The Office of the Public Guardian v Manning - [2008] NSWWCCPD 94

WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
*STATUS: Reported Decision: The Office of the Public Guardian v Manning* (2008) 7 DDCR 302**
CITATION:	The Office of the Public Guardian v Manning [2008] NSWWCCPD 94
APPELLANT:	The Office of the Public Guardian
RESPONDENT:	Irene Manning
INSURER:	Allianz Australia Insurance Limited, an agent of the Treasury Managed Fund No. 3
FILE NUMBER:	WCC6335-07
DATE OF ARBITRATOR’S DECISION:	18 April 2008
DATE OF APPEAL DECISION:	2 September 2008
SUBJECT MATTER OF DECISION:	Section 289A of the Workplace Injury Management and Workers Compensation Act 1998; nature of ‘review’ in appeal from a discretionary decision; proof of ‘injury’ – infectious disease allegedly contracted in the course of employment; costs order against a successful employer.
PRESIDENTIAL MEMBER:	Acting Deputy President Snell
HEARING:	On the papers
REPRESENTATION:	Appellant:	DLA Phillips Fox
Respondent:	Gillis Delaney Lawyers
ORDERS MADE ON APPEAL:	The decision of the Arbitrator, dated 18 April 2008, is revoked and the following decision is made in its place: “1. Award for the Respondent Employer. 2. Respondent Employer to pay the Applicant’s Costs.” The Appellant Employer is to pay the Respondent’s costs of the appeal.

BACKGROUND TO THE APPEAL

On 16 May 2008 the Office of the Public Guardian (‘the Appellant’) sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Workers Compensation Commission (‘the Commission’) against a decision, dated 18 April 2008.

The Respondent to the Appeal is Irene Manning (‘the Respondent’). The proceedings relate to the death of the Respondent’s late husband, Keith Manning (‘the deceased’), and are brought by the Respondent on behalf of herself, and the four children of the marriage, pursuant to sections 25 and 26 of the Workers Compensation Act 1987 (‘the 1987 Act’). The proceedings initially were against the Appellant, together with the Office of the Ombudsman. The action against the Office of the Ombudsman was discontinued at the arbitration hearing on 28 February 2008.

The deceased held tertiary qualifications in welfare studies and education, including a Masters of Education (Human Relations and Community Education). He commenced working with the Appellant on 2 November 1998, as a guardian. Mr Graham Smith, director of the Appellant, describes the deceased’s duties as follows:

“…his responsibilities included investigating the needs, developing plans and making decisions on behalf of people who were allocated to him for case management. He would have carried a case load of about 35 people.
In order to do that work he would visit the person under guardianship, make contact with various support agencies associated with that person and after assemble the relevant information. Where required he would make decisions about where the person likes (sic), their medical treatment and what services they had. He would have to provide consent to medical treatment.
That would take him to hospitals, nursing homes, disability homes, private homes and various offices. He covered the outer metropolitan area and was located at our Blacktown office. His area was Western Sydney and out to the Blue Mountains.
He was a full time employee except for a brief period where he worked part time between 19 August 2002 and 17 November 2002 when he was working 14 hours per week.”

From 2 June 2003 the deceased also worked for the Office of the Ombudsman, as a community visitor, a part-time ministerial appointment. In this capacity he visited institutions such as nursing homes and boarding houses, ensuring appropriate care was being provided by such institutions. He was in apparently good health. He was a non-drinker, non-smoker, did not drink tea or coffee, and swam five times per week. His spare time was spent predominantly involved in his church. A file from the Department of Health indicates none of his family members smoked. The deceased suffered from asthma, although this was well under control.

The deceased had an onset of symptoms on 2 December 2003. He initially attended his general practitioner. A rash was not at that stage apparent, and he was sent home. Symptoms continued, and a rash developed. On Wednesday 3 December 2003 the deceased was taken by ambulance to Mt Druitt Hospital, where a blood test was positive for Neisseria meningitides, meningococcal disease. He was transferred to Westmead Hospital, where he was diagnosed with meningococcal meningitis, and treated. He improved, and on 9 December 2003 he was transferred from Intensive Care to a ward. In the mid-afternoon of 11 December 2003 he was found unconscious in his room. A diagnosis of pulmonary embolus was made, and the deceased underwent emergency surgery, which he survived, to relieve the clot. However there was significant brain damage. The deceased passed away at Westmead Hospital on 14 December 2003. The death certificate records the cause of death as “Hypotic Encephalopathy due to Massive PE resulting in EMO Arrest”. Another significant condition contributing to the death is given as “Meningococcal meningitis”.

On 16 January 2005 the Respondent completed claim forms in substantially identical terms addressed to the Appellant and the “NSW Ombudsman”. These employers had a common insurer. Neither employer raised lateness of claim as a defence. The claim forms describe “What Happened” as:

“Contracted meningococcal disease and subsequently died as a result of contact with customers and/or staff and/or contact with persons travelling to and from home and work via city rail.”

On 23 September 2005 Treasury Managed Fund (‘TMF’) wrote to the Respondent. It described the employer as “The Office of the Ombudsman”, and declined liability. This letter did not mention the Office of the Public Guardian. The basis of declinature was:

“However, we have made our decision because we do not have proof that Mr Manning’s death resulted from any disease contracted during his employment or, if contracted elsewhere, was such that his employment contributed to any disease or contributed in any way to his death.
Specifically, we do not have proof that the meningitis was contracted in the course of his employment, and further we believe that his death resulted from a massive pulmonary embolism (or blood clot lodged in the artery from the heart to the lungs), not from the meningitis.
Our decision is based on the Hospital records of Westmead Hospital and the reports of M & A Investigators dated 29 March 2005 and 10 August 2005. Copies of these will be provided to you on request.”

The investigation report of 29 March 2005 described the insured as “Office of the Ombudsman”. It stated “we have interviewed the Claimant’s wife and representatives of the insured”. The thrust of the investigation was to consider the possible liability of the Office of the Ombudsman. It says of the Office of the Public Guardian “We understand that a separate claim has been filed with that department.” The attachments to the investigation report document visits made by the deceased in his capacity as a visitor with the Office of the Ombudsman. The report of 10 August 2005 attaches certain medical records from Westmead Hospital. Again, the insured is described as “The Office of the Ombudsman”.

The Appellant’s submissions on appeal describe proceedings being commenced between the same parties on 11 September 2006. A teleconference was held on 20 November 2006, and an arbitration hearing on 5 December 2006. Those proceedings were discontinued against both employers at the arbitration hearing. The Appellant states the Respondent did not raise, during the course of these earlier proceedings, an assertion that the Appellant and its insurer had not disputed the claim against it. The Respondent does not, in its submissions, dispute these assertions going to the history of the earlier proceedings. Neither party has sought to put into evidence the pleadings from such proceedings.

The Application to Resolve a Dispute in the current proceedings (‘the Application’) was registered in the Commission on 21 August 2007. The only document attached to it, declining liability, is the letter of TMF dated 23 September 2005. As against both employers, the Application states at paragraph 1.2 that “Failure to Determine” is not relevant, and “Section 74/54/287A notices” are attached. The injury is described (against both of the employers) as:

“The deceased contracted meningitis meningococcal disease during the course of his employment with the respondent. As a result the deceased suffered an embolism and eventually death.”

The same firm of solicitors acted for both employers in the current proceedings. The Replies (both lodged on 11 September 2007) purportedly confirm the issues “as per dispute notice(s) attached to the Application”. Additionally, each Reply sets out identical issues “not raised in the Application to Resolve a Dispute”. These include whether the conditions of meningococcal disease and pulmonary embolism were contracted in the course of employment, whether death resulted from the meningococcal disease, and whether employment was a substantial contributing factor to either condition (section 9A of the 1987 Act). It is disputed that either condition occurred on a journey pursuant to section 10 of the 1987 Act. Reference is made to the decision in South Western Sydney Area Health Service v Edmonds [2007] 4 DDCR 421; [2007] NSWCA 16 (‘Edmonds’), in attacking the opinion of Dr Anderson, whose report was attached to the Application. ‘Dependency’ and the entitlement to funeral expenses were also placed in issue.

A teleconference was held on 25 September 2007. The matter proceeded to arbitration hearing on 14 November 2007. The transcript records the full available time at that arbitration hearing was used in the conciliation phase, in an unsuccessful attempt to achieve resolution. The transcript suggests an issue as to whether the Appellant had ever given a section 74 notice to the Respondent was raised at this arbitration hearing. The matter was stood over for further arbitration hearing on 6 February 2008, which date was varied to 28 February 2008.

TMF wrote to the Respondent on 14 February 2008 declining her claim for “death benefits”, as against the Office of the Public Guardian. The letter said the decision was made under sections 4, 9a (sic), 25 and 26 of the 1987 Act. This letter also attached a notice under section 74. The letter went on to say:

“Kindly note that we make no concession as to not previously providing you with
notice that your claim is wholly contested. We maintain that at all material times,
you have been aware of our decision to decline liability for the claim.”

The section 74 notice recited the same sections as being relevant, and in essence stated “we have no evidence which proves on the balance of probabilities that your husband sustained an injury in the course of his employ (sic) which lead to his death, and/or alternatively, that his employment was a substantial contributing factor to the contracting of any disease or injury leading to his death.” The notice also set out “Issue(s) relevant to the decision”, which I shall not recite. They raised substantially the same issues I have just set out.

The Appellant’s solicitors wrote to the Respondent’s solicitors on 20 February 2008 serving an Application to Admit Late Documents of the same date, to which the Appellant’s section 74 notice and covering letter were attached. The letter of 20 February 2008 again asserted no concession was made “as to not previously providing you or your client with notice that your clients (sic) claim is wholly contested”. It referred to the Appellant discontinuing the earlier proceedings.

The matter proceeded to arbitration hearing on 28 February 2008. The parties were represented by counsel. The same counsel appeared for both employers. The Appellant made an application, which was opposed, that its Application to Admit Late Documents dated 20 February 2008 be admitted into evidence. After hearing from counsel, the arbitrator refused the Appellant leave to rely upon its recently served section 74 notice. Ex tempore reasons for this refusal were given. After a short adjournment, the Respondent sought leave to discontinue her proceedings against the Office of the Ombudsman. This occurred, with no particular opposition, although at the request of the Office of the Ombudsman the question of costs of that aspect of the proceedings was reserved.

After some housekeeping regarding ‘dependency’, the Respondent’s counsel made submissions, at the arbitrator’s invitation, on whether there was a prima facie case against the Appellant. The arbitrator said “you need to establish a prima facie case on the balance in the absence of a section 74 notice denying liability” (T21.35). Counsel for the Appellant indicated he sought to make no submissions, in view of the earlier ruling disallowing the Appellant leave to rely upon its section 74 notice. The arbitrator then stood the matter over to a teleconference, to finalise the orders, to permit adult dependants an opportunity to be heard, and to give the Office of the Ombudsman an opportunity to address the reserved costs, should it wish.

Subsequent to the teleconference, the arbitrator issued a certificate of determination dated 18 April 2008, together with a Statement of Reasons (‘the reasons’). The reasons refer to the earlier ex tempore reasons on the Application to Admit Late Documents, and add some further reasons on that topic. The arbitrator at [13] of his reasons described the procedural consequences of his refusal to grant leave in respect of the section 74 notice:

“As the Section 74 Notice was refused, the matters raised in the Notice and the evidence relied upon by the Respondent cannot henceforth be agitated as disputed between the parties. The Respondent submits however, that notwithstanding an uncontested Application the Applicant is still required to satisfy the bona fides of that Application to establish entitlements under the Act. I accept that submission and consider that pursuant to Section 289A(4) of the 1998 Act it is in the interests of justice to hear or otherwise deal with the matter, but that I should do so in circumstances where the Application proceeds uncontested in respect of those issues raised in the Section 74 Notice.”

The statutory basis for this procedure is unclear. Section 289A(4) gives a discretion to hear or otherwise deal with a dispute relating to previously unnotified matters. Leave to rely upon the section 74 notice having been refused, it is difficult to identify a ‘dispute’ which could be dealt with pursuant to section 289A(4). If the view were taken that issues such as ‘injury’ and causation should be dealt with pursuant to the discretion in section 289A(4), notwithstanding they were unnotified, it is difficult to see why the standard of proof would be that of establishing a prima facie case, or satisfying the bona fides of the Application. Dealing with such issues pursuant to the discretion would involve dealing with them on their merits.

The arbitrator’s reasons considered the merits of the case, by reference to the material lodged by the Respondent, particularly on the issue of causation, and whether meningococcal disease had been contracted in the course of the deceased’s employment. The substantial finding is set out at [33] of the reasons.

THE DECISION UNDER REVIEW

The ‘Certificate of Determination’, dated 18 April 2008 records the Arbitrator’s orders as follows:
1.   That the Application to Resolve a Dispute is amended at Part 5.6 to read under the heading ‘Dependants’ – Keturah Louise Manning, Daughter (married on 2 July 2005) – otherwise unchanged.
2.   That the Application to Admit Late Documents filed by the Respondent on 20 February 2008 in respect of a Section 74 Notice and letter to the Applicant’s solicitors, dated 20 February 2008, is refused.
3.   That the worker, Keith James Manning died on 14 December 2003 as a result of injuries received in the course of his employment with the Respondent.
4. That the Respondent pay lump sum compensation pursuant to Section 25 of the Workers Compensation Act 1987, to be apportioned as follows:
i.   $20,000 to Keturah Louise Manning;
ii.$20,000 to Sariah Jayne Manning;
iii.$20,000 to be paid to Irene Louise Manning authorised under section 85A(1)(b) of the 1987 Act to be held in trust on behalf of Lachlan James Manning until he reaches the age of 18 years;
iv.$20,000 to be paid to Irene Louise Manning authorised under Section 85A(1)(b) of the 1987 Act to be held in trust on behalf of Hannah Ruth Manning until she reaches the age of 18 years;
v.$205,750 to Irene Louise Manning.
The above amounts as agreed between those parties in
accordance with Section 26(b) of the Workers Compensation Act
1987 are approved by the Commission as amounts that are
reasonable and proportionate to the injury to those dependants.
5.   That there were no other persons dependant in whole or in part upon the deceased worker.
6. That the Respondent pay Irene Louise Manning in respect of weekly benefits compensation at the rate of $359.20 per week ($89.80 per dependant child) from 14 December 2003 to date and continuing, as adjusted in accordance with Section 25 of the 1987 Act, up until 1 July 2005 after which Keturah Louise Manning ceased to be a dependant, and thereafter at the rate of $269.40 per week and continuing, as adjusted in accordance with the Act.
7.   That the Applicant elects to discontinue the claim for funeral expenses and the requirement to lodge a Notice of Discontinuance is dispensed with.
8.   That the Respondent pay the Applicant’s costs as agreed or to be assessed.

ISSUES IN DISPUTE

The issues raised in the appeal are:

(i)whether the arbitrator erred in refusing the Appellant leave to rely upon the section 74 notice dated 20 February 2008;
(ii)whether the arbitrator erred in holding he had jurisdiction to hear the matter ‘on an uncontested basis’;
(iii)whether the Commission was deprived of jurisdiction by the arbitrator’s refusal to grant leave, as there was then no dispute in respect of the claim;
(iv)whether the arbitrator’s acceptance of the opinion of Dr Anderson was contrary to the decision of the Court of Appeal in Edmonds, and
(v)whether the arbitrator’s finding was in error, that the meningococcal meningitis and pulmonary embolism, that caused the death of the deceased, arose out of or in the course of employment, and the employment was a substantial contributing factor.

ON THE PAPERS REVIEW

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 both 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.

LEAVE

Before proceeding to deal with an appeal the Commission must determine whether the application meets the requirements of section 352 of the 1998 Act.

The appeal was lodged within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act.

The sum awarded is in excess of the sum of $5,000.00 prescribed in section 352(2)(a) of the 1998 Act, and the whole of the award is appealed against. The threshold requirements in section 352 are met, and the Respondent properly makes no submission to the contrary.

I grant leave to appeal.

EVIDENCE

Literature from the Western Sydney Area Health Service, attached to the Application, variously described the incubation period for meningococcal disease as “2 to 10 (usually 3 to 4) days”, and as “usually between 2 to 4 days, but can be up to 7 days”. A report of Professor Tapsall, a medical practitioner and microbiologist, dated 24 November 2006, was attached to the Appellant’s Reply. He said the incubation period was “usually said to be between 2 and 10 days, but may be slightly longer”. Professor Tapsall adopted “the longer incubation period” of 2 to 14 days in formulating his views.

There was an onset of symptoms on 2 December 2003, so relevant contacts the deceased could have acquired the disease from, were described by Professor Tapsall as those from 18 November 2003. There was effectively no evidence of the deceased coming into contact with a person known to have suffered from meningococcal disease, either in a work or non-work context, during this period from 18 November 2003 to 2 December 2003. This is subject to a handwritten note in the Department of Health file (meningococcal is a notifiable disease) commented upon by both Dr Anderson and Professor Tapsall, and referred to by the arbitrator in his reasons. This note will require more detailed consideration later in this decision.

Thus the question in the proceedings became whether it was possible, on the available evidence, to find on the probabilities that the deceased contracted the disease in the course of his employment and/or whilst on a journey within the meaning of section 10 of the 1987 Act.

Dealing with proof of the circumstances of injury, in death cases where the precise circumstances of death are unknown, Professor Mills in Workers Compensation (New South Wales), 2^nd edition wrote:

“The proof that is required to be shown does not mean proof to rigid mathematical demonstration, because that is impossible; it must mean such evidence as would induce a reasonable man to come to the conclusion as a fact that the employment was the cause of the death. If that evidence is forthcoming, that is sufficient to establish the applicant’s case: Hawkins v Powells Tillery Steam Coal Co Limited [1911] 1 KB 988 at 995 per Fletcher Moulton LJ. If the known facts are equally consistent with either alternative, that is that the injury falls within the definition or not, the applicant will have failed to prove his case: Mitchell v Glamorgan Coal Co Ltd (1907) 9 WCC 16 (CA), per Gorell Barnes J; Pomfret v Lancashire & Yorkshire Railway Co [1903] 2 KB 718 (CA), esp per Collins MR, but if the more probable conclusion is that for which the claimant contends and there is anything pointing towards it, then there is evidence on which the court may find for the claimant. “Courts, like individuals, habitually act upon balance of probabilities”: Evans & Co Ltd v Astley [1911] AC 674 (HL) per Lord Loreburn LC.”

The contraction of an infectious disease, due to a virus entering a worker’s body in the course of his employment, has been held to constitute ‘injury’ (Favelle Mort Ltd v Murray (1976) 133 CLR 580).

In Murray v Shillingsworth [2006] 4 DDCR 313 Einstein J set out the following passages of the judgment of Spigelman CJ in Seltsam Pty Ltd v McGuiness (2000) 49 NSWLR 262:

“i. “There are cases in which medical science cannot identify the biological or pathological mechanisms by which disease develops. In some cases medical science cannot determine the existence of a causal relationship. Such a state of affairs is not necessarily determinative of the existence or non-existence of a causal relationship for purposes of attributing legal responsibility…In circumstances where the aetiology of a disease is uncertain, or subject to significant scientific dispute, the courts are not thereby disenabled for making decisions as to causation on the balance of probabilities.” [at 93 – 94]

ii. “When assessing expert evidence on causation, the legal concept of causation requires the court to approach the matter in a distinctively different manner from that which may be appropriate in either philosophy or science, including the science of epidemiology.” [at 142]

iii. The commonsense approach to causation at common law is quite different from a scientist’s approach to causation…an inference of causation for purposes of the tort of negligence may well be drawn when a scientist, including an epidemiologist, would not draw such an inference.” [at 143]”

Einstein J also referred to the following cautionary passage from the judgment of Dixon CJ in Jones v Dunkel (1959) 101 CLR 298:

"[T]he law… does not authorise a Court to choose between guesses, where the possibilities are not unlimited, on the ground that one guess seems more likely than another with the others"

There is a statement of Graeme Smith, Director of the Office of the Public Guardian dated 1 December 2006. He was Acting Director of that Office in late 2003. He says “I have no knowledge that anyone from this office or any other area considered to be Mr Manning’s work environment caused him to be exposed to this disease. There is no evidence at all of exposure from the information I have.”

The Department of Health file relating to the deceased was produced to the Respondent pursuant to the Freedom of Information Act 1989, and attached to the Application. A document headed “Meningococcal Case Summary and Audit Sheet” describes eight close contacts of the deceased who received prophylaxis, five household and three others. The five ‘household’ is consistent with the Respondent and the four children of the marriage. The three others are two general practitioners and a secretary exposed to vomit (this was the initial attendance on the deceased’s general practitioner). The document records the Department receiving three “calls…concerning this case”. A document headed “Risk factors” indicates the deceased was not exposed to an identified case of the disease in the sixty days “before onset”.

A document headed “Work/School Contact Management – Exposed to Oral Secretions (specifically kissing, sharing food/drinks/other)” sets out:

“No contact with clients of the Office of the Public Guardian (nor staff).
Received message from Marcel Williams – office of Community Visitors NSW Ombudsmans Office 9265 0409
Tried to return call, message A/M - @12.50. Visit to group home for adults with disability. Could have been (?) about (?) 3 hours Mon 1/12 over 2 visits.
Tues 2^nd/12 – meeting about (?) 2 hrs.
Wife said – usually spends about (?) 1 hr to 2 hrs.
Tues 9am – 11am
Mon 1 ½ - 2 hrs. Never been (greater than) 4 hrs.
Marcell Williams confirmed clients (less than) 4 hrs.
NO CONTACTS via Community Visitors.”

Some other notes have been cut off the copies used in the proceedings. These appear basically to be names and telephone numbers. One part of the material reads:
“rang CS – PHU for advice @ 4.30”.

A document headed “Social Contacts” seeks information regarding social gatherings, and visits to “pubs, clubs or restaurants” during the incubation period. It has inserted “friends and family over for meals (?)”. It indicates no persons were exposed to the deceased’s oral secretions. It is unclear who filled out this document, although the writing appears similar to that in a handwritten memorandum set out below.

There is a handwritten memorandum in the file that reads:

“16/12 – CS called, asked us to speak (with) wife of contact. Husband works had meeting on 21^st November with someone who died of meningococcal disease on Sunday. (Dr Claire Burman (sic) 77879033). When called her, would not indicate where husband works. Explained couldn’t give her info unless she could give me something to tie in (with) what known by WS-PHU. She will speak to husband for further information.”

The solicitors acting for the employers obtained a report from All States Investigations dated 20 October 2007, dealing with Dr Claire Burman. The investigator indicated he had interviewed Dr Burman about the memorandum, and she furnished a letter relevantly stating that she had never been associated with the deceased or the Respondent. She said in 2003 she worked as a health administrator in the employ of The Canterbury Division of General Practice Limited. It was that organisation’s phone number in the memorandum. It “is a general practice and general practitioner support and education structure”. She said she had no recollection of the phone call referred to in the memorandum, but “at the CDGP I did receive calls from the general public seeking health related advice”. The “invariable practice” was to refer the caller to the local public health unit.

The employer’s solicitors also arranged a letter from Dr Conrad Moreira, Director, Communicable Diseases and Immunisation with Sydney West Area Health Service, dealing with the handwritten memorandum. He stated the reference to “‘CS’ refers to the (then) Central Sydney Public Health Unit”. It is apparent from his letter he is interpreting the memorandum, without necessarily having personal knowledge of its substance. He indicated Dr Claire Burman (sic) was the “wife” referred to in the memorandum, which would appear not to be the case, having regard to Dr Burman’s letter. However his reference to the meaning of “CS” is consistent with that appearing at the foot of the document “Work/School Contact Management” in the Public Health file – “rang CS – PHU for advice”, referred to at [38] above.

A factual investigation of M & A Investigations dated 29 March 2005 was attached to the Replies filed on behalf of both employers. On its face, it was commissioned by the common insurer to investigate the potential liability of the Office of the Ombudsman. It set out details of the deceased’s employment and duties with that Office. It attached a printout of visits by the deceased, in this capacity, since 1 July 2003. It noted the deceased attended a “DADHC institution” and visited a resident for one hour on 21 November 2003 (the date in the handwritten memorandum). It noted two people visited by the deceased passed away on 30 November 2003 and 6 December 2003. The report recommended specific follow up with various residential premises visited by the deceased from 21 November 2003 to 2 December 2003. It recommended obtaining a statement from the Respondent. There is no indication any of these recommendations were acted upon by the insurer.

The Appellant attached to its Reply the report of Professor Tapsall dated 24 November 2006. He sets out a substantial amount of helpful background information about the disease. In discussing transmission, the Professor says:

“Meningococci, of both pathogenic (encapsulated) and non-pathogenic varieties are spread by continued and close contact with droplets of oro-pharyngeal secretions containing the organism. Casual contact with an infected person is not regarded as a particular risk factor for contracting meningococci over and above that in the general community. However ‘household contact’, defined as sharing premises for eight hours or more, is so regarded.”

Professor Tapsall says there is no particular likelihood of increased carriage rates of pathogenic meningococci in groups the deceased visited, such as persons at nursing homes and boarding houses. He said there was a peak frequency of the disease in children under 4, and people aged 15 to 24, “The disease was and remains rare outside these age groups”. He went on to say there was nothing in the material supplied to him to indicate the nature of the deceased’s contact with clients was of such a nature as to pose any particular risk of acquisition of the disease. He refers to the list of visits to clients. This is the attachment to the report of M & A Investigations. It sets out visits in the course of employment with the Office of the Ombudsman, but not with the Appellant. Professor Tapsall concluded it was “highly unlikely that Mr Manning acquired the organism in this aspect of his employment”. He also concluded “on the (sparse) information available to me, I feel that it is highly unlikely that Mr Manning acquired the infecting organism during work-related travel”.

The Respondent relied upon a report of Dr Tim Anderson, an occupational physician, dated 1 December 2006. Dr Anderson referred to the handwritten memorandum from the Public Health Unit file, and concluded from it:

“I can find no other detail in the file which gives us further information about this notation. It does however suggest that Mr Manning was exposed to somebody who had recently had meningococcal disease and had died from it. I would respectively suggest that this is an issue that should be further addressed in detail to find out exactly what happened, when it did happen and who “CS” is.”

Dr Anderson’s view on the deceased’s contraction of the disease was:

“It is acknowledged that “in general” the infective transmission of this organism seems to be relatively low and more than “casual exposure” is generally needed for successful transmission of the infective organism. Nevertheless, if Mr Manning had for whatever reason had exposure to smoke or recent viral or respiratory illness and had been exposed to droplet distribution of the organism, he could still have contracted the disease. In looking at the “most likely source” of Mr Manning’s exposure to this organism, although there is no “scientific evidence” of the existence of this organism at home, at the swimming pool, at church, or on the way to and from work, it does seem to be the case that at work he would have been more likely to have been exposed to such a phenomenon.”

Dr Anderson, while agreeing with Professor Tapsall’s comments that there is no specific relationship between meningococcal disease and pulmonary embolus, thought it likely the pulmonary embolus resulted from how the deceased was managed for his meniongococcal disease, particularly sustained immobility.

Professor Tapsall produced a supplementary report dated 24 September 2007, commenting upon Dr Anderson’s views. Professor Tapsall maintained “the nature of the work environment, and the type and duration of contact together constitute a very low risk of transmission of meningococcal disease.” Professor Tapsall commented that, having regard to how cases of meningococcal are managed, it is likely Dr Anderson had misinterpreted the handwritten memorandum in the Public Health file. Professor Tapsall thought the memorandum probably recorded an enquiry by a member of the public after the deceased’s death, rather than a reference to contact by the deceased with someone who died from the disease. He said he was unaware of any instance of meningococcal transmission in the circumstances recorded by Dr Anderson as constituting the deceased’s “work travel”.

Professor Tapsall discussed the role of ‘prophylactic’ (or ‘clearance’) antibiotics, which are given to persons who have had contact with a person infected with known meningococcal disease:

“Antibiotics are given to close contacts (defined as household or household-like) because it has been demonstrated that it is from this grouping that secondary or co-primary cases most often arise. This may be because the index case may introduce the offending organism into the household and under household arrangements the organism may spread and cause more cases. The ‘clearance’ antibiotics are given to eliminate the newly acquired meningococcus from the throat before it invades the bloodstream.
Another important reason for use of clearance antibiotics in this household situation is that the pathogenic strain may already have been acquired by a household contact from another source and that person has then become an asymptomatic carrier, although this acquisition has not resulted in disease in that person. This unidentified ‘carrier’ may thus continue to disseminate the organism amongst the remaining household contacts. The ‘clearance’ antibiotics are thus also given to close household contacts of a case to account for this possibility that there is an asymptomatic carrier already in the household who spread the organism to the index case and may continue to do so to other members of the family.”

Professor Tapsall’s ultimate conclusion in the supplementary report, regarding where, in his view the deceased probably contracted the disease, was:

“Given (1) the details provided in regard to the lack of close contacts elsewhere (church, swimming, workplace, travel); (2) a consideration of circumstances that are required for transmission of meningococci in general and in the case of Mr Manning; (3) that household contacts constitute a major source of transmission of meningococci; and (4) that Mr Manning’s household included two teenage daughters and two younger children, my view is that this household setting, for reasons set out above, was another equally or even more likely source of the infection.”

Professor Tapsall, in his supplementary report, accepted Dr Andersons’ explanation of the causal link between the meningococcal disease and the pulmonary embolus that resulted in the deceased’s death:

“Although my expertise lies outside the issues of prevention of pulmonary embolism, I would thus agree with the broad contention (point 4) that as there was no other obvious cause, the circumstances surrounding Mr Manning’s general, as opposed to specific management, resulted in pulmonary embolus and this event was the cause of his demise.”

Dr Anderson produced a supplementary report, dated 24 October 2007, in response to that of Professor Tapsall dated 24 September 2007. Dr Anderson’s ultimate opinion was:

“Notwithstanding other issues which may have been suggested, I am still persuaded that because of the much higher numbers of possible ‘exposures’ in the work environment in comparison to elsewhere that it is more likely that Mr Manning did indeed contract this infection associated with his work or travel to and from work rather than elsewhere.”

DISCUSSION AND FINDINGS

The Refusal to Grant Leave

The first of the grounds of appeal is that the arbitrator erred in refusing to exercise his discretion pursuant to section 289A of the 1998 Act, to grant the Appellant leave to rely on the Application to Admit Late Documents dated 20 February 2008, attaching the Appellant’s section 74 notice. The Appellant concedes the section 74 notice was “served late”. It is submitted section 289A(4) provides a broad discretion. The Appellant states the arbitrator was referred to the decision of Roche DP in Mateus v Zodune Pty Ltd t/as Tempo Cleaning Services [2007] NSWWCCPD 227 (‘Mateus’), which sets out matters relevant to exercise of the discretion pursuant to section 289A. It is submitted the arbitrator considered the “pre-eminent” factors to be considered were the decision of the insurer to dispute the claim without properly and carefully considering the legal and factual issues, the lack of a satisfactory explanation for delay, and a failure to act promptly to remedy the shortcoming. It is submitted the arbitrator failed to give proper weight to other matters relevant to the exercise of the discretion. It is said the same issues had previously been raised in the Reply filed by the Appellant. It is submitted there was no evidence of prejudice. It is submitted additional weight should have been given to issues identified as (d), (e), (f) and (g) in Mateus (these are set out at [65] below).

The Appellant characterises its failure to give notice pursuant to section 74 at an appropriate time in the following way:

“By letter dated 23 September 2005, the former workers compensation insurer of both Respondents (GIO Australia) declined liability, based on the medical records produced by Westmead Hospital and factual investigation reports of M & A Investigations. It is now not disputed that through an administrative oversight, GIO Australia sent a letter declining liability only in respect of the claim against the First Respondent (the Office of the Ombudsman)”

The Respondent takes issue with this description of the failure, saying there was no evidence to support the suggestion the notice was meant to deal with both employers, and through oversight nominated only the Office of the Ombudsman. It is submitted there is no evidence any factual investigation was undertaken by the Appellant. The Respondent submits the relevant considerations, as identified in Mateus, were considered by the arbitrator. It is submitted no investigation was carried out by the Appellant, the period of delay was unreasonable, and the delay was unexplained. It is submitted there is prejudice, flowing from the Appellant’s failure to investigate the claim in a timely way, as the opportunity to do so has now been lost, the trail has gone cold.

The Respondent submits that, for the appeal to succeed in respect of this discretionary matter, it is necessary the Appellant demonstrate error of the kind described in House v The King (1936) 55 CLR 499 (‘House v The King’).

There is a review by Roche DP in Ranvet Pty Ltd v Vasilevski [2008] NSWWCCPD 81 of a number of authorities on the nature of ‘review’ pursuant to section 352 of the 1998 Act. The nature of the review process was described by Spigelman CJ in State Transit Authority of NSW v Chemler (2007) 5 DDCR 287; [2007] NSWCA 249 (‘Chemler’) at [20] to [30], particularly in the following passages:

“22 The scope of an internal merits review by a Presidential member is an important safeguard for the proper operation of the legislative scheme. Arbitrators’ decisions, particularly on issues of credit, are entitled to respect. That does not, however, mean that such a merits review process should operate on the basis of some kind of presumption that the first instance decision-maker should redetermine the matter.
28 The concept of a review on the merits is wider than the concept of an appeal in a judicial context. There is a well established line of authority on the use of the terminology of “review” instead of “appeal” with respect to the workers compensation system in this State which establishes the breadth of a review on the merits.
30 A Presidential member exercising a power to review a decision must decide whether the original decision is wrong or, as it is often put in the context of administrative appeals on merits, must decide what is the true and correct view. If s/he does so decide then s/he should substitute his or her own views, unless it is an appropriate case to remit. The power to remit is not constrained in the manner for which the Appellant contends.”

Interference on appeal with the exercise of discretion is ordinarily subject to the principles in House v The King (see for example Dalma Formwork (Australia) Pty Ltd v Maricic & Anor (No 3) [2008] NSWCA 29 per Basten JA). However, given the nature of the review process as described in Chemler and Duinker v St Vincent de Paul Society Aged and Special Services Limited (Lewisham Nursing Home) [2008] NSWCA 127, my function on review, including review of the exercise of the arbitrator’s exercise of discretion raised in the first ground of appeal, is broader than this. Toll Pty Limited v Morrisey [2008] NSWCA 197 was an appeal regarding an arbitrator’s refusal to exercise his discretion pursuant to Rule 13.4 of the Workers Compensation Commission Rules 2006 (‘the Rules’), in connection with the issue of a Direction for Production. It was not suggested by the Court of Appeal that the Presidential member, who entertained the appeal by way of review, was confined by the principles in House v The King. In the recent decision of Tan v National Australia Bank Ltd [2008] NSWCA 198 Basten JA said:

“Where the statute refers to an “appeal”, as opposed to a review, it may be intended that the appellate tribunal could vary or discharge the decision below only if satisfied that it was affected by a relevant error. However, the concept of an “appeal” does not necessarily invoke the precondition of a finding of error: an appeal may be by way of hearing de novo, where “the matter is heard afresh and a decision is given on the evidence presented at that hearing”: Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission [2000] HCA 47; 203 CLR 194 at [13]. Furthermore, as noted in McKee v Allianz Australia Insurance Ltd [2008] NSWCA 163 at [64], the term “review” may connote a fresh consideration of a matter, without the need to find error before setting aside or varying the decision below. But even in a hearing de novo the appellate tribunal will not necessarily disregard conclusions reached by the original decision-maker. Constraints may arise at various stages. First, in deciding the primary facts, the appellate tribunal may defer to findings made by a decision-maker who has resolved conflicts in the course of hearing and assessing oral testimony. In such a case, the appellate tribunal which does not hear the witnesses, will be constrained to approach the findings in a manner similar to that described in Fox v Percy [2003] HCA 22; 214 CLR 118. Secondly, the appellate tribunal may be constrained in drawing inferences, not having seen the witnesses, but to a lesser extent, for reasons analogous to those identified in Warren v Coombes [1979] HCA 9; 142 CLR 531 at 551, despite there being no need to find error. Thirdly, a similar constraint may arise in relation to the exercise of a discretionary power, again recognising that the appellate tribunal may not be required to find error: cf House v The King [1936] HCA 40; 55 CLR 499 at 505.”

Consistent with the above, it is not necessary that I find error of the kind described in House v The King, for the appeal by way of review to succeed. Applying Chemler, it is necessary that I conduct a merits based review.

Section 74 of the 1998 Act relevantly provides:

“74 Insurers to give notice and reasons when liability disputed
(1) If an insurer disputes liability in respect of a claim or any aspect of a claim, the insurer must give notice of the dispute to the claimant.
(2) The notice must contain the following:
(a) a statement of the reason the insurer disputes liability and of the issues relevant to the decision,
(a1) a statement to the effect that the worker can request a review of the claim by the insurer,
(b) unless paragraph (c) applies, a statement to the effect that the worker can refer the dispute for determination by the Commission,
(c) if the insurer has referred or proposes to refer the dispute for determination by the Commission, a statement to that effect specifying the date of referral or proposed referral,
(c1) a statement to the effect that the matters that may be referred to the Commission are limited to matters notified in the notice, or in a notice after a further review or in correspondence prior to any such referral concerning an offer of settlement or in a request for a further review,
(d) a statement to the effect that the worker can also seek advice or assistance from the worker’s trade union organisation or from a lawyer,
(e) such other information as the regulations may prescribe or, subject to the regulations, as the Authority may from time to time approve and notify to insurers and self-insurers.

(2A) In the case of a claim for compensation under this Act, a statement of reasons in a notice under this section is to indicate the provision of the workers compensation legislation on which the insurer relies to dispute liability.
(2B) A notice under this section must be expressed in plain language.
…
(5) Before giving a notice under this section, an insurer must carry out an internal review of the decision to dispute liability in respect of the claim or an aspect of the claim.”

Section 289 of the 1998 Act prevents referral of a dispute about a claim to the Commission, unless the person on whom the claim is made either disputes it (wholly or in part), or fails to determine it. Neither party has suggested a claim by dependants pursuant to Part 3 Division 1 of the 1987 Act is not subject to the operation of sections 289 and 289A. Section 289A was inserted into the 1998 Act by the Workers Compensation Legislation Amendment (Miscellaneous Provisions) Act 2005, and had effect from 1 November 2006. Thus the claims on both employers predated section 289A, but the section had effect prior to the current proceedings being commenced on 21 August 2007. Neither party submits section 289A does not apply to these proceedings. Section 289A of the 1998 Act provides:

“289A Further restrictions as to when a dispute can be referred to Commission
(1) A dispute cannot be referred for determination by the Commission unless it concerns only matters previously notified as disputed.
(2) A matter is taken to have been previously notified as disputed if:
(a) it was notified in a notice of dispute under this Act or the 1987 Act after a claim was made or a claim was reviewed, or
(b) it concerns matters, raised in writing between the parties before the dispute is referred to the Registrar for determination by the Commission, concerning an offer of settlement of a claim for lump sum compensation.

(3) The Commission may not hear or otherwise deal with any dispute if this section provides that the dispute cannot be referred for determination by the Commission. However, the Commission may hear or otherwise deal with a matter subsequently arising out of such a dispute.
(4) Despite subsection (3), a dispute relating to previously unnotified matters may be heard or otherwise dealt with by the Commission if the Commission is of the opinion that it is in the interests of justice to do so.”

The operation of section 289A was considered by Roche DP in Mateus, a decision to which both parties refer. Neither party has submitted Mateus does not set out appropriate matters to consider, in the exercise of discretion pursuant to section 289A. Clearly one basis on which the Appellant sought to rely on the defences in its Reply, notwithstanding its failure to serve a section 74 notice, was on the basis of section 289A(4). However, in adopting the procedure of serving a section 74 notice shortly prior to the arbitration hearing, and seeking to rely upon it pursuant to an Application to Admit Late Documents, the Appellant was also seeking that the arbitrator exercise a discretion pursuant to Rule 10.3(3) of the Rules. Both parties throughout have approached the application for leave on the basis it is an application pursuant to section 289A(4), and I will approach it accordingly.

In Mateus the arbitrator who initially dealt with the application, identified the following matters as being relevant to the exercise of her discretion under section 289A(4):

“(a) the degree of difficulty or complexity to which the unnotified issues give rise;

(b) when the insurer notified that it wished to contest any unnotified issue/s;

(c) the degree to which the insurer has otherwise fulfilled its statutory obligation to notify the worker of its decision disputing liability;

(d) any prejudice that may be occasioned to the worker, and

(e) any other relevant matters arising from the particular circumstances of the case.”

Roche DP agreed with the arbitrator’s identification of these matters, and stated he would add the following observations (at [47]):

“(a) a decision by an insurer to dispute a claim for compensation should not be made lightly or without proper and careful consideration of the factual and legal issues involved;

(b) any insurer seeking to dispute an unnotified matter is seeking to have a discretion exercised in its favour and, accordingly, must act promptly to bring the matter to the attention of the Commission and all other parties;

(c) any unreasonable or unexplained delay in giving notice of an unnotified matter will be relevant to the exercise of the discretion;

(d) in exercising its discretion the Commission may have regard to the merit and substance of the issue that is sought to be raised;

(e) in assessing prejudice to the worker it will be significant to consider when and in what circumstances the worker was first made aware of the unnotified issue that is sought to be raised;

(f) though it will be relevant to the exercise of the discretion to keep in mind that the Commission must act according to equity, good conscience and the substantial merits of the case, those matters will not be determinative, and

(g) the general conduct of the parties in the proceedings will also be relevant to the exercise of the discretion.”

The factors militating against granting the Appellant leave to rely on the issues in the late section 74 notice, having regard to the matters identified by the arbitrator in Mateus, and the additional observations of Roche DP in the same matter, are:

(i)the evidence does not indicate the Appellant (or its insurer) gave proper and careful consideration to the factual and legal issues. The investigation by M & A Investigations directs itself to investigation of the potential liability of the Office of the Ombudsman, not the Appellant. When Professor Tapsall’s original opinion was being obtained, he was furnished with material going to the deceased’s activities and contacts in his employment with the Office of the Ombudsman, and was asked for his opinion based upon such material. He was not given material dealing in any detail with the deceased’s contacts in his employment with the Appellant. The Appellant’s submissions state:
“Contrary to the Arbitrator’s finding, the material contained in the records of the Westmead Hospital and the investigation reports of M & A Investigations disclosed that investigations and enquiries had taken place in relation to the contraction of the diseased (sic) by the Deceased Worker in respect of his employment with each of the Respondents.”

The material from Westmead Hospital would clearly have been needed to consider the potential liability of both employers. However the obtaining of such material hardly amounts to investigation of the claim against the Appellant. The existence of the Appellant is mentioned from time to time in the investigation report, on the basis the deceased worked there, in addition to the Office of the Ombudsman. However a fair reading of the investigation report makes it clear the matter being investigated was the potential exposure of the deceased in his employment with the Office of the Ombudsman, and the potential liability of that Office. I do not accept the report of M & A Investigations indicates enquiry was made relating to the contraction of meningococcal disease by the deceased, in respect of the claim against the Appellant;
(ii)the Appellant and its insurer did not act promptly to bring to the attention of the Commission and other parties the unnotified matters, that is, all matters relied upon in denying liability. It appears the Appellant’s failure to serve a section 74 notice was raised when the current proceedings were originally listed for arbitration hearing, on 14 November 2007;

(iii)the material put on does not adequately explain the delay in giving notice pursuant to section 74. The submission quoted at [55] above suggests the declinature of liability was always intended, by the common insurer of both employers, to relate to both employers. Its failure to mention the Appellant was due to “administrative oversight”. There is no evidence to this effect. This submission is at odds with the fact the investigation report relied upon at the time concerned itself with the Office of the Ombudsman, described that Office as the ‘insured’, and only peripherally mentioned the Appellant;

(iv)there is further unexplained delay between 14 November 2007 and 14 February 2008. The notice served on 14 February 2008 describes the decision to decline liability as having been both made and reviewed by two named people (I infer employees of the Appellant’s insurer) on 14 February 2008;

(v)the degree of difficulty and complexity raised by the issues in the notice are significant, and

(vi)the Appellant and its insurer have not otherwise fulfilled their statutory obligation of notification of the Respondent. No section 74 notice was served upon the Respondent, in respect of the Appellant, until 14 February 2008.

Those factors favouring the granting of leave are:

(i)the merit and substance of the issue to be raised is significant. The issue of ‘injury’, that is, whether the deceased contracted meningococcal disease in the course of or arising out of his employment, or on a journey within the meaning of section 10 of the 1987 Act, is a significant one between the parties, on the merits. It is a fundamental issue, going to the question of whether the Appellant has a liability in respect of the death of the deceased;

(ii)the Respondent first became aware (in a general sense) of the issues of injury, and whether the fatal pulmonary embolus resulted from the meningococcal disease, from the letter dated 23 September 2005, denying liability on behalf of the Office of the Ombudsman. The Respondent became aware of various matters both employers sought to put in issue from when the Replies on behalf of both employers were filed on 11 September 2007. It should be noted both of these Replies raised multiple issues that were not raised in the original letter declining liability, on behalf of the Office of the Ombudsman, dated 23 September 2005. It may well be that similar issues were raised in the Replies lodged by both employers in the earlier proceedings commenced 11 September 2006, discontinued on 5 December 2006. As no party has put those documents into evidence, I cannot know this, and do not rely on this possibility in considering exercise of the discretion;

(iii)the general conduct of the parties is relevant. The Application commencing the proceedings required information, at Part 1.2, relevant to whether the requirements of sections 289 and 289A of the 1998 had been complied with. The Applications against both the Appellant, and the Office of the Ombudsman, were completed in the same fashion in this section. Each indicated notices were attached pursuant to section 74, 54 or 287A. Each indicated “Failure to Determine” was not relied on. Notices pursuant to sections 54 and 287A were not of relevance. The notices pursuant to section 74 attached to both Applications, including that against the Appellant, consisted of the notice dated 23 September 2005. Thus, not only the Appellant, but also the Respondent, approached the pleadings on the basis the notice of 23 September 2005 had application in respect of the Appellant, as well as the Office of the Ombudsman;

(iv)there is no evidence of significant prejudice resulting from the Appellant’s late section 74 notice. The Respondent submits “The prejudice flowing is insurmountable because the Second Respondent (the Appellant) and its insurer were favourably placed to undertake an investigation of the circumstances of the worker’s death immediately or soon after he died. The opportunity is now lost; the Second Respondent has never acknowledged the dereliction of its obligations.” There are difficulties with this submission:
(a) the Department of Health file has a handwritten notation that states:
“31/8/04: Oanh (?) Nguyen
- Received a call from Mr Manning’s solicitor asked (sic) for a copy of public health follow up. Provided director’s name and postal address of the Centre for Public Health to the solicitor (Mr David Newey) to write to Steve Corbett (Director). (The call was put through in switch, Michelle, around 11.30 am 31/8/04.
Emailed to Director (Stephen Corbett), Acting Regional Health Officer (Conrad Moreira) & Surveillance officer who followed up the case (Jennifer Peterson) – Attached email – to inform above this legal request from a solicitor.”;

(b) the copy Department of Health file, attached to the Application, is under cover of a letter dated 23 September 2004 from the Executive Officer, Western Sydney Area Health Service, to the Respondent. The letter indicated the documents were being released pursuant to a request by the Respondent under the Freedom of Information Act 1989. The documents were described as “relating to death and subsequent investigation of Keith James Manning from Meningococcal disease in December 2003.” The letter stated “Full access has been granted to all documents.”;

(c) the claim forms directed to both employers are dated 16 January 2005. This is a little over one year after the death of the deceased. It is a little less than five months after solicitors acting for the family were making their own enquiries regarding the matter. The statement of Mr Smith (Acting Director of the Appellant in December 2003) dated 1 December 2006, says he had no knowledge of anyone from the office of the Appellant, or any other area considered to be the deceased’s working environment, causing the deceased to be exposed to Meningococcal disease. He was aware an investigation was conducted by the Public Health Unit, NSW Health, “into this very issue”. This “investigation was contemporaneous with the time that Mr Manning felling (sic)/ passed away.”, and
(d) there is nothing in the material to suggest that, if investigations were carried out by the Appellant within a reasonable time after lodgement of the claim form upon it, these would have produced information additional to that now available. One would not have expected the Appellant to have engaged in an investigation of its own, before a claim form was lodged. The Respondent and her solicitors obtained material from the contemporaneous Department of Health investigation, before a claim form was lodged. The statement of Mr Smith does not suggest there was any information available to the Appellant, around the time of death or subsequently, going to possible sources of the infection, and
additionally, relevant prejudice is prejudice flowing from the failure of the Appellant to notify the Respondent of a dispute in accordance with section 74. This is not the same as prejudice flowing from a failure by the Appellant to investigate the claim in a timely way. The onus of establishing injury in the course of or arising out of the deceased’s employment with the Appellant, rests upon the Respondent. It was not up to the Appellant to disprove it.

The matters for and against the granting of leave pursuant to section 289A are fairly evenly balanced. The factors against this course relate predominantly to the Appellant’s tardiness in carrying out its statutory obligations, and the somewhat unsatisfactory way it sought to explain such deficiencies. Whilst these matters are important, a refusal to grant leave would mean the issues could not be dealt with on their merits. Section 354(3) of the 1998 Act requires the Commission “to act according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms”. Roche DP in Mateus regarded this requirement as relevant, but not determinative. On balance, considering those factors both for and against the granting of leave, and the dictate of section 354(3), I have formed the view the interests of justice require that I exercise my discretion pursuant to section 289A(4) to permit the dispute relating to previously unnotified matters to be dealt with.

It would not, in my view, be appropriate to permit the Appellant to rely upon all of the matters raised in its Reply. Section 9A of the 1987 Act is raised in paragraphs 1(c) and (e) of the Reply. Section 9A was not raised in the notice issued by the common insurer of the employers on 23 September 2005. The Appellant’s submissions assert the employers, in the current proceedings, raised the same issues, namely injury and causation, as were raised in the previously discontinued proceedings. Whether section 9A was raised by the employers in the earlier proceedings is not specifically dealt with. It is submitted the issues raised by the employers in the new proceedings were the same or substantially the same as in the earlier proceedings. The Respondent’s submissions do not quibble with this description of the earlier proceedings. There is no specific evidence section 9A was raised in the Replies filed by either employer in the previously discontinued proceedings. One cannot be satisfied that, when the Respondent lodged her Application in the current proceedings, erroneously asserting section 74 notices had been issued by both employers, she necessarily anticipated that section 9A would be an issue. The medical evidence from Dr Anderson, supporting the Respondent’s case, does not specifically deal with the issue of ‘substantial contributing factor’. Nor does the evidence of Professor Tapsall, although on his views, the issue does not arise. The Respondent would be prejudiced if this issue were raised at this stage. The grant of leave does not extend to raising an issue pursuant to section 9A.

The Appellant’s Reply raises some other issues that were not raised in the notice of 23 September 2005. Two of these produced no difficulties. The claim for funeral expenses ultimately was not proceeded with. The denial of dependency was decided in favour of the Respondent (and other dependants), and that finding is not challenged on this appeal. The points raised at [15] and [16] of the Appellant’s Reply, flowing from the decision in Edmonds, are really submissions on the medical evidence going to ‘injury’, and do not need to be separately raised as issues. The notice of 23 September 2005 did not specifically raise an issue regarding whether the deceased contracted meningococcal disease on a journey, compensable pursuant to section 10 of the 1987 Act. Whether there was such an injury is raised as an issue in the Reply. This allegation, although made in the alternative in the claim form, was not actually pleaded in the ‘Injury Details’ in the Application. There is little evidence to support this allegation, to the extent it is made. I give the Appellant leave to rely upon paragraphs 1(a), (b) and (d), and 2 to 14 inclusive, of the Reply.

The Appellant also submitted, on this appeal, that as a consequence of the arbitrator’s refusal to grant leave, the Commission was deprived of jurisdiction, pursuant to section 289A(1), (2) and (3). It was submitted that, as a consequence, the arbitrator did not have jurisdiction to engage in the fact-finding process he adopted, considering whether the “bona fides” of the Application were established. Because of the view I have reached regarding the Appellant’s application for leave, it is unnecessary that I consider this jurisdictional argument in any detail. In my view, the discretion pursuant to section 289A(4) is a broad one. It is sufficient to permit the Commission to hear or otherwise deal with a dispute, potentially in circumstances where the other provisions of section 289A would have prevented the Commission doing so. In saying this, I am not approving the approach adopted by the arbitrator, of considering whether the Respondent could establish a prima facie case, to decide whether an award would be entered. Section 289A(4) gives the Commission discretion to hear or otherwise deal with a dispute. By refusing the Appellant leave to rely upon its section 74 notice, when that application was pursued on the basis of section 289A(4), and then to use section 289A(4) to justify hearing the matter on the basis it was “uncontested”, was in my view inappropriate. Leave is either granted to deal with a dispute pursuant to section 289A(4), or it is not. Given the view I have reached regarding the exercise of discretion pursuant to section 289A(4), it is unnecessary I deal with the issue of whether, in the absence of a notice pursuant to section 74, section 289A deprived the Commission of jurisdiction.

The Injury and Causation Issues

Thus the substantive issues requiring determination, pursuant to the leave granted, are whether the deceased contracted meningococcal disease in the course of his employment with the Appellant, whether it resulted in his death, and whether the pulmonary embolism resulted from injury in the course of the deceased’s employment with the Appellant.

Dr Anderson said the deceased developed a pulmonary embolus, causing cardiac arrest. “This ultimately resulted in severe coagulopathy and hypoxic brain damage. This brain damage was “incompatible with survival or improvement”, and resulted in the deceased’s death. The pulmonary embolus resulted from the treatment of the deceased for meningococcal disease, particularly sustained immobility, according to Dr Anderson.

Professor Tapsall, in his first report, said “In my opinion, the meningococcal meningitis and the pulmonary embolism were unrelated diseases in this patient, with death attributable to the latter condition”. Professor Tapsall referred to a text on meningococcal disease, that did not mention pulmonary embolism as a complication of invasive meningococcal disease. However Professor Tapsall, in his second report of 24 September 2007, considered Dr Anderson’s views. Professor Tapsall opined “I would thus agree with the broad contention (point 4) that as there was no other obvious cause, the circumstances surrounding Mr Manning’s general, as opposed to specific management, resulted in pulmonary embolus and this event was the cause of his demise.” The Professor goes on to add that pulmonary embolus is usually regarded as “largely preventable” in a hospital setting, and accordingly he sees the pulmonary embolus as “a separate and subsequent event entirely related to his general hospital care”.

Thus the medical evidence supports the contention that treatment of the deceased’s meningococcal disease involved hospital care, associated with immobility. This led to the development of a pulmonary embolus, which in turn led to cardiac arrest, brain damage, and death. In a well known passage in Kooragang Cement Pty Limited v Bates (1994) 35 NSWLR 452 Kirby P (as he then was) said at 463G to 464A:

“The result of the cases is that each case where causation is in issue in a workers compensation claim, must be determined on its own facts. Whether death or incapacity results from a relevant work injury is a question of fact. The importation of notions of proximate cause by the use of the phrase "results from", is not now accepted. By the same token, the mere proof that certain events occurred which predisposed a worker to subsequent injury or death, will not, of itself, be sufficient to establish that such incapacity or death "results from" a work injury. What is required is a commonsense evaluation of the causal chain. As the early cases demonstrate, the mere passage of time between a work incident and subsequent incapacity or death, is not determinative of the entitlement to compensation. In each case, the question whether the incapacity or death "results from" the impugned work injury (or in the event of a disease, the relevant aggravation of the disease), is a question of fact to be determined on the basis of the evidence, including, where applicable, expert opinions.”

Applying this commonsense evaluation of the causal chain, to the common ground in the experts’ reports, in my view it is clear the deceased’s death resulted from the meningococcal disease he had contracted.

The definition of ‘injury’ in section 4 of the 1998 Act is as follows:

“injury:
(a) means a personal injury arising out of or in the course of employment, and
(b) includes:
(i) a disease contracted by a worker in the course of employment, where the employment was a contributing factor to the disease, or
(ii) the aggravation, acceleration, exacerbation or deterioration of any disease, where the employment was a contributing factor to the aggravation, acceleration, exacerbation or deterioration, but

(c) does not include (except in the case of a worker employed in or about a mine):
(i) a dust disease, or
(ii) the aggravation, acceleration, exacerbation or deterioration of a dust disease.”

Subparagraph (c) is clearly irrelevant. The medical evidence does not suggest employment with the Appellant was a contributing factor to the aggravation, acceleration, exacerbation or deterioration of the disease, so subparagraph (b)(ii) is irrelevant. Did the contraction by the deceased of meningococcal disease amount to ‘injury’ within the meaning of subparagraphs (a) or (b)(i) of the definition? If it did, then his death resulted from injury in the relevant sense, bearing in mind the finding I have made regarding the causal relationship between that disease, and his death.

In Favelle Mort Limited v Murray (1976) 133 CLR 580 Barwick CJ, and McTiernan and Jacobs JJ held the contraction of a disease, through a virus entering the body in the course of a worker’s employment, amounted to injury. Barwick CJ said:

“Consequently, in my opinion, upon the proper construction of the Act, a morbid condition of the body, a disease, externally caused or excited, may be an injury within the meaning of the Act through the employment has not contributed to the reception or contraction of that condition.”

Thus if it can be established the organism that entered the deceased’s body, causing meningococcal disease, did so in the course of his employment, that is sufficient to establish ‘injury’, without the need to establish that employment was a contributing factor to the disease.

I should deal initially with the handwritten memorandum from the Department of Health file, quoted at [40] above. Dr Anderson, in his report dated 1 December 2006, set out the memorandum, and said it “does however suggest that Mr Manning was exposed to somebody who had recently had meningococcal disease and had died from it.” Professor Tapsall, in his report dated 24 September 2007, commented on Dr Anderson’s views. Professor Tapsall suggested Dr Anderson had misinterpreted the memorandum, and said:

“…the provision of accurate and factual information on the disease and its presentations alerts this wider group of low level contacts to various issues surrounding the nature of the disease and its presenting symptoms and provides them with details whereby they can obtain more information if necessary. Public Health Units are the contact points for the public and GPs and others may suggest their patients ring the PHU if they need further advice or information.
I suggest this was the nature of the contact that gave rise to Dr Anderson’s speculative comment – an enquiry from a member of the general public as a follow up to information already provided by the PHU.”

Having regard to the material from Dr Moreira and Dr Burman, referred to at [41] and [42] above, I am satisfied Professor Tapsall’s explanation of the handwritten memorandum is the correct one. It is not a reference to contact between the deceased and a person who died from meningococcal disease. This being so, there is no evidence of any identified actual contact between the deceased and a person with a known meningococcal infection, during the incubation period from 18 November 2003 to 2 December 2003 (see [29] and [30] above).

Dr Anderson thought the most likely source of the infection “probably came from either travelling to or from work by train or from exposure in his work environment”. He said there “is always the possibility (we do not have sufficient information to state ‘probability’) that he may have been in circumstances which enhanced his susceptibility to such infection”. Such susceptibilities had previously been identified in Dr Anderson’s report at page 6:

“ Nevertheless there does seem to be variation of susceptibility of individuals. Smoking and exposure to smoke, as well as concurrent or recent viral illness, is thought to enhance susceptibility. It is also understood that susceptibility is increased in certain hereditary conditions, although we have no detail if Mr Manning experienced such a phenomenon. We know that he was a non-smoker and it is understood that all members of his family were non-smokers. There was no detail, however, of his precise state of health in the two weeks before he developed meningococcus disease.”

The potential significance of enhanced susceptibility is twofold. Firstly, whatever it results from, it may produce an individual who could contract the disease more readily than others. This is relevant to the level of exposure needed to lead to infection. Secondly, enhanced susceptibility would be relevant if it resulted from the deceased’s employment, for example, exposure to smoke rendering an individual more susceptible. There is no evidence to indicate the deceased suffered from any enhanced susceptibility. He did not smoke, nor did his family. There is no evidence of a concurrent or recent viral illness, or of any relevant hereditary condition. There is no evidence the deceased was exposed to smoke in the course of his employment, or otherwise. Whilst Dr Anderson raises the possibility of enhanced susceptibility, the evidence does not supply a basis to conclude it existed in this case.

Dr Anderson records the deceased spent about forty-five minutes each way, commuting to work, in trains that were often crowded. He also records the deceased visited homes for people with disabilities. He says:

“It has been suggested that carrier rates in ‘closed communities’ (military barracks are frequently used for this example) tended to be higher than in more open communities. I would respectively suggest that some of the establishments that Mr Manning visited, such as group homes, would be more likely to be in this category.”

Dealing with how the disease is transmitted, Dr Anderson said:

“It is acknowledged that ‘in general’ the effective transmission of this organism seems to be relatively low and more than ‘casual’ exposure is generally needed for successful transmission of the infective organism. Nevertheless, if Mr Manning had for whatever reason had exposure to smoke or recent viral or respiratory illness and had been exposed to droplet distribution of the organism, he could still have contracted the disease. In looking at the ‘most likely source’ of Mr Manning’s exposure to this organism, although there is no ‘scientific evidence’ of the existence of this organism at home, at the swimming pool, at church, or on the way to and from work, it does seem to have been the case that at work he would have been more likely to be exposed to such a phenomenon.”

Dr Anderson says transmission generally requires more than casual exposure, but the disease is transmitted more readily if there is enhanced susceptibility. There is no evidence in this case of any features that Dr Anderson would point to, as leading to enhanced susceptibility. There is no evidence of contact between the deceased and other people, in the course of his employment, or while commuting to and from work, that would go beyond ‘casual’ exposure. The only additional feature of the deceased’s employment identified by Dr Anderson, to support his conclusion that the relevant exposure probably came from train travel or exposure in the work environment, is the above reference to increased rates of infection in ‘closed communities’, of which group homes may be examples. This does not explain how casual exposure in such communities would lead to infection. In his second report dated 24 October 2007, Dr Anderson said:

“Regardless of the described low infectivity of Neisseria Meningitidis, it is still evident that the condition is still transmitted from person to person. This begs the question as to the most likely circumstances under which Mr Manning would have contracted the condition.
I would still most respectively draw attention to the likely numbers of the general community with whom Mr Manning came into contact both at work and on his journey to and from work in comparison with those with whom he came in contact in the non-work environment.
I would suggest that the numbers of people with whom he came into contact (possible exposures) would be infinitely more in the work or work related environment.”

This passage again fails to deal with the issue of how, given the low infectivity of the disease, and the unlikelihood of it being transmitted by casual contact, it was contracted by the deceased in the course of his employment. There was no evidence of more than casual contact in the course of his employment or on public transport, and no evidence of enhanced susceptibility that may have explained the disease being transmitted more easily than was usually the case. I accept the submission of the Appellant that Dr Anderson’s conclusion is a bare ipse dixit, that is not persuasive (Edmonds at [130] to [132]; Hevi Lift (PNG) Ltd v Etherington (2005) 2 DDCR 271 at [84]).

I find the evidence of Professor Tapsall more persuasive, and I prefer it. Professor Tapsall is well qualified in the area. He is a medical practitioner, and a consultant microbiologist at the Prince of Wales Hospital. He has been a coordinator of the Australian Meningococcal Surveillance Programme since 1994, is a member of the NSW Department of Health Meningococcal Diseases Advisory Committee, and a member of the Meningococcal Diseases (guidelines) subcommittee of the Communicable Diseases network of Australia.

Professor Tapsall considered it more likely the deceased had acquired the disease from “non-work related sources”. He was of the view that “casual contact” with an infected person was not a particular risk factor (see the passage quoted at [44] above). There is a helpful and logical discussion, which I accept, of the means of transmission, at pages 7 to 8 of the report dated 24 November 2006. Professor Tapsall said there were, to his knowledge, no increased carriage rates of the disease in the groups visited by the deceased. Professor Tapsall said there was nothing to suggest the nature of the contact was such as to pose any particular risk of acquisition of the infection.

Professor Tapsall also concluded it was “highly unlikely” the deceased acquired the organism during work related travel. In this regard he again noted normally a prolonged exposure is required for transmission of meningococci. On commercial air flights “only those who are in adjacent seats over a period of 8 hours are deemed to be at increased risk.” In preparation of his supplementary report dated 24 September 2007, Professor Tapsall had access to Dr Anderson’s report, and accordingly to the history on which Dr Anderson’s views were based. Professor Tapsall disputed Dr Anderson’s argument that carriage rates may be higher in group homes than in the general community. He contrasted the conditions leading to higher carriage rates in military barracks in years gone by, with those applying in group homes, nursing homes and the like. He said the nursing homes and group homes visited by the deceased were not high risk environments for the transmission of meningococci. Professor Tapsall said the circumstances of the deceased’s “contact with the inmates of the group homes was not of a nature that is associated with transmission of meningococci.”

Professor Tapsall ultimately concluded, in passages referred to at [50] and [51] above, that the more likely source of infection, in the deceased’s case, was domestic.

Of course the Appellant does not need to disprove the Respondent’s case on injury, it is a question of whether the Respondent has established, on the probabilities, that the deceased probably contracted the disease in the course of his employment with the Appellant. In my view she has not. The medical evidence overall indicates casual contact is an unlikely method of transmission, in the absence of enhanced susceptibility, of which there is no evidence. There is no evidence of more than casual contact with others, either in the course of the deceased’s employment, or, to the extent that reliance is placed upon it (it is not pleaded in the Application) whilst travelling to and from work. In a passage helpfully quoted by the arbitrator in this case, in Flounders v Millar [2007] NSWCA 238 at [35] Ipp JA said:

“It remains necessary for a plaintiff, relying on circumstantial evidence, to prove that the circumstances raise the more probable inference in favour of what is alleged. The circumstances must do more than give rise to conflicting inferences of an equal degree of probability or plausibility. The choice between conflicting inferences must be more than a matter of conjecture. If the court is left to speculate about possibilities as to the cause of the injury, the plaintiff must fail. As I have attempted to demonstrate, there are many cases in this Court that follow and adopt these principles. I would explain Binks simply on the basis that the Court in that case was not referred to the relevant authorities. The rules governing causation at common law are those expressed in Luxton v Vines and March v Stramare (E & M H) Pty Limited (1991) 171 CLR 506, namely, the test of commonsense, with the onus of proof at all times being on the plaintiff.”

To echo the language of Dixon CJ, quoted by Einstein J in the passage at [35] above, the Commission is being asked to choose between guesses. The Respondent has not proved the more probable inference is that the deceased contracted meningococcal disease in the course of his employment with the Appellant. I prefer the evidence of Professor Tapsall to that of Dr Anderson. The more probable inference is that the deceased contracted the disease from domestic sources.

DECISION

The decision of the arbitrator dated 18 April 2008 is revoked, and the following decision is made in its place:

“1. Award for the Respondent Employer” (the Appellant in this appeal).

COSTS

The procedural history of the matter has been set out above. The Appellant did not serve a section 74 notice until 14 February 2008, it referring to a decision of the insurer of the same date. This was shortly prior to the second arbitration hearing date, of 28 February 2008. This was notwithstanding the claim form served upon the Appellant was dated 16 January 2005, and the lack of an appropriate notice had been raised at the arbitration hearing of 14 November 2007. Even when the absence of the notice was an issue between the parties, the Appellant did not act promptly to rectify the situation.

The correspondence serving the notice of 14 February 2008 did not concede there had been a failure to give notice previously (see [13] above). That concession is now made (Appellant’s submissions at [7]). The Appellant relied upon an assertion of “administrative oversight” to explain the failure to serve a notice at an appropriate time.

The Appellant has come to the Commission, both when the matter was listed for arbitration hearing, and on this appeal, requiring a grant of leave, only available to it on a discretionary basis, to contest the matter on its merits. The need to seek this discretionary relief flows from the failure of the Appellant to originally give notice pursuant to section 74 in compliance with its statutory obligations.

I have a wide discretion as regards costs, pursuant to section 341 of the 1998 Act. The circumstances in which a successful employer may be ordered to pay the costs of an unsuccessful claimant were dealt with by Roche ADP (as he then was) in Connor v Trustees of the Roman Catholic Church for the Archdiocese of Sydney [2006] NSWWCCPD 124 (‘Connor’). Having regard to the procedural history overall, and applying what was said by Roche ADP at [77] to [79], and the passage of the judgment of McHugh J in Oshlack v Richmond River Council (1998) 193 CLR 72 cited in Connor, I order the Appellant to pay the costs of the Respondent, both in the arbitral proceedings, and on this appeal.

Michael Snell
Acting Deputy President
2 September 2008

I, TUYET WALLIS, CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF MICHAEL SNELL, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.

ASSOCIATE