P & N Beverages Australia Pty Ltd v Hammoud

[2008] NSWWCCPD 102

WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:				P & N Beverages Australia Pty Ltd v Hammoud [2008] NSWWCCPD 102
APPELLANT:				P & N Beverages Australia Pty Ltd
RESPONDENT:				Zakaria Hammoud
INSURER:				QBE Workers Compensation (NSW) Limited
FILE NUMBER:				WCC7593-07
DATE OF ARBITRATOR’S DECISION:				12 May 2008
DATE OF APPEAL HEARING:		17 September 2008
DATE OF APPEAL DECISION:				23 September 2008
SUBJECT MATTER OF DECISION:				Application to admit late documents; interests of justice; Part 10 Rule 10.3(3) of the Workers Compensation Commission Rules 2006.
PRESIDENTIAL MEMBER:				Deputy President Bill Roche
HEARING:				Oral
REPRESENTATION:				Appellant:	Mr Batten, instructed by QBE In House Legal
Respondent:	Mr Hanrahan, instructed by Keddies Lawyers
ORDERS MADE ON APPEAL:				Paragraphs one and five of the Arbitrator’s determination of 12 May 2008 are revoked and the following orders made: “1.     The matter is remitted to a different Arbitrator for re-determination of Mr Hammoud’s claim for weekly compensation in accordance with the reasons in this decision. 2.      The Respondent employer is to pay the Applicant worker’s costs of the second arbitration, regardless of the outcome.” Paragraphs two, three, four and six of the Arbitrator’s determination of 12 May 2008 are confirmed. Each party is to pay his or its own costs of the appeal.

INTRODUCTION

1. This matter concerns whether an Arbitrator’s decision to award weekly compensation should be revoked in circumstances where she refused to allow an employer to rely on several documents (including a DVD of the worker’s activities) attached to an Application to Admit Late Documents filed a few days before a second teleconference and 20 days before the arbitration.

BACKGROUND

1. Mr Hammoud was born in Lebanon in 1962 and is now 46 years old.  He came to Australia in 1987.  His efforts to find employment in Australia were unsuccessful and he remained at home for several years, caring for his partially disabled wife during her pregnancies.  He first obtained employment in Australia when he started with P & N Beverages Australia Pty Ltd (‘P & N’) on 3 April 2002 as a casual process worker.  His duties included lifting heavy boxes of bottled drinks from a production line and placing them onto pallets.

1. On 15 April 2002, Mr Hammoud injured his back and neck while lifting boxes in the course of his employment.  He reported his injury to his supervisor and was sent him home.  He has not returned to work since.  He saw his general practitioner, Dr Chwah, on the same day complaining of severe back and neck pain.  Because he was unaware of his rights, he did not claim compensation until his solicitor made a claim on his behalf on 8 June 2006.

1. P & N’s insurer, QBE Workers Compensation (NSW) Limited (‘QBE’), arranged for a factual investigation in March 2007 and for a medical examination with Dr Breit in August 2007. It denied the claim and issued a notice under section 74 of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’) on 28 August 2007. 

1. On 5 October 2007, Mr Hammoud filed an Application to Resolve a Dispute (‘the Application’) in the Commission alleging injury to his neck and back as a result of moving heavy boxes at work on 15 April 2002.  He sought weekly compensation from 16 April 2002 to date and continuing, lump sum compensation in respect of a 26% whole person impairment and $8,594.85 in respect of hospital and medical expenses.

1. By a Reply filed on 29 October 2007, the Appellant Employer confirmed the matters in dispute to be those “as per dispute notice attached to the Application”, that is, as per the section 74 notice. The “Statement of matter [sic] in dispute” in that notice states:

“Our evidence indicates that:

·You are no longer incapacitated for your usual employment

·Your condition is no longer considered to be work related

·Ongoing treatment is no longer reasonably necessary

·No offer for S66 \ Permanent Impairment

·The alleged injury has now resolved and you do not continue to suffer any injury.”

1. At a teleconference on 12 November 2007, the matter was, by consent, referred to the Registrar for referral to an Approved Medical Specialist (‘AMS’) for assessment of Mr Hammoud’s whole person impairment and to answer specific questions about Mr Hammoud’s incapacity.  By consent, the Arbitrator also issued a Direction, dated 16 November 2007, granting leave for certain Directions for Production to be issued, for Mr Hammoud to file and serve financial records and an updated statement, and for the Appellant Employer to file and serve wages records, all by 17 December 2007.

1. On 3 January 2008, Trevor Zabow, the Registrar’s delegate, referred the matter to an AMS.  The AMS, Dr Bye, examined Mr Hammoud on 27 February 2008 and prepared a Medical Assessment Certificate (‘MAC’) on 11 March 2008 assessing Mr Hammoud to have an 11% whole person impairment as a result of his injury with P & N.

1. At a second teleconference on 16 April 2008, P & N indicated that it had filed an Application to Admit Late Documents on 10 April 2008 and that it would be seeking to rely on the documents (‘the late documents’) attached to that application at the arbitration.  After hearing submissions from the solicitors for both sides, the Arbitrator refused the application to rely on the late documents and listed the matter for arbitration on 1 May 2008.

1. At the arbitration hearing, both parties were represented by counsel.  Counsel for P & N renewed an application to rely on the late documents and the Arbitrator again refused that application.  After hearing further submissions on the substantive application, the Arbitrator made the following orders in an ex tempore decision, formalised in a Certificate of Determination issued by the Commission on 12 May 2008:

“1. The Application to Admit Late Documents filed by the Respondent is refused.

2.Pursuant to s66 of the Workers Compensation Act 1987 (‘the Act’) and the MAC issued by the Commission the Respondent is to pay the Applicant the sum of $14,000.00 in respect of 11% WPI.

3.Pursuant to s67 of the Act the Respondent is to pay the Applicant the sum of $7,500.00.

4.The Respondent is to pay the Applicant’s reasonably necessary s60 expenses.

5. Pursuant to s40 of the Act the Respondent is to pay weekly compensation to the Applicant as follows:

(ix)      15/4/02 to 30/9/02 @ $301.40 per week;

(x)       1/10/02 to 31/3/03 @ $305.70 per week;

(xi)      1/4/03 to 30/9/03 @ $310.90 per week;

(xii)     1/10/03 to 31/3/04 @ $317.20 per week;

(xiii)     1/4/04 to 30/9/04 @ $323.00 per week;

(xiv)     1/10/04 to 31/3/05 @ $328.90 per week;

(xv)     1/4/05 to 30/9/05 @ $334.10 per week;

(xvi)     1/10/05 to date and continuing @ $335.00 per week.

6.The Respondent is to pay the Applicant’s costs as agreed or assessed.”

1. By an appeal filed on 27 May 2008, P & N seeks leave to appeal the Arbitrator’s decision and orders.

LEAVE TO APPEAL

1. Before proceeding to deal with an appeal the Commission must determine whether the application meets the requirements of section 352 of the 1998 Act.

1. The quantum in issue on the appeal is in excess of $5,000.00 and there is no issue that the thresholds in section 352(2) are satisfied.  

1. The appeal was lodged within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act.

1. I grant leave to appeal.

ISSUES IN DISPUTE

1. The issues in dispute in the appeal are whether P & N should be allowed to introduce, as fresh evidence or additional evidence on appeal, the late documents, and, in addition, whether the Arbitrator erred in:

(a)finding that Mr Hammoud was and is incapacitated when such finding was against the evidence and the weight of the evidence;

(b)failing to give adequate reasons for that finding;

(c)rejecting the Appellant Employer’s applications on 16 April 2008 and 1 May 2008 to admit into evidence the documents and DVD attached to the Application to Admit Late Documents dated 10 April 2008, and

(d)failing to give adequate reasons for those rejections.

1. If P & N succeeds with its argument that the late documents should have been admitted before the Arbitrator, it will be necessary for the matter to be re-determined before a different Arbitrator and, as a matter of procedural fairness, for Mr Hammoud to be given an opportunity to respond to that material.  As the resolution of this issue will dispose of the appeal, it is appropriate that it be determined first.

1. P & N has not challenged the Arbitrator’s orders relating to Mr Hammoud’s compensation under sections 66, 67 or 60 of the Workers Compensation Act 1987 (‘the 1987 Act’) and those orders are confirmed.

EVIDENCE AND SUBMISSIONS

1. The late documents consist of the following:

(a)an investigation report from LKA Group, dated 18 December 2007 (‘the investigator’s report’);

(b)a surveillance report and DVD from MJM Investigations (Australia) Pty Ltd (‘MJM’), dated 3 December 2007 (‘the surveillance report/DVD’);

(c)a letter from QBE to Dr Breit, dated 27 February 2008;

(d)a report from Dr Breit, dated 7 May 2008;

(e)a letter from Mr Hammoud’s solicitor (Keddies) to QBE, dated 28 March 2008;

(f)a Functional Capacity Evaluation Report from AW Workwise, dated 1April 2008 (‘the Functional Capacity Report’) and,

(g)a Vocational Assessment Report from AW Workwise, dated 25 March 2008 (‘the Vocational Assessment Report’).

1. At the hearing of the appeal, counsel for P & N (Mr Batten) did not press the investigator’s report of 18 December 2007, as a report from the same investigators (dated 28 March 2007) had already been attached to the Reply and tendered in evidence before the Arbitrator.  Counsel for Mr Hammoud does not now object to the tender of the Functional Capacity Report and the Vocational Assessment Report, though he did object to them at the arbitration.

1. On 22 November 2007, QBE instructed MJM to place Mr Hammoud under surveillance for 40 hours.  Following receipt of those instructions, MJM placed Mr Hammoud under surveillance on seven days between 23 November and 1 December 2007.  Over that period, the investigators took 45 minutes of film.  The activities recorded on the film may be summarised as follows:

Date	Activity	Comment
Friday 23 November 2007	Walking slowly; checking a letterbox; standing; leaning forward.
Monday 26 November 2007	Driving a car; walking; standing in a queue; bending slightly from the waist to reach into a fridge at a supermarket; ascending and descending stairs.	Mr Hammoud is observed to: walk with a slight limp; stand for about eight minutes without any apparent discomfort; enter and exit his car in a slow and measured manner; stand by as a woman pushes a shopping trolley to his car and lifts several shopping bags from the trolley into the boot.
Tuesday 27 November 2007	Walking a short distance; shopping.
Friday 30 November 2007	Driving a car; walking a short distance.	A woman is seen to lift a laundry basket from the car while Mr Hammoud remains seated.
Saturday 1 December 2007	Driving a car; walking; carrying two shopping bags a short distance and bending forward to place the bags into the boot of his car; buys petrol.

1. At some stage, QBE forwarded the DVD to Dr Breit who responded on 7 March 2008.  His summary of the film makes no mention of the slight limp I observed in the film taken on 26 November 2007, which was also commented upon in the surveillance report.  He added that “There [sic, he] has also been noted to carry several bags of shopping and fill up his car with petrol without any assistance or evidence of discomfort”.  The film on 1 December 2007 showed Mr Hammoud filling his car with petrol, but I did not observe Mr Hammoud carrying “several bags of shopping”, as claimed by Dr Breit.

1. Dr Breit concluded that:

“This video surveillance is consistent with the clinical presentation of gross abnormal illness behaviour and exaggeration.

The surveillance showed Mr Hammoud functioning without any apparent discomfort doing normal activities of daily living which are claimed to be totally outside of his capabilities.  It reinforces my opinion that there is no injury, there is no permanent impairment and the diagnosis should be changed from abnormal illness behaviour to malingering.”

1. To understand the significance of Dr Breit’s comments it is necessary to consider his findings at examination on 14 August 2007, set out in his report of the same date attached to the Reply.  Mr Hammoud attended that examination with his stepson.  Dr Breit recorded that Mr Hammoud felt pain in his low back while lifting boxes at work for P & N on 15 April 2002.  He reported the incident, went home and did not return to work.  Dr Breit also recorded that Mr Hammoud said he “could not use the arm overhead, could not bend and was only able to lift and carry light objects” (Dr Breit 14 August 2007, page two).

1. Dr Breit observed Mr Hammoud walk from the waiting room to the consulting room while being supported at the arm by his stepson.  Mr Hammoud stood and walked around the waiting room for about 20 minutes, without any signs of difficulty, while Dr Breit took the history.  When asked to disrobe, his movements “became very reduced and his stepson had to help with dressing and undressing” (page three).  While undressing, he had a far greater range of movement than displayed at formal assessment.  Mr Hammoud sagged at the knees when Dr Breit touched the top of his skull.  Neck movements were reduced by 50% and Mr Hammoud was only able to elevate his arms to 80 degrees with abduction 60 degrees and external rotation of 30 degrees.  Mr Hammoud had to be assisted by his stepson to step onto a stool and to sit on the edge of the bed.  There were calls of pain and movement as soon as the doctor touched anywhere along his thoracic and lumbar spines.  There was no wasting of either leg.  When his stepson helped him to dress, Mr Hammoud was able to demonstrate more lumbar flexion than had been seen earlier in the examination, though the doctor did not record exactly how much flexion was demonstrated on each occasion.

1. Dr Breit diagnosed “abnormal illness behaviour” and declared Mr Hammoud to be fit for his pre-injury duties.  At most, he felt that Mr Hammoud had sustained a minor temporary strain to the neck and thoracic region that settled within weeks and “there was no evidence that he ‘injured’ his back” and employment was not a substantial contributing factor to Mr Hammoud’s condition.

1. P & N argues that the late documents should have been admitted into evidence at the teleconference because:

(a)the admission or rejection of evidence requires a determination of whether the evidence is relevant and, if it is, the making of such orders as would best ameliorate any prejudice to the opposing party;

(b)in State of Queensland & another v J L Holdings Pty Limited [1997] HCA 1; (1997) 189 CLR 146 Dawson, Gauldron and McHugh JJ said (at 155), in an appeal dealing with the trial judge’s refusal of an adjournment:

“Justice is the paramount consideration in determining an application such as the one in question. Save in so far as costs may be awarded against the party seeking the amendment, such an application is not the occasion for the punishment of a party for its mistake or for its delay in making the application. Case management, involving as it does the efficiency of the procedures of the court, was in this case a relevant consideration. But it should not have been allowed to prevail over the injustice of shutting the applicants out from raising an arguable defence, thus precluding the determination of an issue between the parties. In taking an opposite view, the primary judge was, in our view, in error in the exercise of her discretion.”

(c)the only prejudice identified by Mr Hammoud at the teleconference was that there may not have been an opportunity for Dr Ellis (Mr Hammoud’s qualified doctor) to consider the DVD and comment on Dr Breit’s second report.  That was not a prejudice, as Mr Hammoud had an opportunity to obtain a further report from Dr Ellis and to tender other evidence in response to the late documents;

(d)the late evidence is credible and there is a high degree of probability that there would have been a different decision if it had been admitted;

(e)it was not obliged to undertake surveillance in August 2007 or obtain a Vocational Assessment Report at that time, but was entitled to investigate the claim at any time;

(f)it is not obliged at law to provide an explanation as to why surveillance was not undertaken prior to late 2007, though an explanation was provided at the teleconference;

(g)it is familiar with the relevant legislation and the Commission’s rules. Applications for the admission of late documents are very common in the Commission and under Part 10 Rule 10.3(3) of the Workers Compensation Commission Rules 2006 (‘the Rules’) 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)” and it would be unjust not to admit the evidence in all the circumstances of the case;

(h)whilst it is accepted that some of the documents could have been served before April 2008, that failure was due to an oversight, and

(i)the late documents came into existence after the Reply was filed on 29 October 2007.

1. Mr Hammoud has conveniently set out a chronology (not disputed by P & N) of the significant events in this claim:

8 June 2006section 281 particulars provided to QBE outlining the claim for lump sum compensation

20 September 2006 section 281 notice served on QBE regarding section 66 and 67 claims

10 October 2006          section 281 notice served on QBE

27 February 2007        Questionnaire forwarded by LKA Group to Keddies

28 March 2007            factual report from LKA Group to QBE

12 April 2007              letter from Keddies to LKA Group providing particulars

31 July 2007                letter from Keddies to P & N advising that weekly compensation payments had not been commenced and referring to section 274 of the 1998 Act

3 August 2007             letter from QBE to Keddies requesting information under section 71 of the 1998 Act

14 August 2007           examination and report by Dr Breit

28 August 2007 section 74 notice prepared by QBE identifying the matters in dispute

8 October 2007            Application to Resolve a Dispute filed in Commission by Mr Hammoud

29 October 2007          Reply filed in Commission by P & N

12 November 2007      first teleconference – matter referred, by consent, to an AMS for assessment of claim for whole person impairment

22 November 2007      QBE instructs LKA Group to undertake investigations

3 December 2007        surveillance report prepared

18 December 2007      factual investigation report from LKA Group to QBE

27 February 2008        examination by AMS (Dr Bye)

27 February 2008        letter from QBE to Dr Breit requesting supplementary report

7 March 2008              report from Dr Breit to QBE

11 March 2008            MAC prepared by Dr Bye assessing 11% whole person impairment

25 March 2008            Vocational Assessment Report prepared

1 April 2008                Functional Capacity Report prepared

10 April 2008              Application to Admit Late Documents prepared by QBE and filed with the Commission

14 April 2008              Application to Admit Late Documents received by Keddies

16 April 2008              second teleconference – application to rely on late documents refused and matter listed for arbitration on 1 May 2008

1 May 2008arbitration hearing – application to rely on late documents refused

1. Mr Hammoud submits:

(a)P & N has been on notice about the issues in dispute since June 2006 and July 2007 and has had ample time to investigate the matter and prepare its evidence;

(b)the late documents should have been obtained at the time the insurer first undertook its investigations into the matter;

(c)there is no explanation as to why QBE failed to gather all of its investigative material at the time they engaged investigators in February 2007;

(d)the late documents should have been attached to the section 74 notice;

(e)he has not introduced new issues into the proceedings at any time and P & N was always aware of the issues;

(f)P & N should have complied with Rule 10.3(1) of the Rules and section 290 of the 1998 Act and attached to its Reply “all information and documents on which” it intended to rely;

(g)at the first teleconference, the Arbitrator sought the parties’ comments regarding further documents and P & N did not state that it would be obtaining further documents, apart from documents produced by the treating doctors and wage records;

(h)the surveillance report and investigation report were both obtained in December 2007 and should have been served as soon as they were received rather than waiting four to five months;

(i)the late documents are highly prejudicial and he has not been given any opportunity to respond to them;

(j)the film does not contain images of activities inconsistent with his presentation to Dr Bye and Dr Breit or activities he claims he cannot do;

(k)there is not a high probability that, if the late documents had been admitted, a different decision would have been made.  Dr Breit noted inconsistencies in Mr Hammoud’s presentation in his report of 14 August 2007 and this evidence was before the Arbitrator;

(l)it is unreasonable to force him to obtain additional evidence to meet the late documents, and

(m)had the late documents been admitted, it would have caused a substantial delay in the proceedings.

DISCUSSION AND FINDINGS

1. I approach this matter having regard to the Commission’s statutory objectives set out in section 367 of the 1998 Act, which provides (so far as is relevant):

“367 Objectives of Commission

(1) The Commission has the following objectives:

(a) to provide a fair and cost effective system for the resolution of disputes under the Workers Compensation Acts,
(b) to reduce administrative costs across the workers compensation system,
(c) to provide a timely service ensuring that workers’ entitlements are paid promptly,
(d)…”

1. Section 290 of the 1998 Act provides that when a dispute is referred for determination by the Commission, each party to the dispute must provide to the other party and to the Registrar such information and documents as the Rules require. Part 10 Rule 10.3 of the Rules 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).

(4) Where a party wishes to rely on a document produced as required by a direction
issued under rule 13.4 or a notice for production served under rule 12.2, or inspected in response to a notice of objection served under rule 12.4(1)(b)(i), and claims that the party was:

(a) unaware of the relevant information in the document, or
(b) unable to obtain possession of the document,

at the time the party lodged the application to resolve the dispute or reply by the party in the proceedings, the party must, as soon as practicable after becoming aware of the information, lodge and serve on all other parties to the proceedings:

(c) a copy of the document, or
(d) if the document was inspected in response to a notice of objection
served under rule 12.4(1)(b)(i), a description of the document.

(5) Without limiting subrule (3), where a party complies with subrule (4) in respect of any information, the Commission may allow the party to introduce evidence of that information.”

1. By attempting to prepare its case after the first teleconference, P & N failed to comply with the 1998 Act and the Commission’s Rules.  It argues that the Commission has a discretion to admit the documents and, as it was necessary “in the interests of justice to do so”, the Arbitrator erred in failing to admit the late documents. 

1. Where a party in default seeks to tender late documents, that party carries the onus of establishing why the Rules should not be enforced. Acting Deputy President Snell considered this issue in Nelson Bay Pest Service Pty Ltd v Morrison [2007] NSWWCCPD 135, where he referred to several relevant Court of Appeal authorities. In Iovanescu v McDermott [2004] NSWCA 106, the NSW Court of Appeal dealt with an application pursuant to the District Court Rules, to seek an extension of the time in which to seek rescission of a dismissal order. Young CJ in Eq said:

“3. Mr Doherty SC almost used the phrase ‘merely a matter of case management’ as some sort of mantra which would excuse all non-compliances with the court rules.
4. It is true, as has been said many times over, that the rules must be the servant and not the master, in litigation.
5. However, the authorities, when properly examined, do not stop there, but actually make it clear that prima facie the rules must be observed and that a person who seeks dispensation from them, particularly because of delay, must show good reason why such dispensation should be granted and must endeavour to explain away his or her apparent blameworthiness in connection with the total delay involved.”

1. In the same case, Windeyer J said:

“12. So far as prejudice is concerned the trial judge said that the relevant rule under which the statutory dismissal took place was part of the case management armoury of the court. He then set out various passages from State of Queensland & another v J L Holdings Pty Limited [1997] HCA 1; (1997) 189 CLR 146 which are well known and which need not be reproduced, but which in essence state that case management is not an end to itself but is an aid to the administration of justice and that case management procedures do not overcome the requirement of ensuring a fair trial. It is a mistake to regard the decision in that case as a sort of gospel in all indulgence applications; it is important to remember it was relevant to amendment.”

And:

“16. I turn now to the explanation as to whether or not there was a proper explanation for delay. Counsel for the respondent argued that as there was no statutory requirement for an explanation, no explanation was required. That is not correct. It is always a question bearing upon the exercise of discretion in a claim for extension of time: Salido v Nominal Defendant (1993) 32 NSWLR 524 at 533, 539 and 541; Holt v Wynter [2000] NSWCA 143; (2000) 49 NSWLR 128 at 136. That is because it goes to the question of whether it is just and fair to grant the indulgence sought, namely an extension of time to apply to rescind the dismissal. It cannot just be a question of prejudice and ability to have a fair trial. If that were the position and everything else could be sorted out by appropriate costs orders then the accepted requirements for case management would go out the window. Hence the principles of case management assume that the parties will comply with rules or give proper reasons for failure to do so.”

1. Deputy President Byron also considered this issue in Coles Myer Limited v Tabassum [2005] NSWWCCPD 16 where he described (at [18]) the following as factors which might be taken into account, in considering the admission of late documents:

“-Whether there was an acceptable explanation for the delay
-Whether or not the refusal to admit the evidence will cause a substantial prejudice to the party making the application
-The prejudice, if any, that would result to the other party
-Whether or not the delay in filing the document was attributable to the legal representative and not the party personally
-The nature of the proceedings, including the nature of the relevant statutory scheme
-General considerations of fairness and justice between the parties.”

1. The explanation offered by P & N at the second teleconference for its default is found at T24.23, where the Arbitrator said:

“Arbitrator: I asked the respondent [at the second teleconference] why the documents had been filed so late, and I referred him [QBE’s solicitor] to section 290 of the WIM Act and rule 10.3. He said that the applicant took five years to make a claim, so it was not reasonable for the applicant to now make a fuss about the respondent's delay. He also agreed that he was on notice of those claims since June 2006 and February 2007 but that the respondent chose not to spend money on the reports until it knew that the applicant was serious about proceeding with the claim. He said he was entitled to continue to gather evidence or rely upon it as he saw fit, notwithstanding that it was a front‑end‑loaded system. Those were his submissions in relation to the…”

1. QBE’s solicitor has not challenged the accuracy of the above ‘explanation’ and I accept it as an accurate summary of what was said at the second teleconference. Not only is it not a proper and reasonable explanation for the non-compliance with the Rules, it demonstrates a fundamental lack of knowledge of the 1998 Act and the Commission’s Rules. I make the following additional observations. First, QBE never suggested that it has been prejudiced by Mr Hammoud’s delay and it did not raise that as an issue in its section 74 notice. It is therefore difficult to see its relevance to the issue of the admission of the late documents. Second, the assertion that “the Respondent” (in reality, QBE) chose not to spend money on the reports until it knew that Mr Hammoud was serious about proceeding with the claim is implausible in light of the fact that it obtained a factual investigation in March 2007 and a medical report in August 2007. Third, the assertion by QBE’s solicitor that he was entitled to continue to “gather evidence or rely upon it as he saw fit” was wrong, inappropriate and misguided. A party is not entitled to gather and rely upon evidence as he or she thinks fit. The 1998 Act and the Commission’s Rules make it clear that relevant evidence must, so far as possible, be attached to the Application to Resolve a Dispute and the Reply. The tendering of late documents is the exception, not the rule. Subject to the issuing of Directions for Production, P & N’s case should have been prepared well before the first teleconference.

1. On appeal, counsel for P & N conceded that there had been a failure to promptly serve the surveillance report and the DVD and that was because of an oversight (T20.57).  He also made reference to a change in personnel at QBE at some time in late 2007, though how that was relevant was not explained.  QBE has not sought to tender any evidence that the change in personnel prejudiced its preparation of the case.  An experienced solicitor represented QBE at the first teleconference.  He made no mention that further enquires were required for his client to be in a position to properly present its case.  He sought leave (which was granted) for certain Directions for Production to be issued and he consented to the matter being referred to an AMS for assessment of whole person impairment and for the AMS to answer certain specific questions relating to incapacity. 

1. Whilst the Arbitrator’s statement (at T23.36) that no explanation was offered for the delay in serving the surveillance report and DVD was inaccurate, the explanation offered was unsatisfactory.  The purported explanation for the delay in obtaining the late documents was completely inadequate and demonstrated a fundamental misunderstanding of the legislation.  These factors strongly militate against granting the indulgence now sought by P & N.

1. The history of the matter also operates against granting P & N’s application.  P & N and QBE knew about the claim from 2006 and QBE arranged a factual investigation in early 2007.  The Arbitrator records that at the first teleconference there was a detailed discussion about whether any other documents would be relied on (T22.21) and “what information might be needed” (T22.29), but P & N’s solicitor gave no indication that further enquiries were necessary.

1. It is also necessary to consider the relevance of the late documents and prejudice to the parties. P & N submits that the evidence in the late documents is highly relevant to the issue before the Arbitrator. Given the history of the matter, the issue in the case is the nature and extent of Mr Hammoud’s incapacity. I agree that the late documents are directly relevant to that issue and that the Arbitrator would have been assisted in her assessment of the case had the documents been admitted. I make no comment on whether the evidence is of such probative value that a different result would have been likely had it been admitted. The late documents will have to be considered in the light of all the other evidence in the case and that will include such evidence in response that Mr Hammoud tenders. All I can determine is that the exclusion of the late documents has deprived P & N of the possibility of a more favourable outcome on the issue of incapacity (see discussion at [44] below) and that is a factor in favour of admitting the documents.

1. At the hearing of the appeal, Mr Batten’s submissions seemed to suggest that his client’s prejudice extended to a lost opportunity to contest the issue of injury. He pointed to the transcript at the arbitration where he submitted that the Arbitrator would not enter an award under section 66. He said (at T38.45):

“And, very briefly in relation to section 66, I submit you would not enter an award in favour of the applicant in relation to section 66 except that there’s been a finding, but the finding is partially in respect of the lumbar spine, and, in my submission, the evidence on closer examination indicates that the applicant didn’t sustain an injury to his lumbar spine. And, in my submission, you wouldn’t enter an award in his favour.”

1. QBE did not identify ‘injury’ as an issue in its section 74 notice though it did identify an issue as to whether Mr Hammoud’s continuing condition was work related. However, QBE having consented (through its solicitor at the first teleconference) to the matter being referred to an AMS for assessment of whole person impairment as a result of the injury, even that issue is no longer available. The Registrar cannot refer a matter to an AMS where liability is in issue (section 321(4)(a) of the 1998 Act). Though leave was apparently sought at the second teleconference to belatedly put ‘injury’ in issue, that application was refused (T50.15), was not renewed at the arbitration hearing and has not been raised as an issue on appeal.

1. Having regard to the issues identified in the section 74 notice and the fact that P & N consented to the matter being referred to an AMS for assessment of the injuries in the Application (that is, the injuries to Mr Hammoud’s neck and back) it is not open to P & N to now argue that Mr Hammoud did not injure his lumbar spine. The MAC has not been appealed and is conclusively presumed to be correct as to the degree of permanent impairment as a result of the injury to his neck and back (section 326(1)(a) of the 1998 Act). The Arbitrator’s order under section 66 has not been challenged on appeal and is final and binding (section 350(1) of the 1998 Act). Therefore, there is no issue as to injury or Mr Hammoud’s entitlement to the lump sum compensation, which the Arbitrator determined on the basis of the unchallenged MAC. As a consequence, it is not open to argue that Mr Hammoud has suffered no injury or that he has recovered from his injury. Such an argument would be contrary to the MAC, which has confirmed an 11% whole person impairment as a result of the injuries identified in the Application. To the extent that the late documents are relevant, they are only relevant to the issue in dispute, namely, the nature and extent of Mr Hammoud’s incapacity.

1. Whilst Dr Breit’s evidence is relevant, his opinion that Mr Hammoud suffered no injury and has no permanent impairment is not entitled to any weight, as it is contrary to the unchallenged MAC and the Arbitrator’s orders under sections 66 and 67 of the 1987 Act.

1. Nevertheless, P & N argues that its prejudice on the issue of incapacity is significant because Mr Hammoud has received a substantial award for weekly compensation from 2002 to date and continuing and, as he is only 46 years old, the award may continue for many years into the future.  I accept that the quantum of compensation at issue is substantial and that the exclusion of the late documents has prejudiced P & N’s case as to the assessment of Mr Hammoud’s entitlement to weekly compensation. 

1. Once it is determined that the documents are relevant to an issue in dispute, the questions to be considered are whether any prejudice will be occasioned to the other party if the documents are admitted and, if so, whether that prejudice can reasonably be accommodated.  Mr Hammoud is prejudiced because of the content of the documents and the fact that P & N sought to tender them at such a late stage of the proceedings.  The prejudice caused by the content of the documents could have been met by allowing Mr Hammoud to gather evidence in response.  It is difficult to see that it would have taken more than three or four weeks for Mr Hammoud to do that.  That being so, the arbitration hearing would not have been unreasonably delayed, if it were delayed at all.  Whilst the vacation of a hearing that is set to take place within a few days of the application to vacate may result in an unreasonable prejudice (that is, one that could not be remedied with a costs order) to a party because of the prolongation of the litigation (Menzies & anor v CRCI Pty Ltd [2007] NSWCA 118), no such argument can be mounted in the present matter because the hearing date had not been set at the time P & N made its application at the second teleconference.

1. Mr Hammoud’s argument is not that he is unable to respond or that he is irreparably prejudiced, but that he should not be put to the trouble of having to respond.  I do not accept that argument.  Whilst QBE’s conduct in the preparation of this matter has been unsatisfactory, the Arbitrator was required to consider the relevance of the evidence, the prejudice to each side and the interests of justice.  There was a real prejudice to P & N if the documents were excluded.  Any possible prejudice to Mr Hammoud could have been accommodated by allowing him time to gather evidence in response and then setting the date for the arbitration accordingly.  That course would have been simple, reasonable, fair to both parties, and would not have resulted in an unreasonable delay in the resolution of the dispute.

1. The crucial fact in this case is that, as at 14 April 2008, the matter had not been listed for hearing. P & N was not seeking a vacation of a hearing date, but merely the admission into evidence of relevant documents. The Guideline “The Practice of the Conciliation/Arbitration Process”, prepared by the Registrar in April 2007, states that an arbitration hearing “will be held approximately 21 days following the teleconference”. The first teleconference took place on 12 November 2007 when the Arbitrator issued certain directions and arrangements made for referral to an AMS. The second teleconference was on 16 April 2008. It was at this teleconference that the matter was listed for arbitration on 1 May 2008. There is no requirement in the legislation or Rules that matters must be listed for arbitration within such a short time frame. The Guidelines are important, but they are merely a non-binding indication of policy (Fletchers International Exports Pty Ltd v Barrow & anor [2007] NSWCA 244 at [43]). Any prejudice to Mr Hammoud could have been met by allowing him sufficient time (three or four weeks) to obtain evidence in response to the late documents.

1. Last, the interests of justice must be considered.  The interests of justice are not the same as the interests of one party (BHP Billiton Ltd v Schultz [2004] HCA 61; (2004) 221 CLR 400 at [15]). The objectives of the tribunal must also be considered. The Commission’s statutory objectives include the provision of a fair, cost effective and timely system for the resolution of disputes. Had the late documents been admitted at the second teleconference, any delay in the allocation of the hearing date would have been no more than a week or two, if that. No further medical examination was required, but merely an opinion from Mr Hammoud’s medical experts as to the whether the film and/or Dr Breit’s further report altered their views. In circumstances where the hearing date had not yet been allocated and it was a relatively simple matter for Mr Hammoud to respond to the late documents, it was in the interests of justice that the documents be admitted.

CONCLUSION

1. Having conducted a review on the merits (State Transit Authority of New South Wales v Fritzi Chemler [2007] NSWCA 249; (2007) 5 DDCR 287 at [28]), I find that the Arbitrator’s decision refusing the admission of the late documents was erroneous. Notwithstanding QBE’s unsatisfactory explanation for not having complied with the legislation and Rules, the documents should have been admitted, but subject to terms that allowed Mr Hammoud a reasonable time to respond. As a result, the Arbitrator’s determination of Mr Hammoud’s entitlement to weekly compensation must be revoked and that part of the claim re-determined. As Mr Hammoud will now wish to obtain and file evidence in response to the late documents (and he is given leave to do that), it is not appropriate that I conduct the re-determination.

1. Had P & N’s application succeeded before the Arbitrator, the matter would most likely have required an additional teleconference and Mr Hammoud would have incurred additional costs.  Given QBE’s default in its general preparation and conduct of the matter, it is appropriate that it pay the additional costs associated with the second arbitration, regardless of the outcome of that arbitration.

1. The matter will now need to be listed for a teleconference to determine precisely which of the documents attached to its Application to Admit Late Documents dated 10 April 2008 P & N now wishes to tender, how long Mr Hammoud will need to respond, and to set a date for arbitration accordingly.

DECISION

1. Paragraphs one and five of the Arbitrator’s determination of 12 May 2008 are revoked and the following orders made:

“1.The matter is remitted to a different Arbitrator for re-determination of Mr Hammoud’s claim for weekly compensation in accordance with the reasons in this decision.

2.The Respondent employer is to pay the Applicant worker’s costs of the second arbitration, regardless of the outcome.”

1. Paragraphs two, three, four and six of the Arbitrator’s determination of 12 May 2008 are confirmed.

COSTS

1. Each party is to pay his or its own costs of the appeal.

Bill Roche
Deputy President

23 September 2008

I, TYUET WALLIS, CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF BILL ROCHE, DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.

ASSOCIATE