McMahon v Anthony Lagana and Joseph Lavella t/as The Vessel “Nimble II”

APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR

CITATION:	Christopher Michael McMahon v Anthony Lagana and Joseph Lavella t/as the Vessel “Nimble II” [2003] NSWWCCPD 22
APPELLANT:	Christopher Michael McMahon
RESPONDENT:	Anthony Lagana and Joseph Lavella T/as The Vessel “Nimble II”
INSURER:	CGU Workers Insurance (NSW) Limited
FILE NO:	WCC 2537-2002
DATE OF APPEAL DECISION:	3 September 2003
PRESIDENTIAL MEMBER:	Deputy President, Dr Gabriel Fleming
DECISION UNDER APPEAL:	Application for Leave to Appeal against a decision of an Arbitrator
DATE OF DECISION UNDER APPEAL:	17 March 2003
HEARING:	Determined on the Papers
REPRESENTATION:	Appellant: Lee Sames Egan Solicitors
Respondent: Lee & Lyons Lawyers
ORDERS MADE ON APPEAL:	The decision of the Arbitrator is confirmed.

THE APPEAL

On 14 April 2003, Christopher Michael McMahon (‘the Appellant Worker’), lodged an Appeal Against the Decision of an Arbitrator in the Commission. The Appeal named Anthony Lagana and Joseph Lavella t/as the vessel “Nimble II” as the Respondent (‘the Respondent’). The Respondent’s insurer is CGU Workers Compensation (‘the Insurer’).
The Certificate of Determination and attached Statement of Reasons (‘the reasons’), dated 17 March 2003, include the decision of the Arbitrator, as follows:
I find that the Applicant has incapacity for work, however I do not find that the Applicant has satisfied the factual or evidentiary tests on injury in the course of employment or that in the circumstances of this case that his employment was a substantial contributing factor to the serious injuries he sustained. I find that the Applicant fails under subsections (b) of section 9A of the WCA, and that Section 9A (3) (a) does not apply to the Applicant even if he were to be found to be in the course of employment on the substantial contribution issue.
Award for the Respondent.
No Award is made as to costs.
The Appellant seeks to have the decision of the Arbitrator set aside, and an order made in its place that the Respondent is liable to pay the Appellant Worker weekly compensation for total incapacity from 10 September 2002 to date and continuing, plus medical and related expenses and costs.
The Respondent submits that the Arbitrator’s decision should be confirmed.
The appeal is made within time and meets the threshold requirements of section 352 of the Workplace Injury and Workers Compensation Act 1998 (‘the 1998 Act’). Leave to appeal was granted on 11 July 2003.

ON THE PAPERS REVIEW

In accordance with Practice Direction 6, I am satisfied that sufficient information has been supplied in connection with the appeal to enable me to determine the substantive issues in dispute without holding a conference or formal hearing i.e. ‘on the papers’ (section 354(6) of the 1998 Act). Both parties have consented to the matter proceeding on the papers.

APPLICATION TO ADMIT NEW EVIDENCE

The Applicant seeks to admit new evidence in the form of a statement by Mr. McMahon, dated 11 April 2003. In support of this application he submits that:
This new or additional evidence seeks to make it clear that the Applicant was engaged to work upon the vessel from his home at Evans Head and was required to “camp” away from his home in order to fulfil the terms of his employment - that is to be ready to go to sea at short notice and to perform tasks other than catching fish in and around the vessel while it was moored and he was living on it.
. . . the new evidence should be admitted to avoid any incorrect conclusions the Commission may draw on the facts as presently set out in the statements. The substantial justice of the case requires full factual basis (sic) so that the authorities as set out in the list provided to the Commission, may be properly addressed and applied.
The Applicant also submitted that the statement was not put in evidence as it was assumed by the Applicant that the facts set out were agreed. The Applicant submits that the statement is critical to establishing the similarities of the facts in this case to those of the leading case of Hatzimanolis v ANI Corporation Limited (1992) 173 CLR 473 (‘Hatzimanolis’).
The Respondent has made no submission on the issue of the admission of new evidence.
Section 352(6) of the 1998 Act provides that, in an appeal, leave is required for the admission of fresh evidence or evidence in addition to that which was before the Arbitrator. The requirements of this section were, at the relevant time, addressed in the President’s Direction Number 6B of 2002, which provided that:
In general, the Commission will allow new evidence to be given 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.
Principles relevant to the exercise of the discretion to admit new evidence in relation to proceedings before the Commission were discussed in the matters of Ross v Zurich Workers Compensation Insurance [2002] NSW WCC PD 7, and Shipman Pty Ltd v Matters [2003] NSW WCC PD 19. Factors weighing in favour of the exercise of discretion to admit fresh evidence in an appeal against the decision of an Arbitrator in the Commission include that:
(i)if the request is refused, a substantial injustice will result to the party who seeks to have the evidence admitted, Radnedge v Government Insurance Office of NSW (1987) 9 NSWLR 235,
(ii)the evidence could not have been discovered, with reasonable diligence, at the time of the original proceedings, Radnedge v Government Insurance Office of NSW (1987) 9 NSWLR 235; Glover v Australian Ultra Concrete Floors Pty Ltd [2003] NSWCA 80, and
(iii)the evidence is of such probative value that there is a high degree of probability that it would lead to a different outcome in the case; Greater Wollongong City Council v Cowan (1955) 93 CLR 435, Warr v Santos [1973] 1 NSWLR 432, Harrison v Schipp (2002) 54 NSWLR 738; Akins v National Australia Bank (1994) 34 NSWLR 155.
Factors weighing against the exercise of the discretion to admit fresh evidence in the appeal include:
(iv)The interest in the finality of litigation and the importance of the ability of the successful party to rely on the outcome of the proceedings, Litynski v Albion Steel Pty Ltd (1994) 10 NSWCCR 287,
(v)The prejudice, if any, that may result to the other party, particularly if the fresh evidence raises new arguments in the appeal, and
(vi)The intention of the legislative scheme in relation to the nature of the proceedings.
The Workers Compensation Act 1987 (‘the 1987 Act’) and the WorkplaceInjury Management and Workers Compensation Act 1998 (‘the 1998 Act’) provide a comprehensive statutory scheme governing workers compensation entitlements, the making of claims and dispute resolution. The intention of the legislature in creating the Workers Compensation Commission was clearly to create a fair, informal and expeditious forum for the binding resolution of workers compensation disputes. Arbitrators determine disputes in the Commission, through first attempting to bring the parties to a conciliated agreement, and, if that is not successful by making a determination (section 355 of the 1998 Act). Commission rules and procedures require full and early particularisation of an Applicant’s claim, the Respondent’s evidence and submissions in reply to the claim. The parties have the option of identifying that evidence which is not immediately available and which will be submitted at a specified later date.
The Presidential Member on appeal may confirm the Arbitrator’s decision or revoke it and substitute a new decision in its place (section 352(7) of the 1998 Act). It was not the intention of the legislature to allow appeals to effectively become a full second hearing of the dispute. A Presidential member has a specific role in the review of a decision of the Commission constituted by an Arbitrator. It is not an ‘appeal’ in the strict sense, as the Commission can receive further evidence. Similarly it is not a ‘rehearing’ of the matter where the Commission is re-exercising the power of the Arbitrator at first instance by hearing the matter ‘de novo’ and coming to a fresh decision based on all the evidence available at that 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 ‘review’ is by way of rehearing where the powers of the Commission to confirm, revoke or substitute a new decision are exercisable only where it can be demonstrated that the original decision of the Arbitrator is affected by ‘some legal, factual or discretionary error’ (Allesch v Maunz (2000) 203 CLR 172, Mayne Health Group t/as Nepean Private Hospital v Sandford [2002] NSW WCC PD 6).
In this matter the Applicant filed a copy of two statements, dated 11 April 2001 and 30 October 2001, with the ‘Application to Resolve a Dispute’ filed on 18 September 2002. On 29 November 2002 the Applicant’s solicitor wrote to the Commission stating that due to unfamiliarity with the Workers Compensation Commission procedures, a statement by the Applicant was not filed with the application and seeking leave to again file the above statements. The date of the April 2001 statement was corrected to read 11 April 2002.
The Applicant attended a conciliation conference and arbitration in the Commission on 24 February 2003, at which both parties were represented and the Applicant gave affirmed, oral evidence. In particular, the Applicant’s legal representative sought leave of the Arbitrator to allow the Applicant to give oral evidence, in addition to the documentary evidence already before the Arbitrator, as to the Applicant’s presence on the boat outside work - outside fishing hours and the terms of his employment as alluded to by the Respondent himself in the provision of food and so on. (Transcript of Arbitration proceedings, page 3). The Arbitrator permitted the Applicant to file the statement of 11 April 2002 and give oral evidence.
I am not satisfied that any grounds have been made out to allow the Applicant to now submit a further statement. I do not accept that a substantial injustice will result to Mr. McMahon if this statement is not admitted. He had ample opportunity to address the facts of his case in earlier written statements and in oral evidence. The terms of his employment on the Nimble II is not a ‘new’ issue in the dispute and I do not accept that the Appellant worker could not, with reasonable diligence, have organised to give full evidence in relation to this, either in a statement, filed at the time of filing the application, as required by the Interim Workers Compensation Commission Rules 2002; at some later time by requesting leave from the Arbitrator, or by way of oral evidence at the arbitration hearing. These issues are, in fact, covered in evidence already before me on the appeal.
It is neither fair to the Respondent, nor appropriate in the circumstances, to allow a further statement on these issues to be tendered at the point of appeal against the Arbitrator’s decision. Given the evidence already before the Arbitrator, and now before me on appeal, I am also not satisfied that the further clarification of certain ‘facts’ by Mr. McMahon is of such probative value, that it has the potential to alter the outcome of the appeal.
Leave to admit new evidence in the form of an additional statement by Mr. McMahon, is refused.

THE DECISION UNDER REVIEW

I have before me, and have taken into account, the evidence that was before the Arbitrator and the submissions made on the appeal.
The facts of the case, in so far as they appear to be accepted by both parties, may be summarised as follows:
·     At the time of the injury Mr. McMahon was a 26 year old man. He had commenced employment with the Respondent on 7 July 2001 as a deckhand on the employer’s vessel, the ‘Nimble II’, which was moored at Ulladulla wharf.
·     The employment involved Mr. McMahon taking trips to sea in the boat for commercial fishing, cleaning, unloading the boat and cleaning the catch on return to Ulladulla.
·     As part of the employment Mr. McMahon lived on the boat and was provided with food. Similarly two other deckhands lived and worked on the vessel. When the vessel was near Evans Head Mr. McMahon would return to live at his home there.
·     There were no set hours of work as the boat would go to sea when the weather was suitable and the fish were running.
·     Mr. McMahon was paid 7% of the value of the catch after expenses such as freight were deducted.
·     On 6 October 2001 the Nimble II returned from two days at sea and by midday the catch had been unloaded and the boat cleaned. Mr. McMahon and another deckhand then went to the local hotel. He stated that he returned to the Nimble II to cook dinner then returned to the hotel and stayed there for a number of hours.
·     At the hotel Mr. McMahon had an altercation with a Mr. Shane Heycox, a stranger but also a fisherman, and a physical fight occurred outside the hotel at around 2.30 am. Mr. McMahon stated that by this time he was affected by alcohol but did not consider himself ‘drunk’.
·     Shortly after 2.30 am on 7 October, Mr. McMahon returned to the Nimble II, and Mr. Heycox appeared on the wharf, calling to him to come out of the boat. When he did so, he was attacked by Mr. Heycox with a machete.
·     Mr. McMahon was taken to hospital and treated for lacerations to his right hand, right arm, head, left shoulder and left leg.
·     Mr. McMahon has not returned to any employment since the incident and claims ongoing weekly compensation for total incapacity.
·     The insurer met Mr. McMahon’s claim for weekly compensation until 10 September 2002 when payments ceased. The insurer denied liability for the claim on the basis that Mr. McMahon’s employment was not a substantial contributing factor to his injury (section 9A of the 1998 Act).
The Arbitrator did not accept Mr. McMahon’s claim that providing security for the vessel, while living on it, was a condition of his employment. The Arbitrator found that Mr. McMahon had:
. . . finished work on the day in question, and did not resume duties for the employer, and that the events surrounding the injury were not arising out of, nor in the course of employment. They were suffered during a social event over a number of hours when the worker was off duty and, on his own admission, intoxicated, and presumably unfit for normal duties. I should note my concern on the conduct issue. The Applicant was threatened by his assailant that ‘I am going to come back and cut you up’ on the way back to the vessel; he chose to return to the hotel where he had the original confrontation with his assailant, and then chose to leave the vessel when he was later confronted by his assailant on the wharf. Although I do not find any liability in the Applicant for this conduct, I do not accept the submission that these events were in the course of employment.
The Arbitrator did not accept that there was any causal linkage between the injury and the work that the Applicant was required to perfom on the Nimble II, nor that the employer expressly or impliedly induced or encouraged the activity of the Applicant. The Arbitrator found no employment relationship in this matter because an analysis of what the injured person was in fact doing in his employment which caused or contributed to the injury fails the test under Section 4 of the Workers Compensation Act 1987 (‘the 1987 Act’).
The Arbitrator went on to consider, if the injury could be said to arise in the course of employment, whether that employment was a substantial contributing factor to the injury in accordance with section 9A of the 1987 Act. The Arbitrator rejected this submission on the basis that there were no employment related activities giving rise to the Applicant’s injury.

THE ISSUES IN DISPUTE

There are a number of factual and legal issues in dispute in the Appeal. The Appellant submits that the Arbitrator erred in that he:
A.Misdirected himself as to the definition of injury in Section 4.
B.Misdirected himself as to whether the applicant was “in the course of employment” at the time of injury, as required by Section 4.
C.Considered the provision of security upon the vessel needed to be an “obligation” before it could be considered to be in the course of employment.
D.Considered the provision of security upon the vessel needed to be the applicant’s “exclusive obligation” before it could be considered to be in the course of employment.
E.Considered that the provision of security needed to be a “condition” of the applicant’s employment before the applicant could be considered to be in the course of employment.
F.Failed to consider all of the incidents of employment when considering the applicant’s circumstances.
G.Failed to provide adequate reasons in relation to his findings on the question under Section 4.
H.Misdirected himself as to the requirements under Section 9A.
I.Misdirected himself as to the meaning of “employment” under s9A, in that he considered a narrow interpretation, being the “obligations” and “conditions” thereof, and not referring to the work which the worker is required to do including its nature, its conditions, its employment and its incidents and extends to matters naturally incidental to the contract of employment.
J.Having misdirected himself under s4, failed to properly consider the incidents of employment under s9A.
K.Having found that s9A is satisfied if the applicant was in the course of his employment at the time of injury, failed to find that the applicant’s employment was a substantial contributing factor to his injuries.
L.Failed to provide adequate reasons for his findings in Section (A).
M.In the alternative, and on the basis of his conclusions under Section 4 and Section 9A, failed to consider the provisions of Section 11.

SUBMISSIONS

The Appellant’s submissions may be summarised as follows:
Section 4 - Definition of Injury
1.Mr. McMahon had been induced or encouraged by his employer to spend intervals between employment upon the Nimble II. He was injured at his place of employment and therefore satisfies the test set out in Hatzimanolis. It was unnecessary for the employer to have expressly or impliedly encouraged the activity. The only conclusion, on the correct application of Section 4 of the 1987 Act and the Hatzimanolis test, is that Mr. McMahon was in the course of his employment at the time of the injury.
Section 9A - ‘Substantial Contributing Factor’
2.The ‘causal linkage’ between Mr. McMahon’s employment and injury, is made out (Mercer v ANZ Banking Group (2000) 48 NSWLR 740). Mr. McMahon’s employment was a substantial contributing factor to his injury. The Arbitrator erred in not properly considering the authorities in relation to the application of Section 9A of the 1998 Act, on the basis that his finding in relation to Section 4 rendered this unnecessary.
The Respondent’s submissions on the appeal, other than by way or restatement of the reasons for decision, were as follows;
At the Arbitration hearing on 18 March 2003 (sic) the applicant did not seek to rely upon Section 11 of the WCA. In any event, the Section does not respond. The applicant voluntarily subjected himself to an abnormal risk of injury. Please see paragraphs . . . .
The Arbitrator did not accept on the evidence that he (the applicant) was obliged to provide security for the vessel as a condition of his employment. There was no corroborating evidence on this issue. If necessary, a statement can be obtained from the applicant’s employer in relation to this issue. Quite clearly, when alighting from the vessel, the applicant was not seeking to secure it. He was simply taking up from where he left off outside the pub. This incident did not arise in the course of the applicant’s employment. In addition, the applicant’s employment was not a substantial contributing factor to the injury.

DISCUSSION AND FINDINGS

Section 4 - Injury

The Arbitrator made a number of factual findings (found throughout the Statement of Reasons for Decision under ‘Evidence’ and ‘Submissions’ and ‘Findings and Reasons’) that were the basis upon which he then considered the legal question of whether the Appellant Worker met the statutory definition of ‘injury’ in section 4 of the 1987 Act, which provides as follows:
Injury:
(a)  means personal injury arising out of or in the course of employment,
(b)  includes:
(i)  a disease which is contracted by a worker in the course of employment and to which the employment was a contributing factor, and
(ii)  the aggravation, acceleration, exacerbation or deterioration of any disease, where the employment was a contributing factor to the aggravation, acceleration, exacerbation or deterioration, and
(c) does not include (except in the case of a worker employed in or about a mine to which the Coal Mines Regulation Act 1982 applies) a dust disease, as defined by the Workers’ Compensation (Dust Diseases) Act 1942, or the aggravation, acceleration, exacerbation or deterioration of a dust disease, as so defined.
There is no dispute that Mr. McMahon is a ‘worker’ within the above definition and that he suffered an injury, when he was attacked on the Ulladulla wharf on 7 October 2001. The phrases arising out of and in the course of are put in the alternative in section 4. The injury did not arise out of Mr. McMahon’s employment in the sense of a causal relationship between the injury and his employment. The issue is whether this injury occurred in the course of employment.
On the issue of providing security for the vessel the Arbitrator, while accepting Mr. McMahon as a truthful witness, was not satisfied that his evidence supported a conclusion that this was a condition of his employment. The Arbitrator stated that even if that is so, I infer that it was not his exclusive obligation given that others were staying on the vessel at the same time.
The evidence before the Arbitrator on this issue was as follows
11 April 2002 Statement of Mr. McMahon
My duties on [Nimble II] including shooting away, which means clipping on fishing hooks and baiting them, winching up, cleaning fish, fighting fish, and all round deckhand duties.
. . . Part of the employment arrangement I had, was that I slept on the boat unless we were fishing around Evans Head, when I would go home. I was also supplied with food whilst I was on the boat at sea. If I had a week off or we had a long period of bad weather I would come home also, but apart from that I generally stayed on the boat with the other deckhands.
. . .There were no set hours of duty when I was working on Nimble II. Everything is governed by the weather and how the fish are running.
9 April 2002 Statement by Anthony Lagana, Employer
Nimble II is a commercial fishing vessel that. . . currently employs myself as skipper and three deckhands.
Christopher was employed on this vessel as a deckhand . . .on 7 July 2001. . . . His duties involved shooting the lines out, fishing, unloading the boat and cleaning the vessel at the end of fishing trips.
There were no set hours of duty associated with Christopher’s role and if there are fish out there and the weather is good, then we go out and fish. If the weather is bad or there are no fish around, we stay in Ulladulla wharf or wherever we may be. . . .
As well as being paid a percentage of the catch, Christopher lived on board Nimble II and we supplied all food. He lives in Evans Head, NSW, and whenever we were away from that location he lived on the boat. When we were fishing up near Evans Head he would live at his home up there.
. . .
At the time of this assault Christopher was not working. . . he had stopped working at 12 md the day before. . .
9 April 2002 Statement of Aaron Jones, Deckhand, Nimble II
. . .At the time of the assault Christopher and I were not working and had finished working at about 12 md the day before. After that we had knocked off and gone to the pub and stayed there until we came back to the boat to sleep.
Oral Evidence of Mr. McMahon, Workers Compensation Commission Arbitration Hearing 24 February 2003
(Transcript at page 5)
Q. And were you provided with accommodation on the vessel not only while you were at sea but while it was moored in Ulladulla?
A. Yes
. . . .
Q. When it was moored at the wharf did you do any other work in or around the vessel?
A. Yes
Q. What sort of work was that?
A. It was repairs on the boat and taking care of the vessel.
The evidence before the Arbitrator was that Mr. McMahon did not have prescribed working hours, however he did have prescribed duties. These were as he described, namely . . . clipping on fishing hooks and baiting them, winching up, cleaning fish, fighting fish, and all round deckhand duties. These ‘all round’ duties included general repairs and maintenance to the vessel to keep it seaworthy. Mr. McMahon’s working hours were relative to the time that he was required to carry out these duties, i.e. when he was preparing to go to sea, at sea, and when he was performing duties such as unloading the catch, cleaning the vessel or repairing it when the vessel was docked.
The evidence does not support the conclusion that Mr. McMahon was on duty, or on call, outside of these times, or that he was required or authorized to perform any other work for his employer (Humphrey Earl Ltd v Speechley (1951) 84 CLR 126. On the day that Mr. McMahon was injured, i.e. 7 October 2001, he had finished his duties on the Nimble II at around midday. After this he had gone to the hotel, returned to the vessel to have a meal, gone back to the hotel, continued drinking, and again returned to the Nimble II. I do not accept that Mr. McMahon, in doing this, or simply in returning to the vessel late at night to sleep on board, was doing something that he was reasonably required to do in order to carry out his duties for his employer. In my view the time in which the injury occurred was an interval or interlude within an overall period or episode of work, (Hatzimanolis v ANI Corporation Ltd (1992) 173 CLR 473 at 476.
The Appellant worker’s legal representative submitted that Mr. McMahon was quite obviously providing further benefits to the respondent simply by his presence by way of security to the boat (Transcript, page 11). He submitted that Mr. McMahon, while he did not have duties of ‘security guard’, his presence on the boat is a deterrent to other thieves or mischief-makers. Their very presence would have some effect on that . . . The submission is that it was for the employers, or, sorry, it was for the parties’ mutual benefit that the arrangement was entered into rather than simply an ex gratia act of kindness by the respondent (Transcript, page 14).
In my view the Arbitrator did not err in finding that the provision of security to the Nimble II was not a condition of Mr. McMahon’s employment nor an obligation or requirement imposed upon him by his employer. Not only was there no evidence that this was the case, the evidence taken as a whole suggested otherwise. Mr. McMahon did not, in his evidence, refer to any obligation to remain on the vessel to provide security. Similarly the employer made no reference to this issue in his evidence. Mr. McMahon was one of three deckhands who lived on the vessel when it was docked at Ulladulla. He was not expected to be on the vessel at all times as he resided at his home in Evans Head when the vessel was in that area. There was no evidence that he was prevented from leaving the vessel at any time (other than, obviously, when it was at sea), nor that he carried out any duties that could be regarded as providing security for the vessel. Mr. McMahon stated that if he had a week off or the weather was bad he would go home to Evans Head. There was no evidence that he was required to be on the vessel if the other deckhands or the owner were absent. It may equally have been the case that another of the deckhands living on the Nimble II was required to provide security or that the owner of the vessel made other arrangements for its security if the need arose. There was no evidence as to what ‘security’ was in fact required, and whether, for example, it was possible to secure the boat without needing a personal presence on board at all times, or whether there was any need at all for security during daylight hours.
It is difficult to discern clearly from the Arbitrator’s reasons what findings, if any, were made in relation to Mr. McMahon’s conduct on the night of the injury. The Arbitrator noted ‘concern’ about Mr. McMahon’s conduct but did not find any liability in the Applicant for [his] conduct. On balance, it appears that the Arbitrator did not consider that Mr. McMahon’s conduct was such as to have in some way caused the incident. The evidence of Mr. McMahon is that he did not provoke or otherwise engage his assailant in any way and that he was attacked after an earlier altercation in the hotel. The Arbitrator accepted Mr. McMahon’s evidence that he was intoxicated, but not drunk. There is no evidence to contradict this account of events, and indeed it is supported by the evidence of Aaron Jones, who was also a deckhand on the Nimble II, and was present when the events occurred.
However, these findings do not necessarily preclude Mr. McMahon from satisfying the statutory criteria that the injury occurred ‘in the course of employment’. The test is not whether at the time of the injury Mr. McMahon was required, obliged or authorized to be aboard the Nimble II to provide security for the vessel (Henderson v Commissioner of Railways (WA) (1937) 58 CLR 281). The courts have taken a broad view of the phrase ”in the course of employment” and given it an extended meaning, Koutroullis v E R McNamara Pty Ltd (1993) 9 NSWCCR 196 at 200). The leading case on this issue is the decision of the High Court in Hatzimanolis v ANI Corporation Ltd (1992) 173 CLR 473 (‘Hatzimanolis’), at 478, where the court held that . . . the course of employment is not identical with the period of employment of a worker or with the work which that person performs.
In Hatzimanolis the Court set out the relevant organizing principle upon which to determine whether particular facts satisfied the test of in the course of employment as follows, at 484;
. . 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. In determining whether the injury occurred in the course of employment, regard must be had to the general nature, terms and circumstances of the employment “and not merely to the circumstances of the particular occasion out of which the injury to the employee has arisen” (Danvers (1969) 122 CLR at 537).
In determining whether there is sufficient connection to employment in the instant case, . . . the time, place and circumstance, as well as practice, must be considered together with the conditions of employment, (Whittingham v Commissioner for Railways (WA) (1931) 46 CLR 22 at 29).
Taking into account the broad test set down in Hatzimanolis and the findings of fact that are relevant to this issue, it is my view that the Arbitrator made an error of law in the application of the definition of injury, in section 4 of the 1998 Act, to the facts of this particular case. I find that Mr. McMahon did suffer an injury in the course of his employment as a deckhand on the Nimble II on the following basis:
·At the time of the injury on 7 October 2001 Mr. McMahon was employed as a deckhand on the Nimble II. His hours of work were variable and dependent upon the weather and the potential catch. He had immediately returned to Ulladulla from fishing and had completed his duties on the vessel. However the point at which those duties would recommence, whether going to sea, attending to repairs on the vessel or other routine maintenance, was unpredictable. This was again dependent upon the weather conditions for fishing and the directions of his employer in relation to tasks to be done on the vessel. I consider that the whole of the time the Nimble II was docked at Ulludalla wharf and that Mr. McMahon was residing on the boat, was an overall period or episode of work.
·Mr. McMahon finished his duties on the vessel around midday on 6 October 2001. What followed, i.e. Mr. McMahon’s visit to the hotel and his return to the Nimble II, was an interval or interlude in his overall period or episode of work.
·The provision of food and accommodation to Mr. McMahon on the Nimble II when it was docked at Ulladulla wharf was a condition of Mr. McMahon’s employment. It amounts to an implied inducement to him to reside on the vessel during intervals in his employment. While not a condition of his employment, or an obligation on him, his residence on the boat had some benefit to the employer.
·Having regard to the general nature of Mr. McMahon’s employment, including the variability of his duties, the unpredictability of his hours of work, and the provision of food and accommodation on the vessel, I am satisfied that his injury occurred in the course of his employment.
·Mr. McMahon’s conduct during the interval in his employment, from midday 6 October 2001 until he returned to the Nimble II around 2.30 am on 7 October 2001, was not such as to take him outside of the course of his employment at the time the injury occurred.

Section 9A - Substantial Contributing Factor

The second issue raised on appeal, concerns the application of section 9A to Mr. McMahon’s claim. Section 9A provides as follows:
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.
Despite finding that the injury did not arise in the course of employment, the Arbitrator went on to consider, and reject, the Applicant’s submissions under section 9A. The Arbitrator rejected the submission that there was a ‘. . . causal linkage between the work that was required to be performed (Mercer v ANZ Banking Group (2000) NSWCA 138).’ The Arbitrator found that, even if the causal relationship between the injury and employment could be made out, the employment was not a substantial contributing factor to Mr. McMahon’s injury.
For the purpose of section 9A it is insufficient to prove that the employee was injured in the course of employment. A causal relationship must be established between the actual work activity the worker was engaged in at the time of the injury, and the injury itself, (Stanton-Cook v TAFE Commission (NSW) (1999) NSWCCR 5. As Mason P, said in Mercer v ANZ Banking Group Ltd (2000) 48 NSWLR 740;
. . . the words “employment concerned” in 9A reinforce the view that it is the work activity in which the worker was engaged at the time of the 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 sub ss (2) and (3) of 9A.
There may be more than one substantial contributing factor to an injury. The meaning of substantial in this context is more than minimal, large or great (Mercer v ANZ Banking Group Ltd (2000) 48 NSWLR 740). The causal connection between the injury and the employment required by section 9A is to a lesser degree than that required to demonstrate that the injury arose out of the employment (secton 4). The determination of what is a ‘substantial’ contributing factor is a matter for determination in the individual circumstances of each case. ‘Employment’ will include matters incidental to the performance of the actual duties of the employee, (Muscat v Woolworths Ltd (2000) NSWCC 16).
Taking these principles into account, I turn to the factors set out in section 9A (2) of the 1987 Act, and make the following findings;
(a)the time and place of the injury. The injury occurred at around 2.30 am on 7 October 2001 at the Uludulla wharf, where the Nimble II was docked.
(b)the nature of the work performed and the particular tasks of that work. Findings in relation to this matter are set out at paragraphs 30-33 above. It follows from these findings that Mr. McMahon was not performing any work or particular work tasks when he returned to the Nimble II on 7 October 2001, or when he went onto the wharf, where he was attacked.
(c)The duration of the employment. Mr. McMahon was employed as a deckhand from around July 2001 until the time of his injury.
(d)The probability that the injury or a similar injury would have happened anyway, at about the same time or at the same stage of the worker’s life, if he or she had not been at work or had not worked in that employment. Mr. McMahon’s injuries were suffered as a result of the attack on him with a machete; they are not such that they would likely have occurred at this time in his life for other reasons. The evidence is that Mr. McMahon had an earlier altercation with his attacker in the hotel, however the attack upon him on the wharf, in particular the severity of it, was not predictable. It is evident that if Mr. McMahon had not been a deckhand on the Nimble II it is unlikely that he would have been on the boat or the wharf at the relevant time. However this is saying no more than that the injury occurred ‘in the course of employment’.
(e)The worker’s state of health before the injury and the existence of any heriditary risks. This is not relevant to this case.
(f)The worker’s lifestyle and his or her activities outside the workplace. Mr. McMahon’s lifestyle did not contribute to his injury.
Mr. McMahon was not performing any actual duties for his employer when he was attacked on the Ulladulla wharf on 7 October 2001. Nor was he performing duties that could be said to be incidental to his employment. He had finished his duties around midday. He had been enjoying himself at the local hotel, as he was perfectly entitled to do, in an interval in his employment. Having returned to the vessel to sleep for the night, he was lured onto the wharf and was the victim of a violent attack. The fact that he was working as a deckhand on the Nimble II and, as a consequence, was residing on the vessel, was a minor contributing factor to his injury. The causal connection between Mr. McMahon’s actual duties and his injury is not established.

Adequacy of Reasons

The Arbitrator’s reasons have been the subject of some comment above. Commission Arbitrators have a common law and statutory obligation to provide adequate reasons for decision (Section 294(2) of the 1998 Act, Rule 73 Workers Compensation Commission Rules 2003 (Rule 41 of the Rules as they were at the time of the decision), Absolon v NSW TAFE [1999] NSWCA 311). Failure to do so constitutes an error of law and may be a ground to set aside the Arbitrator’s decision.
The standard by which the adequacy of reasons must be determined is relative to the nature of the decision itself and the decision-maker (see discussion in Mayne Health Group t/as Nepean Private Hospital v Sandford [2002] NSW WCC PD 6). The Commission is not a court and proceedings are conducted with as little formality and technicality as the proper consideration of the matter permits. This approach is equally applicable to the preparation of statements of reasons. At the same time, the reasons must be capable of adequately conveying to the parties the basis upon which the Arbitrator came to his or her decision. These matters are now set out in Rule 73 of the Workers Compensation Commission Rules 2003, and require the Arbitrator to give a brief statement setting out the reasons for the determination including;
(1). . .
(g)    the findings on material questions of fact, referring to the evidence or other material on which those findings were based, and
(h)    the Commission’s understanding of the applicable law, and
(i)   the reasoning process that lead the Commission to the conclusions it made.
(2)Without limiting subrule(1), the reasons set out in a statement referred to in subrule(1) are to be stated sufficiently (in the opinion of the Commission) to make the parties aware of the Commission’s view of the case made by each of them.
It is not incumbent upon an Arbitrator to set out every detail of the evidence that was before him or her. To do so would be unreasonable and inconsistent with the objectives of the Commission in providing a speedy resolution to workers compensation disputes. However the reasons should set out the evidence, findings and application of the applicable law clearly. The statement of reasons for decision must ultimately explain to the parties why the Arbitrator has made the particular decision.
To succeed on the ground of ‘inadequate reasons’ it will be necessary for the Appellant to demonstrate not only that the reasons are inadequate but that the inadequacy sufficiently demonstrates that the Arbitrator has failed to exercise his or her statutory duty to fairly and lawfully determine the application. The Court of Appeal in YG v Minister for Community Services [2002] NSWCA 247 (26 July 2002), per Hodgson JA, said,
. . . inadequate reasons do not without more show that the decision involved error: the inadequacy must be such as to warrant the inference that the Tribunal had not exercised its jurisdiction in accordance with law: see Absolon v. NSW TAFE [1999] NSWCA 311 at [67].
. . In my opinion, a question whether there is a deficiency of reasons, and whether that deficiency warrants an inference that a tribunal has not exercised its jurisdiction in accordance with law, is a matter of judgment, and in borderline cases, minds may reasonably differ (at [37]-[38]).
I have found that the Arbitrator made an error of law in his determination of this matter. However I am not satisfied that the Arbitrator’s reasons for the conclusions he came to were inadequate. He set out his findings on the relevant evidence and also set out his consideration of the law that he applied to the case. In my view the parties, while they may not accept the decision, could clearly discern the reasons why the Arbitrator made it. Whilst the statement of reasons may have benefited from greater clarity in expression and careful editing of its format, it is not, in substance, inadequate.

DECISION

The Arbitrator made an error of law in the determination of this matter. However, for the reasons outlined above, I have come to the conclusion that the Appellant worker cannot succeed on the appeal, on the basis that his employment was not a substantial contributing factor to his injury. It is unnecessary to proceed with the legal fiction of revoking the Arbitrator’s order on the ground of error of law and then substituting an order that is identical.
The decision of the Arbitrator is affirmed.

COSTS

The appeal has been unsuccessful and costs fall to be determined in accordance with section 345 of the Act. That section provides, relevantly, that:
345Costs Penalties Where Appeal Unsuccessful
(1)On an appeal from the Commission constituted by an Arbitrator to the Commission constituted by a Presidential member:
(a)If the appellant is the claimant and is unsuccessful on the appeal, the Commission must not make an order for the payment of the appellant’s costs on the appeal by any other party to the appeal, or
(b)If the appellant is an insurer (other than a licensed insurer that maintains a statutory fund under the 1987 Act) and is unsuccessful on the appeal the Commission may order the insurer to pay to the Authority for payment into the WorkCover Authority Fund an administration fee of $1000 or such other amount, as may be prescribed by the Regulations.
(2)If the appellant in any such appeal is a licensed insurer that maintains a statutory fund under the 1987 Act and is unsuccessful on the appeal:
(a) the insurer’s costs on the appeal, and
(b)the costs of any other party to the appeal that the insurer is ordered to pay,
are not to be paid out of the statutory fund.
(3)If an appeal concerns lump sum compensation, weekly payments of compensation or medical expenses compensation, the appellant is considered to be unsuccessful on the appeal unless the decision on appeal results in a change in favour of the appellant in the amount awarded or ordered to be paid in the decision appealed against of at least $5,000 (or such other amount as may be prescribed by the regulations) and at least 20% of the amount awarded or ordered to be paid.
(4)An administration fee that an insurer is ordered to pay is recoverable as a debt due to the Authority.
(5)The Registrar is to notify the Authority of an order to an insurer under this section to pay an administration fee.
The parties are encouraged to come to an agreement in relation to costs in accordance with the above provision.

Dr. Gabriel Fleming
Deputy President

I certify that that this is a true and accurate record of the reasons for decision of Deputy President Dr Gabriel Fleming, Workers Compensation Commission.

Registrar

Date:

[2003] NSWWCCPD 22

3 September 2003