Suleski v Pilbara Iron Company (Services) Pty Ltd - [2018] WASCA 147

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT :   THE COURT OF APPEAL (WA)
CITATION:   SULESKI -v- PILBARA IRON COMPANY (SERVICES) PTY LTD [2018] WASCA 147
CORAM:   MURPHY JA
MITCHELL JA
BEECH JA

HEARD:   17 AUGUST 2018
DELIVERED          :   17 AUGUST 2018
PUBLISHED           :   24 AUGUST 2018
FILE NO/S:   CACV 92 of 2017
BETWEEN:   SPASE SULESKI
Appellant
AND
PILBARA IRON COMPANY (SERVICES) PTY LTD
Respondent

ON APPEAL FROM:
Jurisdiction              :   DISTRICT COURT OF WESTERN AUSTRALIA
Coram:   HERRON DCJ
Citation: PILBARA IRON COMPANY (SERVICES) PTY LTD -v- SULESKI [2017] WADC 114
File Number             :   APP 71 of 2016

Catchwords:

Worker's Compensation - Disease caused by stress from discipline - Compensation not payable unless disease predominantly arose from discipline which was unreasonable and harsh on the part of the employer - Arbitrator concluded that the disease was predominantly caused by discipline which was unreasonable and harsh on the part of the employer - On appeal primary judge found that the arbitrator misapprehended the scope of the inquiry he was required to undertake - Where leave to appeal was required for the appeal to the District Court and leave could only be granted if the appeal involved a question of law - Whether appeal to District Court involved a question of law

Legislation:

Workers' Compensation and Injury Management Act 1981 (WA), s 5, s 18, s 247, s 254

Result:

Leave to appeal refused
Appeal dismissed

Category: B

Representation:

Counsel:

Appellant	:	Mr J R Brooksby
Respondent	:	Mr D R Clyne

Solicitors:

Appellant	:	Slater & Gordon
Respondent	:	Jackson MacDonald

Case(s) referred to in decision(s):

Forrest & Forrest Pty Ltd v Minister for Mines and Petroleum [2017] WASCA 153; (2017) 51 WAR 425
Hossain v Minister for Immigration [2018] HCA 34
Jenkins v Western Australian Department of Training [1999] WASCA 199
Medical Board of Australia v Woollard [2017] WASCA 64; (2017) 51 WAR 32
Minister for Immigration and Citizenship v Li [2013] HCA 18; (2013) 249 CLR 332
Paridis v Settlement Agents Supervisory Board [2007] WASCA 97; (2007) 33 WAR 361

REASONS OF THE COURT:

At the conclusion of the hearing of this appeal, the court refused leave to appeal and dismissed the appeal. These are our reasons for making those orders.
The appellant (Mr Suleski), was employed as a crane supervisor by the respondent (Pilbara Iron). At a meeting with his superintendent on 22 August 2013, Mr Suleski was placed on a performance management plan. He subsequently developed a disease, characterised as either an adjustment disorder or depressive disorder. This disease rendered Mr Suleski totally incapacitated to perform work as a supervisor, and all forms of work involving heavy machinery.
Section 18 of the Workers' Compensation and Injury Management Act 1981 (WA) (Act) provides that, if an injury of a worker occurs, the employer shall, subject to the Act, be liable to pay compensation in accordance with sch 1 to the Act.
'Injury' is defined by s 5 of the Act to include a disease contracted by a worker in the course of his employment at or away from his place of employment and to which the employment was a contributing factor and contributed to a significant degree. However, a proviso to the definition of 'injury', read with s 5(4), excludes a disease caused by stress that arose wholly or predominantly from his discipline, unless the discipline 'is unreasonable and harsh on the part of the employer'.
An arbitrator determined a dispute as to Pilbara Iron's liability to pay workers' compensation to Mr Suleski under pt XI of the Act. In findings which are not challenged in this appeal, the arbitrator found, in effect, that Mr Suleski contracted a disease in the course of his employment with Pilbara Iron, and that his employment was a contributing factor which contributed to a significant degree to the disease. The arbitrator also found that the disease was caused by stress that arose predominantly from the implementation of the performance management plan, which was a form of discipline. In light of those findings, whether Mr Suleski suffered from an 'injury' turned on whether the implementation of the performance management plan was 'unreasonable and harsh on the part of the employer'.
The arbitrator found that Pilbara Iron's implementation of the performance management plan was both unreasonable and harsh. With respect, the arbitrator's reasons for reaching that conclusion are not particularly clear. However, they appear to rely on Mr Suleski having a perception that he was being unfairly targeted, and that it was unreasonable for Pilbara Iron not to accept Mr Suleski's explanations for his alleged performance failures, and to instead implement the performance management plan.[1] It followed from these findings that Mr Suleski suffered from an injury which was compensable under the Act.
[1] Paragraphs 88 and 100 - 101 of the arbitrator's reasons.
Having found that Mr Suleski suffered from a compensable injury, the arbitrator made orders for the payment of workers' compensation to him under the Act.
Pilbara Iron appealed against those orders to the District Court of Western Australia. The primary judge granted leave to appeal and allowed the appeal. The primary judge set aside the arbitrator's orders and the 'decision' that the implementation of the performance management plan was unreasonable and harsh. The primary judge remitted the issue of whether the implementation of the performance management plan was unreasonable and harsh to a different arbitrator.
Under s 247 of the Act, an appeal from an arbitrator to the District Court only lies with the leave of that court, and leave can only be granted if 'a question of law is involved' in the appeal.
Mr Suleski now appeals to this court against the orders made by the primary judge. There were initially five grounds of appeal, which relate to a single question of law. That question is whether the errors identified by the primary judge were properly characterised as errors of law, so that the appeal to the District Court involved a question of law.
The grounds of appeal as originally formulated do not challenge the merits of the primary judge's conclusion that the arbitrator erred in concluding that Pilbara Iron's implementation of the performance management plan was unreasonable and harsh. Nor do the grounds challenge the judge's conclusion that the arbitrator erred in the specific respects identified by his Honour. Rather, as counsel for the appellant accepted,[2] the only element of the primary judge's reasons which is challenged by these grounds is whether the errors which his Honour identified were correctly characterised as errors of law. Whether the arbitrator made the errors is not challenged, only the judge's characterisation of those errors as errors of law.
[2] Appeal ts 11 - 13.
In our view, there is no merit in those grounds of appeal. The primary judge was cognisant of the requirement that the appeal involve a question of law.[3] His Honour correctly characterised the errors which he identified as errors of law. It follows that the appeal to the District Court from the arbitrator's decision involved a question of law.
[3] Pilbara Iron Company (Services) Pty Ltd v Suleski [2017] WADC 114 (Primary decision) at [19] - [23].
In essence, the primary judge found that the arbitrator misapprehended the nature of his statutory task,[4] or as the primary judge put it:
the arbitrator erred in law in the way in which he approached the determination of whether the implementation of the [performance management plan] was unreasonable and harsh as set out in his reasons [171]. (citation omitted)
[4] Primary decision [171] - [175].
The primary judge found that the correct approach was to determine whether in all of the circumstances, looked at objectively, the action of Pilbara Iron in placing Mr Suleski on the performance management plan was unreasonable and the consequences were harsh.[5]
[5] Primary decision [171].
The primary judge identified two kinds of error in relation to the arbitrator's findings based on Mr Suleski's subjective belief that he was being unfairly targeted.
First, the primary judge found that there was no evidence to support the finding that Mr Suleski subjectively believed that he was being unfairly targeted at the time that the disease was contracted.[6] This was on the basis that Mr Suleski only discovered that another employee had been treated differently during the course of the proceedings before the arbitrator, over two years after he suffered from the stress‑related condition.[7]
[6] Primary decision [172].
[7] Primary decision [108] - [113].
Secondly, the primary judge found that the arbitrator erred by having regard to the irrelevant consideration of Mr Suleski's subjective belief that he was being treated unfairly, which distracted the arbitrator from determining whether the discipline was objectively unreasonable and harsh.[8] The judge found that, in that manner, the arbitrator failed to apply the proper construction of the expression 'harsh and unreasonable' in the definition of injury.[9]
[8] Primary decision [173].
[9] Primary decision [173].
The primary judge also concluded that the arbitrator erred in finding that it was unreasonable for Pilbara Iron not to accept or disregard Mr Suleski's explanations but to instead implement the performance management plan. This was essentially on the basis that the arbitrator failed to have regard to all of the circumstances, and erred in focussing on Mr Suleski's subjective belief or perception that he was being unfairly treated.[10] Again, the judge found that this indicated that the arbitrator had failed to apply the proper construction of the statutory expression.[11]
[10] Primary decision [174].
[11] Primary decision [174].
The kind of errors which the primary judge identified are all errors of law: a finding of fact in the absence of any supporting evidence, taking into account irrelevant considerations, failing to take account of relevant considerations and misunderstanding the nature of the statutory inquiry.[12]
[12] See Medical Board of Australia v Woollard [2017] WASCA 64; (2017) 51 WAR 32 [154].
Ultimately, the primary judge found that, by failing to consider all of the circumstances relevant to whether the discipline was 'unreasonable or harsh':[13]
The arbitrator has therefore erred in the correct statutory construction of the meaning of the expression 'unreasonable and harsh' in the definition of 'injury'.
It is evident from this passage, understood in the context of the reasons as a whole, that the primary judge did not merely conclude that the arbitrator's decision was against the evidence or the weight of the evidence, which would not be an error of law.[14] Rather, the primary judge ultimately inferred from the arbitrator's reasons that he had misconstrued the Act and misunderstood the scope of the inquiry which he was required to undertake. The primary judge was correct to characterise an error of that kind as an error of law.
[13] Primary decision [175].
[14] Paridis v Settlement Agents Supervisory Board [2007] WASCA 97; (2007) 33 WAR 361 [54].
The primary judge's approach to characterising an error of law is consistent with that taken by this court in Jenkins v Western Australian Department of Training.[15] That case concerned the question of whether an appeal lay from a decision of a review officer under predecessor provisions of the Act. The review officer had to consider whether a transfer of an employee was unreasonable and harsh on the part of the employer. The relevant error in that case was a misapprehension by the review officer as to the scope of the inquiry that is to be undertaken in determining whether a transfer was unreasonable and harsh on the part of the employer.[16] It was held that the true scope of the inquiry must be ascertained upon a proper construction of the Act, and therefore does involve a question of law. As was noted in that case, it is not to the point that the ultimate decision as to whether the transfer was unreasonable and harsh on the part of the employer also involves questions of fact.[17] We agree with the approach taken in Jenkins.
[15] Jenkins v Western Australian Department of Training [1999] WASCA 199.
[16] Jenkins [33].
[17] Jenkins[35].
We do not accept Mr Suleski's submission that the decision in Jenkinsis distinguishable on the basis that it was concerned with a 'transfer' rather than 'discipline'. Nor do we accept the submission that the question of law in Jenkins concerned the meaning of the term 'transfer'. The question in Jenkins was whether the review officer erred in law by concluding that only events prior to the date of formal transfer could be considered in determining whether the employer's conduct was unreasonable and harsh. The court concluded that the review officer had erred, as he was required to give proper consideration to anything that was capable of making the transfer unreasonable and harsh on the part of the employer, including subsequent events.[18]
[18] Jenkins [32] - [33], [37].
We accept that the proper characterisation of the errors identified by the primary judge as errors of law is itself a question of law, so that an appeal from the primary judge's decision to this court is available under s 254(a) of the Act.[19] However, for the above reasons, there is no merit in any of grounds 1 - 5 in the appeal to this court.
[19] Jenkins [35], citing the predecessor provision to s 254(a).
At the hearing of the appeal, Mr Suleski was granted leave to add the following additional ground of appeal:
6.The judge erred in law, given that the term 'unreasonable and harsh' is a finding of fact and, providing there is evidence capable of supporting that proposition, no error of law is committed.
Particular
The arbitrator's findings at [100] and [101] are capable of supporting the proposition that the employer's conduct was unreasonable and harsh.
This additional ground is merely another way of formulating the question identified at [10] above. We do not accept the proposition made in this ground. A decision‑maker may err in law by misconstruing or misunderstanding the nature and scope of his or her power, irrespective of whether or not the material before the decision‑maker is capable of supporting his or her ultimate conclusion. A material misapprehension by a decision‑maker of the nature and limits of his or her power ordinarily constitutes a jurisdictional error.[20] So long as the misapprehension could have made a difference to the ultimate decision,[21] the existence of jurisdictional error will not ordinarily be denied by evidence which is merely capable of supporting the ultimate decision. In the present case, the question of whether the arbitrator exceeded his power by proceeding on the basis of a material misunderstanding of the scope of his inquiry is a question of law.
[20] Minister for Immigration and Citizenship v Li [2013] HCA 18; (2013) 249 CLR 332 [71]; Forrest & Forrest Pty Ltd v Minister for Mines and Petroleum [2017] WASCA 153; (2017) 51 WAR 425 [91]; Hossain v Minister for Immigration [2018] HCA 34 [29].
[21] Hossain [30], [72].
Some of the supplementary written submissions and the oral submissions advanced on Mr Suleski's behalf appeared to contend that the primary judge erred in construing the Act and the arbitrator's reasons.[22] To that extent, the submissions extend beyond the grounds of appeal, as amended. In any event, nothing in the written and oral submissions advanced on behalf of Mr Suleski provides any proper basis for doubting the correctness of the primary judge's conclusion that, on its proper construction, the Act required the arbitrator to consider whether, in all of the circumstances looked at objectively, the discipline was unreasonable and harsh on the part of the employer. Nor do those submissions provide any proper basis for doubting the correctness of the primary judge's conclusions that the arbitrator failed to undertake such an inquiry, and thus misunderstood the scope of the inquiry he was required to undertake.
[22] Appellant's Proposed Supplementary Submissions, par 12, 16, 19, 21, 27, 29; Appeal ts 6 - 7, 22, 30 - 32.
Therefore, we refused leave to appeal under s 254(b) of the Act on the basis that none of the grounds of appeal have any reasonable prospect of succeeding, and dismissed the appeal.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
ET
RESEARCH ASSOCIATE/ORDERLY TO THE HONOURABLE JUSTICE MITCHELL
24 AUGUST 2018