JP Morgan Holdings Australia Ltd t/as JP Morgan Operations Australia Ltd v Haider - [2006] NSWWCCPD 234

WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
*STATUS: Decision confirmed on Appeal: Haider v JP Morgan Holdings Aust Ltd t/as JP Morgan Operations Australia Ltd* [2007] NSWCA 158; (2007) 4 DDCR 634**
CITATION:	JP Morgan Holdings Australia Ltd t/as JP Morgan Operations Australia Ltd v Haider and Ors [2006] NSWWCCPD 234
APPELLANT:	JP Morgan Holdings Australia Ltd t/as JP Morgan Operations Australia Ltd
FIRST RESPONDENT:	Tahira Haider
SECOND RESPONDENT:	Haider Hassan Zaidi, Seema Zaidi, Ali Zaidi, Zahara Zaidi
INSURER:	GIO Workers Compensation (NSW) Ltd
FILE NUMBER:	WCC17491-05
DATE OF ARBITRATOR’S DECISION:	7 April 2006
DATE OF APPEAL DECISION:	19 September 2006
SUBJECT MATTER OF DECISION:	Social function; in the course of or arising out of employment; substantial contributing factor; section 9A of the Workers Compensation Act 1987.
PRESIDENTIAL MEMBER:	Acting Deputy President Bill Roche
HEARING:	On the papers
REPRESENTATION:	Appellant:	Rankin Nathan Lawyers
1^st Respondent:	Buttar Caldwell & Co
2^nd Respondent:	Dominic Stamford
ORDERS MADE ON APPEAL:	Time to appeal is extended until 19 May 2006.
The findings made by the Arbitrator and set out at paragraph 27 of her Reasons are revoked.
Paragraphs one, two and three of the Arbitrator’s decisions are revoked and the following orders made:
“1. Award for the First Respondent.
2. No order as to costs.”
No order as to costs of the appeal.

BACKGROUND TO THE APPEAL

On 5 May 2006 JP Morgan Holdings Australia Ltd t/as JP Morgan Operations Australia Ltd (‘the Appellant Employer/JP Morgan’) sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Workers Compensation Commission (‘the Commission’) against a decision, dated 7 April 2006. The appeal was rejected by the Registrar for technical reasons and was filed again on 19 May 2006. An application has been made to extend the time to appeal.

On 23 August 2003 Mohammad Qasim Syed-Zaidi (‘the deceased’) was employed by JP Morgan as an assistant accounting manager in its Sydney office. On 20 August 2004 he attended a cruise on Sydney harbour organized by the “JP Morgan Social Club” (‘the social club’). Whilst on the cruise he fell over board and drowned. The First Respondent to the Appeal is Tahira Haider (‘the First Respondent/Mrs Haider’), who was the Applicant before the Arbitrator, and is the deceased’s widow. The Second Respondents are Haider Hassan Zaidi (the deceased’s father/Mr Zaidi), Seema Zaidi (the deceased’s mother/Mrs Zaidi), Ali Zaidi (the deceased’s brother/Ali) and Zahara Zaidi (the deceased’s sister). The First Respondent and the Second Respondents claim to be dependent for support on the deceased as at 20 August 2004. For convenience I shall refer to the First Respondent and the Second Respondents as ‘the Respondents’ unless otherwise stated.

At the Arbitration hearing on 2 March 2006 the case proceeded to determine the issue of liability under sections 4, 9 and 9A of the Workers Compensation Act 1987 (‘the 1987 Act’). Therefore, no argument was heard on the question of dependency.

In a reserved decision delivered on 7 April 2006 the Arbitrator determined liability in favour of the Respondents.

THE DECISION UNDER REVIEW

The ‘Certificate of Determination’, dated 7 April 2006, records the Arbitrator’s orders as follows:

“1.These proceedings be scheduled for teleconference on Wednesday 10 May 2006 @ 9.30am for the purpose of making any appropriate directions and to schedule a conference/Arbitration in respect of the claims pursuant to s25 or s26 of the 1987 Act by the Applicant and the Second Respondent.
2.The First Respondent to pay the costs of the Applicant and the Second Respondent as agreed or assessed.

Certification
3.These proceedings involved a number of issues which required resolution by way of Arbitration on 2 May 2006. The Conciliation/Arbitration proceeded for approximately 5 hours and in these circumstances I certify that the matter is complex for the purposes of Item 4.10 of the Workers Compensation Regulation 2003.”

The above Certificate of Determination was issued pursuant to the following findings made by the Arbitrator at paragraph 27 of her Statement of Reasons for Decision (‘Reasons’):

“(a)Mohammand Qasim Syed Zaidi died as a result of an injury sustained on 20 August 2004 when he fell from the ‘Vagabond Star’ and drowned.
(b)The injury and subsequent death arose out of or in the course of his employment.

(c)Employment was a substantial contributing factor to the injury and death.”

ISSUES IN DISPUTE

The issues in dispute in the appeal are whether:

1.the evidence relied upon by the Arbitrator was sufficient to support the finding that the deceased’s injury and subsequent death arose out of or in the course of his employment, or that his employment was a substantial contributing factor to his death, and

2.the evidence was such that it should not have led the Arbitrator to conclude that the “employer authorised, encouraged and indicated [sic] to employees to [sic] to participate in the activities of the social club” (see Appellant Employer’s grounds of appeal paragraph 2.3).

LEAVE TO APPEAL

Monetary Threshold

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

The quantum in issue on the appeal is in excess of $5,000.00 and therefore the threshold in section 352(2)(a) of the 1998 Act is satisfied. No award of compensation has yet been made in this case but the Arbitrator’s finding would result in the Respondents’ receiving compensation under section 25 or section 26 of the 1987 Act of up to $296,250.00. The whole of that compensation is “at issue” on appeal and I therefore find that the second limb of section 352(2)(b) is satisfied.

Time

The appeal was initially lodged on 5 May 2006, within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act. However, it was rejected by the Registrar because it did not comply with the Workers Compensation Commission Rules 2003 (‘the Rules’). The appeal was again submitted in the correct form on 19 May 2006.

An extension of time in which to appeal can be granted in certain limited circumstances. Rule 77(8) of the Workers Compensation Commission Rules 2003 (‘the Rules’) provides that:

“(8) The Commission constituted by a Presidential member may, if a party satisfies the Presidential member, in exceptional circumstances, that to lose the right to seek leave to appeal would work demonstrable and substantial injustice, by order extend the time for making an appeal.”

The question of extending time to appeal was considered by Justice McHugh in Gallo v Dawson (1990) 93 ALR 479 (‘Gallo’) where his Honour said at 480:

“The discretion to extend time is given for the sole purpose of enabling the court or justice to do justice between the parties: see Hughes v National Trustees Executors & Agency Co of Australasia Ltd [1978] VR 257 at 262. This means that the discretion can only be exercised in favour of an applicant upon proof that strict compliance with the rules will work an injustice upon the applicant. In order to determine whether the rules will work an injustice, it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation, and the consequences for the parties of the grant or refusal of the application for extension of time: see Avery v No 2 Public Service Appeal Board [1973] 2 NZLR 86 at 92; Jess v Scott (1986) 12 FCR 187 at 194-5; 70 ALR 185. When the application is for an extension of time in which to file an appeal, it is always necessary to consider the prospects of the applicant succeeding in the appeal: see Burns v Grigg [1967] VR 871 at 872; Hughes at 263-4, Mitchelson v Mitchelson (1979) 24 ALR 522 at 524. It is also necessary to bear in mind in such an application that, upon the expiry of the time for appealing, the respondent has ‘a vested right to retain the judgment’ unless the application is granted: Vilenius v Heinegar (1962) 36 ALJR 200 at 201.”

The Appellant Employer submits that the initial appeal was filed within time on 5 May 2006 and was rejected because an outdated form was used. In addition it is said that it will, because of the large sum involved, suffer a substantial injustice if leave to appeal is refused.

The Respondents have made general submissions on why leave to appeal should not be granted but have not made any submissions in opposition to the application to extend the time to appeal under Rule 77(8).

For the following reasons I believe that this is an appropriate case in which to extend the time to appeal until 19 May 2006:

(a)the conduct of the appellant in acting promptly to file its appeal within time on 5 May 2006;
(b)no objection is raised by the Respondents;
(c)refusing to extend to time appeal would, in my view, work a substantial injustice in view of the quantum of compensation at issue, and
(d)the Appellant Employer has an arguable case that the Arbitrator was in error.

The Respondents submit that leave to appeal should be refused because the Appellant Employer has “failed to establish some prima facie meritorious appeal point” (First Respondent’s submissions, paragraph eight). On the authority of Gallo, the prospect of success on appeal is a factor to take into account in deciding whether to extend the time in which to appeal, but it is not a factor in determining the question of leave to appeal under section 352(1) of the 1998 Act.

The First Respondent cites Chapmans Ltd v Yandell [1999] NSWCA 361. That case concerned an application for leave to appeal a costs assessment under section 208M of the Legal Profession Act 1987. It has limited, if any, relevance to section 352 of the 1998 Act. The Commission’s practice is that if the monetary thresholds set out in section 352(2) are satisfied, then leave to appeal is usually granted. That is the approach I intend to adopt in the present case.

If I am wrong in this approach and something more is required before leave to appeal can be granted under section 352 then I believe that the present case is an appropriate one in which to grant leave because:

(a)it raises important points of principle about the application of section 9A of the 1987 Act;

(b)the quantum of compensation at issue is substantial, and

(c)the Appellant Employer has an arguable case.

Time to appeal is extended to 19 may 2006 and I grant leave to appeal.

PRELIMINARY MATTERS

Section 354(6) of the 1998 Act provides:

“(6)If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”

Having regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submissions by the parties that the appeal can proceed to be determined on the basis of these documents, I am satisfied that I have sufficient information to proceed ‘on the papers’, without holding any conference or formal hearing, and that this is the appropriate course in the circumstances.

Since the appeal was lodged the parties’ were invited to make further submissions by Direction issued by the Commission on 14 August 2006. All parties have made further submissions in response to that Direction.

FRESH EVIDENCE

Applications were made by all parties to introduce late evidence after the conclusion of the Arbitration hearing on 2 March 2006. Each application was rejected by the Arbitrator. Neither party seeks to challenge the Arbitrator’s ruling on those matters on appeal but in the further submissions lodged by the Second Respondents on 8 September 2006 and by the First Respondent on 11 September 2006 leave is now sought for the first time to rely on fresh evidence on appeal.

Fresh evidence on appeal is governed by section 352(6) of the 1998 Act, which provides as follows:

“(6) Evidence that is fresh evidence or evidence in addition to or in substitution for the evidence received in relation to the decision appealed against may not be given on an appeal to the Commission except with the leave of the Commission.”

Practice Direction No.6 sets out the process for seeking leave of the Commission to give ‘new evidence’ on appeal. It provides as follows:

“New Evidence
Where a party seeks leave to give new evidence in relation to the decision appealed against, that party must serve a copy of the new evidence on the other parties to the dispute when serving the Application or Opposition.
In general, the Commission will allow new evidence to be introduced only where it can be demonstrated that the new evidence could not reasonably have been obtained by the party and tendered in proceedings before the Arbitrator and that failure to allow the new evidence would cause a substantial injustice in the circumstances of the individual case.”

Practice Direction No.6 also provides that if new evidence is sought to be relied upon, the Application or Opposition to the Appeal must contain:
“ -a schedule of the new evidence,
-a copy of the new evidence,
-a brief outline of the new evidence and the reasons why it was not given in the
proceedings before the Arbitrator, and
-submissions why the new evidence should be admitted.”

The Respondents have not complied with Practice Direction No. 6 but I have nevertheless considered the application to rely on fresh evidence. The fresh evidence is a deposit summary slip (‘the deposit slip’) dated 20 August 2004 with a dated stamp from St George Bank Limited of 28 August 2004. This is the same document the Respondents sought to introduce into evidence in an Application to Admit Late Documents filed on 8 March 2006, well after the conclusion of the Arbitration hearing on 2 March 2006. That application was considered by the Arbitrator and rejected by her in reasons given in a document headed ‘Orders’ dated 14 March 2006. The Arbitrator treated the application to tender the deposit slip as an application by the Respondents to re-open their case. After carefully considering the application the Arbitrator rejected the tender of the document for the following reasons:

“1.I am not convinced Vagabond Cruises was required to produce the document pursuant to the Direction to Produce.

2. The evidence sought to be tendered could have been obtained prior to the hearing from a number of sources including Vagabond Cruises.
3. The document is open to a number of different inferences and therefore has no probity [sic] value and accordingly the document cannot be said to be material.”

The Respondents then again sought to re-open their case to call oral evidence from the author of the “disallowed document” (the deposit slip). Notice of the second application to re-open was given by letter dated 14 March 2006. The second application to re-open was refused in reasons given by the Arbitrator in a document headed ‘Orders’ dated 17 March 2006. The Arbitrator’s reasons were as follows:

“1.It would be a breach of the principles of procedural fairness and natural justice to re-open the proceedings for the purpose of calling an unidentified witness to give evidence relating to a document that has not been admitted into evidence.
2.I am not satisfied:
·Any such evidence would be definitive and material.
·Could not have been obtained prior to the hearing on 2 March 2006.
·Would affect the outcome of the hearing.”

As a result of the applications to admit late documents filed by the Respondents before the Arbitrator, the Appellant Employer filed an Application to Admit Late Documents on 14 March 2006. The application sought to rely on a statement from Gerrard Fitzgibbon dated 10 March 2006 responding to the matters alleged to arise from the deposit slip. In a document headed ‘Orders’ dated 27 March 2006 the Arbitrator refused that application for the following reasons:

“1.Mr Fitzgibbon is an employee of the First Respondent [the Appellant Employer].
2.The statement of Mr Fitzgibbon could have been obtained prior to the hearing.
3.The information contained in the statement could have been obtained from other sources prior to the hearing.
4.The evidence on the issue of liability closed on 2 March 2006 and the delay in making the application is unreasonable.”

Given that the Appellant Employer’s application was only made in order to respond to the late applications by the Respondents, the Arbitrator’s reasons for rejecting Mr Fitzgibbon’s statement were not well founded. However, as the applications to admit late evidence by the Respondents were rejected, there was then no need for the Appellant Employer to introduce evidence in reply.

On appeal it is submitted that the tender of the deposit slip was rejected because “the Arbitrator had already determined that there was more than enough evidence for her to find in favour of the first respondent [widow]” (see Respondents’ further submissions, paragraph 22). The above analysis of the history before the Arbitrator shows that that submission is patently wrong and misleading. The Arbitrator’s reasons for rejecting the deposit slip are set out above and are quite clear. No challenge has been made to her ruling on this issue. To allow the deposit slip into evidence on appeal when no challenge has been made to the Arbitrator’s refusal to admit the document would deny procedural fairness to the Appellant Employer as it has now been denied the opportunity to seek to introduce the statement from Mr Fizgibbon of 10 March 2006.

In these circumstances I reject the application to rely on fresh evidence as I am not satisfied that with reasonable diligence the evidence could not have been obtained before the Arbitration hearing. In addition, no challenge has been made to the Arbitrator’s rulings set out above. Further, I am not satisfied that the failure to allow the fresh evidence will cause a substantial injustice in all the circumstances of this case.

THE FACTS

At the commencement of the hearing counsel for the First Respondent read out certain agreed facts. There are some minor discrepancies between the facts read out by counsel and those recorded in the Arbitrator’s Reasons at paragraph 10, but for the sake of accuracy I have taken the following ‘agreed facts’ from the transcript of evidence at pages three to eleven inclusive.

Agreed Facts

1.“The deceased was employed by J. P. Morgan Holdings Australia Pty Limited as an assistant accounting manager from on or about 23 August 2003 until his death at approximately 10.30 p.m. on Friday, 20 August 2004” (transcript, page two line 13).
2.“The deceased died as a result of drowning following his fall into the water of Circular Quay through an open doorway of the motor vessel the Vagabond Star” (transcript, page two line 19).
3.“Immediately prior to falling through the open doorway, the deceased had been dancing on the dance floor of the Vagabond Star to music, along with a number of passengers. At the time he was affected by alcohol. It is agreed that the circumstances leading up to his fall through the open doorway are as outlined in the statement of Lorna Dixon dated 17 November 2004” (transcript, page two line 53) (paragraphs 16 to 18 inclusive of Ms Dixon’s statement are set out at paragraph [34] below).

4.“According to the certificate of analysis of the Institute of Clinical Pathology dated 18 October 2004, the deceased’s blood alcohol level at the time of testing was 0.189” (transcript, page three line 22)
5.“On Friday, 20 August 2004, the deceased commenced work at approximately 9.00 a.m. and left the work, his place of employment along with a group of other co‑workers at approximately 5.15 p.m., where he and his co‑workers adjourned to the Belgian Beer Cafe in The Rocks. There, he and the group of co‑workers remained for 30 minutes. During this time the deceased was observed to consume at least one glass of beer. The group, including the deceased, then moved on to the cruise departure point at the Museum of Contemporary Art stairs. They arrived at approximately 6.15. The vessel did not arrive until 6.30 p.m.” (transcript, page three line 29).
6.“The cruise ship departed not long after 6.30 p.m. There were approximately 200 passengers on board. Throughout the cruise the deceased consumed an unknown quantity of alcohol. Unlimited alcohol and finger food was provided without additional charge, apart from the cost of the ticket to attend the cruise, throughout the course of the evening and duration of the cruise. The evidence is that the majority of the passengers were consuming alcohol throughout the course of the cruise” (transcript, page three line 55).
7.“Disco music and a DJ were provided throughout the course of the evening. At the time the deceased fell through the open doorway the dance floor was-- reasonably crowded and the dance floor was slippery” (transcript, page four line 10).
8.“When the Vagabond Star was approximately 50 metres from the MCA steps and was in the process of turning to the starboard (right) commencing its disembarkation procedure, the deceased fell overboard. The evidence is that the Vagabond Star was rocking and that the deckhand opened the restraining chain across the doorway” (transcript, page four line 22).
9.“The deceased was a member of the J. P. Morgan Social Club. See application form by deceased and note the charter” (transcript, page four line 40) (see paragraph [35] below).
10.“The deceased paid a membership fee of approximately $4 a month deducted from his pay through the Payroll Department of the first respondent. All persons interviewed by the police and the GIO’s investigators (see statements admitted into evidence) were members of the J. P. Morgan Social Club and were employees of the first respondent. The social club was a voluntary organisation, being an association with no legal entity other than through its individual members” (transcript, page four line 44).
11.“The J. P. Morgan Social Club had a charter (see application form)” (transcript page four line 55). “The J. P. Morgan Social Club Committee met on a regular basis, as outlined in the statement of Mr David Barton at paragraph 9” (transcript, page five line seven) (see paragraph [37] below).
12.“The J. P. Morgan Social Club maintained an e‑mail address through the first respondent’s internal e‑mail system utilising the first respondent’s domain name” (transcript, page six line 57).
13.“An advertisement for the cruise on the Vagabond Star was sent to all personnel employed by the first respondent via its internal e‑mail system on not less than two occasions” (transcript, page seven line six).
14.“Members of the J. P. Morgan Social Club paid $10 for a ticket for the cruise, members’ partners paid $20 per ticket, and non‑members paid $50 a ticket” (transcript, page seven line 13)
15.“The cruise was a sell‑out. Approximately 200 people attended, of which the evidence would indicate that 117 were members, 67 were the partners of members, and 16 were non‑members: see spreadsheet attached to e‑mail chain found in the applicant’s Application to Admit Late Documents” (transcript, page seven line 33).
16.“The total cost of the cruise was approximately $8,000. The evidence would suggest that the ticket sales amounted to approximately $3,300, with the shortfall being made up through the J. P. Morgan Social Club subscriptions” (transcript, page seven line 42).
17.“The cruise was advertised as an end-of-financial-year function” (transcript, page 11 line seven).
18.“Personnel senior to the deceased (bosses) in attendance on the evening included James Ingersoll (Accounting Manager), who was the deceased's direct supervisor or team leader, Christopher Stevens (Senior Accounting Manager)” (transcript, page 11 line 14).
19.“Staff were permitted to wear mufti” at work on the day of the cruise (transcript, page 11 line 58).

In her statement of November 2004, Lorna Dixon, portfolio analyst with JP Morgan, states:

“16.Qasim went on the cruise and he spoke to me prior to it and he seemed very excited about it. I did not get on the boat with Qasim but once on the boat our team remained pretty much together for the night. There were other JP Morgan employees on the cruise but as far as I am aware it was only JP Morgan employees on the cruise.
17.There was a group of our team on the dance floor dancing and that including Qasim, none of us were dancing with any particular person but just dancing as a group. I saw Qasim whilst we were dancing, we were opposite each other.

18.I had the day off and I met the team at the Belgian Beer Café in the Rocks and we all headed down to the boat together after that. I was at the Belgian for about fifteen minutes but I cannot say how long the others in my team had been there. In that [sic] time I was at the Belgian I saw Qasim drinking beer but how many he had I cannot say.”

Documentary Evidence and Statements

The deceased joined the social club by submitting a written application signed on 19 February 2004. The application form is headed “JP Morgan Social Club”. The deceased provided his name, department, his ‘corporate ID’, stated that he would pay the membership fees monthly ($4.33 per month) and signed a consent form to have those fees deducted from his salary. The form also asked him to indicate his ‘preferred events’ which included ‘sports’ and ‘social’. Under ‘sports’ is included: JP Morgan Challenge, Corporate Games, City to Surf and Golf Day. Under ‘social’ is included: Annual Ball, Movie Nights, Trivia Night, Drinks Night, Fun Runs/Charity Events, Race day, Staff Barbeques, and Discounts/Door Prizes. There are two contacts for the social club, JP Morgan Social Club, Level 34, AAP Centre, Sydney or Social Club [email protected].

The consent signed by the deceased also included the ‘Social Club Charter’ which states:

“The charter of the JPMorgan Social Club is to increase morale and interaction.
·Break down barriers and improve awareness of people and resources within our company
·Cultivate JPMorgan spirit at both company and departmental levels
·Work towards centralising bankwide activities
·Assist in the communication of JPMorgan sponsored events to club members.”

The statement of David Barton, business analyst with JP Morgan and committee member of the social club, of 3 December 2004 adds:

“9. The Club has meetings on a regular basis, usually it is on a weekly basis and the Company allows the meetings [sic] to attend on the basis the Committee members have their Managers approval to attend.
10.There are minutes kept of the meetings that we have and I should be able to supply you a copy of the Charter and the minutes dealing with the Harbour Cruise on the 20 August 2004.

11.The name of the Club is the Sydney Social Club but its members are made up of JP Morgan employees only. JP Morgan does not sponsor the Social Club financially for any of the functions the Club has other than that I have already stated.

12.JP Morgan does not have any official capacity in the Social Club or in the running of the Club. JP Morgan is aware of the existence of the Club but they do allow us to use Company time for Committee members [sic] as well as the use of some Company resources (eg email) and the payroll system to take deductions from the salary of members of $1.00 per week.

13.Membership of the Social Club is open to all JP Morgan Sydney employees only and they become members on completion of a membership application which includes the payroll deduction form and on payment of the subscription.

14.There is no compulsion on any JP Morgan employee to join the Club and there is no compulsion for any member to attend any or all functions arranged by the Club.

15.Any Social Club functions are for the benefit of the Club members and for some functions, it is also [sic] benefit the member’s guests or partners. Members subscriptions are not used to support guests usually and they are required to pay full price for the function whereas the members get a reduced price for the function’s they attend.

16.The Harbour cruise function was one that was advertised throughout the Company through the Sydney Group Email Box which sets out the details of the function, the cost and where tickets were available.

17.There was a cost for members as well as a higher cost for a member’s guest as well as higher cost again for non member [sic] but still employees of JP Morgan.

18.I was involved in arranging the Harbour Cruise function on the 20 August 2004; this function was purely a Social Club function and had nothing to do with JP Morgan. The function did not include any guests of JP Morgan and it was not a work related function but was one arranged for the benefit of members of the Social Club out of the workplace and out of working hours.”

Further evidence on the nature of the social club was provided by Gerrard Fitzgibbon, head of legal for JP Morgan in Australia and New Zealand and a director of the Appellant Employer, in his statement of 3 December 2004. He states:

“6.I am aware of the JP Morgan Social Club and it is an informal group comprising employees of JP Morgan in Australia, it is not in any legal sense part of the JP Morgan Group and as far as I am aware it does not have any legal existence.
7.Never the less [sic] JP Morgan recognizes and permits the continued existence of the Social Club for amongst other things the staff morale benefits the firm sees arising from the Social Club’s existence.

8.The firm permits the use of the JP Morgan name in relation to the Social Club and permits the use of limited firm time and resources, (eg Intranet use) for Social Club activities such as disseminating publicity relating to proposed Social Club events.

9.The firm does not contribute financially to the Social Club or Social Club events however it does allow the payroll system to be used for voluntary membership payments to be deducted from relevant employee’s salaries and membership of the Social Club is voluntary.

10.As I have said, as far as I am aware invitations to the August harbour cruise were circulated via the firm’s intranet email system but I cannot recall if I actually opened or looked at that email and as far as I am aware the firm was not involved in this function other than relevant employees in their capacity as member [sic] of the Social Club being involved in the organisation of the event.”

Oral Evidence

Oral evidence was given on behalf of JP Morgan by Sarah Jane Curran, human resources generalist employed by the Appellant Employer. This evidence was in addition to her statement of 9 January 2005 which was also before the Arbitrator. It should be noted that parts of the statement were the subject of objection (transcript page 14 line 55 to page 20 line five).

Ms Curran was cross examined by Mr Gibson, counsel for the Second Respondents, as follows at page 29 line 40 of the transcript:

“Q. As a generalist in Human Resources, there is a thing that I can loosely term the J. P. Morgan culture?
A. Yes.
Q. And, of course, quite apart from people fronting up to work and having legal qualifications and accounting qualifications, it's important to the company that there be some social harmony with all the staff?
A. To, I guess, embrace a worksafe happy environment, yes.
Q. And, more than that, also as part of the culture of being a happy family, working together?
A. Yes.
Q. And it’s in the interests of the company to promote that harmony?
A. Yes.
Q. And Human Resources do what they can to do that, don’t they?
A. We do that through our performance management programs and through training, yes.
Q. All right, then. And part of it would be to break down and improve barriers and awareness of people and resources which the company has?
A. Yes.
Q. And to cultivate what one thinks of as the J. P. Morgan spirit. Is that a fair ‑ such a terminology?
A. JPM culture.
Q. Yes.
A. JPM culture, yes.
Q. And you’d be, as part of your group, particularly your people, the six personnel in Sydney, would be to cultivate that spirit at company and departmental levels?
A. Yes.
ARBITRATOR: Well, that department, apparently you say [inaudible].
WITNESS: We’re required to, I guess, provide strategic and consulting advice, which would be to advise managers on ensuring that people come to work in a, I guess, collegial manner and work ‑‑
MR GIBSON: Q. Collegiate?
A. Yep.
Q. Yes, yes. A happy environment?
A. Yes.
Q. And also if there was a J. P. Morgan‑sponsored event, and I appreciate your evidence on that, part of your function would be to try and promulgate that and make sure that the regular staff or those who should be going would go, and you’d encourage it, I gather?
A. It’s not our ‑ as a department, the Human Resources Department, it’s not our responsibility ‑‑
Q. Not your responsibility. But the company generally do so?
A. ‑‑ to liaise with the ‑‑
Q. You might not ‑‑
A. Depending on the ‑‑
Q. You might not but someone else would?
A. Depending on the event ‑‑
Q. Do you see ‑‑
A. ‑‑ and the persons running the event.
Q. And, of course, what I’ve spoken to you about is, in fact, the same, isn’t it, objective of the social club charter?
A. No.”

In cross examination from Mr Austin, counsel for the First Respondent, Ms Curran was asked the following questions at page 28 line 21:

“Q. No. All right. Just a final set of questions. What is the J. P. Morgan Challenge?
A. It’s a corporate‑sponsored event whereby we hold it, and it’s a global event as well. So we hold the event here in Australia, and it’s an opportunity for J. P. Morgan to invite corporate banking clients to that function, and it’s like a fun sort of challenge in terms of running and that sort of thing. J. P. Morgan employees can register to attend that event if they wish.”

Then at page 28 line 46:

“Q. I only use the word ‘annual’ ball because it seems to be nominated in the social club application form?
A. This is ‑ I guess just to distinguish, there are ‑ the J. P. Morgan Challenge, as you’ve just previously ‑‑
Q. Yep.
A. ‑‑ mentioned, is a firm‑sponsored function.
Q. Right.
A. So the firm has a marketing and communications event co‑ordination group that then, you know, run and sponsor that directly and pay for that directly. That's directly paid for by J. P. Morgan as opposed to a social club ball, which is not funded by the employer at all.
Q. All right. And does J. P. Morgan, the employer, actually sponsor or pay for a Christmas party at the end of the year?
ARBITRATOR: Oh ‑ go on.
WITNESS: It has previously. We haven’t had one for two years.”

THE LEGISLATION

Section 4 of the 1987 Act, so far as is relevant, defines ‘injury’ as follows:

“4 Definition of “injury”
In this Act:
injury:

(a) means personal injury arising out of or in the course of employment,
(b) …:”

Section 9 of the 1987 Act provides:

“9 Liability of employers for injuries received by workers—general

(1) A worker who has received an injury (and, in the case of the death of the worker, his or her dependants) shall receive compensation from the worker’s employer in accordance with this Act.
(2) Compensation is payable whether the injury was received by the worker at or away from the worker’s place of employment.”

Section 25(1) of the 1987 Act provides:

“25 Death of worker leaving dependants

(1) If death results from an injury, and the worker leaves any dependants wholly dependent for support on the worker, the amount of compensation payable by the employer under this Act shall be:
(a)…, and”

SUBMISSIONS

Appellant Employer’s Submissions

The Appellant Employer submits that:

·     the evidence does no more than establish that JP Morgan gave permission for the social club to operate;
·     there is a legal distinction between the social club on the one hand and JP Morgan on the other;
·     this is not a case to which Hatzimanolis applies and it is not a ‘camp’ case; the event was held after work hours as distinct from during an interval in an overall period of work;
·     the employer had nothing to do with the cruise itself beyond permitting notice of the cruise to be circulated through its administrative systems;
·     JP Morgan stood to gain no benefit from the cruise and had no involvement in the cruise;
·     the cruise was held after working hours and not at the employer’s premises;
·     the cruise was not an event that was directly or indirectly the subject of any encouragement or participation by JP Morgan;
·     the cruise was not one where JP Morgan purported to exercise any control;
·     senior staff members of JP Morgan attended as members of the social club;
·     there is no suggestion of a work connected activity in the cruise itself;
·     JP Morgan was not entertaining clients on the cruise;
·     the cruise was not a ‘work get together’ but a social function for members of the social club, their spouses and guests;
·     less than half of JP Morgan’s employees were members of the social club;
·     the social club functions, such as the cruise, are to be contrasted to functions that JP Morgan organises and promotes, such as the JP Morgan Challenge;
·     the cruise was not connected with the deceased’s employment or any part of his employment duties;
·     his attendance at the cruise was completely voluntary;
· the requirements of section 9A of the 1987 Act are not satisfied;
·     reliance is placed on Powell v Intercapital Brokers (1998) 16 NSWCCR 259 (‘Powell’), referred to in detail below;
·     the deceased was employed as an accountant during normal working hours;
·     the death resulted from the deceased being on a social harbour cruise where large quantities of alcohol were consumed, the dance floor was slippery and a deck hand opened a gate as the boat was preparing to dock in circumstances where the boat was rocking – none of these circumstances have any employment characteristic at all and, therefore, the deceased’s employment was not even a factor let alone a substantial contributing factor to the death, and
·     the Arbitrator was in error in finding that the deceased’s death was caused by or arose out to his employment with JP Morgan and that his employment was a substantial contributing factor to the death.

Respondents’ Submissions

The submissions prepared for the First Respondent and the Second Respondents are identical except for additional points raised by the Second Respondents in paragraph 20 of their submissions. The submissions made are as follows:

·     there is no point of law raised by the Appellant Employer; the appeal seeks a review of the facts in an attempt to get the Presidential Member to come to a different conclusion;
·     no argument is available to the Appellant Employer under section 14 of the 1987 Act (‘serious and wilful misconduct’);
·     the Arbitrator was entitled to find that the allocation of time and resources to the social club by JP Morgan was substantial and could not be underestimated (Reasons, paragraph 16);

·     the JP Morgan web site said: “We hold numerous social events both internally and with other firms in industry. In the past these have included dinners, sailing, touch football competitions etc”;
·     the Arbitrator was entitled to place reliance upon the social club’s charter which reflected the public inducements on the web site and the events organised by the social club having the same benefits as the sponsored events in that both encouraged the employees to “know the team and the culture”;
·     it was open to the Arbitrator to determine that the activities of the social club were “inextricably linked to the operations of the employer and the employer authorised, encouraged and induced its employees to participate in the activities of the social club and the payroll deductions were an added inducement” (Reasons, paragraph 21);
·     the Arbitrator correctly applied Van Haeften in that the employer authorised, encouraged or permitted the social club to operate for the purpose of organising activities and events for morale and cohesion of the employees thereby deriving a benefit from the activity;
·     documents produced showed that liability for payment of Vagabond Cruises rested solely with JP Morgan;
·     the event was organised within work hours, money was raised within work hours using work facilities and connected to work and named in such a fashion as to represent work;
·     the Appellant Employer stood to gain from the cruise;
·     the social club’s purpose was obvious, namely, to promote leadership, cohesion, loyalty and a team spirit amongst workers employed by the Appellant Employer;
· the word ‘employment’ in section 9A includes matters incidental or ancillary to employment and includes “matters which a worker was reasonably required, expected or authorised to do to carry out his work”;
·     what amounts to a substantial contributing factor is a question of degree and impression (Dayton v Coles Supermarkets Pty Ltd (2001) 22 NSWCCR 46);
·     the Appellant Employer:
(i)knew about the existence of the social club;
(ii)permitted and even authorised the social club to use the JP Morgan monika;
(iii)knew that the cruise event was taking place;
(iv)did nothing to prevent the cruise;
(v)gained a benefit from the existence of the social club and the events it organised under its (JP Morgan’s) name;
(vi)provided the company internet to advertise the cruise and club events;
(vii)provided the accounting services for club finances;
(viii)permitted club members to utilise company facilities for club meetings and promotions, and
(ix)permitted senior personnel to facilitate and promote club activities.

· substantial contributing factor for the purpose of section 9A is not limited in its interpretation (reference is made to section 9A(2));
· the appeal is without merit and must be dismissed, the Appellant Employer having failed to demonstrate that the findings made by the Arbitrator were not open to her, and
· there is no compelling submission that would warrant the Presidential Member arriving at a different conclusion to that reached by the Arbitrator.

THE AUTHORITIES

The Football Cases and Hatzimanolis

These cases must now be read with some care as they all pre date the introduction of section 9A in the 1987 Act on 12 January 1997 but they are still helpful in determining whether the relevant injury was caused by or arose out of the employment.

In Clancy v Department of Public Health [1962] NSWR 2 (‘Clancy’) the worker was injured when playing a football match at one of his employer’s psychiatric hospitals. The employer encouraged the staff to play football and had organized and patronized a club known as the ‘Callan Park Staff Soccer Club’. The manager of the hospital was patron, the chief male nurse was president and the medical staff were vice presidents of the club. The worker was encouraged by the employer to join the club and to play soccer. All matches in which the club participated were played at the hospital oval on Saturday afternoons. On all such occasions the hospital authorities encouraged and organized the patients into attending the oval and watching the games – the object being to assist in the well being, care and treatment of the patients and to contribute to the esprit de corps of the staff. Importantly, whenever a member of the club, including the worker was rostered for duty when a match in which the club participated was due to be played, the hospital authorities temporarily relieved him of his duties to enable him to play. Such member was still paid his normal wage for the time spent playing in the match. If he had been rostered off duty when a match was played, he was not paid. The officer in charge of all the male nurses gave evidence that participation by the staff in sporting activities was a recognized and expected activity in all psychiatric hospitals and that this practice was part and parcel of the treatment for the patients (at 3.35)

In Clancy the worker succeeded with his claim and Evatt CJ and Wallace J held at 4:

“If the activity is not an independent excursion but is reasonably incidental to the worker’s employment, it is sufficient to bring the case within the statute. The activity need not be an actual duty but may be merely something which the worker is reasonably expected or authorised to do under the terms of his employment. Questions of fact, degree and circumstance are of course involved;…”

A different result was reached on similar facts in Paroz v Commissioner for Government Transport (1963) 80 WN (NSW) 883 (‘Paroz’) where Clancy was said to have been decided on its “exceptional circumstances”. In Paroz, Sugerman J based his decision on the High Court authorities of Henderson v Commissioner of Railways (WA) (1937) 58 CLR 281 and Humphrey Earl Ltd v Speechley (1951) 84 CLR 16 (‘the Henderson Speechley test’).

The Henderson Speechley test was reviewed by the High Court in Hatzimanolis v ANI Corporation Limited (1992) 173 CLR 473 (‘Hatzimanolis’). The test was summarized in Hatzimanolis at [9] where the majority said:

“9. In Henderson v. Commissioner of Railways (W.A)(3) (1937)58 CLR 281, at p
294, Dixon J. acknowledged that general expressions such as ‘incidental to the
performance of the work’ had not ‘proved very helpful’ in determining whether
an injury had occurred in the course of employment. His Honour suggested
that, in cases which were not concerned with injuries sustained during actual
work, the test of whether an injury had been sustained in the course of
employment ultimately depended upon whether the workman was doing something
which he was ‘reasonably required, expected or authorized to do in order to
carry out his actual duties’ (4) ibid. Dixon J. also applied that principle
in Humphrey Earl Ltd. v. Speechley (5) (1951) 84 CLR 126, at p 133 although in
that case he omitted the adjective ‘actual’.”

Their Honours went on to state at [13] that the Henderson Speechley test “no longer accurately covers all cases of injury which occur between intervals of work and which are held to be within the course of employment” and, consequently, this area of the law required:

“…a reformulation of the principles which determine whether an
injury occurring between periods of actual work is within the course of the
employment so that their application will accord with the current conception
of the course of employment as demonstrated by the recent cases, particularly
the decisions of this Court in Oliver and Danvers.”

In providing that ‘reformulation’ their Honours discussed the cases where workers have succeeded in establishing that their injuries, though sustained in an interval between periods of actual work, had been sustained within the course of their employment and said at [14]:

“14. A striking feature of the recent cases which have held that an injury
occurring in an interval between periods of actual work was within the course
of employment is that in almost all of them the employer has authorised,
encouraged or permitted the employee to spend his time during that interval at
a particular place or in a particular way. However, it would be an
unacceptable extension of the course of employment to hold that an employee
was within the course of employment whenever the employer had authorised,
encouraged or permitted the employee to spend the time during an interval
between periods of actual work at a particular place or in a particular way.
That formulation would cover not only the case of the ‘lunchtime’ injury, as
in Oliver, and the case of the railway worker, as in Danvers, but also many
cases involving injuries occurring during intervals between daily periods of
work which could not fairly be regarded as within the course of employment.
Thus, an employee who is encouraged by his or her employer to see a doctor
after working hours is not ordinarily within the course of employment if
injured while visiting the doctor, although the case would come within such a
formulation. The course of employment is ordinarily perceived as commencing
when the employee starts work in accordance with his or her ordinary or
overtime hours of work and as ending when the employee completes his or her
ordinary or overtime hours of work.” (emphasis added)

At [15] their Honours added:

“15. The distinction between an injury sustained by a railway worker as in
Danvers and a non-compensable injury sustained by an ordinary employee after
the day’s work has ceased lies not so much in the employer’s attitude to the
way the interval between the periods of actual work was spent but in the
characterisation of the period or periods of work of those employees. For the
purposes of workers’ compensation law, an injury is more readily seen as
occurring in the course of employment when it has been sustained in an
interval or interlude occurring within an overall period or episode of work
than when it has been sustained in the interval between two discrete periods
of work. Where an employee performs his or her work at a permanent location
or in a permanent locality, there is usually little difficulty in identifying
the period between the daily starting and finishing points as a discrete
working period. A tea break or lunch break within such a period occurs as an
interlude or interval within an overall work period. Something done during
such a break is more readily seen as done in the course of employment than
something that is done after a daily period of work has been completed and the
employee has returned to his or her home. On the other hand, there are cases
where an employee is required to embark upon some undertaking for the purpose
of his or her work in circumstances where, notwithstanding that it extends
over a number of daily periods of actual work, the whole period of the
undertaking constitutes an overall period or episode of work. Where, for
example, as in Danvers, an employee is required to go to a remote place and
live in accommodation provided by his or her employer for the limited time
until a particular undertaking is completed, the correct conclusion is likely
to be that the time spent in the new locality constitutes one overall period
or episode of work rather than a series of discrete periods or episodes of
work. An injury occurring during the interval between periods of actual work
in such a case is more readily perceived as being within the current
conception of the course of employment than an injury occurring after ordinary
working hours to an employee who performs his or her work at a permanent
location or in a permanent locality.”

In the next paragraph their Honours set out the now regularly quoted passage that, in my view, is intended to cover ‘camp’ or similar cases where a worker has sustained an injury in a interval between an overall period or episode of work:

“Accordingly, it should now be accepted that an interval or interlude within an
overall period or episode of work occurs within the course of employment if,
expressly or impliedly, the employer has induced or encouraged the employee to
spend that interval or interlude at a particular place or in a particular way.”

In the present case the death occurred during a period between two “discrete periods of work” and not whilst on an “interval during an overall period of work”. The ‘reformulation’ the High Court spoke of seems to me to have been directed towards the latter situation rather than the former.

Their Honours cited with apparent approval the decision of Deane J in Commonwealth of Australia v Lyon (1979) 24 ALR 300 (‘Lyon’) where his Honour said of the Henderson Speechley test, at 303:

“That test is plainly a most useful aid as a criterion of inclusion in the concept of ‘course of employment’ (ie if the test is satisfied, the respondent was doing something in the course of his employment). If, however, the test is to be used as a criterion of exclusion (ie if the test is not satisfied the respondent was not doing something in the course of his employment) it is, in my respectful view, necessary to place a gloss on the words ‘in order to carry out his duties’ which conclude the question formulated by Dixon J. so that that prima facie intractability may be tempered to accord with the current views of what comes within the scope of employment which are more liberal than those prevalent at the time Dixon J. formulated it (see per Dixon J. Commonwealth v Oliver (17)) (1962) 107 CLR, at p 358. Any such gloss tends to reintroduce general concepts such as what should be accepted as reasonably incidental to employment.”

In Lyon the worker, a clerk in the Bureau of Customs, was injured when playing football for the customs team in the Sydney Domain. The football was encouraged by the employer, which provided amenities for the team to change at work and transport to the Domain. The Collector of Customs attended the match, the results of which were also reported in the official Bureau publication. The game was the grand final of a competition restricted to teams drawn from the various Commonwealth Departments and various State (NSW) Departments. The team was known as the ‘Customs Team’ and the Bureau gave significant support and assistance to the team. It was established practice in the Bureau that when participation in the game involved a team member in being absent from duty for more than the period of his lunch time, he would complete his attendance record on the basis that he had resumed duties at the expiration of his lunch time period and would not be required to make up time (at 302). Members of the team were permitted to absent themselves from work during the afternoon following the lunch time game to celebrate their win. The court held that the injury was sustained in the course of the worker’s employment, noting that there was no need for there to be any causal connection between the work the employee was employed to do and the injury sustained.

The above cases (except for Lyon) were review by the Court of Appeal in Van Haeften v Caltex Oil (Australia) Pty Ltd (1995) 12 NSWCCR 250 (‘Van Haeften’). In that case the worker was employed by Caltex Oil (Australia) Pty Ltd (‘Caltex’) as a storeman. He was injured while playing touch football on a Sunday at a field called Caltex Oil Field. The game was part of an annual occasion when all the oil companies and a number of different departments from Caltex in Sydney had teams play in a competition on that day. On the day of the game the worker’s team was provided with shorts and T-shirts bearing the logo “Caltex Balmain”. The field where the game was played was sponsored by Caltex. On the day there were marquees set up with ‘Caltex’ written on them. In the Court of Appeal Priestley JA (with Clarke and Meagher JJA agreeing) held at 256-257 that it was proper to draw an inference that it was more probable than not that the management of Caltex was aware of the annual event and was active in encouraging the going forward of the event. The benefit to the company was not only that of morale but also favourable advertising and publicity. Therefore, there was a sufficient connection between the game and the worker’s employment to justify the conclusion that he was “in the course of his employment” when he was injured. In the course of his decision Priestley JA said at 255:

“It seems to me that the overall result of Hatzimanolis is that, as well as giving guidance of a more or less specific kind to courts concerning cases which fall into the ‘camp’ category, it indicates that there is a wider area of case where, although the Henderson Speechley test will often still be appropriate, there will be other cases where it is no longer fully appropriate because of the course of decision in the vast number of cases decided since that test was formulated.”

I have been unable to discern any additional guidance from Hatzimanolis in a situation such as the present where the injury occurred between two discrete periods of work rather than on an interval during an overall period of work. In reconciling Clancy and Paroz Priestley JA said at 256:

“…the Commissioner would have been entitled to come to the conclusion which he came to for a more accurate reason than the one he relied on, that is that there was a sufficient connection between the game at Caltex Field on the Sunday and the worker’s employment, to justify the conclusion that he was ‘in the course of his employment’ when he was injured.”

That “sufficient connection” was based on the fact that it was open to infer that the employer was aware of the annual event, that it “encouraged” the “going forward of the event”, and got a benefit from improved morale and from favourable advertising and publicity surrounding the staging of the event at Caltex Field (at 257).

Two points should be noted about Van Haeften. First, it pre dates section 9A of the 1987 Act. Second, the employer called no evidence to deny that it had encouraged the going forward of the event.

In Black v NSW Fire Brigades (1994) 10 NSWCCR 322 (‘Black’) Justice Campbell reviewed the Henderson Speechley test in the light of Hatzimanolis and held that as the injury occurred between two discrete periods of work, as opposed to on an interval during one overall period of work, the test to be applied was that set out in Henderson Speechley, but with the “gloss” suggested by Deane J in Lyon. In Black the worker was injured playing football for the NSW Fire Brigade Rugby League Team. The match was organised by the Fire Brigades Sports Council. It was found that fitness was a desired object of the Brigade and his Honour was prepared to infer that the cultivation of a sense of esprit de corps was also important (at 337F). The Brigade provided some facilities for the collection of monies by the Sports Council and took an interest in its activities. Notwithstanding these matters his Honour held that the injury neither arose out of nor in the course of the worker’s employment. His Honour noted:

(a)the worker was not required or expected to engage in the activity;

(b)the reactivation of the football team was a matter initiated by people who wanted to play football, not the employer;

(c)the team was not funded by the employer, but by the players, and

(d)the players were not permitted to play on duty.

Whilst I am inclined to the view that Justice Campbell was correct in his analysis of Hatzimanolis, I am naturally bound to apply, and I do apply, the principles set out in Van Haeften as further explained in Dew & another v Maher (1996) 14 NSWCCR 56 (‘Dew’).

Other Authorities

In Dew the worker was employed as a general hand on a rural property about 40 minutes from where his family lived. He lived in a flat above the shearing shed to avoid travelling during the working week and often at weekends. The worker’s supervisor was the station manager and also a professional pig shooter and licensed explosives operative. He used his explosives skill to destroy rabbit burrows and would shoot pigs on the property and retain the proceeds of carcases sold. The eradication of rabbits and pigs was for the benefit of the employer and was something it encouraged. The employer knew and approved of other employees assisting the station manager in these activities. Neither the station manager nor the employees who accompanied him on the pig shoots were paid for this activity. On the night of the accident the worker, the station manager and some friends went on a pig shoot. The station manager took some explosives. Whilst on the shoot the station manager prepared a bomb, with the worker’s knowledge and assistance, with the intention of frightening the other visitors. The bomb exploded prematurely causing injury to the worker. The two issues in the case were whether the worker was in the course of his employment at the time of the explosion and whether he had been guilty of gross misconduct.

The Court of Appeal held that the worker was in the course of his employment whilst undertaking the pig shoot. The following points are taken from the decision of Cole JA at 64:

(a)the activity of pig shooting was one that was “authorised, encouraged or permitted” by the employer;

(b)it was an activity that was for the employer’s benefit;

(c)it was an activity that was normally done between intervals of employment and was, in part, a recreational activity notwithstanding the benefit to the employer;

(d)in determining whether the injury occurred in a period when the worker was or was not engaged in the course of his employment, the fact that he lived on the farm needs to be considered;

(e)if an employee has been encouraged by his employer to live on the farm, that may be a factor indicating the inappropriateness or difficulty in defining periods of employment, and

(f)even if the worker’s period of employment was less than the actual time spent on the farm, if during intervals between such periods the worker is engaged on a task which is of benefit to the employer, even though it involves an element of recreation, it will be in the course of employment in accordance with the principles set out in Hatzimanolis.

Dealing specifically with Hatzimanolis and Van Haeften Cole JA (with Handley JA agreeing) said at 64-65:

“Here the evidence was that Mrs Dew invited the worker to live on the property, and the appellant authorised, encouraged or permitted the worker to engage with others in the task of eradication of feral animals for the benefit of the employer. It follows, in my view, that it can properly be said that the injury was suffered in the course of his employment whilst engaged in an activity incidental to it, subject of course to the misconduct point. I understand my view to accord not only with the view of the majority in Hatzimanolis, but also with the decision of this Court in Van Haeften v Caltex Oil (Australia) Pty Ltd (1995) 12 NSWCCR 250. For these reasons I do not think that Manser CCJ erred in his application of either of those decisions.
It was contended that the principles restated in Hatzimanolis apply only in relation to remote places of employment where the employer requires the employee to reside on site. I do not think that is so. The principles are of general application producing differing factual results depending upon the application of particular factual situations. The High Court made clear (at 482) it was addressing generally the concepts of the duration of periods of employment and their relationship to injury suffered between or within such periods.”

In Blacktown City Council v Smith (1996) 14 NSWCCR 132 the worker went to rescue a woman in an adjoining office, which was unconnected with the council, and was injured by the woman’s assailant. The Court of Appeal upheld the trail judge’s decision that the worker was in the course of her employment when she went to the rescue of the person being attacked in the adjoining office. Justice Mahoney noted at 136 that there was nothing in Hatzimanolis which finally determined the matter. His Honour added:

“What is to be considered is (to adapt the language of Hatzimanolis) whether what occurred, properly characterised, terminated the relationship with the employment.”

In considering what would have been likely to have been the attitude of the employer to what the worker did his Honour said at 137B:

“I do not mean by this that the matter is to be decided or even formally tested by the use of terms such as ‘allowed’. In Hatzimanolis, the Court pointed out that such terms, though they had been used by the High Court in earlier cases to describe what was and was not within the course of employment now provide unsatisfactory tests.”

His Honour noted that one may look to the “practical necessities and mutual expectation of the parties” (Danvers v Commissioner for Railways (NSW) (1969) 122 CLR 529 at 538).

The case of Powell is a first instance judgment that is instructive in its application of Hatzimanolis. That case concerned a broker who attended a weekend away at Wisemans Ferry at the invitation of a co-worker. The employer’s manager was present and the worker felt it was important that he attend and he felt obliged to attend. The weekend was intended to be one involving waterskiing and socialising. The cost of the weekend was to be met by the employer through a generous expense account. In the course of the weekend, when he was well affected by alcohol, the worker fell and was injured. After referring to Hatzimanolis, Van Haeften and other cases, Judge Armitage held at [20] and [21]:

“20 With reluctance I am of the view that the applicant has failed to establish on the probabilities that he was encouraged or induced to attend the weekend upon which he suffered his injury by his employer, his servants or agents, or that he was otherwise in the course of his employment at this time, it not being argued that the injury arose out of his employment. It is true that it was in the employer’s interest for him to attend. The employer had, in my view, an interest in ensuring that employees in a highly competitive and stress-prone workplace got on well together and bonded together as human beings. It had an interest in ensuring good relations between its employees at intermediate levels, such as the applicant, and the manager of the respondent and its South East Asian manager, both of whom were present at the weekend. It had an interest in promoting healthy sporting activities between its employees, such as occurred on this weekend. Mr Hickey’s evidence established that the main activity to be undertaken at the weekend was waterskiing, and that he had successfully organised a waterskiing weekend attended by a number of employees on an earlier occasion.
21 However, this may also occur, for example, where several employees of a company gather, perhaps with higher management and perhaps with clients of their employer, to play golf on the weekend at a golf club at which one or more of them are members. Playing golf with clients is a frequent way of establishing a rapport so as to bring business one’s way. The mere fact that one attends to play golf with one or more clients at one’s golf club, whether or not one is accompanied by one’s fellow employees, is not enough, one would have thought, to bring the playing of the golf game, and for that matter one’s journey to and from it, within the course of one’s employment. Something more is required, and Hatzimanolis defines what it is. There must be encouragement or inducement by the employer to attend and undertake the activity in question.”

In Worrell v Longworth & anor (2000) 20 NSWCCR 400 (‘Worrell’) the worker worked on the employer’s agricultural property as an irrigation foreman. His hours of work varied depending on the season and the irrigation requirements. At peak times he would work 12 hours per day, seven days per week. On the day of his injury he worked for two or three hours up to 8am and he proposed working a similar stint at 5pm that afternoon. The worker lived about 5 to 10 km from the employer’s property in rented premises. On the day of the injury the employer rang him and invited him and his family to a picnic at the dam on the property. The worker accepted. While the worker was reattaching a rope to a speedboat on the dam the boat accelerated causing his finger to be amputated. The worker failed with his claim. Judge Burke held that the break in work was an “interlude between two discrete periods of work” [25] and that there had been no “overt encouragement or inducement to accept the invitation” [23]. In his decision his Honour made the following observations about Hatzimanolis at [12]:

“12 Hatzimanolis has been considered, and possibly interpreted, in quite a number of matters decided subsequently. Two matters raise a pertinent consideration: Cudgegong Soaring Pty Ltd v Harris (1996) 13 NSWCCR 92 and WorkCover Authority (NSW) v Billpat Holdings Pty Ltd (1995) 11 NSWCCR 565. Both place some stress upon an employer not merely passively authorising a particular activity but actively encouraging or inducing it before the requisite nexus to employment can be established. Glenbuddah Pty Ltd v Williams (1995) 12 NSWCCR 468 and Van Haeften v Caltex Oil (Australia) Pty Ltd (1995) 12 NSWCCR 250 have the same general thrust on this particular aspect. Hatzimanolis appears to have modified one limb of the test in Humphrey Earl Ltd v Speechley (1951) 84 CLR 126 per Dixon J at 133, of ‘reasonably required, expected or authorised to do’. If ‘required’, the activity was explicitly part of the employment; if ‘expected’, it is tacitly part of the employment. It is the ‘authorised’ parameter that has been modified. Insofar as that merely imports permission that, of itself, will not suffice to render the activity part of the employment. It must not merely be permitted but encouraged or induced.”

In general terms I agree with the Judge Burke’s analysis of Hatzimanolis. On the question of whether a worker injured whilst performing an ‘authorised’ activity is sufficient to render the activity one that is either ‘in the course of’ or ‘arising out of’ the employment Kirby A-CJ (as he then was) noted in WorkCover Authority (NSW) v Billpat Holdings Pty Ltd & others (1995) 11 NSWCCR 565 (‘Billpat’) at 593:

“Although in Hatzimanolis, the majority also referred (at 482) to what the worker has been ‘authorised’ or ‘permitted’ to do, their Honours did not accept that that would be a permissible criterion for defining the ‘course of the employment’. I therefore take Toohey J’s opinion to be a statement of principle which goes beyond that established by the majority. However sympathetic I am to Toohey J’s view, I hold myself bound to the views expressed by the majority. They limit the scope of employment to what the employer has ‘expressly or impliedly induced or encouraged’. Such criterion is fully in accord with the outcome in Hatzimanolis. It goes beyond previous authority. But mere authorisation is not enough to cast the protective net of the Workers Compensation Act. To give the very substantial protections which that Act affords, there needs, according to the majority opinion in Hatzimanolis, to be a more direct connection with the employer’s enterprise. This involves encouragement and even inducement by the employer.”

The Picnic Cases

Whilst there are several first instance cases dealing with claims for compensation as a result of injuries sustained at Christmas parties, there seems to be very little appellate authority on this topic. One case that gives some guidance is Boolaroo Co-Operative Society Ltd v Black [1958] WCR 61. In that case the worker drowned at the employer’s annual staff picnic held at Avoca beach. The picnic was an annual summer event that had been arranged by the employer for more than forty years. It was held on a normal working day, on a date fixed by the employer which made a truck available for transport. Workers were expected to attend and were paid their normal wage for attending. Those who did not attend were not paid for that day. Street CJ agreed with the following statement by the trial judge that the worker “was doing what his employer desired him to do on that day in order to earn his remuneration” (at 63). On appeal it was held that it was open to the Commission to conclude that the worker’s death arose out of or in the course of his employment.

REVIEW

The nature of a review has been considered in many cases. In Mayne Group Limited v Roberts & Faulding Health Care Pty Ltd [2005] NSWWCCPD 15 Deputy President Byron held:

“39. A Presidential Member on appeal has a specific and limited role in the review of the decision of an Arbitrator. The review is not a rehearing, nor is the Presidential Member dealing with the matter de novo, nor is he or she arriving at a fresh decision based upon all of the evidence available at a later time (Coal & Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194; Builders Licensing Board v Sperway Constructions (Sydney) Pty Ltd (1976) 135 CLR 616). The powers of the Presidential Member to revoke the decision pursuant to section 352(7) of the 1998 Act and to substitute a new decision in its place, are exercisable only where it is demonstrated that the decision of the Arbitrator is affected by some legal, factual or discretionary error (Allesch v Maunz (2000) 203 CLR 172). Alternatively, the Presidential Member may remit the matter back to the Arbitrator concerned, or to another Arbitrator, for determination in accordance with any decision or directions made.”

DISCUSSION AND FINDINGS

I have engaged in a lengthy analysis of the relevant authorities in order to illustrate the kinds of cases where the courts have held that the injury was sustained in the course of employment and to contrast those situations to the present case. 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. The deceased was employed as an accountant. He worked regular hours in the Appellant Employer’s Sydney office, not at some remote mine or distant farm. In these circumstances something done during a the tea break during normal office hours is more readily seen as done in the course of employment than something done after a daily period of work has been completed (Hatzimanolis at [15]).

I do not agree with the Arbitrator’s statement that the allocation of time and resources by the Appellant Employer to the social club was “substantial”. The evidence was that the social club fees were deducted from workers’ wages through JP Morgan’s payroll system and committee meetings were held during working hours. There was no evidence as whether that involved any or any substantial allocation of resources by the Appellant Employer. There was no evidence that the use JP Morgan’s internal email system would have involved any cost to the company. It was merely a convenient way for the social club to communicate its activities to its members.

The reference on the JP Morgan web site does no more than state that JP Morgan holds social events as part of its culture. That is not disputed. JP Morgan did hold social events that it sponsored and no doubt wanted its employees to take an active role in. What the Appellant Employer says, and I agree, is that the subject cruise was not a JP Morgan sponsored event. This conclusion is supported by the evidence from Gerrard Fitzgibbon where he states that “the firm was not involved in this function” (see paragraph [38] above) and from David Barton where he states that “this function was purely a social club function and had nothing to do with JP Morgan” (see paragraph [37] above). Ms Curran was cross examined about the ‘JP Morgan culture’ and the importance of having social harmony with all the staff. She was then asked about the JP Morgan Challenge and said that it was a “corporate-sponsored event” which was a “fun sort of challenge”. Employees were free to participate and it was a “firm sponsored function” where “the firm has a marketing and communications event co-ordination group that…run and sponsor that and pay for that directly…as opposed to the social club ball, which is not funded by the employer at all” (see paragraph [42] above) (emphasis added).

There is a clear contrast between social club events (such as the cruise) and events such as the JP Morgan Challenge. The corporate or commercial nature of the latter is obvious and is in stark contrast to the cruise where no JP Morgan clients were invited and there was no evidence that JP Morgan logos or other corporate identification was on display. This fact is in sharp contrast to the circumstances surrounding the sports day in Van Haeften. On that day the event took place at Caltex Oil Field and team members wore T-shirts bearing their employer’s logo. The event was an annual one where other oil companies and other departments from Caltex participated in a competition. Marquees were set up with ‘Caltex’ written on them. Significantly, no evidence was called by Caltex to deny that the event was organised and promoted with its consent. The facts in the present case are to the opposite effect. Several witnesses were called by the Appellant Employer to give evidence as to the social nature of the cruise and the lack of involvement of JP Morgan.

A further distinction between Van Haeften and the present case is that JP Morgan did not “encourage” the “going forward of the event”. It is true that it allowed its email system to be used to bring the event to the attention of JP Morgan employees, but in my view that amounts to no more than ‘authorising’, which, on the authorities, is not sufficient (Hatzimanolis and Billpat). In addition, JP Morgan did not gain anything from favourable advertising or publicity from the cruise. There was no advertising or publicity surrounding the event. The significant factual differences between Van Haeften and the present matter were not considered by the Arbitrator and in this regard she was in error.

The social club’s charter was to “increase morale and interaction” and “break down barriers and improve awareness of people and resources” within the company. Whilst that is a laudable goal and, if it is achieved, is something that may well contribute to improved esprit de corps, it does not make a purely social event an employment event. The benefit to the Appellant Employer is, in my opinion, too vague and tenuous to be sufficient to make an injury that occurs at a purely social function an injury that is sustained either in the course of or arising out of the employment.

Whilst I accept that the Appellant Employer impliedly ‘authorised’ the social clubs activities, that falls well short of the finding made by the Arbitrator that the activities of the social club were “inextricably linked to the operations of the employer and the employer authorised, encouraged and induced its employees to participate in the activities of the social club and the payroll deductions were an added inducement” (Reasons, paragraph 21). I have already noted that mere authorisation is not enough to make the particular activity one that is given the protection offered by the Workers Compensation Acts. The only evidence that might fall into the category of ‘encouragement’ or ‘inducement’ is the statement on the web site referred to earlier. That statement appeared in a promotion to attract employees for summer internships. It does no more than advise prospective employees that there will be opportunities to get to know their co-workers because numerous social events are held. There is no evidence of any encouragement or inducement from JP Morgan to employees for them to join the social club. The Appellant Employer did not pay or even subsidise membership fees. There is no evidence that employees were given any benefit or bonus if they joined the social club, it was entirely their choice. In fact less than half of the Appellant Employer’s employees were members of the social club. At best the Appellant Employer allowed the company facilities to be used to allow the club to operate. In my view JP Morgan did no more than facilitate or authorise the running of the club and the Arbitrator was in error in finding that it “encouraged and induced its employees to participate” in the clubs activities. There is no evidence of any encouragement or inducement by JP Morgan to secure attendance of employees at the harbour cruise. It was entirely a matter for each individual employee whether he or she attended or not. No time off work was given. No financial inducement was offered. Being allowed to wear jeans on the day of the cruise was, at best, a neutral factor.

The Respondents’ submission that “documents produced showed that liability for payment of Vagabond Cruises rested solely with JP Morgan” is not sustainable. One of the documents referred to was rejected by the Arbitrator (as was the further evidence sought to be relied on by the Appellant Employer on this issue) and has not been admitted on appeal. The evidence about the cost of the cruise is set out in agreed fact 16 in paragraph [33] above. The shortfall between the cost of the boat and the revenue from ticket sales was made up “through the JP Morgan Social Club subscriptions”. The ‘letter of booking confirmation’ from Vagabond Cruises dated 26 July 2004 is addressed to ‘David Barton JP Morgan Level 35, 259 George Street, Sydney’. David Barton was a member of the social club committee and in that role he was active in organising the cruise. He makes the point at paragraph 11 of his statement of 3 December 2004 that “JP Morgan does not sponsor the social club financially for any of the functions the club has other than I have already stated”. The reference to “other than I have already stated” is a reference to the committee meetings being held in work hours. Mr Barton’s evidence on this issue is corroborated by Mr Fitzgibbon’s statement at paragraph nine where he said “the firm does not contribute financially to the social club or social club events”. In the light of this evidence the fact that the invoice from Vagabond Cruises dated 20 September 2004 is addressed to ‘JP Morgan Level 35, 259 George St Sydney’ does not support the submission made by the Respondents.

It is true the event was organised within work hours and that the Appellant Employer’s email system was used to promote it. I do not agree that the event was named in such a fashion as “to represent work” as has been submitted. No evidence is relied on to support this submission and it ignores the fact that it was not a work function but a purely social function.

The submission is made that the Appellant Employer stood to gain from the cruise. In my view the only gain to be had by JP Morgan from the cruise may have been in the form of improved morale. Such an indirect benefit is, on its own, insufficient. The activity was not done ‘for the employer’s benefit’ (as in Dew) but done with the object of having a party. This benefit is to be contrasted to the benefit to Caltex in Van Haeften of significant publicity and advertising in what was obviously a ‘corporate day’. Though JP Morgan did have such ‘corporate days’ (the JP Morgan Challenge), the cruise was not such an event.

It is submitted that the social club’s purpose is to promote leadership, cohesion, loyalty and team spirit amongst workers. Whilst I agree that improved morale may well have been a benefit to the Appellant Employer from the existence of the social club, I do not agree that the cruise in question was an event likely to promote leadership, cohesion, loyalty and team spirit. The event was a harbour cruise not a team building exercise. I do not agree that a social event involving dancing and drinking is likely to promote leadership, loyalty or team spirit. Any gain to the Appellant Employer was secondary to the primary purpose served by the cruise, namely, to relax and have a good time.

Taking all of the evidence into account I believe the Arbitrator erred in finding that the deceased’s injury and consequential death was either caused by or arose out of his employment with the Appellant Employer. In my opinion the injury and consequential death neither arose out of nor in the course of the deceased’s employment with JP Morgan.

If I am wrong in this conclusion it is necessary to consider the application of section 9A of the 1987 Act because a finding that an injury was either caused by or arose out of employment does not of itself satisfy section 9A. In ICM Agriculture Pty Ltd v Perry [2002] NSWCA 257 (‘Perry’) at [17] the President said:
“Nothing in those cases suggested that s9A is satisfied merely because the injury arose out of or in the course of employment. Nor does Mercer. Section 9A(3)(a) explicitly states that a finding that the injury arose out of or in the course of employment is not, in itself, a basis for a finding of substantial contributing factor.”

The Court of Appeal has confirmed in McMahon v Lagana [2004] NSWCA 164 at [33] (‘McMahon’) that ‘substantial contributing factor’ in section 9A is a separate and distinct question from the issue of ‘in the course of’ employment.

SUBSTANTIAL CONTRIBUTING FACTOR

The Respondents submit that section 9A includes matters incidental or ancillary to employment and includes “matters which a worker was reasonably required, expected or authorised to do to carry out his work”. The point is also made that section 9A is not limited in its interpretation with reference being made to section 9A(2).

Section 9A of the 1987 Act provides:

“9A No compensation payable unless employment substantial contributing factor to injury

(1) No compensation is payable under this Act in respect of an injury unless the employment concerned was a substantial contributing factor to the injury.
(2) The following are examples of matters to be taken into account for the purposes of determining whether a worker’s employment was a substantial contributing factor to an injury (but this subsection does not limit the kinds of matters that can be taken into account for the purposes of such a determination):
(a) the time and place of the injury,
(b) the nature of the work performed and the particular tasks of that work,
(c) the duration of the employment,
(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,
(e) the worker’s state of health before the injury and the existence of any hereditary risks,
(f) the worker’s lifestyle and his or her activities outside the workplace.

(3) A worker’s employment is not to be regarded as a substantial contributing factor to a worker’s injury merely because of either or both of the following:
(a) the injury arose out of or in the course of, or arose both out of and in the course of, the worker’s employment,
(b) the worker’s incapacity for work, loss as referred to in Division 4 of Part 3, need for medical or related treatment, hospital treatment, ambulance service or occupational rehabilitation service as referred to in Division 3 of Part 3, or the worker’s death, resulted from the injury.

(4) This section does not apply in respect of an injury to which section 10, 11 or 12 applies.”

The term ‘employment’ is not defined in either the 1987 Act or the 1998 Act but has been the subject of considerable judicial comment over the years. In Mercer v ANZ Banking Group Ltd (2000) 48 NSWLR 740 (‘Mercer’) Mason P considered the High Court authority of Federal Broom Co Pty Ltd v Semlitch (1964) 110 CLR 626 (‘Semlitch’) and said at [19] to [21] inclusive:

“19 The appellant cites Federal Broom Co Pty Ltd v Semlitch. There Kitto J (with whom Taylor and Owen JJ agreed) was critical of an aspect of the reasoning of Else-Mitchell J in the court below where his Honour had treated the word ‘employment’ in the definition of ‘injury’ (at 632) :
as something distinct both from the fact of the employment of the worker and from any consequence of the employment and confine[d] it ... to the inherent features or essential incidents of the employment, to the exclusion of occurrences in the course of the work.

20 In the same case, Windeyer J said (at 641):
I pass then to the next, and I think more difficult, question, was this aggravation or deterioration contributed to by her employment? This requirement of the Act is not satisfied by showing only that a worker suffering from some disease would or might have suffered less severely if he had not been employed at all. When the Act speaks of ‘the employment’ as a contributing factor it refers not to the fact of being employed, but to what the worker in fact does in his employment. The contributing factor must in my opinion be either some event or occurrence in the course of the employment or some characteristic of the work performed or the conditions in which it was performed.

21 The appellant submits that Bishop CCJ erred when he cited and applied the passage in the judgment of Windeyer J as distinct from that of the judgment of Kitto J. I confess that I see no difference of substance between the two judgments on this point. Each of their Honours was accepting that what Kitto J described as ‘the inherent features or essential incidents of the employment’ was relevant, employment in this context being a reference to the worker’s actual contract of employment. But the thrust of the two passages was to emphasize that ‘employment’ in the context extended to what the worker was in fact doing in his or her employment.”

His Honour noted at [13] of the same case the meaning of ‘employment’ in section 9A. His Honour said:

“It is common ground between the parties and well-established by earlier authority that, when s 9A(1) speaks of ‘the employment concerned’ being a substantial contributing factor to the injury, the legislation is not referring to the fact of being employed, but to what the worker in fact does in the employment (see FederalBroom Co Pty Ltd v Semlitch (1964) 110 CLR 623 at 632-3, 641). In other words, one starts with the actual and not the hypothetical, with what (if anything) the worker was in fact doing in his or her employment that caused or contributed to ‘the injury’ as defined in s 4. See also Stanton Cook”.

Section 9A was considered in Stanton-Cookv TAFE Commission (NSW) (1999) 17 NSWCCR 632 where Judge Neilson held at paragraph [44] (after referring to Hatzimanolis):

“However, since the enactment of s9A, it is insufficient to prove that the employee was in the course of his employment. It must be established that the injury arose out of the employment, that is there was a causal relationship between the injury and the work which the worker is required, expected or authorised to do in pursuit of his employment contract.” (emphasis added)

In Mercer at [22] Mason P said:

“The worker correctly submits that the words ‘employment concerned’ in s9A reinforce the view that it is the work activity in which the worker was engaged at the time of injury that is relevant. The ultimate question is whether that activity or task was a substantial contributing factor to the injury, bearing in mind that the concept of “a substantial contributing factor to an injury” is exegeted in ss (2) and (3) of s 9A.” (emphasis added)

In Dayton v Coles Supermarkets Pty Ltd (2001) 22 NSWCCR 46 (‘Dayton’) Giles JA noted at [22]:

“…‘substantial’ qualifies ‘contributing factor’, indicating that it is the strength of the causal linkage that is in question; and it is ‘the employment concerned’ which must be a substantial contributing factor, meaning not the fact of being employed but what the worker was doing in his employment.” (emphasis added)

In McMahon Justice Hodgson, with Santow JA and Stein AJA agreeing, stated at [35] that:

“…the question whether the worker is performing positive employment duties or is merely in an interval between such duties, when the injury occurs, may be relevant to whether the employment was a substantial contributing factor to the injury;”

Applying Semlitch and Mercer, the relevant ‘employment concerned’ is a reference to “what the worker in fact does in the employment”. The deceased was employed as an assistant accounting manager in the Appellant Employer’s Sydney office working regular office hours. He started work at 9am on the day of the cruise and ceased at about 5.15pm.

The ultimate question of whether the section 9A test is satisfied is a question of fact and is a matter of impression and degree (Dayton at [29]).

If it is thought, contrary to my finding, that the deceased’s death was caused by or arose out of his employment, that circumstance is relevant in assessing whether employment was a substantial contributing factor, but it is not determinative. However, to use the words of Hodgson JA in McMahon at [38], “there were countervailing factors, including the circumstance that the [deceased] was not performing any positive duties”, and the circumstance that the injury and consequential death occurred during an interval between two discrete periods of work. The last fact is to be contrasted to McMahon where the injury occurred during an interval in an overall period of work. As the High Court held in Hatzimanolis, an injury sustained during such an interval is more readily seen as done in the course of employment than something that is done after a daily period of work has been completed.

Applying the above authorities to the specific subsections of 9A(2) I make the following findings:

(a)“the time and place of injury”: the time of injury was well outside working hours and the place of injury was well away from the deceased’s place of employment;

(b)“the nature of the work performed and the particular tasks of that work”: the deceased was not performing any work duties or doing anything incidental to his work duties at the time of his death; nor was he doing anything that was ‘required or expected’ of him in the performance of his duties;

(c)“the duration of the employment”: this factor is not relevant in this case;

(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”: it is certainly possible that an accident of the kind that befell the deceased could have happened on any harbour cruise at about the same time of his life if he had not been employed with JP Morgan; however, that falls well short of saying there was a probability that the deceased would die from accidental drowning at about the same stage of his life;

(e)“the worker’s state of health before the injury and the existence of any hereditary factors”: the deceased’s state of health is not a relevant factor in this case, and

(f)“the worker’s lifestyle and his or her activities outside the workplace”: the deceased’s lifestyle and his activities outside the workplace were a factor, though certainly not determinative, because, on the evidence, the deceased had been drinking heavily on the night of the cruise and that fact may have contributed to his death.

In all the circumstances I do not believe it can reasonably be concluded, bearing in mind the provisions of section 9A(2), that the deceased’s employment was a substantial contributing factor to his injury and death. In my opinion the substantial contributing factors to the deceased’s injury and death were the deceased attending a social function where a large quantity of alcohol was consumed (by him and others), the dance floor was slippery and a crew member opened a gate before the boat was securely docked in circumstances where the boat was still rocking.

The Arbitrator failed to consider the subsections to section 9A(2) and failed to consider Mercer or Semlitch in reaching her conclusion that employment was a substantial contributing factor to the injury and subsequent death (Reasons, paragraph 22). That failure involves an error and, as a consequence, the decision cannot stand. In my opinion, even if the death was caused by or arose out of his employment, the deceased’s employment was not a substantial contributing factor to his injury and consequential death and there must therefore be an award for the Appellant Employer.

SERIOUS AND WILFUL MISCONDUCT/GROSS MISCONDUCT

In light of the above findings it is not necessary to make a finding on this issue.

DECISION

The findings made by the Arbitrator and set out at paragraph 27 of her Reasons are revoked.

Paragraphs one, two and three of the Arbitrator’s decision are revoked and the following orders made:

“1.Award for the First Respondent.
2.No order as to costs.”

COSTS

No order as to costs of the appeal.

Bill Roche
Acting Deputy President
19 September 2006

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

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