K-Mart Australia Limited v Falzon
[2006] NSWWCCPD 283
•25 October 2006
WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:K-Mart Australia Limited v Falzon [2006] NSWWCCPD 283
APPELLANT: K-Mart Australia Limited (in its interests as a self-insurer)
FIRST RESPONDENT: Carmen Falzon
SECOND RESPONDENT: K-Mart Australia Limited (in the interests of Allianz Australia Workers Compensation (NSW) Limited)
INSURERS:Allianz Australia Workers Compensation (NSW) Limited
Self-insurer
FILE NUMBER: WCC2391-06
DATE OF ARBITRATOR’S DECISION: 18 May 2006
DATE OF APPEAL DECISION: 25 October 2006
SUBJECT MATTER OF DECISION: Absence of transcript/Reasons for decision
PRESIDENTIAL MEMBER: Acting Deputy President Michael Snell
HEARING:On the papers
REPRESENTATION: Appellant: Lander & Rogers
` First Respondent: Peter Erman
Second respondent: Hicksons
ORDERS MADE ON APPEAL: The decision of the Arbitrator dated 18 May 2006, is revoked and the matter is remitted to another Arbitrator for determination afresh in accordance with these reasons.
Costs of the original conciliation/arbitration hearing, and of the appeal, to follow the final costs order when the matter is determined afresh.
BACKGROUND TO THE APPEAL
On 14 June 2006 K-Mart Australia Limited (‘K-Mart’), in its interests as a self-insurer (‘the self-insurer’), sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Workers Compensation Commission (‘the Commission’) against a decision, dated 18 May 2006.
The Respondents to the appeal are the worker, Carmen Falzon (‘Ms Falzon’) and Allianz Australia Workers Compensation (NSW) Limited (‘Allianz’), which was the other relevant insurer of K-Mart. Allianz had insured K-Mart at relevant times up to 17 February 2002, and K-Mart had been a self-insurer thereafter.
Ms Falzon’s claim relied upon alleged injuries to her neck on 20 July 2000 and 21 February 2001, together with the “nature and conditions of employment” from 1 January 1998 to 25 April 2003. She also relied upon the ‘disease’ provisions of the Workers Compensation Act 1987 (‘the 1987 Act’). She claimed injury to the neck and left shoulder. She sought weekly compensation at the rate of $180.00 per week from 17 June 2005 to date and continuing, medical expenses pursuant to section 60 of the 1987 Act, and lump sum compensation pursuant to sections 66 and 67 of the 1987 Act.
THE DECISION UNDER REVIEW
The matter was listed for conciliation/arbitration hearing on 17 May 2006. Ms Falzon, and the two insurance interests, were legally represented. The Arbitrator recorded “…the offers which had been made were within the ballpark of being reasonable and that the disagreement at that stage, or the dispute at that stage was as between the two insurers as to what was the appropriate apportionment or if there was any appropriate apportionment. So that I indicated that the issues of the nature of the injury and the date of the injury would be determined and we would then take a break and see if there was any utility in further discussions at that stage.” (T1.55 to 2.5). Consistent with this, the Arbitrator proceeded to deal with questions of ‘injury’ as a preliminary matter, without embarking on a consideration of quantum. No oral evidence was adduced. The parties addressed the Arbitrator, who then delivered an ex tempore decision.
The ‘Certificate of Determination’, dated 18 May 2006 records the Arbitrator’s orders as follows:
“1.The worker suffered a work related injury to her neck and left shoulder whilst in the employ of the respondent which was in the nature of the aggravation of a disease.
2. The deemed date of injury pursuant to the provisions of s.16 of the WCA is
23.11.02 being the date that a claim for compensation was made.
3. A further telephone conference is to be appointed for 9am on 30th May
2006.”
The Certificate of Determination goes on to say a “brief statement of reasons for determination, in accordance with Rule 73 of the Workers Compensation Commission Rules 2003, is attached”.
In fact there are no reasons for determination available. The arbitration hearing was sound recorded, and a transcript was prepared from that sound recording, as is usual practice. The transcript records various preliminary matters which were raised at the commencement of the arbitration hearing, and then records submissions by Ms Falzon’s counsel, who was the first to address. Part way through his submissions, Ms Falzon’s counsel says he will pause, while his instructing solicitor takes a phone call, to which the arbitrator says “All right.” (T12.25). That is the conclusion of the transcript. The balance of the submissions, and the arbitrator’s reasons for determination, are not transcribed. The Commission has made further enquiries of the Arbitrator, who has indicated she has no other records of the proceedings. Thus, for whatever reason, transcript is unavailable of much of the arbitration hearing, and of the arbitrator’s reasons for determination.
ISSUES IN DISPUTE
It followed, from the finding made by the Arbitrator on ‘injury’ (as recorded in the ‘Certificate of Determination’), that whatever payments of compensation Ms Falzon was ultimately held entitled to receive would be payable by the self-insurer.
The self-insurer, in its appeal documents, asserts the arbitrator “misinterpreted and/or ignored the reasoning and/or made an error of law in respect of her decision” that:
(a) Ms Falzon suffered from a disease of gradual process which had been materially aggravated or exacerbated in the course of her work with K-Mart;
(b) Ms Falzon’s employment with K-Mart had been a significant contributing factor to the injury/disease;
(c) The deemed date of injury was the date of claim, being 23 November 2002.
The balance of the material in the self-insurer’s appeal documentation goes to formal matters of jurisdiction and the like. In addition there is reference to the absence of any reasons for the determination, such that the self-insurer says it “is unable to prepare detailed submission (sic) in respect of the appeal, and accordingly reserves its right to amend documentation.”
Notices of Opposition to the appeal have been filed by both of the other parties. That of Allianz notes the absence of transcript of much of what transpired, requests a full transcript, and then makes some submissions opposing the self-insurer’s appeal, “based upon contemporaneous notes taken at the time of the hearing”. Allianz said it reserved its right to make further submissions after the transcript was available. The Notice of Opposition filed on behalf of Ms Falzon draws attention to various deficiencies in the appeal filed on behalf of the self-insurer. By and large, these deficiencies would flow from the appeal documentation having been drafted in the absence of full transcript and reasons for the determination. Ms Falzon’s Notice of Opposition goes on to say she is unable to make further submissions in the circumstances, other than to support those made by Allianz in opposition to the appeal.
ON THE PAPERS REVIEW
Section 354(6) of the Workplace Injury Management and Workers Compensation Act, 1998 (‘the 1998 Act) provides:
“(6) If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”
It is submitted, on behalf of Ms Falzon and Allianz, that the appeal can be dealt with ‘on the papers’, without an oral hearing. It is submitted by the self-insurer that the matter should be listed for oral submissions. Given the practical difficulties in dealing with the substantive matters raised by the self-insurer on the appeal, in the absence of transcript or reasons for the arbitrator’s determination, I do not believe anything would be gained by having an oral hearing. Having regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submission by Ms Falzon and Allianz that the appeal can proceed to be determined on the basis of these documents, I am satisfied that I have sufficient information to proceed ‘on the papers’, without holding any conference or formal hearing, and that this is the appropriate course in the circumstances.
LEAVE
Before proceeding to deal with an appeal the Commission must determine whether the application meets the requirements of section 352 of the 1998 Act.
The appeal was lodged within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act.
The compensation claimed by Ms Falzon, and at issue between the parties, greatly exceeds
the sum of $5,000.00 prescribed in section 352(2)(a) of the 1998 Act. As the arbitrator was dealing with the question of ‘injury’ as a preliminary point, she has not actually made an award of compensation. However it has been held that, if no award of compensation has actually been made in a decision, it is sufficient to satisfy the threshold test in section 352(2) if the decision is one which clearly has the potential to put in issue the amount of compensation claimed: Fletchers International Exports Pty Ltd v Regan [2004] NSWWCCPD 7 at [28]. The finding made by the Arbitrator on ‘injury’ clearly can be characterised in this way.
In the circumstances, I grant leave to appeal.
DISCUSSION AND FINDINGS
There have been a number of Presidential decisions in circumstances where, for various reasons, transcript of evidence and/or an arbitrator’s reasons for decision have been unavailable. Fleming DP, faced with such a situation in Fraternity Bowling & Recreation Club Limited v Sartor [2004] NSWWCCPD 47 (‘Fraternity No 1’), said:
“The critical threshold issue for the parties in this appeal is the provision of reasons for the decision. This is not to deny that substantive issues are raised by the Appellant on the appeal, and that they may remain issues in dispute if the Arbitrator’s reasons for decision were to be known. The Appellant proposed that I reconstruct the Arbitrator’s reasons on the basis of its legal representative’s notes of the Arbitration. Clearly any steps along that path would require that I then hear from the Respondent as to the alleged reasons, and make a decision on what I find to be the reasons. This is not a legitimate forensic exercise and would yield nothing but a poor, subjective and unreliable view of what the Arbitrator intended. However the difficulty presented to the Appellant by the lack of reasons remains.” (at [30])
The approach taken by Fleming DP in Fraternity No 1 was to remit the matter back to the arbitrator who had determined it, for the provision of written reasons for the decision. This led to the consequence the Arbitrator attempted to provide written reasons for his decision, but had difficulty due to the elapse of time, little recall of witnesses and the like. This led Fleming DP to conclude the written reasons were inadequate, and did not cure the defects which existed, and consequently the matter was remitted to another arbitrator for decision afresh: Fraternity Bowling & Recreation Club Limited v Sartor [2004] NSWWCCPD 79 (‘Fraternity No 2’).
In Thompson v Expamet Pty Ltd t/as T & G Sheetmetal Services [2005] NSWWCCPD 14 (‘Thompson’), as in the matter before me, the Arbitrator had given ex tempore reasons, which were then lost. In dealing with the approach to be taken on appeal in such circumstances, Fleming DP said:
“Where reasons are given ex tempore, recorded and made available to the parties, Section 294(2) and Rule 73 will be complied with, subject to the reasons being adequate. However, where there is no record of the reasons, and therefore nothing to be incorporated, by reference, in the ‘Certificate of Determination’, then the ‘Certificate of Determination’, issued under Section 294(2) of the 1998 Act, does not comply with Rule 73. There is, in effect, no statement as referred to in Rule 73. Failure to provide adequate reasons for decision is not only a breach of the Arbitrator’s statutory obligations; it is an error of law (Sydney Water Corporation Limited v Aqua Clear Technology P/L Supreme Court of NSW, Rolfe J, (P/L 55047/96) 17 December 1996; Dennis Willcox Pty Limited v Federal Commissioner of Taxation (1988) 79 ALR 267).
Where reasons are given ex tempore and there is a failure to make any record of those reasons, the reality is that the parties do not have a record of the reasons, the Commission does not have a record of the reasons, and there is no record of the reasons for the purpose of review by a Presidential member. This amounts to a constructive failure to give reasons, as required by Section 294 and Rule 73. It matters not whether this failure was occasioned by human error in the operation of the sound recording equipment, administrative failure or technical failure. Ultimately it must be said that the Arbitrator erred in failing to provide reasons for decision.” (at [11])
In the matter before me, I do not have transcript of much of the submissions. I cannot be satisfied regarding what stance was taken, or concessions made, by the parties during the arbitration hearing. I have none of the Arbitrator’s reasons which led to the decision contained in the Certificate of Determination. As was observed by Fleming DP in Thompson:
“The task of the Presidential member is to review the Arbitrator’s decision, wherever it is possible to do so, either ‘on the papers’ or after an oral hearing. It is not the intention of the statutory dispute resolution scheme that the review of an Arbitrator’s decision be a fresh hearing of the whole of the dispute (Barbour v BHP Steel Pty Limited [2004] NSWWCCPD 42).” (at [11])
In short, there is no decision for me to review within the meaning of section 352(5) of the 1998 Act. Applying the approach taken by Fleming DP in Fraternity No 1 and Thompson, there is a constructive failure to give reasons which amounts to an error of law. Although it is regrettable from the point of view of the parties, the appropriate course (as was taken in Fraternity No 2 and Thompson) is that I revoke the orders of the Arbitrator, and remit the matter for determination by another Arbitrator.
DECISION
The decision of the Arbitrator dated 18 May 2006, is revoked and the matter is remitted to another Arbitrator for determination afresh in accordance with these reasons.
COSTS
The situation which has arisen is the fault of none of the parties. I have a broad discretion pursuant to section 341 of the 1998 Act. The appropriate order in my view is that costs of both the original conciliation/arbitration hearing, and of this appeal, should follow the final costs order when the matter is determined afresh.
Michael Snell
Acting Deputy President
25 October 2006
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF MICHAEL SNELL, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
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