Hardman and INCO Ships Pty Ltd
[2006] AATA 468
•30 May 2006
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2006] AATA 468
ADMINISTRATIVE APPEALS TRIBUNAL )
) No S2005/6
GENERAL ADMINISTRATIVE DIVISION ) Re FINLAY MURDOCH HARDMAN Applicant
And
INCO SHIPS PTY LTD
Respondent
DECISION
Tribunal Deputy President D G Jarvis Date30 May 2006
PlaceAdelaide
Decision
The tribunal sets aside the decision under review, and:
(a) in substitution for that decision, decides that the respondent is liable to pay compensation for the injury to the applicant’s left knee;
(b) remits the matter to the respondent for determination in accordance with these reasons;
(c) reserves liberty to apply within fourteen days in relation to the costs of the proceedings; and
(d) orders that in the absence of any such application the respondent pay the costs of the proceedings.
D G Jarvis
(Signed)
Deputy President
CATCHWORDS
COMPENSATION – Seafarers compensation – injury to left knee – aggravation of degenerative condition – omissions and misstatements in form completed by applicant when obtaining certificate of medical fitness from doctor – failure to disclose other medical conditions before joining ship – persisting with duties despite increasing pain in knees – continuing to use stairs instead of lift – employment contributed in a material degree to aggravation of degenerative condition of left knee – meaning of contribution “in a material degree” – injury not caused by serious and wilful misconduct of applicant – authorities as to misconduct in unfair or summary dismissal cases not determinative of serious and wilful misconduct under workers’ compensation legislation – decision under review set aside.
Seafarers Rehabilitation and Compensation Act 1992 (Cth), ss 3 and 29(3)
Safety, Rehabilitation and Compensation Act 1988 (Cth)
Barker v Mitsubishi Motors Australia Pty Ltd [2003] SAIR Comm 59
Britax Rainsfords Pty Ltd v Jones (2001) 109 IR 381
Chappell v Hart (1998) 195 CLR 232
Comcare v Canute [2005] FCAFC 262
Commonwealth v Beattie (1981) 35 ALR 369
Concut Pty Ltd v Worrell (2000)176 ALR 693
Fitzgerald v Penn (1954) 91 CLR 268
Hollingsworth v Commissioner of Police (No. 2) (1999) 47 NSWLR 151
Ilsley v Wattyl Australia Pty Ltd (1997) 75 FCR 1
Johnson v Marshall Sons & Co, Ltd [1906] AC 409
Kennelly v Incitec Ltd [1998] FCA 1470
March v E & MH Stramare Pty Ltd (1991) 171 CLR 506
Medlin v State Government Insurance Commission (1995) 182 CLR 1
North v Television Corporation Ltd (1976) 11 ALR 599
Paparella v WorkCover GIO Australia (Kangaroo Island Ferries Pty Ltd) [1998] SAWCT 57
Richards v Faulls Pty Ltd [1971] WAR 129
Roncevich v Repatriation Commission (2005) 85 ALD 257
Suters v Australian Postal Corporation (1992) 28 ALD 320
Treloar v Australian Telecommunications Commission (1990) 26 FCR 316
Wiegand v Comcare (2002) 72 ALD 795
REASONS FOR DECISION
30 May 2006 Deputy President D G Jarvis 1. The applicant, Finlay Murdoch Hardman, was employed by the respondent, Inco Ships Pty Ltd, as a caterer and a trainee integrated rating on the vessel Iron Chieftain, which plied continuously between Whyalla and Port Kembla. He worked on the vessel for one continuous period or “swing” commencing on or about 17 May 2004 and terminating on 20 July 2004.
2. He had previously injured his right knee in 2003, when working for a different employer. Soon after he commenced his swing on the Iron Chieftain, his right knee became painful. As a result he began to favour that knee by putting more weight on his left leg, and his left knee then became increasingly painful. After he completed his swing he received medical treatment which included an arthroscopy of the left knee. He claimed compensation from Inco Ships under the Seafarers Rehabilitation and Compensation Act 1992 (Cth) (the Seafarers Act).
3. Inco Ships rejected the claim, and this rejection was confirmed on reconsideration. Mr Hardman has applied to this tribunal for review of the reconsideration decision.
Issues before the tribunal
4. The issues before the tribunal are as follows.
(a)Did the symptoms involving the left knee result from an incident during the swing when Mr Hardman slipped whilst descending stairs and struck his left knee?
(b)Did the symptoms involving the left knee result from an aggravation of a pre-existing degenerative condition, and if so, was that aggravation contributed to in a material degree by the employment?
(c)If the symptoms from the knee constituted the aggravation of a pre-existing condition, was the aggravation contributed to in a material degree by the employment?
5. One of the grounds on which Inco Ships rejected Mr Hardman’s claim was that he had not given written notice of his injury as soon as practicable after he became aware of it, as required by paragraph (a) of subsection 62(1) of the Seafarers Act. However, this issue was not raised by the respondent’s Statement of Issues, and at the hearing before me counsel for Inco Ships confirmed that this matter was no longer in issue.
Background
6. Mr Hardman was born on 30 September 1955. He left school at the age of fifteen. He has worked in the shipping industry since 1989, mostly as a steward.
7. Between 2001 and 2004 he worked as a stevedore with P & O Ports Ltd. This work included loading cars on to ships for export, and entailed kneeling down in order to lash the cars for transportation. He would kneel down to do this, and said that he would be up and down hundreds of times a day in carrying out this work. He also worked unloading other products, such as steel and fertilizers, and some of his work involved heavy lifting.
8. He said that he fractured his left tibia in 1985 and that entailed a dislocation of his left ankle. He was off work for four months. He said that he recovered from this injury, and it has not caused him much of a problem.
9. In about 1990 he started getting twinges in his back when he was working as a steward on the Able Tasman. He said that his back symptoms never go away, and he gets sciatic nerve pains down his left side.
10. In 2003 he experienced pain in his right knee which he attributed to his stevedoring work. He had physiotherapy initially, and then was referred by his general practitioner to Dr Brook, an orthopaedic surgeon, who carried out an arthroscopy. He was able to return to work about two months after the operation, and continued to work as a stevedore. However, his duties were changed, and he no longer engaged in lashing down cars. Instead, he co-ordinated the movement of gangs, and located particular vehicles that had to be loaded on to the vessel concerned for export.
11. Later he went to Perth and undertook a trainee integrated rating (TIR) course.
12. During his swing from May to July 2004, he worked as a steward in the mornings, from 7.00 am until about 12.30 pm. This work entailed cleaning the mess room, alleyways, stairwells, toilets, conference rooms, bars and television rooms. It included mopping, vacuuming, cleaning, washing dishes, and getting out stores.
13. From about 1.00 pm each day for about two hours Mr Hardman would work on TIR duties. This work was very diverse, and included washing down the ship, greasing conveyor belts, painting, chipping off old paint, shovelling spillages onto the conveyor belt, hosing and bringing equipment to where it was needed. His work was done on all of the decks, and he used the stairs or ladders in the ship many times each day.
14. He said that he had no difficulties for the first couple of weeks of the swing, but then he started to get sharp pains in his right knee. He said he was able to control this by taking anti-inflammatory medication, which he had taken with him when he commenced the swing.
15. As mentioned above, he later began to experience some twinges or pain in his left knee, and this knee became progressively worse.
16. Mr Hardman said that he spoke to the bosun, Mr Boles, and indicated that he was having trouble doing some things, such as kneeling. He said that after that the bosun would not ask him to do things that would be too hard for him, such as tasks involving kneeling, but otherwise he carried on with his duties.
17. On 7 July 2004 he completed an employee notification form. He said he did this at the suggestion of the captain. This form reads:
“Soreness stiffness and swelling in left knee. Has become progressively worse over the last few weeks. Will be seeking medical advice during my leave.” (Exhibit A1, T3)
18. Mr Hardman said that his duties involved working on all six decks of the Iron Chieftain. He said that using stairs and ladders on the ship made his symptoms worse. As a result, he would use the lift when it was convenient to do so. However, on occasions the lift was not available on the floor where he was working, and to get his work done he would use the stairs rather than wait for the lift. Further, on other occasions he worked in an area known as the tunnel, where access between decks was only by ladder. He said that he would use the stairs between half a dozen and twenty times a day, and twelve times a day on average.
19. When he was later asked by Dr Brook whether he could remember a specific incident when he hurt his left knee, Mr Hardman said he recalled one occasion when he missed his step and struck his left knee on some machinery. He said that he sustained some bruising, but did not think much of this incident at the time, and that he only mentioned this because of Dr Brook’s inquiring of him. He cannot recall any other specific incident where he might have injured his knee.
20. After completing the swing, he saw his general practitioner, Dr Chambers, two days later. He was then referred to Dr Brook, who saw him on 26 July 2004. Dr Brook arranged for an MRI examination, and then performed an arthroscopy on the left knee in August 2004.
21. He said that apart from his duties on the Iron Chieftain, he had not done anything else that contributed to the problems with his left knee.
22. Mr Hardman signed a claim form dated 8 August 2004 (exhibit A1, T28). In answer to question 11 on the form reading:
“When did the injury/illness occur or when did you first become aware of the injury/illness?”
Mr Hardman inserted “30/6/04” in the box for the date, and “morning’’ in the box for the time. He described the nature of the injury as “knee pain” and said that the left and right knees were affected. In answer to question 22, reading “Please describe the events that led to your injury/illness, including unexpected events”, he said:
“Noticed pain in right knee approx. 2 wks after joining. Began to favour that knee and then noticed pain in left knee after a while which became progressively worse. Decided to report it to Captain but was able to continue to carry out my duties by taking anti-inflammatories until end of swing. Duly sought medical advice when I got home. Was referred to specialist.”
In describing the equipment, substance or actions that directly contributed to his illness or injury, he said “Having to climb and descend stairs”.
23. Mr Hardman did not work for about one year after the arthroscopy, but worked as a cook on a dredge from October 2005 until just before Christmas that year.
24. Both Mr Boles, the bosun on the Iron Chieftain, and the captain on duty at the date of the employee notification form, Captain Briggs, gave evidence which did not differ significantly from Mr Hardman’s evidence as narrated above. I will refer below to the relevant differences. Apart from these differences, the above facts were not contested. I accept the evidence narrated above.
Legislation
25. Subsection 26(1) of the Seafarers Act provides relevantly as follows:
“(1)If an employee suffers an injury that results in his or her death, incapacity for work, or impairment, compensation is payable for the injury.
…
(3)Compensation is not payable for an injury that is not intentionally self-inflicted but is caused by the serious and wilful misconduct of the employee, unless the injury results in death, or serious and permanent impairment.”
26. This section must be interpreted by referring to a number of interlinked definitions in s 3 of the Seafarers Act. The relevant definitions are as follows:
(a) the word “injury” is defined to mean:
“(a) a disease; or
(b)an injury (other than a disease) suffered by an employee, being a physical or mental injury arising out of, or in the course of, the employee’s employment; or
(c)an aggravation of a physical or mental injury (other than a disease) suffered by an employee (whether or not that injury arose out of, or in the course of, the employee’s employment), being an aggravation that arose out of, or in the course of, that employment; …”
(b) the word “disease” is defined to mean:
“(a) any ailment suffered by an employee; or
(b) the aggravation of any such ailment;
being an ailment or an aggravation that was contributed to in a material degree by the employee’s employment);”
(c) the word “ailment” is defined to mean:
“any physical or mental ailment, disorder, defect or morbid condition (whether of sudden onset or gradual development);” and
(d) the word “aggravation” is defined to include “acceleration or recurrence”.
There is no definition of “material” or “in a material degree”.
Consideration
27. Counsel for Inco Ships, Mr Manuel, submitted that I should not accept the veracity of the evidence given by Mr Hardman, and that I should find that he had had symptoms in his left knee before he was employed by Inco Ships, and that he is now dishonestly claiming compensation for symptoms which pre-dated his employment and were the consequence of a degenerative condition of his left knee. He pointed out that Mr Hardman had admitted to two convictions for making fraudulent claims for social security benefits. He also referred to a discrepancy between Mr Hardman’s evidence and the history he provided to Dr Brook as to the date of the onset of symptoms in the right knee, and to the very specific time and date of injury stated in the claim form, which was also inconsistent with his evidence.
28. Counsel further referred to a medical examination report form (exhibit A3) that Mr Hardman had completed when seeking a certificate of medical fitness from one Dr Macris on 17 January 2004. Mr Hardman acknowledged that this certificate was required before he would be able to undertake duties at sea, and admitted that he understood that the certificate of fitness would be provided to the Australian Maritime Safety Authority. Counsel drew attention to the following questions and answers in the medical examination report form:
“(a)Have you been absent from work due to sickness or injury for more than 14 consecutive days over the past two years? A. No.
(b)Have you ever had any surgical or chiropractic treatment? A. Yes. Plate in left leg after breaking tibia, 1985.
(c)Are you taking any medications at present? A. No.
(d)Are you aware of ANY circumstances regarding your health which may interfere with the satisfactory discharge of the duties of your designated position/occupation? A. No.
(e)Does the applicant have normal use of the legs and arms? A. Yes.
(f)Are the bones and joints free of any defects? A. Yes.
(g)Are joint movements in normal range and pain-free? A. Yes.
(h)Any restriction or pain in movement of spine? A. No.”
In addition, the answer “no” was given to a question of whether Mr Hardman had ever had (amongst other conditions) sciatica or other back trouble, any form of arthritis or stiff joints, back pain or joint injuries.
29. The above answers were incorrect. Mr Hardman had been absent from work for about two months following his right knee injury in 2003, for which he had an arthroscopy. He omitted to disclose the arthroscopy. He had also had some back pain with associated sciatica, and admitted that he was taking anti-inflammatory medication for this (although, he said, only spasmodically), and had had problems with his right knee for which he received physiotherapy treatment in the month before he commenced his swing with Inco Ships. Counsel further submitted that Mr Hardman should have realised, from the change in his duties with P & O Ports Ltd, that his right knee condition would have interfered with the satisfactory discharge of his duties on the Iron Chieftain.
Cause of symptoms in left knee
30. The matters referred to in paragraphs 26 to 28 above are relevant not only to the issue of credibility, but also to the issue of whether Mr Hardman’s left knee injury was caused by serious and wilful misconduct. I will refer to the latter issue later in these reasons. I now turn to the issue of the causation of the condition of the left knee.
31. Counsel for Inco Ships referred to records of two earlier events which described physiotherapy treatment to the left knee. On 28 May 2002, according to notes kept by the Semaphore Road Physio and Sports Injury Clinic, Mr Hardman experienced pain in the left knee “driving heavy clutch”. The notes indicate that this caused swelling, but the activity ceased and the knee got better.
32. The second references to physiotherapy treatment on the left knee appeared in the Clinic’s notes of attendances on 19 and 22 April 2004. These notes, together with a note of an attendance a few days earlier on 15 April 2004 relating to the right knee, were made by Ms Lucinda Harper who was employed at the Semaphore Road Clinic. The notes on the later two dates of 19 and 22 April 2004 refer in each case to the left knee, and refer to the history obtained by Ms Harper and her examination, and suggest that the knee was symptomatic. The notes of 22 April 2004 indicate that Mr Hardman had stirred up his knee, and slipped and twisted it.
33. As to the entries on 19 and 22 April 2004, Ms Harper gave evidence that the reference to the left knee was incorrect, and that the entries should have referred to the right knee, and related to follow-up treatments to the treatment she provided on 15 April 2004, where she correctly referred to the right knee. Ms Harper based her evidence partly on her recollection, but also on the contents of her notes; she said that the later two entries were typical follow-on assessments, whereas if the entry on 19 April 2004 had been intended to relate to a new injury to the left knee, it would have included more detail in the subjective assessment of such matters as how the injury had occurred and the area of pain, as well as more diagnostic tests in the objective examination. She was reinforced in this conclusion by the nature of her entry on 27 August 2004, where she saw Mr Hardman for the first time in connection with his left knee, which was then a new injury as far as she was concerned. I accept Ms Harper’s evidence. She appeared to be embarrassed at having to admit her error. It is regrettable that she made this error. However, she was definite in stating that an error had been made, and it was not suggested that she had any motive which might have led to her giving false evidence to support the applicant’s claim.
34. Mr Hardman gave evidence about the physiotherapy treatment in May 2002. He said that he had been learning to drive a truck which had a heavy clutch. He admitted that he had had difficulty with his left knee at this time, but said that when he stopped that activity his knee recovered, and he did not need any further treatment on it, and it did not cause him any further difficulties until his left knee became painful during his subsequent duties on the Iron Chieftain. I note that there is no other reference in the physiotherapy notes or in any other records in evidence that is inconsistent with Mr Hardman’s evidence. I accept that he did not have any symptoms in his left knee in the period after the 2002 episode and prior to the commencement of his symptoms during the swing on the Iron Chieftain.
35. When Dr Brook performed the arthroscopy of the left knee in August 2004, he observed a tear in the meniscus. He estimated that from its appearance, the tear would have occurred somewhere between two to three months and twelve months previously. Mr Manuel pointed out that this would make it more likely that the tear had occurred prior to the swing on the Iron Chieftain. He further submitted that the incident when Mr Hardman slipped was on his own description a minor incident, and was unlikely to have caused the meniscal tear.
36. My analysis of Mr Hardman’s evidence and the medical evidence has led me to find that the meniscal tear is of little relevance to the symptoms which developed in the left knee. Dr Brook explained that the meniscal tear was likely to have caused a feeling of instability in the knee, that is, a feeling that the knee was likely to give way, rather than pain. He added that the degenerative condition of the knee was, however, likely to cause pain. I note that when describing his symptoms in evidence, Mr Hardman did not refer to instability in the knee, but rather referred to pain in the knee. It appears from Dr Brook’s evidence that this symptom would have been caused by the degenerative condition of the knee, and not by the torn meniscus.
37. I also note that Inco Ships had obtained a medical report dated 12 September 2005 from another orthopaedic surgeon, Dr Robert Bauze. A copy of his report is included as T48 in exhibit A1. In paragraph 9 of this report, Dr Bauze says:
“The tear of the meniscus was negligible and I consider it played no part in his symptoms or subsequent effect on mobility.”
Earlier in his report, Dr Bauze makes it clear that he considers that Mr Hardman had a pre-existing degeneration of the medial femoral condyle of the left knee, and that the climbing of steep ladders or stairs on the Iron Chieftain caused or aggravated the pre-existing degeneration in both knees, particularly the left. He added that aggravation of the degeneration causes pain and swelling, particularly with squatting and with negotiating stairs and ladders.
38. In any event, whilst it appears unlikely that the slipping incident described by Mr Hardman caused the tear in the meniscus, both Dr Brook and Dr Chambers said in evidence that such tears can on occasions occur without a severe trauma or twisting injury. Further, the earlier of Dr Brook’s estimates of the age of the tear would mean that the tear might have occurred during the swing on the Iron Chieftain.
39. I think it likely, and find, that Mr Hardman suffered an aggravation of a pre-existing degenerative condition of his left knee during the swing. I note that, like Dr Bauze, Dr Brook also considered that Mr Hardman had degenerative changes in his left knee, and that the arthroscopy entailed not only a partial medial meniscectomy but also a chondroplasty. Dr Bauze comments in paragraph 3 of his above report that operating on the left knee with chondroplasty may have temporarily aggravated the condition of degeneration which had already been aggravated by the work on the Iron Chieftain, and that chondroplasty is frequently associated with temporary synovitis which takes some time to settle down, in comparison to meniscal surgery which normally produces little reaction.
40. There is force in Mr Manuel’s submissions regarding what appear to be blatant omissions or misstatements in the medical examination report submitted to Dr Macris. As mentioned above, the reference to the specific time and date of 30 June 2004 as the date of injury is inconsistent with Mr Hardman’s evidence. There are also inconsistencies between his evidence as to the date when symptoms first occurred in the right knee and the reference to this in the history obtained by Dr Brook. It is also of concern that when he saw Dr Chambers on the first occasion after completing the swing Mr Hardman requested for his own purposes a medical certificate to the effect that he was not incapacitated for work. His admitted record of offending indicates that he is prepared to be untruthful in order to gain financial advantage.
41. However, the employee notification form, T3, appears to be a contemporaneous document which is consistent with the evidence given by Mr Hardman, and with the history he gave to his doctors at the time when he sought treatment. The narrative description in paragraph 22 of the claim for compensation form is also consistent with the above matters insofar as the left knee condition is concerned. Further, Mr Hardman’s account of the development of his symptoms is consistent with the medical evidence as to the likely effect of the relevant activities on the pre-existing degenerative condition of Mr Hardman’s left knee. All of these matters lead me to accept Mr Hardman’s evidence, notwithstanding the contrary submissions on credibility made by Mr Manuel.
42. In Commonwealth v Beattie (1981) 35 ALR 369, at 378, Evatt and Sheppard JJ said that “pain brought on by work activity may constitute an aggravation of a pre-existing injury, even though no pathological change takes place.” I am satisfied that Mr Hardman’s employment by Inco Ships contributed in a material way to the aggravation of a pre-existing degenerative condition of the left knee, and that this resulted in incapacity for work and the incurring of medical expenses.
43. In reaching this conclusion, I have had regard to a number of authorities relating to the required causative connection between the disease or condition on which an employee’s claim is based and his or her employment.
44. In Treloar v Australian Telecommunications Commission (1990) 26 FCR 316, the Full Federal Court (Sweeney ACJ, Sheppard and Foster JJ) referred to the use of the word “material” in earlier authorities relating to what would be sufficient for employment to constitute a contributing factor to the onset of a disease for the purposes of the Compensation (Commonwealth Government Employees) Act 1971 (Cth). Their Honours said (at 323) that it was sufficient:
“… that features of the employment did in fact and in truth contribute to the condition complained of. The causal connection must be established on the probabilities and not left in the area of possibility or conjecture. Once the link is established, however, it matters not that the contribution be large or small.”
45. When that 1971 Act was repealed and replaced by the Act now known as the Safety, Rehabilitation and Compensation Act 1988 (Cth) the corresponding provision in the new 1988 Act required employment to contribute “in a material degree” to the contraction of the disease. Nevertheless, in cases such as Suters v Australian Postal Corporation (1992) 28 ALD 320 (at 323) and Wiegand v Comcare (2002) 72 ALD 795 (at [23]) the approach in Treloar was treated as authoritative on the meaning of the word “material” when interpreting the causal connection with employment required by the definition of “disease” in the 1988 Act, where (as is the position under the Seafarers Act) the definition requires the relevant ailment or aggravation to be “contributed to in a material degree by the employee’s employment” (emphasis added).
46. However, in Comcare v Canute [2005] FCAFC 262 French and Stone JJ drew attention to the inclusion of the words “in a material degree” in the 1988 Act and to the reference to those words in the second reading speech of the Minister for Social Security when the Bill for that Act was read for a second time in the House of Representatives on 27 April 1988. They quoted an extract from that speech where the Minister referred to the requirement in the 1971 Act for an employee to establish only that the employment was a contributing factor to the contraction of the disease, and said that this had frequently resulted in the Commonwealth being liable to pay compensation for diseases that had “little, if any connection with employment”. The extract continued:
“This Bill seeks to remedy that situation by requiring an employee to show that his or her employment contributed in a material degree to the contraction of the disease. The Government believes that this is a test which is firm but fair and which properly reflects the balance between the interests of the Commonwealth as employer and its employees. An employee will not be required to show that his or her employment caused the disease, or even that it was the most important factor in the contraction of the disease. It is intended that the test will require an employee to demonstrate that his or her employment was more than a mere contributing factor in the contraction of the disease. Accordingly, it will be necessary for an employee to show that there is a close connection between the disease and the employment in which he or she was engaged.”
Their Honours also referred to Treloar (supra) and Suters (supra), and went on to say at [68] that the changes brought about by the enactment of the 1988 Act:
“ … were intended to require that the contribution be ‘more than a mere contributing factor’ and, as such, the comments of the Court in Treloar must be assessed in this light. Content must be given to the word ‘material’ contained in the definition of ‘disease’ in the legislation as it presently stands. The inclusion of this term imposes an evaluative threshold below which a causal connection may be disregarded. However, it is not necessary for present purposes to consider the proper meaning of ‘material’ and nothing more need to (sic) said about this issue.”
47. There is clear evidence before me as to the nature of Mr Hardman’s work activities, and I am satisfied that even on the potentially higher evaluation threshold referred to in Canute, those activities contributed in a material degree to the aggravation of the degenerative condition of Mr Hardman’s left knee.
Was the injury caused by serious and wilful misconduct?
48. It was contended on behalf of Inco Ships that Mr Hardman had engaged in serious and wilful misconduct. Mr Manuel referred first to the following matters in support of this submission:
· the omissions and false statements in the medical examination report form provided to Dr Macris at the time when he provided a certificate of medical fitness;
· Mr Hardman’s action in undertaking altered duties with P & O Ports Ltd following the right knee arthroscopy in 2003, which (Mr Manuel submitted) was evidence that he should have been aware that he was not fully fit for work;
· the non-disclosure of the physiotherapy treatment, which Mr Hardman received only a matter of weeks before the commencement of the swing on the Iron Chieftain; and
· his actions in taking anti-inflammatory medication on board the Iron Chieftain at the beginning of the swing.
Counsel submitted that Mr Hardman should have been aware, from the above matters and from the training Mr Hardman had received in Perth, of the kind of work that he would be undertaking on the Iron Chieftain, and that he was not fit to undertake that work, and that to do so would be a breach of his statutory obligation to take reasonable care for his own safety.
49. Mr Manuel further submitted that by continuing to carry out his duties on the Iron Chieftain after becoming aware of increasing pain in his knees, Mr Hardman further disregarded his own safety, and that this also constituted serious and wilful misconduct. He submitted that Mr Hardman should have avoided altogether the use of stairs and the ladders, and should only have used the lift to pass between the decks of the ship, and further that he should have asked to be relieved of all the duties which were causing his symptoms, and should have avoided all over-time work.
50. In his final address, Mr Manuel referred to four authorities in support of his contention that Mr Hardman’s conduct amounted to serious and wilful misconduct. One of those authorities, namely Paparella v WorkCover GIO Australia (Kangaroo Island Ferries Pty Ltd) [1998] SAWCT 57, was a decision of Acting Judge Gilchrist (as he then was) of the South Australian Workers’ Compensation Tribunal and entailed a consideration whether a worker’s injury was the result of his gross misconduct so that the resultant disability did not arise out of or in the course of his employment. His Honour’s decision on that issue was based on the particular facts of that case. I do not find it helpful to the resolution of the present matter.
51. The other three authorities cited by Mr Manuel, namely Kennelly v Incitec Ltd [1998] FCA 1470, North v Television Corporation Ltd (1976) 11 ALR 599 and Concut Pty Ltd v Worrell (2000) 176 ALR 693 related to whether a contract of employment could be terminated by an employer because of misconduct on the part of its employee. These cases are helpful and relevant in the context of that issue, and include a reference to the fiduciary relationships that arise in a contract of employment. The cases concerned entailed a consideration of the contractual nature of the relevant contracts of employment, and whether there was a right to repudiate the contract for breach of contractual conditions. However, in the present matter, the issue is to interpret the words as used in subsection 26(3) of the Seafarers Act, and I think that this question entails different considerations.
52. At the conclusion of the hearing, I afforded both counsel the opportunity to refer me to any further authorities which they considered to be relevant, having regard to the facts of the application before me. Mr Manuel subsequently referred to three further cases, namely Britax Rainsfords Pty Ltd v Jones (2001) 109 IR 381, Hollingsworth v Commissioner of Police (No. 2) (1999) 47 NSW LR 151 and Barker v Mitsubishi Motors Australia Pty Ltd [2003] SAIR Comm 59. He acknowledged that each case turned on its own facts, but said that he relied on the statements of principle contained within the decisions.
53. I note that each of the three further cases involved appeals against decisions arising out of the termination of an employee’s employment on the grounds that the termination was harsh, unjust or unreasonable within the meaning of legislation relating to industrial or workplace relations. The cases involved situations where the employee provided false information to the employer, or failed to disclose information relating to such matters as the employee’s background or previous medical history or an earlier worker’s compensation claim. Whilst those cases indicate that such conduct may constitute serious and wilful misconduct so as not to render the termination of employment harsh, unjust or unreasonable, it is clear that the decisions made depended on their own facts. Under the relevant legislation, it was necessary to examine all of the circumstances leading to the termination of employment to decide whether that termination was harsh, unjust or unreasonable, and the remedies available included the reinstatement of the employee whose employment has been terminated.
54. I think that a failure to provide information to an employer or the provision of false information to an employer might well be very relevant to claims for unfair dismissal, and to the question of whether an employee should be re-instated. However, under s 26(3) of the Seafarers Act, where the consequence of a finding of serious and wilful misconduct is to deprive an employee of his or her right to compensation for work-related injuries or diseases, different considerations may become important. These considerations would include whether the asserted misconduct was likely to entail the risk of a work-related injury or disease to the employee or other workers, whether the employee appreciated or should reasonably have appreciated any such risk, and in a case involving disobeying an employer’s instructions, whether those instructions were relevant to safety issues rather than the efficient functioning of the employer’s business. Although the additional references provided by Mr Manuel are helpful, and the facts of the three further cases in question are similar in some respects to the facts of the present matter, I do not regard them as determinative of the issues arising in the present matter.
55. I also record for the sake of completeness that it was not suggested that Mr Hardman was injured because he voluntarily and unreasonably submitted to an abnormal risk of injury within the meaning of s 9(4) of the Seafarers Act.
56. I note that in Johnson v Marshall Sons & Co, Ltd [1906] AC 409 at 413, the House of Lords considered the meaning of the words “serious and wilful misconduct” in the Workmen’s Compensation Act (1897) (UK). Lord James said that the words of the statute “represent a higher standard of misconduct than that which would justify immediate dismissal”; and whilst I do not necessarily agree with that assessment of the relativities of the relevant standard of conduct, it is significant that his Lordship recognises that the requisite conduct might be different where the issue to be decided relates to the termination of employment.
57. In Johnson their Lordships declined to provide a general definition of the concept of serious and wilful misconduct, and indicated that it was necessary to consider the facts of each case in order to determine whether the conduct in question amounted to serious and wilful misconduct within the meaning of the statute. Lord Loreburn LC said (at page 411) that the misconduct concerned must be wilful, that is, deliberate and not merely a thoughtless act done on the spur of the moment. Further, the reference to “serious” was to the misconduct, and not to its consequences. The House of Lords decided that the conduct of the workman concerned, namely riding on a goods lift in breach of an instruction not to do so, did not amount to serious misconduct. Lord James took into account that the misconduct constituted the bare breach of a rule, from which breach no injuries, actionable or otherwise, could reasonably be anticipated (see at page 413.6). Similarly, Lord Atkinson (at page 415) had regard to the absence of any knowledge or belief on the part of the employee of any risk to himself or his fellow employees.
58. I will now examine the facts of the present matter in accordance with the approach of the House of Lords in Johnson. I have found above that the physiotherapy treatment in April 2004 related to Mr Hardman’s right knee, and not his left knee. I am not satisfied that Mr Hardman understood, when he commenced the swing on the Iron Chieftain, that the activities which he would engage in would have exposed himself or other people to a risk of injury as a result of the then condition of his right knee. It appears that he expected that he would be able to fulfil his duties on the swing, or he would not have joined the Iron Chieftain. Further, the claim as presented in the tribunal is based on the injury to the left knee. On my findings there is no basis for the contention that he should have been aware that his duties during the swing would cause any injury to or disability in that knee.
59. The disentitling provisions of subsection 26(3) are applicable only if there is a causative link between the condition of Mr Hardman’s left knee and the asserted serious and wilful misconduct. In Medlin v State Government Insurance Commission (1995) 182 CLR 1 Deane, Dawson, Toohey and Gaudron JJ considered the test of causation in a common law action for damages for negligence. Their Honours said that on the facts of that case, the question of causation was complicated by the intervention of a decision of the plaintiff (namely a decision to retire from his employment) which constituted a more immediate cause of the plaintiff’s loss or damage. Their Honours said (at page 6):
“For the purposes of the law of negligence, the question whether the requisite causal connexion exists between a particular breach of duty and particular loss or damage is essentially one of fact to be resolved, on the probabilities, as a matter of commonsense and experience … And that remains so in a case such as the present where the question of the existence of the requisite causal connexion is complicated by the intervention of some act or decision of the plaintiff or a third party which constitutes a more immediate cause of the loss or damage. In such a case, the ‘but for’ test, while retaining an important role as a negative criterion which will commonly (but not always) exclude causation if not satisfied, is inadequate as a comprehensive positive test … The ultimate question must, however, always be whether, notwithstanding the intervention of the subsequent decision, the defendant’s wrongful act or omission, is, as between the plaintiff and the defendant and as a matter of commonsense and experience, properly to be seen as having caused the relevant loss or damage.”
60. Similar views were expressed by the High Court in the earlier cases of Fitzgerald v Penn (1954) 91 CLR 268 at 277 - 278 and March v E & MH Stramare Pty Ltd (1991) 171 CLR 506 at pages 515 – 519 and 522 - 524, and in the later case of Chappell v Hart (1998) 195 CLR 232 at pages 243 - 244, 255 - 256 and 268 - 270. These were also common law actions for negligence. However, the concept of a common-sense evaluation of the causal chain was adopted by the Full Federal Court in the context of compensation legislation (with the caveat that it is necessary to consider the language used by Parliament in the statute under consideration) in Ilsley v Wattyl Australia Pty Ltd (1997) 75 FCR 1 at page 515. That approach was also referred to by Kirby J recently in Roncevich v Repatriation Commission (2005) 85 ALD 257 at [82], in a case involving concepts of causation in the Veterans’ Entitlements Act 1986 (Cth). I accordingly consider that I should approach the test of causation in the present matter in accordance with the approach in Medlin (supra) and other authorities to which I referred in the preceding paragraph.
61. In the present matter, it appears that Dr Macris conducted a physical examination of Mr Hardman, and that this included asking him to squat and to perform other movements of his limbs. There is no evidence that Dr Macris would not have issued a certificate of medical fitness if Mr Hardman had correctly filled in the medical examination report form. Further, there is no evidence that Inco Ships would not have taken Mr Hardman on if they had been informed of the history of his right knee condition, including the comparatively recent physiotherapy consultations. In these circumstances, I further find that even if (contrary to my above finding) Mr Hardman’s actions up to the time of his engagement constituted serious and wilful misconduct, that conduct did not cause the symptoms of the left knee which led to his incapacity for work. The present matter is analogous to Richards v Faulls [1971] WAR 129, where the Court found that no causal connection had been proven between the relevant misconduct of driving with an excessive blood alcohol level and the death of the deceased worker.
62. I have concluded that Mr Hardman’s persisting with his duties after his knees became progressively worse did not constitute serious and wilful misconduct. It appears from the employee notification form that he intended to seek medical advice during his leave, but he continued to work notwithstanding his symptoms. There is no suggestion that his symptoms would result in his or any other crew member being put in danger. Nor is there evidence that Mr Hardman knew the extent (if at all) that his continuing to work would result in any significant injury to his knees.
63. Further, although Captain Briggs could not remember receiving the employee notification form, it appears that the form was in the possession of Inco Ships, and it appears to be a contemporaneous record. Captain Biggs said that he could recall that he may have spoken to Mr Hardman about a knee problem, but could not remember the details of any conversations with him. I accept Mr Hardman’s evidence that he gave the form to Captain Briggs. Mr Boles said in his evidence that on one occasion Mr Hardman said that he could not undertake a particular task, and that he arranged for another seaman to attend to it. Mr Boles accordingly acknowledged that there was one occasion when he was aware of Mr Hardman’s difficulties. He added that he could not recall any other occasions when Mr Hardman had said that his knee or knees were causing him difficulties, but said that it was possible that Mr Hardman could have mentioned this on other occasions. One Captain Low took over as captain in August 2004 for about the last nine days of Mr Hardman’s swing. He also said that Mr Hardman had mentioned, in a brief informal discussion, that he had had stiffness in his knee or knees from an earlier injury.
64. I accordingly find that both captains were or should have been aware that Mr Hardman had knee problems, and that Mr Boles was made aware of them, at least on one occasion and probably more. Notwithstanding these matters, Mr Hardman was not instructed to desist from his duties, or to vary them. On the contrary, Captain Briggs, Mr Boles and Captain Low all said in effect that they had expected Mr Hardman to continue to carry out his duties. Indeed, Captain Briggs made the comment in his evidence that he “had a degree of respect for Mr Hardman because I clearly admired him if he was prepared to work through this injury” (transcript, 30.03.06, page 10, line 38). The present case therefore differs from cases where an employee has been expressly instructed not to engage in the course of conduct, but does so in breach of instructions and thereby commits serious or wilful misconduct.
Summary and Conclusion
65. On my above findings, I am not satisfied that Mr Hardman’s conduct during his swing on the Iron Chieftain constituted serious and wilful misconduct within the meaning of subsection 26(3) of the Seafarers Act. Further, I have already found that Mr Hardman’s conduct leading up to and including the time when he joined the Iron Chieftain did not amount to serious and wilful misconduct, and that even if I am wrong in this conclusion, I am not satisfied that that conduct caused the injury to his left knee. It was not suggested that the injury to the left knee had resulted in a serious and permanent impairment, and so the exception to subsection 26(3) is not applicable.
66. I am further satisfied that Mr Hardman suffered an injury in the form of an aggravation of a degenerative condition of his left knee as a result of his activities on the Iron Chieftain, which I have described above, and that these activities contributed in a material degree to the aggravation of his pre-existing degenerative condition.
Decision
67. The tribunal sets aside the decision under review, and:
(a)in substitution for that decision, decides that the respondent is liable to pay compensation for the injury to the applicant’s left knee;
(b)remits the matter to the respondent for determination in accordance with these reasons;
(c)reserves liberty to apply within fourteen days in relation to the costs of the proceedings; and
(d)orders that in the absence of any such application the respondent pay the costs of the proceedings.
I certify that the 67 preceding paragraphs are a
true copy of the reasons for the decision herein
of Deputy President D G JarvisSigned: .....................................................................................
J. MacIntyre AssociateDate/s of Hearing 28 - 30 March 2006
Date of final submission 6 April 2006
Date of Decision 30 May 2006
Counsel for the Applicant Mr S Cole
Solicitor for the Applicant Duncan Basheer Hannon
Counsel for the Respondent Mr R Manuel
Solicitor for the Respondent EMA Legal
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