State of New South Wales v Roberts Concrete Specialists Pty Ltd (formerly Jack Harrison Home Builders Pty Ltd) - [2020] NSWWCCPD 20

DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:	State of New South Wales v Roberts Concrete Specialists Pty Ltd (formerly Jack Harrison Home Builders Pty Ltd) [2020] NSWWCCPD 20
APPELLANT:	State of New South Wales
RESPONDENT:	Roberts Concrete Specialists Pty Ltd (formerly Jack Harrison Home Builders Pty Ltd)
APPELLANT’SINSURER:	Employers Mutual Limited as agent for icare insurance for NSW
RESPONDENT’S INSURER:	QBE Workers Compensation (NSW) Ltd
FILE NUMBER:	A1-6465/18
ARBITRATOR:	Ms Beilby
DATE OF ARBITRATOR’S DECISION:	16 May 2019
DATE OF APPEAL DECISION:	20 April 2020
SUBJECT MATTER OF DECISION:	Apportionment of liability; s 22 of the Workers Compensation Act 1987; just and equitable in the special circumstances of the case; s 22A of the Workers Compensation Act 1987; Sutherland Shire Council v Baltica General Insurance Co Ltd & Ors (1996) 12 NSWCCR 716 applied
PRESIDENTIAL MEMBER:	President Judge Phillips
HEARING:	Oral
DATE OF APPEAL HEARING:	27 February 2020

REPRESENTATION:	Appellant:
Mr D Baran, counsel
Turks Legal
Respondent:
Mr P Morris SC, counsel
McCulloch & Buggy Lawyers
ORDERS MADE ON APPEAL:	1. The Certificate of Determination dated 16 May 2019 is revoked. 2. The matter is remitted for re-determination by another Arbitrator.

INTRODUCTION

This matter concerns a claim for apportionment pursuant to ss 22 and 22A of the Workers Compensation Act 1987 (the 1987 Act) between two employers.

BACKGROUND

The worker, John Harrison, worked for the respondent, Roberts Concrete Specialists Pty Ltd (deregistered) (formerly known as Jack Harrison Home Builders Pty Ltd), as a labourer/carpenter. In about 1970, Mr Harrison injured his left knee when he fell from scaffolding and landed on his left leg twisting his left knee. He underwent a meniscectomy and had some time off work. The respondent’s then insurer, Mercantile Mutual (now QBE Workers Compensation (NSW) Ltd), paid Mr Harrison weekly payments of compensation for the period he was on leave due to the work injury and medical expenses associated with the surgery.
In 1976, Mr Harrison commenced work for the appellant, Fire & Rescue (State of New South Wales) as a fire fighter. In the course of his work for the appellant for over twenty years, Mr Harrison sustained injuries to his left knee and lumbar spine. On 4 December 2003, Mr Harrison injured his lumbar spine while lifting a hose in the course of his employment with the appellant. In April and September 2006, Mr Harrison twisted his left knee in the course of his employment with the appellant. He did not take sick leave following injury to his left knee but his left knee did not improve and he experienced pain and swelling. Mr Harrison later underwent an arthroscopy on his left knee on 15 February 2007 and a left total knee replacement on 3 December 2007. Mr Harrison was medically discharged from the appellant in 2008. The appellant’s insurer, Employers Mutual Limited, paid Mr Harrison weekly payments of compensation and medical expenses associated with the work injury.
On 25 February 2011, Mr Harrison lodged an Application to Resolve a Dispute seeking lump sum compensation against the respondent in respect of an injury to the left leg, left knee and back (Matter No 1600/11). Mr Harrison sought lump sum compensation in respect of:
(a)     the left knee injury as a result of the nature and conditions of employment with the appellant aggravating a diseased left knee injury deemed to have occurred on 11 January 2007;
(b)     the lumbar spine injury dated 4 December 2003;
(c)     the lumbar spine injury deemed to have occurred on 28 April 2010.
On 27 June 2012, Arbitrator Peacock issued a Certificate of Determination in Matter No 1600/11. Arbitrator Peacock noted that the appellant was joined to the proceedings as the second respondent. She also noted that the claim for lump sum compensation was amended to include a claim for lump sum compensation as a result of injury to the left leg at or above the knee in or about 1970 against the respondent. Arbitrator Peacock further noted that there was no liability dispute in respect of injury to the left knee and lumbar spine arising from injury in the course of employment with the appellant.
In respect of the claim against the respondent, Arbitrator Peacock found that Mr Harrison had sustained an injury in 1970 while employed by the respondent. Arbitrator Peacock held:
“When weighing the evidence before me I am satisfied on the balance of probabilities that Mr Harrison suffered in about 1970 an injury to the left knee in the course of or arising out of his employment with Roberts when he fell from scaffolding and twisted his left knee, such injury resulting in a torn meniscus and as a result of that injury he underwent a medial meniscectomy.”[1]
[1] Harrison v Roberts Concrete Specialists Pty Ltd [2012] NSWWCC 178, [50].
Arbitrator Peacock remitted the matter to the Registrar for referral to an Approved Medical Specialist (AMS) for assessment of the degree of permanent impairment, if any, of the injuries claimed.
On 18 October 2012, Dr Kim Ostinga (AMS) issued a Medical Assessment Certificate (MAC) in respect of the injuries claimed. It is not relevant to set out the details of the MAC, other than to note the following regarding the assessment of the extent to which the injury in 1970 contributed to the impairment assessed. The AMS commented that the “need for his total knee replacement was due to be an inevitable result from the 1970 accident which resulted in an open medial meniscectomy” and the 2006 injury (deemed to have occurred on 11 January 2007) may have precipitated the need for this procedure at an earlier date. The AMS assessed a whole person impairment of 20% in respect of the left knee. The AMS then proceeded to assess that the relevant deduction under s 323 of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act) for a pre-existing condition was 9/10^th (not 8/10^th), resulting in a 2% whole person impairment in respect of the 2006 injury to left knee.
On 8 February 2013, the Medical Appeal Panel (MAP) revoked the MAC dated 18 October 2012 and issued a new MAC in its place. The MAC was revoked on the basis of an erroneous application of s 323 of the 1998 Act, in respect of assessment of the left leg at or above the knee in 1970. Given this error, the MAP was able to issue a new MAC in respect of all impairment assessed.
Relevantly, the MAP observed that the condition of Mr Harrison’s left knee was “predominantly due to the initial injury, and the meniscectomy which [Mr Harrison] underwent in having that injury treated.” It also added that Mr Harrison’s “current condition is largely in keeping with the natural progression of the pathology associated with that initial injury and the meniscectomy.”
The MAP noted that the injuries sustained to the left knee were “consistent with weakness caused by the original injury in about 1970, which has remained the predominant cause of [Mr Harrison’s] left knee problems”. It further added that Mr Harrison underwent an arthroscopy of his left knee in February 2007 and had a total knee replacement in December 2007. These procedures were “an inevitable consequence of the original injury to [Mr Harrison’s] knee, and the meniscectomy, in about 1970.” The MAP considered that a deduction of “8/10^th”, indicating that one fifth of Mr Harrison’s impairment results from his activities as a fire-fighter, more accurately represented the relevant contributions. Accordingly, 4% whole person impairment was assessed as having resulted from the injury to the left lower extremity in January 2007.
The new MAC recorded:
(a)    30% impairment, under the table of disabilities, in respect of loss of left leg or greater part thereof in relation to injury in about 1970.
(b)    4% whole person impairment, in respect of injury to the left knee deemed to have occurred on 11 January 2007 as a result of the nature and conditions of employment.
(c)    5% whole person impairment, in respect of injury to the lumbar spine dated 4 December 2003.
(d)    0% whole person impairment, in respect of injury to the lumbar spine deemed on 28 April 2010 as a result of the nature and conditions of employment aggravating a diseased lumbar spine.
On 7 March 2013, a Commission Arbitrator issued a Certificate of Determination entering an award for lump sum compensation consistent with the MAC issued by the MAP. The terms of the Certificate of Determination are as follows:
“The Commission orders:
1. That the first respondent pay the applicant, as lump sum compensation under section 66 of the Workers Compensation Act 1987:
(1)$6,600 in respect of 30% loss of leg or the greater part thereof resulting from injury in about 1970.
The Commission orders:
2. That the second respondent pay the applicant, as lump sum compensation under section 66 of the Workers Compensation Act 1987:
(1)$5,500 in respect of 4% permanent impairment resulting from injury on 11 January 2007.
(2)$6,250 in respect of 5% permanent impairment resulting from injury on 4 December 2003.
The Commission determines:
3. That the Applicant suffers 0% permanent impairment resulting from the date of injury on 28 April 2010.
4. That the first and second respondent pay the applicant’s costs as agreed or assessed.”
On 1 August 2016, the appellant’s legal representative sent a letter to the respondent’s insurer. In the letter, the appellant referred to the MAP decision and said that the MAP regarded that 80% of the left knee condition was “consequential of an initial injury in or about 1970 whilst he was in the employ of the [respondent] … for which liability has been accepted”. On this basis, the appellant sought an 80% contribution under s 22 of the 1987 Act for past and future compensation paid arising out of the injury suffered to the left knee. It noted that it had paid Mr Harrison $340,290.19 comprising of weekly benefits and medical expenses arising out of incapacity caused by work related injuries. On the basis of the 80% contribution, the appellant sought that the respondent contribute $272,232.15.
On 11 December 2018, the appellant lodged a Miscellaneous Application (Form 20). The appellant lodged the application against the respondent, seeking an order under s 22 and s 22A of the 1987 Act. The apportionment related to weekly payments in the sum of $289,135.54 and medical expenses in the sum of $51,154.65 which had been paid by the appellant.
On 22 January 2019, Arbitrator Beilby held a telephone conference in this matter. Arbitrator Beilby took a record of the issues discussed during the telephone conference. In the telephone conference outcome and appearances sheet, Arbitrator Beilby recorded that weeklies, medicals and lump sum benefits were still in dispute. She also recorded:
“Claim for reimbursement from earlier respondent
Interesting issues …
1. Limitation Act
2. Prejudice - haven’t had the opportunity to redeem worker, or rehabilitate worker or challenge worker
3. S22 says what is just and equitable.. if accept 80-% then take in to account back so comes to 64% ... but resp says can only go 6 years ( limitation act) … then r says that under 1926 act don’t have to pay as much … but app says you have to pay for life,,,,,
So maybe $118k goes to 100k?”
On 12 March 2019, the matter proceeded to conciliation/arbitration before Arbitrator Beilby. Mr O’Neill, of counsel, appeared for the appellant and Mr Stockley, of counsel, appeared for the respondent. Relevantly, during the arbitration proceedings the respondent made a concession that based on the findings of the MAP, Mr Harrison would continue to have a disability arising from the 1970 incident affecting his left knee but did not concede that he had an incapacity arising from the period of employment with the respondent.
On 16 May 2019, Arbitrator Beilby issued a Certificate of Determination declining the application for apportionment. A summary of Arbitrator Beilby’s reasons is set out below.
On 13 June 2019, the appellant filed an Application to Appeal Against Decision of an Arbitrator (the Application). The appellant seeks apportionment pursuant to s 22 of the 1987 Act. This is claimed at an 80% contribution for both past and future compensation paid to Mr Harrison arising out of injury suffered to the left knee in keeping with the assessment of the MAP.
On 29 July 2019, the respondent filed a Notice of Opposition to the Application (Opposition).
On 28 August 2019, the appellant filed submissions in reply to the respondent’s Opposition.
On 26 November 2019, I issued the following direction to the parties in anticipation of an oral hearing:
“1. The appellant has brought its appeal in respect of ss 22 and 22A of the Workers Compensation Act 1987 (1987 Act). The appellant appears to use the terms ‘apportionment’ and ‘contribution’ interchangeably. Please provide clarification as to which claim is being prosecuted.
2.      If the claim being prosecuted is apportionment, how does this relate to past payments?
3. At the hearing before the learned Arbitrator, both parties addressed upon whether the learned Arbitrator should exercise her discretion in accordance with s 22A(1)(a) of the 1987 Act. The appellant addressed this at the hearing, see Transcript of Arbitration Proceedings 12 March 2019 (T)16.10–14 and the respondent at T42.13–17.
This appeal has not addressed, in terms, in Ground One the principles that arise on appeal in relation to a discretionary decision by a decision maker (although it is dealt with obliquely by the appellant at [43] of its submissions). At [43] the appellant, notwithstanding maintaining that the apportionment power to order what is just and equitable in the special circumstances of the case was the exercise of a discretion, now on appeal eschews the position that the decision was in fact discretionary. The Commission would benefit from the parties’ submissions on these two issues.
4.      In Ground Two the appellant alleges that it was denied procedural fairness in that an issue was determined which had not been notified prior to the hearing or identified as an issue for determination. These issues are identified in [45] of the appellant’s principal submissions on appeal. The appeal ground itself alleges that the appellant had not been notified of these issues prior to the hearing nor were they identified as an issue for determination, yet in the appeal submissions says it was “not given a proper opportunity” (paragraph [45]) or “the arbitrator did not afford an appropriate opportunity to the appellant to address all of the deficiencies set out by the respondent” (paragraph [46]).
5.      In relation to the appellants submissions at [45] and [46], please confirm the following:
(a)Does the appellant say it was afforded no opportunity, or that the opportunity afforded was not ‘appropriate’ or ‘proper’?
(b)Are these matters relevant to the exercise of the learned Arbitrator’s discretion?”
The matter was set for hearing before me on 16 December 2019, but was vacated and relisted on 27 February 2020. Mr Baran, of counsel, appeared for the appellant and Mr Morris SC, of counsel, appeared for the respondent. Following the hearing, the decision was reserved.

THRESHOLD MATTERS

There is no dispute between the parties that the threshold requirements as to quantum and time pursuant to ss 352(3) and 352(4) of the 1998 Act have been met.

THE EVIDENCE

Mr Harrison

No evidence was led from Mr Harrison by the appellant.

Medical certificates

In evidence are a series of Workcover medical certificates, indicating that Mr Harrison was not fit to work/had no current work capacity and was fit for suitable duties between 1996 to April 2018. In respect of no current work capacity due to injury to the left knee, the medical certificates date from 5 January 2007 to 15 February 2018. However, these medical certificates do not record that Mr Harrison has no capacity as a result of the 1970 incident or indeed that that incident relates to the incapacity as found. There are also medical certificates dating as early as 1996 to 2000 regarding no current work capacity in relation to injuries not associated with the left knee, including the lower back, the thumb and elbow.
In evidence are also several Workcover medical certificates which detail periods of current work capacity and no current work capacity between 1998 and 2004, in respect of injuries unrelated to the left knee. In a Workcover NSW Medical Certificate, dated 3 August 1998, Dr Mohamed, treating general practitioner, certifies Mr Harrison fit for pre-injury duties from 3 August 1998. In a Workcover NSW Medical Certificate, dated 12 December 2000, Dr Mohamed certifies Mr Harrison fit for pre-injury duties from 13 December 2000. In a Workcover NSW Medical Certificate, dated 21 February 2001, Dr Mohamed certifies Mr Harrison fit for pre-injury duties from 23 January 2001. In a Workcover NSW Medical Certificate, dated 5 January 2004, Dr Mohamed certifies Mr Harrison fit for pre-injury duties from 7 January 2004. In a Workcover NSW Medical Certificate, dated 4 May 2004, Dr Mohamed certifies Mr Harrison fit for pre-injury duties from 4 May 2004.

Other medical evidence and reports

On 6 May 2008, Dr Brendon Jones, orthopaedic surgeon, issued a report to the appellant. In that report, Dr Jones recorded that he had reviewed Mr Harrison for his six month assessment after the left knee replacement. He recorded that Mr Harrison was not fit for full operational duties but fit for selected duties.
On 17 June 2008, Dr Tania Rogers, Brigades Medical Officer employed by the appellant, issued a Medical Retirement Summary Information Sheet, based on Mr Harrison’s fitness for duty medical information available to the appellant at the time of medical retirement. The date of injury is recorded as 5 September 2006. The date Mr Harrison became unable to perform the essential tasks of his position was recorded as 11 January 2007. The clinical diagnosis was recorded as “L total knee replacement”. The following additional information is also recorded:
“Mr Harrison has a long history of knee pain. He underwent a left total knee replacement on 3rd December 2008. He now has significant problems with tasks including walking, negotiating stairs, kneeling, squatting and lifting. The condition will not improve.”
The information sheet also records that medical retirement was recommended for 30 October 2008 because of “left total knee replacement”.
On 9 October 2008, Dr Jones issued a report to the appellant. In that report, Dr Jones referred to the left knee replacement surgery and noted that Mr Harrison was “permanently unfit for full fire fighting duties”. He also noted that the “artificial knee is functioning satisfactorily but it is certainly recommended that he did not go back to heavy work where he may have to run or jump.”
On 11 November 2008, Dr Rogers reported that Mr Harrison was suffering from a medical condition that resulted in him being permanently unfit for his substantive position and no permanent modified duties were identified to be available.
On 12 November 2008, Dr Jones, issued a report to the appellant. In that report, Dr Jones referred to the “left sided total knee replacement for post-traumatic osteoarthritis in his knee”. He recorded that Mr Harrison does not have normal function in his left knee and that he would “regard him as permanent [sic] unfit for full duties as a Fire Fighter with the NSW Fire Brigades”.
On 23 December 2009, Ms Seleena Thomson, rehabilitation consultant, issued a Final Rehabilitation Report. In that report it was recorded that a goal of the rehabilitation program had been for Mr Harrison to obtain work as a Student Special Transport Driver with a different employer. There was no reference to the reason for incapacity. However, there was a reference to hypertension and weight gain and the associated impact on the workers compensation claim.

On 30 August 2013, Dr Mohamed wrote a letter to Employers Mutual Limited. In that letter, Dr Mohamed records that he cannot identify whether Mr Harrison’s “work incapacity is related to an incident in 1970 or 2007.” He also records that Mr Harrison complains of chronic knee pain, which “limits his mobility and function” and because of this Mr Harrison “feels he can’t return to his duties”.
On 7 November 2013, Dr Ghabrial, orthopaedic and spinal surgeon, wrote a letter to Dr Mohamed. In that letter, Dr Ghabrial recorded that Mr Harrison had been “experiencing increasing symptoms in his left knee and occasional episodes of swelling and giving way.” He also recorded that Mr Harrison had chronic lower back pain. In his view, Mr Harrison had “zero” prospects of returning to work due to his left leg and back problems.
On 3 February 2014, Victoria Riley, occupational therapist from Work Options, issued a Combined Initial / Nominated Treating Doctor Case Conference Report. In that report reference was made to a long history of compensable left knee issues “dating back to the 1970s requiring knee surgery and many treatment interventions”. It recorded that Mr Harrison joined the appellant’s workplace “after passing ‘a medical’”. It also recorded that Mr Harrison aggravated his knee over the years while employed by the appellant, including a “significant aggravation” in 2006 when he fell during the course of his duties with the appellant. His knee did not improve and he underwent a total knee replacement in 2007. It was further recorded that Mr Harrison sustained an injury to his lower back in 2003, for which he had ongoing symptoms. It was also recorded that Mr Harrison was diagnosed with cardiomyopathy in 2013, and as a consequence was not able to take any “pain reliving medications for his left knee injury due to his current medication intake for his heart condition.” Due to his heart condition, Mr Harrison had limited capacity to undergo activities of daily living including rehabilitation. As a result of his heart condition he experienced “significant weight gain” but lost 40 kgs with diet, but this had not impacted on his knee symptoms as would be expected with less loading on the knee joint.
In the report, under the summary of the case conference with Mr Harrison’s treating general practitioner, Dr Mohamed, it was recorded that Dr Mohamed advised that Mr Harrison remained unfit for work due to his left knee, and that his capacity to return to work was not likely to change in the foreseeable future. It was also recorded that Mr Harrison’s heart condition was treated separately to his workers compensation claim, and that he “remains unfit for work due to his current incapacities related to his left compensable knee injury.”
Relevantly, under the heading “Recommendations”, it was noted that “causation of Mr Harrison’s ongoing left knee symptoms is unknown at this stage and as such, future RTW interventions will depend upon results of the bone scan and /or other medical investigations”.
On 25 March 2014, Ms Riley issued a further report. This report recorded that Mr Harrison underwent a bone scan of the left knee which showed degenerative changes in the left knee and micro stress fractures. It was also recorded that Mr Harrison had a non-workers compensation health condition, which means he was unable to take any analgesic pain relief for his left knee injury. It was further recorded that Mr Harrison remained certified as “having nil work capacity”.
On 2 April 2014, Dr Ghabrial issued a report confirming the results of the bone scan on 19 February 2014.

Dr Roger Pillemer

On 3 October 2018, Dr Roger Pillemer, orthopaedic surgeon, issued a report to Employers Mutual Limited following a request to specifically address the issue of apportionment of incapacity for work as a result of Mr Harrison’s left knee injury. In that report, Dr Pillemer referred to the MAC and MAP decision. He opined that Mr Harrison’s “incapacity could be said to result with 4/5ths in relation to his left knee and 1/5^th in relation to the lumbar spine.” He added that “[a]s far as the left knee is concerned, please note that this includes the original date of injury in 1970, after which injury he had an open meniscectomy.”
Dr Pillemer regarded Mr Harrison to be “totally unfit to get back to his pre-injury employment as either a builder or a fire fighter”. He added that Mr Harrison “would have been able to get back to restricted duties that did not place excessive stress on his knee or his low back.” He also opined that the cause of Mr Harrison’s incapacity “would have been the ongoing problems with his left knee and his lumbar spine, mainly the left knee.”
In response to the following question, Dr Pillemer recorded:
“Whether, having regard to the findings of the AMS and MAP, the 1970 injury can be said to be responsible for any incapacity and if so, to what extent (expressed as a percentage);
Please note that the ongoing problems with Mr Harrison's left knee are almost certainly as a result of his injury in 1970 when he had an open meniscectomy carried out. It is generally accepted that following open meniscectomies, particularly at the age of 18 (as Mr Harrison would have been at the time), predictably this will be followed by progressive osteoarthritic change in the knee which would seem to have occurred in the present case.
As noted when Mr Harrison joined the Fire Brigade in 1976 there was a fairly rigid medical examination carried out as would be expected, and he was not complaining of any particular problems at the time.
There was no further specific injury until September 2006 at which stage advanced osteoarthritic change was found to be present. In my opinion the problems with Mr Harrison's knee therefore do date back to the 1970 injury.”
Dr Pillemer recorded that it was predictable that Mr Harrison was going to have ongoing problems with his knee in the future and that symptoms would increase with time. He added that it is unlikely that any further treatment, including rehabilitation would be regard as being reasonably necessary.

Radiological investigations

On 1 November 2013, Mr Harrison underwent an x-ray of his left knee. In a report dated the same, Dr C Walker recorded that the patella showed spurring at the quadriceps insertion and articular surface.
On 19 February 2014, Mr Harrison underwent a bone scan of his left knee. In a report dated the same, Dr Douglas Howarth recorded that there was evidence of micro-stress fractures at three different sites at the bone-prosthesis interface, medial and lateral tibial plateau regions. There was also evidence of degenerative arthropathy in the right patello-femoral compartment.

THE ARBITRATION PROCEEDINGS

At the arbitration proceedings on 12 March 2019 the following submissions were made.
The respondent conceded that Mr Harrison had sustained an injury in about 1970 in the course of his employment with Roberts Concrete Specialists Pty Ltd.[2] The respondent also conceded that Mr Harrison “continues to have a disability affecting his left knee as a result of his injury of 1970”.[3]
[2] Transcript of arbitral proceedings 12 March 2019 (T1) 3.11.
[3] T1 3.19.

Appellant’s submissions

There was some discussion as to whether the Commission had jurisdiction to deal with the dispute under s 22 of the 1987 Act, in the absence of a claim which involves the worker.[4] The appellant submitted that there was jurisdiction under s 22(5).[5]
[4] T1 4.2.
[5] T1 4.29.
The appellant submitted that s 22A(8) of the 1987 Act does not apply, as there had “previously been a dispute about the entitlement of the worker to compensation and that was formed in relation to the previous proceedings. There was a dispute about whether or not the worker was entitled to lump sum compensation.”[6] Further, the appellant submitted that s 22A(8) cannot be satisfied because the precondition in s 22A(8)(b) cannot be satisfied as the respondent has been deregistered.[7]
[6] T1 5.30–6.2.
[7] T1 6.19.
The appellant submitted that the Limitation Act 1969 does not apply. Section 14(1)(d) of that Act provides that a limitation of six years applies to a cause of action, in proceedings in a court, to recover money. As the Commission is not a court, the appellant submitted that this section has no application.[8]
[8] T1 8.30–9.18.
The appellant submitted that s 22(1)(a) of the 1987 Act involves an enquiry as to whether capacity and treatment expenses resulted from both injuries, “that as a matter of ordinary common sense and experience it should be regarded as having resulted from both of them.”[9] The appellant then submitted on the evidence and said that based on the “totality of the evidence adopting a common sense evaluation of the causal chain … you would be satisfied that the worker has been totally incapacitated for employment for the preponderance of the time since 11 January 2007 and that any entitlement to benefits for medical treatment results from more than one injury such that liability to pay compensation ought to be apportioned.”[10] The appellant submitted that the second limb of special circumstances applies, as there were two specific incidents which bring the current application.[11] The appellant submitted that it was appropriate for Arbitrator Beilby to exercise her discretion to find that it “is just and equitable in the special circumstances of the case to approach the apportionment exercise in a manner different to the default position.”[12] The appellant further submitted that the appropriate approach is to apportion twenty per cent of the liability under s 22 to the appellant and the balance to the respondent.[13]
[9] T1 11.10–11.
[10] T1 15.4–11.
[11] T1 18.24–28.
[12] T1 16.10–14, 19.30–33.
[13] T1 20.10–13.
In respect of the impact of the back injury, the appellant submitted that it ought not have any bearing on the approach to the assessment of apportionment.[14] That was because, so the appellant submitted, Mr Harrison had recovered successfully from the back injury as at 7 January 2004, prior to the injury in 2006 relating squarely to the left knee condition.[15]
[14] T1 20.16–18.
[15] T1 20.19–21.
In respect of the medical expenses, the appellant submitted that Dr Jones’ recommendation around further arthroplasty and total knee replacement shows that the surgical procedure was something that was reasonably necessary under s 60 of the 1998 Act.[16] The appellant submitted that apportionment should be made in respect of the medical expenses incurred.
[16] T1 23.28–24.1.

The respondent’s submissions

The respondent submitted that the jurisdiction of the Commission is not enlivened by a claim by an insurer or an employer who is seeking some sort of contribution of payments from another employer or insurer.[17] The respondent added that “there’s no facility in this application for the respondent to adduce any evidence” or any opportunity to have the worker medically examined.[18]
[17] T1 27.25–29.
[18] T1 27.33–28.3.
The respondent also submitted that as the appellant was seeking a claim for contribution it “falls foul of section 14 of the Limitation Act 1969, and to the extent that any part of the claim predates the six years prior to the filing of this application, which was December 2018, it’s statute barred.”[19] The respondent added that the Limitation Act 1969 is a complete answer to the application to the extent it is brought to recover contribution prior to 11 December 2012.
[19] T1 29.20–24.
The respondent accepted that there was an injury to the left knee in 1970.[20] However, the respondent submitted that the statutory test for considering incapacity with the appellant is a different test to determining incapacity with the respondent.[21] The respondent submitted that the appellant failed to place any evidence before Arbitrator Beilby other than the most “simplistic proposition” about incapacity to work as a fire fighter.[22] The respondent added that the evidence available does not provide a strong basis to draw any positive conclusion as to the nature and extent of Mr Harrison’s incapacity simpliciter or the related contribution to the incapacity that flowed from the 1970 injury.[23] The absence of “coherent and persuasive probative evidence all work against an exercise of discretion in favour of [the appellant].”[24] The respondent added that the evidence available does not address capacity in respect of the relevant statutory schemes. The respondent further added that it is at a “distinct forensic disadvantage” because it does not have access to Mr Harrison and no right to adduce any evidence.[25] The respondent finally submitted that Arbitrator Beilby should not apply her discretion against its interests.[26]
[20] T1 32.3.
[21] T1 33.14–26.
[22] T1 33.29–31.
[23] T1 38.7–10.
[24] T1 42.15–17.
[25] T1 33–T44.5.
[26] T1 44.21–24.

ARBITRATOR BEILBY’S REASONS

On 16 May 2019, Arbitrator Beilby issued the Certificate of Determination. In her reasons attached to the Certificate of Determination, Arbitrator Beilby noted a number of matters. She noted that the appellant sought apportionment under s 22 of the 1987 Act, in the nature of 80% for both past and future compensation paid to Mr Harrison arising out of the injury to the left knee.[27]
[27] Fire and Rescue v Concrete Specialists [2019] NSWWCC 171 (Reasons), [15].
Arbitrator Beilby also noted the effect of the MAP’s findings, in respect of the claim for lump sum compensation for impairment. She noted that there was a mathematical calculation with an outcome of 80% of Mr Harrison’s left knee condition arising out of the 1970 injury with the respondent and 20% with the appellant.[28]
[28] Reasons, [13].
Arbitrator Beilby further noted that the respondent conceded at the arbitration that Mr Harrison would continue to have a disability affecting his left knee as a result of the 1970 injury. However, Arbitrator Beilby noted that this did not amount to a concession of incapacity arising from the period of employment with the respondent.[29]
[29] Reasons, [14].
Arbitrator Beilby identified the following agreed issues for determination:
(a)    Does the Commission have jurisdiction to entertain the application? If so;
(b)    What would be just and equitable apportionment in the circumstances?
(c)    Does the Limitation Act 1969 apply?
Arbitrator Beilby considered that the relevant legislative preconditions were met to allow apportionment to be sought under s 22 of the 1987 Act. Arbitrator Beilby found that:
“I think in circumstances where there is a lump sum apportionment of 80% to the respondent and there is considerable evidence of a total if not near total incapacity, then it would defy common sense to find that liability could fall to both respondents for that incapacity. The crucial question being what is just and equitable, a matter I will return to later.”[30]
[30] Reasons, [32].
Arbitrator Beilby considered the application of the decision in Secombe v Demolon Pty Ltd,[31] and commented that consistent with that decision, apportionment could be applied even though liabilities arise in different forms under different Acts.[32]
[31] [1995] NSWCC 33; 12 NSWCCR 409 (Secombe).
[32] Reasons, [35]–[36].
Arbitrator Beilby also observed that apportionment under s 22A of the 1987 Act is to be based on the relative length of the worker’s employment with each employer or on any other such basis as the Commission considers “just and equitable” in the “special circumstances of the case”.[33]
[33] Reasons, [37].
Arbitrator Beilby commented that the nature of the correspondence between the parties indicated that the appellant was seeking a “contribution rather than apportionment” under s 22 of the 1987 Act.[34] Arbitrator Beilby did not consider this a basis for denying jurisdiction to the Commission to determine the dispute.
[34] Reasons, [43].
Arbitrator Beilby held that the purpose of s 22 of the 1987 Act was to be used in exceptional circumstances so that the section “can embrace the notion of an incapacity partially arising from one injury and partially from another whereas the disease provisions usually cure such circumstance”.[35]
[35] Reasons, [47].
Arbitrator Beilby reasoned that s 22 of the 1987 Act is more appropriately enlivened when there has been a properly ventilated claim in respect of incapacity, not one where one respondent has elected to pay on its own volition payments for incapacity and medical expenses (like the present matter). That this is the case did not deny jurisdiction to the Commission, as Arbitrator Beilby found that the relevant legislative preconditions had been met.[36] Arbitrator Beilby observed that issues going to a “properly ventilated claim in respect of incapacity” are more pertinent to the “just and equitable” consideration.[37]
[36] Reasons, [48].
[37] Reasons, [48].
In denying the appellant relief, Arbitrator Beilby observed that it would be against the “principles of justice that the respondent is visited upon with a liability with no recourse” but to follow the accepted course by the appellant.[38] Arbitrator Beilby said that the respondent was not able to test the case being put against it by way of independent medical examination or testing Mr Harrison’s evidence.[39] This was held to be “highly relevant” to the just and equitable consideration.[40]
[38] Reasons, [49].
[39] Reasons, [49].
[40] Reasons, [49].
Arbitrator Beilby referred to Pickersgill v Freightbases Pty Ltd[41] in respect of the inherent danger in the respondent not being able to adduce evidence to dispute incapacity or the level of incapacity. She observed that the flaw in the appellant’s case was that the appellant is “unable to quantify, without [Mr Harrison’s] evidence, the level of incapacity that would flow from the earlier injury.”[42] Arbitrator Beilby expressed some sympathy for the appellant’s case, noting the substantial amount of evidence in support of incapacity such as medical certificates, but observed that the respondent had no path where it could cross examine Mr Harrison or test any of the evidence.[43]
[41] [1983] 3 NSWLR 117.
[42] Reasons, [51].
[43] Reasons, [52].
Arbitrator Beilby further observed that there was no evidence from Mr Harrison to make a finding in respect of incapacity. Although she accepted that there was “substantial medical material” supporting on the one hand a finding of incapacity, she considered “the vacuum created by the lack of evidence from the injured worker himself” resulted in the failure of the appellant to meet the required burden of proof.[44]
[44] Reasons, [53].
Arbitrator Beilby considered that there was an absence of evidence crucial to an apportionment of any capacity. She noted that there was no evidence from Mr Harrison as to “his thoughts, feelings and observations” of his pain level when he finished employment with the respondent and the appellant.[45] Arbitrator Beilby added that similar evidence is used to support a recovery action under s 151Z of the 1987 Act.[46]
[45] Reasons, [53].
[46] Reasons, [53].
Arbitrator Beilby observed that there was no evidence before her to support the respondent’s submission that it was prejudiced because it cannot locate its insurance file, that it is no longer trading, and that records from the treating doctors were no longer available. As a result, Arbitrator Beilby gave these factors “little weight” in her determination.[47]
[47] Reasons, [54].
Arbitrator Beilby found that, even if s 22 of the 1987 Act were enlivened, the “general prejudice to the respondent” was insurmountable in circumstances where there was no ability for the respondent to have Mr Harrison assessed and there was no evidence from Mr Harrison directly.[48] Accordingly, Arbitrator Beilby held that it was “not ‘just and equitable’ to apportion the payments made by the [appellant] on a voluntary basis”.[49] It followed that the application for apportionment was declined.
[48] Reasons, [55].
[49] Reasons, [55].
Arbitrator Beilby also observed that because she found that there should be no apportionment, there was no reason to determine whether the Limitation Act 1969 applied. That is, whether that Act operated to preclude the appellant from obtaining an order for apportionment on any payments made six years prior to the commencement of proceedings.[50]
[50] Reasons, [56]–[57].

GROUNDS OF APPEAL

The grounds of appeal are whether Arbitrator Beilby erred in law:
(a) in determining that no apportionment as between the appellant and the respondent ought to be made, and
(b) by denying the appellant procedural fairness in determining an issue not notified prior to the arbitration or identified as an issue for determination but nonetheless determining that issue against the appellant denying it relief.

LEGISLATION

Section 22 of the 1987 Act provides:
“22    Compensation to be apportioned where more than one injury
(1)     If—
(a)the death or incapacity of a worker, or
(b)a permanent impairment suffered by a worker as referred to in Division 4 of Part 3, or
(c)a liability under Division 3 of Part 3 to a worker,
results from more than one injury to the worker, liability to pay compensation under this Act is to be apportioned in such manner as the Commission determines.
(1A) Death, incapacity, loss or liability that results partly from one injury and partly from one or more other injuries is taken to have resulted from more than one injury.
(2)     Liability to pay compensation under this Act includes—
(a)the liability of an employer (including an employer who is a self-insurer), and
(b)the liability of an insurer under a policy of insurance in respect of the payment of that compensation (including a direct liability to the worker), and
(c)a liability in respect of a claim under Division 6 of Part 4, and
(d)in the case of a worker who is partially incapacitated for work, a liability that arises because the worker is entitled to be compensated under this Act as if totally incapacitated.
(3)    Liability to pay compensation under this Act is not to be apportioned by the Commission if the parties to whom the liability relates have agreed on the apportionment.
(4)    Liability to pay compensation under this Act may be apportioned by the Commission even though it is the liability of a single insurer in respect of different periods of insurance, but only if the employer or the Authority applies for such an apportionment.
(5)    The Commission may, on the application of any insurer or employer concerned or of the Authority, determine a dispute as to whether—
(a)liability to pay compensation under this Act should be apportioned under this section, or
(b)any such liability should be apportioned under this section in respect of different injuries.
The determination of the Commission has effect despite any agreement on apportionment if the application for determination was made by an employer (in the employer’s own right) or the Authority.
(6)    (Repealed)
(7)    A person who is liable to pay compensation under this Act is not entitled in any proceedings under this Act to a reduction in that liability by apportionment on account of the existence of any other person who is also liable to pay any part of that compensation unless that other person is a party to the proceedings.
(8)    This section applies to any liability arising before or after the commencement of this Act.”
Section 22A of the 1987 Act provides:
“22A Further provisions concerning apportionment of liability under section 22
(1) The apportionment of liability under section 22 is—
(a)in the case of the apportionment of liability between employers—to be on the basis of the relative length of the worker’s employment with each employer concerned (not including any period of employment after the last relevant injury was received), or on such other basis as the Commission considers just and equitable in the special circumstances of the case, and
(b)in the case of the apportionment of liability between insurers of the same employer—to be on the basis of the relative length of the employer’s period of insurance with each insurer concerned during which the worker concerned was employed by the employer (not including any period of insurance after the last relevant injury was received), or on such other basis as the Commission considers just and equitable in the special circumstances of the case.
(2)    (Repealed)
(3) Liability may be apportioned under section 22 even if the liability has been discharged.
(4) When liability to pay compensation is apportioned under section 22 between 2 or more persons, the Commission may order that the compensation is payable to the worker by one of those persons and that the other persons are to pay (by way of contribution) their apportioned share of that compensation to that person.
(5)    The person ordered under subsection (4) to pay compensation to the worker is to be—
(a)in the case of apportionment between employers—the employer who most recently employed the worker, or such other of the employers as the Commission considers reasonable in the special circumstances of the case, and
(b)in the case of apportionment between insurers—the insurer of the employer at the time of the last injury, or such other of the insurers as the Commission considers reasonable in the special circumstances of the case.
(6)    An order is not to be made under subsection (4) if the parties concerned have agreed as to the payment by one of them of the compensation concerned.
(7)    In this section a reference to an insurer includes a reference to a self-insurer and a reference to a period of insurance includes a reference to a period of self-insurance. A liability in respect of a claim under Division 6 of Part 4 is for the purposes of this section taken to be a liability of the insurer of the employer concerned during the period that is relevant to that liability.
(8) In a case to which section 22 applies, if all of the insurers concerned (being either insurers of the same employer or of the different employers concerned) are insurers within the meaning of Division 4 of Part 7 and the entitlement of the worker (or other claimant) to receive compensation is not disputed—
(a)the compensation is (despite subsection (5)) payable by the last insurer or the last employer (as relevant to the case), with no apportionment of liability under section 22, and
(b)for the purposes of calculating an insurance premium payable by any of those employers, their claims histories are to be determined on the assumption that liability had been apportioned under section 22 (without the need for a determination of, or agreement as to, that apportionment).
(9) The operation of section 22 is not to be limited because of the fact that it provides for liability to be apportioned rather than providing for payment of contributions.”

SUBMISSIONS

Appellant’s Submissions

As to Ground One

The appellant outlined the history of the proceedings, leading to the filing of the appeal.
The appellant submits that Arbitrator Beilby’s analogy with s 151Z of the 1987 Act was misplaced, as s 151Z is a different statutory mechanism which operates differently to ss 22 and 22A of the 1978 Act. The appellant adds that there is no authority for the proposition that a s 151Z recovery claim must require the evidence of the injured worker.
The appellant also submits that there is no legal right to cross-examination in the Commission and decisions whether to allow cross-examination or to limit it are discretionary. The appellant submits that the respondent made no application to cross-examine Mr Harrison. The appellant submits that the suggestion that Mr Harrison could not be compelled to give evidence is plainly wrong as the rules permit a summons to be issued to give evidence, and had the respondent provided notice of an intention to cross-examine or else the submission would be put that the apportionment order should not be made, those orders would have been sought at the teleconference or an adjournment of the proceedings sought. Rather, the appellant submits, the respondent appears to have raised this issue at the very end without notice.
The appellant submits that the issues raised for determination are inconsistent with the ultimate issues identified by Arbitrator Beilby as the issues she relied upon in determining the claim adverse to the appellant.
The appellant raises a further issue, being Arbitrator Beilby’s suggestion that Mr Harrison could not be medically examined. The appellant submits that this suggestion is unfair given the requirement for a medical examination was not raised at teleconference, was not identified as an issue and involves error by Arbitrator Beilby given the respondent in fact had the opportunity to make an application for Mr Harrison to be medically examined under s 120 of the 1998 Act but made no attempt to do so.
The appellant submits Arbitrator Beilby’s refusal to make any apportionment whatsoever was in error and ignored several fundamental features of the Commission, namely:
(a)    The Commission operates in an informal setting and the rules of evidence do not apply.
(b)    It must, in accordance with the principles of good conscience and equity, arrive at a fair, quick and expeditious decision.
(c)    Arbitrator Beilby had a proper basis to undertake an apportionment exercise, having regard to the prior decision of the Commission, the AMS and MAP assessments and other voluminous material. Further, Arbitrator Beilby was not entitled to simply ignore the medical evidence including the histories given to doctors in determining whether the onus of proof had been discharged. Arbitrator Beilby was required to do the best she could based on the materials she had before her.
(d)    Arbitrator Beilby was unable to point to any authority for the proposition that where the worker is not called or there has been an effluxion of time, that results in a determination that the just and equitable power conferred by statute on the Commission ought not be exercised.
(e)    The respondent in effect belatedly argued the case upon the basis that the proceedings were analogous to an abuse of process, namely that due to the effluxion of time or the destruction of some records, it could not have a fair hearing of the proceedings even though it made no attempt whatsoever at the teleconference to point this issue out nor was an application made for the proceedings to be dismissed or permanently stayed.
The appellant submits that if the decision to apportion was discretionary (which it submits it is not), then the legal errors identified above apply equally as errors of discretion. However, the appellant submits Arbitrator Beilby refused to exercise her power, as opposed to exercising a discretionary decision and arriving at an apportionment of nil.

As to Ground Two

The appellant submits the arbitration process departed substantially from its accepted procedure in the Commission in that the specific issues for determination were departed from and the appellant was not given a proper opportunity to make submissions as to why the witness issue, the cross-examination issue, the records issue and the delay issue were not disqualifying factors to relief. The appellant submits that determination on these grounds, as opposed to the identified specific issues, amounts to error in taking into account an irrelevant consideration and by a denial of procedural fairness because the appellant was not afforded appropriate opportunity to respond to the deficiencies set out by the respondent.
The appellant submits there was sufficient material before Arbitrator Beilby to determine the claim, however if the absence of evidence from Mr Harrison was going to be a significant issue and one that would possibly lead to the apportionment proceedings completely failing, it had to be pointed out and an appropriate accommodation made for the appellant to deal with Mr Harrison’s evidence and call him.

Respondent’s Submissions

The respondent notes the appellant has sought apportionment and contribution in circumstances where the appellant has made voluntary payments of compensation to Mr Harrison from 2006 to 18 February 2018, despite there being issues as to causation. The respondent notes the material before Arbitrator Beilby clearly demonstrated the uncertainties of history and conflicts of opinion which troubled Arbitrator Beilby and could not be readily resolved given the way the appellant had chosen to press its claim.
The respondent submits evidence from Mr Harrison specific to the claim was neither obtained nor served and Mr Harrison was not an available witness for the hearing. The respondent refers to Kurnell Passenger and Transport Service Py Ltd v Randwick City Council[51] in submitting that because a claim had not been made by Mr Harrison against the respondent, the respondent had no opportunity or right to arrange medical review of Mr Harrison and a proper assessment of his history.
[51] [2009] NSWCA 59.
The respondent submits a MAC is conclusive evidence with respect to impairment but is of no probative effect in determining the causes of incapacity. The respondent refers to March v E & MH Stramare Pty Ltd[52] for the correct test of causation with respect to claims for incapacity.
[52] [1991] HCA 12; 171 CLR 506.
With respect to limitation issues, the respondent submits that the clear law is to the effect that it is the underlying right and title to contribution which arises from the payment of compensation which is subject to the Limitation Act 1969. In a claim such as the present, a claim for contribution brought after the expiration of six years from a payment of compensation is barred by ss 14(1)(d) and 63 of the Limitation Act 1969.

As to Ground One

The respondent submits that Arbitrator Beilby’s concern for the lack of evidence presented by the appellant was the subject of express submission by the respondent and therefore not a surprise to the appellant. The respondent submits the appellant failed to satisfy the onus of providing evidence enough for Arbitrator Beilby to make the determination in the appellant’s favour. This was due to both the absence of evidence from Mr Harrison and the appellant’s selective tendering of evidence.
The respondent also submits that details of Mr Harrison’s history were not addressed in the prior hearing before Arbitrator Peacock and there was no analysis of Mr Harrison’s capacity immediately prior to the 2006 injury. However, the findings in those proceedings revealed what may have occurred in that 2006 injury and whether the arthroscopic procedure would have been necessary but for that injury.
The respondent further submits that the fact that it had made voluntary payments had no probative significance with respect to the matters before Arbitrator Beilby. Further, the decisions of Arbitrator Peacock and the MAP have limited value.

As to Ground Two

The respondent submits there is no element of procedural fairness that would warrant a rehearing and that the issue of the adequacy of the evidence presented by the appellant was clearly raised before Arbitrator Beilby.
The respondent notes the only formal concession it made in the proceedings was that an injury had occurred in 1970. The respondent further submits that it was clear from the outset that the appellant bore the onus of establishing each of the elements of its case for apportionment and contribution, which included establishing that the appellant had a liability to pay compensation to Mr Harrison and that the compensation was paid in satisfaction of the appellant's liability and in proper amounts. The respondent further submits the appellant ought to have known that it also bore the onus of establishing the relative significance of the 1970 injury to the various aspects of its claim including the need for the arthroscopic surgery initially undertaken, the need for the subsequent knee replacement and the causes of subsequent periods of incapacity.

Appellant’s submissions in reply

The appellant submits the respondent’s concession made at the arbitration hearing[53] is important as it conceded injury, causation and the correctness of the determination by Arbitrator Peacock in the first set of proceedings.
[53] T1 3.10–20.
The appellant refutes the submission that it “selectively” tendered medical certificates, medical reports and a MAC, noting the entire record was before Arbitrator Beilby.
The appellant notes there was in fact substantial evidence from Mr Harrison as a consequence of the documents produced from other proceedings and the concession which was sufficient to crystallise a liability in the respondent for the purposes of apportionment.

Appellant’s submissions during the appeal hearing

During the appeal hearing, the appellant’s counsel referred to the decisions in Wilson v Blayney Abattoir County Council,[54] Secombe, HIH v GIO,[55] Waycon Services Pty Ltd v Sutton,[56]and Aluminium Louvres & Ceilings Pty Limited v Zheng.[57]
[54] [1995] NSWCC 36; 12 NSWCCR 509.
[55] [2000] NSWCC 25.
[56] [2005] NSWWCCPD 132.
[57] [2006] NSWCA 34 (Zheng).
The appellant submitted that Arbitrator Beilby placed emphasis on the “absence of a statement” from Mr Harrison, “[i]n the absence, as it were, of a witness and the inability, as it were, to cross-examine.”[58] However, the appellant submitted that those matters were “irrelevant to the duty, not the discretion, the duty to undertake the apportionment exercise.”[59]
[58] Transcript of appeal proceedings, 27 February 2020 (T2) 4.11–14.
[59] T2 4.15–17.
The appellant submitted that the test for apportionment involves two stages. The appellant submitted that there was a series of jurisdictional facts which needed to be determined. He submitted those jurisdictional facts to be as follows:
“Do you have a worker within the meaning of the Act in respect of each employer?
Did the worker suffer from an injury arising out of or in the course of employment with each employer?
Is the incapacity established in respect of each employer to the effect that each employer is partly responsible for it?”[60]
[60] T2 6.8–6.16.
Once these jurisdictional facts are determined then the decision maker is to consider what is just and equitable.[61]
[61] T2 6.21.
The appellant relied on the decision in Zheng and s 354 of the 1998, and submitted that the Commission is not bound by the rules of evidence and must act according to equity, good conscience and the merits of the matter, ensuring that there is no formality or technicality.[62] The appellant submitted that there is no legal right to cross-examine an applicant or witness in the Commission, and cross-examination may be granted by application for leave.[63] Arbitrator Beilby’s comment that the respondent is not able to test the case put against it by “independent medical examination or testing of the worker’s evidence” and the comment that the respondent “has no path where it can cross-examine [Mr Harrison] or test any of [his] evidence” assumes, so the respondent submits, that there is a right to cross-examine which is wrong.[64] Having regard to the telephone conference outcome summary, the appellant’s counsel, who did not appear in the proceedings before Arbitrator Beilby, conceded that the inability to redeem or challenge Mr Harrison was raised during the conciliation phase of proceedings before the Arbitrator.[65] However, the appellant submitted that there can be no criticism of the parties, on a Browne v Dunn[66] basis, when there was a failure to cross-examine Mr Harrison.[67]
[62] T2 6.25–7.8.
[63] T2 7.15.
[64] T2 8.4–24.
[65] T2 9.25.
[66] (1893) 6 R 67.
[67] T2 10.1.
The appellant briefly referred to the evidence, including the medical certificates, medical retirement documentation, the reports of Dr Ghabrial, Dr Mohammed and Dr Jones, and Dr Pillemer. The appellant submitted that the simple point is:
“… that when you look at the enormity of the evidence – let’s assume we have an HIH v GIO case where the man suddenly dies prior to the hearing, on our learned friend’s case thesis, well, we can’t cross-examine him and we’re prejudiced. Don’t say why, what is it that’s the smoking gun that they say we’re prejudiced and, therefore, there should be no apportionment that’s unjust and inequitable.
In our submission, section 354 and the whole purpose of the Commission is to have an Arbitrator to be able to sit down, try and get the parties to resolve, it they can’t resolve to then do the best one can on the material and again, can I say against me, let it be assumed there was something that the worker had to say which was hotly contentious and it’s not identified, then that affects stage 2 which is the discretionary weighing up process. I don’t have evidence from the worker about this, I don’t have evidence from the worker about that.
There is an absence of evidence, or I take from account the fact that his learned friends say that couldn’t have him mentally examined, we say it’s wrong and I take that into account but it doesn’t mean you don’t go to stage 2 and decline to apportion. It means these were all jurisdictional facts which affect the ultimate discretion and it’s the stage 2 part that the Arbitrator does not get to.
We say that at stage 1 she had to make the requisite findings, then we say it is mandatory, not discretionary, for her to then go to stage 2 and do the best she can. We may have come out at nil but she had to go there and she had to say why it was that there was such a heavy emphasis to the exclusion of all the material I’ve taken you onto now on what the worker may or may not say ...”[68]
[68] T2 15.16–16.17.

The appellant added that Arbitrator Beilby’s references to a need to have “evidence of the worker’s thoughts and feelings” ignores her function to make a determination and “orders regarding the various palpabilities [sic, culpabilities] of both insurers on a percentage basis doing the best she could.”[69]
[69] T2 16.27–33. (A review of the audio recording of the appeal proceedings revealed that the word “culpabilities” was incorrectly described in the written transcript of proceedings as “palpabilities”. The record has been amended to correct the error.)
The appellant submitted that although Mr Harrison could have given evidence about his thoughts, feelings and observations of his pain levels, they are also matters from which Arbitrator Beilby was entitled to draw a series of rational inferences from the available material.[70] There is enough material for the stage one enquiry to be satisfied based on rehabilitation, medical certificates, doctors’ opinions, reports together with previous statements of Mr Harrison in the prior proceedings and the findings of Arbitrator Peacock.[71] The appellant further submitted that there was enough for Arbitrator Beilby to proceed to stage two.[72]
[70] T2 17.25–29.
[71] T2 18.5–10.
[72] T2 18.11.
Again, the appellant submitted that Arbitrator Beilby’s finding that the inability of the respondent to have Mr Harrison assessed and the fact there was no evidence from him amounted to an insurmountable prejudice was incorrect.[73] That did not form part of her function under s 22 and s 22A of the 1987 Act.
[73] T2 18.24.
The appellant contended that Arbitrator Beilby was in error in law to refer to “exceptional circumstances” as a matter which was taken into account in stage one.[74] The appellant distinguished between exceptional circumstances and special circumstances. The appellant submitted that this was a significant error of law in the process of apportionment and her function under s 22 of the 1987 Act. The appellant added that s 22 contemplates the absence of a person, in circumstances of apportionment where the injury results in death of a worker, and liability is to be apportioned in such manner as the Commission determines.[75] The section includes the word “is” which imposes a duty (to apportion).[76]
[74] T2 19.11–13.
[75] T2 19.30.
[76] T2 20.4.
The appellant further submitted that it was not provided with notice that the absence of a statement and ability to cross-examine was an issue.[77] Had the appellant been aware that this was an issue it submitted that it would have made an application for an adjournment and an application for a summons to be issued to Mr Harrison to attend to give evidence. As a result, the appellant submitted that it was denied procedural fairness as a matter of legal principle.[78] The appellant accepted that the respondent raised the absence of a statement and issue of cross-examination, but Arbitrator Beilby did not say anything about this or why it was that that fact formed part of stage one and not stage two.[79] On this basis, the appellant submitted that the matter should be remitted back for redetermination in accordance with the law.
[77] T2 22.10.
[78] T2 22.29.
[79] T2 23.10–12.

Respondent’s submissions during the appeal hearing

The respondent submitted that the absence of coherent and persuasive probative evidence worked against the exercise of discretion in favour of the appellant. The appellant was missing a coherent and persuasive probative case as to the fact that the incapacity and the medical expenses claimed should be apportioned and how they should be apportioned.[80]
[80] T2 24.5–9.
The respondent also submitted that there is no mandated obligation to apportion in every case. It is not a question of “you lose because you didn’t bring the worker, it’s a question of you lose because you did not present a coherent and persuasive case which would persuade” Arbitrator Beilby to make a determination of apportionment.[81] The respondent added that the reference to “is to be apportioned” in s 22 means that “the Commission’s got a right to determine the matter in accordance with the normal principles but when one goes to s 22(5) it’s permissive rather than mandatory”.[82]
[81] T2 24.23–27.
[82] T2 24.30–25.1.
The respondent submitted that Arbitrator Beilby had a discretion to apportion, and that the exercise of that discretion was not mandatory.[83] The respondent added a discretion is only interfered with when there has been a departure of the kind that would not ordinarily be made.[84]
[83] T2 25.9.
[84] T2 25.20, citing House v The King [1936] HCA 40; 55 CLR 499 (House v The King).
The respondent conceded that the fact that the appellant had paid compensation did not bar it from making a claim for apportionment.[85]
[85] T2 25.33.
The respondent also submitted that the usefulness of Arbitrator Peacock’s decision was limited.[86] It was limited to the determination of whether an injury occurred within the meaning of the Act. Arbitrator Peacock did not determine incapacity or who was responsible for payment of medical expenses, because her only issue to determine was whether there were two injuries that could be apportioned by the MAP.[87] The respondent further submitted that the proposition that other matters relevantly were explored in those proceedings is untenable. In the present matter, it is an apportionment of incapacity payments and medical expenses which requires an enquiry to establish why that incapacity arose and why medical expenses arose at a particular time.[88]
[86] T2 26.30.
[87] T2 27.1–20.
[88] T2 27.22–25.
The respondent noted that there was some evidence that expressed a view that the creation of a medical condition being osteoarthritis in the knee was a result of an operation. However, that does not answer the question of how to approach apportionment in respect of a need for an operation.[89] The respondent added that:
“You could go through your whole life with an osteoarthritic knee and never have the operation, never have the need to operate. Maybe continue to work in your normal employment, something happens and it causes a need. You have to know what that something is that happens, you have to know its significance and you have to know how it affected somebody to know whether it’s incapacitating.” [90]
[89] T2 28.3.
[90] T2 28.4–11.
The respondent contended that the matter is further complicated by the fact that Mr Harrison had a back injury, which was incapacitating, and he has cardiomyopathy which prevented him from heavy work.[91] The respondent added:
“So you’re dividing up a liability for weekly payments, you’re trying to work out the significance of something that happened in 1970, you’re not told the day-to-day of somebody’s life as a fireman, you’re not told just how many injuries he had, you’re not told what that 2006/7 injury was that led to further operative treatment, as I recall, you’re not told when the back injury occurred and how it affected him in any real sense.”[92]
[91] T2 28.3–33.
[92] T2 28.18–26.
Similarly, there is no evidence as to when the cardiomyopathy started to affect Mr Harrison and how it affected him.[93]
[93] T2 28.33.
The respondent submitted that:
“It’s not a case where [the Arbitrator] said you can’t win because you didn’t call the worker, it’s a case where [the Arbitrator] says I don’t get any sense of a coherent case of the sequence of this, of the chronology without the worker because I’ve got nothing else to guide me.”[94]
[94] T2 29.6–10.
The respondent further submitted that Arbitrator Beilby cannot be required to make a decision when the evidence is inadequate.[95] There was no coherent case to enliven the exercise of her discretion.
[95] T2 29.14.

Appellant’s submissions in reply during the appeal hearing

In submissions in reply, the appellant added that it was significant that Arbitrator Beilby said she declined to apportion liability as sought. She did not say that the “proceedings are hopeless or the proceedings are so prejudicial that they haven’t discharged the onus of proof and [I’m] going to dismiss them, she just said I’m not going to the next step.”[96] Rather, Arbitrator Beilby considered that it was “unjust to proceed to apportionment” on the “basis of fairness or the injustice of it, it would be unjust to proceed.”[97]

DISCUSSION

[96] T2 30.20–24.

[97] T2 30.31–33.

Ground one - apportionment

The Commission has a broad power, under ss 22 and 22A of the 1987 Act, to apportion liability to pay compensation between employers where permanent impairment or incapacity results from more than one injury to the worker.
The apportionment provisions apply to any liability arising before or after the commencement of the 1987 Act.[98] Relevantly, if a period of incapacity for work resulted both from injury received before the commencement of s 22 of the 1987 Act and injury received after that commencement, the incapacity for the purposes of determining the amount of compensation payable will be treated as having resulted from the injury received after that commencement.[99]
[98] 1987 Act, s 22(8).
[99] 1987 Act, cl 4(3) of Pt 4 of Sch 6; Secombe.
The test of apportionment involves a series of questions of fact going to what role the given injuries played in the subsequent incapacity and need for treatment and medical expenses. Apportionment under s 22 and s 22A of the 1987 Act involves a two stage process.[100] In Baltica, Clarke JA held that:
“if the worker satisfies the test in a case where there are a number of work injuries and apportionment is sought, the trial judge is then to apply the s 22 test and that test will be satisfied if the incapacity resulted partially from one injury (presumably the injury which led to the finding under s 33) and partly from another or other injuries.”[101]
[100] Sutherland Shire Council v Baltica General Insurance Co Ltd (1996) 12 NSWCR 716 (Baltica).
[101] Baltica, 732 (Priestley JA and Hunter AJA agreeing).
The first stage involves a determination of liability to pay compensation.
The second stage involves an apportionment of liability, having regard to the evidence relating to the injured worker’s capacity. This requires consideration of issues going to causation of incapacity. If incapacity or permanent impairment suffered by the worker results from more than one injury then liability to pay compensation is to be apportioned in such manner as the Commission determines. The second stage involves a different inquiry to that of determining causation in a dispute about liability. It involves an inquiry as to whether incapacity resulted partially from one injury and partly from another or other injuries. It also involves an inquiry as to “whether the injury caused or materially contributed to the incapacity”.[102] In other words, whether the incapacity was so connected with a number of injuries that as a matter of ordinary commonsense and experience it should be regarded as having resulted from all or any of them.[103]
[102] Baltica, 730G–731B (per Clarke JA, Priestley JA and Hunter AJA agreeing); Rail Services Australia v Dimovski [2004] NSWCA 267, [36].
[103] Baltica, 94F (per Clarke JA, Priestley JA and Hunter AJA agreeing).
If it is found that incapacity resulted from more than one injury then this would enliven the Commission’s jurisdiction to proceed to the exercise of power to apportion the payment of compensation between two different employers or insurers. That is, once it is found that incapacity results from more than one injury liability to pay compensation “is to be apportioned in such manner as the Commission determines.”[104] The case law confirms this approach. In Baltica it was held that, if incapacity is found to have resulted from more than one injury then “the apportionment exercise will need to be carried out”.[105] What logically follows is the application of the relevant test under s 22A(1) of the 1987 Act.
[104] 1987 Act, s 22(1).
[105] Baltica, 727 (per Clarke JA, Priestley JA and Hunter AJA agreeing).
In the present matter, the appellant carries the onus to establish that any incapacity results from the 1970 injury. The appellant must discharge the relevant onus before any apportionment can be made between the employers.
As liability was not a live issue in dispute, Arbitrator Beilby did not determine liability. That is, she did not specifically find whether the weekly compensation paid and medical expenses incurred resulted from the injuries with the appellant or the injury with the respondent or both. Arbitrator Beilby instead proceeded to deal with the question of capacity. She found that:
“I think in circumstances where there is a lump sum apportionment of 80% to the respondent and there is considerable evidence of a total if not near total incapacity, then it would defy common sense to find that liability could fall to both respondents for that incapacity. The crucial question being what is just and equitable, a matter I will return to later.”[106]
[106] Reasons, [32].
Arbitrator Beilby’s finding reproduced above appears inconsistent with other aspects of her decision that deal with incapacity and her comment that there is “substantial evidence in support of incapacity”[107]. It is possible that what the Arbitrator meant to say was that “it would defy common sense to find that liability could [not] fall to both respondents for that incapacity”. Although, I make no concluded view on this matter.
[107] Reasons, [52].
However, what is clear is that, before determining whether Mr Harrison’s incapacity for the periods of weekly benefits as distinct from medical expenses claimed was a result of more than one injury, namely the 1970 injury and subsequent injury in 2006 to the left knee, she proceeded to consider the application of s 22A(1)(a) and whether apportionment was “just and equitable.”[108] In the present matter, the question of apportionment proceeded on the basis of the second limb under s 22A(1)(a), namely whether it was “just and equitable in the special circumstances of the case.” It did not proceed on the basis of apportionment based on the relative lengths of the periods employment nor is it argued on appeal that Arbitrator Beilby should have undertaken that step.
[108] Reasons, [48]–[49].
In her reasons, Arbitrator Beilby identified “the flaw” in the appellant’s case to be that it was “unable to quantify, without [Mr Harrison’s] evidence, the level of incapacity that would flow from the earlier injury.”[109] She said that despite the substantial evidence in support of incapacity, there was no path where the respondent could cross-examine Mr Harrison or test his evidence.[110] She added that there was no evidence from Mr Harrison, including evidence as to “his thoughts, feelings and observations of his pain level” when he ceased employment with the appellant and respondent, to make a finding in respect of incapacity.[111] She then concluded that it was “not ‘just and equitable’ to apportion the payments made” by the appellant.[112] Accordingly, she declined to exercise the power to apportion because she considered that it was not just and equitable in the circumstances. That is, Arbitrator Beilby proceeded to consider what was just and equitable in the special circumstances of the case, under s 22A(1)(a) of the 1987 Act, before she finally determined whether incapacity resulted from more than one injury under s 22 of the 1987 Act. That was an error.
[109] Reasons, [51].
[110] Reasons, [52].
[111] Reasons, [53].
[112] Reasons, [55].
I appreciate Arbitrator Beilby’s comments that the appellant was not able to quantify the level of incapacity that would flow from the earlier injury on the basis of the state of the evidence. I am also sympathetic to the respondent’s situation and consider that the appellant should have taken further steps to secure the necessary evidence from Mr Harrison to address incapacity. However, Arbitrator Beilby’s approach to the question of apportionment was in error. Arbitrator Beilby did not specifically find that because of the state of the evidence she was unable to find that incapacity results from more than one injury or that incapacity results from both employers, and as a result declined to exercise the power to apportion. She found that because of the state of the evidence, namely there being no evidence from Mr Harrison, it was not “just and equitable” to apportion the voluntary payments made by the appellant. It was an error to consider the test of “just and equitable” as a reason for declining to exercise the power of apportionment, when she had not finally determined the relevant question of whether incapacity results from more than one injury. The state of the evidence on incapacity is a relevant factor to the determination of whether injury with the appellant and respondent materially contributed to the incapacity and, if so, second, the ultimate level of apportionment that should be awarded. However, by declining to apportion between the employers on the basis that it was not “just and equitable”, instead of on the basis that the relevant incapacity could not be established, Arbitrator Beilby erred.
Arbitrator Beilby’s remark that she needed Mr Harrison’s evidence as to “his thoughts, feelings and observations”[113] of his pain level when he finished employment with the respondent and the appellant was not apt. The more appropriate enquiry would have been to the available evidence about Mr Harrision’s incapacity for work from time to time and that evidence should have been led by the worker himself, if possible.
[113] Reasons, [53].
If I am wrong, in the alternative, I find that Arbitrator Beilby erred in the exercise of her discretion to apportion between the employers on the basis that she overlooked relevant evidence. The principles to be considered in overturning an exercise of discretion were set out in House v The King. Those principles were conveniently set out by Heydon JA in Micallef v ICI Australia Operations Pty Ltd & Anor as follows:
“As a result, Garling DCJ had to make a discretionary decision on a matter of practice and procedure - an extremely important one, having potentially serious consequences for the plaintiff, but a discretionary decision on a matter of practice and procedure nonetheless. Any attack on decisions of that character must fail unless it can be demonstrated that the decision-maker:
(a)     made an error of legal principle,
(b)     made a material error of fact,
(c)     took into account some irrelevant matter,
(d)     failed to take into account, or gave insufficient weight to, some relevant matter, or
(e)     arrived at a result so unreasonable or unjust as to suggest that one of the foregoing categories of error had occurred, even though the error in question did not explicitly appear on the face of the reasoning.
Even though this Court might conclude that it would have exercised the discretion differently if the discretion had been conferred on it in the first instance - might have adjourned the matter so as to permit the defendants to consider the late-supplied particulars, or might have held the plaintiff to the old particulars, or might have fixed one more ‘final’ date for outstanding matters to be completed by - any such conclusion would be immaterial. The law committed the exercise of the discretion to Garling DCJ. The law permits interference with his exercise of the discretion in only the limited circumstances just described.”[114]
[114] [2001] NSWCA 274, [45] (Sheller JA and Studdert AJA agreeing).
While the parties have not specifically addressed the above principles, I am satisfied that the appellant seeks to argue that Arbitrator Beilby erred on the basis that she failed to take into account or gave insufficient weight to the medical evidence in determining the question of apportionment which, if proven, would permit an interference with the exercise of a discretion.
I accept the appellant’s broad submissions that on the available evidence Arbitrator Beilby overlooked evidence regarding incapacity in determining that the onus of proof had not been discharged. While the absence of evidence from Mr Harrison was an important factor, there was evidence dealing with the cause of incapacity which was relevant to determining apportionment on a basis that was “just and equitable” in the special circumstances of the case. Indeed I consider that there is medical evidence that was overlooked which indicates that Mr Harrison’s need for surgery results in-part from the 1970 incident, and it is arguable that any incapacity arising from the need for surgery would therefore also result in-part from the 1970 incident (see Dr Pillemer below at [138] and above at [42]–[45]). That is, the evidence suggests that the 1970 incident and related surgery to the left knee brought about Mr Harrison’s osteoarthritis and made it inevitable that he would be required to undergo a knee replacement at some point in time. Further, the 2006 incident aggravated Mr Harrison’s symptomatology in the left knee and escalated the inevitable need for surgery, and the consequent incapacity.

The causal connection between the need for subsequent left knee surgery and the associated incapacity is addressed to some extent in the medical evidence. That evidence includes the report of Dr Jones, dated 12 November 2008, which indicates that the left knee replacement was “for post-traumatic osteoarthritis in his knee” and that he was permanently unfit for full duties due to his left knee. It also includes the report of Dr Pillemer, dated 3 October 2018, who opined that open meniscectomy of the left knee, like that which occurred following the 1970 incident, “predictably … will be followed by progressive osteoarthritic change in the knee which would seem to have occurred in the present case”. Dr Pillemer added that there was no further specific injury until 2006 at which stage Mr Harrison had “advanced osteoarthritic change”, and the problems with the left knee “therefore do date back to the 1970 injury”. Further, the available evidence suggests that immediately before the 2006 incident Mr Harrison had capacity to work. I accept that the cause for the need for further left knee surgery may be different from the cause of any incapacity arising from the left knee. However, an available inference from the evidence is that the 1970 incident led in-part to the need for surgery of the left knee in 2007 and the consequent incapacity arising from the surgery. Having said that, given the state of the evidence, I reach no concluded view on incapacity in this matter.
Whether the 2006 incident aggravated Mr Harrison’s condition in his left knee and materially advanced the time at which he came to and required further surgery has not been properly ventilated in the submissions. Further, whether the incapacity for which weekly payments were paid and for which apportionment is now sought is directly related to the need for the further surgery has also not been properly ventilated. Arbitrator Beilby has not dealt with these issues or the above evidence in any significant detail nor have the parties properly addressed on it. Accordingly, it is appropriate that the matter be remitted to another Arbitrator for re-determination so that these matters may be properly considered and addressed.
In proceedings before Arbitrator Beilby, the appellant placed much reliance on the second MAC issued by the MAP. I accept that the MAC is relevant and conclusively presumed to be correct in respect of, among other things, the degree of permanent impairment of a worker as a result of an injury.[115] However, a MAC is only binding in respect of the purpose for which it was obtained.[116] It is not binding or determinative on issues regarding incapacity arising from impairment which results from an accepted injury.
[115] 1998 Act, s 326(1).
[116] JC Equipment Hire Pty Ltd v Registrar of the Workers Compensation Commission of NSW [2008] NSWCA 43, [SS] (per Tobias JA).
As Arbitrator Beilby noted in her reasons, the nature of the proceedings in this matter gave rise to several difficulties. In particular, as the appellant had accepted liability and paid compensation there had not been a properly ventilated claim in respect of incapacity. Another difficulty arises due to the nature of the multiple injuries incurred by Mr Harrison, resulting in periods of incapacity. That is, a left knee injury in 1970 in the course of employment with the respondent, and a lumbar spine injury in 2003, left knee aggravation in 2006/7 and a lumbar spine aggravation in 2010 in the course of employment with the respondent. A further difficulty arises by reason of scarcity of evidence going to incapacity. In particular, the evidence does not properly articulate whether for the periods of weekly benefits and medical expenses paid Mr Harrison was incapacitated as a result of the left knee injury in 1970 or in 2006/7 or indeed whether incapacity relates to the back or non-compensable work injuries. Indeed, the medical evidence does not precisely identify for what the medical and treatment expenses were incurred nor whether those expenses were reasonably necessary as a result of injury, and, if so, what injury. In view of the available evidence, it is difficult to identify the relative contribution of each employment to Mr Harrison’s ultimate incapacity. Absent any direct evidence on incapacity, or evidence from Mr Harrison or an independent medical examination report dealing specifically with incapacity, it is difficult for any decision maker to reach a properly informed view on incapacity and determine what level of apportionment of liability is just and equitable in the special circumstances of the case. These are all matters which will need to be properly prepared, fully explored and ventilated on remitter.
Further, it is not disputed that Mr Harrison is entitled to weekly benefits. However, in submissions during the course of the appeal proceedings the appellant suggested that the respondent questioned Mr Harrison’s entitlement to treatment and expenses paid.[117] Although, this issue and whether the medical treatment and expenses incurred were reasonably necessary as a result of injury was not further developed during proceedings. In the circumstances, this issue will also need to be addressed on remitter.
[117] T2 32.15–18.
Given all of these issues, it is more appropriate that the matter be remitted to another Arbitrator for re-determination afresh in accordance with this decision. As I have determined that the matter should be remitted to another Arbitrator for re-determination, it is not necessary that I consider the other outstanding issues raised under this ground.
Whilst the appellant has succeeded under this ground and the matter will be remitted for re-determination, the outcome on appeal should not be taken as any affirmation of how the case was presented below. The appellant’s case was not adequately prepared particularly in regard to the evidence on incapacity and the evidence regarding medical expenses incurred. But for the for the errors identified above, I would not have intervened and remitted the matter for re-determination.

Ground two - procedural fairness

As I have found that ground one succeeds it is not necessary that I consider ground two. However, I make the following observations about the appellant’s submissions on procedural fairness.
The appellant argues that Arbitrator Beilby determined the matter on a different basis to that argued by the parties, thereby taking into account an irrelevant consideration and denying it procedural fairness. In particular the appellant submits that Arbitrator Beilby failed to notify the parties of a live issue in the proceedings concerning prejudice to the respondent in not being able to assess Mr Harrison or challenge his evidence.
Arbitrator Beilby found that, whether or not s 22 of the 1987 Act was enlivened, she was unable to exercise her discretion under s 22A of the 1987 Act because it was not just and equitable to apportion payments in circumstances where the respondent was subject to prejudice in not being able to assess Mr Harrison or challenge his evidence. The appellant suggests that Arbitrator Beilby’s findings regarding the inability to call Mr Harrison and test his evidence as being fatal to its cause.
I accept that the absence of evidence from Mr Harrison and an inability to test that evidence formed a large part of Arbitrator Beilby’s reasons for declining to exercise her power to apportion liability for compensation. She found that in the absence of evidence from Mr Harrison the appellant was “unable to quantify” the level of incapacity that would flow from the earlier injury. She also found that the respondent had no path by which it could cross-examine Mr Harrison or test any of his evidence. While she accepted that there was “substantial medical material supporting” a finding of incapacity she held that the “vacuum created by the lack of evidence” from Mr Harrison led to the appellant not meeting the requisite “burden of proof”.
It is well accepted that decisions must be determined on the basis of the issues raised in the pleadings. The purpose of this is to enable a party to prepare its case on the issues as defined in the pleadings and ensure that parties may know the case which they have to meet and ensure that procedural fairness is met. That is, of course, unless “the parties have deliberately chosen some different basis for the determination of their respective rights and liabilities”.[118]
[118] Banque Commerciale SA, (in liq) v Akhil Holdings Limited [1990] HCA 11; 169 CLR 279, 287 (per Mason CJ and Gaudron J).
I do not accept the appellant’s submissions that Arbitrator Beilby determined the matter on a basis that was not argued. That is because the issue of the absence of evidence from Mr Harrison and ability to test that evidence was squarely raised during the telephone conference before Arbitrator Beilby. This is borne out by Arbitrator Beilby’s telephone conference outcome summary document. While the appellant’s counsel on appeal did not appear in the proceedings below, during the course of the appeal hearing the appellant’s counsel conceded that the telephone conference outcome summary document (see above [104]) is an accurate summary of what was said during the telephone conference before Arbitrator Beilby. That document records the following issue “[p]rejudice - haven’t had the opportunity to redeem worker, or rehabilitate worker or challenge worker.” This squarely raises the issue of prejudice to the respondent in challenging Mr Harrison, in the context of there being insufficient proof and evidence to support the exercise of power to make an order for apportionment.
I am fortified in the above view, having regard to the transcript of the arbitration proceedings before Arbitrator Beilby. In that transcript, the appellant’s then counsel, Mr O’Neill submitted that in the proceedings before Arbitrator Peacock the respondent was given the opportunity to “cross examine the worker and/or I believe his father, who provided a statement in those proceedings around the circumstances of the accident” and that this “goes to the issue of prejudice”.[119] While, the appellant’s then counsel submitted that he would “submit later” on this point no additional submissions were made.[120] In the transcript, the respondent’s counsel also specifically raised the issue of a “forensic disadvantage” in not being able to have Mr Harrison “medically examined” or test Mr Harrison’s evidence, and to adduce useful evidence in defence of the claim.[121] These references to the transcript of proceedings before Arbitrator Beilby further indicate that the issue of “prejudice” was a live issue in the proceedings.
[119] T1 13.9–15.
[120] T1 13.14.
[121] T1 27.24–28.15; 41.25–29; T1 43.33–44.5.
Contrary to the appellant’s purported submission, Arbitrator Beilby was not required to notify the parties of the significance of the absence of evidence from Mr Harrison and/or ability to test that evidence to her determination of the dispute. That is because it was an issue that was clearly ventilated during the telephone conference, for the reasons set out above. It is also because it was raised by the respondent during the arbitration phase of proceedings, in the context of the absence of cogent evidence to support incapacity resulting from the 1970 injury, which included evidence from Mr Harrison. Even though the issue of prejudice was raised in the proceedings below the appellant made no application for adjournment to obtain further evidence on incapacity or evidence from Mr Harrison. On this basis, the appellant cannot seek to argue that it was caught by surprise by Arbitrator Beilby’s findings on prejudice.
It follows that the appellant cannot seek to argue that it was denied procedural fairness on the basis that Arbitrator Beilby determined the matter on an issue that was not raised or properly notified to the parties. Therefore, to the extent the appellant seeks to argue that Arbitrator Beilby has erred by taking into account an irrelevant consideration, by determining the dispute on a basis that was not argued, I do not accept that submission.
For these reasons, ground two fails.

Roberts Concrete Specialists Pty Limited (Formerly Jack Harrison Homebuilders Pty Ltd)

In the proceedings before Arbitrator Beilby it was indicated that the respondent had been deregistered.[122] Arbitrator Beilby did not make a declaration pursuant to s 162 of the 1987 Act that the respondent had entered into a contract of insurance with Mercantile Mutual (now QBE Workers Compensation (NSW) Ltd) in respect of any workers compensation liability and that the respondent had ceased to exist. This is likely because Arbitrator Beilby did not make any award for apportionment between the employers. However, a declaration under s 162 will need to be made on remitter if an award of compensation is to be made against the deregistered respondent.
[122] T1 2.15–3.1.

CONCLUSION

The appellant did not present a well prepared case in the proceedings below, to enable the exercise of power to apportion. Indeed, counsel for the appellant on the appeal acknowledged the holes in its case in respect of the available evidence. Notwithstanding this, for the errors identified, I have decided to remit the matter for re-determination by another Arbitrator. I would expect that the deficiencies in the way in which the case was presented be remedied before the hearing on remitter.

DECISION

The Certificate of Determination dated 16 May 2019 is revoked.
The matter is remitted for re-determination by another Arbitrator.

Judge Phillips

PRESIDENT

20 April 2020