Spears v Department of Ageing, Disability & Homecare of NSW
[2010] NSWWCCPD 35
•7 April 2010
| WORKERS COMPENSATION COMMISSION | |||||
| DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR | |||||
| CITATION: | Spears v Department of Ageing, Disability & Homecare of NSW [2010] NSWWCCPD 35 | ||||
| APPELLANT: | Therese Mary Spears | ||||
| RESPONDENT: | Department of Ageing, Disability & Homecare of NSW | ||||
| INSURER: | Allianz Australia Insurance Limited | ||||
| FILE NUMBER: | A1-4577/09 | ||||
| ARBITRATOR: | Mr S Georgiadis | ||||
| DATE OF ARBITRATOR’S DECISION: | 17 November 2009 | ||||
| DATE OF APPEAL DECISION: | 7 April 2010 | ||||
| SUBJECT MATTER OF DECISION: | Section 354(7A)(b) of the Workplace Injury Management and Workers Compensation Act 1998; proceedings dismissed at teleconference; whether dismissal order created an issue estoppel or res judicata estoppel in subsequent proceedings between the same parties; whether a dismissal order at a teleconference is a final decision on the merits; meaning of “lacking in substance”; purpose of teleconferences | ||||
| PRESIDENTIAL MEMBER: | Deputy President Bill Roche | ||||
| HEARING: | On the papers | ||||
| REPRESENTATION: | Appellant: | PK Simpson & Co | |||
| Respondent: | McLean Lawyers | ||||
| ORDERS MADE ON APPEAL: | The Arbitrator’s determination of 17 November 2009 is revoked and the matter is remitted to a different Arbitrator for determination on its merits. | ||||
| The respondent employer is ordered to pay the appellant worker’s costs of the appeal, as assessed or agreed. The costs of the first arbitration are to follow the event of the second arbitration. | |||||
BACKGROUND
Ms Spears alleges that she sustained a primary psychiatric injury as a result of the circumstances of her employment with the respondent employer between January 2005 and 29 July 2007.
She initially commenced proceedings in the Commission in matter number 1281/09 (‘the first Application’) registered in the Commission on 19 February 2009. The respondent disputed liability in respect of that claim. The Commission listed the matter for a telephone conference on 26 March 2009 when Arbitrator Nolan ordered that the proceedings be dismissed under section 354(7A)(b) of the Workplace Injury Management and Workers Compensation Act (‘the 1998 Act’).
In giving reasons for his order, Arbitrator Nolan noted that the Application to Resolve a Dispute stated that a report was “to be provided” from Dr Hampshire, a qualified consultant psychiatrist. However, as at the date of the telephone conference, the worker’s solicitors had not filed or served the report, though they were apparently in possession of it. In the absence of that report, the Arbitrator stated that the applicant had not provided the Commission or the respondent with expert medical evidence to establish a prima facie case. He concluded (at [6]):
“The procedures are front-end loaded and such a fundamental report of the Applicant’s key psychiatric evidence is a clear pre-requisite to establishing the Applicant’s claim. Without Dr Hampshire’s report the Applicant has not made out her claim and the case is lacking in substance. Under subsection 354(7A)(b) of the 1998 Act the Application ought to be dismissed.”
Ms Spears registered a further Application to Resolve a Dispute (‘the second Application’) (matter number 4577/09) in the Commission on 15 June 2009 alleging the same injuries and claiming substantially the same compensation as that claimed in her first Application.
The respondent employer’s insurer, Allianz Australia Insurance Limited (‘Allianz’), disputed liability in a section 74 notice dated 10 June 2009. Though the notice was very poorly drafted, it essentially disputed injury, whether employment was a substantial contributing factor to any injury, incapacity, and entitlement to hospital and medical expenses. The notice also referred to section 11A of the Workers Compensation Act 1987 (‘the 1987 Act’), but provided no proper particulars of that alleged defence.
The Commission listed the second Application for conciliation and arbitration before Arbitrator Georgiadis on 2 September 2009. Mr Carney, barrister, appeared for Ms Spears and Mr Batten, barrister, appeared for the respondent employer. Mr Batten stated (at T2.20) that it had been agreed that Ms Spears sustained an injury. Despite that concession by Mr Batten, the Arbitrator identified the issues (at T3.22) to be:
“Injury, section 4, substantial contributing factor, section 9A, any defence under 11A – it’s a psychiatric injury – and capacity, all matters that remain in issue.”
The parties made submissions on the issues summarised by the Arbitrator. Neither side called any oral evidence. At the conclusion of submissions, the Arbitrator reserved his decision.
The Arbitrator issued a Direction on 23 September 2009 advising the parties that he had listed the matter for a further teleconference on 1 October 2009 for submissions on whether any estoppel or res judicata arose from the order made on 26 March 2009 in the first Application. Though there is no transcript of the proceedings on 1 October 2009, the Arbitrator gave the parties leave to file written submissions. The worker’s solicitors filed written submissions on 22 October 2009, but the respondent employer filed no further submissions.
In a decision delivered on 17 November 2009, the Arbitrator dismissed the second Application on the ground that, by reasons of issue estoppel and res judicata estoppel, the orders made by Arbitrator Nolan in the first Application prevented Ms Spears from pursuing the same compensation against the same employer in the second Application. The Commission issued a Certificate of Determination on 17 November 2009 in the following terms:
“The Commission determines as follows:
1. Amend the Application to Resolve a Dispute (ARD) as follows:
a)Delete all reference to Injury 1 at Part 4 in respect of a frank injury on 29 July 2007;
b)Add ‘deemed date of injury - 29 July 2007’ to Injury 2, at Part 4.
2. Application dismissed.
3. No order as to costs of the Applicant.
4. For the purposes of Schedule 6 of the Workers Compensation Regulation 2003 I certify this matter as complex pursuant to Table 4, Item 4 and certify that there is to be a 25% uplift for the Respondent of the costs otherwise available for the following reason:
·This was a psychological injury case where injury, section 9A and section 11A and other issues were in dispute. I am satisfied that the preparation of this matter required additional work over and above what is normally required and that the uplift allowed of 25% is appropriate in the circumstances of this case.”
In an appeal filed on 11 December 2009, Ms Spears seeks leave to challenge Arbitrator Georgiadis’s determination of 17 November 2009. McLean Lawyers have advised in writing that, though they continue to act for the respondent employer, they will not be filing a Notice of Opposition to the appeal.
LEAVE TO APPEAL
Monetary Threshold
Before proceeding to deal with an 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 1998 Act’).
It is not disputed that the monetary thresholds in section 352(2) of the 1998 Act are satisfied.
Time
The appeal was lodged within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act.
I grant leave to appeal.
ON THE PAPERS
Section 354(6) of the 1998 Act provides:
“(6)If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”
Having regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submissions by the appellant worker that the appeal can proceed to be determined on the basis of these documents, I am satisfied that I have sufficient information to proceed ‘on the papers’, without holding any conference or formal hearing, and that this is the appropriate course in the circumstances.
THE ARBTIRATOR’S REASONS
In a reserved Statement of Reasons (‘Reasons’), the Arbitrator reviewed the procedural history of the matter and noted that a distinction had to be drawn between a decision on procedure alone and a decision on the merits. After referring to Spencer Bower, Turner and Handley, The Doctrine of Res Judicata (third edition, 1996) (‘Spencer Bower’), the Arbitrator recorded that a “finding that a case [was] not made out because it [was] lacking in substance” was not one of the recognised categories that would exclude res judicata.
The Arbitrator stated at [24] of his Reasons:
“The Arbitrator found at paragraph 6 of his determination that ‘the Applicant had not made out her claim as the case lacked substance … and that the Application ought to be dismissed’. The Arbitrator then proceeded to determine to dismiss the Application under subsection 354(7A)(b) of the 1998 Act. This is different to a striking-out of the matter which allows the matter to be brought back before the Commission.When an issue is the subject of res judicata estoppel, it is not justiciable in a further action, it is not open to consideration de novo (Almario v Carrington Constructions Pty Ltd [1996] NSWCC 37; (1996) 13 NSWCCR 739).” (emphasis included in original)
Arbitrator Georgiadis determined that Arbitrator Nolan “necessarily considered the same indispensible issues as raised in the present dispute…before coming to the decision to dismiss the Application” (Reasons at [25]).
Arbitrator Georgiadis went on to hold that the parties and the issues in the second Application were identical to the parties and the issues in the first Application. He concluded that, without Dr Hampshire’s report, Arbitrator Nolan had found that the worker had not “made out her claim and the case was lacking in substance and was subsequently dismissed” (Reasons at [28]). He considered that the order made on 26 March 2009 was a “determination of the merits of the case” and, if it was to be challenged, it had to be challenged under section 352 of the 1998 Act (Reasons at [33]).
He concluded that the worker was estopped in the present proceedings by reason of res judicata and issue estoppel, and he dismissed the second Application.
ISSUES IN DISPUTE
The issues in dispute in the appeal are whether the Arbitrator erred in:
(a)finding an issue estoppel or res judicata estoppel in relation to the dismissal of application number 1281/09 on 26 March 2009 on procedural grounds, and
(b)finding that the decision in the first Application was “a final Determination”.
SUBMISSIONS, DISCUSSION AND FINDINGS
Arbitrator Georgiadis erred in his approach in this matter.
The insurer never notified issue estoppel or res judicata estoppel as issues in dispute in the section 74 notice. Section 289A of the 1998 Act is clear that a dispute cannot be referred for determination to the Commission unless it has been previously notified (section 289A(1)). The Commission may not hear or otherwise deal with any dispute if the dispute cannot be referred to it for determination (section 289A(3)). A dispute relating to previously unnotified matters may be heard or dealt with by the Commission, with leave, if “it is in the interests of justice to do so” (section 289A(4)).
The insurer made no application for leave to dispute the claim on the basis decided by the Arbitrator. Had the insurer made such an application, it is difficult to see, given the delay and lack of merit in such a defence, how it would have been in the interests of justice that it be permitted to dispute liability based on issue estoppel and/or res judicata estoppel.
It is clear from section 74 of the 1998 Act that the responsibility for the identification of the issues in dispute, and for providing full particulars of those issues, rests with the insurer from whom the worker has claimed compensation. Whilst it is appropriate for an arbitrator to raise evidentiary and legal issues that the parties have not properly addressed (either in evidence or submissions), it is not part of an arbitrator’s function to raise entirely new issues in dispute that are not in the section 74 notice. Arbitrator Georgiadis erred in doing so in the present matter. Having regard to the history of the matter, however, it is appropriate that I deal with the substantive matters considered by the Arbitrator.
Even if the insurer had identified issue estoppel and res judicata estoppel as issues in dispute in the section 74 notice, it could not have succeeded on those issues. Before a res judicata estoppel can arise, there must be a final decision on the merits (Spencer Bower at [19]).
An order under section 354(7A) dismissing an Application to Resolve a Dispute at a teleconference is usually an interlocutory order and not a final order. The authorities of Little v State of Victoria (1998) 4 VR 596 (‘Little’) and Wickstead v Browne (1992) 30 NSWLR 1 at 11 (‘Wickstead’) provide clear statements of principle that are applicable in the present matter. In Little, an order striking out proceedings because they did not disclose a course of action was held to be interlocutory. In Wickstead, an order for summary dismissal under Part 13 Rule 5 of the New South Wales Supreme Court Rules was held to be interlocutory. Consistent with these authorities, the Commission has held that orders dismissing Applications under section 354(7A) are interlocutory and therefore do not finally determine parties’ rights (Graziani v Burrangong Pet Food Pty Ltd [2007] NSWWCCPD 215; Hawke v Stanyer & ors trading as Stanyer Partnership [2007] NSWWCCPD 208; Nott v The Western Stores Limited & ors [2007] NSWWCCPD 83).
These decisions are consistent with Jones v Insole (1891) 64 LT 703, a decision of the English Court of Appeal where it was held that an order striking out a statement of claim on the ground that it failed to disclose a reasonable course of action was interlocutory and not a final order. Taylor J (with whom Owen J agreed) cited Jones v Insole with approval in Hall v The Nominal Defendant [1966] HCA 36; (1966) 117 CLR 423 at 440 (see also Rogers v Legal Services Commission (1995) 64 SASR 572).
In considering whether interlocutory orders create issue estoppels, Edmonds J held in Windsor v Sydney Medical Service Co-operative Ltd (No. 2) [2009] FCA 704 (at [25]):
“25.Interlocutory orders, by nature, lack finality. It follows, therefore, that they are insufficient to create an issue estoppel (see Wilson v Union Insurance Co[1992] NTSC 107; (1992) 112 FLR 166; cited with approval in Bowles v Fehlberg & ors (No 2) [2001] TASSC 24 at [22] and by the New South Wales Court of Appeal in Miller v Deputy Commission of Taxation (1997) 38 ATR 51.”
Court orders must always be interpreted in the context of the relevant governing legislation. Arbitrator Nolan dismissed the first Application at a teleconference. The guideline headed “The Practice of the Conciliation/Arbitration Process In The Workers Compensation Commission” (‘the guideline’) sets out the purpose of the teleconference (at page 5) to be:
“• to explore resolution of the dispute (Rule 15.3 (d));
• to ensure parties understand the nature of the proceedings and to explain any aspect of the procedure for resolving the dispute (Rule 15.3 (a) & (b));
• if all issues ARE settled, to determine how the matter is to be finalised, and
• if all or some issues ARE NOT settled, to clearly identify the issues remaining in dispute and to ensure the matter is ready for the next phase.”
Under “Protocol For Telephone Conference” the guideline states that an Arbitrator will:
“• remind the parties that the primary purpose of the conference is to resolve the dispute;
• address the worker personally and invite him/her to participate fully in the discussions;
• tell the parties that the role of the Arbitrator in the telephone conference is to direct the proceedings and assist the parties with settlement discussions;
• advise parties if the conference is to be recorded;
• where parties are not represented the conference will be recorded. This will be arranged by the Registry when the conference is booked;
• ascertain the stage parties have reached in settlement discussions;
• clarify exactly what the Applicant is claiming, what is in dispute and what orders are sought;
• identify any threshold jurisdictional issues that require a determination of the Commission before the matter can proceed and determine how and when these issues are to be addressed, and
• if parties have not already engaged in settlement discussions prior to the conference, the Arbitrator at this stage will invite the applicant and respondent (including the worker personally) to put forward offers of settlement or suggestions as to how the dispute might be resolved.”
If the matter does not resolve, the Arbitrator will prepare the matter for the next phase and will:
“• identify issues resolved and agreed by the parties, and then those still in dispute and to be determined;
• the Arbitrator may direct the parties to file a joint signed statement of the facts and issues on which the parties agree, and those that continue to be in dispute (Rule 15.4);
• deal with any issues arising from the limitation on the number of medical reports, which may be relied on by each party (Clause 43, 43A and 43AA Workers Compensation Regulation 2003);
• consider any application by any party e.g. Applications to Admit Late evidence (Rule 10.3.3); Applications for the issue of Directions for Production (Rule 13.4) and/or leave to call oral evidence (Rules 14.2 and 14.3)
∗ If not already provided note how and by whom, and when these documents are to be provided for use in the proceedings.
(Usually the party who wishes to have the documents admitted into evidence will provide copies to the Commission and the other parties. The onus is on parties wishing to have documents admitted into evidence to provide them to the Registry and serve them on the other parties).
∗ If the Arbitrator has reached a preliminary view that the matter can be determined on the papers, ask the parties whether there is any reason it should not proceed to determination in this way, and
• remind parties that a matter may be settled by agreement at any stage.”
If the dispute must proceed to conciliation/arbitration, the Arbitrator will:
“• confirm the date, time and venue for the conciliation conference/arbitration hearing;
• check any facilities or services needed for the conference – video, conference phone, interpreters, and facilities for participants with a disability;
• explain the process for the conciliation/arbitration of their case to the parties, and
• organise the evidence:
∗identify the evidence to be used as a basis for determination if the matter is not resolved at the conciliation conference;
∗remind the parties that arbitration by the Commission has a strong non-adversarial flavour and will usually proceed on the basis of the documentary evidence. Oral evidence will not normally be given except where a statement of evidence is filed or appropriately notified (Rules 14.2 & 14.3);
∗make any appropriate Direction/Order, and
• remind the parties of the limitations and restrictions in respect of the calling of oral evidence.”
As can be seen from the guideline, a teleconference is a procedural step in the dispute resolution process. It gives an arbitrator the opportunity to explain the process and the parties an opportunity to resolve the dispute or narrow the issues. If the matter does not resolve, then, once the arbitrator ensures that the matter is ready to proceed to the determination phase of the process, he or she will list the matter for conciliation and arbitration. Whilst the parties and the arbitrator will discuss the issues at the teleconference, the arbitrator will rarely (if ever) determine substantive issues in dispute at that stage, though he or she will often issue directions and make procedural rulings about the future conduct of the matter. Thus, as a teleconference is not a hearing on the merits, it cannot be suggested that an order dismissing an application under section 354(7A) at the teleconference stage of the proceedings is a decision on the merits and the fundamental requirement for an issue estoppel or res judicata estoppel is lacking.
The following passage from the second edition of Bower and Turner The Doctrine of Res Judicata (1969 at 51), cited with approval in DA Christie Pty Ltd v Baker [1996] 2 VR 582 and in Morris v Riverwild Management Pty Ltd [2009] VSC 439 at [23], is also instructive. It states:
“When an action, or motion, or application, is dismissed by a judicial tribunal after a trial or hearing, it is often a question whether anything can be said to have been decided, so as to conclude the parties, beyond the actual fact of the dismissal. The answer to this enquiry depends on whether, on reference to the record or such other materials as may properly be resorted to, the dismissal itself is seen to have necessarily involved a determination of any particular issue or question of fact or law, in which case there is an adjudication on that question or issue; if otherwise, the dismissal decides nothing, except that in fact the party has been refused the relief which he sought.” (emphasis added)
Arbitrator Nolan did not conduct a hearing on the merits, but determined, at a preliminary stage (the teleconference), that the case was “lacking in substance” and, therefore, was appropriate to be dismissed under section 354(7A). Essentially, though he did not express himself in these terms, he formed the view on 26 March 2009 that the matter was not ready to proceed because there was no evidence from a qualified psychiatrist. He therefore summarily dismissed the matter under section 354(7A) on the ground that, in his view, it was lacking in substance. He made no determination of any particular issue or question of fact or law.
It is timely to consider the circumstances in which the courts have held it appropriate for matters to be summarily dismissed. The leading authority is General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125 (‘General Steel’), where Barwick CJ held (at 129):
“It is sufficient for me to say that these cases uniformly adhere to the view that the plaintiff ought not to be denied access to the customary tribunal which deals with actions of the kind he brings, unless his lack of a cause of action - if that be the ground on which the court is invited, as in this case, to exercise its powers of summary dismissal - is clearly demonstrated. The test to be applied has been variously expressed; ‘so obviously untenable that it cannot possibly succeed’; ‘manifestly groundless’; ‘so manifestly faulty that it does not admit of argument’; ‘discloses a case which the Court is satisfied cannot succeed’; ‘under no possibility can there be a good cause of action’; ‘be manifest that to allow them’ (the pleadings) ‘to stand would involve useless expense’.”
In the present matter, Arbitrator Nolan did not properly consider or apply the above tests, but determined, without any apparent consideration of the voluminous material attached to the first Application and Reply, that the worker’s case was “lacking in substance” because her solicitors had not attached a report from a qualified psychiatrist. He failed to consider whether the worker’s evidence, together with the evidence from her general practitioner, Dr Holmes, which supported her claim, was sufficient to establish a prima facie case. Thus, though in a case of res judicata estoppel it is not open to question the correctness of the original determination (see Spencer Bower at [15]), the fact that Arbitrator Nolan failed to consider the evidence reinforces my conclusion that the dismissal was not a determination on the merits after a hearing but was merely an interlocutory step taken because of the Arbitrator’s assessment of the state of preparation of the worker’s case.
The meaning of the phrase “lacking in substance” depends on the legislative context in which it is used. The Court of Appeal held it would be “inappropriate” to attribute to the phrase a meaning other than “not reasonably arguable” (Ipp JA with Beasley and Bryson JJA agreeing) in The Owners Corporation of Strata Plan 4521 v Zouk [2007] NSWCA 23 at [45]. That case concerned the power of the Consumer Trader and Tenancy Tribunal to make an order for the payment of costs when dismissing an appeal from an order of an adjudicator under the Strata Schemes Management Act 1996 (NSW). The Tribunal’s power to make such an order was in section 192 of the Act, which provided:
“The Tribunal may not make any order for the payment of costs except as specifically authorised by this Act or in relation to an order dismissing an application or appeal because:
(a)the application or appeal is frivolous, vexatious, misconceived or lacking in substance,…” (emphasis added)
In the 1998 Act, the phrase appears in section 354, which is headed “Procedure before Commission”. Subsection (1) of section 354 provides that proceedings in the Commission are to be conducted with as little formality and technicality as the proper consideration of the matter permits. Subsection (3) provides that the Commission is to act according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms.
The full terms of subsection (7A) provide:
“(7A) The Commission may dismiss proceedings before it before or during the conduct of proceedings:
(a) if it is satisfied that the proceedings have been abandoned, or
(b) if it is satisfied that the proceedings are frivolous or vexatious or otherwise misconceived or lacking in substance, or
(c) for any other ground of dismissal specified in the Rules.”
Having regard to the context in which the phrase “lacking in substance” appears, it is clear that a matter should not be dismissed under that subsection unless the test set out in General Steel is satisfied and the matter is clearly “not reasonably arguable”. Arbitrator Nolan did not apply that test but merely determined that the case lacked substance because Ms Spears had no evidence from a qualified psychiatrist. The lack of such a report did not necessarily mean that the case was lacking in substance.
It follows that no issue estoppel arose because Arbitrator Nolan did not decide any issues. He made no finding on the issues in the section 74 notice. He did not even refer to those issues. Arbitrator Georgiadis erred in stating that Arbitrator Nolan “necessarily considered the same indispensible issues in the present dispute s4; s9A; s11A, etc before coming to the decision to dismiss the Application”. If he had, he would have referred in detail to the worker’s statements and the supportive evidence from Dr Holmes.
Arbitrator Georgiadis’s order dismissing the second Application was in similar terms to those used by Arbitrator Nolan, but the order in the present matter has at least been made after a hearing on the merits (an arbitration). It was not an order under section 354(7A) and was therefore not an interlocutory order. It was a final order purporting to determine the parties’ rights, subject to any appeal under section 352 of the 1998 Act. Given Arbitrator Georgiadis’s findings, however, the appropriate order, had those findings been correct, should have been an award for the respondent. Such an order would have avoided the potential uncertainty that can sometimes arise from use of the expression “application dismissed”, which is better reserved for use when dealing with interlocutory applications.
CONCLUSION
Having conducted a review on the merits, I have determined that the true and correct position is that there is no issue estoppel or res judicata estoppel from Arbitrator Nolan’s determination and Arbitrator Georgiadis erred in finding to the contrary. The determination must be revoked and the matter remitted to a different Arbitrator for determination on its merits.
DECISION
The Arbitrator’s determination of 17 November 2009 is revoked and the matter is remitted to a different Arbitrator for determination on its merits.
COSTS
The respondent employer is ordered to pay the appellant worker’s costs of the appeal, as assessed or agreed. The costs of the first arbitration are to follow the event of the second arbitration.
Bill Roche
Deputy President
7 April 2010
I, TUYET 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
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