Northern NSW Local Health District (Tweed Heads Hospital) v Conaghan - [2014] NSWWCCPD 54

WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:	Northern NSW Local Health District (Tweed Heads Hospital) v Conaghan [2014] NSWWCCPD 54
APPELLANT:	Northern NSW Local Health District (Tweed Heads Hospital)
RESPONDENT:	Patrick Damien Conaghan
INSURER:	QBE Workers Compensation (NSW) Limited
FILE NUMBER:	A1-16041/12
ARBITRATOR:	Ms Annemarie Nicholl
DATE OF ARBITRATOR’S DECISION:	12 May 2014
DATE OF APPEAL DECISION:	28 August 2014
SUBJECT MATTER OF DECISION:	Section 4 WorkersCompensation Act 1987; injury arising out of or in course of employment; Worker injured as a result of altercation with fellow worker and its consequences; challenge to finding that injury arose out of employment; consideration of decisions in Tarry v Warringah Shire Council [1974] WCR (NSW) 1 and Davis v Mobil Oil Australia Ltd (1988) 12 NSWLR 10
PRESIDENTIAL MEMBER:	Deputy President Kevin O'Grady
HEARING:	On the papers
REPRESENTATION:	Appellant:	Turks Legal
Respondent:	Leitch Hasson & Dent
ORDERS MADE ON APPEAL:	1. Time to appeal is extended to 11 June 2014. 2. The Arbitrator’s findings and orders as recorded in the Certificate of Determination dated 12 May 2014 are confirmed. 3. The appellant is to pay Mr Conaghan’s costs of the appeal.

BACKGROUND

Mr Patrick Conaghan alleged that he received psychological injury arising out of or in the course of his employment with Northern NSW Local Health District (Tweed Heads Hospital) (the appellant) between 1 March 2011 and 4 May 2011. Mr Conaghan was employed by the appellant as a wardsman at the appellant’s hospital premises at Tweed Heads, New South Wales. On 1 March 2011, Mr Congahan and a fellow employee, Ms Bernadette McCullough, became involved in an altercation. Mr Conaghan was subsequently arrested by the police on 12 May 2011 and charged with the offence of common assault. Mr Conaghan entered a plea of guilty to that charge. The presiding Magistrate found Mr Conaghan guilty of the offence, but without proceeding to conviction, directed that he enter into a good behaviour bond for six months, pursuant to s 10(1)(b) of the Crimes (Sentencing Procedure) Act 1999.
It was Mr Conaghan’s case before the Arbitrator, that between the date of the altercation and 4 May 2011, he had been the subject of discriminatory and harassing treatment by other members of the appellant’s staff. This included verbal abuse, constant telephone calls and a variety of other conduct which caused the injury as alleged.
Mr Conaghan ceased work on 4 May 2011 by reason of the disabling consequences of the alleged injury. Written notification of injury was given by Mr Conaghan to the appellant on 6 May 2011. On 27 May 2011, Mr Conaghan received written notice from the appellant’s insurer that his claim for compensation had been declined. That notice was issued pursuant to s 74 of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act).
On 17 August 2012, a claim against the appellant was made on behalf of Mr Conaghan by his solicitors in respect of weekly compensation, medical expenses and lump sum compensation pursuant to ss 66 and 67 of the WorkersCompensation Act 1987 (the 1987 Act).
On 4 September 2012 the appellant’s insurer again gave Mr Conaghan notice pursuant to s 74 of the 1998 Act, that his claim in respect of compensation benefits had been declined. That notice included a denial of injury and a statement that, in reaching its decision, reliance was placed by the appellant upon the provisions of ss 9A and s 11A of the 1987 Act.
Mr Conaghan filed an Application to Resolve a Dispute with the Commission in December 2012. That application came before Arbitrator Annemarie Nicholl for conciliation and arbitration on 13 December 2013. The matter proceeded to hearing, following which the Arbitrator reserved her decision. A Certificate of Determination was issued by the Commission on 12 May 2014, which was accompanied by a Statement of the Arbitrator’s Reasons for her decision. The following findings and orders are recorded in that certificate:
“The Commission determines:
Findings and Orders
1.I find the applicant suffered psychological injury arising out of the period of his employment from 1 March 2011 to 4 May 2011 for the purposes of section 4(b)(i) of the Workers Compensation Act 1987 with a deemed date of injury of 4 May 2011. The applicant’s employment was a substantial contributing factor to that injury as required by section 9A of the Workers Compensation Act 1987.
2.The respondent is to pay the applicant weekly benefits compensation pursuant to section 36 of the Workers Compensation Act 1987 (as it stood prior to the amendments of 19 June 2012) at the rate of $737.41 for 26 weeks from 4 May 2011. From the end of that period until 31 December 2012 the respondent is to pay the applicant weekly benefits compensation pursuant to section 37 of the Workers Compensation Act 1987 (as it stood prior to the amendments of 19 June 2012) at the maximum statutory rate for a worker with no dependants.
4.The respondent is to pay the applicant’s reasonably necessary section 60 expenses resulting from psychological injury on production of accounts, receipts and or the Medicare Notice of Charge.
5.I remit this matter to the Registrar for referral to an Approved Medical Specialist for assessment of the degree of permanent impairment in respect of psychological injury as a result of his employment over the period from 1 March 2011 to 4 May 2011, with a deemed date of injury of 4 May 2011.
6.The documents to be sent to the Approved Medical Specialist are those accepted into these proceedings, as well as a copy of this Statement of Reasons.
7. The respondent is to pay the applicant’s costs as agreed or assessed.
Certification
1.In light of the medical, legal and factual complexities in this case and for the purposes of Schedule 6 Table 4 Item 4 of the Workers Compensation Regulation 2011 I certify this matter as complex with 30 per cent increase in the costs otherwise available to both parties.
A statement is attached to the determination setting out the Commission’s reasons for the determination.”

PRELIMINARY MATTERS
Threshold

There is no dispute between the parties that the threshold as to quantum as found in the provisions of s 352(3) have been met.
It is common ground that the appeal was not made within 28 days after the making of the Arbitrator’s decision, as is required by the provisions of s 352(4) of the 1998 Act. The commencement of the appeal is one day out of time. This is so despite the assertion made by Mr Conaghan that the appeal was “more than two weeks out of time”. The appeal had, in fact, been made by the filing of an application on 11 June 2014 which was followed by the filing of an amended application on 30 June 2014.
The appellant seeks an extension of time which may be granted by the Commission as is provided by Pt 16 r 16.2 (12) of the Workers Compensation Commission Rules 2011 (the 2011 Rules), which is as follows:
“The Commission constituted by a Presidential member may, if a party satisfies the Presidential member, in exceptional circumstances, that to lose the right to appeal would work demonstrable and substantial injustice, by order extend the time for making an appeal.”
The principles relevant to the exercise of discretion to extend time were considered by McHugh J in Gallo v Dawson [1990] HCA 30; 93 ALR 479. As stated by his Honour, such discretion is given for “the sole purpose of enabling the Court or Justice to do justice between the parties”. His Honour proceeded to state (at 480):
“In order to determine whether the rules will work an injustice, it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation, and the consequences for the parties of the grant or refusal of the application for extension of time: see Avery v No.2 Public Service Appeal Board (1973) 2 NZLR 86, at 92 and Jess v Scott (1986) 12 FCR 187, at 194-195. When the application is for an extension of time in which to file an appeal, it is always necessary to consider the prospects of the applicant succeeding in the appeal: see Burns v Grigg (1967) VR 871 at 872; Hughes at 263-264; Mitchelson v Mitchelson (1979) 24 ALR 522, at 524. It is also necessary to bear in mind in such an application that, upon the expiry of the time for appealing, the respondent has a ‘vested right to retain the judgement’ unless the application is granted: Vilenius v Heinegar (1926) 36 ALJR 200, at 201.”
In support of its application seeking an extension of time, the appellant argues that there exists no prejudice to Mr Conaghan, given that it has “processed the weekly payments entitlement” which was provided for by the terms of the award. It is further argued that the grounds for appeal “are arguable and raise issues that were not properly considered by the Arbitrator at the hearing”. It is further put that the prospects of success are “significant” having regard to the evidence concerning Mr Conaghan’s conduct. The submissions contain a statement that instructions were received by the appellant’s solicitors in respect of pursuit of the appeal on 3 June 2014, following which counsel was briefed to assist in preparation of the appeal. It is further stated that a “misunderstanding between the appellant’s solicitors and counsel” gave rise to the delayed filing of the appeal on 11 June 2014. That last mentioned matter, alone, would not ground an application of this nature.
Having regard to all the circumstances, in particular, to the very brief period by which the time limitation was breached, and having regard to the nature of the litigation, including the nature of arguments raised on appeal, I am of the view that it is appropriate that time be extended. I order that time to appeal be extended to 11 June 2014.

ON THE PAPERS

Each of the parties has submitted that this appeal may proceed to be determined “on the papers” as is permitted by s 354(6) of the 1998 Act. Having regard to all relevant circumstances, I am of the view that the appeal may be determined on the papers.

ISSUES IN DISPUTE

The grounds of appeal noted at [2.8] of the Amended Application concerning this appeal, assert error of law on the part of the Arbitrator in the following respects:
1. Exclusion of the evidence of Ms Bernadette McCullough, and
2. Determining that Mr Conaghan’s injury arose out of his employment in terms of s 4 of the 1987 Act.
The manner in which this appeal has been presented, gives rise to a number of difficulties. Whilst the appellant complains of error on the part of the Arbitrator in refusing to admit the evidence of Ms McCullough, no application has been made that Ms McCullough’s evidence be admitted as additional evidence on appeal, as is permitted by the provisions of s 352(6) of the 1998 Act.
The appellant’s approach to the Arbitrator’s ruling concerning Ms McCullough’s evidence is found at [2.6] of the application filed with respect to the appeal which is headed “Interlocutory”. That paragraph merely asserts error on the part of the Arbitrator in making the interlocutory order rejecting the evidence and it is stated that a “reasonable explanation has been provided [by counsel at the hearing] for the delay in the statement being filed in the proceedings”. This argument is later repeated in support of ground one, and an assertion is made that “the decision of the Arbitrator significantly prejudiced the appellant’s case”.

At [2.10] of the Amended Application filed by the appellant part of the relief sought on this appeal is stated to be that “the statement of [Ms McCullough] be admitted into evidence”. Revocation of the Arbitrator’s determination is also sought, as is the entry of an award in favour of the appellant.
It seems to be assumed by the appellant that, should ground one be upheld on this appeal, it follows that Ms McCullough’s evidence would be admitted as additional evidence on appeal and would somehow be taken into account in determining the merits of ground two. That assumption, if made, is unfounded and would demonstrate serious misapprehension of the Commission’s procedures as prescribed by the Acts and Rules.
In the circumstances it is proposed to address the merits of each ground which will require a consideration, in the context of ground one, of the content of Ms McCullough’s statement and the correctness or otherwise of the Arbitrator’s ruling that it be excluded.

THE ARBITRAL PROCEEDINGS

The proceedings before the Arbitrator were recorded and a transcript has been produced and made available to the parties. Each party was represented before the Arbitrator by counsel. The documentary evidence before the Arbitrator is noted by her at [14] of her Reasons.
No oral evidence was adduced before the Arbitrator. At the commencement of the hearing, the appellant made application that the statement made by Ms McCullough, dated 11 December 2013, be admitted as a late document. It was Ms McCullough who had been involved with Mr Conaghan in the altercation which took place on 1 March 2011. The tender by the appellant was rejected by the Arbitrator for reasons which are discussed below. Following rejection of the evidence the appellant sought an adjournment of the proceedings. That application was refused by the Arbitrator. No complaint is made on this appeal concerning the Arbitrator’s ruling with respect to the adjournment application.

The evidence

There was in evidence before the Arbitrator a statement made 29 November 2012 by Mr Conaghan. The following extract from that statement relates to Mr Conaghan’s allegation of psychiatric injury:
“…
11.As a result of my current psychological injury, I have been seeing Dr Julian Chin (GP) and Dr Bill Wright (psychiatrist). I have previously seen Meg Perkins and Alison Tuck.
12.I have not returned to the Hospital since 4 May 2011. The attendance of the Police at my workplace was the last in a long series of events which had been putting me under intense pressure.
13.On 1 March 2011 I had a disagreement with another wards-person. Though I initially left the phone with the wards-person and started to walk away from the confrontation, words were exchanged wherein I thought she was going to throw the phone at me. She had abused and threatened me and snatched the phone out of my hand before the other nurses arrived.
14.Because I was afraid of being hit with the phone, I walked back up to her and attempted to take the phone off her by opening her fingers. She dropped the phone to the ground.
15.Half an hour later I had a male wards-person by the name of Wayne Graham come up to me and asked me how I was. He told me that the same wards-person I had the argument with had thrown a chair at him before this incident.
16.From the date of this incident, I became the recipient of discriminatory and harassing treatment from other staff members such as domestic services personnel, nurses and wards persons. Examples of such treatment included verbal abuse, constant phone calls to my mobile phone (from the hospital whose number I would recognise on my phone), pointing, jeering and staring.
17.I would also get comments from other workers such as “you are a woman basher” and “you are a woman hater”. I also had nurses spitting at me as I walked past them in the corridors. One specific example was when I walked into the Medical 2 Ward on 2/03/2011 and two nurses were standing by the doors. As I walked past I felt wet spots on the back of my shirt and the two nurses were laughing and saying that I bash women up.
18.I also had one Team Leader who would elbow me in the ribs and it always left bruises. I was told that I was a male and could take it. His name was Ray Robinson, Team Leader. My wife saw the bruises.”
The evidence established that Mr Conaghan had not returned to work since cessation of his duties on 4 May 2011. Mr Conaghan had consulted his general practitioner, Dr Julian Chin, on 4 May 2011 at which time Dr Chin issued a medical certificate which stated he was unfit to continue his usual occupation by reason of receipt of medical treatment, between 4 May 2011 and 3 June 2011. That was not a formal WorkCover Certificate. A WorkCover NSW Medical Certificate was issued by Dr Chin on 6 May 2011, which included a stated diagnosis of “post traumatic stress disorder”. That Certificate included a statement that Mr Conaghan’s employment was a substantial contributing factor to the injury. Dr Chin certified that Mr Conaghan was unfit to work from 4 May 2011 to 4 June 2011.
The evidence established that on 4 May 2011 the police visited Mr Conaghan’s workplace for the purpose of interviewing him concerning the altercation which had occurred approximately two months earlier. He was informed that he was required to give a statement. It is not known whether such statement was provided. It seems that Mr Conaghan was formally arrested on 12 May 2011 in connection with a charge of common assault. The matter came before the local court on 31 August 2011, at which time Mr Conaghan entered a plea of guilty and, as noted earlier, the Magistrate invoked the provisions of s 10 of the Crimes (Sentencing Procedure) Act 1999.

Both parties relied upon a pre-liability assessment conducted by Dr Peter Ashkar, forensic psychologist. That comprehensive report, dated 23 May 2011, addresses a great many matters which are of no relevance to the issues raised before the Arbitrator or on this appeal. Of relevance, Dr Ashkar stated under the heading “Industrial Contributing Factors”:

“[Mr Conaghan’s] emotional distress is a response to the police investigation of 4 May 2011 and common assault charge on 12 May 2011. Although these events arise from [Mr Conaghan’s] altercation with [Ms McCullough] at his place of work on 1 March 2011, they transcend the workplace and are not work-related events.”

The report of Dr Ashkar includes a comprehensive statement by Mr Congahan taken at the time the report was being compiled. That statement includes the following summary of the altercation between Mr Conaghan and Ms McCullough:

“On 1 March 2011, I was working my shift. It was a bed cleaning shift. I carry a work phone which is used to communicate with other staff while on shift. I started at 11:00. I had my first break at 13:00. You walk from ward to ward cleaning beds. As the afternoon progressed, I was pretty much on top the work. I got a call from the Team Leader, Trent Wood, to clean some beds in the Kids Ward, which I did do. I was almost finished cleaning the beds when he has called me to clean the beds in the Birthing Suite. I told him I was still quite busy with the beds in the Children’s Ward. He told me to stop what I was doing and just go down and start cleaning. He never specified if it was urgent.

On the way down to the Birthing Suite, I passed [Ms McCullough], the Wards person. Nothing was said. She just passed me in the hallway. I went into the Birthing Suite. I had a big clean to do which was going to take me at least 45 minutes to clean. I started cleaning it. It was coming down towards my break and I needed someone to take my phone. Then I tried to contact Trent. He doesn’t answer his phone. A doctor asked me to clean up an assessment room. I couldn’t contact Trent to get permission to work through my break. I worked through my break. I cleaned up the assessment room. I finished my cleaning in the Birthing Suites.
I walked out of the Women’s Care Ward. I returned some cleaning equipment to a cleaning cupboard. As I was doing this, I saw Gwenn Sharkey, a Wards person. She was sitting down with her feet up in the cleaning cupboard. I mentioned to her that I had been working through my break and may as well keep going. I went downstairs to Medical 2 where there was another bed to clean. I get a call from Nursing Manager Shirley Clarke, telling me that Trent had told her that I had refused to take my break. I hadn’t even spoken to him. He has just gone ahead and rang somebody above him to tell me that I am not working through my break. I told Shirley that was fine, that I would go and take my break. I didn’t explain what Trent had said because she wouldn’t listen. She took his word for it and that was it.

I still had the phone. I needed to give that to someone before taking my break. It was just before 6 pm. On my way to take my break, I run into [Ms McCullough]. I start a conversation about who is going to take the phone while I have my break. The conversation was about taking the phone during my break. She was saying that no one takes the phone on afternoon shift. I was saying that someone needed to cover the phone for the phone calls. It seemed to irritate her when I asked her to take the phone, so I walked away. Then, out of the blue, she started yelling at me, “We don’t know what’s wrong with you. We don’t know what’s wrong with you. You’re a fucking dick head. You’re a fucking wanker”. Being a long day, working through my break, I went up to her and verbally abused her back in her face, saying the same things back to her. That’s when she’s turned around and gone, “Give it here” and snatched the phone out of my hand. She was aggressive and rude. I was surprised. I was taken back.
…
I was shocked. I told her she was a little bitch. I walked outside and sat down. Shirley Clarke called me. She asked to speak with me. I told her on the phone that I had personal issues with her and did not want to sit down with her. I told her that I knew that what she had done with our daughter in the community [she dobbed my wife in to DoCS in 2009] and didn’t want to sit down and have any discussions with her. She suggested that I sit down with someone else. I was upset and not in any state of mind to talk about anything that happened. I didn’t receive any support from anyone at work. I went home shortly after that. I returned to work as normal the next day. I didn’t take any time off in the weeks that followed.”

There is in evidence, a copy of notes which purport to record proceedings at a meeting held on Wednesday, 30 March 2011, conducted by Ms Wendy Howell, Assistant Director of Nursing, and Mr Conaghan. Mr Conaghan’s wife was present as a “support person” and the meeting was recorded by Ms Kathryn Porks.
That record amplifies matters concerning the altercation as found in the statement mentioned above. The following responses by Mr Conaghan to questions put to him, are there recorded:
“[Mr Conaghan] said… ‘I was called to do a bed in Med 2. Then I had a call from the Nurse Manager, Shirley Clarke (SC) to say that Trent had phoned her and that I had refused to take my break. SC said ‘I am telling you to take your break’.
I said I was that busy that I would rather work through my break. That is when I went downstairs. No-one wanted to take the phone. I ran into BM coming through the back door. It appeared that she had been out the back smoking with one of the other nurses. I asked her where she was and said ‘does anyone want to take this phone?’ She said ‘We don’t work to times and that’s all there is to it’. She started carrying on. She got quite annoyed. She started saying there was something drastically wrong with me. I did not understand. She was not there to help. I tried to get away and walk around the corner. We kept exchanging words and that was when she told me I was a wanker and a dickhead.
Because it had been a long, busy day I got into her face and called her the same back. I got right into her face. She was quite verbal about it. I was trying to get away from the whole thing. She said ‘We do not know what is wrong with you’. I said ‘what are you talking about?’. Even though she is a little thing she is quite verbal and nasty. I did not deserve this and gave it back to her.’
WH said ‘You swore at her?’
PC said ‘Yes. I said ‘who is going to take the phone for my break?’ She rudely and nastily snatched the phone out of my hand. I was upset by her manner. Just then a nurse walked around the corner. I grabbed BM’s hand and the phone out of her hand. I told her she was a little bitch. I said ‘I won’t take this from anyone’.
WH asked PC to describe how he took the phone from BM.
PC said ‘I opened her fingers up. The phone fell on the ground. That is when I walked away and called her a little bitch. The nurse happened to see the whole thing.’
WH said ‘I have spoken to the nurse and both she and BM say that you were shaking BM and that you had left marks on her hand.’
PC said ‘No, not at all. I opened her fingers up and took the phone from her hand. She had a very aggressive manner. I have done exactly the same to her. Because I am a male I suppose this frightened and upset her but I am entitled to defend myself.’
WH reminded PC that the Hospital has zero tolerance to this kind of incident.”
Mr Conaghan relied upon the evidence of Dr Robert Hampshire, consultant psychiatrist, who had been qualified to provide an opinion for the purposes of this litigation. The report of Dr Hampshire, dated 4 May 2012, includes a history of the altercation between Mr Conaghan and Ms McCullough, which is generally consistent with the factual summary found in Mr Conaghan’s statement and in the notes of the meeting conducted by Ms Howell. Dr Hampshire records that the police attended Mr Conaghan’s place of work on 4 May 2011, who “advised him that he was under arrest for assault and needed to provide a statement. He was subsequently arrested on 12 May 2011, charged with common assault. The matter was dismissed under s 10.” Dr Hampshire proceeded to record the “psychological problems” experience by Mr Conaghan since his cessation of work on 4 May 2011. The opinion was expressed by Dr Hampshire, that Mr Conaghan has “a severe depression and fulfils the operational criteria under the DSM-IV for a Major Depressive Disorder with Psychotic features. Dr Hampshire also recorded that Mr Conaghan had experienced panic attacks which had commenced within days of the altercation. Dr Hampshire was also of the opinion that Mr Conaghan “also fulfils the operational Criteria for a Post Traumatic Stress Disorder”. Dr Hampshire records the symptoms which had led him to reach that diagnostic conclusion. Under the heading “Diagnosis, Prognosis and treatment”, Dr Hampshire stated:
“[Mr Conaghan] is suffering from a Major Depressive Disorder with Psychotic features. He is also suffering from a Post Traumatic Stress Disorder and co-morbid panic attacks.
All three conditions are chronic, stable and severe; his depression is extremely severe to the point that he is not only psychotic but a suicide risk and in my opinion should be hospitalised. I have contacted his GP to inform him of this opinion.
His psychiatric treatment is sub-optimal; he is seeing a psychologist in some form of talking therapy and takes a sub-clinical dose of a rarely used these days antidepressant.
In the event that he does not get successful treatment then his prognosis is extremely grave.”
The Pre-Liability Assessment prepared by Dr Peter Ashkar, forensic psychologist, which is dated 23 May 2011, includes a diagnosis as follows:
“[Mr Conaghan] appears to be experiencing emotional distress in response to his arrest and common assault charge. However, several factors suggest that he is exaggerating his symptoms for the purpose of this claim. There is therefore no reliable basis to conclude that he had a psychological injury at the time of his reported injury on 4 May 2011, or at the time of this assessment on 18 May 2011.”
Dr Hampshire had seen Dr Ashkar’s report and has stated that the opinion expressed should be “disregarded” by reason of its “gross inaccuracy”. Dr Hampshire acknowledged, that having regard to the date of Dr Ashkar’s report, it may have been that Mr Conaghan’s clinical picture, as observed by Dr Hampshire, may not have been then present.
A report of Ms Meg Perkins, psychologist, dated 28 November 2011, is in evidence. Ms Perkins expressed the view that Mr Conaghan “is suffering from a communication disorder and a lack of social skills”. Ms Perkins expressed the view that the abuse of Mr Conaghan at work, and his arrest “upset him further”. Dr Perkins expressed the view that Mr Conaghan “seems to be suffering from significant anxiety and depression, fearing further malice from co-workers”.
Dr Hampshire, who had read Ms Perkins’ report, expressed the view that “[Ms Perkins] failed to make the correct diagnosis and failed to understand the causality, which was obviously work related, of the illness she did also not observe”.

THE APPELLANT’S SUBMISSIONS BEFORE THE ARBITRATOR

The argument advanced before the Arbitrator on behalf of the appellant was summarised by counsel at the outset of his submissions as follows:
“Arbitrator the section 74 notice issued by the respondent raises section 4 and section 9A. The heart of the respondent’s case is that the applicant’s actions took him outside of his employment, and alternatively or in addition to that submission that if you find that the applicant does suffer from psychological condition it was caused, the substantial contributing factor to that was him being charged by police and the subsequent court proceedings. And those, those matters are not matters rising out of, out of or in the course of employment because he’d taken himself outside of the course of his employment.”
In response to questioning put by the Arbitrator, counsel for the appellant stated that there were alternative arguments advanced in defence of the claim. Firstly, the appellant’s primary argument was that Mr Conaghan had “taken himself out of the course of his employment” and, in the alternative, should there be a finding, that there was an injury within the meaning of s 4 of the 1987 Act, there should be a finding that “the employment is not a substantial contributing factor [to the injury] and what is a substantial contributing factor and in this case is this [sic, the] substantial contributing factor, is [Mr Conaghan] being charged by the police and subsequent court proceedings.”
It was subsequently made clear in submissions that the assault committed by Mr Conaghan was said to be “a serious matter” and that it took Mr Conaghan “outside the course of his employment”. It was put that such is the case “on [Mr Conaghan’s] version of events”. That submission would be strengthened, it was argued, if the Arbitrator was to accept the version of events as recorded in the investigation assessment report, which is noted at [28] above.

Counsel submitted that the views of Dr Ashkar should be accepted, being that the altercation had not given rise to the need for Mr Conaghan to take time off work, or seek professional intervention, but that it was the “police and the court proceedings”. Reliance was placed upon Dr Ashkar’s view that Mr Conaghan’s “emotional distress is as a response to the police investigation on 4 May 2011, and common assault charge on 12 May 2011”.
Counsel proceeded to address matters which are not challenged on this appeal, including the question of incapacity.
Submissions earlier put on behalf of the appellant concerning the admission of Ms McCullough’s statement as a late document, are noted below where ground one is addressed.
It is to be noted that, notwithstanding the fact that the s 74 notice issued by the appellant made reference to s 11A of the 1987 Act, no submission was put with respect to the relevance or otherwise of that section at the hearing before the Arbitrator.

THE ARBITRATOR’S DECISION

Following a detailed summary of the evidence and submissions put on behalf of each party, the Arbitrator proceeded to determine the primary issue in dispute being the question as whether, on the evidence, Mr Conaghan had established the receipt by him of injury within the meaning of s 4 of the 1987 Act. The Arbitrator noted (at [51] of Reasons), that “there is agreement in the medical evidence that [Mr Conaghan] suffers some psychological symptoms in a medical sense, but there is disagreement regarding the extent of those symptoms, as well as the causes of those symptoms or condition.” Reference was made by the Arbitrator to the evidence of Ms Perkins, in particular her view that Mr Conaghan had pre-existent disorders affecting his hearing and/or language processing and that such “may account for his difficulties with interpersonal relationships and social skills”. The Arbitrator accepted the submission put on behalf of Mr Conaghan that an employer takes a worker as it finds him or her. Reference was made to the “egg shell psyche” principle as discussed by Spigelman CJ in State Transit Authority (NSW) v Chemler [2007] NSWCA 249; 5 DDCR 286.
It appears that a finding was made by the Arbitrator (at [57]), that Mr Conaghan had “some level of psychological and emotional fragility” prior to the events at his workplace in March 2011.
The Arbitrator found that the evidence of Dr Hampshire provided “a clear and convincing explanation for why and how [Mr Conaghan] developed his current and very serious symptomatology”. The diagnoses expressed by Dr Hampshire being “Major Depressive Disorder with Psychotic Features, Panic Attacks and Post Traumatic Stress Disorder”, were accepted by the Arbitrator. Such acceptance was stated as being made in preference to other views expressed by expert witnesses. The Arbitrator noted that Dr Hampshire’s diagnosis “is not challenged by a conflicting opinion from a psychiatrist”.
Following a summary of the expert evidence concerning causation of Mr Conaghan’s psychiatric injury, the Arbitrator stated as follows at [67] – [69] of Reasons:
“67. There is more than sufficient evidence before me to conclude the applicant suffered psychological injury as a result of a combination of work events. On the weight of the evidence before me I accept the chain of causation began with the altercation between the applicant and Ms McCullough on 1 March 2011, which I accept was followed by verbal abuse and harassment (both real and perceived) at work. I accept those events were then followed by the police action including their attendance at the workplace on 4 May 2011, the applicant’s subsequent arrest and finally the court proceedings in which he pleaded guilty of common assault. In my view the attendance by the police and their actions in respect of the applicant were not the only causative events, but may have been the ‘straw that broke the camel’s back’ in the series of events in the workplace that led to the applicant’s complete decompensation.

68. I am satisfied that each and all these events have contributed in a real and significant way to the serious psychological conditions as diagnosed by Dr Hampshire, and as supported by the opinions of Ms Perkins and Dr Chin. In the face of those opinions I do not accept the early opinion of Dr Ashkar that the applicant has suffered only emotional distress. Nor do I accept his conditions are not work-related as Dr Ashkar concludes.

69. In reaching that conclusion I accept in full the submissions on behalf of the applicant that all these events have arisen out of the employment situation. The test for ‘arising out of’ the employment is whether the injury had its origins, in the sense of an unbroken causal connection, as clearly confirmed in Tarry v Warringah Shire Council [1974] WCR (NSW) 1 (Tarry). Those principles were applied more recently by Deputy President Roche in Qantas Airways Ltd v Watson (No 2) [2010] NSWWCCPD 38. I consider a common sense approach to the application of the phrase to the facts of the present case indicates that all the events relevant to the formation of the injury pertain to workplace matters. The altercation between the applicant and Ms McCullough was entirely and solely concerned with workplace matters. The subject matter of the confrontation and their discussion were all about work matters. There was no feature of that incident that involved or imported non-workplace issues. The verbal abuse and harassment to which I accept the applicant was subsequently subjected also arose out of a work matter. Ultimately the action by the police, in coming to the workplace, arresting and charging the applicant, also arose out of the workplace situation.”

The Arbitrator stated her acceptance of the relevance of the decision of the Court of Appeal in Tarry v Warringah Shire Council [1974] WCR (NSW) 1 (Tarry) and the Commission’s decision in Qantas Airways Ltd v Watson (No 2) [2010] NSWWCCPD 38. The Arbitrator concluded that all the events “relevant to the formation of the injury pertained to workplace matters”. The matters relevant, as stated by the Arbitrator, were the altercation, the verbal abuse and harassment which had been accepted by the Arbitrator as having occurred following the altercation, and the action by the police. The police action was found, by the Arbitrator, as having arisen out of the workplace situation.
The Arbitrator determined that it was unnecessary to consider the question as to whether Mr Conaghan’s conduct had taken him “outside the course of his employment”. It was stated at [70] of Reasons, that the Arbitrator was:
“…well satisfied [that] the psychological injury suffered by [Mr Conaghan] can be properly characterised as injury arising out of the employment, with an unbroken chain of causation between each of the work-related events and the eventual occurrence of the injury.”
The Arbitrator noted that it was not necessary that a worker “satisfy both aspects of s 4 of the 1987 Act” to establish injury.
The Arbitrator proceeded to make a formal finding of injury arising out of employment and that such injury was a disease contracted in the course of Mr Conaghan’s employment and to which the employment was a contributing factor, within the meaning of s 4(b)(i) of the 1987 Act.
The Arbitrator made further findings concerning s 9A of the 1987 Act and incapacity and proceeded to record the matters which are found in the Certificate of Determination noted at [6] above.

SUBMISSIONS, DISCUSSION AND FINDINGS

Ground one

The first ground relied upon by the appellant suggests error on the part of the Arbitrator in the exercise of her discretion when the evidence of Ms Bernadette McCullough, as found in her statement dated 11 December 2013, was rejected. It is also asserted in argument that the Arbitrator’s decision had the consequence that the exclusion of Ms McCullough’s evidence had “significantly prejudiced the appellant’s case”.
The statement by Ms McCullough describes the altercation which took place between herself and Mr Conaghan on 1 March 2014 which is substantially similar to the description of the altercation as found in the evidence of Mr Conaghan. Ms McCullough provides particular detail concerning Mr Conaghan’s physical conduct and she asserts that Mr Conaghan obstructed her passage and confined her against a wall at which time Mr Conaghan verbally abused her. The statement also includes an allegation that Mr Conaghan “grabbed” Ms McCullough and shook her. It is also alleged that Mr Conaghan grabbed Ms McCullough by the right arm and pushed her arm into her stomach and “began to shake [her] uncontrollably”.
The statement was recorded on the day before the matter was listed for hearing before the Arbitrator. Counsel appearing on behalf of the appellant at the hearing indicated from the bar table that Ms McCullough had been reluctant to provide a statement because Ms McCullough “also has a claim for compensation” arising out of the subject altercation. That matter appears to be confirmed, to some extent, having regard to Ms McCullough’s statement which appears at [16] as follows:
“I wish it to be clearly understood that I have not made this statement freely and voluntarily. I have provided the statement under duress due to unresolved grievances with NSW Health, because in my opinion, and according to their policies and procedures, the meticulous standards for investigating these matters set out by NSW Health, was not appropriately followed. In addition, my grievance is that I was not advised by NSW Health of my rights in regard to appealing their decision, as their policies state.”
Submissions put on this appeal include argument that the appellant has provided a “reasonable explanation” for the delay in the statement being filed in proceedings. It is suggested that the Arbitrator was “incorrect” when it was stated that “no explanation is given as to why it has taken all but three years to obtain a simple piece of evidence”.

At the time the appellant sought to tender Ms McCullough’s statement, the Arbitrator acknowledged that counsel had made efforts to “explain [to the Commission] that his instructions are that there are difficulty [sic] in obtaining that report [sic] at an earlier date”. The Arbitrator proceeded to observe that since a teleconference, which was conducted in July 2013, steps had been taken by the appellant to obtain evidence as was then foreshadowed. There was no evidence before the Commission concerning the nature of the difficulties encountered in obtaining the statement from Ms McCullough. The Arbitrator appears to have excluded the evidence primarily having regard to the lateness of service upon Mr Conaghan, which occurred the day before the hearing. The Arbitrator acknowledged that, should the evidence be admitted, the matter would likely need to be adjourned to avoid any prejudice to Mr Conaghan. On balance the Arbitrator concluded that there was “no real foundation on which to exercise the discretion in favour of [the appellant]”. Tender of the statement was refused. As earlier noted the appellant then sought an adjournment of the proceedings, which application was refused by the Arbitrator. No complaint is made on this appeal concerning that refusal.
The manner in which proceedings are to be conducted before the Commission is regulated by the 2011 Rules. The lodgement of evidentiary material with the Commission in the course of proceedings is regulated by Pt 10 of the 2011 Rules. Part 10 r 10.3, so far as is relevant, provides:
“10.3 Material to be lodged with application or reply
(1)     For the purposes of section 290 of the 1998 Act, a party to proceedings must
lodge and serve with:
(a) the application to resolve the dispute, if the party is the applicant, or
(b) the reply required by rule 10.4 (1), if the party is a respondent, or
(c) the reply required by rule 11.1 (7), if the party is a party joined under rule
11.1 (4),
all information and documents on which the party proposes to rely and that are
in the possession or control of the party, and that have not been lodged by a
party in the current proceedings.
(2)     Subject to subrules (3)–(5), a party may not in proceedings introduce evidence
that has not been lodged and served as required by subrule (1) or has not been
provided to any other party as required by the 1998 Act or any Regulation or
Guideline made under that Act.
(3)     The Commission may, if it is satisfied that it is necessary to do so in the
interests of justice, allow a party to introduce evidence that the party would
otherwise be prevented from introducing because of the operation of subrule (2)…”
The appellant has correctly characterised the Arbitrator’s ruling concerning the exclusion of Ms McCullough’s evidence as being an interlocutory ruling. In reaching her decision concerning the appellant’s application to tender that evidence, the Arbitrator was plainly exercising her discretion. The Commission, when addressing ground one, may be guided by that which was recently stated by Ward JA in Cicek v The Estate of the Late Mark Solomon [2014] NSWCA 278 at [69] and [70]:
“69 Appellate courts exercise particular caution in reviewing interlocutory rulings on matters of practice and procedure (Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc [1981] HCA 39; (1981) 148 CLR 170 at [9] 177; Re Will of Gilbert [1946] NSWStRp 24; (1946) 46 SR (NSW) 318 at 322-3). The task of a party challenging such a ruling is recognised as being a difficult one (Warragamba Winery Pty Ltd v State of New South Wales [2010] NSWCA 174 at [6]; Micallef v ICI Australia Operations Pty Ltd [2001] NSWCA 274 at [45]).
70. What is required is that the appellants establish an error of legal principle; material error of fact; that the primary judge took into account some irrelevant consideration or failed to take into account or give sufficient weight to a relevant consideration; or that the primary judge arrived at a result so unreasonable or unjust as to suggest such an error (House v R [1936] HCA 40; (1936) 55 CLR 499 at 505; Micallef per Heydon JA, as his Honour then was, at [45]). In Kelly v Mina [2014] NSWCA 9 at [46], it was recognised that an appellate court should be slow to interfere and ought not reverse the primary judge's decision on a matter of practice and procedure unless convinced it is plainly erroneous.”
The thrust of the appellant’s argument on this appeal suggests that the exclusion of Ms McCullough’s evidence gave rise to significant prejudice. It seems to be asserted that such prejudice arises by reason of the absence of Ms McCullough’s “side of the story” concerning the subject altercation. It was the appellant’s argument that Mr Conaghan’s conduct had taken him “outside his employment”, given that his conduct constituted an assault. That fact is plainly established on Mr Conaghan’s own case. In my opinion, nothing put on behalf of the appellant either before the Arbitrator or on this appeal would remotely suggest that the Arbitrator’s ruling was “plainly erroneous” as considered by Ward JA as noted above. I am not satisfied that the appellant has made out a persuasive argument that error had been committed with respect to its application to adduce the evidence of Ms McCullough, and ground one must fail.

Ground two

The appellant’s second ground challenges the Arbitrator’s finding as to the occurrence of injury. The error alleged concerned her determination that Mr Conaghan’s “injury arose out of his employment for the purposes of s 4 of the Workers Compensation Act 1987”. That section provides as follows:
“In this Act:
injury:
(a) means personal injury arising out of or in the course of employment,
(b) includes a disease injury, which means:
(i)a disease that is contracted by a worker in the course of employment but only if the employment was the main contributing factor to contracting the disease, and
(ii)the aggravation, acceleration, exacerbation or deterioration in the course of employment of any disease, but only if the employment was the main contributing factor to the aggravation, acceleration, exacerbation or deterioration of the disease,
…”
The Arbitrator’s reasoning concerning the finding made as to the occurrence of injury is as recorded at [44] above.
As earlier discussed it was the appellant’s argument before the Arbitrator that, assuming that psychological injury had been received by Mr Conaghan, such injury had been occasioned by reason of the assault and the consequences being the police intervention, the charge and subsequent court appearance at which time a guilty plea was entered. It was argued that his conduct during the altercation took Mr Conaghan outside the course of his employment, and further that the police intervention and the arrest were not causally related to his employment. These arguments are reiterated on this appeal.
It is important to note that on this appeal the appellant has, for the first time, included reference to the term “gross misconduct”, a term that was adopted by the plurality in Hatzimanolisv ANI Corporation Limited [1992] HCA 21; 173 CLR 473 (Hatzimanolis).
A difficulty arises given that the argument as advanced on this appeal fails to clearly distinguish between matters directed to the question as to whether the injury alleged arose in the course of employment or to whether it arose out of the employment. Notwithstanding the blurring of that distinction, it is reasonably clear that the conduct of Mr Conaghan is said to have taken him outside his employment and that the police intervention and the subsequent arrest and charge of assault, whilst causative of injury, did not arise out of the employment.
It is also important to note that the appellant has made no reference whatsoever, either before the Arbitrator or on this appeal, to the provisions of s 14(2) of the 1987 Act which provides:
“… (2) If it is proved that an injury to a worker is solely attributable to the serious and wilful misconduct of the worker, compensation is not payable in respect of that injury, unless the injury results in death or serious and permanent disablement…”.
Mr Conaghan does not make any complaint that the appellant has, on this appeal, raised for the first time the concept of “gross misconduct”. Having regard to relevant authority, the concept of “gross misconduct” as discussed in Hatzimanolis is, in my opinion, included in the statutory concept of serious and wilful misconduct as it appears in s 14(2). As was stated by Priestley JA in Higgins v Galibal Pty Ltd t/as Hotel Nikko Darling Harbour (1998) 45 NSWLR 45 (at 58E):
“A further opinion I have reached, relevant to the decision of this appeal is that ‘serious and wilful misconduct’ was intended to include ‘gross misconduct’ as that term had been used in the cases. Also, in my view, the intention was realised because, in my opinion, the words in their ordinary meaning would include ‘gross misconduct’.”
Having regard to the matters which I have attempted to summarise above, it is clear that the legislation provides that, upon proof of the commission of serious and wilful misconduct, and subject to the proviso found in s 14(2) concerning death or serious and permanent disablement, an injured worker who is guilty of such conduct is disentitled to receipt of compensation benefits. That disentitlement may embrace a situation where gross misconduct as discussed in Hatzimanolis is made out. No argument has been advanced concerning any possible relevance of the provision.
Returning to the argument as advanced, the difficulty which confronts the appellant with respect to this ground is that the Arbitrator has made a finding that there is an “unbroken causal connection” between the altercation and its consequences, including the police intervention, and the injury. Reliance was placed by the Arbitrator upon the authority of Tarry when reaching her conclusion that the injury arose out of Mr Conaghan’s employment.
In Tarry, the deceased worker, a foreman in the employ of the Council, suffered cardiac arrest during an altercation with a worker who had objected to the manner in which work was being allocated. The deceased and the worker, a tanker driver, were both aggressive and became involved in what may be described as a tussle during which the deceased became unconscious by reason of heart failure, of which condition he subsequently died. As was stated by Glass JA (at 7):
“The present position, in my opinion, in determining whether an injury arose out of the course of employment is that, whether the deceased at the time of the injury was within the scope or course or sphere of his employment is a relevant factor, but is not a decisive factor. In a given situation the injury may arise out of the employment even though at the time it is sustained the deceased or the applicant is no longer in the course of his employment. So much was specifically stated by Fullagar J in his judgment in Kavanagh v The Commonwealth (1960) 103 CLR 547 at 558-559. The proper test for determining whether the injury arose out of the employment has been stated by Jordan CJ in Nunan v Cockatoo Docks & Engineering Co Ltd (1941) 41 SR (NSW) 119 at 125, when he describes the employment as causing or contributing to the injury; by Fullagar J in the passage to which I have referred, when he states the need for a causal connection between the employment and the injury and by Starke J in South Maitland Railways Pty Limited v James (1943) 67 CLR 496 at 502, when he says ‘the words ‘out of’ require that the injury had its origin in employment’”.
The distinction between the two ingredients of s 4 of the 1987 Act were addressed also by Samuels JA in Tarry where the equivalent provision (s 6(1) of the Workers Compensation Act 1926) was being considered as follows:
“I agree with what my brothers have said. As brother Glass has indicated, the argument presented by Mr Adrian Cook for the employer in support of the learned Commissioner’s conclusions tends to obscure the distinction which exists between the two ingredients contained in the definition of ‘injury’ in s 6(1) of the Act. The first, that is, the concept of arising out of, plainly involves the notion of causality, but the second does not. This has been clearly pointed out by Fullagar, J in Kavanagh’s Case, 103 CLR at 558. Hence it is only the second which requires the necessity that the injury should occur while the worker was engaged in his employment or in something incidental to it. Accordingly, it cannot be right to determine matters which arise under the first leg of the definition by debating questions of the scope of employment. The question which we have to determine is to be answered by enquiring whether there was a causal connection between the employment and the injury.”
As was the case in Tarry, the events which gave rise to the altercation and its consequences were, as found by the Arbitrator, all related to employment. In such circumstances a resultant injury arises, as a matter of law, out of the employment: see Davis v Mobil Oil Australia Ltd (1988) 12 NSWLR 10 per Hope JA at 14D; Priestley JA at 15C, and McHugh JA at 15D. The appellant has failed to make out any convincing argument concerning the Arbitrator’s findings of fact, or that her ultimate conclusion was reached in error. That being so, the Arbitrator’s conclusion that, between 1 March 2011 and 4 May 2011, Mr Conaghan received injury within the meaning of s 4 of the 1987 Act must stand. Ground two is rejected.
The appeal fails and appropriate orders appear below.

DECISION

The Arbitrator’s findings and orders as recorded in the Certificate of Determination dated 12 May 2014 are confirmed.

COSTS

The appellant is to pay Mr Conaghan’s costs of the appeal.

Kevin O'Grady
Deputy President

28 August 2014

I, JACQUELINE HAGGER, 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