McGrath v P.m Electric Pty Ltd

CERTIFICATE OF DETERMINATION OF MEMBER
CITATION:	McGrath v P.M Electric Pty Ltd [2021] NSWPIC 174
APPLICANT:	Nicole McGrath
FIRST RESPONDENT:	P.M Electric Pty Ltd
SECOND RESPONDENT:	Taleya Amelia McGrath
THIRD RESPONDENT:	Kayden Charles McGrath
MEMBER:	Catherine McDonald
DATE OF DECISION:	8 June 2021
CATCHWORDS:	WORKERS COMPENSATION- Claim for the death benefit and expenses under section 28 of the 1998 Act; worker died on a trip to Singapore funded by his employer for team building and to reward staff; course of employment- Hatzimanolis v ANI Corporation Limited, Comcare v PVYW and Pioneer Studios v Hills; substantial contributing factor - Badawi v Nexon Asia Pacific and Roncevich v Repatriation Commission; Held- worker was in the course of employment but employment was not a substantial contributing factor to the injury; award for the respondent.
DETERMINATIONS MADE:	1. Award for the first respondent.

STATEMENT OF REASONS

BACKGROUND

Nicholas McGrath died on 21 September 2019 whilst on a trip to the Formula One Grand Prix in Singapore which was funded by his employer P.M. Electric Pty Limited.
The trip was organised by P.M. Electric as a reward for Mr McGrath and others for their hard work and the company paid for their airfares, accommodation, Grand Prix three day pass and travel insurance. Each was paid a $240 per day as a meal allowance. They were paid wages and not required to take annual leave.

His wife, Nicole McGrath claims the death benefit under s 25 of the Workers Compensation Act 1987 (the 1987 Act) together with the expenses of transporting Mr McGrath’s body to Australia under s 28. There is no dispute that Ms McGrath and her children, Taleya and Kayden, were dependent on Mr McGrath at the date of his death.
P.M. Electric’s insurer disputed the claim on the basis that Mr McGrath’s death did not result from an injury which arose out of or in the course of his employment and that employment was not a substantial contributing factor to the injury.

PROCEDURE BEFORE THE COMMISSION

The claim was listed for conciliation conference and arbitration hearing by video on 16 April 2021. Mr Hallion of counsel appeared for Ms McGrath, Ms Goodman of counsel appeared for P.M. Electric, Mr Morgan appeared for Taleya and Mr Gaitanis appeared for Kayden.
Only Mr Hallion made oral submissions on 16 April and a direction was made for the remainder of submissions to be made in writing. Submissions were made in accordance with the orders as amended.
I am satisfied that the parties to the dispute understand the nature of the application and the legal implications of any assertion made in the information supplied. I used my best endeavours in attempting to bring the parties to the dispute to a settlement acceptable to all of them. I am satisfied that the parties have had sufficient opportunity to explore settlement and that they have been unable to reach an agreed resolution of the dispute.
The representatives for Ms McGrath and the children agreed that if I was to find that compensation was payable, then the death benefit was to be apportioned as to 70% to Ms McGrath and 15% to each of Taleya and Kayden. P.M. Electric agreed that any compensation should include the costs of transporting Mr McGrath’s body under s 28.

EVIDENCE

The following documents were in evidence before the Commission and considered in making this determination:

(a)    Application to Resolve a Dispute and attached documents;
(b)    Reply filed for P.M. Electric;
(c)    Reply filed for Taleya;
(d)    Reply filed for Kayden, and
(e)    Application to Admit Late Documents filed for P.M. Electric on 7 April 2021.

Cause of death

Mr McGrath died at premises in Singapore known as the Substation. He went to those premises after drinking at an adjoining bar called Timbre and was alone at both locations.
The autopsy report states that Mr McGrath died as a result of an acute haemorrhage from a deep incised wound to his right wrist which involved complete transection of the radial and ulnar arteries, the median and ulnar nerves and the associated flexor tendons. The pathologist said that the wound was consistent with being caused by the sharp edges of glass fragments found at the scene of death.
The Coroner’s report dated 30 March 2020 noted the findings of the autopsy report and a toxicology report from which the pathologist concluded that Mr McGrath would have been in a state of intoxication before his death. The Coroner noted that three receipts had been found in Mr McGrath’s possession – a receipt from Raffles Hotel dated 20 September 2019 at 1.04 pm, a receipt from Cool Cat’s Club dated 21 September 2019 at 12.19 am and a tax invoice from Timbre at 1.35 am.
The Coroner noted that Mr McGrath was found on a rooftop under a window which appeared to have been broken from the inside.
The Coroner summarised the evidence of Mr McGrath’s workmates. She considered the evidence of those at Timbre, including Mr Lim, the operations manager who saw Mr McGrath arrive at 12.30 am and who left the bar at 2.35 am when Mr McGrath was still there. She considered the evidence of Mr Doming, another manager at Timbre who saw Mr McGrath walk into a courtyard which connected the bar with the Substation building. Mr Doming latched the door shut at 3.00 am. Mr Daquil, the bar supervisor at Timbre saw a man enter the Substation from the courtyard at about 2:30 am and, in the dark, assumed him to be a staff member of the Substation.
The Coroner said:
“Based on the evidence uncovered, there is no basis to suspect foul play. Mr McGrath was seen entering The Substation from the connecting courtyard through the door on Level 2. It is likely that in his inebriated state, he had wandered up to Level 3. Once there, he must have found the building to be dark and deserted and became disoriented and incapable of finding his way out of the unfamiliar building.”
She said:
“The shattered window pane bore evidence of being smashed from the inside. Mr Mcgrath's [sic] hands were observed to have glass fragments embedded in the skin. Coupled with the deep laceration on his right wrist, the circumstances suggest that Mr Mcgrath had used his right fist to punch through the glass window. His intoxicated state had probably contributed to his panic and confusion. This would also explain why Mr Mcgrath did not use his handphone to call his colleagues or the police for assistance, or simply to turn the handle to unlatch the window to open it. Instead, he chose to smash the window with his fist. As a result, he sustained a deep incised wound on his right wrist caused by the jagged edges of the broken window which led to his death. In the circumstances, I find Mr Mcgrath's death to be an unfortunate misadventure.”
The Coroner’s findings were relied on by all parties for the description of his injury and death.

Nicole McGrath

Ms McGrath said that the purpose of the trip was a reward for the staff and that Mr Murray “used to reward staff a lot.” She said that Mr McGrath would not have been on the trip unless his salary and leave entitlements “were not to be affected by the trip.” She attached an email from Mr Murray dated 23 October 2019 in which he said:

“The purpose of the Singapore Fl event was to thank the invitees for their hard work and performance for the company and to experience Singapore and the Fl event.

Heres [sic] what the company provided for the trip to Singapore

·Air tickets
·Accommodation
·Meal Allowance ( $240 per day)
·Fl three x day pass including designated seating
·Travel insurance for the trip
·No annual leave was required to be taken by the employees”

Peter Murray

Mr Murray prepared a statement dated 16 December 2019. He set out the history of Mr McGrath’s employment with P.M. Electric. In 2019, Mr McGrath was Construction Manager and Mr Murray’s “right hand man.” Mr Murray said that he organised the trip to Singapore for those who had missed out on a previous trip to the New South Wales South Coast.
Mr Murray said:
“The trip was an all-expenses paid excursion for the guys to go to the Formula One in Singapore and included airfares, accommodation, a $240 per day meal allowance, a
3-day pass for the race track and travel insurance. All of these items were fully paid for by the company.
There was no discussion regarding whether the meal allowance included drinks of any description. The meal allowance was there to be used at the guys' own discretion, as they saw fit.
…
The only real planned activity for the trip was the Formula One. We had passes to the event and designated seating. Outside of that, the guys were free to enjoy their time in whatever manner they chose.”
Mr Murray said that on the first day in Singapore the group walked to collect the tickets before going to Raffles Hotel for drinks. Between 12 noon and 2.30 pm they visited food markets before returning to the hotel and going to the pool. About 4.30 pm Mr McGrath said that he wanted to go to the track “because he didn’t want to miss anything.” Mr Murray walked to the track with the rest of the group and dropped them at the designated seating at about 7.30. Mr Murray said:

“Nick wasn't at the seating when we arrived, we had been calling him on our mobile phones on the way there. When we got hold of him he said that he was with some friends from Sydney.
I then assumed that this was why he had wanted to leave earlier. It was no issue at all for Nick to spend his time with other friends. He seemed to be having a great time, regardless, and it was his time to do whatever suited him.”

Mr Murray then left the group and spent the evening with his wife’s cousin. The remainder of his statement contains information provided by others.

Andrew Fitzgerald

Andrew Fitzgerald is employed by P.M. Electric as a Service Foreman. He described the trip to Singapore as a reward for hard work and a “bit of a team bonding experience…It was purely a leisure trip.”
Mr Fitzgerald said that after breakfast on 20 September the group walked to collect their Formula One tickets then went to a bar where they had a couple of drinks and then to the Hawker Markets for lunch. They spent the afternoon at the pool and Mr McGrath left earlier than the others – at about 3.00 or 4.00 pm, saying that he was going to the track.
When they arrived at the seating at the track, Mr McGrath was not there but they made contact and met at about 8.30 or 9.00 pm. Mr Fitzgerald said that Mr McGrath did not appear to be intoxicated. Mr Fitzgerald left the group to go to the toilet and the group was not at the seating on his return. He met Mr Allen and they returned to the hotel.
Mr Fitzgerald said:
“Whilst on the trip to Singapore we were not under the direction or guidance of Peter Murray. We were not following any strict itinerary and were not told where to go or what to do. It was simply a matter of the six of us deciding amongst ourselves what we wanted to do , where we wanted to go, and when we were going to do it. It was a very relaxed trip. I think the only set thing we had to do was to go and pick up the tickets for the track.”
And

“On the trip Peter Murray provided each of us with a food allowance. He deposited a certain amount of money into each of our pays for each day that we were in Singapore. I can 't recall how much it was. He called this a ‘food allowance’ but he did not provide any direction or instruction as to how we spent it. We were then each responsible for paying for own food , drinks and entertainment etc whilst on the trip.”

Scott Allen

Scott Allen is also a Service Foreman. He agreed that the trip to Singapore was a reward and a team building trip. He said:

“Other than the requirement to collect the tickets , we were permitted to do as we pleased on the trip. We could come and go as we pleased and go wherever we wanted, although we did tend to stay together for the most part.”

Mr Allen said that after collecting the tickets, the group went to Raffles Hotel and waited in line until it was open. After a drink, they went to the food market where “most of us shouted a round of beers.” They returned to the hotel and went to the pool. Mr McGrath wanted to go to the track to watch the practice and asked Mr Allen to go with him. Mr Allen “wanted to stay with Pete as he was funding the trip and I thought it was a respectful thing to do.”
When the group arrived at the track, they made contact with Mr McGrath through What’s App and met at the allocated seats around 9.00 or 10.00 pm. Mr McGrath appeared slightly intoxicated but in a good mood and appeared to be fine. The group split up in the toilet queue and Mr Allen returned to the hotel with Mr Fitzgerald. He said:
“Prior to our trip to Singapore , Peter Murray provided each of us with a travel allowance which was deposited into our bank accounts along with our regular pay. We were told that we could use this money at our discretion. I recall that it was something like $240.00 per day . During the trip we all paid for our own food and drinks etc. Beyond the travel allowance that we were given, the company did not pay for our food, drinks and transportation etc. The company paid for our airfares and accommodation and the travel allowance, but nothing more.”

Matthew Deuchar

Matthew Deuchar is employed by P.M. Electric as an Estimator. He agreed that the trip was a reward for hard work and a bonding experience. He said:

“Earlier that year-Peter had bought a holiday house down the coast and took everyone from work down there. I couldn't go on the trip to the South Coast. He then decided to take those of us who had not gone on the South Coast trip to Singapore for the Formula 1 Grand Prix as a reward for our hard work over the year.”

Mr Deuchar said:

“There was not any itinerary for the trip . Peter bought tickets to the Formula 1 for everyone and so we all had a three day pass . Other than that, we were free to do our own thing, but we did most things together in the small amount of time leading up to Nick's death.”

Mr Deuchar said that the group collected their Formula One passes then went for a walk around the shopping complex and then to Raffles Hotel where they each had a Singapore Sling and maybe a beer. They went to the markets for lunch and returned to the hotel. Mr Deuchar was sharing a room with Mr McGrath.
The group met at the pool at about 3.00 pm. Mr Deuchar said:
“All of our arrangements throughout the entire trip were just made on the run by conferring amongst our-selves. Peter Murray was not directing us or telling us what to do. He knew where to go etc as he has family in Singapore, but he was not directing us where to go or what to do. It was very much a case of everyone deciding amongst ourselves.”
Mr Deuchar said that Mr McGrath left to go to the track to watch some of the practice and to meet some other friends from Sydney. He said that the group drank beer at the pool but he was not aware if Mr McGrath had done so. He agreed that the group contacted Mr McGrath through What’s App and eventually met him at their allocated seats at about 9.00 or 9.30 pm. He said that Mr McGrath seemed fine and appeared to be having a good time and did not appear intoxicated.

The group split up again and went to the toilet or to watch a DJ. When Mr Deuchar returned to the hotel, he sent Mr McGrath a text message at about midnight. He was unaware that Mr McGrath had not returned until the following morning.
Mr Deuchar said:
“For the entirety of the trip to Singapore up to that time, none of us were required to attend any particular place, event or function, although it was expected that we would attend the Formula 1 races together, given that Peter had supplied us with the tickets at significant expense. There was no requirement that any of us stay together. We could, and did, go our own way at various times and for various reasons throughout the trip .
All of us on the trip were given a meal allowance by PM Electric. We were free to spend it at our own discretion. This was given to us as part of our last pay before the trip. I think it worked out to be about $240 or $250 per day. Whilst in Singapore we all just paid for our own food , drinks and entertainment. As is usually the case, we took it in turns of buying rounds of drinks etc.”

Matthew Pogue

At the time of the trip to Singapore, Mr Pogue was a Senior Estimator for P.M. Electric. He said:

“This was a team building exercise and also a reward for hard work. I was not originally slated to be going, … At that time he suggested that I join them on the trip to get me re-energised and to slot me back into the team .
We did not do any actual work during the trip to Singapore and it was not intended that we do any work whilst there.
…

There was not any set itinerary for the trip to Singapore , other than that we had tickets to the Grand Prix. We were not required to be at certain places at certain times. All decisions as to what we did and where we went were made through discussion as a group. No one made decisions for the group or directed us as to what we were doing or when we were doing it.
We could do our own thing on the trip, but it was the expectation of the group that we would stay together most of the time. We could go and do our own thing if we wanted to, for example if someone wanted a different meal , but we did most things together. We stayed at the same hotel together and we shared hotel rooms, with two workers to each room.
Each of us was given a meal allowance by PM Electric. Peter Murray deposited an amount for each day into our bank accounts along with our pay. The intention of this money was that it would cover the cost of our food whilst we were in Singapore . It was up to our discretion as to how we spent the money, but the money was in place for meals. We were all responsible for our own expenditure on the trip.”

Mr Pogue’s evidence about the group’s activities is essentially consistent with that set out above. He described the group’s time at the pool:

“During this time it was very relaxed and everyone was cruising and having a few drinks and a bite to eat. No one was drinking excessively or fast. Nick appeared to be quite sober and in good spirits as he left the pool.”

Mr Pogue said he cannot recall if they met up with Mr McGrath at the track, though he did send a message asking Mr McGrath to join the rest of the group. They spoke on the phone and met about 10.00 pm. Mr McGrath “made a vague comment’ about being with some other friends”. Mr Pogue did not see Mr McGrath again though had a “missed call” from him at about 12.22 am. Mr Pogue said:

“The last time I saw Nick he appeared to be in a good but strangely agitated mood as he wanted to get out and get amongst it. It appeared that he did not want to be controlled by the movements of the group and stay in the allocated seating, but wanted to go and party. He seemed to be a bit frustrated that we were staying at the seats. He had obviously been drinking, but he did not appear to be out of control.”

Dispute Notice

P.M. Electric’s insurer issued a notice under s 78 of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act) on 6 March 2020. The insurer said that it did not agree that Mr McGrath’s death had resulted from an injury arising out of or in the course of employment and said that employment was not a substantial contributing factor to any injury. It said that after the night practice session of the F1 Grand Prix the travel group undertook independent activities. Mr McGrath went to a bar and entertainment venue called the Substation and was found the next morning in an adjoining building. The insurer said that P.M. Electric did not induce or encourage him to attend that venue.

SUBMISSIONS

Mr Hallion made oral submissions on 16 April. He said that the insurer declined liability in the s 78 notice on the basis that P.M. Electric did not induce or encourage Mr McGrath to attend the venue at which he died. Mr Hallion said that the activity which brought about the injury was the consumption of alcohol and that the insurer had not disputed that the employer had induced or encouraged the consumption of alcohol. He said that the injury occurred during a paid trip to Singapore and that the whole trip was incidental to the course of employment, as determined by Mr Murray. He said that the injury did not occur in an interval during a period of employment so that the test in Hatzimanolis v ANI Corporation Limited[1] (Hatzimanolis) applied in Comcare v PVYW[2] (PVYW) was not relevant.
[1] [1992] HCA21; (1992) 173 CLR 473.
[2] [2013] HCA 41.

Mr Hallion referred to Roncevich v Repatriation Commission[3] (Roncevich) and said that there was an expectation that alcohol would be consumed on the trip. He said that the payment of salary meant that the trip was undertaken in the course of employment. Though Mr Murray did not tell the group to drink all day, the purpose of the trip was team building. The only planned activity was to attend the Grand Prix and the group was permitted to enjoy the time in Singapore in whatever manner they chose.
[3] [2005] HCA 40; 222 CLR 115.
Mr Hallion took me through the statements in detail, focusing particularly on the consumption of alcohol and attempting to estimate, based on the statements, the amount consumed, which, he said, was likely to have occurred in “shouts” because of the age of the men and the industry in which they worked. He relied on the receipts which the Coroner said had been found in Mr McGrath’s possession in support of that argument. He also noted that the statements which said that the group had queued to get into Raffles confirmed that the consumption of alcohol was the motivation for the day.
Mr Hallion said there was a direct, unbroken connection between that and the team building aspect of the trip, so that employment was a substantial contributing factor to the injury. He said, relying on Roncevich that part of the course of employment was socialising so that it was inevitable that alcohol would be consumed.
Mr Morgan made written submissions on behalf of Taleya. He said that there was no interval in the overall period of employment and that no work was being performed. The evidence showed that the men were free to do what they wanted and that they joined and left the group as they pleased.
Mr Morgan said that Mr McGrath’s stopping at a bar on his way home from a night out in Singapore was an activity that had been expressly encouraged and permitted by Mr Murray. He quoted from Qantas Airways Ltd v Arnott[4], a case concerning a flight attendant who was compensated as a result of being assaulted while overseas during an interval in employment and said that the facts were similar but Mr McGrath was not injured during an interval between periods of employment.
[4] [2013] NSWWCCPD 35.
Mr Morgan quoted from Pioneer Studios Pty Limited v Hills[5] (Pioneer Studios No 1.) where Basten JA said that the boundaries of the elements of employment had been eroded over time and that “[T]he course of employment is determined by the employer” and “the characterisation of the occasion will depend upon an objective assessment of the conduct of persons in authority with the employer.”[6] He distinguished Scharrer v Redrock Co Pty Limited[7] (Scharrer) noting that the insurer had not relied on s 14 of the 1987 Act which precludes compensation in circumstances of serious and wilful misconduct and that Mr McGrath was entitled to do as he pleased on the trip, including enjoying himself even by himself.
[5] [2012] NSWCA 324.
[6] At [45].
[7] [2010] NSWCA 365
Mr Morgan submitted that interest should be awarded from the date of the claim on 3 December 2019 at various rates between 5.25% and 4.1% set out in the submissions.

Mr Gaitanis made submissions on behalf of Kayden, in which he summarised the evidence and endorsed the submissions summarised above. He said that there were other explanations beside intoxication for the injury which caused Mr McGrath’s death. He suggested that Mr McGrath was able to negotiate all of his activities during the evening and that his conduct was benign. When he entered an unfamiliar room, factors such as darkness and fatigue contributed to his inability to find his way out.
Ms Goodman prepared submissions on behalf of P.M. Electric. She noted that the course of employment involved a temporal relationship between work and injury while arising out of employment connoted a causal connection.
Ms Goodman referred to Hatzimanolis and PYVW and said that in the latter case, the question to be determined was whether the injury was within the course of employment if it occurred during an interval or interlude within a period of employment and at a place at which the worker induced or encouraged the employee to spend time. She said that the only inducement or encouragement by the employer was to go to Singapore. P.M. Electric did not induce or encourage Mr McGrath to be at the Substation in circumstances where he could not find his way out and the activity in which Mr McGrath was engaged when he was injured was smashing a window to get himself out which was not encouraged or induced by the employer.
Ms Goodman referred to Li v Brighton Australia Pty Limited[8] (Li), and the finding that the worker’s injury in that case was not a result of his presence in a restaurant whilst working away from home but in going to the aid of co-workers who were attacked. She said that it was necessary to look at the circumstances in which Mr McGrath was injured and said that P.M. Electric had not induced or encouraged him to be at the Substation. Even if it had, the activity which caused his death was not induced or encouraged by P.M. Electric and had no relevant connection with his employment. Ms Goodman also noted the decision of Neilson CCJ in Cunningham v Tobin, Bolt and Rawlings t/as Stingray Cafe[9] (Cunningham) and said that the mere fact that Mr McGrath was in Singapore in the course of his employment was an insufficient basis to find that the injury which caused his death was in the course of employment.
[8] [2020] NSWWCCPD 44 at [69].
[9] [2001] NSWCC 90.
As to whether the injury arose out of employment, Ms Goodman noted the decision in Tran v Vo[10] (Tran) where Payne JA cited Stewart v Metropolitan Water, Sewerage and Drainage Board[11] (Stewart) and said that an injury did not arise out of employment merely because “but for” the employment the worker would not have been at the premises.
[10] [2017] NSWCA 134.
[11] (1932) 48 CLR 216.
Mr Hallion prepared submissions in reply in which he summarised his substantive submissions. He said that Mr McGrath’s injury occurred in the course of his employment as determined by Mr Murray which included the consumption of alcohol. He said that Hatzimanolis was not on point because P.M. Electric had failed to establish when any interval or interlude commenced. If, however, the injury occurred during an interval, Mr Murray’s evidence supported the conclusion that Mr McGrath was free to go where and do what he wished during the time in Singapore.
Mr Hallion submitted that Mr McGrath was in the course of his employment during the time. He said that “going on holiday with your employer is not something that in the general community that would be seen as a reward rather that [sic] something that must be done as part of the employment relationship.”
If the injury did occur during an interval, Mr Hallion submitted, then the findings of the Coroner made it clear that the injury was a result of Mr McGrath’s intoxication. He was entitled to drink alcohol and visit bars to experience Singapore which he was authorised by his employer to do.

FINDINGS AND REASONS

The claim is defended on the basis that after attending the practice session of the Grand Prix, the members of the group undertook independent activities. The insurer said that Mr McGrath was not induced or encouraged by his employer to attend the venue at which he died and that, at the time of his death, Mr McGrath was not in the course of his employment, nor did his death arise out of employment. The insurer said that employment was not a substantial contributing factor to his death.
The evidence led by the parties was limited to Ms McGrath’s statement, the statements of Mr Murray and Mr McGrath’s co-workers and the documents from the inquest, being the autopsy report and the findings of the Coroner. There is no evidence about how Mr McGrath spent most of his time between leaving the pool at the hotel late in the afternoon and meeting the other members of the group at around 9.00 pm. There is no evidence about what Mr McGrath did between separating from the other members of the group at about 10.00 pm and when he was observed at Timbre at about 12.30 am.
Mr Murray did not see Mr McGrath after Mr McGrath left the pool. Taking the statements of the other members of the group together, it appears that they met Mr McGrath at the seating at the Grand Prix at around 9.00 pm and were with him for a relatively short time before Mr Allen and Mr Fitzgerald returned to the hotel and Mr Deuchar and Mr Pogue went to hear a DJ. When they met Mr McGrath, Mr Fitzgerald and Mr Deuchar said that he did not appear intoxicated, Mr Allen said that he was slightly intoxicated and Mr Pogue said that he had obviously been drinking and was “strangely agitated.”
The parties accepted the facts as found by the Coroner in respect of Mr McGrath’s dearth. The blood alcohol reading recorded in the autopsy report is very high. The Coroner found that Mr McGrath left Timbre in an inebriated state and entered the Substation. He became disoriented and unable to find his way out of an unfamiliar building. She found that his intoxicated state contributed to his panic and confusion which explained why he did not use his mobile phone to call for help or did not unlatch the window.

The course of employment

As Ms Goodman observed, an injury suffered in the course of employment has a temporal connection with the employment. A worker attending a social function may be in the course of employment.
Counsel for Mr McGrath’s dependants all characterised Mr McGrath’s presence in Singapore as being in the course of his employment and they said that cases such as Hatzimanolis and PVYW were not relevant because the injury did not occur during an interval or interlude between two periods of employment.
Mr Murray provided an email to Ms McGrath which is dated 23 October 2019 in which he said that the purpose of the trip was to thank the invitees for their hard work and performance for the company and to experience Singapore and the Grand Prix. The company paid for air fares, accommodation, a meal allowance of $240 per day, three-day passes to the event including designated seating and travel insurance. The invitees were not required to take annual leave.
The only evidence that Mr McGrath’s salary was paid during the trip is from Ms McGrath but there is no reason to accept that it was so.
The evidence of Mr Murray and the other men in the group is that the trip was a reward and a bonding or team-building exercise.
A worker attending a Christmas party or other social function may be in the course of employment during the time they are at the function. Examples are Cunningham and Collins v Signature Blend Pty Ltd t/as Alira[12].
[12] [2015] NSWWCCPD 22.
A worker who is away from home for work purposes and injured during an interval between periods of work may be in the course of employment.

Mr Hatzimanolis was employed for an extended period at a mine site in Western Australia where accommodation was provided. On a day when he was not required to work, the employer organised an excursion to Wittenoom Gorge and provided transport. Mr Hatzimanolis was injured in a motor vehicle accident on the way back to the camp.
The worker in PYVW was injured whilst in a motel where she was staying whilst on a work trip. The worker in Li travelled from Sydney to Adelaide for an extended period of work as a plasterer. He was injured in an altercation after dinner in a restaurant where he had eaten, there being no kitchen facilities at the accommodation provided for him.
In each of those cases, the worker was away from home for a period for the performance of work and was injured during an interval when he or she was not working.
In Hatzimanolis, Mason CJ, Deane, Dawson and McHugh JJ said[13]:
“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. Furthermore, an injury sustained in such an interval will be within the course of employment if it occurred at that place or while the employee was engaged in that activity unless the employee was guilty of gross misconduct taking him or her outside the course of employment.”
[13] At [16].
In Watson v Qantas Airways Limited a pilot on a layover between flights was injured in a motor vehicle accident when he was returning to the accommodation provided by his employer. The Court of Appeal said that before applying the principle in Hatzimanolis, it was necessary to characterise the periods of work then focus on what occurred in the interval between those periods. The Court said:

“The test that was required to be applied was that stated in Hatzimanolis. This requires, in the first instance, a determination or characterisation of the period or periods of work of the employee as one overall period or episode of work, or two or more; one does not first, before that task, examine aspects of, and employers’ attitudes to, how the period of work is spent: see Hatzimanolis at 483. Once the period of work of the employee is characterised, the circumstances of what occurred are to be analysed within that framework. This was not done. Nowhere does the Deputy President analyse the question whether the layover was to be characterised as part of the one overall period or episode of work. If that had been done, and if the view had been reached that the appellant was engaged on one episode of work takin him to the USA and returning, the particular aspects of the way the layover was spent might take on a very different complexion.”

On remitter[14] and relying on a statement by Kirby A-CJ (as his Honour then was) in WorkCover Authority v Billpat Holdings Pty Limited[15], Roche DP determined that the time in a slip port was an interval or interlude but that mere authorisation to spend time in a particular way was not sufficient – encouragement or inducement was necessary.[16]
[14] Qantas Airways Limited v Watson (No 2) [2010] NSWWCCPD 38.
[15] (1995) 11 NSWCCR 565 at 593.
[16] At [65].
Qantas Airways Limited v Arnott[17] concerned a long-haul flight attendant who was assaulted during slip time while working a flight pattern from Sydney to Dallas and return. The worker was assaulted while walking back to his hotel, which had been selected by his employer. He was supplied with briefing material which noted the facilities available within easy access of the hotel. Though the worker had consumed a significant amount of alcohol, there was no prohibition about the consumption of alcohol on slip time. There was no evidence that there was any misconduct by the worker nor that the consumption of alcohol contributed to the assault. It was accepted, however, that the period of slip time was an interval or interlude within an overall period of work.
[17] [2013] NSWWCCPD 35.
There was evidence that the employer encouraged its staff to engage in social and recreational activities away from the hotel, including for the purpose of being able to answer questions from passengers seeking information about the destination. Keating P said:
“Once it is accepted that Mr Arnott was at a particular place with the encouragement of his employer during an interval within an overall period of employment at the time he was injured, unless he was guilty of gross misconduct taking him outside the course of employment, then he is entitled to succeed.”

In PVYW, the majority (French CJ, Hayne, Crennan and Kiefel JJ) explained the decision in Hatzimanolis:

“Because the employer’s inducement or encouragement of an employee, to be present at a particular place or to engage in a particular activity, is effectively the source of the employer’s liability, the circumstances of the injury must correspond with what the employer induced or encouraged the employee to do. It is to be inferred from the factual conditions stated in Hatzimanolis that for an injury to be in the course of employment, the employee must be doing the very thing that the employer encouraged the employee to do, when the injury occurs.
Moreover, it is an unstated but obvious purpose of Hatzimanolis to create a connection between the injury, the circumstances in which it occurred and the employment itself. It achieves that connection by the fact of the employer’s inducement or encouragement. Thus, where the circumstances of the injury involve the employee engaging in an activity, the question will be whether the employer induced or encouraged the employee to do so.”[18]
…
“The starting point in applying what was said in Hatzimanolis, in order to determine whether an injury was suffered in the course of employment, is the factual finding that an employee suffered injury, but not whilst engaged in actual work. The next enquiry is what the employee was doing when injured. For the principle in Hatzimanolis to apply, the employee must have been either engaged in an activity or present at a place when the injury occurred. The essential enquiry is then: how was the injury brought about? In some cases, the injury will have occurred at and by reference to the place. More commonly, it will have occurred while the employee was engaged in an activity. It is only if and when one of those circumstances is present that the question arising from the Hatzimanolis principle becomes relevant. When an activity was engaged in at the time of injury, the question is: did the employer induce or encourage the employee to engage in that activity? When injury occurs at and by reference to a place, the question is: did the employer induce or encourage the employee to be there? If the answer to the relevant question is affirmative, then the injury will have occurred in the course of employment.
It follows that where an activity was engaged in at the time of the injury, the relevant question is not whether the employer induced or encouraged the employee to be at a place. An employer's inducement or encouragement to be present at a place is not relevant in such a case.”[19]
[18] At [35]-[36].
[19] At [38]-[39].

The majority concluded:

“The principle in Hatzimanolis should nevertheless be understood to have sought, and achieved, a connection or association with employment. For present purposes that understanding is helpful to explain, if it be necessary, that for an injury occurring in an interval in a period of work to be in the course of employment, the circumstance in which an employee is injured must be connected to the inducement or encouragement of the employer. An inducement or encouragement to be at a particular place does not provide the necessary connection to employment merely because an employee is injured whilst engaged in an activity at that place.”[20]
[20] At [60].

The result is that, in appropriate circumstances, an injury suffered during an interval or interlude can be an injury suffered in the course of employment.
While Ms Goodman’s submissions dealt with that line of authority, she did not identify when the relevant interval or interlude was. The submission that the only inducement was to go to Singapore might indicate that P.M. Electric’s case was that the whole trip was an interlude or interval between periods of work in Sydney but that was not stated or developed.
The author of the s 78 notice may have had Hatzimanolis and the other cases described above in mind because of the reference to inducement or encouragement but it did not identify any relevant interval or interlude and it did not specifically refer to the principle.
There is no basis in the evidence to find that the injury was suffered during an interval or interlude between two periods of employment.

In Pioneer Studios Pty Ltd v Hills (No 1)[21] Allsop P said that, in order to determine if an injury arose in the course of employment, it was necessary to determine what the employment was, not what the worker thought the course of employment was. The case concerned an injury suffered at a party at the employer’s premises but not organised by the employer. The worker ran her case on the basis that she was in the course of employment because she attended the party.
[21] [2012] NSWCA 324.

In the second appeal (Pioneer Studios Pty Ltd v Hills (No 2)[22] ) (Pioneer Studios No 2) Basten JA noted that the decision of the Deputy President had also relied on the subjective belief of the worker. His Honour said:
“Unfortunately, this reliance on the subjective belief of the respondent was the reasoning rejected in the first judgment of this Court. Further, it appears that the Deputy President has taken the elements of inducement and encouragement from the reasoning in Hatzimanolis, without regard to the different circumstances and without regard to the purpose for which that language was adopted, and applied it as a freestanding test of how an activity may fall within the course of employment. The fact that the respondent was encouraged, or even induced, to attend the party was not sufficient to render it part of her employment.”
[22] [2015] NSWCA 222.
The submissions made on behalf of P.M. Electric seek to rely on the test in Hatzimanolis and PVYW as a freestanding test. It cannot be used in that way. If the injury suffered by Mr McGrath was not suffered during an interval between two periods of employment, the concepts of inducement and encouragement are irrelevant.
Cunningham was a case about a Christmas party, held to thank employees for hard work over a period in which the business opened a second café. Neilson CCJ (as his Honour then was) found that the party was to take place at a park and then subsequently at a hotel. His Honour accepted evidence in that one of the purposes of the party was to improve staff morale and build a team, increasing their ability to work together, so that there was a benefit to the employer. His Honour found that while attending the party, Mr Cunningham was in the course of his employment.
Mr Cunningham argued, relying on Hatzimanolis, that he should be seen as being in the course of his employment whilst on his way home. His Honour found that the situation was different – Mr Cunningham worked at the café and lived in the Wollongong area. His Honour found that Mr Cunningham was on a journey and that he did not recover compensation because of s 10(1B) of the 1987 Act and the role of the alcohol consumed.
Relying on Cunningham, Ms Goodman said that I would not accept that Mr McGrath was in the course of his employment. In fact, the case supports the contention that he was in the course of his employment during the whole of the trip to Singapore. The trip was organised to reward staff for hard work, to build the team and to boost morale. The whole of the cost was borne by P.M. Electric, much as it might have been if it had paid for the group to go to a conference in Australia.
I am satisfied that during the whole of the trip to Singapore, Mr McGrath was in the course of his employment.

Substantial contributing factor

A decision that Mr McGrath was in the course of his employment for the duration of the trip does not dispose of the matter. P.M. Electric’s insurer also relied on s 9A of the 1987 Act which, as the Court of Appeal said in Badawi v Nexon Asia Pacific Pty Limited[23] (Badawi) must be considered separately. Section 9A provides:
[23] [2009] NSWCA 324.

“9A No compensation payable unless employment substantial contributing factor to injury
(1) No compensation is payable under this Act in respect of an injury (other than a disease 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 workplace 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.”

To satisfy s 9A, employment must be a substantial contributing factor to the injury. In this case that means the haemorrhage suffered as a result of breaking a window and not to the general circumstances of Mr McGrath being in Singapore.
In his submissions in chief, Mr Hallion sought to calculate the number of drinks which might have been consumed over the course of the day. He said that the fact the group queued to get into Raffles showed that the consumption of alcohol was a motivation for the day. I do not agree that follows – it is likely that a group who had not visited Singapore before might wish to visit a Singapore landmark. The fact that a tax invoice from Raffles was found in Mr McGrath’s possession does not support Mr Hallion’s suggestion that he bought a round of drinks as part of a series of shouts in the absence of further information which the Coroner’s report does not contain.
Mr Hallion said that the nature of the work performed on the relevant day was socialising to which the consumption of alcohol was incidental. Employment was therefore a substantial contributing factor to Mr McGrath’s injury.
The preferable view is that the motivation for the trip was team building based around the Grand Prix. Mr Murray had purchased three day passes. His evidence was that was the only planned activity and that outside of that, the group were free to spend time as they wished. The members of the group said that the only fixed commitment was to collect the tickets for the Grand Prix. All other decisions about what to do were made as a group.
However Mr Deuchar said that it was “expected that we would attend the Formula 1 races together, given that Peter had supplied us with the tickets at significant expense”.
Mr Hallion relied on Roncevich to support the relevant connection between the consumption of alcohol and the injury.
Roncevich concerned an application for a repatriation pension and it was necessary for the claimant to prove that an injury to his knee arose out of or was attributable to defence service. The injury had occurred when he fell out of a window while intoxicated after attending a Mess dinner for a distinguished guest. The majority said:
“As Dixon J said in the passage from Henderson cited by Heerey J in the Full Court, whether an event arises in the course of an activity, or as here, out of ‘an activity’, depends upon such matters as the nature of the person's employment, the circumstances in which it is undertaken, and what, in consequence, the person is required or expected to do to carry out the actual duties. The connexion must however be a causal and not merely temporal one.
There is little doubt in this case that there was a requirement, albeit not one to be found in formal military orders, and an expectation, of attendance at the Sergeants' Mess and the consumption in some quantity, even perhaps to the point of intoxication short of physical incapacity, of alcoholic drinks. So too, the need for the appellant's return to his quarters and the preparation of his uniform for the next day, are capable of being seen to have arisen out of, or of having been attributable to, his defence service. The remaining question is whether, climbing on to the box to expectorate through the open window, and then falling because he was inebriated, similarly either arose out of, or was attributable to his defence service.”
The matter was remitted to the Administrative Appeals Tribunal for determination of the latter question.
In Pioneer Studios (No 1) , Basten JA said:
“In Roncevich v Repatriation Commission [2005] HCA 40; 222 CLR 115, the High Court considered an application for compensation by a soldier who was injured when he fell inside his barracks after returning inebriated from the Sergeant's Mess. The entitlement to compensation was satisfied if the injury ‘arose out of’ his defence service, the last concept being the equivalent of employment. The Court was satisfied that ‘whether an event arises in the course of an activity, or as here, out of 'an activity', depends upon such circumstances as the nature of the person's employment, the circumstances in which it is undertaken, and what, in consequence, the person is required or expected to do to carry out the actual duties’: at [23] (McHugh, Gummow, Callinan and Heydon JJ). On the facts of the case, the plurality held at [24]:
‘There is little doubt in this case that there was a requirement, albeit not one to be found in formal military orders, and an expectation, of attendance at the Sergeant's Mess and the consumption in some quantity, even perhaps to be point of intoxication short of physical incapacity, of alcoholic drinks.’
Thus, where there was no necessary criterion to be satisfied beyond the causal connection, the case was assessed by reference to a 'requirement' (of an informal kind) and an 'expectation' to attend a social function. No lesser connection should be accepted where the employment must be a ‘substantial contributing factor’: Workers Compensation Act 1987 (NSW), s 9A. Counsel for the respondent submitted that the language in Roncevich was explicable by the military context in which it arose, but in fact it was taken from the judgment of Dixon J in Henderson v Commissioner of Railways (WA) [1937] HCA 67; 58 CLR 281, which had nothing to do with a military setting.”
I do not accept that alcohol played the central role in the activities undertaken in Singapore that Mr Hallion ascribed to it. Mr Murray arranged the trip as a reward and a team building exercise. It might be expected that alcohol would be consumed but the purpose was to attend the Grand Prix. If the purpose was the consumption of alcohol, the team building exercise could just as well have been undertaken in Sydney. The circumstances are different to those of the Sergeants’ Mess described in Roncevich.
In Badawi, Allsop P, Beazley JA and McColl JA said:
“…Section 9A(1) requires a determination as to whether the employment is a substantial contributing factor to the injury. The determination so called for is not performed in a case such as this by looking at the recreational activity and then seeing whether any aspect of the employment concerned might have strengthened the linkage with that employment. Rather, a decision maker, in determining under s 9A whether the employment concerned is a substantial contributing factor, is required to consider the employment concerned and the circumstances surrounding the occurrence of the injury, including activities that might be undertaken during an interval in the employment. Those circumstances may be fully encompassed by the factors specified in s 9A(2), or there may be other factors that are relevant to take into account.
However, to approach the question in s 9A from the perspective of the non-employment activity undertaken during an interval in the employment, rather than from the perspective of the employment concerned, was to misunderstand the statutory test.”
Mr McGrath was employed as a project manager by an electrical company. He was injured when in Singapore on a team building trip but at a time when he was alone and had consumed a large quantity of alcohol.
Mr Pogue said that when he saw Mr McGrath at about 9.00 pm, that Mr McGrath “wanted to go and party. He seemed to be a bit frustrated that we were staying at the seats.” While Mr Murray said (in statements made after the trip) that the members of the group were free to spend the time in Singapore as they chose, the purpose was to attend the Grand Prix and to attend it together, as Mr Deuchar’s evidence confirms. For the substantial part of the evening, Mr McGrath was away from the other members of the group and not participating in the activity which was the purpose of the trip.
Neither Mr McGrath’s employment nor the circumstances of the trip to Singapore required him to drink alcohol. I am not satisfied that there was an expectation that large amounts of alcohol would be consumed and the circumstances are quite different to expected attendance and participation at a Sergeants’ Mess at an army barracks, so that the decision in Roncevich does not assist.
The Coroner’s findings as to the cause of death which were accepted by the parties turn on the impact of alcohol consumption in the causation of the injury. I am not satisfied that employment was a substantial contributing factor to the injury.

Arising out of employment

An injury suffered in the course of employment will usually arise out of employment but the tests are different and only one or the other must be satisfied. The test for determining if an injury arises out of the employment has a causative element.[24]
[24] Badawi at [72]-[79].
In Tran, a worker suffered an injury while at her employer’s premises on a day when she was not required to work. Payne JA said[25]:
“Stewart makes clear that it is not sufficient, as the appellant submitted orally, that the injury was one “arising out of” employment because ‘but for’ the employment, the worker would not have been at the scene of the accident.”
[25] At [104]

Mr McGrath’s injury did not arise out of his employment merely because he would not have been in Singapore but for his employment. In any event, even if I was satisfied that the injury arose out of employment, I would need to be satisfied that employment was a substantial contributing factor to the injury. For the reasons set out above, I am not satisfied that it was.
I therefore make an award for the first respondent, P.M. Electric.

[2021] NSWPIC 174

8 June 2021