Hills v Pioneer Studios Pty Ltd - [2011] NSWWCCPD 30

WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:			Hills v Pioneer Studios Pty Ltd [2011] NSWWCCPD 30
APPELLANT:			Kathryn Hills
RESPONDENT:			Pioneer Studios Pty Ltd
INSURER:			CGU Workers Compensation (NSW) Ltd
FILE NUMBER:			A1-6838/10
ARBITRATOR:		Ms D Moore
DATE OF ARBITRATOR’S DECISION:			13 January 2011
DATE OF APPEAL HEARING:			19 May 2011
DATE OF APPEAL DECISION:			1 June 2011
SUBJECT MATTER OF DECISION:			Whether injury at a social function arose out of the worker’s employment; function held at employer’s premises for multiple purposes; whether worker induced or encouraged to attend function for a work purpose; causation; application of principles in Hook v Rolfe (1986) 7 NSWLR 40, Tarry v Warringah Shire Council [1974] 48 WCR 1 and Nunan v Cockatoo Docks & Engineering Co Ltd (1941) 41 SR (NSW) 119
PRESIDENTIAL MEMBER:			Deputy President Bill Roche
HEARING:			Oral
REPRESENTATION:			Appellant:	Mr B Gross QC with Mr S Dixon, instructed by Carroll & O’Dea Lawyers
Respondent:	Mr B Odling, instructed by Bartier Perry
ORDERS MADE ON APPEAL:			The Senior Arbitrator’s determination of 13 January 2011 is revoked and the following orders made in its place: “1. The matter is remitted to the Registrar for referral to an Approved Medical Specialist for assessment of the applicant worker’s claim for whole person impairment as a result of her head and brain injury on 14 March 2004. 2. The respondent employer is to pay the applicant worker’s reasonably necessary hospital and medical expenses under s 60 of the Workers Compensation Act 1987. 3. The respondent employer is to pay the applicant worker’s costs, as agreed or assessed. The matter is certified as complex with an uplift of 30 per cent.” The respondent employer is to pay the appellant worker’s costs of the appeal, assessed at $2,200 plus GST.

INTRODUCTION

The appellant worker, Ms Kathryn Hills, received a serious head and brain injury when she fell over a balustrade while attending a social function at the premises of the respondent employer, Pioneer Studios Pty Ltd (Pioneer), in the early hours of the morning of 14 March 2004. Ms Hills alleges that her injury “arose out of” her employment with Pioneer because the party was a “work function” which she attended because she thought it was important for her to meet clients, make a good impression and join in with the team.

BACKGROUND

Pioneer rents studios and photographic equipment to a range of clients. Its main clients are photographers and companies in the fashion industry. As at 2006, it had about 20 employees. Ms Hills started work with Pioneer as the manager of the equipment rental department about two weeks before her accident. She had a background in photography, having completed a media arts degree at Waikato Polytechnic Institution at Hamilton in New Zealand. She was to take the position held by Jennifer Martel, who was planning to go overseas. At the time of the accident, she was 27.
Pioneer’s managing director, Richard Ludbrook, gave permission for Pioneer’s premises to be used for the function and, at about 2.00 am on the morning of the fall, he directed Ms Martel to ask guests to leave. The function had been organised by Alistair Buchanan, a photographer with Pioneer, and his two flatmates, Peter Fleming and Jordan Cvetanovski, neither of whom worked with Pioneer. The party was to celebrate the three men’s birthdays and to farewell Mr Buchanan, who was leaving Pioneer to start work as a freelance photographer.
The exact circumstances in which Ms Hills was invited to the party are disputed. In essence, her case is that either Mr Ludbrook and/or Ms Martel, Pioneer’s incumbent manager of the equipment rental department, invited her because clients would be present and it would be a good chance to meet them and get to know other members of staff. Mr Ludbrook denies having told Ms Hills that it was in her interests to go to the party and denies that Pioneer played any role in the organisation or promotion of the party. Ms Martel agrees that she urged Ms Hills to attend the function, but the exact circumstances in which she did so, and whether she said that photographers would be present, are contentious and are considered in detail below.
The party started on the evening of Saturday 13 March 2004. Sometime after 2.00 am on Sunday 14 March, Ms Hills was walking from level five to level four when she lost her balance and fell over the railing on level five onto the landing on level four. An ambulance took her to Royal Prince Alfred Hospital where she remained until 13 April 2004 when she was transferred to Royal Rehabilitation Centre, Ryde. She returned to New Zealand on 19 May 2004 where she underwent extensive rehabilitation and eventually returned to work. She returned to Australia in July 2007 and worked in various jobs before returning to New Zealand in December 2009. Since May 2010, she has worked at a photography studio in Wellington.
Pioneer’s workers compensation insurer, CGU Workers Compensation (NSW) Ltd (CGU), initially accepted liability and paid voluntary compensation for a short period. Ms Hills formally claimed compensation in a letter dated 8 June 2007. In response to that claim, CGU denied liability in a s 74 notice dated 4 July 2007. It disputed liability on the following grounds:
(a) the injury was not an injury within s 4 of the Workers Compensation Act 1987 (the 1987 Act);
(b)     employment was not a substantial contributing factor to the injury;
(c)     the injury occurred at a private party not under the control or authority of the respondent employer, and
(d)     misconduct by Ms Hills.
On 20 August 2010, Ms Hills commenced proceedings in the Commission in which she initially claimed weekly compensation from 19 May 2004 to date and continuing, hospital and medical expenses, and lump sum compensation in respect of a 16 per cent whole person impairment, together with compensation for pain and suffering.
The Commission listed the matter for conciliation and arbitration on 10 December 2010 when Mr Gross QC, with Mr Dixon, appeared for Ms Hills and Mr Odling appeared for Pioneer. Ms Hills discontinued her claim for weekly compensation. The Senior Arbitrator confirmed that the issues in dispute were injury under s 4, substantial contributing factor under s 9A, and misconduct by the worker under s 14. The Senior Arbitrator heard oral evidence from Ms Hills and Ms Martel.
The Senior Arbitrator delivered a reserved decision on 13 January 2011 in which she made an award for Pioneer. She was not satisfied that Ms Hills had been induced or encouraged to attend the social function and said that, on the night of the party, Pioneer’s premises had become a place of entertainment, not of employment. She concluded that she was not satisfied there was such a connection between the worker’s injury and her employment that her injury could be regarded as having arisen out of that employment. The Commission issued a Certificate of Determination on 13 January 2011 giving effect to the Senior Arbitrator’s determination in the following terms:
“The Commission determines:
1. Award in favour of the respondent.
2. Each party to pay its own costs.”
In an appeal filed on 11 February 2011, Ms Hills seeks leave to challenge this determination.

LEAVE

Before proceeding to deal with an appeal, the Commission must determine whether the application meets the requirements of s 352 of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act).

Monetary threshold

It is not disputed that the monetary thresholds in s 352(2) of the 1998 Act are satisfied.

Time

The appeal was lodged with the Commission by email on 10 February 2011. In reckoning time under s 352 of the 1998 Act, time commences from the day after the date of the Commission’s Certificate of Determination (Dennis v NSW Fire Brigades [2007] NSWWCCPD 165). The appeal was lodged on the 28th day after the Certificate of Determination and was therefore lodged within time.
I grant leave to appeal.

NATURE OF THE APPEAL

As the Senior Arbitrator’s decision was published before the commencement of the amendments to s 352 of the 1998 Act effected by the Workers Compensation Legislation Amendment Act 2010 (Pt 19G cl 8 of Sch 6 to the 1987 Act), the appeal is a review in which I am required to conduct a review on the merits to determine the true and correct position (State Transit Authority of New South Wales v Chemler [2007] NSWCA 249; 5 DDCR 286).

THE EVIDENCE

Lay evidence

Kathryn Hills

The worker’s evidence is set out in two statements and in her oral evidence given at the arbitration. The first statement is dated 18 May 2006. The second is undated, but the parties agreed that it was prepared on 31 May 2010 (T40.5).
Ms Hills was born in New Zealand in 1976. After completing her media arts degree, she worked as a photographic personal assistant in Wellington. Between 1999 and 2001, she worked in the photography industry in London. She returned to New Zealand in 2002 and obtained a Diploma of Computer Graphics while working part-time. In 2003, she came to Sydney and worked as an in-house designer with Bont.
She started work with Pioneer, as the manager of the equipment rental department, about two weeks before the accident. Mr Ludbrook told her that she would take over from Ms Martel, who was leaving the company. He said that Ms Martel would tell her what was required in the job. Her duties involved liaising with clients and renting photographic equipment (cameras, lights, flashes, reflectors and tripods) to them. Sometimes, equipment would be used in one of Pioneer’s studios. In the two weeks prior to the party, Ms Martel trained Ms Hills to take over her position running the equipment room.
With respect to her attendance at the party, Ms Hills said (at [2] of her first statement):
“Some time in the week before Saturday 13 March 2004 (when the party was held) either Richard Ludbrook or Jennifer Martel said to me at work words to the effect of ‘We are going to have a farewell party here for Alistair (Buchanan) on Saturday night. Alistair’s leaving to become a freelance photographer. It would be good if you came to the party. Most of the people from here will be there. We are having the party in one of our studios here. There will be a lot of our clients and photographers who we hire equipment to who are going to be at the party. This will be a good chance for you to be able to meet a lot of the clients that we do business with and to get to know them better’.”

After this conversation, Ms Hills spoke further to Mr Ludbrook and Ms Martel, and to other people at Pioneer about the party, and they asked her, “Are you coming to our party for Alistair on Saturday night?” Ms Hills added (at [4] of her first statement):
“In conversations which I had with Jennifer and anyone else at the company, I felt that it was important for me to be at the party to meet the clients face to face and to get on good terms with them. I thought this was very important for me to do, so that I could impress my superiors at work and have a good relationship with the people that I would be hiring equipment to.”
She said (at [5] of her first statement) that she “always thought that the party on the Saturday night was a work function”, and the first she heard that the party was also for two of Mr Buchanan’s flatmates was when she saw it in some of the police statements recently sent to her. She did not receive a written invitation to the party, but had “definitely [been] told verbally about the party on a number of occasions in the week before the Saturday night” (at [6] of her first statement). In all those conversations, she “understood that it was a work function” in which they were farewelling Mr Buchanan, who was leaving Pioneer to become a freelance photographer.
Ms Hills said she wanted to meet the firm’s clients (photographers and people using photographic equipment) with whom she would be dealing, so they would know who she was and she would be “comfortable doing business with them” (at [10] of her first statement). She thought it was very important that she knew the clients on a personal basis, rather than just being someone they spoke to on the telephone, or someone they saw if they came into the office. She believed that she “was encouraged to be at the party so as to meet with and socialize [sic] with the people who hired the equipment from us, the photographers” (at [10] of her first statement). She thought it would help her “impress her superiors” and that she would be better able to meet her employer’s expectations of her in the job if she attended the party and “did a good job of impressing the clients”.
Ms Hills invited her friend, Tanya Cable, a make-up artist who did not work for Pioneer, to attend “our work party” with her. They had dinner together earlier in the evening. They then changed for the party and purchased some white wine (to take to the party) before arriving at the party at about 10.00 pm.
She was told by people at Pioneer that the sort of clients (photographers) who would be at the party were in the fashion and advertising industry, “which is where we get our work” (at [13] of her first statement). Ms Hills was keen to meet with all her workmates because she wanted to fit into the company and be accepted. Her recollection was that, as a new employee of Pioneer, she should use the opportunity (provided by the party) to cement good relations with clients. She was not involved in setting up for the party, which was done by other people in the company.
In response to Mr Ludbrook’s statement that attendance at the function was purely voluntary and no staff were directed to attend, Ms Hills said (at [25] of her first statement):
“I was under the impression, whether from Richard Ludbrook or other staff members of the company, that I should be at the party and that they were expecting me to be at the party because a lot of clients of the company were going to be there. I say, other staff members, as whilst Richard Ludbrook was my employer, he was very busy and I was being guided by other staff members. I always believed that if I was to do my job properly for the company as the new manager of the equipment rental department, I really had to be there to meet with the clients and socialise effectively with them.”
Ms Hills conceded that she drank “a fair amount of alcohol” at the party, but said she was no different from the rest of the people who attended who were drinking and having a good time. She thought she should stay for the duration of the party to “fully use the opportunity to meet everyone and to make it a successful night for our company and their clients and friends” (at [26] of her first statement).
In her 2010 statement, Ms Hills said that she understood she was attending a work function (on the night of the party) to farewell another employee, Mr Buchanan. As she was a new employee, she did not know Mr Buchanan. She attended the function “to meet clients and fellow employees”. The function was held in one of Pioneer’s studios at the worker’s usual place of work for Pioneer.
The balance of the 2010 statement dealt with the worker’s medical treatment and post-accident employment history.
In cross-examination, Ms Hills said that she could not recall if she had a trial period before she was put “on the payroll” (T4.52). With respect to her memory, the following exchange occurred (at T6.12–7.35):
“Q. And that doctor [Dr Lynch] records that you had the fall down two flights of stairs, landed on your head and that as a result you’d lost memory of the previous four to seven nights prior to the accident?
A. Yes.
Q. That’s still the difficulty that you have, is that right?
A. I am getting back memories from those previous two weeks. I definitely remember my time of employment there day to day especially with Jennifer Martel in the same office. Definitely I don’t have – remember the night of my accident but I remember the previous more so than probably the year after my accident.
Q. I see so in the week before the accident, you’re getting some memory back?
A. Yes.
Q. Whereas the accident itself and the period of hospitalisation immediately following is still a blank is it?
A. It is, yes.
Q. Now – and the regaining of some memory for the prior events has been a, what, a progressive thing has it?
A. Yes.
Q. Mainly over the last year or two?
A. Yes.
Q. And your first Statement that was given on the 18^th of May 2006 – so that’s now, that’s four years ago and only, what, two years after the accident – so your memory of those events from the two weeks before the accident were [sic] very vague at that time I take it?
MR GROSS: Can I just object? There’s a lot of ambiguity creeping into the question. I’m giving you some scope, but if a question’s to be asked about memory, they should really be asked with a bit more precision than what’s being asked.
MR ODLING: Well I’ll press the question on that basis because it’s—
ARBITRATOR: Perhaps if you could just repeat the question Mr Odling.
Q. At the time the first Statement was taken – given by you, 18^th of May 2006, that was just over two years after the accident—
A. Yes.
Q. —four years, four-and-a-half years, back from today, at that time, two years after the accident—
A. Yes.
Q. —your memory of the events of the two weeks before were [sic] still vague was it not?
A. They were – I can’t really think that I – that I didn’t have very much more memory than I’ve got now, but just – I just remember – have flashbacks now of the day to day with Jennifer and the kind of the conversations and—
Q. Alright. Well by the time you first saw a solicitor – and I don’t know how long before this Statement you’d seen the solicitor – but before you saw a solicitor for advice, had you had discussions with other people about events leading up to the accident?
A. No.
Q. No? Not even your friend Ms Cable?
A. I was quite sick. There was no – there was probably no reason to. I mean obviously – probably my friend Tanya Cable – of the events leading up to the accident, maybe because she’s my friend. I mean we do talk and so I don’t know what any relevance that conversation would have had. Probably she asked me how my day was at work but I—.”
She agreed that she could not recall the exact words used by Ms Martel and Mr Ludbrook in the week before 13 March 2004, but she added (at T7.52):
“I’m not recalling exactly [the words] they used but they did say that Alistair was having a leaving party and there was all the employees and also clients coming and they told me about it and encouraged me to go.”
The following exchange then occurred (at T7.56):
“Q. Who do you say said that?
A. Well both of them actually. I said – as I recall this is my memory – I mean obviously working beside Jennifer day to day she would have said it. I think that also Richard had basically asked me if I’m coming as well.
Q. And you’re not suggesting they spoke to you together and saying the words that you put in your Statement?
A. Not together? Separately.
Q. No and you see it’s simply not right, is it, to suggest that either of those people suggested to you there would be – to use your words – a lot of clients coming to the party?
A. I can kind of debate that. I don’t—
Q. No I’m just asking you. It’s simply not what was said to you is it?
A. I’m not sure. Unfortunately there was – I know that it was suggested that there definitely will be clients there and—
MR ODLING: Yes—
MR GROSS: Don’t interrupt please.

MS HILLS: —as I said I don’t know actually their complete words but they did say there will be clients there.”

Ms Hills conceded that she could not recall the precise words spoken by Ms Martel or Mr Ludbrook, but she was able to recall that it “was definitely suggested” (T8.45) that she go (to the party).

Ms Hills agreed that she had no memory at all of the night of the party (T10.5), but added that it was “logical” that, if she was “working with them”, they know her on a social and personal level (T10.18). She thought it was a “great opportunity” for her to be at the party “for that reason” (T10.21).
She repeated (at T13.38) that she was not sure of the words used by Mr Ludbrook, but he did encourage her to go to the party. She agreed that other people at Pioneer said that she should be at the party “in the sense that it’s going to be a great party” or “great fun” (T14.18). She was not under the impression that if she did not go to the party it would be the end of her job, but she was new and needed to “make a good impression”, and needed to “join in with the team” (T14.29).
After again saying that she did not really remember the events on the night of the party (T15.42), the following exchange occurred at T15.45:
“Q. And you say I wanted to fully use the opportunity to meet everyone and make it a successful night for our company and their clients and friends. That’s completely reconstruction isn’t it – what you believe now you would have believed at the time?
A. Yes.
MR GROSS: I object, there’s a double question there really.
ARBITRATOR: I think the Applicant’s handled it. I think she has cleared it; really what she said now is what she believed at the time.”

In response to questions from Mr Gross, Ms Hills said that, if Mr Ludbrook and Ms Martel had not told her that they wanted her at the party, she would not have gone (T16.6). She added that she probably would have “spent the Saturday night with, not people that I didn’t know” (T16.12). With respect to her memory, she said that it had improved significantly over time since the accident (T17.45).

Barbara Hills

Mrs Hills is the worker’s mother. She provided a statement on 19 December 2006, in which she said she was informed about the accident at 11.00 am on 14 March 2004, when her daughter’s boyfriend telephoned to say that she had had a terrible accident at her “work party”. She made arrangements to travel to Sydney with her husband and was met at the airport by the worker’s friend, Tanya Cable, who told her that she had been at the “work party” with Ms Hills.

Tanya Cable

Ms Cable gave a statement to the police on 17 March 2004. She said that she became good friends with Ms Hills around 1987 and had remained friends with her since then. On 11 March 2004, Ms Hills telephoned Ms Cable and asked her to go with her to a “work party” (Ms Cable’s statement at [5]). The two had dinner together at the worker’s apartment before the party. They arrived at the party at about 10.00 pm after having stopped to purchase wine. During the night, Ms Hills introduced Ms Cable to “Richard [Ludbrook], Lee and Alistair [Buchanan] and a few other people” whose names she could not recall. Ms Cable left the party at about 1.00 am. At that time, Ms Hills was still dancing. Though Ms Hills was intoxicated, she was “holding it together at that stage”.

Jennifer Martel

Ms Martel has given three statements; a statement to the police on 16 March 2004, a signed statement to investigators on 7 April 2006, and an unsigned statement to investigators on 15 June 2006. She also gave oral evidence at the arbitration.
In her statement to the police, Ms Martel said that she was a photographer’s assistant and had worked for Pioneer for nearly three years. She was in charge of the equipment room and of hiring lights and cameras to photographers. Pioneer occupied three levels of 134 Broadway, Chippendale. Ms Martel lived at a flat on level five of those premises.
She said that Ms Hills started work for Pioneer about two weeks prior to 16 March 2004. Mr Ludbrook and Ms Martel hired Ms Hills to take over Ms Martel’s position and run the equipment room because Ms Martel was leaving to travel overseas. She trained Ms Hills during her first two weeks with the company. Ms Hills fitted in well and worked hard. She was very friendly and got on with everyone. She was “on trial” for the first week.
Two weeks prior to the party, another employee, Mr Buchanan, invited Ms Martel to a party he was having on 13 March 2004 for his birthday and as a “farewell for him”. Ms Martel worked on the day of the party until about 7.00 pm and then went to her flat on level five. She had drinks with a friend in her flat and, at about 8.30 pm, she and her friend went to studio six, where the party was to be held, just outside her flat on level five. When she and her friend arrived, Mr Buchanan and two of his friends arrived. By about 11.00 pm to 11.30 pm, there were about 100 people there.
Ms Hills arrived with another girl at about 10.00 pm. Ms Martel sat down with Ms Hills and had a chat with her when she first arrived. Later in the evening, she saw Ms Hills on the dance floor.
At about 2.00 am on the morning of 14 March 2004, Mr Ludbrook asked Ms Martel to “start to get people to move out”. She went to the roof and spoke to two other people who worked for Pioneer, and told everyone to start moving back into the studio. On returning to studio six, Ms Martel saw the worker dancing. Ms Hills was concerned that she had misplaced her bag and camera. She eventually found both items behind a couch. Ms Martel said goodbye and retired to her flat. About half an hour later, she returned to studio six to see how many people were left. She then became aware that Ms Hills had fallen and received serious injuries.
In her April 2006 statement, Ms Martel described herself as the equipment room manager. She said:
“9.     A farewell party had been organised for Alistair Buchanan who was leaving our company. Alistair invited me to the party. The party was outside of work hours. The party was by invitation only. As far as I know Alistair invited people and two of his friends also invited people as the party had been made into a combined birthday party for the three of them and it was also a farewell party for Alistair.
10.    As far as I am aware the company did not provide anything for the party.
11.    We were also not directed to go to the party by the company. It was purely voluntary attendance and by invitation only. There may have been a bit of alcohol at the party but it was also byo.”
In her June 2006 statement, Ms Martel added:
“19.   I do not recall any conversation with Kathryn prior to the party in which I indicated to her that it would be in her best interests to go to the party. I do not recall telling her that a lot of our clients would have been there. It was not my position to invite other people to the party. I was not able to invite other people. The only reason I was going to the party was because I had been invited. I could not have gone if I was not invited.
20.    I also had no idea who was going to be at the party. All of the invitations and inviting was done by Alistair or his two friends.
21.    The only conversation I had with Kathryn about the party was in asking her if she was going to go to the party. I recall she said she thought so. I told her it would be a lot of fun and there would be a lot of work people there. I did not mention clients because I didn’t know who was going to be there. I only knew from work colleagues that some of them had been invited.
22.    The party was not meant as any type of networking party for our clients. It was originally just a birthday party for Alistair and two of his friends and it then also turned out to be a farewell party for Alistair who was leaving the company. Alistair and his friends were in total control of who was invited and came, and the catering and other arrangements.
23.    I do recall an invite coming through on my email at work for the invite to the party. It only mentioned a birthday. I don’t have the email any more. I recall it was a birthday for Alistair and at least one of his friends at that time.
24.    There was no mention of clients going to the party. I don’t remember discussing with Alistair who was going to be at the party so I would not have told Kathryn to go to the party to meet clients.
25.    As far as I know the company was not involved in any of the arrangements for the party.
26.    I remember that the mix of people at the party were mainly Alistair’s friends. They were not known to me. The others were work colleagues who worked for our company. I do not recall any clients being at the party.”
In her oral evidence at the arbitration, Ms Martel agreed she was a “trusted lieutenant” (T20.43) to Mr Ludbrook and that he trusted her judgment in how to “handle employees” (T20.52–56). Though Mr Ludbrook was “the main boss”, Ms Martel had a role of being in charge of matters “in the equipment room” (T21.11). Ms Hills was under Ms Martel’s direction in terms of what she should do “in the equipment room” (T21.15). Ms Martel agreed that she was training Ms Hills to be an “effective working member of the team” (T21.19). To that end, she agreed it was important for Ms Hills to get on with her fellow employees and with clients (T21.23–28). She was then asked (at T21.30):
“Q. Right and you emphasised to her how important it was to get on with other employees and clients, that right?
A. Well I don’t know if I actually said that in any specific terms.
Q. Yeah, okay, but certainly you were aware of the fact, weren’t you, that Richard Ludbrook had told her that in effect she should take directions from you?
MR ODLING: I object to that question.
ARBITRATOR: Mr Gross you’re going at a rate of knots too. Just – what’s your objection Mr—
MR ODLING: Well that’s definitely a [unclear 0:52:06.8] a blunt type of question. He’s got to firstly establish that there was any such conversation.
ARBITRATOR: Yes, yes I think that’s right Mr Gross.
Q. Okay, okay. Well were you aware one way or the other of what Mr Ludbrook had told Ms Hills about in effect taking directions from you?
A. Well not exactly. I never heard him say the words—
MR GROSS: Okay.
MS MARTEL: I was training her to take my position and that was kind of understood between me and Richard and her, it happened.”

She could not recall if there was a security guard on the door (T22.15). She did not remember that Mr Ludbrook told her at 2.00 am that he wanted everyone to go home (T22.29 and T23.14), though that was in her statement. In response to the suggestion that the length of time people were permitted to stay on the premises depended on what Mr Ludbrook said, Ms Martel said, “Yep I guess so” (T23.37).
Ms Martel denied having consulted with Mr Ludbrook about her answers to the insurance investigator (T25.1–6) and did not know if she saw his statement.
When questioned about whether paragraph 11 of her April 2006 statement (see [44] above) was something she told the investigator in her own words, Ms Martel said (at T25.25):
“Yeah because it was – yeah it was not – it was – yeah it was up to everyone if they wanted to go [to] the party it, was Alistair’s party – you know, there was alcohol there I remember. I remember taking some myself as well so I guess, yes.”
She said that the words in paragraph 11 of her statement were her words, not the investigator’s words (T25.35). She did not remember that the investigator “selected the words that went into the statement” (T25.54–T26.1). She did not know what was in Mr Ludbrook’s statement (T25.47) or why he said the same as her (T26.10).
Ms Martel was then asked the following questions (starting at T26.13):
“Q. Now isn’t it the situation that you did urge Kathryn Hills to go to the party?
A. In order to meet the other employees, yeah. I said it would be, you know, a nice idea.
Q. Yeah and you thought it important yourself that she should meet the employees because it’s important to have a good, happy working team, is that right?
A. I guess so. It was more because, you know, you don’t see – in that situation you didn’t see everyone, you know, every day kind of thing and it was a nice opportunity for her to meet a few people she might not have met.
Q. Yes and you also told her there’d be clients and photographers at the party didn’t you?
A. No. No because I didn’t know who was invited so I wouldn’t have known if there was photographers. I don’t know though, it’s a long time ago.
MR GROSS: Yeah, yeah.
MS MARTEL: I mean obviously photographers would have been there because they were friends with Alistair but—
Q. Yeah and Alistair was leaving the company but he himself was going to become a photographer, we know that, but it would be likely that he may be hiring equipment back from Pioneer?
MR ODLING: I object to that.
ARBITRATOR: Well I don’t think that that’s relevant and I don’t think it’s a matter that this witness can answer, Mr Gross, so I reject the question.
Q. In any event you considered that photographers were likely to be at the party?
A. Yeah I guess so.
Q. Yeah and by photographers you meant photographers who Pioneer hired equipment to?
A. Yeah I guess so.
Q. Right and you told her that you wanted her to meet those people?
A. No I didn’t tell her I wanted her to.
Q. But you told her you wanted her to go to the party and you told her that those people would be there?
A. I didn’t necessarily want her to go to the party, I just said to her, there’s a party, there’ll be people there from work, you know, it might be a nice idea for you to meet them.
Q. Yeah but also you told her that there’d be photographers there didn’t you?
A. I don’t remember saying the exact words but maybe I did say that. I mean it was a – you know, I’m sure there was [sic] photographers going to be there.
Q. Yeah and including photographers who would be the sort of persons who’d hire equipment from Pioneer?
A. Yeah, well that’s probably how they met Alistair who was having the party, yeah.
Q. And her job – that is Kathryn’s job – was basically to, in effect, do business with photographers who hired photographic equipment wasn’t it?
A. Yeah at work, yeah, not at parties.”
Ms Martel denied that she was directly under Mr Ludbrook in terms of him being the top person and she being the next underneath (T27.33–39).
In response to the suggestion that a farewell party was organised for Mr Buchanan, Ms Martel said, “Alistair organised the party” (T27.44). She agreed that it must have been organised after Mr Buchanan spoke to Mr Ludbrook. She agreed that she knew Mr Buchanan was leaving and that it was a farewell party, but she did not remember if it started out as a birthday party (T28.55).
Ms Martel said that she had nothing to do with the organisation of the party (T30.2). In response to the question of whether she recalled any clients being at the party, she said (at T30.6):
“I remember there being photographers there, you know, essentially clients but, you know, I don’t – you know I don’t know of their relationship with Alistair outside of work so …”
At T32.15, Ms Martel was asked:
“Q. Do you recall whether or not you said words to the effect that you [Ms Hills] should come to the party?
A. I remember saying to her that she – not that – that she should go just to meet people and get a bit of – you know, meet other young people that she hadn’t seen that might go to the party.
Q. Do you recall you made any comment about like it’d be a great night or anything like that?
A. Yeah definitely. I would have said something along the lines of just, you know, come to the party, it’d be fun.”
Ms Martel did not recall going to any specific functions for clients at Pioneer. There were often parties at the studios. Photographers would come, but there were “never any specific functions for clients that were held” that she knew of (T32.53). In answer to the question of whether she saw that as being “good for business”, Ms Martel said (at T33.40):
“A. Well it wasn’t really my business, you know. I just went to these parties and took part. You know that’s up to Richard to decide if it’s good for his business or not.”

Richard Ludbrook

Mr Ludbrook provided two statements, the first dated 7 April 2006 and the second dated 15 June 2006. In his first statement, he said that he was the sole director of Pioneer Studios Pty Ltd, a company that has about 20 employees. He had overall responsibility for running the company. He said that Ms Hills started with the company about two weeks before her accident. As the manager of the equipment rental department, she had to liaise with clients and rent equipment to them. Her usual hours were from 10.00 am until 7.00 pm. She had a good aptitude for the job and a positive attitude.
Though he had been at the function on 13 March 2004, he had gone home before the fall and only became aware of it when he was called and told that Ms Hills had had an accident and that an ambulance had been called.
In respect of the function, he said that Mr Buchanan had approached him with a view to using studio six “for a farewell party” on 13 March 2004. Mr Buchanan was leaving Pioneer and the party was also to be a combined birthday party for him and two of his friends who were not known by Mr Ludbrook. Mr Ludbrook asked Mr Buchanan to arrange for security. Mr Buchanan was going to arrange for everything, including catering and cleaning. No money was paid. Mr Ludbrook respected Mr Buchanan and was happy for him to use the studio.
In his first statement, Mr Ludbrook said:
“21.   As far as I am aware the party was by invitation only. Access to the building was by the Broadway entrance and Alistair had arranged security to be at the door to check people coming and going.
22.    Our company had no involvement in the organisation or control over what was happening at the party. I attended myself on the evening because I was invited.
23.    No employees, including Kathryn, were directed to attend the function. It was purely voluntary attendance and by invitation.”
In his second statement, Mr Ludbrook said:
“7.     I did not have a conversation with Kathryn Hills about it being in her best interests to go to Alistair’s party on 13 March 2004. I do not recall having any discussion with Kathryn at all about whether she was going to the party or not. I would not have even known whether she had been invited or not.
8.     I remember around that time that Kathryn had been employed to work in the equipment room and once that had happened I stepped back and let my staff train her and allow her to settle in to her new job. That is what I do with all new employees.
9.     I don’t recall discussing Alistair’s party with her and advising her that it was in her best interests to go. That is not something I would have done as it was not a work function and I had no idea who was going to be there in any event. Alistair and his friends were responsible for who was invited and as far as I know the party was by invitation only.
10.    The invitations and all arrangements for the party were done by Alistair and his friends. Our company had no involvement in who was being invited.
11.    I also had no prior knowledge as to who was going to be at the party. I do not recall Alistair discussing with me who was going to be at the party or who he had invited. I specifically do not recall him telling me that he had invited clients of our company.
12.    We do have parties and functions for our clients however this was not a work function. I do not recall any clients being there on the night. The mix was a lot of people I did not know, some I knew as Alistair’s friends, and my own employees.
13.    This was not a party which was organized [sic] for our clients. This was a party which our company had no involvement in in [sic] organising.
14.    Alistair came to me and asked me whether he could use the premises to have a party. I recall asking him specifically to arrange security however all the arrangements and organising were done by Alistair or his friends. Our company was not involved in any way apart from my workers and me being invited as guests.
15.    There were a lot of people at the party that I didn’t know. I probably didn’t know about two-thirds of them. The only people I knew were my own employees. Again I do not recall any clients being there. The majority of people there were either friends or contacts of Alistair or his two friends. I knew some of Alistair’s friends but a lot of them were not known to me.
16.    From what I could see of Kathryn on the night and from conversations I have had with her family since the accident Kathryn was a willing participant at the party and she even brought a girlfriend along with her. She was there willingly and voluntarily. She did not have to go on the night and she could have left at any time.
17.    We did not compel or order her to go to the party. All attendance at the party was by invitation through Alistair. I had no power to invite or order other people to go to the party myself.
18.    A lot of my employees who were at the party have since left my company.”

Alistair Buchanan

Mr Buchanan gave a statement to the police on 14 March 2004. He said he had worked at Pioneer since January 2001. There were 12 to 15 people at the company. They included an office manager, digital department crew, equipment crew, delivery crew, and cleaning crew. The company hired out studios, lights and cameras to photographers. A few months prior to March 2004, he decided to leave Pioneer to become a freelance photographer.
About two-and-a-half weeks before the party, his flatmates, Peter Fleming and Jordan Cvetanovski, started organising a party for 13 March 2004 to celebrate their birthdays. They originally planned to have the party in their unit at Rose Bay. They thought better of that idea and Mr Buchanan approached Mr Ludbrook and asked him if they could use one of the studios at Pioneer for the party. Mr Ludbrook agreed and suggested that he have the party as a farewell, as well as a birthday party.
On about 4 March 2004, Mr Fleming and Mr Cvetanovski emailed invitations to their friends. On 9, 10 and 11 March 2004, Mr Buchanan emailed invitations to his friends and work colleagues. Between them, they sent about 100 invitations. People were requested to bring their own drinks. Mr Buchanan and his friends organised a disc jockey and supplied soft drinks. People were requested to dress up as anything starting with the letters A, P or J: the first letters of the given names of Mr Buchanan, Mr Fleming and Mr Cvetanovski.
A friend picked Mr Buchanan up at about 1.45 pm on 13 March 2004 and drove him to the studio at Broadway to set up for the party. Mr Buchanan and Mr Cvetanovski collected the sound system at about 3.00 pm. He left the premises at about 6.30 pm to return to his unit at Rose Bay to change his clothes for the party.
Security for the party was provided by a man called Neil, who stood at the front door of the building. He was instructed to make sure that no uninvited guests came to the party and that each guest had a bottle of alcohol before they entered. Messrs Buchanan, Fleming and Cvetanovski paid Neil $150.
During the course of the party, Mr Buchanan greeted Ms Hills and “danced with her a bit”. At some stage early on the morning of 14 March 2004, Mr Buchanan helped Ms Hills look for her camera. They were walking from studio six on level five to the equipment room on level four to look for it when Ms Hills lost her balance and fell over the railing on level five onto the landing on level four.
Mr Buchanan had only briefly spoken to Ms Hills about half-a-dozen times since she started with Pioneer about two weeks prior to the accident.

Peter Fleming

Mr Fleming is an architect. He shared a flat with Mr Buchanan and Mr Cvetanovski. He was involved in organising the party to celebrate his birthday, Mr Buchanan’s farewell from Pioneer, and Mr Cvetanovski’s farewell for his overseas trip. During the course of the party, Mr Buchanan introduced Mr Fleming to a lot of his workmates, but he could not be certain if he met Ms Hills at the party.

Jordan Cvetanovski

Mr Cvetanovski is an investment analyst. He assisted in organising the party. Around 3 March 2004, he sent invitations to his friends via email.
The party went well and “peaked” at about 1.00 am when there were between 70 and 100 people present. The bulk of people starting leaving between 2.30 and 3.00 am. At around 3.20 am, he told the disc jockey to play one last dance. The disc jockey put on a song and Mr Cvetanovski recalled seeing Mr Buchanan and Ms Hills dancing. During the dance, they walked over to the couches and appeared to be looking for something. Ms Hills fell about a minute later.

Sonia Borella

Ms Borella was Mr Buchanan’s girlfriend. He introduced her to Ms Hills and she spoke with her for a few minutes about where in Pioneer she was working. Ms Borella said she met many people that night who worked with Mr Buchanan.

Samantha Hawken

Ms Hawken provided two statements, the first dated 11 April 2006 and a second, unsigned, dated 15 June 2006. The first statement is not in evidence but is referred to in the second statement. At the time of the second statement, Ms Hawken worked with Screen Pty Ltd. I infer from her second statement that, at the time of the accident, she worked with Pioneer.
Ms Hawken said that she had no recollection of anyone being compelled or ordered by Pioneer to go to the party. Attendance was purely voluntary and by invitation. There was no directive given that staff had to attend to mix or network with clients. Ms Hawken went to the party knowing that some of her work colleagues would be there, but she had no “pre-knowledge of any of our clients being involved”. She did not recall any of the company’s clients being at the party. The mix of people appeared to be friends or colleagues of Mr Buchanan and his two friends.

Louise Banyard

Ms Banyard was friends with Ms Borella and had known Mr Buchanan for about 12 years. Ms Borella invited her to the party about one week before 13 March 2004 to celebrate Mr Buchanan’s birthday. She was not introduced to Ms Hills on the night of the party and had not met her previously. She left the party at about 3.00 am with Ms Borella.

Medical evidence

Dr Lynch

Dr Lynch is a neurologist/neurophysiologist who examined Ms Hills on 26 January 2005. He took the following history:
“She told me that she was at a work function at Pioneer Studios when she apparently fell down two flights of a stairwell, a distance of approximately 6 metres, landing on her head. The patient is unable to recall events of the previous four to seven days prior to the accident and has no clear recollection of the events up to four weeks after the accident. She was admitted to Royal Prince Alfred Hospital in Sydney where significant brain injuries were noted on imaging with a subarachnoid haemorrhage, a left frontal subdural haemorrhage and a fractured base of the skull extending to the right occipitoparietal region.”
Neuropsychological data suggested minor improvements (in executive and cognitive functioning) occurred between 2004 and March 2005.

Dr Fearnside

Dr Fearnside, neurological surgeon, reported to Carroll & O’Dea on 25 July 2005 that Ms Hills attended an after-hours workplace function at Pioneer Studios premises on 14 March 2004. She had no clear recollection of the incident, but understood that she fell backwards over a banister. An ambulance arrived at 4.01 am and found Ms Hills to have a Glasgow Coma Score of 3, that is, she was deeply unconscious as a consequence of her head injury.
She was admitted to Royal Prince Alfred Hospital, where she remained until 13 April 2004, when she was transferred to the Brain Injury Unit at Royal Rehabilitation Centre, Ryde.
Dr Fearnside stated that “memory impairment remained”. Neuropsychological assessments on 3 May 2004 and 10 May 2004 revealed that Ms Hills had some “significant ongoing problems in areas of visual memory, processing of visuospatial information, executive function and slowing of information processing”.

Susan Shaw

Ms Shaw is a neuropsychologist who has assessed Ms Hills on several occasions. In her last assessment in May 2006, she said that the:
“current neuropsychological profile suggests improvements in memory abilities and processing speed since the last assessment 14 months ago.”
There had also been some improvement in executive functions and attention and concentration, but those abilities were still reduced compared to pre-morbid estimates. Ms Hills still suffered forgetfulness.

WorkCover medical certificates

The first WorkCover medical certificate issued is dated 7 May 2004. The injury is described as “severe traumatic brain injury”, which occurred at a “workplace function”.

Other evidence

The applicant also tendered a copy of a Cabcharge statement. The account is in the name of Pioneer. It confirms that Mr Buchanan used the account at about 7.45 pm on the evening of 13 March 2004 and on three other occasions in March 2004.

THE SENIOR ARBITRATOR’S REASONS

After summarising the evidence and referring to several authorities, the Senior Arbitrator concluded that Ms Hills had not received an injury within the meaning of s 4 of the 1987 Act on 14 March 2004. Her reasoning may be summarised as follows:
(a)     the injury occurred during a period between two discrete periods of work, not whilst on an interval during an overall period of work (Statement of Reasons (Reasons) at [113]);
(b)     there was no evidence of “organisation, promotion or commitment of resources by the employer to the function” (Reasons at [114]). Mr Ludbrook was present only as an invited guest and merely authorised the holding of the party at his premises to assist a long-term and trusted employee. The only connection with “employment” was that the function was held at Pioneer’s premises. The evidence did not disclose that Mr Ludbrook either encouraged or induced employees to attend;
(c)     Ms Martel and Mr Ludbrook could not have told Ms Hills that clients were attending because they themselves were unaware of the guest list. Mr Buchanan and his friends invited the guests. Ms Martel, Mr Ludbrook and Ms Hawken all stated that they did not see clients at the party. Photographers were present, but, if they were also clients of Pioneer, they were invited in their capacity as friends of Mr Buchanan. She did not accept that clients were in attendance (Reasons at [115]);
(d)     other features of the party that confirmed it was not a function that could be considered reasonably incidental to the worker’s employment included: it was held outside work hours, it was a fancy dress party with guests being asked to dress in something starting with A, P or J, the initials of the three hosts, it was a “BYO event”, with the security guard being urged to ensure that guests brought a bottle, and Mr Buchanan and his friends organised and set up the party and paid for the security guard (Reasons at [116]);
(e)     the fact that Mr Ludbrook told Ms Martel at about 2.00 am to get people to move out did not indicate “a significant degree of control over the event by Mr Ludbrook”, but, rather, a concern at the lateness of the hour. In any event, the party continued after 2.00 am (Reasons at [117]);
(f)      there was no evidence that the “primary purpose of the function” was a farewell party (Reasons at [118]). There was no evidence that Mr Ludbrook made a speech or in some way contributed financially with the provision of alcohol. Though the party had a “mixed purpose”, it was not possible to state that the “farewell” aspect of the party could be regarded as the “relevant purpose” of the event “such that the applicant’s attendance could be said to have arisen out of or in the course of her employment” (Reasons at [118]);
(g)     she was not persuaded that there was sufficient evidence to conclude that Ms Hills, or indeed other employees, were either encouraged or induced to attend the party. She did not consider Ms Martel’s evidence that she told Ms Hills it would be a nice idea to attend and an opportunity to meet fellow employees amounted to “encouragement” by Pioneer to attend the party. It was more of a suggestion to enjoy a fun night out. The worker’s attendance was in response to the invitation by a fellow employee, not Mr Ludbrook. The premises became, on the night of the party, a place of entertainment, not employment (Reasons at [119]);
(h)     the mere fact that a worker attends a party with other employees, even management and clients, is not enough to bring the attendance at the party within the course of the worker’s employment. There must be some encouragement or inducement to attend (Reasons at [120]);
(i)      much of the worker’s evidence suggested that she had no clear independent recollection of events and had essentially reconstructed them. She may well have considered that she had been “encouraged” to attend the party, but the Senior Arbitrator considered that any such “encouragement” was more in the nature of an opportunity to meet and socialise with other employees in a party context, as Ms Martel stated. The worker’s evidence that it was “suggested” that she attend was consistent with Ms Martel’s evidence. Ms Hills agreed that the party arrangements were “loose” and that she was not obliged to attend at a particular time. Ms Hills admitted that she could not now be sure of what either Mr Ludbrook or Ms Martel said to her (Reasons at [121]);
(j)      a “suggestion” does not amount to encouragement or inducement. She had no real memory of the party and said that it was “logical” that it would be beneficial to meet clients in a social context (Reasons at [122]);
(k)     Dr Lynch’s evidence that Ms Hills could not recall events of the four to seven days prior to the party was compelling. The worker’s later recollection of events, as set out in her statements, was not entirely reliable. The Senior Arbitrator did not accept that any communication about the party took place well before the four to seven day period prior to 13 March 2004 (Reasons at [123]);
(l)      she could accept that Ms Hills regarded the function as a “work party”. The fact that the worker’s mother and Ms Cable also referred to the event as a “work party” was not in itself determinative (Reasons at [124]);
(m)   ultimately, Ms Hills had to establish that she was encouraged or induced to attend the function and the evidence fell short of that requirement (Reasons at [125]);
(n)     the insurer’s initial acceptance of liability did not constitute an admission of liability (Reasons at [128]);
(o)     many of the authorities cited by counsel for the worker could be distinguished on the facts (Reasons at [129]);
(p)     the result may have been different if Pioneer had been involved in the organisation, promotion and funding of the event. The employer’s premises on the night of 13 March 2004 had become a place of entertainment, rather than a place of employment. Pioneer did not take any active steps to facilitate the holding of a party (Reasons at [130]);
(q)     the Senior Arbitrator was not satisfied that, “as a matter of ordinary common sense and experience” (per Clarke JA in Zinc Corporation Ltd v Scarce (1995) 12 NSWCCR 566 at 571A), there was such a connection between the worker’s injury and her employment that her injury could be regarded as having arisen out of that employment (Reasons at [131]);
(r)      she was not satisfied that Ms Hills had demonstrated the necessary causative connection between her employment in her particular job and her injury, or that her attendance at the party was part of or incidental to her duties (Reasons at [132]), and
(s)     were it necessary, the Senior Arbitrator was not persuaded that the worker’s employment was a substantial contributing factor to her injury since the causal connection was not “real and of substance” (Badawi v Nexon Asia Pacific Pty Ltd t/as Commander Australia Pty Ltd [2009] NSWCA 324; 75 NSWLR 503; 7 DDCR 75 (Badawi).

ISSUES IN DISPUTE

The issues in dispute in the appeal are whether the Senior Arbitrator erred in:
(a)     determining, contrary to Tarry v Warringah Shire Council [1974] 48 WCR 1 (Tarry), the issue of whether the injury to Ms Hills arose out of her employment by reference to case law and legal doctrines concerning the separate issue of whether the injury arose in the course of her employment;
(b)     failing to address the worker’s arguments and the evidence in support of such arguments that:
(i)Pioneer’s employee, Ms Martel, had actual and ostensible authority on behalf of Pioneer to encourage Ms Hills to attend the party for work purposes, and exercised that authority by encouraging Ms Hills to attend the party so that Ms Martel’s acts were those of Pioneer, and
(ii)Pioneer, through Mr Ludbrook, delegated to Alistair Buchanan tasks and decisions in relation to holding and arranging the farewell party, so that Mr Buchanan’s acts were those of Pioneer;
(c)     her consideration of the evidence by misapprehending the effect of the whole of the evidence given, including the concessions made by Ms Martel in cross-examination, as to:
(i)the work purposes of the party;
(ii)the attendance of clients and potential future clients at the party;
(iii)the benefit to Pioneer’s business in having the clients and potential future clients attend the party;
(iv)Pioneer’s role in relation to the party, and
(v)the reasons for Ms Martel, as agent for Pioneer, requesting and encouraging Ms Hills to attend the party.

SUBMISSIONS

Senior counsel for Ms Hills, Mr Gross QC, submitted that:
(a)     though Ms Martel denied in cross-examination that she had told Ms Hills that there would be clients and photographers at the party, because she did not know who had been invited, she then corrected that evidence by saying (at T26.48–55) that “obviously photographers would have been there because they were friends with Alistair” and then agreed that, in any event, she “considered that photographers were likely to be at the party, that is, photographers who Pioneer hired equipment to”. The Senior Arbitrator did not refer to this change in Ms Martel’s evidence and her concessions about the presence of clients, and only relied on her initial assertion;
(b)     the Senior Arbitrator erred in determining the issue of whether the injury arose out of the employment by reference to case law and legal doctrines concerning the separate issue of whether the injury arose in the course of her employment. An injury does not have to be “in the course of” employment to “arise out of” that employment and, though the Senior Arbitrator referred to Tarry, she failed to draw from that case the principles discussed;
(c)     the Senior Arbitrator erred in considering only some of what Mr Ludbrook did personally in relation to the party, and ignored evidence as to what was said and done by Ms Martel and Mr Buchanan. Mr Ludbrook’s approval of Mr Buchanan’s proposal was an act by Pioneer. His conferral of authority and permission on trusted employees was Pioneer’s act. Ms Martel and Mr Buchanan did what was within the scope of the authority with which Mr Ludbrook, on behalf of Pioneer, entrusted them. So far as Ms Hills was concerned, Ms Martel and Mr Buchanan had the apparent authority of Pioneer, and their statements and actions were the statements and actions of Pioneer;
(d)     by concentrating on Mr Ludbrook and ignoring what Ms Martel and Mr Buchanan did, the Senior Arbitrator unduly narrowed the class of persons whose acts could be regarded, in combination, as being Pioneer’s acts in relation to encouraging Ms Hills to attend the party;
(e)     the Senior Arbitrator ignored the clear evidence that Mr Ludbrook gave instructions to Ms Martel “to go around and start to get people to move out”. He did not need to perform this task personally in order to exercise his decisional role of determining when the party should end;
(f)      the Senior Arbitrator treated the “employer” as only being Mr Ludbrook and erred by stating (at [114]) “[t]here was no evidence of organisation, promotion or commitment of resources by the employer to the function”;
(g)     the Senior Arbitrator erred (at [115]) in finding of significance “the comment made by both Ms Martel and Mr Ludbrook that they could not have told the applicant that clients were attending since they themselves were unaware of the guest list”. The Senior Arbitrator made a related error (also at [115]) when she said that Ms Martel, Mr Ludbrook and Ms Hawken all stated that they did not see any clients at the party. This involved placing “undue reliance” upon the statements obtained by Pioneer’s investigator without weighing that evidence against the balance of the evidence, which showed that there were (invited) photographers present who did business with the company. It made no sense to state (as the Senior Arbitrator did) that the photographers present were invited only in their capacity as friends of Mr Buchanan. This was a bare assertion found in the statement secured by an investigator and it made no sense to rely upon that assertion so as to either accept the proposition that these three people did not “see” any clients at the party, or to reject the submission that “clients were in attendance”;
(h)     photographers who were clients of Pioneer were at the party. That fact was not undermined by the proposition that Ms Martel asserted that they were invited only in their capacity as friends of Mr Buchanan, and not as clients. The Senior Arbitrator needed to fully consider the evidence and not ignore the concessions made by Ms Martel in cross-examination regarding the photographers being in attendance, and Ms Martel telling Ms Hills that they would be there;

(i)      Mr Ludbrook, as Pioneer’s sole director, asserted a degree of control over the premises, and the event, by allowing Mr Buchanan to use the premises and by giving instructions (to Ms Martel) as to when to exclude the guests. It was not suggested that it should occur only if the three “birthday boys” were happy for the party to close down. Even if the party did continue for some time after Mr Ludbrook left, he had asserted as much control as he could while he was still there by telling Ms Martel to get the people to leave. This exercise of control was consistent with Pioneer having conducted a farewell party;
(j)      the Senior Arbitrator did not subject the facts to a rigorous analysis after taking all relevant facts and evidence into account. It is impossible to understand how the Senior Arbitrator concluded (at [118]) that it was “not possible in the circumstances of this case to state that the ‘farewell’ aspect of the party could be regarded as the ‘relevant purpose’ of the event”. The Senior Arbitrator made a mistake in view of the evidence based on an inadequate consideration of, and incorrect characterisation of, the whole of the evidence;
(k)     the Senior Arbitrator’s conclusion (at [119]) that she was not persuaded that Ms Hills had been either encouraged or induced to attend the party was a product of her earlier errors. It is difficult to understand why any suggestion that it would be a “fun night out” detracts from the concept of “encouragement”, when what is to be borne in mind is whether any incident of the employment causally contributed to Ms Hills being injured. The Senior Arbitrator’s characterisation of the premises as a “place of entertainment, not employment” is “infected” by the Senior Arbitrator’s earlier legal errors regarding the course of the employment being a criterion for whether an injury arose out of the employment. The worker’s evidence that she was not under the impression she would lose her job if she did not attend was a matter undeserving of any weight, as encouragement does not have to be heavy-handed or threatening;
(l)      it was not pertinent to inquire as to what “the primary purpose of the function” was, or as to whether “the emphasis” changed to it being that of a farewell party. If the relevant causal contribution between the worker’s employment and her injury was established, a mixed purpose of the farewell party was sufficient (Hook v Rolfe (1986) 7 NSWLR 40 (Hook));
(m)   the employees were invited to attend their employer’s premises and Ms Martel communicated to Ms Hills that it would be good for her to meet and mix with her fellow employees. This was plainly seen as part of corporate team-building and sustaining esprit de corps (Wolmar v Travelodge Australia Ltd (1975) 26 FLR 249);
(n)     a relative or even complete absence of control in the directorial sense does not necessarily defeat an employee’s claim in relation to a Christmas party injury (Marro v Real Estate Institute (NSW) (1988) 27 IR 27);
(o)     a senior employee can represent the employer for the purpose of communicating encouragement or inducement (Powell v Intercapital Brokers (1998) 16 NSWCCR 259 (Powell)). Just because the employer did not pay for food and alcohol, as it did in Powell, is not critical. The employer provided the premises and that was a (financial) benefit to Mr Buchanan. There was ample evidence that co-workers were at the party and people Pioneer dealt with. That outweighed the question of whether the employer contributed to the cost;
(p)     in Roncevich v Repatriation Commission [2005] HCA 40; 222 CLR 115, the High Court acknowledged (at [27]) that “[a] causal link alone or a causal connexion is capable of satisfying a test of attributability without any qualifications conveyed by such terms as sole, dominant, direct or proximate”. It also emphasised that being affected by alcohol at a work function can be sufficient to create the relevant causal connection, and it is not a disqualifying factor in the particular context;
(q)     the actions of Mr Ludbrook, Ms Martel and Mr Buchanan in their communications with Ms Hills did and said enough to encourage and induce Ms Hills to attend the party, and to be exposed to the risk of injury whilst at the party and leaving the party. The worker’s intoxication is not a disqualifying feature, and
(r)      if the injury arose out of the employment, it would plainly enable Ms Hills to succeed under s 9A.

Mr Gross expanded on these submissions at the oral hearing of the appeal. His submissions have been recorded and I will only refer to them so far as is necessary for the proper determination of the issues in dispute.
Counsel for Pioneer, Mr Odling, submitted:
(a)     at [122], the Senior Arbitrator was referring to her impression of the worker’s evidence and came to the conclusion that the evidence in the written statements was simply quite beyond the worker’s memory at the time she made the statements and when she gave her evidence. Because of her injury, Ms Hills could not have an accurate memory of what was said to her in the days leading up to the accident;
(b)     Ms Cable’s evidence that Ms Hills did not invite her to the party until 11 March 2004 is consistent with the Senior Arbitrator’s finding that the invitations were informal and running very late. That was corroboration of the Senior Arbitrator’s conclusion of the unreliability of the worker’s evidence;
(c)     Mr Buchanan approached Mr Ludbrook to use the premises and Mr Ludbrook agreed and said, by the way, we will make it a farewell. That was not a change in character of the party. It remained a birthday party for three men who invited their own guests. Neither Mr Ludbrook nor Pioneer issued any invitations and it never acquired the character of a company function. Reliance was placed on Haider v JP Morgan Holdings Aust t/as JP Morgan Operations Australia Ltd [2007] NSWCA 158; 4 DDCR 634 (Haider) and it was submitted that the facts are stronger for Pioneer in the present case because it was a far less formal situation. It was purely an offer of premises to satisfy a one-off need for a highly regarded employee, Mr Buchanan.
(d)     there is no evidence that the organisational role played by Mr Buchanan was performed by him on behalf of Pioneer. He did not organise security on behalf of Pioneer. The extent of the non company involvement is clear from Mr Buchanan’s evidence about the activities on Saturday 13 March 2004: Mr Buchanan and his friends set up the disc jockey equipment, lights, furniture and the like;
(e)     Ms Martel’s evidence was that she did not tell Ms Hills that she wanted her to go, but that there was a party with people from work and it might be a nice idea for Ms Hills to meet them. She said to Ms Hills “come to the party, it’ll be fun”. This evidence had the compelling ring of truth about what was said. She encouraged Ms Hills to go but not for the benefit of the employer, but to meet some nice people and have a convivial workplace. Ms Hills was not required to be there at a particular time. She was not required to look after particular people. There was no feature of this case that could give rise to the injury being said to have arisen out of the employment. There was no degree of compulsion intimated in Ms Martel’s evidence. The job was not a high-powered selling position;
(f)      it was not part of Pioneer’s regular mode of doing business for clients to be invited to an organised function. One would not expect invited guests (clients) to bring their own alcohol;
(g)     the evening of the party developed with no control from Pioneer or Mr Ludbrook. His action in asking people to move out was not control by the employer, but the responsible action of the owner of the premises, particularly as it was not a detailed instruction. The party continued after Mr Ludbrook left the premises. Pioneer provided no alcohol and no assistance towards the expenses;
(h)     Ms Martel’s evidence that there were never any specific functions for clients (T32.54) was consistent with Mr Ludbrook’s evidence that he does not have client functions;
(i)      if one looks at the net effect of Ms Martel’s evidence, the Senior Arbitrator made no error and correctly assessed the overall effect of her evidence;
(j)      Mr Ludbrook had not ceded responsibility or authority to Ms Martel, and
(k)     the Senior Arbitrator’s conclusion was correct.

DISCUSSION AND FINDINGS

In conducting a review on the merits, I must determine the true and correct position having regard to the issues in dispute. To establish that the injury arose out of the employment concerned, it is necessary for Ms Hills to show some causal connection between the employment and her injury. To succeed with her claim, she must also establish that her employment was a substantial contributing factor to the injury.
The worker’s case is that she attended the function because she had been encouraged to do so by Ms Martel and Mr Ludbrook, and because she believed that clients and photographers to whom Pioneer rented equipment would be present, and it would be a good opportunity for her to meet those clients and impress her superiors. She was also new to the company and needed to “make a good impression” and “join in with the team”. She viewed the party as a work function.
Subject to the concessions by Ms Martel dealt with below, Pioneer’s case is diametrically opposed to the worker’s version. It says that the function was purely a social function that had nothing to do with work. No clients attended and attendance by employees was voluntary and by invitation issued by Mr Buchanan and his friends. Mr Ludbrook says that Pioneer had nothing to do with organising the party or inviting the guests.
Mr Odling submitted that, because of the nature of the worker’s injury, her evidence is unreliable and the Senior Arbitrator was justified in not accepting it. Whilst it is true that the injury was severe, and that it affected the worker’s memory and cognitive capacity, that does not automatically mean that her evidence should be rejected as unreliable. It means that, where possible, its reliability should be checked against other evidence. Judges should “reason to their conclusions, as far as possible, on the basis of contemporary materials, objectively established facts and the apparent logic of events” (Fox v Percy [2003] HCA 22 at [31]; 214 CLR 118).
The Senior Arbitrator said (at [121]) that much of the worker’s evidence suggested that she had “no clear independent recollection of events” and had “essentially reconstructed them”. She further said that Ms Hills admitted that her recollection of events was not sound. That was not an accurate summary of the worker’s evidence. When it was put to Ms Hills that she had no recollection of what was going through her mind in the week leading up to the function, she answered indirectly by saying that it was logical that “if she was working with them they [should] get to know me on a social level as well as a personal level” (T10.19). This answer provided some support for her alleged lack of independent recollection. However, though Ms Hills conceded that she did not really recall the night of the party, she did not say that her “recollection of events was not sound”.
Mr Odling extensively cross-examined Ms Hills about her recollection. When he put to her that, in 2006, her memory of the events two weeks before the party was still vague, the worker’s answer was equivocal and generally unhelpful. It is worth repeating it (at T7.15):
“They were – I can’t really think that I – that I didn’t have very much more memory than I’ve got now, but just – I just remember – have flashbacks now of the day to day with Jennifer and the kind of the conversations and …”

Based on this evidence, the Senior Arbitrator said (at [56]) that the worker’s memory was “generally in the form of ‘flashbacks’”. However, the worker’s answer must be read with the whole of the evidence. Later in her evidence she said Ms Martel and Mr Ludbrook separately said to her that “Alistair [Buchanan] was having a leaving party and there was all the employees and also clients coming and they told me about it and encouraged me to go” (T7.52). When Mr Odling expressly put to her that that was not what was said, Ms Hills responded, “I’m not sure. Unfortunately there was – I know that it was suggested that there definitely will be clients there”. After an interruption from counsel, she continued, “I don’t know actually their complete words but they did say there will be clients there” (T8.26). When pressed if she could recall the precise words spoken by Ms Martel or Mr Ludbrook, Ms Hills said she could not “but I am able to recall that it was definitely suggested that I go” (T8.45).
The worker’s evidence was much more than “flashbacks” of isolated images or thoughts. It was evidence of a clear recall of the substance of critical conversations with Mr Ludbrook and Ms Martel. Ms Hills denied having discussed her evidence with anyone and her evidence was not shaken or materially undermined in cross-examination. Read as a whole, her evidence does not support a conclusion that she had no clear independent recollection or that her recollection was restricted to isolated “flashbacks”. Rather, it supports the conclusion that she did recall events in the period leading up to 13 March 2004.
The worker’s understanding that she was attending a function to farewell Mr Buchanan is consistent with other evidence. That was undoubtedly one of the purposes of the function. Mr Odling did not challenge the worker’s evidence that she did not become aware that the function was also a birthday celebration for Messrs Buchanan, Fleming and Cvetanovski until she saw it in some of the police statements. This evidence provides support for her assertion that she believed it was a work function and is significant in explaining why she attended. It is consistent with her evidence that, as she was a new employee, she attended to “meet clients and fellow employees”. Her understanding that it was a work function was logical and plausible.
Whilst Ms Hills answered “yes” to the proposition that her evidence was a “reconstruction” (T15.47), Mr Gross objected to the question on the ground that it included a “double question”. Rather than ruling on the objection, the Senior Arbitrator said (at T15.55):
“I think the Applicant’s handled it. I think she has cleared it; really what she said now is what she believed at the time.”
Given this exchange, it was unfair to discount the worker’s evidence on the basis that it was “reconstruction”. The worker’s evidence had to be analysed and weighed against the whole of the evidence and, in particular, the concessions by Ms Martel.
The Senior Arbitrator diminished the weight to be attached to the worker’s evidence by referring (at [59] and [121]) to her having said that it was “suggested” that clients would be present and that it was “suggested” she should attend. The worker’s evidence has to be read in context of the cross-examination. This expression was first used by Mr Odling (not Ms Hills) when he put to her (at T8.4) that she was not “suggesting” that Ms Martel and Mr Ludbrook spoke to her together. He then put to her (at T8.11) that it was simply not right to “suggest that either of those people suggested to you there would be … a lot of clients coming to the party” (emphasis added). Ms Hills responded in similar language that, though she could not recall the exact words, “it was suggested that there definitely will be clients there”. Her inability to recall the exact words is not critical.
I do not agree with the Senior Arbitrator’s statement (at [122]) that a “suggestion” does not amount to encouragement or inducement. Depending on the context, a “suggestion” is capable of amounting to encouragement or inducement to act in a certain way, though it is certainly not as forceful as a command. The context in the present case was a work setting where Ms Martel, one of Pioneer’s managers, and the worker’s supervisor and mentor, agreed in her oral evidence that she did “urge” Ms Hills to attend the function at her employer’s premises to (at the least) meet other employees. That was clear evidence of encouragement to attend.
Though the Senior Arbitrator noted (at [115]) that Ms Martel agreed there were photographers present, she did not refer to the change in Ms Martel’s evidence during cross-examination. That change was significant because, in answer to the assertion by Ms Hills that she had been invited to the party to meet clients, Pioneer’s case was that no clients attended and that Mr Ludbrook and Ms Martel did not know who had been invited. I accept that, apart from Pioneer’s employees, Mr Ludbrook and Ms Martel most likely did not know who had been invited to the party.
Ms Martel twice conceded that clients would have been at the party. The first concession was a half-hearted “[y]eah I guess so”, in answer to the proposition that she considered that photographers were likely to be at the party. That answer was far from convincing and Ms Martel maintained that she did not tell Ms Hills that she wanted her to meet “those people”. She also denied telling her that she “wanted” her to go to the party, but conceded that she told her that there was a party, there would be people from work present, and that it “might be a nice idea for [Ms Hills] to meet them”. Had the evidence remained in that state, I would have found it unconvincing.
However, when pressed about the presence of photographers, Ms Martel said she did not remember her exact words but “maybe” she did say that photographers would be there because she was “sure” that there were photographers going. She also agreed that the worker’s job was to do business with photographers, but at work not at parties. More importantly, Ms Martel ultimately conceded that, contrary to her 2006 statement, she did remember photographers (clients) being at the party. This concession was inconsistent with her initial answers on this topic, and the statements from Mr Ludbrook and Ms Hawken that no clients attended.
In the light of these concessions by one of Pioneer’s main witnesses (and its only witness to give oral evidence), the Senior Arbitrator erred in rejecting Mr Gross’s submission that clients attended and that this was (some) evidence that it was a work function. The concessions by Ms Martel undermined the evidence from Mr Ludbrook and Ms Hawken, which the Senior Arbitrator found “persuasive”, that no clients attended. Rather than considering the relevance of Ms Martel’s concessions, the Senior Arbitrator said that, if photographers at the party happened to also be clients of Pioneer, they were invited only in their capacity as friends or colleagues of Mr Buchanan. Whilst that was almost certainly correct, it did not determine the critical question of whether Pioneer had encouraged or induced Ms Hills to attend the party to meet clients, as she has consistently alleged. Ms Martel’s concessions provided important corroboration for the worker’s evidence that she had been told that clients would be at the function. It also supported her assertion that it was a work function and that she had been encouraged to attend, and did attend, because she believed, on reasonable grounds, it was a work function.
When looking at the purpose of an activity, it is not necessary to inquire, as the Senior Arbitrator did (at [118]), as to the “primary purpose” of the function. The Court of Appeal considered the issue of multiple purposes in Hook. In that case, the trial judge held that the worker (a solicitor) received injuries in the course of and arising out of his employment when he was involved in a car accident whilst on holiday because he had intended seeing one of his employer’s clients in the course of his holiday. The employer appealed. It argued that, as the accident happened on a Monday, and the worker did not intend to see the client until the next day, the holiday purpose displaced the employment purpose and “was the dominant purpose” on the day of the accident. Glass JA (Hope JA agreeing) rejected that argument. His Honour said, at 44–45:
“The existence of conduct inspired by multiple purposes is a common phenomenon. It raises the problem of classification in connection with a legal standard defined in terms of purpose. The solution normally adopted is to act upon the relevant purpose, to disregard others and not to inquire which of them is dominant or earlier: Mikasa (NSW) Pty Ltd v Festival Stores (1972) 127 CLR 617 (withhold supply for the reason that); National Mutual Life Association of Australasia Ltd v Federal Commissioner of Taxation (1970) 122 CLR 13 (land used for the purpose of producing assessable income). The same approach has been adopted in relation to whether conduct motivated by several purposes can fall within the course of employment (Humphrey Earl Ltd v Speechley (at 134).” (emphasis added)

His Honour added that, though the holiday purpose was earlier in time, the “employment purpose was operative in locating him on the road” where the accident happened on the Monday. Dealing with the employer’s argument that the injury had not arisen out of the employment, his Honour said, at 45:
“The fault in this argument is that it ignores the concept of plurality of causes which is embedded in tort law and has been specifically extended to workers’ compensation law: Baker v Willoughby [1970] AC 467 at 492; Morris v George [1977] 2 NSWLR 552 at 580. The finding by the trial judge that the Monday trip was actuated by an employment purpose as well as a holiday purpose justifies a conclusion that one of the causes of the applicant’s presence on the road near Cassilis on Monday afternoon was the professional call to be made next day on his employer’s client.” (emphasis added)
In the present case, the evidence is clear that the function had two main purposes: a birthday party for Messrs Buchanan, Fleming and Cvetanovski, and a farewell party for Mr Buchanan, who was leaving Pioneer to become a freelance photographer. Mr Cvetanovski added that the party was also to celebrate his departure on an overseas trip, though that purpose is of no consequence. It was not appropriate to ask (as the Senior Arbitrator did) if the “primary purpose of the function was a farewell party”. The Senior Arbitrator also said (at [118]) that she was not persuaded that “the emphasis changed to being that of a farewell party” and it was not possible to state that the “farewell” aspect of the party could be regarded as the “relevant purpose”. There was no issue of the emphasis of the party changing. It always had a dual purpose. The employment purpose had to be a “relevant purpose” that “actuated” the worker’s attendance. For the reasons explained below, I am satisfied that employment purposes motivated Ms Hills to attend.
Ms Hills was new to Pioneer and, responding to encouragement from Ms Martel and Mr Ludbrook, she felt that it was necessary for her to attend the function to, at the least, “make a good impression” and “join in with the team”. That was a consistent theme in the worker’s evidence and, not only was it not undermined in cross-examination, it was reinforced when she said that, though she did not recall the exact words, “it was definitely suggested” that she go to the party. Significantly, she added that, if Mr Ludbrook and Ms Martel had not told her that they wanted her at the party, she would not have gone (T16.6) and would probably have “spent the Saturday night with, not people that I didn’t know” (T16.12). This answer was consistent with her having been encouraged or induced (or “actuated”) to attend because of work purposes.
The worker’s evidence that she considered the party a “work function” is corroborated by Ms Cable’s evidence that, on 11 March 2004, Ms Hills had invited her to a “work party”, the WorkCover medical certificate issued on 7 May 2004, which described the injury as having occurred at a “workplace function”, and Dr Lynch’s history that Ms Hills was at a “work function” when she fell down two flights of stairs.
The fact that there was no evidence that Mr Ludbrook made a farewell speech does not detract from the evidence that the farewell to Mr Buchanan was one of the reasons for the function. The fact that photographers and co-workers would be attending was an actuating factor in Ms Hills attending. Given that Ms Hills did not know it was a birthday party until after she saw the police statements, and given her evidence that, had Ms Martel and Mr Ludbrook not told her that they wanted her to go, she probably would not have spent her Saturday night with people she did not know, the only reasonable conclusion is that work purposes were not only a factor that motivated her to attend, but were the factors that motivated her.
On the question of whether the “emphasis” of the function changed, Mr Gross did not submit, “the emphasis changed from a ‘birthday’ to a ‘farewell’ party” (Reasons at [118]). His cross-examination of Ms Martel made the point that the emphasis in her evidence changed from her first statement in 2004, when she said that she had invited Ms Hills to a party for Mr Buchanan’s birthday and as a “farewell for him”, to her evidence in her 2006 statement that it “started off just as a birthday party for Alistair for his friends and then it turned out to be a farewell party” (T28.39). Mr Gross correctly submitted that the farewell party was a feature from the beginning (T44.53), not that it had changed over time from a birthday party to a farewell party. That submission was supported by Mr Buchanan’s evidence in his 14 March 2004 statement that the suggestion that the party be a “farewell as well” came from Mr Ludbrook about two-and-a-half weeks before 13 March 2004.
Given the near contemporaneous corroboration of the worker’s “understanding” of the purpose of the party in the evidence from Ms Cable, the WorkCover certificate and the history recorded by Dr Lynch, given the circumstances in which she was invited by Ms Martel and Mr Ludbrook, and given that she was not a friend of Mr Buchanan’s, and therefore had no reason to attend to celebrate his birthday with people she did not know, the logic of the events is that she was actuated to attend the party because of the reasons she gave. Those reasons were all work-related.
I do not accept Mr Odling’s submission that Mr Ludbrook’s statement that the party would also be a farewell party did not change the character of the function from a birthday party into a farewell function. From the worker’s perspective, it was only ever a farewell function for a co-worker and, therefore, a work function. Had it remained only a birthday party, it seems unlikely, though not impossible, that Ms Hills would have been invited, given that she had had little contact with Mr Buchanan in her short time with Pioneer.
Turning to Dr Lynch’s evidence, the Senior Arbitrator found his evidence that, as at January 2005, Ms Hills was unable to recall events of the four to seven days prior to the accident to be “compelling” and “more contemporaneous” (at [123]). She felt that it added weight to her view that the worker’s evidence in her statements was “not entirely reliable”. She did not accept that any communication about the party took place well before the four to seven day period referred to by Dr Lynch and added that such a suggestion was inconsistent with Mr Buchanan’s evidence that he issued invitations on 9, 10, and 11 March 2004.
It is unclear exactly when Ms Hills was invited to the party. In her May 2006 statement, she said she had been invited in the week before 13 March 2004. This puts the invitation on the edge of the time scale when Dr Lynch said Ms Hills was unable to recall events. However, it is uncontroversial that Mr Fleming issued his invitations around 1 March and Mr Cvetanovski issued his around 3 March. They could not have done so unless they knew the venue. It is therefore probable that Mr Ludbrook gave approval for Pioneer’s premises to be used as a farewell party shortly before those invitations were issued. This is consistent with Ms Martel’s evidence in her 14 March 2004 statement that Mr Buchanan invited her to the party “about two weeks ago”. However, that does not establish when Ms Hills was invited. According to Ms Martel, Ms Hills had been hired about two weeks before 14 March 2004 and was on trial for her first week. If that is correct (and Ms Hills could not recall if that was so or not (T4.50)) it seems unlikely, though it is possible, that Ms Hills would have been invited in the week when she was on trial. The probabilities favour the conclusion that Ms Hills was invited sometime in the week before the party.
If she was invited in the week before the accident, Dr Lynch’s evidence about her loss of memory in the four to seven days before the accident is significant. However, in cross-examination, Ms Hills said that she was “getting back memories from those previous two weeks” and that she “definitely” remembered her “time of employment there day to day especially with Jennifer Martel in the same office” (T6.20). The regaining of her memory had been a progressive thing (T6.37), mainly over the previous year or two. I do not think the fact that the regaining of her memory had been a “progressive thing” detracts from her oral evidence of her definite recall of being invited to the party and the reason for that invitation, which is essentially consistent with Ms Martel’s evidence in cross-examination. Ms Shaw’s testing in May 2006 provides significant independent support for the worker’s assertion that her memory had improved by the time she gave her first statement. In all the circumstances, I do not believe that Dr Lynch’s history so undermines the reliability of the worker’s evidence that it should not be accepted.
The Senior Arbitrator said (at [122]) that Ms Hills conceded in her oral evidence that her 2006 statement (where she said that she was under the impression that she was expected to attend the party and stay for the duration) was “not necessarily accurate”. This part of the statement involved two points: first, her impression that she was expected to attend the party and, second, that she was expected to stay for the duration. Ms Hills conceded in cross-examination that she did not “really remember” (T15.42) the night of the party and did not clearly remember thinking (on the night) that she should stay for the duration of the party. However, she did not concede that her recollection that she was expected to attend the party was not accurate. As I noted above, she said that she could not recall the exact words used by Mr Ludbrook and Ms Martel, but they “definitely” said clients would be present and “definitely” suggested that she attend.
The Senior Arbitrator said that there was no evidence of organisation, promotion or commitment of resources by Pioneer to the function. Though she acknowledged that Pioneer provided its premises for the party, she did not consider that the evidence disclosed that Mr Ludbrook had either encouraged or induced employees, including Ms Hills, to attend. The fact that Mr Ludbrook made Pioneer’s premises available for the party was a significant factor in assessing the work connection with the injury. For Messrs Buchanan, Fleming and Cvetanovski to hire different premises at commercial rates would have involved substantial expense. Therefore, by making its premises available for the party, Pioneer made a significant and valuable contribution of Pioneer’s resources to the event. More importantly, unless the evidence from Ms Hills is completely discounted, and for the reasons stated above I do not believe it can be, her evidence strongly supports the conclusion that Mr Ludbrook did encourage and induce her to attend.
Even if the worker’s evidence of the encouragement from Mr Ludbrook is discounted, there is still the evidence from Ms Martel that she did urge Ms Hills to attend to meet other employees, and her concession that clients would be present. The Senior Arbitrator placed little, if any, weight on this evidence. Where an employee intends to further the interests of the employer, an act by that employee will be within the scope of the employment as long as it can be shown to be reasonably incidental to the performance of the work the employee was employed to do (Canterbury Bankstown Rugby League Football Club Ltd v Rogers (1993) Aust Torts Reports 81–246).
I accept that, given Ms Martel’s position as the manager of the equipment rental room, she was in a position of some authority at Pioneer. She played a role, with Mr Ludbrook, in hiring Ms Hills and it was part of her duties to tell the worker what she was required to do in the job. Once Ms Hills had been hired, Mr Ludbrook stepped back and let his staff train her. Ms Martel provided that training. Ms Martel’s actions in inviting Ms Hills to the function were clearly intended to further Pioneer’s interests by ensuring that Ms Hills would be an “effective working member of the team” and would get on with her fellow employees and with clients. In these circumstances, I am satisfied that Ms Martel had actual or ostensible authority to invite the worker to the party on behalf of Pioneer and that her actions in inviting Ms Hills to the party were actions by Pioneer.
However, I am not satisfied that Mr Buchanan’s actions in organising the party were actions by or on behalf of Pioneer. Whilst Mr Ludbrook gave permission for the premises to be used for the party and for the party to be a farewell party, and he exercised some control over the event by directing Ms Martel to tell guests to leave at about 2.00 am, he did not authorise Mr Buchanan to engage a security guard on behalf of Pioneer. Messrs Buchanan, Fleming and Cvetanovski paid $150 to a man named Neil to be on the door to ensure that no uninvited people entered and that guests had their own alcohol. Though Mr Ludbrook requested Mr Buchanan to arrange for security, that did not mean the arrangements were made by or on behalf of Pioneer. This fact, and the fact that guests provided their own alcohol, supports Mr Odling’s submission that the party was not a work function. However, the other evidence of a work connection that I have referred to above outweighs these matters.
Pioneer makes much of the fact that staff had not been compelled or ordered to attend the function. That is undoubtedly true, but a worker can be encouraged and induced to engage in a work activity without being compelled or coerced into doing so. I do not regard the lack of coercion as a determinative factor. It was therefore not to the point that Ms Hills was not under the impression that she would lose her job if she did not attend. She felt it was important that she attend for work purposes. The cross-examination did not undermine that evidence and it was never suggested that Ms Hills was not genuine in her belief.
I agree with Mr Odling’s submission that the function did not have the usual characteristics or hallmarks of a “company function”: guests brought their own alcohol; the company provided no food or entertainment; Ms Hills was not asked to look after any particular guests; and the company issued no invitations. Clearly, the function was not organised to entertain clients and promote Pioneer to the photographic or fashion industry. That is not the worker’s case. Her case, which I accept, is that she was actuated to attend a work function because of work purposes, namely, to meet clients, make a good impression and join in with the team.
I also accept that Ms Hills was not engaged in a high-powered selling position where it was important to mix with clients in a social setting with a view to securing more sales for Pioneer. However, that fact does not diminish the other work purposes of the event nor the fact that those purposes motivated Ms Hills to attend. Nor does it diminish the significance of the use of Pioneer’s premises or the control Mr Ludbrook exercised by asking Ms Martel to tell guests to leave.
Turning to the authorities cited by Mr Gross, the Senior Arbitrator said (at [92]) that Tarry pre-dated the introduction of s 9A and had to be treated with some caution, as did a number of other assault cases in which the courts considered whether the injury arose out of the employment. As a general proposition, that statement involved no error. However, Mr Gross’s complaint is that the Senior Arbitrator approached the worker’s case by reference to authorities and principles relevant to whether the injury had been received “in the course of” the employment and not by reference to principles stated in Tarry.
In Tarry, the deceased worker was a foreman at the Mona Vale garbage depot. He allocated work to tanker drivers who reported for work at about 4.00 am. On 17 October 1972, the deceased was allocating work by handing out tickets to tanker drivers with details of the work to be performed. An argument developed about the allocation of work and the deceased said to a worker (Ure) “I will have to put you in your place”. The two men walked outside the depot’s gates and took up “fighting attitudes and [threw] a few tentative blows but neither person struck a blow”. Ure slipped and the deceased threw himself onto him. Ure noticed that the deceased appeared to be having difficulty breathing. The deceased slumped to the ground and was taken to hospital where he died on 27 April 1972. It was found that the deceased died from complications resulting from of a cardiac arrest caused by the excitement of the altercation.
The trial judge found that the fight took the deceased outside the course of his employment. On the question of whether the injury arose out of the employment, his Honour concluded that it could not be said that the deceased sustained an injury “whilst he was doing the job which he was employed to do or something incidental to it”. The deceased was asserting his authority in a way that took him outside the scope of his employment. As the deceased “forced the issue and was responsible for the subsequent confrontation”, his Honour was unable to find that the subsequent injury arose out of the deceased’s employment.
In overturning this decision, Samuels JA said (at 8) “it cannot be right to determine matters which arise under the first leg of the definition by debating questions of the scope of employment”. The reference to the “first leg” was a reference to “arising out of”. His Honour added that he agreed with the reasons given by Glass and Hutley JJA. Glass JA said (at 7–8):
“The present position, in my opinion, in determining whether an injury arose out of the course of employment is that, whether the deceased at the time of the injury was within the scope or course or sphere of his employment is a relevant factor, but it is not a decisive factor. In a given situation the injury may arise out of the employment even though at the time it is sustained the deceased or the applicant is no longer in the course of his employment.”
Hutley JA said (at 6):
“In my opinion it is quite clear on the evidence that the injury from which the deceased died arose out of his employment. It arose out of an altercation between two employees of the Warringah Shire Council about a matter which concerned their respective authorities and duties; it arose in a work situation. It does not follow that the injury did not arise out of the employment because in the course of what he was doing the deceased was doing acts which were not in accordance with his duties as a foreman. It is, of course, misconduct in a foreman to settle matters of responsibility by engaging in fisticuffs with a man under him. That, however, has really nothing to do with the question.
The facts proved and established by his Honour show that the injury from which he died was directly and unbrokenly connected with his employment, that is, things he was doing properly within the scope of his employment.” (emphasis added)
In his written submissions, Mr Gross gave 11 examples that allegedly demonstrated that the Senior Arbitrator failed to apply Tarry. Whilst it is true that the Senior Arbitrator had regard to several authorities that only dealt with “in the course”, that was hardly surprising given that many of those cases were cases that Mr Gross had referred to in his submissions. As I have reached a different conclusion on the question of whether Ms Hills had been encouraged or induced to attend a work function, it is not necessary for me to determine if she failed to apply, or incorrectly applied, the principles in Tarry.
The Senior Arbitrator correctly stated (at [89]) that the requirement that an injury “arise out of employment involves a causal relationship between the employment and the injury” (Zinc Corporation Ltd v Scarce (1995) 12 NSWCCR 566 at 570G–571B (Scarce)). At [90], she quoted the following passage from Scarce:
“The question is, of course, a question of fact which ‘must be determined by applying common sense to the facts of each particular case’ (March at 15). In my opinion there is no reason to adopt a different approach in relation to the test of causation posed by the words ‘arising out of’. The question of fact is whether there is such a connection between the worker’s personal injury and his employment that, as a matter of ordinary common sense and experience, the injury should be regarded as having arisen out of that employment. In deciding that question, my preferred view is that the test laid down by Jordan CJ in Nunan v Cockatoo Docks & Engineering Co Ltd (1941) 41 SR (NSW) 119 at 124 – that the fact of his being employed in the particular job caused, or to some material extent contributed to, the injury – should be applied. At the very least, the test requires that the employment was a contributing factor to the injury (an expression to be found in section 6(a) and section 6(b).”

This approach to “arising out of” has been consistently applied as the “settled” meaning of the words (Badawi at [73]). The Senior Arbitrator therefore identified the correct test to determine if the worker’s injury “arose out of her employment”.
However, because of her conclusion that the evidence fell short of establishing that Ms Hills had been induced or encouraged to attend the function, the Senior Arbitrator concluded (at [131]) that she was not satisfied that, “as a matter of ordinary common sense and experience”, there was such a connection between the worker’s injury and her employment that the injury could be regarded as having arisen out of that employment. She felt the result would have been different if Pioneer had been involved in the organisation, promotion or funding of the event. For the reasons explained above, I have concluded that Ms Hills was encouraged and induced to attend the function and that she was “actuated” to attend by work purposes. Pioneer provided substantial support for the function by allowing its premises to be used and Mr Ludbrook exercised control over the function by telling Ms Martel to ask people to leave at about 2.00 am. In light of these findings, the ultimate finding on causation cannot stand.
Pioneer submitted in its written submissions that the test for “arising out of” is whether the injury had its origin, in the sense of an unbroken causal connection, with the employment. It then referred to the circumstances in Haider and Qantas Airways Ltd v Watson (No 2) [2010] NSWWCCPD 38, and submitted that the connection with employment was less in the present matter than in Haider, a case where the worker failed. It followed that causation had not been established.
Mr Odling relied on the following passage from the first instance decision in Haider, reproduced by the Court of Appeal, at [29]:
“In my opinion the evidence in the present case does no more than establish that the Appellant Employer gave permission for the social club to operate. There is no doubt that the Appellant Employer took steps to facilitate the operation of the club, but that does not mean that activities organised by the social club were JP Morgan activities that employees were encouraged to attend as something that was part of or incidental to their duties.”

There is a significant distinction between Haider and the facts in the present matter. In Haider, the employer gave permission for a social club to operate and organise social activities for employees. In the course of such an activity, a harbour cruise, a worker fell overboard and drowned. JP Morgan had not induced or encouraged employees to attend the harbour cruise and had not permitted its premises to be used for the function. The cruise was neither a farewell function for an employee nor a function that clients attended. The worker had not been encouraged to attend by a manager. It was merely a social gathering by staff. It had none of the work connections of the kind present in the matter now before me.
I have not found the other cases cited by Mr Gross to be of any great assistance. Apart from Tarry, they mostly concern “in the course of”. As they were all decided on their own facts, they provide no authoritative statement about the issues before me. Once it is accepted that Ms Hills was encouraged or induced to attend the function on 13 March 2004, and that her attendance was actuated by work purposes, the next question is whether “being employed in the particular job caused, or to some material extent contributed to, the injury” (Scarce and Nunan). The final question is whether employment was a substantial contributing factor to the injury.
Mr Gross submitted that the causation tests in “arising out of” and s 9A are satisfied because Ms Hills was at Pioneer’s premises at the encouragement of the company for work purposes and, if she had not attended, she would not have been injured. The “employment”, so it was submitted, must be correctly characterised. The employment took Ms Hills to the premises and led to the consumption of alcohol. Ms Hills was using part of Pioneer’s premises (the stairs) to get from one floor to the other and fell. Her presence at and use of the premises were all, according to Mr Gross, inherent in being at the premises for work purposes. It was not suggested before the Senior Arbitrator that anything severed the connection with the employment. It was not argued, nor could it have been argued, that the consumption of alcohol severed the employment connection. The consumption of alcohol was an integral part of the event.
I have concluded that there was a direct and unbroken connection between the worker’s employment and her injury such that, as a matter of commonsense, her injury arose out of it. For the reasons already stated, I accept that Ms Hills attended her employer’s premises on the evening of 13 March 2004 at the encouragement of Ms Martel and Mr Ludbrook to attend a function that had two main purposes. One of those purposes was a work purpose, namely, farewelling a longstanding employee, Mr Buchanan. However, that was not the only work connection. The encouragement to attend came to Ms Hills in her position as the new person hired to replace Ms Martel as the equipment rental manager. In that position, she had to deal with photographers and, I infer, other members of staff. Because of her position at Pioneer as the new equipment rental manager, she was encouraged to attend and, because of that encouragement, she did attend. Her attendance brought her into contact with her work premises, where she received her injury when she fell over the balustrade while attempting to descend the stairs at those premises.
Turning to whether employment was a substantial contributing factor to the injury, I note that it is the strength of the causal connection that is relevant (Dayton v Coles Supermarkets Pty Ltd [2001] NSWCA 153; 22 NSWCCR 46 at [22]) and that the connection must be “real and of substance” (Badawi). Considering the provisions in s 9A(2), I make the following observations:
(a) time and place of injury: the accident occurred outside normal work hours but, given that it occurred at a social function, that is not determinative. The location (the employer’s premises) suggests a strong employment connection with the injury;
(b) the nature of the work performed and the particular tasks of that work: the work performed by Ms Hills in Pioneer’s equipment rental section necessarily put her in regular contact with photographers. In that sense, it was important for her to know them and be able to mix with them;

(c)     the duration of employment: duration of employment is rarely a factor in determining whether s 9A is satisfied. However, in this case, the fact that Ms Hills had only been with Pioneer for a few weeks before the accident is important. Because of her newness in the company, she felt it important to attend the function to meet clients, “make a good impression” and to “join in with the team”. This adds weight to the causal connection between the employment and the injury;
(d)     the probability that the injury or a similar injury would have happened anyway, at about the same time or at the same stage of the worker’s life, if he or she had not been at work or had not worked in that employment: while it is possible that Ms Hills may have suffered a similar injury at the same stage of her life if she had not attended the work function, it is not possible to say that, without the particular employment circumstances in this mater, such an injury was probable in a fit, healthy, adult female, aged in her late twenties;
(e)     the worker’s state of health before the injury and the existence of any hereditary risks: this is not a relevant factor in this matter, and
(f)      the worker’s lifestyle and his or her activities outside the workplace: there is no evidence that the worker’s lifestyle exposed her to the kind of risk to which she was exposed by her employment on the night of the function.

Applying the terms of s 9A(2), I am satisfied that the connection between the employment and the worker’s injury was real and of substance.

CONCLUSION

Having conducted a review on the merits, I have concluded that Ms Hills was encouraged or induced to attend a work function for work purposes, namely a farewell function, at her employer’s premises on the evening of 13 March 2004 and that there is a direct and unbroken connection between her employment and her injury such that her injury arose out of her employment, and that her employment was a substantial contributing factor to the injury.

DECISION

The Senior Arbitrator’s determination of 13 January 2011 is revoked and the following orders made in its place:
“1. The matter is remitted to the Registrar for referral to an Approved Medical Specialist for assessment of the applicant worker’s claim for whole person impairment as a result of her head and brain injury on 14 March 2004.
2. The respondent employer is to pay the applicant worker’s reasonably necessary hospital and medical expenses under s 60 of the Workers Compensation Act 1987.
3. The respondent employer is to pay the applicant worker’s costs, as agreed or assessed. The matter is certified as complex with an uplift of 30 per cent.”

COSTS

The respondent employer is to pay the appellant worker’s costs of the appeal, assessed at $2,200 plus GST.

Bill Roche

Deputy President
1 June 2011

I, MARGOT UNDERCLIFFE, CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF BILL ROCHE, DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.

ASSOCIATE