Hatzisavas v Berkley Challenge Pty Limited
[2006] NSWWCCPD 145
•11 July 2006
WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:Hatzisavas v Berkeley Challenge Pty Limited [2006] NSWWCCPD 145
APPELLANT: Steve Hatzisavas
RESPONDENT: Berkeley Challenge (Central) Pty Limited
INSURER:Vero Workers Compensation (NSW) Ltd
FILE NUMBER: WCC2221-05
DATE OF ARBITRATOR’S DECISION: 24 June 2005
DATE OF APPEAL DECISION: 11 July 2006
SUBJECT MATTER OF DECISION: Alleged errors in fact finding, objection not taken at first instance, costs order against claimant.
PRESIDENTIAL MEMBER: Acting Deputy President Michael Snell
HEARING:On the papers
REPRESENTATION: Appellant: Steve Masselos & Co.
Respondent: Gillis Delaney Lawyers
ORDERS MADE ON APPEAL: The decision of the Arbitrator, dated 24 June 2005 is revoked and the following decision is made in its place:
“1. Award for the Respondent.
2. Any application by the Respondent for costs is to be remitted to the Arbitrator concerned, for determination afresh in accordance with these reasons.”
No order as to the costs of the appeal.
BACKGROUND TO THE APPEAL
On 26 July 2005 Steve Hatzisavas (‘the appellant’) sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Workers Compensation Commission (‘the Commission’) against a decision, dated 24 June 2005.
The Respondent to the Appeal is Berkeley Challenge (Central) Pty Ltd (‘the respondent’).
The appellant was born on 20 June 1944, and was employed by the respondent as a cleaner. According to his statement of 3 February 2005 he worked thirty-five hours per week on a split shift, cleaning at one Sydney office building in the morning, and a different one in the afternoon. He said he had been working for the respondent for three years.
The appellant’s claim, as set out in his Application to Resolve a Dispute filed 14 February 2005, was for weekly compensation from 2 October 2004 to date and continuing, together with medical, hospital or related expenses pursuant to section 60 of the Workers Compensation Act 1987 (‘the 1987 Act’). He relied upon one specific incident, that he “slipped whilst mopping” at Hunter Street, Sydney on 1 October 2004, sustaining injury to the back, head and neck. He had not resumed work after that date. The respondent’s insurer had denied the claim. It’s reasons were spelled out in correspondence to the appellant’s solicitors dated 7 December 2004, where it said “our decision relies on the provisions of sections 4 and 9A of the Workers Compensation Act 1987. It is our view that the circumstances of the incident clearly indicate a fabrication of facts in relation to injury.”
The Reply filed by the respondent on 8 March 2005 put multiple matters in issue, including “Occurrence of injury” and “Mechanism of injury’.
The matter raised the usual issues on the nature, extent and duration of incapacity. However there was a more fundamental issue between the parties, being whether the appellant had actually sustained an injury as alleged on 1 October 2004. The appellant’s version of the incident is set out at paragraphs 5 and 6 of his statement of 3 February 2005:
“5. On 1 October 2004 I was mopping the ground floor of the building, as it was very dirty when I slipped and fell.
6. I remember slipping and hitting the back of my head hitting the tiles quite hard. A fellow co-worker, by the name of Maria came to my assistance and called the Ambulance. I also injured my neck and lower back when I fell.”
The appellant gave oral evidence at the arbitration hearing on 16 May 2005. Prior to the appellant being sworn, it was noted by the arbitrator that he and the parties had watched a “DVD video of the applicant during the time of the alleged injury” (T1.25). There was no issue about the authenticity of the video. The appellant said he recognised himself as the person shown in it (T1.50). At one point when the respondent’s counsel attempted to cross-examine the appellant about events depicted on the video, the appellant’s counsel, in explanation of an objection, said “The video is real evidence and it speaks for itself. It serves no point to be cross-examining the worker about it.” (T10.30).
The appellant was cross-examined in a fashion which clearly put his credit in issue. He was cross-examined about whether he lost consciousness in the alleged fall, and if so, for how long (T7 to 12). It was suggested to him his presentation to Dr Endrey-Walder was “a contrivance; it’s a lie” (T14.30). He was asked “Would you agree with me that looking at that video, there is no way known that one could describe what happened to you as a slip?”, the answer to which was “The bucket went in front of me.” (T14.45). In re-examination the appellant’s counsel explored the question of whether the appellant (whose first language was Greek) understood the meaning of the word “slip”, asking him to give an example of the word in a sentence. The response was “Yeah, like, when you walk as you walk you step on a tomato or something like that and you fall and you slip, you go down.” (T15.55)
The respondent’s Reply had attached to it an investigation report of Milne & Associates dated 21 October 2004. An annexure to that report was a DVD. The investigation report describes it in this way:
“We have viewed footage of the Claimant’s accident taken by security cameras in the foyer of 23 Hunter Street and it clearly shows the events leading up to the alleged accident. We refer you to ANNEXURE 1, which is a copy of this footage.
This footage was made available by Dean Lewis from the Ashington Group (Phone 0419 149 235 M).”
The respondent’s case on injury effectively turned upon the conclusion to be drawn from this security footage. The respondent’s counsel in submissions said:
“Now, there is no way known to man that one could describe what was shown on the video as a slip. You can clearly see he’s on a dry part of the floor. It wasn’t dirty. The colour of the floor didn’t change from when his mop went over it to before it was mopped. He mops into that corner, and in the area that this so-called incident happened, the floor was dry, in my submission. And what do we see? We see a man drop to his knees, then fall backwards, and he puts his hand, his right hand, behind his head to prevent any blow to his head.
Just on the video itself you would have to find, in my submission, that this injury has to be contrived. My submission is that you have, on the evidence, no alternative but to give an award for the respondent.”
THE DECISION UNDER REVIEW
11.The ‘Certificate of Determination’, dated 24 June 2005 records the Arbitrator’s orders as follows:
“1. Award in favour of the Respondent in respect of the Applicant’s claim for weekly payments of compensation.
2.Award in favour of the respondent in respect of the Applicant’s claim for expenses under s60 of the Act.
3.That the Applicant pay the Respondent’s costs as agreed or assessed.”
The essential finding made by the arbitrator is at paragraphs 26 and 27 of his Reasons. As that finding is central to the issues on this appeal, I will set out those paragraphs in their entirety:
“26. I have had the benefit of viewing the video evidence during the conduct of the arbitration hearing on numerous occasions. I have also, as suggested by Mr Hanrahan, viewed it since on numerous occasions. The quality of the picture is superior to that usually found on security cameras, although it does appear that the action is slightly speeded up. The video shows the applicant come to a halt, turn somewhat to the side, and thrust the mop into the bucket on wheels. He then appears to bend somewhat at the knees, and fall backward, landing on his back but not on the back of his head. With his head still above the ground, he places his right hand under his head before lowering it. He then lies for a short period in a prone position but then sits up and then lies down again in the prone position which he is in when discovered by his cleaning companion.
27. Accepting as I do Mr Hanrahan’s submission that there is no evidence of conspiracy, nor any evidence as to why he should fake some injury, I have viewed the video very carefully to ensure that I am not mistaken. However, I am of the opinion that the evidence is clear – the fall is a contrived one.”
ISSUES IN DISPUTE
The issues in dispute in the appeal are:
(a)Whether the arbitrator erred in the consideration he gave of the DVD evidence. In this regard it is submitted the DVD evidence was illegal pursuant to the Workplace Video Surveillance Act 1998.
(b)Whether the arbitrator erred in failing to give adequate reasons for rejecting the appellant’s evidence “in favour of the security camera”.
(c)Whether the arbitrator erred in failing to consider sections 4 and 14 of the 1987 Act, in respect of ‘intent’, in dealing with the respondent’s contention the appellant’s injury was a “fraud”, “contrived”, or “intentionally inflicted”.
(d)Whether the arbitrator erred, in failing to consider evidence the WorkCover Authority “had looked at the video and found no sufficient basis to take the matter any further.”
(e)Whether the arbitrator erred in taking into account irrelevant considerations, being “his apparent knowledge of the quality of pictures ‘usually found on security cameras’”.
(f)Whether the arbitrator erred in failing to give the appellant an opportunity to make submissions on costs before making an order against him under section 341(4) if the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’). It is also asserted the arbitrator erred in not making reference to sections 235C and 258 of the 1998 Act, before making a costs order against the appellant.
The respondent, in its Notice of Opposition to Appeal, takes issue with the various errors asserted by the appellant, and submits the decision should not be disturbed.
ON THE PAPERS REVIEW
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.”
Having regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submission by both parties that the appeal can proceed to be determined on the basis of these documents, I am satisfied that I have sufficient information to proceed ‘on the papers’, without holding any conference or formal hearing, and that this is the appropriate course in the circumstances.
LEAVE
Before proceeding to deal with an appeal the Commission must determine whether the application meets the requirements of section 352 of the 1998 Act.
The amount at issue clearly exceeds the sum of $5,000.00 referred to in section 352(2)(a). No compensation was awarded (see Mawson v Fletchers International Exports Pty Ltd [2002] NSWWCCPD 5). The threshold provisions in section 352 are clearly met, and no submission to the contrary is put by the respondent.
The appeal was lodged within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act.
DISCUSSION AND FINDINGS
Injury
The first of the errors of law the appellant seeks to make out is that the arbitrator “failed to properly consider the provenance and reliability of the ‘original’ evidence on DVD disc which was admitted, notwithstanding its illegality and its questionable reliability. The material was not a continuous or ‘real time’ video, but was one of those rapid exposure cameras which takes a series of photographs very quickly.”
The illegality relied upon by the appellant in this submission is pursuant to sections 7 and 8 of the Workplace Video Surveillance Act 1998, which was in force as at 1 October 2004 (although subsequently repealed by the Workplace Surveillance Act 2005). Sub-section 7(1) of that Act was a criminal provision, which concerned itself with covert video surveillance being carried out of an employee by an employer in the ‘workplace’. Sub-section 7(3) created a defence to that criminal provision in certain circumstances, where the covert video surveillance was carried out for a specified purpose of ensuring the security of the workplace or persons in it, and certain other conditions were also met. Sub-section 7(5) provided video surveillance evidence for the purpose specified in sub-section (3) “that is unrelated to the security of the workplace or persons in the workplace is not to be admitted in evidence in any disciplinary or legal proceedings against an employee unless the desirability of admitting the evidence outweighs the undesirability of admitting evidence that has been obtained in the way in which the evidence was obtained”. There is no evidence the video surveillance depicted in the DVD was carried out by the appellant’s employer, the respondent. This is certainly not suggested by the passage in the investigation report which described how the investigator came into possession of the video (see [9] above). It was evidence from video surveillance in a building which was being cleaned by the respondent. Accordingly there is no evidence which would suggest the video fell within the scope of section 7, as it is described in sub-section (1). The current proceedings are not “disciplinary or legal proceedings against an employee”. In my view sub-section 7(5) (on which the appellant relies) did not have application in the circumstances. It also should be noted no such point was taken by the appellant during the running of the arbitration hearing. Sub-section 7(5) conferred a discretion to admit evidence, even if it was potentially vulnerable to exclusion pursuant to that sub-section. The point not having been raised by the appellant at the time, no consideration was given to whether the necessary factual matters were present to trigger the operation of sub-section 7(5), nor whether the discretion should be exercised even if they were. In my view it is not open to the appellant to raise the objection at this stage, the video evidence having been used without objection at the arbitration hearing. It would be unfair to allow the point to be raised on appeal, it not having been taken initially (see Department of Corrective Services v Evans [2005] NSWWCCPD 58, K-Mart Australia Pty Limited v Duggan [2006] NSWWCCPD 137)
The appellant also makes reference to section 8 of the Workplace Video Surveillance Act 1998. That section created a criminal offence where a recording of the activities of a person, authorised by a covert surveillance authority, was then used for an ‘irrelevant purpose’ (which was defined in sub-section 8(3)). Again it is not a point which was raised in any way during the running of the arbitration hearing. Again there is no evidence which would establish the factual matters required for section 8 to operate. In my view section 8 is plainly irrelevant in the circumstances. In addition it would, again, be inappropriate to permit the point to be raised on appeal, it not having been taken before the arbitrator.
There is no factual basis made out to the challenge that the video evidence was of questionable reliability. There was no evidence to challenge its reliability. No such point was taken by the appellant, when the video was used as evidence during the running of the arbitration hearing. Indeed the comments by the appellant’s counsel at T10 (referred to at [7] above) rather suggested the contrary, that the video evidence could speak for itself. Picture quality was not raised as an issue by the appellant at the arbitration hearing. The usual quality of “security camera footage” is something of an irrelevance. Clearly the arbitrator was of the view the quality of the footage was sufficiently good for him to see it and draw conclusions from it. The appellant had not suggested otherwise. I have viewed the video footage on a number of occasions for the purpose of dealing with this appeal, and in my view there is no basis for concluding the quality of it was insufficient to permit the arbitrator to draw the conclusion which he did.
The reasons given by the arbitrator are in my view perfectly adequate to explain why he accepted the contents of the video evidence. The reliability of the video was not seriously challenged during the arbitration hearing. There is no part of the oral evidence of the appellant, nor the other evidence relied upon by the appellant, which questions the reliability of the video. Rather, the issue was what significance should be attached to it, and what conclusions drawn from its contents. Rule 73 of the Workers Compensation Rules 2003 (‘the Rules’) deals with an arbitrator’s duty to give reasons:
“73 (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 process that lead the Commission to the conclusions it made.
(2) Without limiting sub-rule (1), the reasons set out in a statement referred to in sub-rule (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.”
In NSW Department of Education and Training v Sanders [2004] NSWWCCPD 89 Byron DP said:
“An Arbitrator is not required to give lengthy and detailed reasons for decision, nor to recite and analyse in detail the content of the evidence and submissions. The standard by which adequacy of reasons 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] NSWWCCPD 6 and Fraternity Bowling and Recreation Club Limited v Sartor [2004] NSWWCCPD 47). The Commission is not a court and its proceedings are conducted with as little formality and technicality as the proper consideration of the matter permits (see Objectives of the Commission in section 367 of the 1998 Act). Fundamentally, the reasons given must be capable of conveying adequately to the parties, the basis upon which the Arbitrator came to the decision that was made.” (at [11])
There was an essential point to be decided by the arbitrator, being whether, on all of the evidence including the video footage, he was satisfied the appellant had suffered injury. His reasons, in my view, make it plain he could not be so satisfied, having regard to the contents of the video, and the impressions and conclusion he drew from it. The reasons on this point comply with both his statutory and common law duty. For the same reasons, clearly the arbitrator has disclosed the factors which led him to the decision he made. The clearly stated factor was the impression he drew from the video footage, regarding whether or not it was consistent with the case the appellant sought to make out, that he injured himself when he slipped.
The appellant’s point regarding whether the arbitrator was in error in not considering sections 4 and 14 of the 1987 Act is not clearly stated. Section 4 of the 1987 Act contains various definitions. It is not apparent, from his submissions, what use the appellant seeks to make of section 4. The reference to section 14 of the 1987 Act I take to be a reference to section 14(3), which provides “Compensation is not payable in respect of any injury to or death of a worker caused by an intentional self-inflicted injury.” I take the appellant’s point to be that the arbitrator, if he was going to rely upon section 14, had to consider whether there was evidence of intent. This, however, does not really arise. The arbitrator did not find the appellant sustained injury, which was intentionally self-inflicted. Rather, he found the appellant had not sustained injury at all, as the “fall” depicted in the video was not a genuine fall at all, but rather a “contrived” incident. Section 14(3) was irrelevant to the arbitrator’s reasoning process and conclusions.
It is next asserted the arbitrator failed to take into account relevant evidence from the WorkCover Authority, that it had looked at the video and “found no sufficient basis to take the matter any further”. The respondent validly points out that the WorkCover Authority, in making a decision on whether there was a basis for a criminal prosecution of the appellant, was considering whether an offence could be proved, in which it would carry the criminal onus. I accept the respondent’s submission that the decision made by the WorkCover Authority on this question was of no relevance to the proceedings brought by the appellant.
The appellant also submits the arbitrator “took into account irrelevant considerations namely his apparent knowledge of the quality of pictures ‘usually found on security cameras’”. The arbitrator does use this phrase in discussing the quality of the video footage. I cannot see there is room for an assertion that the arbitrator’s knowledge of the quality of other security footage has affected the result in the case before him. He does not, in reaching his conclusion, rely upon any such knowledge. Rather, he relies upon the impression and conclusions he can draw from the footage which was evidence in this case.
Overall, the weight and relevance to be given to evidence before an arbitrator is a matter in the discretion of the arbitrator, and should not be overturned unless it can be shown he failed to exercise that discretion fairly and according to law (see South Western Area Health Service v Edmonds [2005] NSWWCCPD 18, Westpac Banking Corporation v Kilby and Banana Coast Credit Union Ltd [2005] NSWWCCPD 24). The conclusion he drew from the video footage was a conclusion clearly open to him. I see no error in how he approached the matter.
The appellant submits the arbitrator did not, in his Reasons, mention the truthfulness of the appellant as a witness. This is true, the arbitrator did not specifically state he rejected the appellant’s evidence. However it is clearly apparent from his Reasons that he did so, in so far as it was inconsistent with the conclusion he drew from the video evidence. He specifically stated, at [27] of his Reasons, the fall of which the appellant gave evidence was “a contrived one”. This clearly amounted to a rejection by the arbitrator of the appellant’s evidence regarding the occurrence and mechanism of ‘injury’.
The consequence of the decision made by the arbitrator on the question of ‘injury’ is such that the appellant failed in the entirety of his claim, and the respondent is entitled to an award in its favour on all issues. The formal orders made by the arbitrator do not reflect this, and should be corrected. To give proper effect to the findings made, the order should be ‘Award for the Respondent’.
Costs
This leaves the question of the order made by the arbitrator in respect of costs. The respondent did not, in its Reply, foreshadow any application for costs against the appellant. Nor does the transcript indicate any such application was made orally during the running of the arbitration hearing. In such circumstances there is no indication, from the transcript, the appellant made any submissions on the question of costs. The issue of costs was not agitated before the arbitrator. The arbitrator has then gone on to order the appellant to pay the costs of the respondent.
The ordering of costs against a ‘claimant’ is restricted by sub-section 341(4) of the 1998 Act, which provides:
“(4) The Commission may not order the payment of costs by a claimant unless the Commission is satisfied that the claim was frivolous or vexatious, fraudulent or made without proper justification.”
“Claimant” is defined in section 4 of the 1998 Act to mean “a person who makes or is entitled to make a claim”. The appellant is a ‘claimant’ for the purposes of sub-section 341(4). It is apparent from sub-section (4) that there are alternative bases upon which costs may be sought against a claimant, in appropriate circumstances. The respondent not having actually formulated an application for costs during the proceedings, prior to the order being made, it is not apparent which of the bases it may have sought to rely upon. The arbitrator’s Reasons do not specify which of the alternative bases he regarded as justifying the order he made.
In applying the equivalent provision in section 38 of the Workers Compensation Act 1926 (‘the 1926 Act) it has been held that if an order is to be made on the basis of ‘fraud’ the employer seeking such order must satisfy the criminal onus of beyond reasonable doubt (Jackson v Tooheys Pty Ltd [1952] WCR 60). This view was held by the NSW Court of Appeal to be erroneous in Pascoe v Barrier Crash Repairs [1978] 52 WCR156. However Hutley JA in that case referred to the High Court authority of Briginshaw v Briginshaw (1938) 60 CLR 336, and said:
“The position is that a charge of fraud is a serious charge, and the Commission to be satisfied of a charge of fraud has to have regard to its seriousness.” (at P.160)
Neilson J in Locke v Riley (1996) 12 NSWCCR 671 at 680 said:
“The respondent seeks an order for costs against the applicant on the basis that the application was made either without proper justification or fraudulently. For me to make such an order, I need only be satisfied in the balance of probabilities that the applications were made either without proper justification or fraudulently: Pascoe v Barrier Crash Repairs [1978] 52 WCR (NSW) 156).”
The appellant was not given notice that an order for costs may be made against him, and did not have an opportunity to make submissions relevant to such order. It has been held that, whilst the Commission is not bound to rely upon strict pleadings to define the issues, it is necessary that a party have notice of the case against it and an opportunity to respond (see Far West Area Health Service v Radford [2003] NSWWCCPD 10). In the current circumstances, that would amount at least to notice that an application was to be made pursuant to section 341(4) of the 1998 Act, and the basis of such application. It would be necessary the appellant have an opportunity to put on any material he may wish to defend such an application, and to make submissions in opposition to it, if he wished to do so.
It is tolerably clear the respondent wishes to persevere with an attempt to obtain an order for costs against the appellant, given its submissions on this appeal (that the order for costs should stand), and given its application for costs of the appeal.
Accordingly, I am of the view the appellant was denied procedural fairness in the manner in which a costs order was made against him, and this amounts to error which requires that such order be set aside. In addition, the arbitrator, in making the order, did not give reasons for making it, and did not state the basis on which the order was made. This clearly amounted to error.
DECISION
The decision of the arbitrator dated 24 June 2005 is set aside, and the following decision made in its place:
“1. Award for the Respondent.
2. Any application by the Respondent for costs is to be remitted to the Arbitrator concerned, for determination afresh in accordance with these reasons.”
COSTS
The respondent has, in its Notice of Opposition to Appeal, stated it will be seeking costs in the event the appellant is unsuccessful on appeal. Whilst the appellant has not succeeded on appeal, in his challenge to the arbitrator’s finding on ‘injury’, he has succeeded in his challenge in respect of the costs order. In the exercise of my discretion I make no order at to costs of the appeal.
Michael Snell
Acting Deputy President
11 July 2006
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF MICHAEL SNELL, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
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