McKay v Hyrock Pty Limited

[2011] NSWWCCPD 26

WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:		McKay v Hyrock Pty Limited [2011] NSWWCCPD 26
APPELLANT:		Lincoln Carl McKay
RESPONDENT:		Hyrock Pty Limited
INSURER:		Allianz
FILE NUMBER:		A1-7731/10
ARBITRATOR:	Ms Jennifer Scott
DATE OF ARBITRATOR’S DECISION:		7 February 2011
DATE OF APPEAL DECISION:		17 May 2011
SUBJECT MATTER OF DECISION:		Absence of transcript of arbitral proceedings; appeal is not a new hearing: s 352(5) of the Workplace Injury Management and Workers Compensation Act 1998
PRESIDENTIAL MEMBER:		Deputy President Kevin O’Grady
HEARING:		On the papers
REPRESENTATION:		Appellant:	Stacks – The Law Firm
Respondent:	DLA Phillips Fox
ORDERS MADE ON APPEAL:		The decision of the Arbitrator dated 7 February 2011 is revoked and the matter is remitted to another Arbitrator for determination afresh. Costs to follow the final costs order following remitter to and hearing by another Arbitrator.

BACKGROUND TO THE APPEAL

1. Mr Lincoln Carl McKay commenced employment with Hyrock Pty Ltd (the respondent) in 2004 as a boilermaker. He alleges that he received injury to his neck, left shoulder and left arm in the course of that employment on 6 November 2004. He made no formal report of the injury at that time and continued with his duties without loss of time from work.

2. Thereafter Mr McKay experienced pain and discomfort in his neck and shoulder and, in January 2005, underwent massage therapy. The pain persisted and it appears that he consulted a general practitioner, Dr El-Roubai. That practitioner arranged x-ray investigations which were conducted by Dr Reeves who reported by letter dated 23 February 2005.

3. The evidence reveals that Mr McKay consulted a second general practitioner, Dr Al-Aukidy, in March 2005. That practitioner arranged for a cervical CT scan to be conducted by Dr L Narunsky. A report concerning that scan dated 4 March 2005 addressed to Dr Al-Aukidy is in evidence. In May 2005 Mr McKay sought treatment from a chiropractor.

4. Mr McKay continued working with difficulty and, in April 2006, was referred to Dr Vidyasagar Casikar, consultant neurosurgeon. Initial treatment included nerve root injections which afforded Mr McKay some relief. It seems that Mr McKay did not return to consult Dr Casikar until August 2008. At that time an MRI examination was arranged which demonstrated a significant disc prolapse at C6/C7 and a minimal disc bulge at C5/C6.

5. On or about 25 August 2008 Mr McKay presented a workers compensation claim form to the respondent. That document is not in evidence however the respondent’s Injury Claim Report, which is before the Commission, records that the date of injury alleged in Mr McKay’s claim form was 12 January 2005.

6. In October 2008 Mr McKay underwent operative treatment at the hands of Dr Casikar being cervical decompression and fusion. Mr McKay was absent from his employment during convalescence until 24 November 2008.

7. In November 2008 the respondent’s insurer gave notice in accordance with the provisions of s 74 of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act) that liability with respect to Mr McKay’s claim had been declined. The reason for denial of liability was stated to be that “employment was not a substantial contributing factor to [Mr McKay’s] injury within the meaning of Section 9A” of the Workers CompensationAct 1987 (the 1987 Act). A similar notice was served upon Mr McKay by the insurer in November 2009, following receipt by the insurer of a claim in respect of lump sum entitlement which had been forwarded by Mr McKay’s solicitors.

8. Reference was made in each of the s 74 notices to a report of Dr Casikar dated 27 September 2008 in which that practitioner expressed a view that Mr McKay’s neck condition was attributable to “football activities”.

9. In September 2010 an Application to Resolve a Dispute was filed on behalf of Mr McKay. That application came before Arbitrator Scott for conciliation/arbitration on 18 January 2011. Each party was represented by counsel and the matter proceeded to hearing. The Arbitrator reserved her decision and a Certificate of Determination issued on 7 February 2011.

THE DECISION UNDER REVIEW

1. The Certificate of Determination dated 7 February 2011 records the Arbitrator’s orders as follows:

   “1.     Award for the respondent with respect to the applicant’s claim for weekly payments of compensation.

   2. Award in favour of the respondent in respect of the applicant’s claim for lump sum compensation under section 66 of the Workers Compensation Act 1987.

   3.     Each party pay its own costs.”

ISSUES IN DISPUTE

1. The issues in dispute in the appeal are whether the Arbitrator erred in:

   (a)     failing to give proper reasons for her determination;

   (b)     finding that Mr McKay had failed to discharge the onus upon him to prove the occurrence of injury as alleged, and

   (c)     rejecting Mr McKay as a witness of credit concerning matters which had not been put to him in cross-examination.

PRELIMINARY MATTERS

1. The Arbitrator’s decision was made on a date following the commencement of the Workers Compensation Legislation Amendment Act 2010 (the amending Act). In the circumstances this appeal is governed by the provisions of s 352 of the 1998 Act as amended by the amending Act: Sch 6 Pt 19G cl 8 to the 1987 Act. The nature and scope of an appeal such as the present is to be found in s 352(5) of the 1998 Act which provides:

   “An appeal under this section is limited to a determination of whether the decision appealed against was or was not affected by any error of fact, law or discretion, and to the correction of any such error. The appeal is not a review or new hearing.”

2. The powers of the Commission upon conduct of such an appeal are regulated by s 352(7) of the 1998 Act which provides:

   “On appeal, the decision may be confirmed or may be revoked and a new decision made in its place. Alternatively, the matter may be remitted back to the Arbitrator concerned, or to another Arbitrator, for determination in accordance with any decision or directions of the Commission”.

3. The appeal process which has been established by s 352 in its amended terms involves conduct of a rehearing which ordinarily is conducted having regard to the evidence and argument advanced before the Arbitrator. Such an approach is subject to the admission of fresh or additional evidence which may, in the Commission’s discretion, be admitted on appeal: s 352(6).

4. The Commission may exercise the appeal function granted by s 352 without holding any conference or formal hearing. Such procedure, often referred to as a hearing ‘on the papers’, may occur in circumstances where the Commission is satisfied that sufficient information has been supplied to it in connection with the proceedings: s 354(6).

5. The proceeding conducted before the Arbitrator was recorded. However given the loss of the sound card recording, which is not explained, there is no transcript available.

6. No oral evidence was given before the Arbitrator. The absence of a transcript has the practical consequence that the Commission, on appeal, does not have the benefit of a record of those submissions put on behalf of each party. There is thus no material available to enable certainty as to the approach adopted by each party to those issues raised on the evidence.

7. There have in the past been instances of an appeal being brought before a Presidential member in circumstances where, for various reasons, there was an incomplete record of the proceedings from which the appeal was brought. The consequences of such an occurrence were considered by the Court of Appeal in Aluminium Louvres and Ceilings Pty Ltd v Zheng [2006] NSWCA 34; 4 DDCR 358 (Zheng). It was stated by Bryson JA (with whom Handley JA and Bell J agreed) (at [32]) that, as decisions of an Arbitrator are subject to appeal to a Presidential member under s 352, an arbitrator is “under a duty to make a record of the evidence during the arbitration hearing”. His Honour proceeded to state that the absence of a transcript:

   “…is a serious shortcoming, because it greatly impedes the right of appeal and the due exercise of powers of the Presidential member under s 352; and also impedes the conduct of a further appeal under s 353.  According to circumstances, the absence of a sound recording could fairly readily lead a Presidential member to a decision to require a rehearing; although that result would not be automatic.”

8. Mr McKay, in submissions on this appeal, has argued that a hearing ‘on the papers’ as permitted by s 354(6) should not be conducted. In supplementary submissions dated 27 April 2011, which address the fact that there is no transcript of the proceedings available, it is put that, given the nature of the arguments raised on appeal, the appropriate order on appeal would be to remit the matter to a different Arbitrator for rehearing.

9. An alternative submission is put by Mr McKay being that “there should be an oral hearing before the Commission on the appeal so that the appellant can give evidence and be cross examined”.

10. The respondent in its Notice of Opposition to the appeal submits that, notwithstanding the absence of the transcript of the arbitral proceedings, the appeal may be determined ‘on the papers’.

Procedure on Appeal

1. A preliminary question is raised as to the appropriate means of disposition of this appeal. That question requires consideration as to whether the absence of a transcript of proceedings so impedes the conduct of the appeal that, rather than scrutinise the evidence and the decision to determine the existence of error or otherwise, there should be a requirement for a new hearing.

2. The submissions put by Mr McKay in respect of each of the grounds of appeal rely, in part, upon a suggested denial of procedural fairness. It is put that, whilst failure to give notice of injury had not be relied upon by the respondent in support of its denial of liability, such failure, as found by the Arbitrator, appears to have been a significant factor taken into account by her when determining the fundamental question as to proof of the occurrence of injury.

3. Another complaint made in submissions concerns the Arbitrator’s conclusion that the evidence, being the treating general practitioner’s clinical notes, established that Mr McKay was aware of the need to report work injuries. There was, it is put, no notice given to him that such a finding was contemplated by the Arbitrator. In the circumstances he was denied an opportunity to adduce evidence concerning that issue and to advance argument founded upon the evidence as it stood.

4. It is also asserted in submissions that the evidence of Mr McKay and his lay witnesses (his wife and Mr Robinson) should have been accepted given that there was no cross examination concerning the evidence found in those witnesses’ statements. This argument suggests error on the part of the Arbitrator in failing to raise the matter concerning credit of the witnesses and Mr McKay’s resultant loss of the opportunity to give oral evidence and to be cross-examined at the hearing.

5. Having regard to the nature of the arguments which I have attempted to summarise above between [23] and [25] it is in my opinion clear that, given the absence of the transcript, there is insufficient information before the Commission to properly enable a hearing ‘on the papers’. Mr McKay’s assertions in argument cannot be scrutinised with reference to the manner in which argument was advanced at the hearing.

6. The question remains as to whether an appropriate course on this appeal is to proceed to hearing which would, as submitted in the alternative by Mr McKay, enable evidence to be given by those witnesses whose evidence is relevant to the issue of “injury” so that those matters relied upon by the Arbitrator may be addressed and that evidence may be tested in cross examination.

7. I have reached the conclusion that conduct of a hearing on this appeal is inappropriate. Mr McKay’s failure to make out his case before the Arbitrator turned on the rejection of his evidence and, so far as it was relevant, the evidence of his wife and Mr Robinson concerning the occurrence of an injurious event in the course of employment on 6 November 2004. Should there be a hearing conducted on this appeal to enable those matters to be reopened it is inevitable that such proceedings would constitute a new hearing. Conduct of such a new hearing is expressly excluded by the terms of s 352(5). In so concluding I do not suggest that the Commission may not, in an appropriate case, conduct an oral hearing on appeal which might include further oral evidence including cross-examination. Circumstances giving rise to the need for such an oral hearing were addressed by the Court of Appeal in Hancock v East Coast Timber Products Pty Limited [2011] NSWCA 11 (Hancock) (per Tobias JA between [125] and [134]).

8. The circumstances of the present matter may be distinguished from those circumstances which arose in the Commission on appeal in Hancock. In Hancock the evidence of the appellant worker and his expert medical witness was found by the Commission, on appeal, to be unreliable. It was the view of the Court of Appeal that an oral hearing on appeal before the Commission would have afforded an opportunity to explain any suggested shortcomings in the evidence. In the present case, in the absence of a transcript, the rejection by the Arbitrator of Mr McKay’s case as to injury is said to be founded upon matters that had not been raised by the respondent or that had not been raised by the Arbitrator as being relevant to her determination concerning a credit issue. In the present circumstances such oral hearing would constitute a new hearing which procedure is expressly excluded.

9. As earlier noted the circumstances which have led to there being no available transcript of the proceedings are unknown. The Arbitrator has failed in her duty to make a record of the proceedings and such failure constitutes an error of law. In the circumstances it is appropriate that the orders made by the Arbitrator as found in the Certificate of Determination dated 7 February 2011 be revoked. The matter is remitted to another Arbitrator for determination afresh.

DECISION

1. The decision of the Arbitrator dated 7 February 2011 is revoked and the matter is remitted to another Arbitrator for determination afresh.

COSTS

1. The Commission has a broad discretion as to costs which is granted by the provisions of s 341 of the 1998 Act. The need for a rehearing has arisen given the absence of a transcript of proceedings and, concerning that shortcoming, the parties are innocent. In the circumstances I consider it appropriate that the costs of both the original conciliation/arbitration hearing and this appeal should follow the final costs order following remitter to and hearing by another Arbitrator.

Kevin O’Grady

Deputy President  

17 May 2011

I, PENELOPE FLEMING, CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF KEVIN O’GRADY, DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.

ASSOCIATE