Zamovisa Pty Ltd v Kavanagh
[2004] NSWWCCPD 53
•13 August 2004
WORKERS COMPENSATION COMMISSION
APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:Zamovisa Pty Ltd v Kavanagh [2004] NSW WCC PD 53
APPELLANT: Zamovisa Pty Ltd
RESPONDENT: John Thomas Kavanagh
INSURER:Employers Mutual Indemnity (Workers Compensation) Limited
FILE NUMBER: WCC10025-2003
DATE OF ARBITRATOR’S DECISION: 6 November 2003
DATE OF APPEAL DECISION: 13 August 2004
SUBJECT MATTER OF DECISION: Defective Section 54 Notice; failure by employer to discharge onus of proof.
PRESIDENTIAL MEMBER: Deputy President Gary Byron
HEARING:Telephone hearing 29 June 2004
REPRESENTATION: Appellant: Nevill & Edwards Solicitors
Respondent: Cheney & Wilson Solicitors
ORDERS MADE ON APPEAL: The decision of the Arbitrator, dated 6 November 2003, is revoked.
The matter is remitted to another Arbitrator, to be assigned by the Registrar, not being the Arbitrator who determined the matter, to determine it afresh in accordance with these reasons.
BACKGROUND TO THE APPLICATION TO APPEAL
On 3 December 2003 Zamovisa Pty Limited (‘the Appellant Employer’) sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Workers Compensation Commission (‘the Commission’) against a decision, dated 6 November 2003.
The relevant insurer is Employers Mutual Indemnity (Workers Compensation) Limited (‘the Insurer’).
The Respondent to the Appeal is John Thomas Kavanagh (‘the Respondent Worker/Mr Kavanagh’).
On 5 April 2002, Mr Kavanagh received an award from Her Honour Judge O’Toole in the Compensation Court for 30% permanent loss of use of the non-dominant right hand and weekly compensation, on the basis of partial incapacity, of $120.00 per week from 26 January 2002 and continuing. The decision of the Arbitrator, relates to a claim by Mr Kavanagh to restore his weekly compensation payments following a notice to terminate an Award, issued by the Appellant Employer on 19 March 2003, pursuant to section 52A of the Workers Compensation Act 1987 (‘the 1987 Act’).
On 22 December 2003, the Respondent Worker requested an extension of time for the filing of the Reply to the ‘Appeal Against Decision of Arbitrator’. By letter dated 12 January 2004, the Delegate of the Registrar agreed with this request and directed that the Reply was to be filed by Monday 16 February 2004. The Reply was filed on the due date.
The Appellant Employer filed further submissions on 5 March 2004 in response to the Respondent Worker’s Reply.
A Direction was issued allowing the Respondent Worker to file submissions in response to the Appellant’s further submissions insofar as they “must not raise any new issues or anything that may require yet another submission from the Appellant”. The Respondent Worker duly filed and served these submissions on 22 March 2004, which included an objection to the filing by the Appellant Employer, of the further submissions in response to the Reply.
On 8 June 2004 I granted leave to appeal. I formally noted that the documents known collectively as the ‘Arbitrator’s file’ were inadvertently destroyed in the Commission on 4 February 2004. I was advised subsequently that these documents were destroyed in fact on 25 March 2004. I also noted at that time that no transcript of the arbitral proceedings of 6 November 2003 was available. According to a note on the file the Arbitrator purported to record the proceedings but unbeknown to him, the sound card used was defective by reason of a “technical fault”. A compact disc could not be made and therefore, a transcript of the proceedings could not be prepared. Consequently, there is no record before me of the oral submissions made by the parties or of the oral evidence and any cross-examination of the Respondent Worker.
On the same day I issued a direction to the Appellant Employer to file a copy of documents that were missing from the Commission file. These were listed as, “Report of CRS Australia dated 2 July 2003” and “Labour Analysis Report from CRS dated 28 July 2003”. The Appellant Employer duly complied with the direction and filed one document that had been referred to variously, as above. A copy was given to the Respondent Worker. I also directed that the matter be listed for hearing before me, by means of a telephone conference, during the week of 28 June 2004.
The file was returned to me on 23 June 2004.
A telephone conference, attended by the Legal Representatives of the parties, and the Respondent Worker, was held on 29 June 2004. The transcript of that conference has been received and is before me in this appeal, along with a transcript of the Compensation Court proceedings dated 30 October 2001, before Her Honour Judge O’Toole; the written submissions of the parties, on appeal, and the documentary evidence and written submissions that were before the Arbitrator, as set out at pages 6-7 of his Statement of Reasons for Decision (‘Reasons’). No new evidence has been submitted in the appeal.
THE DECISION UNDER REVIEW
The decision of the Arbitrator that is under review in this appeal is set out in paragraph 30 of the Arbitrator’s Statement of Reasons for Decision (‘Reasons’). The Arbitrator made an order (at paragraph 29) restoring the orders made by the Compensation Court, and on the basis of partial incapacity of the Respondent Worker, made the following orders:
“1.The Respondent is to pay the Applicant weekly payments of $120.00 per week from 1 May 2003, such weekly payments to continue in accordance with the provisions of the Act.
2.The Respondent to pay the costs of the Application to be agreed or assessed.”
ISSUES IN DISPUTE
The issues in dispute are set out in the grounds of the appeal submitted by the Appellant Employer and may be summarised as follows:
· The Arbitrator erred at law in finding that the notice under section 54 of the 1987 Act served on the Respondent Worker by the Insurer pursuant to section 52A of the 1987 Act, was defective because it failed to correctly state the section by inserting the word “solely” instead of the word “primarily” therein.
· The Arbitrator erred in finding that the Appellant Employer had failed to discharge its onus of establishing that the Respondent Worker’s failure to obtain employment primarily because of the state of the labour market rather than because of the effects of his injury.
· The Arbitrator erred in finding that the Respondent Worker’s evidence that work was available in shearing sheds as a chef or cook and that he was not cross examined as to his ability to perform such duties. This finding is incorrect as no issue was raised as to this matter in the proceedings. It had been conceded from the outset that the Respondent Worker was not able to undertake such work and consequently, it would not come within the terms of “suitable employment” as required by section 52A(1)(c) of the 1987 Act. Neither party put any submissions, questions or issues in relation to this matter, to the Arbitrator. In the circumstances, the Appellant Employer submits that it has been denied procedural fairness.
ON THE PAPERS REVIEW
Section 354(6) of the Workplace Injury Management and Workers Compensation Act 1998 (‘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.”
The Appellant Employer submitted that the appeal should not be determined on the papers but should proceed to a formal hearing.
The Respondent Worker submitted that the matter was capable of being determined on the papers.
Having regard to the fact that no record of the evidence taken before the Arbitrator, was available in this appeal, the ‘Arbitrator’s file’ had been destroyed, and a document described above was missing from the Commission file, I could not be satisfied on 8 June 2004 that I had sufficient information to proceed ‘on the papers’, without holding any conference or formal hearing. Accordingly, the telephone hearing of 29 June 2004, referred to above, was arranged. Both parties made oral submissions during the hearing.
Notwithstanding that the Respondent Worker objected to the second written submissions of the Appellant Employer, dated 4 March 2004, he responded fully in writing to those submissions and the appeal then went forward to a formal telephone hearing. All submissions made to that point were subsumed into that hearing and both parties had an opportunity to clarify all submissions made and to make further, oral submissions. In the circumstances, all submissions made are taken into account in this appeal.
JURISDICTION AND 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.
In this matter I am satisfied that:
· The appeal is filed within 28 days of the decision appealed against (section 352(4) of the 1998 Act),
· The amount of compensation at issue on the appeal is at least $5,000 (section 352(2)(a) of the 1998 Act) and is at least 20% of the amount awarded in the decision appealed against (section 352(2)(b) of the 1998 Act),
· No new evidence is submitted in the appeal (section 352(6) of the 1998 Act).
Leave to appeal was granted on 8 June 2004.
EVIDENCE AND SUBMISSIONS
The documentary evidence that was before the Arbitrator is before me in this appeal. The Arbitrator’s written Reasons are also before me. However, as indicated above, the transcript of the proceedings, including a record of the oral evidence given by the Respondent Worker and the oral submissions made by the parties, are not before me in this appeal.
The Appellant Employer’s initial written submissions
Section 54 Notice
The Appellant Employer concedes that while the section 54 Notice (’the Notice’) is “defective in so far as it quotes the wording of the 1996 Act, not the 1998 Act”, the finding by the Arbitrator that the notice is thereby defective constitutes an error of law. It is submitted that no argument was put by the Respondent Worker that the notice was defective in the manner found by the Arbitrator, or at all, and further, no submissions were put to the Arbitrator by either party as to the effectiveness of the notice. The Appellant Employer submits that it was denied procedural fairness in relation to the Arbitrator’s decision and this constitutes an appellable error.
The Appellant Employer contends that irrespective of whether the notice was defective or not, the Arbitrator erred in finding “that the failure of the notice to use the word ‘primarily’ instead of the word ‘solely’ exposes the employer to firstly prosecution for an offence and secondly liability to pay the employee compensation”. It is submitted that these findings are erroneous whether or not the notice is defective, but in any event, the Appellant Employer gave Mr Kavangah, “the prescribed period of notice of intention to discontinue payments” as required by Section 54(1) of the 1987 Act.
The Appellant Employer submits that the notice was substantially valid and not defective. The Appellant Employer identifies three grounds. First, there is no prescribed form of notice notwithstanding a power in the Regulations to prescribe such a notice (Goundar v Warren’s Motor Village Ltd t/a Warren Toyota (2002) 24 NSWCCR 593 (‘Goundar’); B W Esler Services Pty Ltd v Dulhunty (2000) NSWCA 349 (‘Dulhunty’)). Second, strict compliance with the required form of the notice is not necessary as substantial compliance is sufficient, Dulhunty per Powell JA at paragraph 46 (Mason agreeing at par 3). Third (and alternatively), no particular form of words is required so long as the notice conveys the requisite statements to the ordinary reader, Dulhunty per Giles J at par 52. The Appellant Employer submits that the notice is a complying notice as it substantially complies with the statutory requirements in section 52A of the 1987 Act.
The Appellant Employer refers to Dulhunty where Powell J, in construing the notice under consideration in that case, concluded that the notice was not defective as it, “identified the dispute, stated the reasons for the dispute and stated the bases upon which the Appellant relied to support the reasons for the dispute”. In terms of the notice in the instant case the Appellant Employer makes the following submission:
“The Section 54 notice in this case is, in practical terms, identical to the notice construed by Powell JA except that here the Applicant was informed, incorrectly, that one of the bases for the dispute was that he had sought employment but had failed to obtain it solely rather than primarily because of the state of the labour market. The notice, although containing an incorrect reason for the Applicant’s failure to obtain employment, was substantially correct and therefore substantially complied with the requirements for a valid notice. On the authority of B W EslerServices PtyLtd v Dulhunty (supra) this renders the notice valid.”
Furthermore, the Appellant Employer claims that even if the incorrect statement in the notice misled the Respondent Worker, he was not detrimentally misled. It was submitted that the Appellant Employer, in deciding whether it was entitled to terminate the Respondent Worker’s payments, applied a stricter test of ‘solely’ rather than the correct test of ‘primarily’. As a consequence, the Appellant Employer, “went beyond the applicable test and therefore acted to the potential detriment of itself, not the [Respondent Worker]”.
The Appellant Employer submits that the Arbitrator’s findings in relation to section 54 of the 1987 Act constituted both an error of natural justice and an error of law.
Onus of Proof and dispute as to the evidence adduced
The Appellant Employer identified three major findings at paragraphs 24 to 28 of the Arbitrator’s Reasons the state of the labour market. The Arbitrator’s findings on this issue are summarised by the Appellant Employer as follows:
“(1).The [Respondent Worker] could perform work as a kitchen hand or cleaner, however this form of employment was not available.
(2).The [Respondent Worker’s] evidence was that work was available in shearing sheds as a chef or cook and that he was not cross-examined as to his ability to perform such duties.
(3).The [Appellant Employer] bears the onus of establishing that the present state of the labour market is the primary reason why the Applicant was unable to obtain employment and the Arbitrator was not satisfied that this had been established.”
The Appellant Employer refers to the absence of a transcript of the proceedings and submits that from the Solicitor’s recollection of events and his notes taken in the proceedings before the Arbitrator, “no issue was raised in relation to the Applicant’s ability to perform work as a chef or cook in a shearing shed as it had been conceded from the outset by the worker that he was not in fact able to undertake such work and as such, it would not come under the terms of ‘suitable employment’ as required by Section 52A(1)(c). As a consequence, no submissions, questions or issues were put to the Arbitrator by either party in relation to this matter.”The Appellant Employer submits that it was denied procedural fairness and this constitutes appellable error. The Appellant Employer refers to the transcript of the previous Compensation Court proceedings on 31 October 2001, where Mr Kavanagh [paragraph 49, at pages 4-6)] concedes that he would not be able to continue in such employment.
The Appellant Employer contends that Mr Kavanagh gave evidence and was cross-examined in relation to his ability to perform work as a kitchen hand and cleaner, and agreed that he was physically capable of performing such work.
The Appellant Employer further claims that there was evidence submitted by the Respondent Worker of a downturn in employment opportunities due to the drought, but that obtaining work in country areas was often made more difficult due to personal relations and jobs being acquired largely through word of mouth. In addition, the Appellant Employer submits that Mr Kavangah “gave evidence that he had applied for a number of positions particularly as a kitchen hand and also as a cleaner and that he did have a number of personal connections, including a relative in a managerial position who may have been able to provide him with work, however despite this, he had been unable to secure any employment.” Furthermore, the Appellant Employer referred to evidence in the form of an Employee Questionnaire dated 14 February 2003, which formed part of the Reply, in which it was conceded that no work was available because of the drought. The Appellant Employer submits that its case is supported by a labour market analysis report, dated 28 July 2003, prepared by the Commonwealth Rehabilitation Service (‘the CRS report’) that confirmed a reduction in employment opportunities due to drought conditions and its effect on agriculture and tourism.
The Appellant Employer maintains, “No submission was advanced on behalf of the [Respondent Worker] that he was unable to secure employment due to his injuries. The only reason submitted by the worker for failing to secure employment was that work was not presently available (paragraph 25 of the Reasons)”.
In summary, the Appellant Employer submits that on the available evidence, including documents produced and specifically, the labour market analysis, and oral evidence by the Respondent Worker in the proceedings before the Arbitrator, including his concession that he was unable to obtain employment due to the drought, a finding that he had been unable to obtain employment due to the state of the labour market must be made insofar as it was not disputed or contradicted. It is further submitted that the Arbitrator’s findings on the basis of availability of work as a chef or a cook but for injury, cannot stand having regard to the direct evidence of the Respondent Worker who conceded that such work was not suitable and therefore not applicable pursuant to section 52A of the 1987 Act.
The Respondent Worker’s initial written Submissions
Section 54 Notice
The Respondent Worker submits that the effect of the defective section 54 Notice must be assessed in light of the particular circumstances and resources of the parties. It was submitted that Mr Kavanagh “had almost no education but on the other hand the insurer had huge financial resources and teams of lawyers. Despite all these resources they couldn’t and didn’t get the notice right. Their error ought to be construed against them. It would be wrong at law to construe it in their favour.” It is further submitted that the Respondent Worker was not skilled at reading or understanding legal documents; the effect of the notice being given under the wrong Act is misleading, and the section is an extremely onerous one on him. “For example he is not entitled to a resumption of weekly compensation once payment is discontinued. The section must therefore be strictly construed against the insurer (party) relying on it.”
The Respondent Worker maintains that the Arbitrator was entirely correct in finding that the Notice given under the wrong (amending) Act was defective. It was submitted that “in matters where rights and entitlements are concerned it is important (essential) to give correct notice, the decision of the Arbitrator should stand. The notice was defective and that should be confirmed by this appeal.”
Onus of Proof and dispute as to the evidence adduced
The Respondent Worker submits that the Appellant Employer chose not to cross-examine Mr Kavanagh in relation to his inability to work as a chef or cook notwithstanding the “earlier transcript that the worker had worked as a cook in shearing sheds or as a chef for 28 years”.
The Respondent Worker refers to the previous Compensation Court proceedings where it was submitted that Mr Kavanagh, “had readily told the court that he could do kitchen hand and cleaning work with the disability which in itself suggested the reason why he wasn’t getting work was because of his injury. The unchallenged evidence from Noel Canty was found by [the Arbitrator] to contain the reason why the worker was not working namely that he was a Workcover liability and that a contractor would not employ him because of his disability.” It is submitted that he was unfit due to his work injury as opposed to any inability to obtain work because of the condition of the labour market.
In relation to the admissibility of the CRS report, the Respondent Worker referred to the judgment of the Court of Appeal in Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305 (‘Makita’) and submitted that “it was not admissible for an expert to base an opinion on reading a transcript and then write an expert report based on it. The Court of Appeal specifically warns that this is not allowable because the other party cannot then challenge which parts of the transcript the expert’s accepted and which part they rejected.” Upon the authority of Makita, the Respondent Worker submits that the CSR report was inadmissible because of the method upon which its preparation was based and therefore, it should be afforded “little or no weight”. It is further submitted that the report did not consider the evidence of the Respondent Worker nor the two statements made by Mr Canty. It is further submitted that the report did not come into existence until 28 July 2003 and therefore did not fall within the definition of “relevant time” under section 52A of the 1987 Act and should therefore, be rejected.
The Respondent Worker submits that the employer carried the onus to establish on the balance of probabilities firstly, the state of the labour market as at March 2003; and secondly that the worker’s failure to obtain suitable employment was solely/primarily due to the state of the market. The Respondent Worker claims that Mr Kavanagh’s tendered statements, his oral evidence and the evidence from Mr Canty all illustrate that the reason why the worker was not working was because of his injury and not the state of the labour market. It is submitted that the credibility of both the worker and Mr Canty was not challenged. In addition, it is submitted that the Appellant Employer’s evidence is of lesser cogent value as the Appellant Employer, “called no oral evidence and tendered a report which, according to the Court of Appeal, should carry little weight. It should also be remembered that the employer chose not to deal with the issues of opportunities for cooks and chefs but confined itself solely to employment opportunities for cleaners.” The Arbitrator, it is submitted, found as a fact that Mr Canty would not employ the Respondent Worker because of his injury and this refutes the Appellant Employer’s contention that Mr Kavanagh was not in work solely or primarily because of the condition of the labour market. The Respondent Worker submits that in light of this finding of fact, the appeal should fail.
The Respondent Worker summarised its position as follows:
“The Commission aims to provide an independent, fair, timely, accessible and cost effective system for the resolution of the disputes [sic] under the Workers Compensation Acts. It makes its decisions on ‘the Balance of Probabilities’. The respondent employer carried the onus of establishing what the state of the labour market was at March, 2003 and also carried the onus of establishing that the worker’s failure to obtain suitable employment was solely/primarily due to the state of that market. In determining the Balance of Probabilities it should be recalled that the worker tendered statements and called oral evidence that the reason why he was not in work was because of his injury. His credit was not challenged. Mr Canty provided evidence that the reason why the worker was not working was because of his injury. His evidence was not challenged … Under those circumstances it cannot be said that the respondent employer discharged either its onus of proof in establishing what the state of the labour market was in March 2003 or discharged its onus in showing the primary reason why the worker was unable to obtain employment was the state of the labour market.”
Further written submissions by the Appellant Employer
The further written substantive submissions made by the Appellant Employer are summarised as follows:
· The Respondent Worker does not challenge the submissions of the Appellant Employer in relation to the issue of the defective notice. Accordingly, the appeal should be upheld on those grounds.
· The Respondent Worker conceded that he was unable to undertake work as a chef or a cook in a shearing shed and accordingly, such claims, together with the statements of Noel Canty, were not relied upon. In the absence of reliance on this evidence, it is not incumbent upon the Appellant Employer to undertake further inquiry in relation to such matters. It is accepted by the Appellant Employer that the Respondent Worker was unable to perform such work and therefore, this concession could not be overturned by the Arbitrator.
· The Appellant Employer objects to the submissions of Ms Law, Solicitor, “in so far as she was the relevant practitioner at the Arbitration who advised both the Appellant and the Arbitrator that the Respondent worker would not be relying on those activities as suitable duties pursuant to Section 52A of the Act.” The Respondent Worker does not state in his submissions that he rejects the allegations made by the Appellant Employer that the concessions were made. Attention is directed to the transcript of the proceedings of the Compensation Court of 30 October 2001, tendered in evidence before the Arbitrator and forming part of the Respondent’s Reply. The Respondent Worker, in responding to his Barrister, said that he could not continue to do the job of a chef (page 6, paragraph 4). This evidence was available for the consideration of the Arbitrator and it and the concession made by the Respondent Worker are inconsistent with the Arbitrator’s finding.
· Advice has been received that no transcript of the proceedings before the Arbitrator is available as the evidence was not recorded, and that “The reason for the failure to record the evidence is also unavailable.”
· The failure by the Commission to properly record the events of 26 September 2003, has made a determination of the appeal difficult. In the absence of an order upholding the appeal, the award of the Arbitrator should be set aside and the matter be re-listed for arbitration on all issues.
· In the absence of a transcript of the evidence, the appeal should be listed for oral submissions to be made.
Further written submissions by the Respondent Worker
The further written substantive submissions made by the Respondent Worker may be summarised as follows:
·The Appellant Employer’s submission that the Respondent Worker has made no submissions to challenge those relating to the defective notice is wrong. Attention is drawn to the Respondent Worker’s original submission number 10 and refers specifically to the notice being given under the wrong Act and that the error should be construed against the Appellant Employer. “Again, this ‘slight of hand’ by the employer should cause the reader to treat their further submissions with the utmost caution.”
·The suggestion that the Appellant Employer did not rely on the statements of Mr Canty should be approached with caution. The issue was not confronted by the Appellant Employer in the proceedings before the Arbitrator. “In particular, Mr. Canty provided a statement to [the Arbitrator] and also gave evidence, but was not cross examined on the issue by the employer’s representative. For the employer to now say that this was ‘not relied on’ is wrong. The fact is they chose not to challenge it by not cross-examining … The fact is the worker called evidence and the employer refused to take up the challenge created by that evidence.”
·In relation to the objection to Ms Law’s submissions about work as a chef, shearer, cook or cleaner being suitable duties, the Appellant Employer’s submission is incorrect. The Arbitrator dealt with this matter on its merits and made a determination in favour of the Respondent Worker.
·The submissions in relation to pages 4 and 5 of the Compensation Court transcript misrepresents what was said. The evidence was given in relation to a particular work trial “and was a long time prior to this application. The evidence that was given related to full-time work as a chef and did not relate to casual work which may have been available as a cook in a shearing shed or kitchen hand work generally. It was limited to his condition at the end of the period of that particular trial. The fact is that the worker called evidence before [the Arbitrator] about the availability of work as a chef or as a cook and the employer chose not to cross-examine him or the potential employer about his restrictions.”
·Having not cross-examined either the Respondent Worker or Mr Canty the Appellant Employer “wants to complain”. The suggestion that there ought to be a re-hearing of the arbitration is opposed and should be rejected.
The telephone conference on 29 June 2004
The discussion and submissions at the telephone hearing covered the same ground as the written submissions of the parties and need not be repeated. However, two things emerged from the written submissions and the telephone hearing. Not only are the parties in dispute in terms of the resolution of the substantive issues in this appeal, they cannot agree as to the substance of much of the oral evidence and oral submissions that were put to the Arbitrator, nor as to the existence or otherwise of any concessions made by the Respondent Worker. Each of the legal representatives acknowledged the difficulty that arises by reason of the absence of a transcript of the proceedings before the Arbitrator, but nevertheless, each adhered to and pressed his case. The Appellant Employer requested that the matter be referred to an Arbitrator to be heard again, while the Respondent Worker in whose favour the Arbitrator made his determination, opposed this request.
DISCUSSION AND FINDINGS
Consideration and evaluation of evidence is a matter for the Arbitrator and, in the absence of demonstrable error in arriving at his decision based upon the evidence, the decision should not be disturbed. A Presidential Member has a specific and limited role in the review of a decision of an Arbitrator. The review is not a rehearing where the Presidential Member is dealing with the matter de novo and arriving at a fresh decision based on all of the evidence available at a later time (Coal & Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194; Builders Licensing Board v Sperway Constructions (Sydney) Pty Ltd (1976) 135 CLR 616). The review is by way of rehearing where the powers of the Presidential Member to revoke the decision pursuant to section 352(7) of the 1998 Act and to substitute a new decision in its place, are exercisable only where it is demonstrated that the decision of the Arbitrator is affected by some legal, factual or discretionary error (Allesch v Maunz (2002) 203 CLR 172). The Workers Compensation Legislation Amendment Act 2004 commenced on 9 July 2004 and amended the 1998 Act by inserting at the end of section 352(7), “Alternatively, the matter may be remitted back to the arbitrator concerned, or to another Arbitrator, for determination in accordance with any decision or directions of the Commission.”
The conduct of the review on appeal in this matter is quite problematic, given the absence of a record of the proceedings before the Arbitrator. The record of proceedings, had it been available, would have been reduced to a written transcript to include all of the oral evidence, any cross-examination that may have occurred, submissions made by the parties, comments and findings by the Arbitrator, and other discussion that may have taken place. It is Commission policy, as set out in the ‘Guideline for the Practice of Conciliation/Arbitration’ (‘the Guideline’) that the arbitration proceedings be always recorded. While there is no statutory requirement for the Commission to record any proceedings, it is established Commission policy and is routinely undertaken during the arbitration phase in the interests of fairness, utility and good practice. The Arbitrator has produced his written Reasons for the decision, as he was required to do in accordance with his common law and statutory duty (section 294(2) of the 1998 Act and Rule 73 of the Workers Compensation Commission Rules 2003 (‘the Rules’)). The difficulty in this appeal is reaching a conclusion as to whether the Arbitrator’s findings and decision were available to him on the basis of the evidence that was before him, in the absence of much of that evidence, and in light of the fundamental disagreement between the parties as to much of what was said, what was not said, and/or what may have been agreed. Moreover, it seems that some of what may have transpired in the proceedings before the Arbitrator may have been in addition to or even at variance with, some of the contents of the documents filed.
Section 54 Notice
The Workers Compensation Legislation Amendment Act 1998 deleted the former section 52A of the 1987 Act and inserted the current section 52A which commenced on 1 August 1998. The former section 52A was inserted into the 1987 Act by the WorkCover Legislation (Amendment) Act 1996. The word “solely” was included in the former section 52A(1)(c) while the word “primarily” is found in the current and applicable section 52A(1)(c). Although the Workers Compensation (General) Regulation 1995 (‘the 1995 Regulation’) was replaced by the Workers Compensation Regulation 2003 (‘the 2003 Regulation’), Clause 15 of each of these Regulations, which prescribes what must be included in the section 54 Notice, are identical. The 1995 Regulation applied at the time of the giving of the Notice. There is no prescribed form for a section 54 Notice.
The Appellant Employer submits that no argument was put by the Respondent Worker to the Arbitrator that the section 54 Notice was defective in the manner found by the Arbitrator, “or at all”, and in fact, that no submissions were put to the Arbitrator by either party as to the effectiveness of the Notice. The Appellant Employer claims that it was denied procedural fairness, in essence because it had no opportunity to be heard on the matter. In his further submissions lodged under cover of letter dated 22 March 2004, the Respondent Worker points out that submissions on this issue were made in his initial submissions on appeal. However, he makes no comment as to whether any submissions on this issue were made by the parties in the arbitral proceedings.
There is no reference to it that I can find in the documentary evidence that was before the Arbitrator, including the documents lodged as part of the ‘Application to Resolve a Dispute’. There is a reference to the “S52A Notice” in the document ‘Teleconference Arrangements and Outcomes’. This refers to the teleconference held on 11 September 2003. Relevantly, the Arbitrator’s endorsement on that document includes the statement, “Teleconference held at 3 pm today. Issue is a S52A Notice to the worker. Specific issue is whether the worker failed to obtain suitable employment primarily because of the state of the labour market.”There is no reference to the Notice allegedly being defective. Furthermore, there is no indication in the Arbitrator’s Reasons that the Appellant Employer had an opportunity to be heard prior to the Arbitrator making his finding that the section 54 Notice was defective. However, at paragraph 13 of his Reasons, the Arbitrator lists the issue of the allegedly defective Notice as an issue in dispute between the parties. It is difficult to accept that the Arbitrator would identify an issue in dispute without that being specifically raised, and then not invite the parties to address the issue in the proceedings before him. However, in the absence of a transcript of the arbitral proceedings, there is no evidence before me to indicate whether and/or how this issue was raised and dealt with, and whether the Appellant Employer was afforded an opportunity to present its case on this issue, or even that it knew that there was a case to answer. The Appellant Employer is adamant that this is the case and the Respondent Worker does not directly contradict this submission. On the basis of the evidence and submissions before me, I can only conclude that the Appellant Employer was denied procedural fairness and that this amounts to an error of law.
The Appellant Employer has set out in its submissions on appeal, the case that it wishes to argue, and that it claims was never given the opportunity to argue, in support of its position that the Notice was not defective.
Onus of proof and dispute as to evidence adduced before the Arbitrator
There are significant disagreements between the parties as to the evidence and submissions in the proceedings before the Arbitrator. The principal areas of disagreement are referred to briefly, hereunder. The detail is found in the written submissions of the parties and is not reproduced in full.
The Appellant Employer maintains that no issue was raised in relation to the Respondent Worker’s ability to perform work as a chef or a cook in a shearing shed as it had been conceded from the outset that he was not, in fact, able to under take such work and consequently, it was not suitable employment as required by section 52A(1)(c) of the 1987 Act . As a consequence, no submissions, questions or issues were put to the Arbitrator by either party, as to this issue. The Respondent Worker does not concede this and also refers to the transcript of the earlier proceedings in the former Compensation Court. The Arbitrator concludes that the facts in the matter are not greatly in issue as the [Applicant] was not cross-examined as to his ability to undertake work as a chef or a cook due to his disability and he readily agreed that he could do kitchen-hand and cleaning work with the disability. The Appellant Employer submits that the reason for the lack of cross-examination on this issue was simply because it was not raised in the proceedings.
The Respondent Worker now seeks to challenge the admissibility of the CRS Report dated 2 July 2003. It is evident that the Arbitrator relied upon the document. No comment is offered by the Appellant Employer in response to this submission. In the absence of a transcript of the proceedings, I am unable to conclude from what is before me, including the Arbitrator’s Reasons, whether the admissibility of the document was argued before him and if so, the substance of his findings. A reading of his Reasons seems to suggest that it was not an issue in dispute, but it is not entirely clear whether this was the case or not, or indeed, whether it is simply a new argument. If it is a new argument it would be inappropriate to entertain it in this appeal: Metwally (No 2) v University of Wollongong (1985) 60 ALR 68 at 71-72; 59ALJR 481 at 483. In that case the High Court said:
“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 the new argument which, whether deliberately or by inadvertence, he failed to put during the hearing when he had an opportunity to do so.”
The CRS Report is relied upon by the Appellant Employer who submits that the Respondent Worker himself gave evidence of a downturn in employment opportunities due to the drought and that jobs were largely obtained through personal contacts and word of mouth. It is also claimed that the Respondent Worker said that he had sought to obtain employment by this means himself, but his attempts had not been successful. The Appellant Employer also refers to an Employee Questionnaire dated 14 February 2003, in which it was conceded that no work was available at that time, because of the drought. This document is listed in the Arbitrator’s Reasons but is not otherwise referred to. On the other hand, the evidence of Mr Canty, Shearing Contractor, clearly indicates that in his view, Mr Kavanagh could not be employed, because of his disability. The Appellant Employer submits that notwithstanding the Arbitrator’s findings “no submission was advanced on behalf of the [Respondent Worker] that he was unable to secure employment due to his injuries.”The Arbitrator however, stated that Mr Kavanagh gave evidence that he could do kitchen-hand and cleaning work notwithstanding his disability, but this work was not available. He further stated that Mr Kavanagh gave evidence that he could not do work as a chef and a cook because of his disability, and this work was available.
The Arbitrator said at paragraph 28 of his Reasons,
“The force of the evidence of the Respondent must be greater than has been provided to give effect to the Section. I am not satisfied that the Respondent has in this instance provided sufficient evidence to revoke the Award of the Compensation Court.”
Consideration of the evidence and the weight of the evidence is a matter for the Arbitrator and in the absence of demonstrable error in arriving at his decision based upon the evidence, the decision should not be disturbed in normal circumstances. However, in relation to this particular finding, establishing one way or the other, whether an error has occurred, is quite problematic.
The written submissions of the parties in this appeal contain submissions and counter-submissions as to what was conceded, what was in dispute, evidence that was given or was not given, the substance of submissions that were or were not made, lack of procedural fairness, and admissibility of evidence, in the proceedings before the Arbitrator. The documentary evidence that was before the Arbitrator was clearly the subject of discussion, further evidence and submissions in the arbitral proceedings. However, without the transcript and/or a consensus between the parties as to what took place, the chances of arriving at a reliable conclusion, let alone a determination, are remote. The situation was not advanced or clarified to any extent, in the telephone hearing in this appeal, at which the legal representatives of the parties indicated that they appreciated that this difficulty may arise, and offered any further assistance that may be required.
Conclusions
I have found an error of law on the evidence before me (at paragraph 49), because the Appellant Employer was denied procedural fairness in that it was not afforded the opportunity to be heard on the issue of the allegedly defective section 54 Notice. A person (or legal entity) who is to be affected by a decision of a court or tribunal has a right to notice of the case against him or her and to be heard by an impartial decision-maker. The content and dimensions of procedural fairness in the Commission are found in the 1998 Act, the nature of the decision under review and the demands of the instant case, (Kioa v West [1995] 159 CLR 550). Specific statutory provisions may modify the requirements of the common law.
In Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323, the High Court said at 351:
“‘Jurisdictional error’ can thus be seen to embrace a number of different kinds of error, the list of which, in the passage cited from [Craig v State of South Australia (1995) 184 CLR 163] is not exhaustive… What is important, however, is that identifying a wrong issue, asking a wrong question, ignoring relevant material or relying on irrelevant material in a way that affects the exercise of power is to make an error of law. Further, doing so results in the decision-maker exceeding the authority or powers given by the relevant statute. In other words, if an error of those types is made, the decision-maker did not have authority to make the decision that was made: he or she did not have jurisdiction to make it.”
A denial of procedural fairness is an error of law that goes to jurisdiction, but it may not necessarily follow that the decision is always a nullity (Minister for Immigration and Multicultural Affairs v Bhardwaj (2002) 209 CLR 597). Whether it is a nullity will depend upon the express or implied intention of the particular statutory provisions that govern it (Jadwan Pty Ltd v Secretary, Department of Health and Aged Care (2003) 204 ALR 55). It must be determined by considering the language, the objects and purposes of the particular statute, and the consequences of what would flow from a finding that the decision is invalid and of no effect at all (Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355).
In terms of an error of law that goes to jurisdiction in the context of the Workers Compensation Acts, the issue was succinctly addressed by Deputy President Fleming in Australian Traineeship System (Cargill Meat Processes Pty Limited) v Ramage [2004] NSW WCC PD 31 (‘Ramage’):
“… the relevant legislation is the Workers Compensation Acts (the 1987 Act and the 1998 Act). The purpose of the legislation is, inter alia, to provide a statutory benefits scheme for workers compensation claims. It is intended that the scheme be a comprehensive statement of workers’ entitlements and employers’ liabilities in relation to these claims. Section 9(1) of the 1987 Act provides that: ‘A worker who has received an injury … shall receive compensation from the worker’s employer in accordance with this Act.’ To this end, a decision that purports to determine those rights and liabilities on the basis of jurisdictional error, cannot be permitted to stand. The consequences of finding such a decision to be of no effect is that a dispute remains on foot before an Arbitrator and the applicant’s claim remains to be properly determined. Taking these factors into account, it is my view that the effect of jurisdictional error by the Commission in making a decision under the Workers Compensation Acts is to nullify that decision and deprive it of any effect.”
However, in the instant case, any failure, if proven, to provide a section 54 Notice as required, would attract a penalty (section 54(1) of the 1987 Act), but does not bring the dispute to an end. The decision of the Arbitrator, following a denial of procedural fairness in relation to the validity or otherwise of a section 54 Notice, does not determine the rights and liabilities of the parties, but there are consequences that flow as set out in sections 52A and 54 of the 1987 Act. In particular, the action that may be taken by a worker where payment of compensation has been discontinued where a Notice has not been given, whether or not a prosecution has taken place for a breach of the section, is set out in section 54.
Having regard to the evidence and submissions that are before me, I am unable to say one way or the other, what actually occurred in the arbitral proceedings. The onus rests on the Appellant Employer to demonstrate that an error of law, fact or discretion affects the decision made by the Arbitrator (Allesch v Maunz (2002) 203 CLR 172). However, it would be manifestly unfair in the instant case to accept or reject the submissions on appeal of either party in favour of the other party, in terms of what occurred, particularly as it is evident that there is more to the matter than the documents in evidence reveal. In this case, the transcript of proceedings is a critical factor in a proper review of the Arbitrator’s decision, given the serious nature of the issues put and contested by the parties, particularly the Appellant Employer. With regard to the telephone conference with the legal representatives and the parties on 29 June 2004, it is clear that while each endeavoured to be helpful (in circumstances that are no fault of theirs), each adhered firmly to his version of events. To that extent, the discussion was of little assistance.
In my view, I am unable to take the matter further other than to observe that the responsibility of a Presidential Member to review the decision appealed against and arrive at a determination, is clearly established by section 352(7) of the 1998 Act. The right to this review ensures that arbitral decisions are fair, just and are made according to law. However, apart from finding that a lack of procedural fairness has occurred with regard to a consideration of the section 54 Notice, and what follows from that, I am unable to properly review the decision and make a determination, having regard to the particular circumstances of this matter. The supervisory function of the Presidential review, in the circumstances of a particular case can be, and in my view in this case has been, defeated (Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247). It is possible, but not established, that errors have been made in addition to the error that I have found. However, I cannot say with any confidence, whether or not the Arbitrator failed to exercise his statutory duty to determine the dispute fairly and lawfully, as claimed by the Appellant Employer (section 294 of the 1998 Act; YG & GG v Minister for Community Services [2002] NSWCA 247; Absolon v NSW TAFE [1999] NSWCA 311). The absence of a transcript does not invariably mean that an appeal cannot be determined, particularly in view of the statutory requirements to file or describe at the outset, all evidence to be relied upon. Having regard to this important consideration, the inability to determine this matter on appeal must be construed as exceptional. However, as I have said, it is evident that there is more to this matter than the documents on file reveal, but I am unable to properly ascertain the substance, nature and extent of it, and therefore, I cannot finally determine the issues in dispute in this appeal.
I propose to revoke the decision of the Arbitrator. In so doing, section 352(7) of the 1998 Act enables me to make a new decision in its place or alternatively, to remit the matter back to the Arbitrator concerned, or to another Arbitrator, for determination in accordance with any decision or directions that I may make. Clearly, it would be inappropriate for me to make a new decision in place of the decision of the Arbitrator. Having regard to the circumstances, it is appropriate that the matter should be determined afresh.
DECISION
The decision of the Arbitrator is revoked. The matter is remitted to another Arbitrator, to be assigned by the Registrar, not being the Arbitrator who determined the matter, to determine it afresh in accordance with these reasons.
Gary Byron
Deputy President
13 August 2004
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF GARY BYRON, DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
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