WorkCover Authority of NSW v Bowie Couriers Pty Limited
[2006] NSWWCCPD 241
•21 September 2006
WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:WorkCover Authority of NSW v Bowie Couriers Pty Limited [2006] NSWWCCPD 241
APPELLANT: WorkCover Authority of NSW
RESPONDENT: Bowie Couriers Pty Limited
FILE NUMBER: WCC5330-05
DATE OF ARBITRATOR’S DECISION: 10 August 2005
DATE OF APPEAL DECISION: 21 September 2006
SUBJECT MATTER OF DECISION: The powers of the Commission under section 145 of the Workers Compensation Act 1987; reimbursement of the WorkCover Authority; and findings of ‘liability’ pursuant to Section 9A of the Workers Compensation Act 1987.
PRESIDENTIAL MEMBER: Acting Deputy President Deborah Moore
HEARING:On the papers
REPRESENTATION: Appellant: TurksLegal
Respondent: Adams & Partners, Lawyers
ORDERS MADE ON APPEAL: 1. The decision of the Arbitrator dated 10 August 2005 is confirmed.
2. WorkCover is to pay the costs of the appeal.
BACKGROUND TO THE APPEAL
On 2 September 2005, the Appellant, the WorkCover Authority of New South Wales (‘WorkCover’) sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Commission in respect of a decision of a Commission Arbitrator dated 10 August 2005.
The Respondent to the appeal is Bowie Couriers Pty Limited (‘Bowie’).
Bowie is a duly incorporated company, its sole director being Mr Mark Boaz. The company was registered on 8 January 2003 and commenced trading shortly thereafter. The sole business of the company was the operation of a courier franchise between Homebush and Campbelltown in Sydney, involving the delivery of what was described before the Arbitrator as “small packages”.
On about 23 January 2003, Bowie engaged Craig John Garland (‘the Worker’) to commence employment in Bowie’s courier business. It appears that the Worker lived next door to Mr Boaz and that they had known each other for a number of years. During that time, according to evidence given by Mr Boaz before the Arbitrator, the Worker had indicated that he suffered from a “bad back” and had previously undergone surgery on his spine.
In a ULIS claim form on WorkCover dated 21 May 2003, the Worker claimed that on 3 April 2003 whilst “exiting a work vehicle” he injured his back. He apparently ceased work that day.
On an incomplete ULIS Employer’s Report of Injury Form Bowie claimed that the date of injury was 27 March 2003.
Nonetheless, liability was accepted by WorkCover and weekly compensation benefits and related medical expenses were paid to the Worker.
By letter dated 23 February 2005, WorkCover forwarded to Bowie a document described as “Form 32 – Notice to Reimburse. Section 145(1) Workers Compensation Act 1987”. Briefly the letter required Bowie to reimburse WorkCover within 28 days “… from the date of service of this Notice …” an amount in the schedule annexed totalling $84,481.28.
On either 8 April 2005 or 12 April 2005 (both Commission date stamps appearing on the document) Bowie filed an ‘Application to Resolve a Dispute’ in the Commission seeking a review of WorkCover’s decision for reimbursement pursuant to the provisions of section 145(1) of the Workers Compensation Act 1987 (‘the 1987 Act’).
The “Reason for Dispute” was identified in the following terms:
“1.The Employer denies that the Worker sustained an injury during the course of his employment on 3 April 2003. The Worker had previously injured his back whilst employed with a former employer prior to the commencement of employment with the Applicant on 16 January 2003.
2.The Employer has not been provided with any documentation including; Notice of Claim Form, WorkCover Certificates, Medical Certificates, or any other communication from WorkCover Authority to enable the Employer to respond to the claim. Accordingly there has been a denial of natural justice to the Employer.
3. The Employer disputes the quantum of weekly payments made or paid to the Employee. At the time [of] the alleged injury on 3 April 2003 the Employee was earning $32,760.00 per annum. The total weekly payments paid to the Employer for a period of 12 months or less is $49,535.78.”
In its Reply filed on 20 April 2005, WorkCover listed the “Issues in Dispute” in similar terms.
The parties attended a conciliation/arbitration hearing on 15 July 2005, where Mr Mark Boaz gave oral evidence.
On 10 August 2005, a ‘Certificate of Determination’ with an accompanying ‘Statement of Reasons’ was issued. The decision of the Arbitrator was as follows:
“1. In accordance with s145(4)(a) of the 1987 Act I determine that the Applicant is not liable to pay compensation in relation to the subject injury sustained by the Worker.
2. I therefore find that the compensation sought by the Respondent from the Applicant is not payable by the Applicant.
3. The Respondent to pay the Applicant’s costs as agreed or assessed.”
On 2 September 2005, WorkCover filed an ‘Appeal Against Decision of Arbitrator’. Briefly, WorkCover submits that:
“The Arbitrator erred in his finding of fact and law and in the application of his discretion in determining that employment was not a substantial contributing factor to the worker’s injury and, concomitantly, that the employer was not liable to reimburse WorkCover pursuant to section 145(1)”.
WorkCover also submits that the Arbitrator’s determination was based upon medical and factual evidence in the absence of any testimony from the Worker, and that as a consequence, WorkCover was “grossly prejudiced”.
On 22 September 2005, Bowie filed a ‘Notice of Opposition to Appeal’. Briefly, Bowie submits that the Arbitrator’s findings were supported by the evidence before him and should not be disturbed.
LEAVE TO APPEAL
The amount at issue on the appeal satisfies the criteria set out in section 352(2) of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’). The appeal was filed within the time limits prescribed by section 352(4) of that Act.
Leave to appeal is granted.
ON THE PAPERS REVIEW
WorkCover objects to the matter being determined ‘on the papers’ for the following reasons:
“This matter is of significant value to WorkCover in the exercise of its powers to seek reimbursement of monies expended in respect of the claim.
The evidence that is available requires extensive review of the medical material available to the Arbitrator.
The error of the Arbitrator as alleged by the Appellant requires addressing of the structure of section 9A and the particular facts of the case giving rise to the appeal”.
Bowie “… requests an oral hearing of the appeal as in the event the appeal is successful, the Respondent’s director may be personally liable to reimburse the Appellant…”
Neither party has provided any submissions as to why the matter is not suitable for a determination ‘on the papers’: Bowie has simply “requested” an oral hearing.
The submissions by WorkCover address the Arbitrator’s findings in relation to the medical evidence before him and to the oral evidence of Boaz, and a number of decisions of the Court of Appeal as to the appropriate interpretation of “substantial contributing factor” as defined in section 9A of the 1987 Act. WorkCover has also made submissions on the issue of “prejudice” having regard to the absence of any evidence from the Worker.
All these issues were canvassed at the arbitration hearing as is evidenced by the 97 pages of transcript emanating from those proceedings. I have had regard to the extensive medical material before the Arbitrator and to a number of authorities upon which both WorkCover and Bowie rely. I am mindful of the significant value of the claim but notwithstanding these submissions, I do not consider that the issues raised on appeal could be further elucidated by oral argument.
Having regard to both parties’ submissions, and all the evidence and documents that are before me, including the transcript, I am satisfied that I have sufficient information to proceed ‘on the papers’ within the meaning of section 354(6) of the 1998 Act and in accordance with Practice Direction No 1, and that this is the appropriate course in the circumstances.
THE ARBITRATOR’S FINDINGS AND REASONS
In making his determination that Bowie was “not liable” to pay compensation to the Worker and that accordingly, WorkCover was not entitled to reimbursement of the benefits it had paid, the Arbitrator made by the following findings contained in paragraphs 84 – 88 of the ‘Statement of Reasons’:
“84.In Raniere Holdings Pty Limited v Daley & Anor (2005) NSWCA 121 the Court of Appeal examined the legislation that has been under scrutiny in this case. Paragraph 57 of the leading judgment of Tobias JA notes that there is no power to make a provision in an order made under s.144(3) for reimbursement of the fund by the employer pursuant to s.144(5): - ‘unless and until, where the matter is in issue, it has determined that the employer is in fact liable to pay compensation to the injured worker under the Act …’
85.I am satisfied in the circumstances of this case, that the employer isnot in fact liable to pay compensation to the injured worker.
86.I therefore find that the worker’s employment with the Applicant was not a substantial contributing factor to the injury and that therefore there is no liability in the Applicant to pay compensation.
87.In accordance with s.145(4)(a) of the 1987 Act I determine that the Applicant is not liable to pay compensation in relation to the subject injury sustained by the worker.
88.I therefore find that the compensation sought by the Respondent from the Applicant is not payable by the Applicant.”
Under the heading “The Injury and Nature of the Claim,” in his ‘Statement of Reasons’, the Arbitrator noted a number of anomalies in the documentary evidence before him. He noted, for example, the discrepancy in the dates of injury. The Worker alleged the injury occurred on 3 April 2003 while Mr Boaz maintains it occurred on 27 March 2003. There were discrepancies in the dates of documents allegedly signed by Mr Boaz at the request of WorkCover. The Arbitrator also noted that, in purportedly accepting liability for compensation payments, WorkCover wrote to the Worker on 25 June 2003, noting “injury sustained on 3 April 2003” with reference to “Re: Bush Fire Fighters Compensation Fund”. As to this, the Arbitrator noted at paragraph 21:
“This puzzle, too, was not noticed by either party. On the face of the documentation, however, it seems that the Respondent has accepted liability … upon the mistaken assumption that the injury happened on an entirely different date to that alleged before me, and in respect of the Bush Fire Fighters Compensation Fund, which appears to have no connection with the business carried on by the Applicant. Again, as this mystery was unaddressed by the parties, I assume that I am to ignore these glaring anomalies, and deal with the issues raised during the hearing.”
The Arbitrator went on to note at paragraph 22 the discrepancies in the alleged dates of injury. The Arbitrator made reference to the Section 145(5) Certificate issued by WorkCover which noted again the date of injury as 3 April 2003 and stated: “Bearing in mind the binding nature of that certificate, as will be explained later, that misstatement alone is capable of discharging any liability of the Applicant. However, again, the point was not taken, and as will be seen, the case turned upon other issues.
The Arbitrator stated, after making reference to the “medical case” and the submissions by the parties, at paragraph 54 under the heading “Findings and Reasons”:
“It needs to be born in mind that this application has occurred as a result of the unilateral decision on behalf of the Authority, taken pursuant to s.143(1)(a) of the 1987 Act. It follows that the officer responsible was satisfied upon enquiries being made that there were no matters arising therefrom which casts sufficient doubt upon both the entitlement of the worker, and the liability of the employer, to cause that officer to refuse to satisfy the claim pursuant to s.143(2) or (3).”
The Arbitrator went on at paragraph 55 as follows:
“When one examines the circumstances of this case, a number of indicators immediately become apparent that ought to have sounded a warning as to the wisdom of satisfying the claim.”
The Arbitrator then went on to note the evidence of the pre-existing medical condition with reference to the provisions of Section 9A of the 1987 Act and the medical reports before him.
At paragraph 58, he stated:
“The fact, then known to the officer concerned, that the injury occurred simply as a result of an everyday action of getting out of a vehicle, should in my view have alerted the Respondent of the possibility of a contest as to liability.”
A detailed examination of the medical evidence then followed:
The Arbitrator noted that the Worker’s claim form simply stated: “Exiting a work vehicle”. He noted, in paragraph 72, that:
“Mr Boaz was asked in cross examination whether there had been a twist whilst the worker was alighting from the vehicle [but] … did not remember whether there was a twist or not and I am satisfied on the totality of the evidence, that there was nothing extraordinary about the way in which the Applicant got out of the vehicle.”
The Arbitrator rejected any suggestion by WorkCover that there was a jump involved and refused to draw an inference that a jump must have been necessitated by virtue of the fact that the Worker was a passenger in a Ford Econovan.
At paragraph 81, the Arbitrator concluded: “… I am satisfied that the Worker did no more than simply get out of a car in aggravating his pre-existing condition.” As a consequence, the Arbitrator concluded that (paragraph 83) “… I find that the Applicant has established on the balance of probabilities, that the employment in this case was not a substantial contributing factor to the injury.”
THE STATUTORY SCHEME
By Division 6 of Part 4 of the 1987 Act, the Uninsured Liability and Indemnity Scheme was set up, to be administered by the WorkCover Authority.
When a claim is made by an injured worker on an uninsured Respondent, Section 143(1) of the 1987 Act enables the WorkCover Authority (‘the Authority’) to either pay the claim (subsection (1)(a)); make an ex gratia payment (subsection (1)(b)); or refuse to satisfy a claim (subsection (2)). Subsection (3) provides that the Worker is to be notified within 14 days of any decision not to satisfy the claim and to be provided with reasons therefore.
When the Authority receives such a claim, it may require an employer to furnish certain information to it specified by notice under section 141.
Section 143 confers an unfettered right upon the Authority to make a decision whether to accept or reject a claim, and is not required to either notify or consult with an uninsured employer as to its decision.
Section 144 of the 1987 Act provides a mechanism for a Worker who is dissatisfied with the decision of the Authority to apply to the Commission for determination of the claim. In those circumstances, the injured worker is required to join both the employer and the Authority to the action (section 144(2)(a)), and the Authority may also join anyone whom it thinks may be liable to pay compensation (section 144(2)(b)).
In other words, the Authority has an unfettered right to pay the claim if it is satisfied that liability exists. It is only if the Authority refuses to pay a claim that the matter becomes litigated as between all relevant parties, i.e, the injured worker, the uninsured employer and the Authority.
Section 145 of the 1987 Act makes provision for an employer or insurer to reimburse the Authority for an amount limited to the payment the Authority has made pursuant to its decision.
The terms of that section are particularly relevant to the claim at hand, and provide as follows:
“145. (1) The Authority may serve on a person who, in the opinion of the Authority, was:
(a) in respect of an injured worker to or in respect of whom a payment has been made under the Scheme, an employer at the relevant time, or
(b) an insurer under this Act of such an employer,a notice requiring that person, within a period specified in the notice, to reimburse the WorkCover Authority Fund an amount (not being an amount exceeding the amount of the payment made) specified in the notice.
(2) The Authority may, by instrument in writing, waive the liability of an employer under subsection (1) to reimburse the WorkCover Authority Fund an amount, if the Authority, in respect of the amount, is satisfied that:
(a) the amount is beyond the capacity of the employer to pay,
(b) the employer could not reasonably have been expected to regard himself or herself as an employer at the relevant time,
(c) the employer, not being a corporation, is bankrupt and the liability under this section is not provable in the bankruptcy,
(d) the employer, being a corporation, is being wound up and the liability under this section is not provable in the winding up,
(e) the employer, being a corporation, has been dissolved, or
(f) it would not be commercially feasible for the Authority to attempt to recover the amount.(3)A person on whom a notice has been served under subsection (1) in respect of an injured worker may, within the period specified in the notice, apply to the Commission for a determination as to the person’s liability in respect of the payment concerned.
(4) The Commission may hear any such application and may:
(a) make such determination in relation to the application, and
(b) make such awards or orders as to the payment of compensation under this Act to or in respect of the injured worker concerned, as the Commission thinks fit.(5)In any proceedings under subsection (4), a certificate executed by the Authority and certifying that:
(a) the payments specified in the certificate were paid to or in respect of an injured worker named in the certificate; and
(b) a person named in the certificate was, in the opinion of the Authority, liable at the relevant time to pay to or in respect of the injured worker compensation under this Act or work injury damages, is (without proof of its execution by the Authority) admissible in evidence in any proceedings and is evidence of the matters stated in the certificate”.
The practical implications of the provisions of section 145 were considered by Deputy President Handley in Mackley v WorkCover Authority of New South Wales [2005] NSWWCCPD 32, whose decision was confirmed by the Court of Appeal on 27 July 2006.
At paragraph 25, he stated:
“… The legislation and cases cited make it clear that the Commission’s power pursuant to sub-sections 145(3) and (4) does not extend to reviewing the exercise of WorkCover’s discretion pursuant to section 145(2) or to exercising the power of waiver thereunder … the Commission’s power is, nevertheless, a broad one whereby it may determine the liability of a person on whom a notice for reimbursement has been served pursuant to section 145(1), in respect of an amount of compensation paid by WorkCover”.
In that case, Deputy President Handley noted that: “The Arbitrator may have viewed ‘a determination as to the person’s liability’ (section 145(3)) narrowly as meaning the quantum of liability and not including broader questions as to whether a person should be liable to reimburse WorkCover.”
Deputy President Handley went on to note, with reference to the Court of Appeal decision in GRE Workers’ Compensation Insurance (NSW) Limited v Nohil Pty Limited (1996) 13 NSWCCR 74 that the “section 145(4) ‘plenary power’ permits the Commission to make orders adjusting the rights of parties as to liability as it thinks fit.”
Thus the question for determination before the Arbitrator was, broadly stated, whether the Commission should use its broad powers to adjust the rights of the parties.
THE SUBMISSIONS AND EVIDENCE
The “Prejudice” Issue
WorkCover’s submission on this issue is stated as follows:
“The worker did not testify as the solicitor for the Appellant was notified by the solicitor for the employer that the worker was not required for cross examination. In reliance on this representation, the appellant did not call the worker at first instance to testify. Notwithstanding this, the employer raised substantial contributing factor and the arbitrator drew inferences as to the mechanism of injury in the absence of the worker’s testimony. The appellant was grossly prejudiced by this and submits that this offended the principles of the conduct of arbitration, in particular the provision of a ‘fair’ system as stated in section 367(1)(a) of the [1998] Act”.
WorkCover takes particular issue with the Arbitrator’s finding at paragraph 81 of the ‘Statement of Reasons’ that the Worker “did no more than simply get out of a car in aggravating his pre-existing condition.”
Section 367(1)(a) of the 1998 Act provides as follows:
“The Commission has the following objectives:
(a)To provide a fair and cost effective system for the resolution of disputes under the Worker’s Compensation Acts, …”
In addition, the provisions of section 354 of the 1998 Act, governing procedure before the Commission, are also relevant. The relevant sections are set out hereunder:
“354(1) Proceedings in any matter before the Commission are to be conducted with as little formality and technicality as the proper consideration of the matter permits.
(2) The Commission is not bound by the rules of evidence but may inform itself on any matter in such manner as the Commission thinks appropriate and as the proper consideration of the matter before the Commission permits.
(3) The Commission is to act according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms.”
Nonetheless, the fundamental principles of procedural fairness must be observed. Denial of procedural fairness is an error of law and is sufficient to ground an appeal.
In these circumstances, it is important to look at the conduct of the proceedings as noted in the transcript.
At the outset, Counsel for WorkCover submitted that the Commission had no jurisdiction to hear the appeal since it was filed outside the time limits prescribed in the Section 145 Notice. The Notice was dated 23 February 2005. The Application before the Commission was filed by Bowie on either the 8th or 12th April 2005. The time permitted in the section 145 Notice was 28 days. The Arbitrator noted (page 2) “… Well, that’s the date of the notice but that doesn’t necessarily say it’s the date of the service. Can you prove service?”. Counsel for WorkCover replied: “No.”
At pages 3 – 4 of the transcript, the Arbitrator ruled on this issue concluding (page 4):
“The notice itself is dated 23 February 2005. The Application has a date stamp of the Workers Compensation Commission of 8 April 2005. I note that the Notice gives 28 days from the date of service and the Respondent is unable to tell me when it was served. Under those circumstances, it has not proved an essential element of this case and I decline the application.”
There followed further discussion between the parties, with Counsel for WorkCover seeking a brief adjournment to get instructions on proof of service, but only after the Arbitrator’s ruling on that issue. Counsel for WorkCover submitted that the “28 days” ran from the date of the notice, i.e., 23 February 2005 and expired on 23 March 2005. When the Arbitrator stated (page 6) “I have ruled on this application”, Counsel for WorkCover then said “but there’s no issue been raised by the Applicant about service.” Counsel for Bowie conceded that that was in fact the case.
At page 6, the Arbitrator then stated:
“Look, your cavilling [sic]. I have – the reason I have disallowed your application is because you were unable to prove what is an essential part of your case in this application, and that is that the notice spoke of the date of service, and you said you couldn’t tell me when it was served. You lose. You have to... It could be that notices don’t go out for three or four weeks. It could be they go out immediately. I don’t know, and I haven’t been told.”
The Arbitrator then said he would move on with the case.
The preceding excerpts from the transcript are reflective of the overall conduct of the proceedings. No issue is taken by WorkCover on appeal on this point although, as the Arbitrator rightly pointed out, it was an “essential” aspect of WorkCover’s case. Indeed, that was the basis upon which the employer was unsuccessful in Raniere Nominees Pty Limited t/as Horizon Motor Lodge v WorkCover Authority of NSW [2005] NSWWCCPD 28, a decision of Deputy President Fleming which followed the referral back to the Commission by the Court of Appeal for a “hearing on the merits” following its decision in Raniere Holdings Pty Limited v Daley & Anor [2005] NSWCA 121 (‘Raniere’). The proceedings in the Court of Appeal set aside orders made by Judge Hughes on 3 December 2003 in the former Compensation Court.
Deputy President Fleming confirmed the Arbitrator’s decision that the application to the Commission pursuant to section 145 was out of time and that he therefore had no jurisdiction to hear it. Deputy President Fleming referred to “… the implications of the plain words of section 145(3) and (4) of the 1987 Act” but concluded that “I am not satisfied that this permits the Commission to consider an application made outside of the time specified in the WorkCover Notice.”
No issue was taken with the concept of “service” of the Notice. The matter proceeded on an acceptance of the date of the Notice itself being the date from which time would run.
No reference was made by any party, nor indeed the Arbitrator, to this decision. An application was made for “a brief adjournment [to] get instructions on proof of service” by Counsel for WorkCover, but only after the Arbitrator had made a somewhat cursory ruling on the issue.
Be that as it may, as I have said, WorkCover takes no issue with this aspect of the Arbitrator’s determination on appeal. I make reference to it because of its relevance in the context of the conduct of the proceedings relating to the provision of testimony from the Worker.
This issue was dealt with commencing at page 27 of the transcript. At the conclusion of the “outline” of the case presented by Counsel for Bowie, the Arbitrator noted that Counsel for WorkCover “… said something to me off the record about whether you are ready to proceed with the matter.” Counsel concurred. Counsel for WorkCover then made reference to Bowie’s amendment of the Application to put in issue section 9A of the 1987 Act and the reasonableness or otherwise of medical expenses. Discussion then ensued which seem to focus on these aspects of the claim. Counsel for WorkCover then said (page 27):
“If I am to meet that issue today, I am concerned that the medical evidence that I have does not necessarily address that with the specificity that I would like because prior to today that has not been an issue. I particularly take note of where … the worker was not required by the Applicant to come to give evidence, even though he had been summonsed by my client. We were told that he wasn’t necessary for these proceedings. Now, if he was here, then you could have heard evidence from him about symptoms and the like prior to commencing employment, during his employment and thereafter [sic] is employment …”
At page 28, Counsel for WorkCover noted that he did not have a statement from the Worker “… so I can’t address the issues for those … reasons.”
In response, Counsel for Bowie said this (paragraph 28):
In relation to the worker being required for cross examination, it is true that the Applicant advised [WorkCover’s solicitors] that he was required, and it is true that yesterday notice was given that he wasn’t required. You should note that the worker has not provided a statement in the Respondent’s brief … and you cannot cross examine someone when they haven’t provided a statement. So on my instructions we had no entitlement to cross examine a witness who has not provided a statement. That’s why he wasn’t required to be cross examined: Because he hasn’t given evidence in chief …”
At page 29, the Arbitrator then said:
“Alright. Well, I hear that. I won’t rule on your application at the moment [Counsel for WorkCover]. For a start, I think we can probably deal with the first ground without the worker. I don’t think there is anything controversial about the manner in which this incident happened in that although there is nothing from the worker you’ve filed a statement from Mr Boaz that clearly shows that something happened whilst at work.”
The Arbitrator then noted that the question was the relevance of the provisions of section 4 (as to injury) and section 9A of the 1987 Act. The Arbitrator then simply stated:
“What I want to do, gentleman, is just go – I just want to go back to basics. I want somebody to tell me the statutory authority for the WorkCover Authority to determine the claim without reference to the uninsured.”
The parties then embarked on a discussion of the provisions of sections 143, 144 and 145 of the 1987 Act, and tendered documents apparently addressing that aspect of the claim. The Arbitrator then proceeded to identify all the evidence before him by reference to exhibit numbers and letters, and at page 41 of the transcript, Mr Boaz commenced his evidence.
It does not seem to be disputed that WorkCover had issued a Summons to the Worker to appear in the proceedings. As I understand it, WorkCover maintains that it did not proceed to enforce that Summons because it was advised by Bowie that the Worker was not required for cross examination. As WorkCover points out in its submissions, it was “in reliance on this representation that the Appellant did not call the Worker at first instance to testify.”
Did the conduct of the proceedings on this issue amount to prejudice to WorkCover?
Section 359(1) of the 1998 Act provides that “The Registrar may issue a summons requiring the attendance of a person at any conference or hearing before the Commission in connection with proceedings before the Commission.”
Rule 66 of the Workers Compensation Commission Rules 2003 (‘the Rules’) deals with the calling of witnesses. Its terms are as follows:
“66(1) Where a party proposes to rely on the oral evidence of a witness, the party must lodge and serve a document containing:
(a) the name of the witness, and
(b) a written statement of the evidence to be given by the witness, signed by the witness,
with the information and documents required under Rule 38(1), 40(1), 42(1) or 44(2) (as the case may require) to be lodged and served by the party.
(2) Subject to sub-rule (3), (4) and (6), a party may not in proceedings call a witness to give oral evidence that has not been included in a document lodged and served as required by sub-rule (1) unless:
(a) the party has lodged and served with the information and documents required under Rule 38(1), 40(1), 42(1), or 44(2) (as the case may require) a statement revealing:
(i) the specific nature of the evidence, and
(ii) the reliance the party intends to place on the evidence, and
(iii) the reasons why the evidence has not been included in a statement as required by sub-rule (i), and
(iv) the time the evidence is expected to be so included and,
(b) The evidence is included in a written statement served on all other parties and lodged as soon as practicable after that statement can be obtained.”
The Rule also makes provision for the calling of oral evidence where a person refuses to sign a statement and the party wishing to adduce the evidence has served a Summons.
The submissions made by Counsel for Bowie before the Arbitrator on this issue were somewhat misconceived. The Worker was not a party to the proceedings, and the requirements of Rule 66 deal with the requirements of the “parties” in the calling of witnesses. The issuing of a summons pursuant to section 359 was the appropriate course to adopt by WorkCover. The proceedings were for the recovery of benefits paid by WorkCover from the uninsured employer. There was no issue that Bowie was uninsured at the relevant time.
Nothing in the provisions of section 359 requires that a person summonsed to attend “in connection with proceedings before the Commission” is required to make a statement of the kind contemplated by Rule 66.
The Worker’s evidence was no doubt of relevance to both parties. There is no privity in a witness but it seems clear that, in circumstances where Bowie had put “injury” in issue, that his attendance was crucial to WorkCover’s case.
It seems to me to be somewhat disingenuous of Counsel for WorkCover to tell the Arbitrator that: “We were told that he wasn’t necessary for these proceedings” when it had issued a summons requiring his attendance.
Whilst Bowie was the Applicant in the proceedings and as such, bore the onus of establishing, on the balance of probabilities, that it was not “liable” to WorkCover within the meaning of section 145(3) of the 1987 Act, WorkCover bore an equal onus to prove that Bowie was so liable.
Whilst there was no explicit reference to the provisions of section 9A of the 1987 Act in Bowie’s Application, the transcript reveals that Bowie, in a letter addressed to WorkCover’s solicitors dated 1 July 2005 sought to amend its application to raise a number of additional issues, including the provisions of section 9A of the 1987 Act. At page 11 of the transcript, Counsel for WorkCover indicated that he would “get formal instructions of a sort” in relation to these matters, but again, nothing further seems to have transpired.
This is again a reflection of the conduct of the proceedings. On numerous occasions, issues were raised, objections noted, the parties went off at a tangent on other issues such that a number of matters were effectively left in abeyance. For example, when dealing with the issue as to why the Worker was not present at the proceedings, there was no application made for an adjournment of the proceedings for the purpose of his attendance. The Arbitrator made reference to Counsel for WorkCover’s saying “something to me off the record about whether you are ready to proceed with the matter” and then later simply said: “I won’t rule on your application at the moment …”. I cannot see that any application was ever made, nor indeed did the Arbitrator ever apparently rule on any such purported application.
Nonetheless, he who asserts must prove. WorkCover no doubt knew of the importance of the Worker’s evidence to its case and took no further steps to procure his attendance. If, as WorkCover somewhat obliquely seems to assert, there was some misunderstanding between the parties as to the Worker’s attendance for the purposes of cross examination, then that should have been squarely raised before the Arbitrator, and not left in abeyance.
Bowie makes a pertinent submission on this point in its submissions on appeal. Whilst asserting that WorkCover failed to comply with Rule 66 of the Rules regarding service of witness statements and did not seek an adjournment for the purposes of obtaining a statement from the Worker, matters which I have discussed previously, Bowie also submits: “During the Arbitration the Appellant did not raise that the manner in which the hearing was conducted was unfair. It is submitted that it is inappropriate to first raise this issue on appeal.”
Bowie makes reference to the decision of the Court of Appeal in Multicon Engineering v FAC (2000) 47 NSWLR 631 on this point.
As Mason P stated in that case at page 645, quoting the High Court in University of Wollongong v Metwally (1984) 158 CLR 447 at 483:
“It is elementary that a party is bound by the conduct of his case. Except in the most exceptional circumstances, it would be contrary to all principle to allow a party, after a case had been decided against him, to raise a new argument which, whether deliberately or by inadvertence, he failed to put during the hearing when he had an opportunity to do so.”
This is a compelling argument. Whilst I am mindful that proceedings before the Commission should be conducted with as little formality and technicality as the proper consideration of the matter permits, the parties nonetheless must bear in mind the onus each carries to establish its case.
The circumstances surrounding the conduct of this case makes it difficult to conclude that WorkCover was either prejudiced or denied procedural fairness. It had opportunities throughout the proceedings to make application to enforce its summons on the Worker.
The absence of the Worker’s testimony was the subject of lengthy submissions before the Arbitrator covering pages 68 – 75 inclusive of the transcript, essentially as to which party bore the onus of proof.
Reference was again made to the Court of Appeal in Raniere to which I have referred previously. It was common ground that Bowie could be liable to reimburse any amount paid by WorkCover up to that stated in the Section 145 Certificate, but equally, that Certificate was only evidence as to payments made by WorkCover.
The issue to be determined by the Arbitrator was the liability of Bowie to pay compensation to the Worker. Bowie submitted before the Arbitrator, that WorkCover “… is standing in the position of the Worker, and they are … obliged to prove its case …” Counsel for Bowie said (page 73 transcript) “… Jones v Dunkel says … I can’t be obliged to call witnesses in the other camp.”
The Arbitrator agreed, then stated:
“The way I see it is that the effect of section 145(3) is to give the uninsured employer the right to call upon WorkCover to verify, if you like, or to establish the rights or … liability … or the merits of the claim … in accordance with the determination that they have made without notice to the uninsured employer. I think a section such as 143, which gives the authority the right to do so, must be construed contra proferentem, in that it is a penal provision affecting the rights of persons … in their absence, and that, therefore, if they are called upon to justify what they have done, then the onus – well, if there is a claim made under 145(3), the onus then falls upon the authority to justify their determination of their decision to, in this case, find that the uninsured respondent is liable and justify the amount of money … they pay”.
Counsel for WorkCover, invited to address the Arbitrator’s view on this issue, differed, and maintained that:
“… The challenge to what has been done now falls upon the employer, the uninsured employer, to say, what you did wasn’t correct, and they then have the capacity via directions in this Commission and any other powers such as summons that they may seek to exercise to also bring to the Commission any evidence upon which they seek to rely to disprove what has been done …”
Counsel for WorkCover then asserted (page 74 transcript) that the onus rested upon the employer who “could have summonsed the worker here”. Counsel again noted “I could also have summonsed the worker … that was done, but then communications were entered into … this worker is not required.” He then conceded that the agreement between the parties was to the effect that the Worker was not required for cross-examination.
Ultimately, the Arbitrator ruled at page 75 of the transcript as follows:
“I think under the statute – there is no doubt that he alleges must prove, and the statute gives the right to the … uninsured employer to apply to the Commission for a determination as to the liability of the injured person in respect of payments made.
It could be argued that the mere fact of making the application puts the Respondent on notice that it is required to justify the decisions it took under section 143 and that, therefore, the issue to which the onus of proof goes is satisfied once the application is made and evidence is brought which, prima face, raises a doubt as to the steps taken by the Respondent. At that stage the onus of proof then becomes an evidentiary onus which shifts according to the various issues that are raised in the case. Therefore, I think that the Respondent is in the position usually held by the Respondents …”
If WorkCover misconceived its evidentiary onus, that in itself is not a proper basis for appeal. It is regrettable that the Arbitrator’s ‘Statement of Reasons’ does not fully address this issue. At paragraph 37, he stated:
“It can be seen then that when the matter comes before the Commission under s145(3), not all the parties are necessarily involved. Rather, only the uninsured employer and the Authority, as in this case. The injured worker is not required to be present. This circumstance can lead to difficulties in the presentation of either side’s case. It seems to me that the onus of proof is on the Applicant to prove his case, and thereafter the evidentiary onus shifts from one side to the other, depending upon the weight of the evidence presented. Watts v Rake (1960) [sic – 1962] 108 CLR 158. Some time was involved in submissions as to what party ought to have called the worker, to which subject we shall return shortly.”
The decision of the High Court in Watts v Rake, supra, has some relevance to these proceedings. That involved a claim for damages where again, there was conflicting medical evidence particularly as to a pre-existing condition. As Menzies J stated at page 163:
“It was for the Appellant as Plaintiff to prove his damages, and merely to prove his present condition and his incapacity to work would not prove that these things resulted from the accident. It was not, however, for the Plaintiff to disprove that his pre-accident health would eventually cripple and incapacitate him. Prima facie, where a Plaintiff was in apparent good health before an accident and is in bad health thereafter, the change would be regarded as a consequence of the accident and it is for the Defendant to prove that there is some other explanation for it, eg, that the Plaintiff has aggravated his condition by some unreasonable act or omission. Similarly, although it is of course material to ascertain what was the pre-accident condition of the Plaintiff who alleges that his post-accident ill health is due to the accident, it is for the Defendant to prove that before the accident, the Plaintiff was in a condition that, without the accident, would have led to his post accident state of health.”
As to “which party ought to have called the Worker”, that was a subject to which the Arbitrator never in fact returned. Nonetheless, nothing in the transcript suggests that WorkCover was denied procedural fairness in the conduct of the proceedings, and I am not satisfied that WorkCover has established any error by the Arbitrator on this issue.
The Medical and Factual Evidence
WorkCover submits that findings of the Arbitrator that the Worker’s employment was not a substantial contributing factor to his injury were “grossly contrary to the balance of available evidence and are therefore not sustainable.”
WorkCover notes that the Arbitrator’s findings were based primarily on medical and factual evidence submitted by it and annexed to its Reply.
The Arbitrator concluded at paragraph 83 that:
“I am satisfied that the nature of the work performed (being the simple act of getting out a vehicle during the delivery of small parcels), and that the state of health of the Worker before the injury are matters which satisfy me that the employment was not a substantial contributing factor to the injury. (See s9A(2)(a), (b) and (e)).”
There was no real issue between the parties that the Worker had a fairly significant pre-existing back condition resulting primarily from an incident in January 2001, following which he underwent surgery in July of 2001. There was also evidence of a pre-existing back injury sustained when the Worker was employed by Sydney City Council, but the details of that incident were not available.
The evidence as to the nature of the ‘injury’ was equivocal. There was some evidence in support of the Arbitrator’s perhaps inappropriately expressed finding that the injury resulted from “the simple act of getting out of a vehicle.” Mr Boaz in his evidence was a little vague as to what had occurred stating (page 46 transcript): “He just got out as normal. I can’t actually say he swung [his legs] I wasn’t actually looking at the time … when he swung – when he got out of the van, no.” Mr Boaz did concede that the worker immediately complained of back pain following the incident.
Nonetheless, as to that evidence, as WorkCover rightly points out, Mr Boaz, as sole director of the employer, was an interested party and his evidence should have been treated with some caution. However, he was the sole witness to the event, but frankly his evidence was not of great assistance because he was not really “… actually looking at the time.”
Dr Evans, Orthopaedic Surgeon, in his report dated 17 August 2004 noted that:
“… As he was getting out of this van he twisted his back. He says he does not know why he twisted his back: he says there was nothing awkward about the seating in the van or the area where he got out.”
Dr Evans concluded: “At the time of [injury on 3 April 2003] there was no very significant injury involved: He just happened to be at work and got out of a van and developed symptoms, aggravating in my opinion what was previously present.”
A vocational assessment report from “Active Working Solutions” dated 21 November 2003 recorded a history that the Worker:
“… Thinks he may have sustained the injury as a result of twisting his back at some stage whilst getting out of the van, however he was not certain. I asked [the worker] if he was holding a package or anything similar whilst exiting the vehicle to which he recorded that he was not and that all he was doing different to a normal shift was sitting in the passenger seat.”
However, Doctors Roarty and Harvey-Sutton took a different history. Dr Roarty in his report of 11 June 2003 noted “[he] was getting out of the van and he twisted his back and was aware of a very acute pain in the lumbo-sacral area with radiation down his right leg”.
Dr Harvey-Sutton in his report of 7 October 2003 noted “He twisted as he alighted from the truck”.
WorkCover had submitted before the Arbitrator that the Worker would have been required to jump from the Ford Econovan given its height. As to this, the Arbitrator stated at paragraph 72:
“I reject any suggestion that there was a jump involved. There is no material lodged that would corroborate that submission from [WorkCover’s Counsel], nor am I prepared to draw an inference that a jump must have been necessitated as no evidence was produced on the dimensions of a Ford Econovan.”
Both Doctors Roarty and Harvey-Sutton took a history that the Worker had been relatively pain free between early 2002 and April 2003 but as the Arbitrator pointed out, this was inconsistent with a detailed report from the Worker’s general practitioner, Dr Tan. There was no doubt, on the basis of that report, that the Worker had some ongoing problems following the incident in January 2001.
The Arbitrator analysed medical reports at length in paragraphs 64 – 81 inclusive of his ‘Statement of Reasons’, and I do not propose to reiterate those paragraphs in any detail further. In short, there were certainly varying histories as to the mechanism of the Worker’s injury with Bowie. Dr Tan, the Worker’s treating general practitioner, in his report of 19 June 2003 opined that “the alleged incident on 3 April 2003 is a relapse of his old injury in January 2000. The imaging result of his injury sustained on 3 April 2003 was not significantly different from his scans in 2001.”
Doctors Roarty and Harvey-Sutton were both of the view that the incident on 3 April 2003 should be regarded as a “fresh injury”. Dr Evans still concluded, as the Arbitrator pointed out at paragraph 80, that “… two thirds of the inability to work was from the injury of January 2001 and one-third from the injury of 3 April 2003.
A finding contrary to the weight of evidence, even a perverse finding, does not necessarily constitute an error of law. Where there is evidence upon which a primary finding of fact can be based, if that evidence is accepted it is not open to challenge even if it could be described as perverse. (See Crown Glass & Aluminium Pty Limited v Ibraham [2005] NSWCA 195).
Moreover, causation is not necessarily the same concept from the point of view of the medical profession and the law. As Herron CJ said in EMI (Australia) Limited v Bes (1970) WCR 114, quoting from Ramsay v Watson (1961) 108 CLR 642 at 645):
“Medical science may say in individual cases that there is no possible connection between the events and the death, in which case, of course, if the facts stand outside an area in which common experience can be the touchstone, then the Judge cannot act as if there were a connection. But if medical science is prepared to say that this is a possible view, then in my opinion, the Judge after examining the lay evidence may decide that it is probable. It is only when medical science denies that there is any such connection that the Judge is not entitled in such a case to act on his own intuitive reasoning. It may be, and probably is, the case that medical science will find the possibility not good enough on which to base a scientific deduction, but courts are always concerned to reach a decision on probability and it is no answer, it seems to me, that no medical witness states with certainty the very issue which the Judge himself has to try.”
In other words, in the present case, lay evidence combined with conflicting medical evidence was sufficient to ground the Arbitrator’s finding of fact that employment was not a substantial contributing factor to the Worker’s injury.
WorkCover has included in its submissions reference as to a number of authorities on the meaning and interpretation of section 9A of the 1987 Act including Dayton v Coles Supermarkets Pty Limited [2001] 22 NSWCCR 46 and Mercer v ANZ Banking Group Limited (2000) 48 NSWLR 740. The principles enunciated in these cases are both well established and well known. In short, whether a claim falls within the ambit of section 9A of the 1987 Act depends on the circumstances of the particular case.
Whilst there was certainly contradictory medical evidence as to the impact of the alleged ‘injury’ on the Worker’s condition, the Arbitrator’s ultimate determination was open to him on the evidence before him, and could not be regarded as “grossly contrary to the balance of available evidence”. His determination is flawed only to the extent that it was expressed in the negative rather than the positive, contrary to his views as to the issue of the parties’ onus. Properly expressed, it was open to the Arbitrator to determine that he could not be satisfied that the employment concerned was a substantial contributing factor to the Worker’s injury, rather than concluding that the employment was not a substantial contributing factor to the injury.
The onus was on WorkCover to prove, on the balance of probabilities, that the employment concerned was a substantial contributing factor to the injury once, as the Arbitrator pointed out, Bowie raised the issue in connection with its liability to the Worker. The evidence fell short of that requirement. The doubts expressed by the Arbitrator were sufficient for him to conclude that WorkCover had not discharged its onus.
CONCLUSION
There was no denial of procedural fairness in the conduct of the proceedings. There was sufficient evidence for the Arbitrator to conclude that WorkCover had failed to demonstrate that the employment with Bowie, in the circumstances of this particular case, was a substantial contributing factor to the Worker’s injury within the meaning of section 9A of the 1987 Act.
DECISION
The decision of the Arbitrator dated 10 August 2005 is confirmed.
COSTS
WorkCover is to pay the costs of the appeal.
Deborah Moore
Acting Deputy President
21 September 2006
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF DEBORAH MOORE, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
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