Elias Bader t/as Genuine Kitchens v Workers Compensation Nominal Insurer - [2018] NSWWCCPD 54

DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:	Elias Bader t/as Genuine Kitchens v Workers Compensation Nominal Insurer [2018] NSWWCCPD 54
APPELLANT:	Elias Bader t/as Genuine Kitchens
FIRST RESPONDENT:	Workers Compensation Nominal Insurer
SECOND RESPONDENT	Botros Abdelahad
INSURER:	Uninsured
FILE NUMBER:	A1-954/18
ARBITRATOR:	Ms R Homan
DATE OF ARBITRATOR’S DECISION:	1 August 2018
DATE OF APPEAL DECISION:	18 December 2018
SUBJECT MATTER OF DECISION:	Procedural fairness; whether the appellant was afforded procedural fairness; inferences drawn from unchallenged evidence - Re Minister for Immigration & Multicultural Affairs; Ex parte Lam [2003] HCA 6; 214 CLR 1, Re Refugee Review Tribunal; Ex parte AALA [2000] HCA 57; 204 CLR 82 considered and applied; Stead v State Government Insurance Commission [1986] HCA 54; 161 CLR 14, Toll Pty Ltd v Morrissey [2008] NSWCA 197; 6 DDCR 561; Workers Compensation Nominal Insurer v Al Othmani [2012] NSWCA 45 applied
PRESIDENTIAL MEMBER:	Deputy President Elizabeth Wood
HEARING:	On the papers
REPRESENTATION:	Appellant:	Uther Webster & Evans
First Respondent:	Sparke Helmore Lawyers
Second Respondent:	Veritas Legal
ORDERS MADE ON APPEAL:	1. The Certificate of Determination dated 1 August 2018 is revoked. 2. The matter is remitted to another Arbitrator for re-determination.

INTRODUCTION

Mr Elias Bader was a sole trader in a business trading as Genuine Kitchens. Mr Bader employed Mr Botros Abdelahad (also referred to as Mr Botros Abdel Ahad or Mr Ahad) for a period of time to assist with the installation of kitchens. On 20 October 2014, Mr Abdelahad was injured when the circular saw he was using bounced back and badly cut his left thumb. He was transported by ambulance to hospital, underwent surgery to the thumb the following day, and was discharged.
Mr Bader did not hold a workers compensation policy of insurance at the time of Mr Abdelahad’s injury.
The Workers Compensation Nominal Insurer (the Nominal Insurer) served a notice dated 14 August 2015 pursuant to s 145(1) of the Workers Compensation Act 1987 (the 1987 Act), claiming reimbursement of payments made totalling $30,815.82. Mr Bader filed a Miscellaneous Application in the Commission, in accordance with s 145(3) of the 1987 Act. He claimed that he was an “exempt employer” pursuant to s 155AA of the 1987 Act. That claim was resolved in the Commission on 2 February 2016 by way of consent orders and a notation that Mr Bader agreed to repay a compromised figure on a voluntary basis.
On 15 January 2018, the Nominal Insurer issued a second notice, seeking reimbursement of a further $70,188.02.
Mr Bader filed a further Miscellaneous Application (the Application) in accordance with s 145(3) of the 1987 Act, again claiming that he was an exempt employer. He also sought a reconsideration of the 2016 consent orders.
The Nominal Insurer opposed both the Application in respect of the claim by Mr Bader that he was an exempt employer and the application for reconsideration.
The disputes were heard together at a conciliation and arbitration hearing on 30 May 2018. The Arbitrator issued a Certificate of Determination (COD) on 1 August 2018 in which she declined to reconsider the 2016 consent orders and determined that Mr Bader was not an exempt employer within the meaning of s 155AA of the 1987 Act.
Mr Bader appealed the Arbitrator’s determination. The appeal is limited to the determination that Mr Bader was not an exempt employer.

BACKGROUND

Mr Bader had previously owned and operated a relatively large business known as Acme Kitchens for a period of some 20 years. He sold that business in 2011 and was intending to retire. In about 2013, he commenced operating the new business trading as Genuine Kitchens. His expressed intention was to run the business as a small entity, performing the “hands-on” work himself.
Mr Abdelahad arrived in Australia from Lebanon in February 2014. He obtained work for a short period of time. Mr Abdelahad was acquainted with some of Mr Bader’s relations and on that basis approached Mr Bader and requested work with him in Genuine Kitchens.
Mr Abdelahad commenced work for Mr Bader, working five days per week. The evidence as to the date upon which that employment commenced is somewhat inconsistent and is discussed below.
Following the injury on 20 October 2014, Mr Abdelahad did not return to work for Mr Bader.

ON THE PAPERS

Section 354(6) of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 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.”
I have had regard to Practice Directions Nos 1 and 6; the documents that are before me, and the submissions by the 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. This is the appropriate course in the circumstances.

THRESHOLD MATTERS

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

THE EVIDENCE

Mr Bader’s evidence

Mr Bader was interviewed by an investigator retained by the Nominal Insurer and following the interview, signed a statement dated 10 December 2014.[1] Mr Bader confirmed that he did not require the assistance of an interpreter for the purposes of making the statement.
[1] Reply to Application to Resolve a Dispute (Reply), p 56–58.
Mr Bader stated that he had owned cabinet making businesses under various names since 1967. He said that Genuine Kitchens had been established for about 18 months. Mr Bader indicated that he did not draw an income from the new business as he received rental income from investment properties.
Mr Bader said that Mr Abdelahad had contacted him and advised that he was looking for work. Mr Abdelahad said that he knew one of Mr Bader’s relatives. He said Mr Abdelahad commenced to work for him on 1 September 2014 on a casual basis as a cabinet maker, for which he had qualifications.
Mr Bader asserted that he told Mr Abdelahad that he preferred to work alone, he did not need an employee, and that he did not have enough work for two people. He did, however, offer Mr Abdelahad work to assist him to get into the workforce.
Mr Bader explained the employment arrangement, which was verbal. He said that he agreed to pay Mr Abdelahad $600 per week, less tax of $50, which was paid into Mr Abdelahad’s Commonwealth Bank account. He denied paying Mr Abdelahad any cash in hand. Mr Abdelahad was to work 40 hours per week, Monday to Friday from 7.30 am to 4 pm. There was not enough work to do overtime.
Mr Bader stated that he would provide Mr Abdelahad with the stub of the bank deposit slip as a receipt of his wages. He kept a wages book, a copy of which was given to the investigator.
Mr Bader acknowledged that Mr Abdelahad was a good worker and an experienced cabinet maker, but wanted to do things his own way. He described the work Mr Abdelahad was required to do, which included using a circular saw. Mr Bader said that on the day of the injury, both he and Mr Abdelahad worked together for the whole day installing a kitchen. At about 4 pm on that day, they needed to cut a piece of timber to finish a bulk head. Mr Abelahad went outside to cut the timber. Mr Bader heard Mr Abdelahad call out, and he and the occupants of the house ran out and saw blood dripping from Mr Abdelahad’s hand. An ambulance was called.
Mr Bader stated that he attempted to call Mr Abdelahad that evening without success. Mr Bader reported that he then received a telephone call from an unknown person, threatening Mr Bader that he had to pay Mr Abdelahad. Mr Bader said he advised the caller that Mr Abdelahad should speak with him directly and that the injury had been reported to the workers compensation insurer.
Mr Bader provided a further statement dated 21 February 2018.[2]
[2] The Application, pp 34–35.
He confirmed that he had previously operated a large business, but two years after selling that business, he commenced Genuine Kitchens (in about 2013). He said his intention was to do small jobs for selected clients, to keep himself interested and earn an income. He intended to work on his own without employees. He maintained that he was not seeking to expand.
Mr Bader contended that prior to the commencement of the business, he went to see his accountant, Mr Nashat Shenouda, in West Ryde for advice. Mr Bader said that in their initial conferences, Mr Shenouda discussed insurance, including workers compensation insurance. Mr Bader reported that he told Mr Shenouda that he did not want to employ anyone, and Mr Shenouda told him to get advice from an insurance broker.
Mr Bader stated that he explained to the broker that he did not intend to employ anyone. The insurance broker advised him that he would only need insurance if the amount of wages exceeded $7,500 per year. On the basis of that advice, Mr Bader concluded that he did not require workers compensation insurance.
Mr Bader confirmed the employment arrangements he made with Mr Abdelahad and denied having any other employees. Mr Bader stated that it was always his intention that the agreement would be short term – approximately a month, and that it was his intention to ensure that the wages total would not exceed the $7,500 threshold. He added that he never paid Mr Abdelahad in cash, and that there was no advantage for him to do that, as workers compensation premiums were tax deductable.
Mr Bader asserted that he was fully aware that if he paid wages exceeding $7,500, he would be required to have workers compensation insurance, which was tax deductable. He further asserted that it was never his intention to pay more than $7,500 wages to anyone in any one year.
He stated that because Mr Abdelahad continued to work after Mr Bader told him there was no more work, on 24 October 2014 he handed Mr Abdelahad a letter terminating Mr Abdelahad’s employment (the termination letter).
Mr Bader also gave oral evidence at the arbitration.[3]
[3] Transcript of proceedings, Elias Bader t/as Genuine Kitchens v Workers Compensation Nominal Insurer, [2018] NSWWCC 182, Arbitrator Homan, 30 May 2018, T 4.15–12.12.
He stated that he gave Mr Abdelahad a letter dated 19 October 2014 (the termination letter). He confirmed the document was written by him. He stated that the arrangement with Mr Abdelahad was that Mr Bader would employ Mr Abdelahad for a period of three to four weeks, but Mr Abdelahad indicated that he liked the work and wished to continue. Mr Bader said that he informed Mr Abdelahad that he could not continue to employ him and that Mr Abdelahad was to finish at the end of the following week.
Mr Bader stated that Mr Abdelahad continued to work and would not leave. As a result, Mr Bader said that he gave Mr Abdelahad the termination letter, which was in Arabic, and kept a copy for himself. Mr Bader asserted that he gave the letter to Mr Abdelahad on the same day that Mr Abdelahad was injured.
Under cross-examination, Mr Bader said that he “gave [the termination letter] to him in the morning before as at today would be the last day he would work.”[4]
[4] T 5.32–33.
Mr Bader explained that he was not sure of the date of the injury, but that he handed the termination letter to Mr Bader on the Monday when he was injured. He said he had written the letter the day before.
Counsel for the Nominal Insurer put to Mr Bader that there was an absence of any mention of the termination letter in the statement Mr Bader made to the WorkCover investigator dated 10 December 2014. Mr Bader stated that he answered all the questions the investigator asked, and that he probably told the investigator about the termination letter, but the investigator did not write down what he said.
Mr Bader agreed that on the day of injury, Mr Abdelahad was not sent home when he turned up for work and at 7.30 am accompanied Mr Bader to the work site where they worked together until 4 pm. Mr Bader explained that as Mr Abdelahad had turned up to work, he did not want to send him home, but informed him that it would be his last day of work.
The Nominal Insurer further put to Mr Bader that having been in business for over twenty years, Mr Bader would be aware of the need to keep records, and did not need the assistance of an interpreter in making his statement. Mr Bader said that when he was in his prior business, he employed two women who did all of the office work. He said his English was poor, that he was able to speak in English but was not confident when filling in forms. Mr Bader indicated again that he thought the investigator may not have incorporated into the statement everything he had said.
Counsel for the Nominal Insurer also put to Mr Bader that the first time the termination letter was mentioned was in his letter to WorkCover on 14 September 2015. Mr Bader did not respond and his oral testimony was terminated.

Mr Bader’s documentary evidence

Mr Bader also completed a schedule to a notice pursuant to s 141(2) of the 1987 Act issued by the Nominal Insurer and dated 21 January 2015.[5] In his response to the notice, Mr Bader asserted that he held a workers compensation policy and provided the policy number. He informed the Nominal Insurer that he was a small employer with an annual wages total of less than $7,500. He advised the total gross wages for that financial year was $4,600 and that Mr Abdelahad was the sole employee, who had been employed on a temporary basis for seven weeks, working 38 to 40 hours per week.
[5] Application, pp 25–31.
Mr Bader indicated that Mr Abdelahad’s gross wage per week was $600 per week ($15 per hour) and that Mr Abdelahad’s employment ceased on 24 October 2014. Mr Bader signed the document on 28 February 2015.
Mr Nashat Shenouda, Accountant, provided a letter dated 13 February 2018,[6] directed to the Commission and confirming that he had been consulted by Mr Bader in 2013 in relation to the commencement of a new business. Mr Shenouda said that in such circumstances, he has a checklist, and workers compensation is one of the items on the checklist.
[6] Application, p 20.
Mr Shenouda recalled discussing the need for workers compensation with Mr Bader, who advised him that he had no intention of employing anyone in the new business. Mr Shenouda wrote that he considered Mr Bader would not require workers compensation insurance as a sole trader, but advised Mr Bader to consult an insurance broker.
Mr Shenouda said that Mr Bader returned after consulting the broker, and told Mr Shenouda that he had been advised that he did not require workers compensation insurance if the wages he paid totalled no more than $7,500.
Mr Shenouda said that Mr Bader returned to see him in 2014. Mr Bader informed him that he had employed a family friend, who he would employ for three or four weeks, and the total wages would not exceed $4,000–$5,000. Mr Bader’s intention was to only employ the worker for a very short period and the wages would not exceed $7,500.
The termination letter (written in Arabic) was also included in the evidence, together with a certified translation.[7] The document, written under the name of Elias Bader t/as Genuine Kitchens, was dated 19 October 2014. The translated copy read as follows:
“Dear Botros,
I am so sorry to ask you to leave work with us by the end of this week. The only reason is that I do not want to expand business, and I do not have enough work. It has been just an opportunity for you to start from here, and the purpose was for you to be with me for two or three weeks. Having told you once and again to leave work, and given that you have ignored what I said, I now have to write this notice in order for you to understand that it is serious. Thank you for having been with us.”
[7] Application, pp 21–22.
A number of further documents were annexed to Mr Bader’s application. Those documents included:
(a)    a weekly time and wages sheet, indicating hours worked were 7.30 am to 4 pm, five days per week from 1 September 2014 to 20 October 2014 inclusive, and a notation that workers compensation was to be paid from 21 October 2014 to 30 October 2014. The wages were recorded as $600 per week less $50 tax, with an allowance for Workers compensation payments and taxi fare for Mr Abdelahad to return home after discharge from hospital;[8]
(b)    Mr Bader’s signed individual tax return for the financial year ending 2015, recording total wages paid for the year were $4,800;[9]
(c)    the notice dated 14 August 2015, issued pursuant to s 145(5) of the 1987 Act, seeking reimbursement of $30,815.82 (with supporting documents);[10]
(d)    the notice dated 15 January 2018, issued pursuant to s 145(5) of the 1987 Act, seeking reimbursement of $70,188.02 (with supporting documents);[11]
(e)    the COD dated 2 February 2016 in relation to the 2015 proceedings, in which the proceedings were discontinued, and the Commission noted that Mr Bader agreed to pay in instalments the amount claimed in the 2015 notice on a voluntary basis.[12]
[8] Application, pp 9 –10.
[9] Application, pp 11–19.
[10] Application, pp 48–55.
[11] Application, pp 37–47.
[12] Application, p 33.
Mr Bader relied on further documentation attached to the application for reconsideration dated 20 April 2018, which relevantly included a letter from Mr Pierre Malouf, managing director of Highlife Kitchens, dated 13 March 2018. Mr Malouf stated that Mr Abdelahad worked for the business from 11 July 2014 to 25 July 2014, and was paid $625 gross per week. Mr Malouf advised that Mr Abdelahad’s employment was terminated because he was a “stubborn character”, which proved him unsuitable for the job.
Additionally, the application for reconsideration annexed a copy of a letter dated 19 March 2018 from Mr Riad Mahfoud, Director of Custom Designed Kitchens. Mr Mahfoud said that Mr Abdelahad worked for that business from 26 October 2015 to 6 November 2015. The relevant payslips were attached.

Mr Abdelahad’s evidence

Mr Abdelahad provided a statement dated 12 November 2014.[13] He required the assistance of an interpreter to complete the statement. He said he was a qualified carpenter, having gained his qualifications in Lebanon.
[13] Reply, p 40–43.
He confirmed that he had come to Australia from Lebanon approximately nine months earlier. He said that since arriving in Australia, he had worked as a carpenter for approximately three months with a person called Raid Mahfoud. He said that about twenty days after ceasing that work, he commenced with Genuine Kitchens on a full-time basis. He said that he was introduced to Mr Bader through Mr Bader’s relatives in Lebanon, who he knew.
Mr Abdelahad stated that his working hours were 7.30 am until 4 pm but if required he would work till 7pm and on Saturdays. He asserted that at the commencement of his employment, Mr Bader told him he would be paid $200 per day, of which $550 per week (after deduction of $50 tax) would be deposited in his bank account and the remaining $400 was to be paid in cash. He added that if there was overtime, he was paid $25 per hour, also in cash. He said there were no time sheets and he would call Mr Bader at the end of the day and Mr Bader would note the finish time.
Mr Abdelahad said that he was paid weekly and was given a hand-written pay slip each week. He provided a copy of the only pay slip he had, which was dated 17 October 2014. Mr Abdelahad described the document, which was a bank deposit receipt. He said that Mr Bader gave him the bank deposit receipts after depositing the $550 and would write on the back of the receipt the pay details, including the cash component.

Mr Abdelahad stated that he was not able to prove he was paid in cash, but that he could not have lived on $550 per week as he was supporting his family in Lebanon and had no other income.
Mr Abdelahad recalled the day of the injury. He said that he and Mr Bader had worked all day installing a kitchen. He said that the occupants of the house returned home after 4.30 pm. He and Mr Bader needed a piece of timber to fill in a gap which should not have been there. Mr Abdelahad suggested they return to the factory to cut the piece, but Mr Bader told him to cut the panel on site, which he did, using a circular saw and a milk crate as a bench.
He described how the injury occurred, which he said happened at about 6.30 pm.
Mr Abdelahad made a statutory declaration on 1 December 2014.[14] The declaration was consistent with Mr Abdelahad’s statement evidence.
[14] Reply, p 44.
There was no application to adduce oral evidence from Mr Abdelahad, or to cross examine him.
By way of an Application to Admit Late Documents (ALD) dated 30 May 2018, Mr Abdelahad produced records of a number of money transfers from Australia to Lebanon made through Western Union between 31 May 2014 and 19 August 2015.[15] Mr Abdelahad also produced his Commonwealth Bank records from 31 May 2014 to 30 December 2014, detailing transactions including three deposits from Custom Designed Kitchens from 16 June 2014 and 27 June 2014, totalling $2,200.[16] Additional bank records in relation to a different account in Mr Abdelahad’s name recorded transactions from 11 August 2014 to 11 February 2015.[17]
[15] ALD, pp 1–9.
[16] ALD, p 13.
[17] ALD, p 15 and pp 21–23.
Mr Abdelahad also attached to his written submissions a letter dated 21 February 2015, titled “Damage Claim”. It was written in English by Mr Bader and directed to Mr Abdelahad. The letter accused Mr Abdelahad of not following cutting instructions on an “8 kitchens job”, costing $6,000 plus GST in replacements. Mr Bader wrote:
“As for the injury you sustained on 20 October 2014, it is my belief that you intentionally inflicted this injury on yourself, since it was scheduled that the installation of the eight kitchens job was to commence the next day.
You use this injury to avoid the next day task which was going to reveal the wrong cuttings made.”

The Nominal Insurer’s evidence

The Nominal Insurer attached a number of documents to its Reply, including documents that had been relied upon in the 2015 proceedings.
Those documents included the Employer Injury Claim form completed by Mr Bader on 19 November 2014[18] in which Mr Bader wrote that Mr Abdelahad commenced employment with Genuine Kitchens on 1 September 2014, was paid $600 per week according to the “Joinery Award”, and he was the only employee. Mr Bader ticked the relevant boxes indicating that Mr Abdelahad was employed on a permanent and full-time basis.
[18] Reply, pp 24–26.
The Reply included a copy of a letter sent from Mr Bader to the WorkCover Authority of NSW dated 14 September 2015,[19] confirming the employment arrangements detailed in his statement, the advice from the insurance broker, reiterating that his intention was not to employ Mr Abdelahad for more than a few weeks, and the reasons for not employing anyone. Mr Bader explained that following the injury, the insurance company sent him the relevant forms to complete and he inadvertently ticked the boxes that indicated Mr Abdelahad was employed on a permanent, full time basis.
[19] Reply, p 21.
In evidence was a WorkCover pre-injury average weekly earnings calculation form (the PIAWE form), completed by Mr Bader, confirming Mr Abdelahad worked 40 hours per week, his gross hourly rate was $15, and his ordinary earnings were $600.[20] Copies of payslips were also provided, recording weekly payments of $600 less tax of $50 for the period 1 September 2014 to 17 October 2014. A further payslip for 20 October 2014 was included, detailing $120 for the one day of work, as well as amounts for workers compensation payments and $40 for the taxi fare home from hospital.[21]
[20] Reply, pp 28–30.
[21] Reply, pp 71–79.
A copy of Mr Abdelahad’s Commonwealth Bank statement for the period from 4 September 2014 to 22 October 2014, which had been given to the investigator by Mr Abdelahad, was attached to the Reply.[22] The document confirmed deposits into that account of $1,100 on 13 September 2014 and 26 September 2014, and three deposits of $550 each per week between 3 October 2014 to 22 October 2014.
[22] Reply, p 46.
A copy of a Western Union Agent receipt was also annexed to the Reply. The document recorded Mr Abdelahad as the sender, that $1,000 in United States currency was transferred to Gerees Abdelahad in Lebanon on 11 October 2014.[23]

Application to adduce additional evidence

[23] Reply p 47.

Mr Bader seeks to have further evidence admitted in the appeal. The evidence consists of an affidavit of Mr Nashat Shenouda dated 27 August 2018, with Mr Bader’s taxation return for the 2014/2015 financial year annexed.
Mr Bader asserts the evidence is new in form only, as it was evidence contained in Mr Shenouda’s letter dated 31 February 2018 and the taxation return was also already in evidence.
Mr Bader submits that the Arbitrator questioned the credibility of that evidence, without response by either party and proceeded to make a determination adverse to him.
He further contends that the Arbitrator questioned the weight afforded to the taxation return and she was unable to determine if it had been filed. Mr Bader said that neither Mr Abdelahad nor the Nominal Insurer raised issues as to the “validity” of the document.
Mr Bader submits that the failure to grant leave to rely on the additional evidence would create a substantial injustice because the Arbitrator’s finding in relation to Mr Shenouda’s letter raises issues of procedural fairness.
Mr Bader asserts that the Arbitrator did not give adequate weight to the evidence of the actual wages paid as noted in the taxation return. He says that was because the Arbitrator observed that the document had not been lodged with the Australian Taxation Office. Mr Bader submits that the additional evidence goes to the reasonable belief held by Mr Bader that he was an exempt employer during the relevant period.

THE ARBITRATOR’S REASONS

The Arbitrator identified the issues for determination as follows:
(a)    whether the Commission had power to reconsider the COD issued on 2 February 2015;
(b)    if so, whether the discretion to reconsider the COD should be exercised;
(c)    whether Mr Bader was estopped from arguing that he was an exempt employer, and
(d) whether Mr Bader was an exempt employer pursuant to s 155AA.
The Arbitrator reviewed all of the evidence and summarised the submissions of the parties (including further written submissions filed in the Commission on 13 June 2018).
Arbitrator Homan reproduced ss 140, 145 and 155AA of the 1987 Act, which were the sections relevant to a determination as to whether Mr Bader was an exempt employer within the meaning of the 1987 Act.
The Arbitrator considered Keating P’s decision in Kula Systems Pty Ltd v Workers Compensation Nominal Insurer.[24] She reproduced the following paragraphs from that decision (citations omitted):
[24] [2018] NSWWCCPD 10 (Kula).
“I accept the appellant’s submission that where a statute describes that there must be ‘reasonable grounds’ for a state of mind an objective test is applied. In Rockett, the High Court unanimously held:
‘When a statute prescribes that there must be ‘reasonable grounds’ for a state of mind ... it requires the existence of facts which are sufficient to induce that state of mind in a reasonable person.’
The fact that a person may honestly believe in a particular state of affairs does not necessarily mean that he or she has ‘reasonable grounds’ for his/her belief in that state of affairs.”[25]
[25] Kula, [150]
…
“With respect to the ascertainment of wages payable, s 155AA of the 1987 Act is expressed in future progressive tense, indicating that something will happen at some point in the future. The section is not expressed in past tense. The provision requires that in order to be classified as an ‘exempt employer’ the employer must have reasonable grounds for believing that the total amount of wages that ‘will be payable’ to workers during the financial year ‘will be not’ more than the exemption limit. That requirement cannot be satisfied only by a consideration of extant legal obligations at a given point in time.
Section 155AA of the 1987 Act does not require a determination of whether the wages paid by the employer during the relevant financial year were in fact less than the exemption limit of $7,500, even though the Arbitrator found that the wages paid by the employer in the present case did not exceed $7,500 in the financial year. The amount of wages actually paid is not determinative of an assessment of what ‘will be payable’ under s 155AA of the 1987 Act. The provision does not provide for a retrospective consideration of the established evidence of wages paid. As the Arbitrator identified, the test ‘... turns on whether the employer had ‘reasonable grounds for believing’ that the total wages payable by it during the financial year in question would exceed that limit’.”[26]
…
“The Arbitrator’s findings with respect to the onus of proof were clearly stated. He correctly found that the Nominal Insurer carried the legal onus of proof under s 145 of the 1987 Act.
I reject the submission that the Arbitrator ‘in effect required the employer to prove for the purpose of s 140(1) of the 1987 Act that it was insured by requiring it to establish reasonable grounds of belief as to why it was an exempt employer’. The submission is misconceived. There was no dispute that the appellant was uninsured when the worker sustained his injuries.
Once the worker’s claim for compensation was satisfied under s 140 of the 1987 Act by the Nominal Insurer, the Nominal Insurer was entitled to seek reimbursement of the compensation paid pursuant to the Deed. This was achieved by issuing a notice under s 145 of the 1987 Act on the uninsured appellant.
It was then open to the uninsured appellant to bring these proceedings in the Commission seeking a determination of its liability under s 145(4) of the 1987 Act. That is the basis on which the matter proceeded.
I do not accept the appellant’s submission that the onus of proof was reversed by requiring it to discharge the evidentiary onus in circumstances where the Nominal Insurer had not discharged its legal onus, at least to a prima facie level.
A certificate issued under s 145(5) of the 1987 Act is evidence of the matters stated in it. However, it is not conclusive evidence and is open to an employer to prove that at the relevant time it was not liable to pay compensation to the injured worker. It follows that the certificate is prima facie evidence that the appellant was liable for payments made by the Nominal Insurer to the worker in the sum of $225,000, unless proven otherwise.
Having correctly dealt with the question of onus, the Arbitrator drew an inference on the available evidence that the appellant, at the relevant time, did not have reasonable grounds for believing that the total amount of wages that would have been payable to the worker during the financial year would not exceed the exemption limit.”[27]
[26] Kula, [166]–[167].
[27] Kula, [188]–[194].
Having considered that authority, the Arbitrator referred to the notices issued by the WorkCover Authority in 2015 and iCare in 2018 pursuant to s 145(1) and s 145(5), together with their annexures, and observed that they were prima facie evidence that Mr Bader was liable to pay compensation to or in respect of Mr Abdelahad. The Arbitrator noted that Mr Bader disputed that he was liable to reimburse the Nominal Insurer on the basis that he was, at the relevant time, an exempt employer and thus deemed to have held a policy of insurance.
The Arbitrator identified that the relevant question before her was whether the Nominal Insurer had established, on the balance of probabilities, that at the time of the injury, Mr Bader did not objectively have reasonable grounds for believing that the total amount of wages payable for the 2014/2015 financial year would not exceed $7,500.
The Arbitrator accepted that Mr Bader had previously employed many staff in his previous businesses, and that Mr Bader returned to business in 2013 as a sole trader, intending to keep himself busy and earn extra income. She further accepted that Mr Bader’s original intention was not to employ staff. On the basis of the evidence of both Mr Bader and Mr Abdelahad, the Arbitrator accepted that Mr Bader employed no other workers other than Mr Abdelahad during the 2014/2015 financial year.
The Arbitrator reviewed the conflicting evidence as to when Mr Abdelahad commenced employment with Mr Bader. The Arbitrator determined that Mr Abdelahad started work with Mr Bader on 1 September 2014, relying on the following evidence:
(a)    In his statement dated 12 November 2014, Mr Abdelahad said that he started work with Mr Bader on a full-time basis about 20 days after he ceased work with Mr Riad Mahfoud;
(b)    Mr Mahfoud was the director of Custom Design Kitchens. In his letter dated 19 March 2018, Mr Mahfoud said Mr Abdelahad worked for him between 26 October and 6 November 2015, but was silent as to any earlier period of employment;
(c)    Mr Abdelahad’s bank statement disclosed deposits of $550 between 16 June 2014 and 8 August 2014. The deposits were made by “Custom Designed” and described as wages. The entry dated 16 June 2014 referred to “2w”, which the Arbitrator inferred meant “two weeks”, indicating that employment commenced on about 1 June 2014;
(d)    Mr Malouf’s evidence that Mr Abdelahad worked for him from 11 July 2014 and 25 July 2014 was not necessarily inconsistent with also being employed by Custom Designed.
(e)    Mr Abdelahad’s evidence was that he commenced with Mr Bader about 20 days after ceasing with Mr Mahfoud. On the evidence that he ceased on 8 August 2014, it was consistent that Mr Abdelahad commenced work with Mr Bader on 1 September 2014. The commencement date was further consistent with the deposits of payments of $550 from that date, which both Mr Bader and Mr Abdelahad said were made into Mr Abdelahad’s account.
The Arbitrator preferred the above evidence (including Mr Abdelahad’s written statement evidence) to the vagueness of the information provided to the Nominal Insurer in circumstances where the Nominal Insurer expressed difficulties in communicating with Mr Abdelahad.
The Arbitrator proceeded to consider the expected duration of employment.
She noted that Mr Abdelahad claimed he was employed on a full-time basis and did not claim that the employment was intended to be temporary or short-term. She further noted that the first evidence from Mr Bader was the Employer Injury Claim form dated 19 November 2014. The Arbitrator observed that in that document, Mr Bader ticked the boxes indicating Mr Abdelahad was employed on a full-time, permanent basis when he could have indicated that the employment was “temporary”, “casual” or “other’. Further on the PIAWE form, Mr Bader also indicated that the employment was full-time, when there were options to select “casual” or “other”.
The Arbitrator considered Mr Bader’s explanation that he made a mistake in completing the forms, because his English ability was not strong and he had difficulty completing forms in English. The Arbitrator said that the explanation was difficult to reconcile when Mr Bader had completed his statement dated 10 December 2014 without the assistance of an interpreter, and had given oral evidence in English, despite an interpreter being available. Further, the Arbitrator said that Mr Bader had operated businesses since 1967 and employed staff of up to 30 people, which would tend to suggest that he would be familiar with the terminology used in the forms.
The Arbitrator referred to Mr Bader’s description of Mr Abdelahad’s employment as “casual” in Mr Bader’s statement dated 10 December 2014. She said that there was no indication as to how long the employment was for, or when the employment would cease.
The Arbitrator considered Mr Bader’s evidence that he advised Mr Abdelahad that he:
(a)    wanted to work alone;
(b)    did not want to employ anyone;
(c)    did not have enough work for the two of them, and
(d)    would require Mr Abdelahad to work alone at times, while he searched for work.
The Arbitrator accepted that there was no mention in Mr Bader’s statement of Mr Bader instructing Mr Abdelahad to cease work or any reference to the termination letter. The Arbitrator further noted the letter dated 21 February 2015 titled “Damage Claim” and concluded that the mention of “8 kitchens job” which was to commence the next day suggested that there was an expectation that the worker’s employment would continue for some time after that day.
The Arbitrator further referred to the evidence in the declaration signed by Mr Bader on 28 February 2015 attached to the s 141(2) notice dated 21 January 2015 that Mr Abdelahad’s employment was temporary and finished on 24 October 2014, but noted that Mr Abdelahad had not returned to employment with Mr Bader since the injury.
The Arbitrator pointed to Mr Bader’s evidence in the termination letter that he expected to employ Mr Abdelahad for two to three weeks and in the letter dated 14 September 2015 Mr Bader indicated the employment was to be for approximately seven weeks. The letter from Mr Shenouda stated that Mr Bader told him that Mr Abdelahad would be employed on a casual basis for three or four weeks, Mr Bader said in his statement dated 21 February 2018 that it was always his intention to employ Mr Abdelahad for approximately one month and in his oral evidence Mr Bader said he agreed to employ Mr Abdelahad for three or four weeks. The Arbitrator considered the evidence to be inconsistent.
The Arbitrator observed that the first reference to Mr Abdelahad being advised by Mr Bader to cease work was in the letter to WorkCover dated 14 September 2015. That letter was also the first reference to Mr Bader having consulted an insurance broker in relation to workers compensation insurance, and that consultation was not mentioned by Mr Bader until one month after the first notice pursuant to s 145(1) of the 1987 Act was issued.
The Arbitrator expressed the view that the failure to mention the termination letter until after the first notice was issued pursuant to s 145(1) was of concern. She further considered that it was unusual that, while the contents of the letter were written in Arabic because Mr Abdelahad did not understand English, the subject line and other parts of the letter were written in English. The Arbitrator found it difficult to understand why the letter advised Mr Bader to cease work at the end of the week, when he had already been told to cease work, and was a casual employee.
The Arbitrator noted that Mr Abdelahad denied being given the letter of termination.
Further, there was no date recorded against the “employment termination date” in the weekly time and wages sheet. The Arbitrator also observed that Mr Bader’s evidence that he repeatedly advised Mr Abdelahad to cease work and gave him a termination letter because he was ignoring Mr Bader was difficult to reconcile with the evidence that on the day of the injury, Mr Bader drove Mr Abdelahad to the worksite, worked with him for the whole day, and Mr Abdelahad was expected to commence installing eight kitchens the day following the injury.
The Arbitrator said that Mr Shenouda’s evidence appeared to corroborate Mr Bader’s evidence, but Mr Bader did not mention that he had consulted Mr Shenouda until after the first notice pursuant to s 145(1) had been issued. The evidence from both Mr Shenouda and Mr Bader that Mr Bader had received advice that he did not require workers compensation insurance was inconsistent with Mr Bader obtaining a policy shortly after the injury. The Arbitrator added that Mr Shenouda’s evidence was not given under oath or affirmation.

The Arbitrator concluded that for those reasons:
(a) she was not satisfied that Mr Shenouda’s evidence was of such a nature to overcome her concerns with Mr Bader’s evidence;

(b) she did not accept that Mr Abdelahad’s employment was for a fixed period or certain duration, and
(c) she did not accept that Mr Bader had informed Mr Abdelahad, either verbally or in writing, that his employment was terminated.

The Arbitrator found that, at the time the injury was sustained on 20 October 2014, it was Mr Bader’s expectation that Mr Abdelahad would continue to work for him for an unspecified time.
The Arbitrator proceeded to consider the evidence in relation to the wages paid to Mr Abdelahad. The Arbitrator summarised Mr Abdelahad’s evidence that he was paid additional wages in cash. Mr Abdelahad made that assertion in his statement dated 14 November 2014, Mr Abdelahad also produced a deposit slip receipt which recorded on the back of it an additional cash payment. The Arbitrator said she could not be satisfied on the evidence that the writing was that of Mr Bader, but the hand-written notations tended to support Mr Abdelahad’s assertions that he was paid partly into his bank account and an additional $400 in cash, as well as cash for overtime worked. Further, Mr Abdelahad alleged he could not live and support his family on $550 per week.
The Arbitrator observed that on the other hand, Mr Bader denied making cash payments and the time and wage sheets supported that evidence. Further Mr Bader consistently stated in his statements, the Employer Injury Claim form, the PIAWE calculation form, the declaration made pursuant to s 141(1) of the 1987 Act, and in written correspondence, that he paid Mr Abdelahad $600 per week (less $50 tax).
The Arbitrator noted that the time and wages sheet and the pay slips were, on their face, unusual because of their uniform appearance and in that they recorded Mr Abdelahad working precise and unchanging hours during his employment.
The Arbitrator said that she had given limited weight to the 2014/2015 tax return indicating that the total wages paid in the 2014/2015 financial year was $4,800. She reasoned that the tax return was not signed until March 2016, some time after the first notice under s 145 was served, and there was no evidence that it had been filed.
The Arbitrator further observed that the hourly rate was significantly lower than the applicable minimum wage, and the deduction of income tax of $50 was completely arbitrary.
The Arbitrator said that the bank records do not disclose any secondary employment and in any event Mr Abdelahad was working full time for Mr Bader, which would leave little time to engage in additional employment. She noted that the total of the Western Union transfers from 30 May 2014 to 20 December 2014 exceeded $8,000, while the bank statements showed no such transactions and the cash withdrawals during the same period were less than $3,000. The Arbitrator said that that evidence “strongly suggested” that Mr Abdelahad had additional income over and above the amount of $550 deposited into his account.
The Arbitrator concluded that she preferred Mr Abdelahad’s evidence over that of Mr Bader and found that Mr Abdelahad was paid $200 per day, or $1,000 per week, plus $25 per hour overtime.
The Arbitrator found that Mr Abdelahad was paid at least $7,000 as at the date of injury (in the 2014/2015 financial year) and that even if it was accepted that Mr Abdelahad’s employment was to be terminated on 24 October 2014, Mr Bader would have an expectation that the wages payable to Mr Abdelahad would have been at least $8,000. The Arbitrator referred to her earlier finding that Mr Abdelahad’s employment would have continued for an undefined period and stated that an even higher figure would have been payable.
The Arbitrator determined that she was satisfied, on the balance of probabilities, that as at 20 October 2014, Mr Bader did not have objectively reasonable grounds for believing that the total wages that would be payable during the 2014/ 2015 financial year would not exceed $7,500. She determined that Mr Bader was not an exempt employer within the meaning of s 155AA of the 1987 Act. Mr Bader was therefore uninsured at the time of injury and in the absence of any dispute about Mr Abdelahad’s entitlement to the compensation paid by the Nominal Insurer, Mr Bader was liable to reimburse the Nominal insurer for the amounts specified in both the notices issued pursuant to s 145(1) of the 1987 Act.
The Arbitrator further determined that on the basis of those findings, it was not necessary for her to consider the application for reconsideration or whether she had the power to reconsider the COD issued in the earlier proceedings.
The Certificate of Determination issued on 1 August 2018 records:
“The Commission Determines:
1. The applicant was not an ‘exempt employer’ pursuant to s 155AA of the Workers Compensation Act 1987 as at 20 October 2014.
2. The applicant is liable to reimburse the Insurance Fund the amount specified in the notice pursuant to s 145(1) of the Workers Compensation Act 1987 served on him on 15 January 2018.
3. The Application for reconsideration pursuant to s 350(3) of the Workplace Injury Management and Workers Compensation Act 1998 of the Certificate of Determination – consent Orders dated 2 February 2016 issued in Commission proceedings 5474/15 is declined.
4. The application for orders terminating the agreement noted in the Certificate of Determination – Consent Orders dated 2 February 2016 issued in the Commission proceedings 5474/15 is declined.”

GROUNDS OF APPEAL

Mr Bader alleges that the Arbitrator erred in fact and law on the following grounds:
(a)    Ground 1: Error of law by failing to make a finding that answers the correct question “as noted by the Statutory Test to determine an exempt employer”;
(b)    Ground 2: Error of fact and law in assessing wages paid in the past and payable in the future;
(c)    Ground 3: Error of law by failing to afford Mr Bader procedural fairness by rejecting the evidence of the accountant, Mr Shenouda, without first putting the rejection to Mr Bader;
(d)    Ground 4: Error of law by making findings without evidence in relation to minimum wage, applicable tax and handwritten notations;
(e)    Ground 5: Error of fact in failing to take into account relevant evidence of the insurance broker and Mr Shenouda;
(f)    Ground 6: Error of fact and law by taking into account irrelevant evidence (being the Western Union transactions) and making the subsequent irrational finding, and
(g)    Ground 7: Error of fact in mistaking the evidence of the termination letter.

LEGISLATION

Section 155AA of the 1987 Act provides as follows:
“155AA Exempt employers not required to obtain policy of insurance
(1)     An employer is an ‘exempt employer’ during a financial year while the employer has reasonable grounds for believing that the total amount of wages that will be payable by the employer during the financial year to workers employed by the employer will be not more than the exemption limit for that financial year.
(2)     An employer is not an exempt employer whenever the employer:
(a) is a member of a group constituted under Division 2A, or
(b) employs a person under a training contract (within the meaning of the Apprenticeship and Traineeship Act 2001).
Note: A ‘training contract’ is a contract entered into for the purpose of establishing an apprenticeship or traineeship.
(3)     An employer who is an exempt employer for the whole or any part of a financial year is deemed to have obtained from the Nominal Insurer (and the Nominal Insurer is deemed to have issued) a policy of insurance in compliance with section 155 (an ‘exempt employer policy’) for any period for which the employer is an exempt employer during the financial year. No premium is payable for an exempt employer policy.
(4)     An exempt employer policy covers the employer for any period for which the employer is an exempt employer but does not cover the employer for any period for which the employer has actually obtained a policy of insurance under section 155.
(5)     An administration fee of an amount prescribed by the regulations is payable to the Nominal Insurer by an employer in respect of each claim made against the employer in respect of an injury to a worker received during any period for which an exempt employer policy covers the employer.
(6)     The regulations may make provision for or with respect to the payment of an administration fee, including provision for or with respect to any of the following:
(a) the period within which an administration fee must be paid,
(b) the payment of a late payment fee if an administration fee is not paid within the required period,
(c) the full or partial waiver or refund of an administration fee or late payment fee.
(7)     The Nominal Insurer is entitled to recover as a debt in a court of competent jurisdiction an administration fee payable by an employer together with any late payment fee payable.
(8)     In this section:
‘exemption limit’ for a financial year means $7,500 or such other amount as may be fixed by the Workers Compensation Market Practice and Premiums Guidelines as the exemption limit for that financial year.
‘financial year’ means a period of 12 months commencing on 1 July in any year.
‘wages’ means wages as defined in section 174 and includes any distribution to a worker as a beneficiary under a trust that would (under section 174AA) constitute wages for the purposes of section 174.”

SUBMISSIONS

For the reasons set out below it is not necessary for me to set out the parties’ submissions in relation to Grounds 1, 2 and 4–7.

Ground 3: Error of law by failing to afford Mr Bader procedural fairness by rejecting the evidence of the accountant, Mr Shenouda, without first putting the rejection to Mr Bader

Mr Bader submits that the Arbitrator rejected the corroborative evidence of Mr Shenouda, apparently on grounds of credit, without any of the parties making a submission to that effect, and in the absence of a challenge to that evidence. Mr Bader submits that while the Arbitrator is not bound by the submissions of the parties, he or she must put any novel or proposed conclusion to the parties as a matter of fairness.
Mr Bader relies on the High Court decision in Suvaal v Cessnock City Council[28] where Gleeson CJ observed:
“A trier of fact, confronted with divergent cases being advanced by the parties, may decline to accept either case and may proceed to make findings not exactly representing what either party said. But that does not justify the creation of an entirely new case with which the losing party had no testimonial or other evidentiary opportunity to deal.”
[28] [2003] HCA 41; 77 ALJR 1449, [36].
Mr Bader contends that Mr Shenouda’s evidence was material evidence, and by not bringing her proposed rejection of that evidence to Mr Bader’s attention, she denied him procedural fairness.
The Nominal Insurer submits that the allegation that Mr Bader was denied procedural fairness should be rejected. It says that Mr Bader asserts that he was entitled to be notified in advance of the contest of the reliability of his own evidence. The Nominal Insurer notes that there is no authority cited by Mr Bader on that point. In any event, it says, it was made clear in Kula that the test is an objective one, and the subjective intentions expressed in the letter from Mr Shenouda are irrelevant, and the Arbitrator’s conclusion on that evidence was appropriate.

The Nominal Insurer contends that there was no failure to afford procedural fairness, given that the document was not given under oath or affirmation. The Nominal Insurer says that the evidence could not be tested under cross-examination, and the Arbitrator was entitled to treat that evidence with reservation and to find the evidence was not of such nature that it would overcome her concerns about Mr Bader’s evidence.
The Nominal Insurer points out that the letter was not in evidence in the previous proceedings.
Mr Abdelahad submits that Mr Bader’s submissions on this ground are ambiguous and vague and do not explain how the Arbitrator rejected Mr Shenouda’s evidence on grounds of credit. Mr Abdelahad asserts that Mr Shenouda could have provided evidence in statement form and, if necessary, been available for cross examination.
In any event, Mr Abdelahad contends that even if Mr Shenouda’s evidence was accepted, it would not have altered the outcome because the evidence only goes so far as to show Mr Bader’s intention in respect of hiring Mr Abdelahad, and not Mr Bader’s conduct once the employment commenced.

The orders sought

Mr Bader seeks to have the Arbitrator’s determination revoked, and a determination made in its place that:
(a) Mr Bader was an “exempt employer” pursuant to s 155AA of the 1987 Act, and
(b) Mr Bader is not liable to reimburse the Nominal Insurer the amount specified in the notice issued pursuant to s 145(1) of the 1987 Act dated 15 January 2018.
The Nominal Insurer submits that Mr Bader has failed to identify an error that has affected the outcome, and applying Raulston, there is no basis upon which to overturn the Arbitrator’s decision. It says the appeal ought to be dismissed.
In the alternative, the Nominal Insurer submits that if the appeal succeeds, the orders sought by Mr Bader should not be made as the Arbitrator did not determine the issues relating to the reconsideration application and the alleged estoppel. In the light of her decision, such determinations were not necessary. The Nominal Insurer says that if the Arbitrator’s decision is set aside, then those issues will be at large and would need to be determined.
Mr Abdelahad seeks orders that the appeal be dismissed and that the decision and findings of the Arbitrator be confirmed.

DISCUSSION

The application to adduce additional evidence

Section 352(6) of the 1998 Act provides that I may admit evidence on appeal only if I am satisfied that the evidence was not available, and could not have reasonably been obtained prior to the proceedings before the Arbitrator or that failure to admit the evidence would cause substantial injustice in the case. That is, there are two alternate thresholds, one of which must be satisfied before I can exercise my discretion to admit the document.
Mr Bader seeks to have additional evidence admitted in the appeal. consisting of an affidavit of Mr Nashat Shenouda dated 27 August 2018, with Mr Bader’s taxation return for the 2014/2015 financial year annexed.
Mr Shenouda’s affidavit consists of a recitation of the matters contained in his letter dated 13 February 2018 and in addition, Mr Shenouda states that he filed Mr Bader’s 2014/2015 taxation return with the Australian Taxation office in 2015. That assertion is difficult to accept because the document itself is dated 24 March 2016.
In any event, there is no reason why, with reasonable diligence on the part of Mr Bader’s legal representatives, Mr Shenouda’s affidavit could not have been obtained prior to Mr Bader commencing these proceedings. The first limb of s 352(6) is clearly not satisfied, therefore I need to consider whether the failure to admit the evidence would cause a substantial injustice in the case.
For the reasons set out below, I have revoked the Certificate of Determination and remitted the matter for re-determination by another Arbitrator. The failure to admit the document on the appeal would not cause Mr Bader a substantial injustice. It is a matter for the parties as to whether they intend to apply to have further evidence admitted on the remitter.
I therefore decline to grant leave pursuant to s 352(6) of the 1998 Act to admit the further evidence on appeal.

The grounds of appeal

It is convenient to deal firstly with the third ground of appeal. Mr Bader contends that the Arbitrator failed to afford him procedural fairness in respect of her conclusion that she was not satisfied that Mr Shenouda’s evidence was of such a nature as to overcome her concerns with Mr Bader’s evidence. The evidence was in the form of a letter dated 13 February 2018 written on Mr Shenouda’s business letterhead and signed by Mr Shenouda.
Mr Bader alleges that the Arbitrator failed to afford him procedural fairness by not giving him the opportunity to make submissions about her concerns with Mr Shenouda’s evidence.
The Arbitrator afforded some weight to Mr Shenouda’s evidence, but formed the view that it was less credible, partly because it was not elevated to the level of sworn testimony, but also because it was unusual that Mr Shenouda could recall with such particularity conversations between him and Mr Bader more than three years earlier. She observed that Mr Bader did not mention that he had consulted Mr Shenouda until after the first notice pursuant to s 145(1) had been issued. Further, the Arbitrator thought that evidence to be inconsistent with Mr Bader’s attempt to obtain a policy of insurance shortly after and on the day of the injury, and his expectation that the injury would be covered by that insurance.[29]
[29] Reasons, [189].
During the course of the proceedings, neither the Nominal Insurer nor Mr Abdelahad raised any issue or made any submission in respect of the relevance of, the credibility of, or the weight to be afforded to, the evidence of Mr Shenouda. The Arbitrator’s conclusion was essentially one in which she doubted the credibility of that evidence.
The High Court discussed the manner in which procedural fairnesscases are approached by the courts in Re Minister for Immigration & Multicultural Affairs; Ex parte Lam,[30] where Gleeson CJ said:
“A common form of detriment suffered where a decision-maker has failed to take a procedural step is loss of an opportunity to make representations. … Fairness is not an abstract concept. It is essentially practical. Whether one talks in terms of procedural fairnessor natural justice, the concern of the law is to avoid practical injustice.”
[30] [2003] HCA 6; 214 CLR 1, [37].
As McHugh J said in Re Refugee Review Tribunal; Ex parte AALA:[31]
“One of the fundamental rules of the fair hearing doctrine is that a decision-maker should not make an adverse finding relevant to a person’s rights, interests or legitimate expectations unless the decision-maker has warned that person of the risk of that finding being made or unless the risk necessarily inheres in the issues to be decided. It is a corollary of the warning rule that a person who might be affected by the finding should also be given the opportunity to adduce evidence or make submissions rebutting the potential adverse finding.’”
[31] [2000] HCA 57; 204 CLR 82, [100].
In Ucar v Nylex Industrial Products Pty Ltd,[32] Redlich JA observed:
“The risk of an adverse finding will usually be present whenever there is a serious challenge to the credibility of a party or witness. Generally speaking, it will be unnecessary for the trial judge to advert to the possibility of such a finding because the risk will be apparent. Where the risk of an adverse finding being made does not necessarily inhere in the issues to be decided or where the facts or the inference which the judge contemplates drawing from the facts and which gives rise to such a risk is unknown to the party, the fundamental rule of fairness requires the decision-maker in some way to draw attention to the existence of that risk.”
[32] Ucar v Nylex Industrial Products Pty Ltd [2007] VSCA 181, [43].
Section 354(2) of the 1998 Act expressly permits the Commission to “inform itself on any matter in such manner” it thinks fits. However, provisions such as s 354 of the 1998 Act do not release the Commission from the obligation to comply with the rules of procedural fairness.[33]
[33] South Western Sydney Area Health Service v Edmonds [2007] NSWCA 16; 4 DDCR 421, [88].
Failing to afford procedural fairness is an error that must be corrected unless it could not possibly have affected the outcome.[34] A decision or award based on a point not raised by the parties or by the Commission would constitute a denial of procedural fairness and be susceptible to challenge.[35]
[34] Toll Pty Ltd v Morrissey [2008] NSWCA 197; 6 DDCR 561, [10].
[35] Workers Compensation Nominal Insurer v Al Othmani [2012] NSWCA 45, [75].

The Nominal Insurer submits that the allegation that Mr Bader was denied procedural fairness should be rejected. It says it was made clear in Kula that the test is an objective one, the subjective intentions expressed in the letter from Mr Shenouda are irrelevant, and the Arbitrator’s conclusion on that evidence was appropriate.
Mr Abdelahad contends that even if Mr Shenouda’s evidence was accepted, it would not have altered the outcome because the evidence only goes so far as to show Mr Bader’s intention in respect of hiring Mr Abdelahad, and not Mr Bader’s conduct once the employment commenced.
The difficulty with the submissions now being made as to the relevance of Mr Shenouda’s evidence is that the Arbitrator took into account that evidence in her assessment of Mr Bader’s evidence. The Arbitrator treated that evidence as relevant, without any submission made to her to the contrary.
Mr Shenouda’s evidence, if accepted, tends to lend support to Mr Bader’s evidence and the overall credibility of Mr Bader’s evidence. The Arbitrator determined that Mr Bader did not have reasonable grounds for believing the wages payable for the financial year would have not exceeded $7,500, partly on the basis of her concerns in relation to Mr Shenouda’s evidence.
It was not part of either respondent’s case that Mr Shenouda’s evidence should not be accepted. In the circumstances of this case, where neither the Nominal Insurer, or Mr Abdelahad had adduced any evidence or made any submission that challenged the evidence of Mr Shenouda, the risk of an adverse finding based on an inference drawn from the facts about that evidence would not have been apparent to Mr Bader.
Had Mr Bader been afforded the opportunity, he could have made submissions as to why that evidence was relevant and ought to be accepted. The Nominal Insurer would also have had the opportunity to make submissions, including as to its relevance. The Arbitrator considered that it was relevant and her ultimate determination was in part based on that evidence, which made that evidence important to the final outcome.
I find Mr Bader has been denied procedural fairness by not being afforded the opportunity to address the concerns articulated by the Arbitrator and the inference she drew from Mr Shenouda’s evidence.
Where the denial of natural justice affects the entitlement of a party to make submissions on an issue of fact, especially when the issue is whether the evidence of a particular witness should be accepted, it is difficult for an appellate court to reach a conclusion that compliance with the requirements of natural justice could have made no difference.[36]
[36] Stead v State Government Insurance Commission [1986] HCA 54; 161 CLR 14 (Stead), [10]–[11].
In the circumstances, it cannot be said that if Mr Shenouda’s evidence was accepted, it could not possibly have affected the outcome, in accordance with the test enunciated in Stead.
Mr Bader has established error on the part of the Arbitrator in arriving at her decision. Such a breach of procedural fairnesshas deprived Mr Bader of the possibility of a successful outcome and requires that the Arbitrator’s decision be revoked.
It is therefore not necessary for me to determine the remaining grounds of appeal, and it would not be appropriate for me to do so in circumstances where the matter is to be remitted to another Arbitrator for re-determination.

DECISION

The Certificate of Determination dated 1 August 2018 is revoked.
The matter is remitted to another Arbitrator for re-determination.

Elizabeth Wood

Deputy President

18 December 2018