Seal v Transfield Services (Australia) Pty Ltd - [2010] SASCFC 44

SUPREME COURT OF SOUTH AUSTRALIA
(Full Court)
SEAL v TRANSFIELD SERVICES (AUSTRALIA) PTY LTD
[2010] SASCFC 44
Judgment of The Full Court
(The Honourable Justice Gray, The Honourable Justice White and The Honourable Justice Kourakis)
29 October 2010
WORKERS' COMPENSATION - ENTITLEMENT TO COMPENSATION - CAUSAL RELATION BETWEEN INJURY AND INCAPACITY OR DEATH - NEW INTERVENING FORCE - GENERAL PRINCIPLES
WORKERS' COMPENSATION - ENTITLEMENT TO COMPENSATION - CAUSAL RELATION BETWEEN INJURY AND INCAPACITY OR DEATH - GENERALLY
Appeal from decision of the Full Bench of the Workers Compensation Tribunal upholding decision of single Deputy President of the Tribunal, that employer was entitled to cease weekly payments to employee on the basis that employee had breached the obligation of mutuality - where employee's partial incapacity for work resulted from work injury - where employee's total incapacity for work consequent upon alcohol dependence - whether employee's conduct constituted a breach of the obligation of mutuality within the meaning of section 36 of the Workers Rehabilitation and Compensation Act 1986 - whether Full Bench had erred in articulation and application of the principle of the "obligation of mutuality" - whether Full Bench had erred in postulating hypothetical prospective reasonable employer when considering whether employee breached the obligation of mutuality - whether Deputy President had erred by not drawing an adverse inference against the compensation authority for its failure to adduce evidence on the question of the unavailability of an employment position - whether Deputy President had erred in concluding that worker's compensable disability had not caused his alcohol dependence and subsequent total incapacity for work - discussion of principle of "obligation of mutuality".
Held: (Gray & Kourakis JJ) Appeal dismissed - Full Bench correctly articulated and applied the principle of the obligation of mutuality - employee breached his obligation of mutuality as due to alcohol and substance abuse, was not "ready, willing and able" to exploit partial capacity remaining following work injury - challenge to finding of Deputy President that employee's increased consumption of alcohol and consequent total incapacity not caused by compensable disability, in substance involved an issue of fact not law - insofar as those findings open or necessary to review, those findings open on the evidence - challenge to conclusion of Deputy President in respect to unavailability of a position for employee, involved issue of fact not law.
(White J) (dissenting) Appeal allowed - matter should be remitted to the Full Bench for reconsideration - the Full Bench did not err in its construction and application of section 36 of the Act concerning the obligation of mutuality - the Full Bench had erred by determining the existence or otherwise of total incapacity by applying as the criterion the attitude of a hypothetical prospective reasonable employer, and it was open to the employee to raise this issue on the appeal - the Full Bench had not erred in refusing to draw adverse inferences because of the compensating authority's omission to adduce evidence as to the availability of work - the appeal…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2010] SASCFC 44
Decision Date: 29 October 2010

CaseChat Overview and Summary

The appeal concerned Noel Seal and Transfield Services (Australia) Pty Ltd, with the dispute arising from Transfield's cessation of weekly compensation payments to Mr Seal. The matter came before the Full Bench of the Workers Compensation Tribunal, which upheld a decision allowing the employer to cease payments on the grounds that Mr Seal had breached the obligation of mutuality. Mr Seal's partial incapacity for work stemmed from a work injury, but his subsequent total incapacity was attributed to alcohol dependence.

The legal issues before the court included whether Mr Seal's conduct constituted a breach of the obligation of mutuality under section 36 of the *Workers Rehabilitation and Compensation Act 1986* (SA). The court was also required to determine if the Full Bench had erred in its articulation and application of the principle of the "obligation of mutuality," particularly in its consideration of a hypothetical prospective reasonable employer. Further questions arose regarding whether the Deputy President had erred by not drawing an adverse inference against the compensation authority for failing to provide evidence on the unavailability of employment, and whether the Deputy President had erred in concluding that the worker's compensable disability had not caused his alcohol dependence and subsequent total incapacity.

Justices Gray and Kourakis dismissed the appeal, finding that the Full Bench had correctly articulated and applied the principle of the obligation of mutuality. They held that Mr Seal had breached this obligation because his alcohol and substance abuse rendered him not "ready, willing and able" to exploit the partial capacity remaining after his work injury. The challenge to the finding that his compensable disability did not cause his alcohol dependence and total incapacity was considered a matter of fact, not law, and was found to be open on the evidence. Similarly, the challenge to the conclusion regarding the unavailability of a position was also deemed a factual issue.

Justice White, dissenting, would have allowed the appeal and remitted the matter for reconsideration. While agreeing that the Full Bench had not erred in its construction of section 36 concerning the obligation of mutuality, he found that the Full Bench had erred by using the attitude of a hypothetical prospective reasonable employer as the criterion for determining total incapacity. He also agreed that the Full Bench had not erred in refusing to draw adverse inferences against the compensation authority for its lack of evidence regarding work availability, and that the appeal concerning causation did not raise a question of law.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

The primary issues sought to be agitated on the appeal are whether the Full Bench made an error of law in its articulation and application of the principle of the “obligation of mutuality” and whether the Full Bench erred in its approach to the topic of causation. For reasons that follow I have reached the conclusion that the appeal should be dismissed. In my view, with respect to the issue of the obligation of mutuality, the Full Bench identified and applied correct legal principle. No error of law occurred. Further, in my view, the challenge to the causation finding was in substance based on factual considerations. Background Before coming to discuss the issues raised on the appeal to this Court, it is convenient to broadly trace the factual background. Noel Seal, the appellant, was born in 1948. He spent the majority of his working life as a maintenance fitter. He is a qualified fitter and turner. At times he has worked in the hotel industry as a casual barman and as a hotel manager. For many years Mr Seal had been a heavy consumer of alcohol and had engaged in other forms of substance abuse. On 20 October 2000, Mr Seal injured his right shoulder and neck in the course of his employment with the business that is now owned by Transfield Services (Australia) Pty Ltd, the respondent, and as a result was incapacitated for work. Initially his incapacity was total but by early 2001 the injury had healed, leaving Mr Seal with a partial incapacity for work. His compensation claim was accepted and he received income maintenance payments. In late February 2001, Mr Seal was certified fit for modified duties. Between April 2001 and September 2003, Mr Seal made attempts to return to modified duties on restricted hours. These attempts were unsuccessful. Between late 2003 and the early months of 2006, Mr Seal engaged in voluntary charity work from time to time. Throughout the period from late 2000 until mid-2006, Mr Seal continued to consume substantial quantities of alcohol and to use marijuana. During 2006 he informed a psychiatrist, Professor Robert Goldney, that on a daily basis he was consuming up to a full bottle of whisky and several beers and was smoking seven cones of marijuana. His alcoholism was long-standing. He was a committed long term substance abuser. On 28 August 2006, Transfield Services[1] gave notice to Mr Seal of the cessation of weekly payments.[2] The notice asserted that Mr Seal had breached his obligation of mutuality. Mr Seal filed a notice of dispute. That dispute was heard by the Workers Compensation Tribunal. On 31 March 2008, Judge Hannon set aside the notice of cessation of payments. Transfield Services appealed from this decision to a Full Bench of the Tribunal, which allowed the appeal and remitted the matter for further hearing before Judge Hannon. [1] The business of Mr Seal’s employer at the time of the injury was later transferred to Transfield Services, an exempt employer under the Workers Rehabilitation and Compensation Ac 1986 (SA).[2] The notice was given pursuant to section 36 of the Workers Rehabilitation and Compensation Act 1986 (SA).

Evidence

Evidence Before The Court

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Decision

Reasons for decision

GRAY J

Insofar as it is necessary or open for this Court to review the factual findings of Judge Hannon on the rehearing, it is evident that those findings were open on the evidence. Conclusion I would dismiss this appeal. WHITE J: This appeal on questions of law against a decision of the Full Bench of the Workers Compensation Tribunal raises issues relating to the entitlement of an employer to discontinue weekly payments of income maintenance. The appellant (the worker) suffered injuries at work on 20 October 2000. Thereafter he received weekly payments of income maintenance under the Workers Rehabilitation and Compensation Act 1986 (SA) (WRCA). On 28 August 2006, the respondent (Transfield) gave the worker a notice of its decision to discontinue the payments of income maintenance. It considered that the worker had breached “the obligation of mutuality” and therefore that it was entitled under s 36(1)(f) of the WRCA to discontinue the payments. The worker was initially successful in challenging that decision but, as a result of later decisions in the Tribunal, his challenge was dismissed and the discontinuance of the weekly payments was confirmed. In order to understand the issues which arise on this appeal, it is necessary to set out some further detail.Background The worker was born in 1948 and is a qualified fitter and turner. He commenced employment as a maintenance fitter with BSA Engineering Pty Ltd (BSA) in or about 1999. On 20 October 2000 the worker suffered injuries to his right shoulder and neck in a fall at work. In particular, he suffered a rotator cuff tear of the right shoulder for which he had surgery in November 2000. However, this operation did not relieve his symptoms entirely, nor did it restore a full range of movement in the right shoulder. As a result of his incapacity, he commenced receiving weekly payments of income maintenance. By reason of acquisitions since 2000, Transfield has succeeded to the business of BSA. Transfield is a self-insured employer under s 60 of the WRCA and, as such, has delegated to it a number of the powers and discretions of WorkCover itself in relation to the administration of the worker’s claim.[28][28] WRCA s 63. From October 2000 until (at least) the hearing in the Tribunal in late 2007 and early 2008 which gives rise to the present appeal, the worker was issued with medical certificates which certified him as being totally incapacitated for work, or fit for restricted duties only. For the most part those certificates gave as the cause of the incapacity the injury to the worker’s right shoulder, but some referred to a state of depression, and others to his substance abuse. In the proceedings in the Tribunal it was common ground that the worker’s shoulder injury gave rise to a partial incapacity for work rendering him unable to carry out activities requiring unrestricted use of the right arm and shoulder.[29][29] Seal v Transfield Services (Australia) Pty Ltd [2008] SAWCT 15 at [5]. At various times after October 2000, the worker made attempts to return to work on alternative duties. These attempts included light duties, such as dish washing at BSA in April 2001; work as a maintenance fitter at the South Australian Brewery in February and March 2002, gardening and maintenance work at the Prospect Primary School; volunteer work at the Julia Farr Centre; cleaning work organised under the WorkCover Rise Scheme in February and March 2003; cleaning work at the British Hotel in Port Adelaide; cleaning/bar tending work at the Golden Port Tavern in May 2003; and work at the North Haven Nursery in September 2003.

Ratio Decidendi

Legal Principle Established

Established by: GRAY J

These decisions have authoritatively determined the meaning of the obligation of mutuality. As Mason J observed in Dowell Australia Ltd,[22] once one accepts that meaning of the obligation of mutuality, it follows that for the relevant period of time the applicant for an award must have been “ready, willing and able” to enter into the employment that he or she claims the employer failed to provide. It is for the employee to demonstrate the co-operation. There is no useful purpose to be served by adding to this clear line of authority. Whether the obligation of mutuality is breached is a matter to be determined having regard to the circumstances of the particular case.[22] Dowell Australia Ltd v Archdeacon (1975) 132 CLR 417 at 435.Consideration of the Issue In the within proceeding, the Full Bench in discussing the appeal from the decision of Judge Hannon following the rehearing, reasoned:[23][23] Seal v Transfield Services Australia Pty Ltd [2009] SAWCT 29 at [3], [12]-[14], [17]-[18].The issue that has divided the parties is whether Mr Seal’s considerable consumption of alcohol, marijuana and other substances has disentitled him to the continued receipt of weekly payments of income maintenance. …As to the significance of Transfield’s continued offers of employment [Judge Hannon] said: “...Whilst they may be considered to be a positive consideration in terms of the worker’s employability, the fact that the proposals were considered by Dr Mills to not be suitable for various reasons, including the reason of substance abuse, would weigh in the mind of the reasonable employer against the employment of the worker.”Ultimately [Judge Hannon] concluded:“...that the worker’s ongoing substance abuse as at 28 August 2006 gives rise to such a range of potential problems, risks and uncertainties, that a reasonable employer could not be expected to accommodate them. In my view, the reality of the situation is that the hypothetical reasonable employer, knowing all the facts, would form the view that offering a job to the worker was not worth the risk given the ongoing substance abuse and dependence issues.”On the second issue [Judge Hannon] directed himself in accordance with the approach outlined by the Full Court of the Supreme Court in WorkCover Corporation v Sherriff. He then gave detailed consideration to the medical evidence and to the worker’s own evidence about the increase in his substance abuse, which he stated to be unreliable. This led him to conclude: “On these facts I do not consider there is a common sense causal connection between the compensable disability and the substance dependence resulting in total incapacity. The compensable disability was not a factor which was significant enough to be able to say that the disability of substance dependence resulting in total incapacity arose out of employment, or that it was a sequelae to the accepted compensable disability.”…Although the second decision does not expressly identify the basis upon which [Judge Hannon] concluded that the worker had breached mutuality, when regard is had to the decisional history, including [Judge Hannon’s] first decision, it is clear enough why he did so. He found that the worker was not able to take up suitable employment because of his substance abuse. There is clear authority that a supervening medical condition that prevents a previously partially incapacitated worker from working is a breach of mutuality.[Footnotes omitted]