Fraternity Bowling & Recreation Club Ltd v Sartor
[2004] NSWWCCPD 47
•29 July 2004
WORKERS COMPENSATION COMMISSION
APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:Fraternity Bowling & Recreation Club Ltd v Sartor [2004] NSW WCC PD 47
APPELLANT: Fraternity Bowling & Recreation Club Ltd
RESPONDENT: Josephine Sartor
INSURER:QBE Workers Compensation (NSW) Limited
FILE NUMBER: WCC 11669-2003
DATE OF ARBITRATOR’S DECISION: 28 November 2003
DATE OF APPEAL DECISION: 29 July 2004
SUBJECT MATTER OF DECISION: No transcript; No statement of reasons; Inadequacy of reasons; No ‘Arbitrator File’; Power to Control Procedure; Sections 352, 354 and 367 of the Workplace Injury Management and Workers Compensation Act 1998.
PRESIDENTIAL MEMBER: Dr Gabriel Fleming
HEARING:29 June 2004
REPRESENTATION: Appellant: QBE Workers Compensation In-House Legal Department
Respondent: Whitelaw McDonald Solicitors & Attorneys
ORDERS MADE ON APPEAL: The decision is remitted back to the Arbitrator who determined the matter, for the provision of written reasons for his decision of 28 November 2003, which are to be provided within 14 days of the date of this decision.
The appeal is listed for a hearing before me, on the remaining grounds of appeal, in the week beginning 6 September 2004.
THE APPEAL
On 15 December 2003 Fraternity Bowling and Recreation Club Limited (‘the Appellant Employer’) sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Workers Compensation Commission (‘the Commission’) against a decision, dated 28 November 2003.
The Respondent to the Appeal is Josephine Sartor (‘the Respondent Worker/Ms Sartor’). The Respondent filed submissions in Reply to the appeal on 24 December 2003.
The relevant insurer is QBE Workers Compensation (NSW) Limited.
The appeal concerns a claim by Ms Sartor for weekly compensation and medical expenses in respect of an injury she sustained on 18 November 2002 when employed by the Appellant Employer. She allegedly suffered panic attacks and an anxiety disorder after an incident at work in which she was spoken to in an abusive manner. Ms Sartor lodged a claim for workers compensation on 27 November 2002. The insurer provisionally accepted the claim but has since denied liability.
On 30 June 2003, Ms Sartor lodged an ‘Application to Resolve a Dispute’ in the Commission. A teleconference was held on 3 October 2003, after which the matter proceeded to a face-to-face conciliation/arbitration on 18 November 2003. Ms Sartor gave oral evidence at the arbitration. The parties were unable to reach an agreement, therefore the Arbitrator made a determination.
The Arbitrator gave the decision and oral reasons for the decision immediately following the arbitration ‘ex tempore’. The Registrar advised that no transcript of the arbitral proceedings exists as the disc on which the proceedings were purportedly recorded, was found to be blank. Consequently, there is no record of the oral evidence or the reasons for the decision of the Arbitrator.
The ‘Certificate of Determination’, dated 28 November 2003, records the Arbitrator’s decision as follows:
“1.The Respondent pay to the Applicant compensation at the rate of $270 per week from the 5th of June 2003 to date and continuing under section 40 of the Workers Compensation Act 1987. Such weekly payments to continue in accordance with the provisions of the Act.
2.The Respondent pay the Applicant’s expenses pursuant to Section 60 of the Workers Compensation Act 1987.
3.The Respondent is to lodge with the Commission copies of the reports of Dr Snowden dated the 26th of June 2003 and the unsigned statement of Adam Sartor.
4.The Respondent is to pay the Applicant’s costs as agreed or assessed.”
A document headed ‘Statement of Reasons-Extempore Orders’ was attached to the Certificate of Determination, and stated, “I delivered an extempore judgment orally at the arbitration hearing. A sound recording of the reasons given is available to the parties.”
The matter was referred to me for review on 20 May 2004. A hearing on the appeal was held on 29 June 2004. Both parties were legally represented and further submissions were made. These submissions concerned whether or not a Presidential Member was able to exercise the jurisdiction to review a decision of an Arbitrator where there was no record of the proceedings, including oral evidence, nor any written reasons for that decision.
ISSUES IN DISPUTE
An Arbitrator’s decision should not be disturbed unless it is found, on review, to be affected by an error of law, fact or discretion (Mayne Health Group t/as Nepean Private Hospital v Sarah Sandford [2002] NSW WCC PD 6). The Appellant argued that the Arbitrator erred in:
· Failing to give any or adequate reasons for his decision,
· Failing to give appropriate weight to the evidence, and
· Making decisions on matters that were not in issue.
The Appellant submits that the appeal cannot proceed because of the absence of a transcript. The ramifications of the absence of the transcript were argued as threshold issues by the Appellant, essentially claiming that there would be a denial of procedural fairness if I proceeded to review the Arbitrator’s decision. The Appellant submits, alternatively, that on the evidence before me on review, the decision of the Arbitrator must be revoked and a decision in favour of the Appellant made in its place.
The Respondent submits that the Arbitrator’s decision cannot be overturned or varied given that there is no transcript available and therefore it must be affirmed.
LEAVE
Leave to appeal was granted on 3 June 2004 on the basis that:
·The amount of compensation at issue on the appeal is at least $5,000 (section 352(2)(a) of the Workplace Injury Management and Workers Compensation Act 1998)(‘the 1998 Act’),
·The amount of compensation at issue on the appeal is at least 20% of the amount awarded in the decision appealed against (section 352(2)(b) of the 1998 Act), and
·The appeal was lodged within 28 days of the Arbitrator’s Certificate of Determination (section 352(4) of the 1998 Act).
THE NATURE OF REVIEW UNDER SECTION 352 OF THE 1998 ACT
Commission Practice
It is the Commission’s policy, set out in the Guideline entitled ‘The Practice of the Conciliation/Arbitration Process in the Workers Compensation Commission’, to record arbitral proceedings. Despite this, Presidential Members have been confronted with a number of appeals where the Registrar has been unable to provide a transcript of the arbitral proceedings, see: Pied Piper Pre-School Association (Wallerawang) Incorporated v Woolsey [2004] NSW WCC PD 5; Aluminium Louvres & Ceilings Pty Ltd v Zheng [2004] NSW WCC PD 26; Divine v Coles Supermarkets Australia Pty Ltd [2003] NSW WCC PD 28; Australian Traineeship System (Cargill Meat Processes Pty Limited) v Ramage [2004] NSW WCC PD 31; Wyong Shire Council v Paterson [2004] NSW WCC PD 45).
Evidence on Review
The absence of a transcript of the Arbitration may be fatal to the conduct of a fair review on appeal where no written reasons have been provided. The task of the Presidential Member is to ‘review’ the Arbitrator’s decision, wherever it is possible to do so, either ‘on the papers’ or after an oral hearing. Where an Arbitrator has erred in making the decision it may not be possible for a Presidential Member to proceed to substitute a new decision (in accordance with section 352 of the 1998 Act) if the evidence on appeal is inadequate. This has frequently occurred because the evidence was not properly filed or given in accordance with the Rules or because it was not properly recorded in the arbitral proceedings. In these circumstances, to grant leave for fresh evidence to be given on appeal can lead to the review becoming a complete second hearing of the dispute (Barbour v BHP Steel Pty Limited [2004] NSW WCC PD 42). This is not the intention of the statutory scheme. The particular circumstances of each case will influence the course of the review.
In this matter the decision was given ex tempore, and there is neither a transcript of the oral evidence nor of the submissions given at the arbitration. The legal representatives tell me that the worker gave evidence and was cross-examined. In addition, the file containing a copy of all the relevant documents, which is made by Commission staff for the Arbitrator, cannot be located. As a result I am not confident that all of the documentary evidence that was before the Arbitrator is now before me, in the original Commission file, on appeal. Frequently documents are handed up at the arbitration and remain on the Arbitrator’s file, without being transferred to the original Commission file.
The repeated failure to produce transcripts and files for the purpose of Presidential review is an unsatisfactory state of affairs. This is a matter of ongoing concern that should be again brought to the attention of the Registrar.
Arbitrator’s Duty to Give Reasons
An Arbitrator has a statutory duty to provide adequate reasons for decision. Part 9 of Chapter 7 of the 1998 Act provides for a scheme for the resolution of workers compensation disputes by the Commission. Section 294 of the 1998 Act provides that:
“294Certificate of Commission’s Determination
(1)If a dispute is determined by the Commission, the Commission must as soon as practicable after the determination of the dispute issue the parties to the dispute with a certificate as to the determination.
(2)A brief statement is to be attached to the certificate setting out the Commission’s reasons for the determination.”
An Arbitrator’s decision must be based on logically probative evidence and supported by adequate written reasons, which apply the relevant law to the facts of the instant case. The Workers Compensation Commission Rules 2003 (‘the Rules’) must be read together with the provisions of the Act. Rule 70 provides that:
“When informing itself on any matter, the Commission is to bear in mind the following principles:
(a)evidence should be logical and probative,
(b)evidence should be relevant to the facts in issue and the issues in dispute,
(c)evidence based on speculation or unsubstantiated assumptions is unacceptable,
(d)unqualified opinions are unacceptable.”
Rule 73 provides as follows:
“73Certificates of Determination
(1)A statement of the Commission’s reasons referred to in section 294(2) of the 1998 Act is to include:
(a) the findings on material questions of fact, referring to the evidence or other material on which those findings were based, and
(b) the Commission’s understanding of the applicable law, and
(c) the reasoning processes that lead the Commission to the conclusions it made.
(2)Without limiting subrule (1), the reasons set out in a statement referred to in subrule (1) are to be stated sufficiently (in the opinion of the Commission) to make the parties aware of the Commission’s view of the case made by each of them.”
It is not necessary for an Arbitrator to give lengthy reasons for their decision. Provided that Rule 73 is complied with, the reasons will be adequate, notwithstanding they do not set out the statutory provisions at length, nor specify and examine all relevant judicial authority on the matters decided.
Justice Kirby in Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Palme [2003] HCA 56 discussed the duty to give reasons, at paragraph 64 of his judgment, thus:
“The more significant the decision, the clearer the duty may be, the clearer the reasons should be and the clearer the consequences will be for the breach. Some decisions cry out for a clear explanation. Especially is this so where the legislature has recognised the need and imposed a duty to give reasons and where the decision is very important for the person affected and for others close to that person. In such a case, the duty to give reasons is one, which this Court should uphold. The just, rational and lawful administration of the law is at stake.”
And, at paragraph 105 of his judgment:
“Rationale for reasons: The rationale of the obligation to provide reasons for administrative decisions is that they amount to a ‘salutary discipline for those who have to decide anything that adversely affects others’. They encourage a ‘careful examination of the relevant issues, the elimination of extraneous considerations, and consistency in decision-making’. They provide guidance for future like decisions. In many cases they promote the acceptance of decisions once made. They facilitate the work of the courts in performing their supervisory functions where they have jurisdiction to do so. They encourage good administration generally by ensuring that a decision is properly considered by the repository of the power. They promote real consideration of the issues and discourage the decision-maker from merely going through the motions. Where the decision affects the redefinition of the status of a person by the agencies of the State, they guard against the arbitrariness that would be involved in such a redefinition without proper reasons. By giving reasons, the repository of public power increases ‘public confidence in, and the legitimacy of, the administrative process’.
In the context of more general developments in Australian administrative law, facilitated by legislative provisions enacted by the Parliament requiring the giving of reasons, the foregoing explanations and justifications are reinforced both by Australian judicial authority and by expert administrative agencies. Similar points have been made in academic writing both in Australia and overseas.”
Ex Tempore Reasons
The standard by which adequacy of reason must be determined is relative to the nature of the decision itself and the decision-maker (see discussion in Mayne Health Group t/as Nepean Private Hospital v Sandford [2002] NSW WCC PD 6). The Commission is not a court and proceedings are conducted with as little formality and technicality as the proper consideration of the matter permits (see section 367 of the 1998 Act, Objectives of Commission). This approach is equally applicable to the preparation of statements of reasons or the giving of ex tempore reasons. The Commission encourages the practice of Arbitrators giving ex tempore reasons, where it is fair and appropriate to do so. This provides the parties with a timely outcome of their dispute. As with written reasons, the ex tempore reasons must be capable of adequately conveying to the parties the basis upon which the Arbitrator came to his or her decision.
Where reasons are given ex tempore, recorded and made available to the parties, Section 294 (2) and Rule 73 will be complied with, subject to the reasons being adequate. However, where there is no record of the reasons, and therefore nothing to be incorporated, by reference, in the Certificate of Determination, then the Certificate of Determination, issued under Section 294(2) of the 1998 Act, does not comply with Rule 73. There is, in effect, no statement as referred to in Rule 73. Failure to provide adequate reasons for decision is not only a breach of the Arbitrator’s statutory and common law obligations; it is an error of law (Sydney Water Corporation Ltd v Aqua Clear Technology Supreme Court of NSW, Rolfe J, (P/L 55047/96) 17 December 1996; Dennis Willcox Pty Limited v Federal Commissioner of Taxation (1988) 79 ALR 267).
In this matter, the Arbitrator is said to have given reasons ex tempore. However the reality is the parties do not have a record of the reasons, the Commission does not have a record of the reasons, and there is no record of the reasons for the purpose of review by a Presidential Member. This amounts to a constructive failure to give reasons, as required by section 294 and Rule 73. It matters not whether this failure was occasioned by human error in the operation of the sound recording equipment, administrative failure or technical failure. Ultimately, it must be said that the Arbitrator erred in failing to provide reasons for the decision in accordance with the legislative requirements.
Transcript and Presidential Review
A critical feature of the dispute resolution scheme found in Part 9 of Chapter 7 of the 1998 Act is the provision of a right of appeal against the decision of an Arbitrator, subject to express thresholds, to a Presidential Member. The right to Presidential review ensures Arbitral decisions are fair, just and made according to law. Where no reasons for decision are given, the right of appeal to a Presidential Member may be defeated. The ‘supervisory’ function of Presidential review, in the particular circumstances of the case, may be denied; Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247.
In this matter, as noted above, there is neither transcript of the evidence nor reasons for decision. I am also not confident that all the documentary evidence that was before the Arbitrator is before me on review. The latter view is reinforced by the terms of the Arbitrator’s orders. I have no idea why the Arbitrator ordered that this evidence be filed, after making his determination. The relevance of the particular medical report and an unsigned statement by the worker is not clear to me. Neither document appears in the Commission file. Whether or not the constructive failure to give reasons for the decision also resulted in the Arbitrator’s failure to exercise his statutory duty to determine the dispute fairly and lawfully on the other grounds claimed, is unknown in the circumstances of this case (Section 294 of the 1998 Act; YG & GG v Minister for Community Services [2002] NSWCA 247; Absolon v NSW TAFE [1999] NSWCA 311).
The result in this case is that it is impossible to review the decision on the basis of the further errors alleged by the Appellant, namely, failing to give appropriate weight to the evidence, and making decisions on matters that were not in issue in the dispute.
The nature of the error
The nature of the error made by the Arbitrator makes the task of review, on appeal, problematic. As discussed above, review by a Presidential Member is not intended to become a hearing de novo. It is not appropriate for all of the evidence to be heard afresh, on appeal.
The critical threshold issue for the parties in this appeal is the provision of reasons for the decision. This is not to deny that substantive issues are raised by the Appellant on the appeal, and that they may remain issues in dispute if the Arbitrator’s reasons for decision were to be known. The Appellant proposed that I reconstruct the Arbitrator’s reasons on the basis of its legal representative’s notes of the Arbitration. Clearly any steps along that path would require that I then hear from the Respondent as to the alleged reasons, and make a decision on what I find to be the reasons. This is not a legitimate forensic exercise and would yield nothing but a poor, subjective and unreliable view of what the Arbitrator intended. However the difficulty presented to the Appellant by the lack of reasons remains.
Alternatively, the Appellant Employer submits that I should substitute a decision in its favour. I am also not satisfied that this is a fair and reasonable way to proceed.
Whether the failure to provide reasons for the decision in this case amounts to a jurisdictional error must be considered in the context of the statutory scheme. McHugh J in Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Palme [2003] HCA 56, (at paragraph 55) stated as follows:
“. . . Jurisdiction is the authority to decide. It is not easy to accept the notion that a decision is made without authority because subsequently the decision-maker fails to give reasons for the decision. Nevertheless, it is always possible that a statutory scheme has made the giving of reasons a condition precedent to the validity of a decision. If it has, a decision that does not give reasons will be made without authority. Whether a scheme has that effect is determined by applying the principles stated by this Court in Project Blue Sky Inc v Australian Broadcasting Authority [(1998) 194 CLR 355]. In Project Blue Sky, the majority of Justices rejected the traditional distinction between ‘mandatory’ and ‘directory’ requirements, saying that ‘[a] better test for determining the issue of validity is to ask whether it was a purpose of the legislation that an act done in breach of the provision should be invalid.’ In determining the purpose of the legislation, regard has to be had to ‘the language of the relevant provision and the scope and object of the whole statute.’”
The Objectives of the Commission are set out in section 367 of the 1998 Act, as follows;
“367 Objectives of the Commission
(1) The Commission has the following objectives:
(a)to provide a fair and cost effective system for the resolution of disputes under the Workers Compensation Acts,
(b)to reduce administrative costs across the workers compensation system,
(c)to provide a timely service ensuring that the workers entitlements are paid promptly,
(d)to create a registry and dispute resolution service that meets worker and employer expectations in relation to accessibility, approachability and professionalism,
(e)to provide an independent dispute resolution service that is effective in settling matters and leads to durable agreements between the parties in accordance with the Workers Compensation Acts, to establish effective communication and liaison with interested parties concerning the role of the Commission.
(2)In exercising their functions, the members of the Commission must have regard to the Commission’s objectives.”
Section 294 requires the Commission to issue a Certificate of Determination, and attached reasons, “as soon as practicable after the determination of the dispute”. Arbitral proceedings are not bound by the rules of evidence, are informal and non-technical (see section 354 of the 1998 Act set out below). Arbitrators must use their best endeavours to bring the parties to a settlement of the dispute, which is acceptable to all of them, before proceeding to make a determination (section 355 of the 1998 Act). In practice these provisions, and the Commission’s procedural guidelines, operate to ensure that the majority of disputes in the Commission are resolved by consent, without the need for a written statement of reasons to issue. Where a dispute continues to present a real contest between the parties the Arbitrator is encouraged to give the decision and reasons promptly. This will often result in the giving of ex tempore reasons, with inherent risks (as demonstrated in this matter) involved. The decision of the Arbitrator is final, subject to limited rights of appeal. Given this statutory scheme and the mixed nature of the powers given to Arbitrators, I am not satisfied that the legislature intended that the giving of reasons be a condition precedent to the validity of an Arbitrator’s decision. The failure to provide any, or adequate, reasons for decision, on its own, is not an error going to jurisdiction. This is so even considering it is more likely an administrative decision-maker will fall into jurisdictional error than a court (Absolon v NSW TAFE [1999] NSWCA 311).
Directions and Future Conduct of the Proceedings
The failure in this case, to give reasons, need not deprive the Appellant with a right of appeal. The substantive issues in the appeal have yet to be argued. While Part 9 of Chapter 7 of the 1998 Act does not expressly provide that an Arbitrator’s decision may be remitted for the purpose of providing written reasons, the power of a Presidential Member to give directions, in section 352 of the 1998 Act, is broad. Section 352(7) of the 1998 Act provides as follows;
“352 Appeal against decision of Commission constituted by Arbitrator
(7) On appeal, the decision may be confirmed or may be revoked and a new decision made in its place.
Alternatively, the matter may be remitted back to the Arbitrator concerned, or to another Arbitrator, for determination in accordance with any decision or directions of the Commission.
(8) In this section, decision includes an award, interim award, order, determination, ruling and direction.”
The procedure to be adopted on review is a matter for the Presidential Member. It must be exercised in accordance with the objectives of the Commission (section 367 of the 1998 Act) and with section 354 of the 1998 Act, which provides as follows:
“354Procedure before Commission
(1) Proceedings in any matter before the Commission are to be conducted with as little formality and technicality as the proper consideration of the matter permits.
(2) The Commission is not bound by the rules of evidence but may inform itself on any matter in such manner as the Commission thinks appropriate and as the proper consideration of the matter before the Commission permits.
(3) The Commission is to act according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms.
(4) Proceedings need not be conducted by formal hearing and may be conducted by way of a conference between the parties, including a conference at which the parties (or some of them) participate by telephone, closed-circuit television or other means.
(5) Subject to any general directions of the President, the Commission may hold a conference with all relevant parties in attendance and with relevant experts in attendance, or a separate conference in private with any of them.
(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.
(7) An assessment or determination is to be made by the Commission having regard to such information as is conveniently available to the Commission, even if one or more of the parties to the assessment or determination proceedings does not co-operate or ceases to co-operate.
(8) In proceedings before a court with respect to a claim for work injury damages (other than proceedings under section 235A or 235C or under the Crimes Act 1900 with respect to fraud), evidence of a statement made in proceedings before the Commission is not admissible unless the person who made the statement agrees to the evidence being admitted.”
Where fairness to the parties will be advanced by referral of the matter back to the Arbitrator who determined the matter in order that written reasons be provided, this should be effected. The parties are entitled to exercise their right of appeal to a Presidential Member. Without a record of the reasons for the decision they are frustrated in that right. The alternative is to set aside the Arbitrator’s decision and remit the matter to a different Arbitrator for determination afresh. This would be a costly and time consuming exercise and is not consistent with the Commission’s objectives.
To this end I propose to review the Arbitrator’s decision in two stages. I have considered the threshold ground of appeal that concerns the failure to provide reasons for decision. Having found that no reasons have effectively been provided, I propose to remit the matter back to the Arbitrator for this to occur. I will then consider the remainder of the grounds of appeal, should they remain on foot after the Arbitrator’s reasons have been issued.
DECISION
The decision is remitted back to the Arbitrator who determined the matter, for the provision of written reasons for the decision of 28 November 2003, within 14 days of the date of this decision.
The appeal is listed for hearing before me, on the remaining grounds of appeal, in the week beginning 6 September 2004.
Dr Gabriel Fleming
Deputy President
29 July 2004
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF DR GABRIEL FLEMING, DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
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