Sheridan v David Anthony Clarke t/as Freestyle Marine Sports

APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
__________________________________________________________________

CITATION:	Ian John Sheridan v David Anthony Clarke t/as Freestyle Marine Sports [2003] NSW WCC PD4
APPELLANT:	Ian John Sheridan
FIRST RESPONDENT:	David Anthony Clarke t/as Freestyle Marine Sports
SECOND RESPONDENT:	WorkCover Authority of NSW
FILE NO:	WCC 251- 2002
DATE OF DECISION:	12 February 2003
PRESIDENTIAL MEMBER:	Dr Gabriel Fleming
DECISION UNDER APPEAL:	Application for Leave to appeal against a decision of an Arbitrator
DATE OF DECISION UNDER APPEAL:	1 November 2002
HEARING:	Leave determined on the papers
REPRESENTATION:	Appellant: Walker Gibbs King Pty Ltd
First Respondent: Kennedy Cooke Solicitors Second Respondent: Ms B Grant Solicitor, WorkCover Authority of NSW
ORDERS MADE ON APPEAL:	Leave to appeal against the decision of the Arbitrator is granted. The Applicant, Ian John Sheridan is to file and serve a signed, written statement of his evidence to the Commission on or before 25 February 2003. The appeal is to be set down for hearing for half a day in the week of 3-7 March 2003.

THE APPEAL

On 28 October 2002 Ian John Sheridan (‘the Applicant’) lodged an appeal against the decision of an Arbitrator refusing his claim for workers compensation made against David Anthony Clarke t/as Freestyle Marine Sports (‘the First Respondent’). The WorkCover Authority of NSW (‘the Second Respondent’) is the relevant insurer under the Uninsured Liability and Indemnity Scheme (ULIS). The First Respondent relied largely upon the submissions of the Second Respondent in the Appeal.
Mr. Sheridan’s claim is that he suffered a total incapacity for work as a result of an injury to his right middle finger that arose out of, or in the course of, his employment as a marine engineer with the First Respondent between April and November 1996.
A Certificate of Determination and attached statement of reasons were issued by the Workers Compensation Commission on 1 November 2002 and set out the decision of the Arbitrator as follows:
1.The Workers Compensation Commission has sole jurisdiction to hear the claim.
2.The Applicant is not barred from recovering compensation under s61 and s65 of the Workplace Injury Management and Workers Compensation Act 1998.
3.The Respondent is not liable to pay the Applicant’s claim for weekly compensation at the rate of $500.00 per week from 1/4/1987 to date and continuing in accordance with s36 and s37 of the provisions of the Workers Compensation Act 1987.
4.The Respondent is not liable to pay the Applicant’s claim under s66 of the provisions of the Workers Compensation Act 1987.
5.The Respondent is not liable for the payment of the Applicant’s claim under s60 of the provisions of the Workers Compensation Act 1987.
6.In all the circumstances there should be no order as to costs.
The Applicant seeks leave to appeal in order to have the decision of the Arbitrator set aside and the matter reheard by another Arbitrator, or alternatively that compensation be awarded to him. The application relies on a number of alleged errors of law, fact and discretion, which are discussed further below.
This decision concerns only the issue of leave to appeal and further directions as to the conduct of the matter. For the reasons set out below the matter will now proceed to a hearing on the substantive issues on appeal.

JURISDICTION TO HEAR THE APPEAL

Before proceeding to hear the appeal the Commission must determine whether the application meets the requirements of section 352 of the Workplace Injury Management and Workers Compensation Act 1998 (‘the Act’), as follows:
(1)A party to a dispute in connection with a claim for compensation may, with leave of the Commission constituted by a Presidential member, appeal to the Commission as so constituted against a decision in respect of the dispute by the Commission constituted by an Arbitrator.
(2) The Commission is not to grant leave to appeal unless the amount of compensation at issue on the appeal is both:
(a)at least $5,000 (or such other amount as may be prescribed by the regulations), and
(b)at least 20% of the amount awarded in the decision appealed against.
(3)If the Commission refuses to grant leave to appeal, the Commission must state reasons for the refusal in writing to the parties.

(4)An appeal can only be made within 28 days after the making of the decision appealed against.
(5)An appeal under this section is to be by way of review of the decision appealed against.
(6)Evidence that is fresh evidence or evidence in addition to or in substitution for the evidence received in relation to the decision appealed against may not be given on an appeal to the Commission except with the leave of the Commission.
(7)On appeal, the decision may be confirmed or may be revoked and a new decision made in its place.
(8)In this section, decision includes an award, interim award, order, determination, ruling and direction.
The ‘amount of compensation at issue on the appeal’ is in dispute. In accordance with the President’s Practice Direction 6B of 2002, I am satisfied that sufficient information has been supplied in connection with the application for leave to appeal to enable me to determine that issue without holding a conference or formal hearing i.e. ‘on the papers’ (section 354(6) of the Act).
The Applicant submits that the amount of compensation at issue in the dispute is the whole of the Applicant’s claim, namely, weekly compensation from 5 April 1997 to date at the rate of $500.00 per week and a lump sum claim for permanent impairment, pain and suffering in excess of $5000.00.
The Workcover Authority submits that as the Arbitrator made no award there can be no grant of leave.
I do not accept the submission that where the Applicant does not succeed in gaining any award there can be no grant of leave. Section 352 refers to ‘the the amount of compensation at issue on the appeal’. Whilst section 352(1) (a) and (b) are clearly cumulative, there is no place for the application of subsection (b) where an award has not been made (see the comments of Deputy President Byron in Mawson v Fletchers International Exports Pty Limited [2002] NSW WCC PD 5). Where a party has been partially unsuccessful before an Arbitrator, to the extent that they dispute at least 20% of the amount awarded by the Arbitrator in the decision, and the amount at issue in the appeal is at least $5000.00, then the threshold test for the grant of leave to appeal is also met. This ensures that in addition to the threshold of $5000.00, appeals that dispute less than 20% of the amount awarded are not allowed, while at the same time, appeals that dispute an award of nil are allowed. While the wording of section 352 (2) lacks clarity and may benefit from review, the intention is to limit appeals in relation to amounts that are only a small proportion of the amount awarded by the Arbitrator.
Leave to appeal the decision is granted.

FUTURE CONDUCT OF THE APPEAL

In accordance with the President’s Practice Direction 6B of 2002, it is necessary to give directions as to the future conduct of the appeal including whether the matter will proceed on the papers and whether further submissions, an oral hearing, or both, are required. These matters are complicated in this case because no written statement of Mr. Sheridan’s evidence has been filed and there is no transcript of the proceedings before the Arbitrator. All parties have submitted that the appeal should not be determined on the papers but that an oral hearing should be held. This submission must be considered in light of the role of the Presidential Member on review.
Failure to Record Proceedings
Dealing firstly with the absence of a transcript of the arbitration phase of the proceedings. This does not conform to the Commission’s published ‘Record of Proceedings Policy’, which provides, relevantly, as follows;
Proceedings of the Commission are recorded during the Arbitration hearing phase of dispute resolution, where the parties have not reached settlement and the Arbitrator must determine the matter.
The Commission records proceedings by digital sound recording, enabling a Compact Disc to be produced of the proceedings for archival purposes.
The Commission will provide a copy of the Compact Disc of the proceedings to a party to the dispute upon request, at no cost.
The conciliation phase of proceedings before an Arbitrator where, pursuant to the Act the Arbitrator is using his or her ‘best endeavours to bring the parties to a dispute to a settlement acceptable to all of them” (section 355 of the Act), is not recorded. There are important reasons for this, including the need to provide an informal and non-legalistic forum in which parties can frankly and openly explore a range of settlement options. However, where the parties are unable to come to an agreement the proceedings move into arbitration, sworn evidence may be taken and legal submissions on the issues in dispute are heard. It is equally important that this latter phase of the proceedings is recorded. In this way all evidence and submissions made orally, which may be relevant to the ultimate decision of the Arbitrator, are on the record. The totality of these matters can then be ‘reviewed’ on appeal. The record may in fact assist a party in determining whether or not to lodge an appeal against the decision.
The importance of this policy is evident upon a consideration of the nature of an appeal against a decision of an Arbitrator. This is not set out precisely in the Act other than to say that it is to be by way of ‘review of the decision appealed against’. This ‘review’ is not an appeal in the strict sense, nor a hearing ‘de novo’. It is a review by way of ‘rehearing’ where the powers of the Commission to confirm, revoke or substitute a new decision are exercisable only where it can be demonstrated that the original decision of the Arbitrator is affected by ‘. . some legal, factual or discretionary error’ (Allesh v Maunz [2000] HCA 40 (3 August 2000)”, (see discussion in Mayne Health Group t/as Nepean Private Hospital v Sarah Sandford [2002] NSW PD 6). The Arbitrator has generally heard oral evidence from the parties (or decided the matter on the papers) and considered comprehensive documentary evidence, which the rules require the parties to file with the Application and Reply. Fresh evidence on appeal is limited and may only be submitted with leave of the Presidential Member (section 352(6)).
The absence of a transcript of the proceedings does not of itself form a ground for appeal. There is no statutory obligation upon the Commission to record proceedings. The recording policy adopted by the Commission is a matter of fairness and good practice.
Rule 36 – Signed, Written Statement of the Applicant
The absence of a transcript of the proceedings may be of less consequence to an appeal where oral evidence was not given before the Arbitrator or where it is agreed that the evidence and submissions do not differ from the written documents. An Applicant’s oral evidence may or may not be in identical terms to the signed written statement required by Rule 36 of the Workers Compensation Commission Interim Rules 2002 which provides as follows:
36.Calling of witnesses
(1)   A party that proposes to call a witness to provide oral evidence must include the name of that witness and a signed written statement by that witness:
(a)If the party is the applicant - with the application for dispute resolution, or
(b).. .
(c). . .
(2)   A party may call a witness to give evidence where a statement has not been filed in accordance with subrule (1) only with the leave of the Commission.
(3)   The Commission cannot grant that leave unless satisfied that admission of the evidence would prevent a substantial injustice to the party.
(4)   An application for leave under this rule can only be made if the party lodges a written and signed statement setting out the evidence of the witness.
(5)   This rule does not prevent a witness being summonsed in circumstances where the person refused to provide a written and signed statement.
Rule 36 is clearly addressed to ensuring that the evidence to be given by a witness is already on notice to the opposing party. If there is then a need for oral evidence, there should be no surprises. The Commission is not a court but an independent tribunal, which operates informally, flexibly and with a view to encouraging the parties to come to their own settlement of the dispute. The full and early disclosure rules in relation to evidence before the Commission support this purpose. They also facilitate the expeditious determination of the dispute on the papers wherever possible. The ‘statement’ referred to in Rule 36 should be a full and frank recitation of the evidence the Applicant wishes to put before the Commission. Oral evidence given by the Applicant may be materially relevant to the Arbitrator’s findings and ultimate determination of the dispute.
The appeal in this matter cites a number of grounds. The ‘Statement of Reasons’ for the decision under review state that sworn oral evidence of Mr. Sheridan was given at the hearing and ‘was taken into account in making the determination’. This oral evidence is referred to at paragraphs 23 and 32 of the reasons. The Applicant alleges, among other things, that the Arbitrator made erroneous findings based on Mr. Sheridan’s evidence (see Amended Appeal filed by the Applicant on 13 December 2002 at paragraphs 6, 14.A.3, 14.B and 14.C, and 14.D). The Second Respondent relies upon Mr. Sheridan’s oral evidence, to deny any error by the Arbitrator and support the correctness of the decision. There is no formal record of this evidence.
There are two written ‘statements’ by Mr. Sheridan referred to in the reasons as being in evidence. Firstly, a statement filed by the Applicant dated 5 March 2001 (incorrectly referred to in the Statement of Reasons for Decision as 2002). The ‘statement’ of 5 March 2001 refers to ‘matters of fact set out in the letter from Walker Gibbs & King to Kennedy & Cooke of 5 March 2001’ as ‘true and correct’. There is no such letter attached to the statement. The ‘statement’ also refers to ‘full details of the facts regarding the finger injury‘ which were ‘with the letter sent around 16 October 2000’. No letter of 16 October 2000, to anyone, forms part of the documents.
The second ‘statement’ of Mr. Sheridan’s evidence referred to in the ‘Statement of Reasons’ for decision is a statement (by Mr. Sheridan) filed by the WorkCover Authority on 26 August 2002. In addition to the ‘appeal’ file I have the original Commission file, containing the Application, Reply and all evidence and submissions filed in the appeal. I can find no statement by Mr. Sheridan dated 26 August 2002.
There is no reference in the statement of reasons as to whether leave was granted to the applicant to give oral evidence in the absence of any statement of his evidence previously being filed (Rule 36(2)).
Ex Tempore and Written Reasons for Decision
The Applicant alleges that the Arbitrator gave two accounts of the reasons for her decision, the first was given ex tempore at the conclusion of the arbitration hearing on 21 October 2002, and the second was contained in the written ‘Statement of Reasons’ dated 1 November 2002. It is the oral reasons given on 21 October, which the Applicant says gave rise to the lodging of the appeal against the decision on 28 October 2002. It is important to note that there is no suggestion that the Arbitrator made two conflicting ‘decisions’, it is the ‘reasons for decision’ which are alleged to differ.
The Applicant submits that the written ‘statement of reasons’ ‘does not fully set out the Arbitrator’s reasons given orally, and in some respects is contrary to those reasons’ (Amended Appeal at paragraph 14A). The Applicant also alleges an inadequacy of the written reasons by comparison with the reasons given orally. The Respondent ‘concedes that the written reasons for decision do not accord exactly with the oral ex tempore judgment’ however ‘in essence they summarise the oral reasons accurately’ (Second Respondent’s Amended Reply filed 23 December 2002 at paragraph 14A).
The ‘Registrar’s Guideline for the Conciliation/Arbitration Process in the Commission’ provides that “[w]herever possible, and having regard to the circumstances of the case, an oral decision, with reasons, should be given on the day of the hearing. Arbitrators should ensure that this is recorded and conveyed to the Registry. It may be reduced to writing if requested and must comply with the Rules. If the decision is ‘reserved’, the parties should be given an indication of when and how the decision will be given.” This does not contemplate two statements of the reasons for decision but either oral reasons or reserved written reasons. Where oral reasons are reduced to writing this is done in the Commission by way of transcription from the sound recording of the proceeding. In my view the Arbitrator has discharged his or her statutory duty and is functus officio if and when he or she chooses the path of giving the decision, together with oral reasons for that decision, at the conclusion of the arbitration.
This is not to say that a decision delivered orally by an Arbitrator cannot be revised when it is transcribed into written form. The limits of such ‘revision’ in relation to judicial decisions, has been considered in a number of cases. Most recently by the NSW Court of Appeal in the matter of Todorovic v Moussa [2001] NSWCA 419 (21 November 2001) (‘Todorovic’). Todorovic was an appeal from a decision of Delaney DCJ. His Honour found in favour of the respondents in respect of Mr. Todorovic’s claim for damages for an injury he sustained when he fell from a ladder on the respondent’s building site. There were a number of grounds of appeal. Relevant to this discussion was the claim that His Honour’s judgment delivered orally some six weeks after the conclusion of the evidence was different to the oral reasons for decision given at the conclusion of the trial. Beazley JA, with whom Powell JA agreed, found that the trial judge’s change in reasons after delivery of the judgment was impermissible in that case (Lam v Beesley (1992) 7 WAR 88. Where an ex tempore judgment is given by a judge “[I]t is always possible, indeed proper, for a judge to revise ex tempore reasons. So long as the substance of the ex tempore reasons is not altered, nor the orders which they sustain, there is no bar to revision, even if it is extensive” (Bar-Mordecai v Rotman & Others [2000] NSWCA 123).
The statutory framework of the decision will also govern the application of these principles to the revision of the reasons for decision (Palmer v Clarke (1989) 19 NSWLR 158). The Workplace Injury Management and Workers Compensation Act 1998 (‘the Act’) provides that the Workers Compensation Commission is to act according to ‘equity, good conscience and the substantial merits of the case’ (Section 354 (3)). There is no statutory requirement upon an Arbitrator to provide reasons for the determination of a dispute, written or otherwise. However the Rules provide for “the making of assessments and determinations by the Commission” (Section 363(d)). Rule 41 of the Interim Workers Compensation Commission Rules 2002 provides as follows:
(1)If a dispute is determined by the Commission, the Commission is to issue a certificate as to the determination in compliance with section 294 in the approved form.
(2)A statement of the Commission’s reasons attached to the certificate is to include:
(a)The findings on material questions of fact, referring to the evidence or other material on which those findings were based, and
(b)The Commission’s understanding of the applicable law, and
(c)The reasoning processes that lead the Commission to the conclusions it made.

The Act does expressly provide for reconsideration of ‘decisions’ (section 350(3). The limits of this provision (section 17(4) of the Compensation Court Act 1984) were considered by Walker J, in the matter of Southern Tablelands Health Service v Solomon 19 NSWCCR 235). There is no provision in the Workplace Injury Management and Workers Compensation Act 1998 (‘the Act’) or the Workers Compensation Interim Rules 2001 expressly allowing the amendment of a statement of reasons after it has been given. Where an Arbitrator gives ex tempore reasons it is the Commission’s practice, in accordance with Rule 41, to attach a brief statement to the ‘Certificate of Determination’, referring to these reasons and the availability of the sound recording.
Where a statement of reasons is found to have been altered in substance the approach to be adopted in the Commission is arguably the same as that for a judicial decision, namely to treat the later reasons for decision as if the alteration did not exist (Palmer v Clarke (1989) 19 NSW LR 158). Without a record of the ex tempore reasons I obviously cannot come to any conclusion as to whether matters of substance are materially different from the written ‘Statement of Reasons’. However, the parties have, in their submissions, identified where these irregularities are alleged to have occurred. These matters are all properly for consideration on the appeal.
While the contention that the Arbitrator provided two, potentially conflicting, statements of reason for the decision is disturbing, I am not persuaded that it precludes the conduct of a fair appeal. In any event I have no power, as the Applicant seeks, to refer the matter back to be reheard by another Arbitrator (section 352(7) of the Act). Nor is it appropriate for the matter to be fully reheard by a Presidential member on appeal. The appeal is a review of alleged errors of fact, law and discretion.
Conduct of the Appeal
There have clearly been a number of irregularities in the conduct of this matter. A written statement in accordance with Rule 36 has not been filed. The question of leave to give oral evidence in the absence of such a statement appears not to have been addressed. There is no doubt that it was the Commission’s obligation to record the sworn oral evidence given in the Arbitration phase of the proceedings and this was not done. The question remains as to how to proceed with a fair ‘review’ of the decision on appeal, given the nature of that review under section 352 of the Act.
Much of the ‘Statement of Reasons’ for decision turns on the acceptance or rejection of medical evidence, all of which is in writing and before me on the appeal. To the extent that the grounds of appeal concern these matters there is no difficulty with proceeding on the documents currently before me. On review, fresh evidence or evidence in addition to evidence received in relation to the decision appealed against is only permitted with leave of the Commission.
This matter is not suitable to determination on the papers and an oral hearing of the appeal will be held. Leave is granted to the Applicant to file additional evidence in the form of filing by the Applicant of a signed written statement of his evidence in support of his claim (his personal evidence, not medical evidence). This statement should cover Mr. Sheridan’s oral evidence before the Arbitrator and any other matters referred to in the previous ‘statements’. Limited cross-examination of Mr Sheridan will be allowed, to the extent only that it is necessary to ensure a fair review of the decision. I recognize that to progress this appeal in this way is open to the criticism that the evidence may now be influenced by the outcome of the Arbitration. However, the fact that the parties have fully participated in the Arbitration, heard the oral evidence and that the Respondent will have the opportunity to further test it, weigh in favour of proceeding in this way. In my view the unusual circumstances in this case also warrant this approach.
The appeal raises a number of ‘errors of law’ including alleged error in the exercise of the Arbitrator’s discretion to accept evidence filed late and incorrectly applying the statutory test of whether the Applicant’s work was a ‘substantial contributing factor’ to his injury (section 9A of the Act). Submissions on these grounds have been filed by both parties and, if necessary, may be reiterated at an oral hearing of the appeal.
In summary, I am satisfied that a proper review of the Arbitrator’s decision can be made on the basis of a consideration of:
a.    the documentary evidence, including all medical reports, relied upon by both parties in the original proceedings,
b.    the ‘Statement of Reasons’ for decision of the Arbitrator dated 1 November 2002,
c.    an additional signed written statement of the Applicant,
d.    the provision of an oral hearing where the Respondents will have an opportunity to test the Applicant’s evidence, and
e.    the written submissions filed in the appeal together with the opportunity to reiterate these at a hearing.

COSTS

The Applicant seeks an order that the Respondent, or alternatively, the Commission pay the costs of the appeal. I do not propose to make any orders in relation to costs at this stage. This is a matter that can be dealt with at the conclusion of the appeal.

ORDERS AND DIRECTIONS

Leave is granted to the Applicant, Ian John Sheridan to file and serve a signed written statement of his evidence to the Commission on or before 25 February 2003.
The appeal is to be set down for hearing no later than the week of 3-7 March 2003.

Dr Gabriel Fleming
Deputy President

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

Registrar

Date:

[2003] NSWWCCPD 4

12 February 2003