Stream Solutions Holdings Pty Ltd v Orr
[2007] NSWWCCPD 39
•7 February 2006
WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:Stream Solutions Holdings Pty Ltd v Orr [2007] NSWWCCPD 39
APPELLANT: Stream Solutions Holdings Pty Ltd
RESPONDENT: Garth Orr
INSURER:Allianz Australia Workers Compensation (NSW) Ltd
FILE NUMBER: WCC8641-06
DATE OF ARBITRATOR’S DECISION: 3 October 2006
DATE OF APPEAL DECISION: 7 February 2006
SUBJECT MATTER OF DECISION: Sections 9A and 14 of the Workers Compensation Act 1987;consumption of alcohol; gross misconduct; serious and wilful misconduct; application of Hatzimanolis v ANI Corporation Ltd (1992) 173 CLR 473
PRESIDENTIAL MEMBER: Deputy President Bill Roche
HEARING:On the papers
REPRESENTATION: Appellant: Ellison Tillyard Callanan
Respondent: Carroll & O’Dea
ORDERS MADE ON APPEAL: The decision of the Arbitrator dated 3 October 2006 is confirmed.
The Appellant Employer is to pay the Respondent Worker’s costs of the appeal.
BACKGROUND TO THE APPEAL
On 27 October 2006 Stream Solutions Holdings Pty Ltd (‘the Appellant Employer/Stream’) sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Workers Compensation Commission (‘the Commission’) against a decision, dated 3 October 2006.
The Respondent to the Appeal is Garth Orr (‘the Respondent Worker/Mr Orr’).
Mr Orr was born on 12 May 1950 and started work with Stream as a specialised products manager (print manager) in mid 2001 having previously worked for Westpac for several years as a procurement person for print products. His duties with Stream included identifying potential suppliers, forming relationships and eventually obtaining pricing from suppliers for a particular contract. To perform his work he was required to visit sites and evaluate suppliers’ production capabilities and capacities.
In 2002 Stream, a Sydney based company, was attempting to break into the Melbourne market. As part of his duties Mr Orr was required to spend time in Melbourne to assist with implementing a contract with the ANZ bank. Stream was not well known in Melbourne and it was part of Mr Orr’s duties to initiate and develop relationships with various suppliers. This involved seeing potential clients at their place of business and at lunch and dinner. Stream supplied a three bedroom flat in Melbourne from which Mr Orr and other employees would base their operations. The flat doubled as an office.
On 8 August 2002 Mr Orr was in Melbourne performing his normal duties for Stream. This required him to attend meetings with suppliers and visit various plants. The last plant visit was completed at approximately 6.20pm. Mr Orr then attended a work dinner at about 7.30 or 8.00 pm to build up relations with prospective suppliers. Alcohol was consumed during the dinner. At the completion of the dinner (some time after midnight) Mr Orr caught a taxi to Stream’s apartment. On getting out of the taxi his foot stuck between the car and the gutter causing him to fall heavily onto his right side hitting his chin, left knee and jolting his neck.
Once in his apartment Mr Orr phoned his wife and then took a shower. Whilst in the shower he alleges that he slipped and fell sustaining a gash to his left leg.
An Application to Resolve a Dispute (‘the Application’) was registered in the Commission on 6 June 2006 seeking lump sum compensation in the sum of $10,000.00 in respect of 8% whole person impairment together with a general order for the payment of hospital and medical expenses. The Application alleged injury “whilst stepping out from a taxi on his way home from work” and “whilst having a shower at his work place”.
By its Reply filed on 22 June 2006 Stream purported to raise 15 issues, including employment, injury, notice, serious and wilful misconduct under section 14 of the Workers Compensation Act 1987 (‘the 1987 Act’), gross misconduct and substantial contributing factor. Many of the ‘issues’ identified in the Reply were not pressed at the hearing. Employers should be aware that the efficient resolution of disputes is not assisted by the failure to properly identity in the Reply the real issues in dispute. The filing of a ‘catchall’ Reply without any consideration of the real issues is unacceptable and may well result in an adverse costs order in circumstances where the employer may succeed on one issue but lose on other issues that should have been conceded from the outset.
The matter was listed for conciliation and arbitration before a Commission Arbitrator on 7 September 2006 when it could not be resolved and proceeded to Arbitration. In a reserved decision the Arbitrator found in favour of Mr Orr on all issues.
Stream seeks leave to appeal the Arbitrator’s decision.
LEAVE TO APPEAL
Monetary Threshold
Before proceeding to deal with an appeal the Commission must determine whether the application meets the requirements of section 352 of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’).
The quantum in issue on the appeal is in excess of $5,000.00 and therefore the threshold in section 352(2)(a) of the 1998 Act is satisfied. The whole of the compensation claimed is ‘at issue’ in the appeal and, therefore, the threshold in section 352(2)(b) is also satisfied.
Time
The appeal was lodged within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act.
I grant leave to appeal.
PRELIMINARY MATTERS
Section 354(6) of the 1998 Act provides:
“(6)If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”
Having regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submission by the parties that the appeal can proceed to be determined on the basis of these documents, I am satisfied that I have sufficient information to proceed ‘on the papers’, without holding any conference or formal hearing, and that this is the appropriate course in the circumstances.
THE DECISION UNDER REVIEW
The ‘Certificate of Determination’, dated 3 October 2006, records the Arbitrator’s orders as follows:
“1.That on 9 August 2002, the Applicant received an injury to his neck arising out of or in the course of his employment with the Respondent.
2.That the Applicant’s employment was a substantial contributing factor to his injury.
3.That a further teleconference be set down in this matter for the purpose of referring the Applicant to an Approved Medical Specialist for assessment of his level of permanent impairment.
4.No order as to costs at this time.”
ISSUES IN DISPUTE
The issues in dispute in the appeal are whether the Arbitrator erred in:
(a)finding that Mr Orr had sustained an injury within the meaning of section 4 of the 1987 Act (‘injury’);
(b)finding that Mr Orr injured his neck on 9 August 2002 (‘injury’);
(c)failing to distinguish between the two events that occurred, the fall in the gutter and the incident in the bathroom (‘injury’);
(d)finding that employment was a substantial contributing factor to his injury or injuries (‘substantial contributing factor’);
(e)failing to find that Mr Orr’s consumption of alcohol took him outside the course of his employment because it amounted to either ‘gross misconduct’ under the principles set out in Hatzimanolis v ANI Corporation Ltd (1992) 173 CLR 473 (‘Hatzimanolis’) (‘gross misconduct’) or ‘serious and wilful misconduct’ under section 14 of the 1987 Act (‘serious and wilful misconduct’);
(f)misquoting the decision of Judge Armitage in Powell v Intercapital Brokers (1998) 16 NSWCCR 259 (‘Powell’) (‘gross misconduct’), and
(g)failing to find that Mr Orr had, by his misconduct, “embarked upon a folly of his own” (Appellant Employer’s submissions paragraph 19) (‘serious and wilful misconduct’).
SUBMISSIONS
The Appellant Employer submits:
a) the Arbitrator did not really determine the issue of injury as she concluded that “the Applicant received an injury to his neck arising out of or in the course of his employment with the Respondent” and did not determine whether the injury “arose out of or in the course of” employment;
b) the Arbitrator did not distinguish between the two events that occurred, namely, the fall getting out of the taxi and the incident in the bathroom;
c) Mr Orr had a “point 2 breath test” at the time he was at hospital at about 2.19am on the morning of 9 August 2006;
d) the hospital notes refer to Mr Orr being intoxicated which was consistent with observations of Jodie McDonald, a work colleague sharing the company flat;
e) the action of the worker in drinking to the extent he did took him outside his employment. His level of consumption of alcohol involved more than “social drinking” and by virtue of his own misconduct had removed himself from his employment;
f) Mr Orr had been involved in substantial drinking and as such “that amounted to gross misconduct” (WorkCover Authority (NSW) v Walling & anor (1998) 16 NSWCCR 527 (‘Walling’));
g) the Appellant Employer gained no advantage from such behaviour and did not expect its employees to drink to such excess. It is unreasonable to say that such behaviour was incidental to Mr Orr’s activities in speaking and dealing with clients and the Appellant Employer did not “induce such activity”;
h) employment was not a substantial contributing factor to the injury because though employment may have led Mr Orr to attend dinner it was not a “real or important factor” when considered in the light of events that subsequently took place;
i) there was no basis for a finding that the Appellant Employer permitted drinking to excess or that it condoned and allowed staff to drink to excess;
j) by his conduct Mr Orr “embarked on a folly of his own” by drinking to excess and such conduct amounted to “serious and wilful misconduct” under section 14 of the 1987 Act and Mr Orr is therefore not entitled to benefits under the Act, and
k) the injuries sustained by Mr Orr have not resulted in “serious and permanent disablement” under section 14(2) of the 1987 Act (Broken Hill Pty Co Limited v Kuhna (1992) 8 NSWCCR 401 (‘Kuhna’)).
The Respondent Worker submits that:
a) Mr Orr sustained a significant jolting to his neck in his falls;
b) the fact that Mr Orr chipped his tooth in his fall taken with the evidence of Drs Burke and Miller provides sufficient grounds to support the Arbitrator’s finding that Mr Orr injured his neck as alleged;
c) it was not necessary for the Arbitrator to apportion between the fall from the taxi and the incident in the bathroom. Her finding that Mr Orr received an injury to his neck “arising out of or in the course of his employment” on 9 August 2002 was sufficient to satisfy the requirement to find ‘injury’ under section 4 of the 1987 Act;
d) there was no evidence as to the accuracy of the alcohol reading taken at the hospital;
e) Mr Orr did not consider his consumption of alcohol to have played a role in either fall;
f) the fact that Mr Orr had been drinking alcohol with clients at a work dinner was not serious and wilful misconduct. Mr Orr was expected to socialise with clients, and
g) the Appellant Employer has not discharged the onus it carries of proving that the injuries sustained by Mr Orr were solely attributable to the alleged misconduct.
REVIEW
The nature of a review and the role and function of a Presidential member on appeal has been considered in many cases in the Commission. In The King Island Company Limited v Deery [2005] NSWWCCPD 1 it was held at [19]:
“19. A Presidential Member on appeal has a specific and limited role in the review of a decision of an Arbitrator. The review is not a rehearing. The Presidential member is not dealing with the matter de novo and is not arriving at a fresh decision based on all of the evidence available at a later time (Coal & Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194; Builders Licensing Board v Sperway Constructions (Sydney) Pty Ltd (1976) 135 CLR 616). The powers of the Presidential Member to revoke the decision pursuant to section 352(7) of the 1998 Act and to substitute a new decision in its place, are exercisable only where it is demonstrated that the decision of the Arbitrator is affected by some legal, factual or discretionary error (Allesch v Maunz (2000) 203 CLR 172). Alternatively, the Presidential Member may remit the matter back to the Arbitrator concerned, or to another Arbitrator, for determination in accordance with any decision or directions made.”
Before an Arbitrator’s decision will be revoked on review it must by demonstrated that it contains or has resulted from an error of fact, law or discretion. The error must be such that, but for it, a different decision should have been made (see Snow Confectionary Pty Ltd v Askin [2004] NSWWCCPD 56; Section 294 of the 1998 Act; YG & GG v Minister for Community Services [2002] NSWCA 247; Absolon v NSW TAFE [1999] NSWCA 311).
I intend to apply the above authorities in the present matter.
DISCUSSION AND FINDINGS
Injury
The Arbitrator considered the evidence and relevant authorities in some detail. At paragraph 32 of her Statement of Reasons for Decision (‘Reasons’) she quoted the following passage in Hatzimanolis:
“Accordingly it should now be accepted that an interval or interlude within an overall period or episode of work occurs within the course of employment if, expressly or impliedly the employer has induced or encouraged the employee to spend that interval or interlude at a particular place or in a particular way. Furthermore, an injury sustained in such an interval will be within the course of employment if it occurred at that place or while the employee was engaged in that activity unless the employee was guilty of gross misconduct taking him or her outside the course of employment.” [16]
Consistent with Hatzimanolis and the evidence before her the Arbitrator found that both events occurred “in an interval within an overall period of work covering the entire period of time he was in Melbourne” (Reasons, paragraph 30). The Arbitrator’s analysis of the evidence on this issue has not been challenged. She correctly applied the principles set out in Hatzimanolis. That application meant that, in the absence of ‘gross misconduct’, she was entitled to find, and did find, that Mr Orr sustained his injuries in the course of his employment. That finding was expressed as follows at paragraph 54 of her Reasons:
“On 9 August 2002, Garth Orr received an injury to his neck arising out of or in the course of his employment as a Specialised Products Manager with Stream Solutions Holdings Pty Ltd.”
It is only necessary for an Arbitrator to find that one of the two alternatives in section 4 is satisfied. It is clear to me, having regard to the Arbitrator’s reference to Hatzimanolis, that she was satisfied that the injury was sustained ‘in the course of’ Mr Orr’s employment. The fact that she made reference to both the alternatives in section 4 does not diminish the force of her finding. Nothing turns on the fact that she did not identify which limb of the definition she relied upon. It is sufficient that she was satisfied that one of the limbs had been satisfied. There may be many cases where it is necessary for a distinction to be drawn between whether an injury ‘arose out of’ or was sustained ‘in the course of’ employment, but this case is not one of them. I see no error in the Arbitrator’s manner of expressing her clear finding.
In respect of Mr Orr’s neck injury the Arbitrator had before her the statement of Mr Orr dated 11 May 2006 together with medical evidence from Drs Burke and Miller. After considering this evidence the Arbitrator stated at paragraph 25 of her Reasons:
“On the medical evidence relied on by both Mr Orr and Stream I find that Mr Orr did suffer an injury to his neck as a result of the falls he suffered on 9 August 2002.”
The Appellant Employer’s challenge to this finding is that neither the ambulance report nor the hospital notes refer to Mr Orr injuring his neck. The absence of a reference to a neck injury in those records does not prove that such an injury did not occur as claimed by Mr Orr. It was for the Arbitrator to assess the evidence on this issue and to make the appropriate finding of fact. She did that. Her finding discloses not error of fact, law or discretion.
The fact that the Arbitrator did not distinguish between the injuries sustained in the fall while getting out of the taxi and the incident in the bathroom is of no consequence. The falls all occurred within minutes of each other. Having found that Mr Orr was not on a periodic journey (Reasons paragraph 46) within the meaning of section 10 of the 1987 Act (a finding not challenged on appeal) means that the same liability test had to be applied to each of Mr Orr’s injuries before he could recover compensation. Therefore, it was not necessary for the Arbitrator to distinguish between the different falls in reaching her conclusions.
Substantial Contributing Factor
Section 9A of the 1987 Act provides:
“9A No compensation payable unless employment substantial contributing factor to injury
(1) No compensation is payable under this Act in respect of an injury unless the employment concerned was a substantial contributing factor to the injury.
(2) The following are examples of matters to be taken into account for the purposes of determining whether a worker’s employment was a substantial contributing factor to an injury (but this subsection does not limit the kinds of matters that can be taken into account for the purposes of such a determination):
(a) the time and place of the injury,
(b) the nature of the work performed and the particular tasks of that work,
(c) the duration of the employment,
(d) the probability that the injury or a similar injury would have happened anyway, at about the same time or at the same stage of the worker’s life, if he or she had not been at work or had not worked in that employment,
(e) the worker’s state of health before the injury and the existence of any hereditary risks,
(f) the worker’s lifestyle and his or her activities outside the workplace.”
The Arbitrator found that subsections (c), (d) and (e) were irrelevant in the context of the dispute before her. No challenge is made to that finding. She then referred to and carefully considered the subsections (a), (b) and (f) as follows:
a) in respect of ‘time and place of injury’: Mr Orr was working for Stream in Melbourne on a weekly basis and whilst in Melbourne was staying in an apartment provided by Stream for its employees to live and work in whilst they were conducting its business in Melbourne (Reasons, paragraph 43);
b) in respect of ‘the nature of the work performed’ by Mr Orr: his duties included socialising with clients and that included attending lunches and dinners. He was injured returning from one such dinner late at night, carrying a briefcase which he said prevented him from breaking his fall, and he alighted from the taxi onto an uneven cobbled curb (Reasons, paragraph 44), and
f)Mr Orr’s ‘lifestyle and activities outside the workplace’ were relevant, as he had consumed enough alcohol for him to have a reading of 0.2.
The Arbitrator then concluded at paragraph 45:
“Taking into account all of the circumstances however, and particularly the time and place of his injury and the nature of the work he performed generally I find that Mr. Orr’s employment was a substantial contributing factor to his injury.” (emphasis added)
The question of whether the section 9A test is satisfied is a question of fact and is a matter of impression and degree (see Dayton v Coles Supermarkets Pty Ltd (2001) 22 NSWCCR 46). The Arbitrator considered all the relevant evidence and made her findings based on that evidence. She did not rely merely on the fact that the Appellant Employer provided accommodation for its employees in Melbourne but also took into account the matters set out above. Those matters established that Mr Orr was performing the duties required of him on the evening of 8 August 2002 and, therefore, that he was acting ‘in the course of’ his employment at the time of his injuries. The Arbitrator has made no error of law, fact or discretion in reaching her conclusion on this issue.
Gross Misconduct
The term ‘gross misconduct’ is not a term used in the Workers Compensation Acts (the 1987 Act and the 1998 Act). It is the expression used by the High Court in Hatzimanolis to described behaviour that would disentitle a worker to the benefits of the 1987 Act if he or she was injured during ‘an interval or interlude within an overall period or episode of work’.
The Appellant Employer’s reference to the decision in Walling does not advance its position. In Walling the Court of Appeal held that the question of whether a worker’s actions amounted to ‘gross misconduct’ was a question of fact. The Court made no statement of principle that provides any guidance in the present matter.
A review of the authorities was conducted by Judge Geraghty in Schinnerl v Commissioner of Police (1995) 11 NSWCCR 278 where his Honour held that it was gross misconduct for a police officer to lie in the course of performing his duties. After reviewing the authorities his Honour noted at 292F:
“‘Gross misconduct’ covers a multitude of sins. As Lamond J thought, it was grossly improper for an employee to urinate in a boiler room. It was grossly improper for an employee to steal, and it was for this reason he was assaulted. It would be grossly improper for a police officer, in my opinion, to take the law into his own hands, to traffic in drugs, to steal, or to bribe somebody.”
Whether a worker’s behaviour can be described as ‘gross misconduct’ depends on the circumstances in each case. In the present matter Mr Orr was required to socialise with potential clients. That included going to lunch or dinner with them. It is not unreasonable that that socialising would include the consumption of alcohol. That is what happened on the night of 8 August 2002. There is no doubt that Mr Orr was affected by alcohol by the time he fell in the street outside his apartment. However, the following points are relevant:
a) he had been socialising with his employer’s knowledge, consent and encouragement;
b) the dinner was directly related to his employer’s activities in Melbourne and was for its benefit, and
c) it is reasonable to expect that an employee engaged to socialise with potential clients over dinner would consume alcohol.
In addition, Stream called no evidence that it discouraged, let alone prohibited, the consumption of alcohol at or during the social functions attended by Mr Orr for Stream’s benefit.
The Appellant Employer challenges the Arbitrator’s reliance on Powell submitting that she “misquoted the decision” (Appellant Employer’s submissions paragraph 18). In Powell, Judge Armitage noted (obiter dicta) that a worker who fell over and injured himself at a weekend social function that had been organised at work was not guilty of gross misconduct or of serious and wilful misconduct though he was significantly affected by alcohol at the time of his fall. The judge noted that the worker had done no more than senior managers of the employer had done at the function.
The Arbitrator accurately summarised the points made by Judge Armitage in Powell and said at paragraph 38:
“On the evidence available to me, it appears that Stream permitted the consumption of alcohol by its senior management at dinners such as that participated in by Mr. Orr.”
She also found at paragraph 39 that, whilst Mr Orr was intoxicated, there was no evidence that Mr Orr conducted himself “in a manner which would amount to gross misconduct”. The accepted evidence was that he suffered a series of falls, possibly for a number of reasons.
In the present case I cannot see that Mr Orr did any more than Stream expected of him. It expected him to socialise. That socialising required him to wine and dine certain clients and potential contacts that would advance the company’s move into the Melbourne market. On the evening of 8 August 2002 Mr Orr was doing exactly that. No evidence was called that Stream placed a limit on the consumption of alcohol while entertaining clients.
For these reasons I reject the Appellant Employer’s argument that Mr Orr was guilty of gross misconduct when he consumed alcohol on the night of 8 August 2002. The Arbitrator’s findings were open on the evidence and disclose no error of fact, law or discretion.
Serious and Wilful Misconduct
The term ‘serious and wilful misconduct’ is set out in section 14(2) of the 1987 Act which provides:
“(2) If it is proved that an injury to a worker is solely attributable to the serious and wilful misconduct of the worker, compensation is not payable in respect of that injury, unless the injury results in death or serious and permanent disablement.”
The Arbitrator’s Reasons imply that she did not consider Mr Orr’s behaviour amounted to serious and wilful misconduct (Reasons paragraph 53) but she did not make that express finding. However, nothing turns on that omission because the Arbitrator found that even if Mr Orr’s conduct did amount to serious and wilful misconduct she was not satisfied that that conduct was the sole cause of his injuries (Reasons paragraph 53). That conclusion was based on the following evidence, which the Arbitrator accepted:
a) Mr Orr did not believe his consumption of alcohol contributed in any way to his fall from the taxi;
b) he stepped from the taxi in darkness onto an uneven cobblestone paved curb while holding a brief case;
c) in these circumstances the fall would have occurred in any event regardless of the consumption of alcohol;
d) the fall or falls in the apartment bathroom occurred because Mr Orr was dazed and confused as a result of the earlier fall from the taxi;
e) in addition, the bath/shower was slippery and had no rubber mat;
f) it was not uncommon for people using the shower to lose their footing in the shower and extra towels were often placed on the floor to prevent slipping (Reasons paragraph 50), and
g) regardless of the general state of the bathroom, at the time Mr Orr fell the shower had been running and that would have made the bath slippery.
The only ‘serious and wilful misconduct’ relied on by the Appellant Employer was Mr Orr’s consumption of alcohol. I infer from the Arbitrator’s finding that that consumption, in the circumstances of this case, did not amount to ‘gross misconduct’ that she was also satisfied that it did not amount to ‘serious and wilful misconduct’ under section 14. Even if such conduct did amount to ‘serious and wilful misconduct’ the Arbitrator’s finding that Mr Orr’s injuries were not ‘solely attributable’ to that conduct meant that the employer failed to establish a defence under section 14. The above findings were open to the Arbitrator and disclose no error of fact, law or discretion.
Given the above findings it is unnecessary to determine whether Mr Orr’s injuries resulted in ‘serious and permanent disablement’.
The above findings make it clear that the Arbitrator was not satisfied that Mr Orr was on a “folly of his own” when he was injured. This proposition was never put at the Arbitration hearing and is simply not supported by the evidence. There is no evidence that Mr Orr was engaged in his own recreational activity on the night of 8 August 2002. At the completion of the dinner he took a taxi directly to the apartment provided for him by Stream. The evidence is that he was engaged in a work activity, which was encouraged by his employer and for its benefit.
DECISION
The Arbitrator’s decision dated 3 October 2006 is confirmed.
COSTS
The Appellant Employer is to pay the Respondent Worker’s costs of the appeal.
Bill Roche
Deputy President
7 February 2006
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF BILL ROCHE, DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
0
5
0