the witnesses on his statement. Rogers CJ Comm Div posed the question: “Does natural justice require that the referee should have held a hearing and in particular given the defendant an opportunity of cross-examining…?” (supra at 21). He answered the question by holding that the unsuccessful party had not been denied natural justice by virtue of the procedure which had been adopted, albeit that it denied an opportunity to adduce oral evidence by way of cross examination. (supra at 24). A number of the immigration cases in the Federal Court of Australia to which the court has been referred arrive at the same conclusion.
32.There may, however, be cases in which the denial of an oral hearing or of the right to cross-examine may constitute a denial of natural justice. In determining whether that is so or not in a given case, it is necessary to consider the whole of the circumstances including the legislation, the general practice as understood by the parties and any agreement as to the way in which the proceedings are to be conducted. It is for the relevant tribunal, in this case the Small Claims Division of the Local Court, to determine this in the light of its obligation to act fairly.”
Three Presidential decisions of the Commission on the topic, to which I shall refer subsequently, quote the following passage from the judgment of Davies J, President of the Administrative Appeals Tribunal, in Saverio Barbero and Minister for Immigration and Ethnic Affairs (1980) 3 ALD 1:
“The requirement of a hearing and the provision of a right to appear and be represented carries with it an implication that, so far as is possible and consistent with the function of the Tribunal, a party should be given the opportunity of testing prejudicial evidentiary material tendered against him. It is generally appropriate that a party should have an opportunity to do more than give evidence to the contrary of the evidence adduced on behalf of the other party. He should be given an opportunity to test the evidence tendered against him provided that the testing of the evidence seems appropriate in the circumstances and does not conflict with the obligation laid upon the Tribunal to proceed with as little formality and technicality and with as much expedition as the matter before the Tribunal permits.”
In addition to ordinary principles of procedural fairness, there are a number of specific statutory and other provisions relevant to granting a party leave to cross-examine, in matters in the Commission. These are discussed by Fleming DP in Aluminium Louvres & Ceilings v Zheng [2004] NSWWCCPD 26 (‘Zheng’). Section 354 of the 1998 Act has provisions governing procedure before the Commission. Rules 70 and 71 of the Rules contain provisions relating to principles of procedure, and the need for the Commission to take measures to assist the parties. There is also the ‘Guideline for the Practice of Conciliation/Arbitration Process’ (‘Guideline’) published by the Commission, quoted at [30] of Zheng. The Guideline contains the following relating to cross-examination at arbitration hearing:
“Questioning or cross examination of witnesses (including parties) will be permitted in very limited circumstances and only if the Arbitrator is of the view that it is necessary to come to a decision. Circumstances where cross-examination may be allowed could include where:
contradictory evidence requires to be clarified or tested, or
adverse matters material to the decision should be put to a witness when there has been no previous opportunity for these to be answered.
The Arbitrator will ask the parties and their representatives if there are matters requiring clarification. The Arbitrator may then ask the questions or allow the party or representative to do so.”
The Guideline does not have the force of statute or regulation. It is published and disseminated by the Commission, for the guidance of arbitrators, parties and practitioners. As was observed by Byron DP in Rick Damelian Pty Limited v Romanas [2004] NSWWCCPD 93 (‘Rick Damelian’):
“The Guideline issued by the President is not a creature of statute but simply aims to provide a practical framework within which many of the practices, procedures and proceedings of the Commission ought to be conducted in the context of the Commission’s objectives and other relevant, statutory provisions.” (at [45])
To pick up the language of O’Keefe J quoted at [35] above, the Guideline is relevant to the general practice as understood by the parties.
Section 360 of the 1998 Act gives the Commission power to require any person appearing before it to give evidence, and to answer any relevant question put.
As is observed by Fleming DP in Zheng, the passage of the judgment of Davies J quoted at [36] above must, in the context of the Commission, be read in the light of the statutory provisions peculiar to the Commission. In Zheng, the appellant employer had been given leave to cross-examine the worker, however after a period the arbitrator prevented further cross-examination. In the circumstances of that matter Fleming DP concluded this did not amount to a denial of procedural fairness.
The matter of Rick Damelian again raised, at Presidential level, the question of whether an employer had been denied procedural fairness, in part by refusal of the employer’s application to cross-examine a Worker. As is Zheng, it was held there was no right to cross-examine, and in the circumstances of the case the Arbitrator had given proper consideration to the employer’s application to cross-examine, and the employer had not been denied procedural fairness.
The question of whether a party was denied procedural fairness, in being denied an opportunity to adduce oral evidence, was also considered at Presidential level in Taumata v Movers and Shakers Pty Ltd [2005] NSWWCCPD 123. In that matter there was a factual issue, between the Worker and the employer’s lay witness, regarding whether an injury occurred. The arbitrator refused an application, on the worker’s behalf, to adduce oral evidence, from the worker and a lay witness, in the worker’s case. The arbitrator in his Reasons then analysed the documentary evidence, and rejected the worker’s account of events, finding the injury did not occur. There was an award in favour of the employer. Handley ADP held, in the particular circumstances of the case, that procedural fairness had been denied to the worker, in the refusal to permit oral evidence. He said:
“43. My role in relation to the Arbitrator’s decision in the present case not to allow oral evidence from Mr Taumata and Mr Ratima, and also not to put what the Arbitrator perceived to be inconsistencies in Mr Taumata’s statements to him before making a finding as to credit, is to decide whether the Arbitrator denied Mr Taumata procedural fairness.
44. My conclusion is that there was such a denial of procedural fairness. The outcome of the hearing turned upon whether the Arbitrator believed Mr Taumata’s account of the alleged lifting incident and his attributing his myocardial infarction to the incident. If the Arbitrator had believed Mr Taumata’s account, then the consequence of this may have been a finding that Mr Taumata suffered an injury arising out of or in the course of his employment and within the definition of ‘injury’ in section 4 of the 1997 Act. The alternative was the decision the Arbitrator took, which was that he was not so satisfied. Indeed, he found that Mr Taumata “did not believe the incident with the safe was responsible, because it did not occur”. This finding seems to implicitly recognise the other possibility identified by Dr Cranney, which was that it was atheroscelerotic plaque rupturing spontaneously that caused the myocardial infarction.”
The decision of Fleming DP in Zheng was taken, by the employer, to the Court of Appeal (Aluminium Louvres & Ceilings Pty Limited v Zheng [2006] NSWCA 34 (‘Zheng appeal’). In upholding the decision of Fleming DP, Bryson JA (who delivered the judgment of the Court) said:
“37 An assessment of whether the Arbitrator's decision should be set aside for want of procedural fairness is no simple matter and could not be disposed of by applying any legal tests susceptible of clear statement relating to entitlement to cross-examine an applicant, or a witness. There is no legal right to cross-examine an applicant or other witness in the Workers Compensation Commission, and decisions whether to allow cross-examination or to limit it are discretionary decisions which must be made in a context of the legislation and practices which the Commission follows, and, at least as importantly, in the context of the facts and circumstances of the case under consideration.
38 A review is a different process to an appeal and the matters which may be considered and the manner in which they may be considered are somewhat wider. See Boston Clothing Co Pty Ltd v. Margaronis (1992) 27 NSWLR 580 at 584 (Kirby P). An attack, on review or otherwise, on an Arbitrator's discretionary decision in controlling procedure may be based on the test stated in House v. R (1936) 55 CLR 499 at 504 - 505; but that is not the only basis on which the Presidential member may act. The powers of a Presidential member on review are somewhat wider and extend to power to reopen consideration of a matter of which an Arbitrator has disposed; the manner in which the powers of the Presidential member are to be exercised is itself the subject of discretion of the Presidential member. I see no ground upon which it could be doubted that the Deputy President acted within her discretionary powers in disposing of the matter as she did. No rule of law required the Arbitrator not to limit cross-examination, and the view that there was no want of procedural fairness was a view which the Deputy President could reasonably reach without any error of law.”
In Boston Clothing Co Pty Ltd v Margaronis (1992) 27 NSWLR 580 (‘Boston Clothing’) Kirby P (with whom the other judges concurred) repeated his observations on the nature of ‘review’, as expressed in Watson v Hanimex Colour Services Pty Ltd (1991) 8 NSWCCR 190:
“I would also agree that the review is not confined to the narrow kind of ‘appeal’ allowed from discretionary decisions where some error of principle must be shown.” (quoted at 586F in Boston Clothing)
On the established principles governing appeal against an exercise of discretion, as set out in House v R (1936) 55 CLR 499, intervention will be justified where a judge at first instance has acted on a wrong principle, allowed extraneous or irrelevant matters to guide or affect him, mistaken the facts, or not taken into account some material consideration. In the current matter, the basis on which the Arbitrator refused the application to cross-examine the Worker is unknown, there being no transcript of the application, or the reasons for refusing it.
It is noteworthy the Arbitrator, having refused leave to cross-examine, found himself in difficulty dealing with the credit issues raised in the case, in the absence of cross-examination (see his Reasons at [26], quoted at [34] above). In my view, it is clear cross-examination should have been permitted, out of fairness to all parties. This would have permitted the insurance interests to raise the various matters going to credit and pre-existing symptoms they regarded as important. It would have permitted the Worker to give such explanations as were available, for the potential discrepancy between her statement, and the subpoenaed medical notes and report of Dr Carter. Most importantly, it would have assisted the Arbitrator in dealing with the factual and credit issue before him, regarding the level of pre-existing symptoms (if any), and the level of symptoms which developed whilst the Worker worked with the relevant employers, and thereafter. A consideration of such matters was essential in dealing with the question of whether there had been an aggravation of the degenerative changes. Leave to cross-examine on such matters would easily have fallen within those parts of the Guideline relevant to cross-examination, quoted at [37] above.
It is clearly difficult to assess the extent to which the Arbitrator has committed error of the kind contemplated in House v R, in the absence of reasons for the decision refusing leave to cross-examine. On the material before me, I infer the Arbitrator failed to take into account a material consideration, being the clear need for evidence on the point to be given and tested. Even if this is not so, as is stated in Zheng on appeal, a review is a different process to an appeal, and I am not restricted to acting in circumstances which would have justified interference on the basis of House v R. My powers on review are wider, and extend to reopening consideration of a matter of which an Arbitrator has disposed. These powers on review are, themselves, discretionary. In my view the refusal of the Arbitrator to permit cross-examination, given the circumstances of this particular case, constituted error.
In addition, the Arbitrator dealt with the credit issue before him, in the absence of oral evidence, in a manner which, in my view, demonstrated error. His essential reasoning on the point was set out at [25] and [26] of his Reasons, quoted at [34] above. He formed the view there were inconsistencies between the Worker’s evidence as contained in her statement, and other elements of the medical evidence. Logically it was then necessary to analyse such inconsistencies, and form a view regarding how they affected the Worker’s credit overall. It was necessary that the Arbitrator form a view regarding whether the Worker’s evidence was acceptable overall, unacceptable overall, or acceptable in part. If he formed a view the Worker’s evidence was unacceptable, either overall or in part, it was necessary to consider where this left the evidence, and whether the Worker could discharge the onus she carried by reference to other evidence (see Malco Engineering Pty Ltd v Ferreira (1994) 10 NSWCCR 117, particularly Handley JA at 118). The Arbitrator described the inconsistencies as not “sufficiently serious as to disentitle her claim for compensation benefits on the basis of credit alone”. He went on to say the “totality of the lay and medical evidence is sufficiently strong to make a finding in favour of the Applicant on credit”. The Arbitrator has not adequately considered what conclusion is to be drawn from the inconsistencies which he found to exist. Nor has he adequately considered how such inconsistencies impact upon the weight to be given to medical evidence supporting the Worker’s claim.
Given the potential credit issue which exists, and my view that the Arbitrator should have acceded to the application that the Worker be cross-examined, it is appropriate I remit the matter to another Arbitrator, to be determined in accordance with these reasons.
DECISION
The decision of the Arbitrator dated 16 January 2006 is revoked and the matter is remitted to another Arbitrator for determination afresh in accordance with these reasons.
COSTS
I make no order as to costs of the appeal.
Michael Snell
Acting Deputy President
22 September 2006
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF MICHAEL SNELL, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
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