Natural justice - Failure to determine issue - Failure to state reasons

Administrative Appeals Tribunal Act 1975 (Cth)

Workers' Compensation and Injury Management Act 1981

Civil Aviation Safety Authority v Central Aviation Pty Ltd [2009] FCAFC 137

Comcare v Singh [2012] FCA 136; (2012) 126 ALD 119

Murray & Roberts Australia Pty Ltd v GB Lifestyles Pty Ltd [2013] WASC 345

Royal Perth Hospital v Morris [2012] WADC 82

Stead v State Government Insurance Commission [1986] HCA 54; (1986) 161 CLR 141

1 CURTHOYS DCJ: In this matter the appellant (St John) appeals against a decision of an arbitrator, Registrar Melville, given on 11 February 2013.

2 The District Court's jurisdiction to hear an appeal is limited by s 247 of the Workers Compensation and Injury Management Act 1981 (the Act), which provides:

(2) Subject to subsection (3), the District Court is not to grant leave to appeal unless -

(a) in the case of an appeal in which an amount of compensation is at issue -

(i) a question of law is involved and the amount at issue in the appeal is both -

(I) at least $5,000 or such other amount as may be prescribed by the regulations;

(II) at least 20% of the amount awarded in the decision appealed against;

(ii) a question of law is involved and, in the opinion of the District Court, the matter is of such importance that, in the public interest, an appeal should lie;

(b) in any other case, a question of law is involved.

3 The basis of this appeal is that there has been a denial of procedural fairness arising from the failure of the arbitrator to consider St John's argument that the respondent (Kezic) failed to comply with s 178 of the Act, or alternatively, the arbitrator failed to provide adequate reasons for his decision.

4 In order for the appellant to have a right of appeal the denial of natural justice (or procedural fairness as it is better expressed to litigants in person) must amount to an error of law.

5 Not every departure from the rules of natural justice will entitle the aggrieved party to a new hearing: Stead v State Government Insurance Commission [1986] HCA 54; (1986) 161 CLR 141, 145.

6 Kezic was employed as a kitchen-hand. Kezic made a worker's compensation claim against St John on 1 July 2009 alleging that she sustained bilateral wrist injuries on 22 May 2009. St John admitted liability for this injury (the first injury).

7 Kezic received compensation under the Act for the first injury, including weekly payments for alleged incapacity.

8 On 14 September 2010 Kezic completed a 'recurrence of disability claim form' claiming a recurrence of the first injury. She stated that since a new computer system had been implemented at work on 2 August 2010, the pain, especially in her right wrist and arm, was unbearable and she was only able to complete her work shifts by using her left hand. (Green AB 88).

9 In late 2010, St John served notice on Kezic pursuant to s 61 of the Act challenging her entitlement to weekly payments on the grounds that she had full capacity to work in a number of suitable jobs.

10 Kezic disputed the s 61 notice.

11 Arbitrator McCahon heard the two applications (SD47/11 and SD325/11) on 23 August 2011. The arbitrator found that Kezic had total capacity to work as a menu monitor. Consequently, St John ceased weekly payments for the first claim on 23 August 2011.

12 Kezic made a second claim against St John on 7 May 2012 alleging that she had sustained a work related right shoulder injury on the same date as the first injury, and had then gone on to develop a secondary left shoulder condition as a direct consequence of this (the second injury) (Green AB 95 - 100).

I had experienced the upper arm/shoulder/neck pain prior to July 2009 and thought nothing of it because at the time the pains I was experiencing to both my wrists was much worse, and I believe the pains to my upper arm/shoulder was directly related to my wrists and associated with the ulna nerve pain and was unaware that this was a separate injury. This is a reason for not reporting this injury earlier.

My right arm/shoulder injury was exacerbated by the overuse of the mouse whilst working as a menu monitor during August/September 2010 which has been documented in the 'recurrence of injury claim form' completed on 14/9/2010.

Due to the deterioration of my right shoulder, I have been using my left arm/shoulder more which in turn has led to more tendinopathy to occur.

14 St John denied liability for the second claim and denied that Kezic was incapacitated for work as a result of the second injury. (Green AB 111 - 115).

15 Kezic subsequently filed a further application seeking a determination of liability for the second claim and an order that she receive weekly payments from 23 August 2011 as a result of incapacity arising from the second injury and/or the first injury (Green AB 101 - 110). 23 August 2011 was the date on which she claims arising from her first injury had been dismissed.

16 St John's Form 154 reply, dated 2 August 2012, (Green AB 113) disputed Kezic's claim for compensation in its entirety and further submitted:

2.3 The Respondent submits the Applicant failed to give notice of and, further, failed to make any claim for compensation in respect of her alleged shoulder and/or neck injuries in accordance with s 178(1)(a) and failed to make her claim within 12 months as prescribed by s 178(1)(b), the Respondent having been prejudiced by the delay.

17 Section 178 of the Act provides as follows:

(1) Proceedings for the recovery under this Act of compensation for an injury are not maintainable unless -

(a) a notice of the occurrence of the injury has been given under section 179 in writing containing substantially the information required by subsection (2) as soon as practicable after the occurrences; and

(b) the claim for compensation with respect to such injury has been made within 12 months from the occurrence of the injury or, in case of death, within 12 months from the time of death,

(c) the want of or any defect of inaccuracy in such notice is not a bar to the maintenance of such proceedings, if it is found in the proceedings for settling the claim that the employer is not, or would not, if a notice or an amended notice were then given and the hearing postponed, be prejudiced in defending the proceedings by the want, defect or inaccuracy, or that such want, defect or inaccuracy was occasioned by mistake, absence from the State, or other reasonable cause; and

(d) the failure to make a claim within the period mentioned in paragraph (b) is not a bar to the maintenance of such proceedings, if it is shown that the employer has not been prejudiced in defending the proceedings by such failure, or if it is found that the failure was occasioned by mistake, absence from the State, or other reasonable cause.

(2A) For the purposes of showing that the employer has not been prejudiced in defending the proceedings for subsection (1)(d), the period from the occurrence of the injury, or from the time of death, to the time the claim is made is to be taken into account.

18 At page 4 of the Form 154, St John indicated that they intended to call non-medical evidence from five other people. On 22 October 2012, St John subsequently filed two witness statements: one from Paul Faraguna dated 17 September 2012 and another from Jennifer Hudson dated 12 October 2012.

19 A directions hearing was held on 13 August 2012. St John raised the issue of prejudice caused by the late notification of the neck and/or shoulder injury (Green AB 86). At that hearing, St John indicated there would be witness statements dealing with or addressing the s 178 issue in relation to the second injury.

20 The arbitrator indicated that he proposed to adjourn the directions hearing to September to give St John sufficient time to obtain the witness statements in relation to the second injury and s 178. (Green AB 18).

21 The next directions hearing was listed for 6 November 2012 but was adjourned to 22 November 2012.

22 On 14 November 2012 St John attempted to file a supplementary statement from Faraguna that was relevant to the second injury.

23 On 15 November 2012 St John's lawyers wrote a letter to the arbitrator notifying him of a jurisdictional issue in relation to the recurrence injury arising from Kezic's failure to comply with s 178. In essence, they submitted that a fresh application should have been made under s 58.

24 On 22 November the arbitrator acknowledged that he had received notification of the jurisdictional issue in relation to the recurrence injury. He described it as 'a further and new jurisdictional issue'. (Green AB 66).

25 The arbitrator proposed that the matter should be listed for arbitration and that he should deal with all interlocutory matters before the hearing date. He ordered that the parties file and serve interlocutory applications by 3 December 2012 and file and serve any submissions in response by 17 December 2012.

26 The arbitrator noted that the supplementary witness statement of Mr Farauna had been received but that it had not been processed by the registry. He stated that 'that will be attended to'. (Green AB 71).

27 On 26 November, St John was notified by WorkCover WA that the arbitrator had not granted leave for the filing of the supplementary statements of Faraguna and Hudson and that they were rejected.

28 On 22 December 2012 St John filed an interlocutory application seeking leave to file the witness statements. (Green AB 252 - 263).

29 On 25 January 2013, St John wrote to WorkCover WA 'asking when Registrar Melville intends addressing the outstanding jurisdictional issue raised by our client and, further the outstanding interlocutory applications'. (Green AB 487).

30 On 5 February 2013, St John filed a further interlocutory application seeking to file supplementary witness statements in support of the second injury jurisdictional issue. (Green AB 488).

31 The net effect was that as at 5 February 2013, St John wished to file further witness statements in support of the second injury jurisdictional issue. There had been no determination of whether those witness statements should be admitted.

32 On 11 February 2012 the arbitrator notified the parties that he had jurisdiction to hear the matter. He published his reasons on 12 February 2013.

33 It is evident from the reasons for decision that the arbitrator dealt only with the first injury recurrence jurisdictional issue. The arbitrator commenced with the reference to Royal Perth Hospital v Morris [2012] WADC 82 and proceeded to deal with and distinguish that case. At [15] he deals with prejudice to St John. At [16] he stated that St John had an evidentiary onus to discharge. He went on to say that there is no evidence from St John's as to how it is prejudiced by the applicant's alleged non-compliance with s 178. He then went on to find at [19] that St John was not prejudiced in the event that there had been a failure to comply with s 189(1) of the Act and he had jurisdiction to deal with the application.

34 To the extent that it might be argued that the arbitrator has dealt with the second injury jurisdictional issue at the same time as the first injury recurrence jurisdictional issue, then he dealt with that matter when there were still outstanding applications for further evidence. To proceed to a determination of that matter when the question of the evidence that was before him had not been resolved meant that St John did not have an opportunity to put before the arbitrator all the evidence that was relevant to a determination of whether or not there was prejudice.

35 Either the arbitrator failed to deal with the second injury jurisdiction point or he dealt with it but failed to give any, or sufficient, reasons.

36 Section 213 of the Act provides that an arbitrator's reasons for decision need only identify the law the arbitrator has applied in coming to a decision and the reasons for doing so and that an arbitrator need not canvass all the factual and legal arguments or issues arising in a case. Here, the arbitrator dealt with the first injury recurrence jurisdictional point. However, in this case the arbitrator has simply failed to deal with a significant issue of fact and law - the application of s 178 to the second injury application and whether prejudice had been demonstrated. It was incumbent on him to deal with second injury jurisdictional point and to hear the further evidence relating to that.

37 Section 43(2B) of the Administrative Appeals Tribunal Act 1975 (Cth) provides:

Where the Tribunal gives in writing the reasons for its decision, those reasons shall include its findings on material questions of fact and a reference to the evidence or other material on which those findings were based.

38 Section 43(2) of the Administrative Appeals Tribunal Act provides:

Subject to this section and to sections 35 and 36D, the Tribunal shall give reasons either orally or in writing for its decision.

39 Section 44(1) of the Administrative Appeals Tribunal Act provides:

A party to a proceeding before the Tribunal may appeal to the Federal Court of Australia, on the question of law, from any decision of the Tribunal in that proceeding.

40 In Civil Aviation Safety Authority v Central Aviation Pty Ltd [2009] FCAFC 137 [49] the Full Federal Court considered an appeal under the Administrative Appeals Tribunal Act. The Full Court held that:

A failure to state reasons for a decision - at least in those circumstances where a statement of reasons is a requirement of the exercise of the decision-making process - constitutes an error of law: Preston v Secretary, Dept of Family and Community Services [2004] FCA 300; (2004) 39 AAR 177 at [21] per Stone J; Hill v Repatriation Commission [2004] FCA 832; (2004) 207 ALR 470 at 474 per Mansfield J.

41 See also Comcare v Singh [2012] FCA 136; (2012) 126 ALD 119.

42 In Murray & Roberts Australia Pty Ltd v GB Lifestyles Pty Ltd [2013] WASC 345 [65] Malcolm CJ held that a breach of the rules of procedural fairness apparent on the reasons of the decision-maker is an error of law. The same principles should apply to a failure to deal with an issue and to provide reasons.

43 The relevant provisions of the Administrative Appeals Tribunal Act are sufficiently analogous to apply the same principles to the Act.

44 In SDR Australia Pty Ltd v Nedic [2009] C3-2009 Commissioner McCann held [26]:

Turning to the adequacy of the arbitrator's reasons, the relevant principles are derived from the common law as modified by s 213(4) of the Act and have been canvassed in numerous decisions of the Court of Appeal and the Commissioner. I outlined those principles in Nardi v Department of Education and Training [2006] C22-2006 (at [26] - [31]) and incorporate them here. There are three fundamental requirements of a statement of reasons. First, they must refer to the relevant evidence. Second, they should set out any material findings of fact and any conclusions or ultimate findings of fact reached. Third, reasons for such findings should be given together with the reasons for applying the law to the facts found. Fairness requires that the parties should know why they have won or lost and the reasons must be sufficient to give effect to the right of appeal. The arbitrator should set out findings sufficient to explain why one set of significant evidence was preferred over another. This requirement also extends to explaining how or why fundamental contested issues of principle were resolved.

45 Here, the arbitrator's failure to decide the issues or to give any reasons for his decision to dismiss the second injury jurisdictional issue constitutes an error of law.

46 Leave to appeal is granted to St John, the order of Registrar Melville of 11 February 2013 is quashed and case number A1539 is to be relisted for hearing before a new arbitrator of the arbitration service of WorkCover WA.