FLETCHER INTERNATIONAL EXPORTS PTY LIMITED v BARROW & ANOR

Court of Appeal (NSW)|2007-06-15|Before: Mason P, Santow JA, Tobias JA

The Applicant has provided histories to eight Medico/Legal Specialists and his own General Practitioners and treating Specialists. The histories given to each doctor are not consistent and vary greatly as to when the onset of particular symptoms occurred. Each of the Specialists have commented in their Reports that they had considerable difficulty in obtaining a sequential history. I am not greatly assisted by the 8 Medico/Legal Specialists' Reports as they are each based on a different medical history as against the full history that emerged from the oral evidence of the Applicant at the Arbitration.

On balance I prefer the evidence of Dr Rizkallah as he has seen the Applicant on 4 occasions over a period of 18 months and as the treating Orthopaedic Surgeon his opinion is to be preferred to the competing medico/legal specialists engaged by the parties.

59 The employer submitted in this Court that the Deputy President's decision was wrong in law because: I There was no evidence of a "disease being the failure of the right shoulder to cope with the repeated stresses imposed upon it" from any medical source.

Ii The medical evidence summarised by the Arbitrator identified conditions such as "tendonitis", "bursitis", "rotator cuff tendonitis", "calcific tendonitis", "rotator cuff lesion", "right shoulder rotator cuff strain" and "capsulitis". There were references on a couple of occasions to the degenerative nature of the problem.

Iii Nowhere is there a description of these conditions or processes as being a "disease". 60 In my view, the Arbitrator's decision was open to him on the evidence that is referred to in his Reasons. See in particular Dr Rizkallah's opinion that there was "evidence of rotator cuff and bicipital tendinitis as a result of overuse and repetitive trauma at work". This is found in his report dated 8 January 2001 that was indubitably relied on before the Arbitrator, not in the report of 20 December 2004 as to which there is some controversy (see below).

61 The failure of an area of the body to cope with repeated stress imposed upon it, leading to pain and loss of function is capable of being found to be a disease process (see generally Armao v Ladue Holdings Pty Ltd (1992) 8 NSWCCR 440; Perry v Tanine Pty Ltd t/as Ermington Hotel (1998) 16 NSWCCR 253). There was in the present case a substantial body of medical evidence as to the nature and origin of the worker's condition which allowed the Commission to conclude that the injury process as disclosed by the evidence was a disease. The evidence was also capable of showing that the disease had been aggravated by the nature and conditions of the work. Did the Arbitrator err in law in having regard to material that was "not in evidence"? (Grounds 8-10)

62 This is the manner in which this complaint was formulated in this Court (Notice of Appeal, Ground 8) and previously in the Application to Appeal Against the Arbitrator's Decision (Ground (d)).

63 The complaint focussed upon four documents: (a) Report of Dr Rizkallah dated 20 December 2004; (b) Injury report by the worker dated 4 December 2000; (c) First-Aid notes for various dates between 17 October 2000 and 10 January 2001; and

(d) Form letter from the employer to Dr Rizkallah dated 7 June 2002. These are among the documents that the Arbitrator records (in para 11 of his Reasons) as being "in evidence before the Commission and taken into account in making [the] determination" .

64 As indicated, s354(2) of the WIM Act provides: 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.

65 It became common ground before us that the four documents had been served on all parties and also formed part of the bundle of documents "on file" with the Commission by the time of the arbitration hearing. Indeed, they had been specifically referred to as "admitted" in the teleconference with the Arbitrator that preceded the hearing.

66 The nub of the employer's complaint, as ultimately refined, was that the hearing before the Arbitrator had not involved a sufficient signalling of intention to rely upon the offending material so as to engage the principles of procedural fairness. The employer further submitted if need be (and I think it would be), that the problem was not cured when the matter went before the Presidential member by way of "review".

68 The legislative scheme contemplated that proceedings in the Commission might take place on the papers (see WIM Act, s354(6)). Consistent with this, the Commission's practice is to require parties to identify "supporting documents and information" in their respective Application and Reply. In the present case the parties attached hefty bundles of documents to the Application filed by the worker and the Replies filed by the employer and the insurer.

69 The lodgement of material prior to an arbitration commencing was mandated by Rule 38 of the Workers Compensation Rules 2003 (now repealed). That Rule also contemplates that the Commission might allow the late introduction of "evidence".

70 Documents (b) and (c) were part of the Application to Resolve a Dispute filed by the worker at the outset.

71 Applications to admit "late documents" were addressed at the teleconferences that preceded the arbitration (see Red 416, 419). There was an application to adjourn a teleconference listed for 30 November 2004 because the worker's solicitor had yet to receive the report of Dr Rizkallah requested in response to "the late report of Colin Bass" (Red 421), this being a vocational assessment report dated 5 September 2004 that was part of the materials filed and relied upon by the insurer (Red 425). Dr Rizkallah's report dated 20 December 2004 (document (a) above) was served on the employer's solicitor on 21 January 2005 well over a month before the arbitration hearing. At a teleconference held on 2 February 2005 the report was one of several recorded by the arbitrator as "admitted without objection". (This was not a ruling as to relevance, but a response to the formal Application to Admit Late Documents which was the process whereby disputes about the documentary material before the Arbitrator at the hearing was resolved.)

72 At the commencement of the arbitration hearing the respective legal representatives listed the medical reports that they relied on (Red 449-451).

73 Mr Perry, for the worker, listed various reports of Dr Rizkallah but did not mention the report dated 20 December 2000. It is not clear whether this was an oversight, given that this report had only lately been added to those on the Commission file. It had been served in either late January or early February 2005. The report is not in evidence before us. However, we were informed without objection that it dealt with historical matters and a proposed operative procedure (CA Tr 15/06/07 p22). An extract from the report appears in the Arbitrator's Determination (Red 426). It includes a statement that the doctor considered the worker's injuries to be directly related to his employment as a slaughter-man at Fletcher International Exports Pty Ltd. It was, however, an opinion of Dr Rizkallah in a 2002 report (Red 18) that is referred to in the Arbitrator's summary of the medical evidence grounding his findings about injury consisting of aggravation etc of a disease (Red 431).

74 The worker was called to give oral evidence. His evidence included reference to treatment by Dr Rizkallah and he was questioned about the injury report dated 4 December 2004 (document (b)).

75 Submissions then commenced (Red 505). The worker's barrister immediately indicated that he wished to add to the documents that had been tendered on behalf of the worker some "documents produced under the directions to produce". The documents were admitted over objection. That objection was a complaint about relevance, not based on surprise or the inappropriateness of the Arbitrator referring to these documents. They appear to have included some otherwise unidentified "supplementary reports of Dr Rizkallah" (Red 506H).

76 The form letter (document (d)) was also referred to during submissions at the arbitration hearing. An objection based on relevance was rejected (Red 506).

77 It can therefore be seen that the employer's suggestion that there was want of procedural fairness at the arbitration is entirely without substance. The relevant documents were before the Arbitrator to the knowledge of all parties. The parties had and exercised the opportunity of questioning the worker on them and making submissions about them.

78 In Aluminium Louvres Bryson JA made a statement which I would respectfully endorse. He said (at [25]): The requirements of the rules for information to be lodged in advance and for statements revealing the cases of parties to be made in advance, taken with the width of the sources of information on which the Commission is authorised to act and the ways in which it is authorised to proceed, mean that assumptions upon which common law trials are conducted should not be readily carried over when testing contentions that a hearing before an Arbitrator was not conducted in a fair way. The overall and continuing duty under s.355 to use best endeavours to bring the parties to settlement acceptable to all of them must have large influence on the manner in which proceedings are conducted. The environment of contestation and the confrontational methods of the common-law trial would not usually be appropriate; there may be issues of kinds which it is appropriate to deal with in that style, and much is left to the discretion of the Arbitrator. The Arbitrator is in a good position to decide on and to impose appropriate controls on the adduction of evidence, by cross-examination or otherwise. The Arbitrator will usually be in a position to perceive whether a wish to pursue an issue has a basis, whether it is a sound basis, whether some issue or line of questions is merely exploratory, or for that matter whether questions are merely the product of inventiveness.

79 When the employer exercised its right to seek a review of the Arbitrator's Determination it included a ground of appeal that:

The Arbitrator has erred in considering as evidence that which was not evident (sic).

80 The Acting Deputy President was in my view entirely justified in rejecting this challenge on the following grounds: 46. Fletcher submits that: "The Arbitrator has erred in considering as evidence that which was not evident". No further particulars are provided. I assume that this is a reference to the material referred to earlier in the "jurisdiction" issue, but it is by no means clear. 47. As I have said, this material was admitted into evidence by the Arbitrator without objection. The fact that Fletcher apparently failed to notice it cannot be ascribed to any error on the part of the Arbitrator.

Without further particulars as to the nature of this 'non-evident' material, I am not satisfied that there has been any error by the Arbitrator on this issue.

81 The employer has sought to address the materiality of documents (a) to (d) in its written and oral submissions in this Court. It has focussed on documents (a) and (b). Document (a) (Dr Rizkallah's report dated 20 December 2004) is obviously material, but equally clearly, it was before the Arbitrator ("in evidence" if you like) to the knowledge of all concerned at all material times.

82 Document (b) (the Injury Report dated 4 December 2000) is said to be relevant to the "jurisdictional" issue already addressed (see Appellant's Supplementary Submissions para 13). As indicated, the "jurisdictional" point has no substance. In any event, the Report was so clearly "before" the Arbitrator that it was put to the worker in the course of his oral testimony.

83 These grounds fail. Miscarriage and/or denial of procedural fairness in the decision of the Acting Deputy President to "deal with the matter on the papers" (Grounds 6 and 7)

84 When, on 27 April 2005, the employer filed an Application to Appeal Against Decision of Arbitrator it set out grounds of appeal (Red 441-3) foreshadowing the possibility of amending those grounds "at the Hearing before a Presidential Member following receipt of Transcript of Proceedings and following the provision of documents admitted by the Arbitrator but not provided to the Respondent".

85 The employer indicated that it did not seek leave to rely on any fresh or additional evidence. It also indicated its "view" that the matter could not be dealt with on the papers (s354(6)), but rather should be dealt with by appointing of a hearing before a Presidential member. Reasons were advanced (Red 441).

86 The employer's solicitors wrote to the Commission on 10 June 2005 as follows:

We refer to the Appeal filed in this matter and we note from the Notice of Opposition filed on behalf of the Respondent to the Appeal that the Appeal is not actually opposed at all (presumably in view of the very clear authority of the Commission as set out in Kurrajong Holdings v Carrett - PD8 of 2004). In these circumstances we await confirmation from you of the Appeal having been allowed and of an award having been entered in favour of the Respondent employer in its interests as a self insurer at your earliest convenience.

87 In fact, the worker filed a Notice of Opposition that same day (Red 445). The Notice indicated that he did not seek any opportunity to file submissions or supplementary evidence. He made no submission about whether the appeal should be dealt with on the papers.

88 A further letter from the employer's solicitors on 22 July 2005 betrayed further signs of over-confidence on the employer's part. It asserted that the absence of certain material on the Commission file: …simply confirms the Grounds of Appeal and as there are no submissions in opposition to the Appeal it should not be necessary to inspect the file subject to the Appeal being allowed.

It will only be necessary for us to inspect the file if the Appeal is not allowed on the papers in which case the appointment of a hearing date will be required at which time we will arrange such an inspection.

89 The Acting Deputy President explained her reasons for proceeding without a formal hearing in the following terms:

Fletcher submits that the matter is not capable of being dealt with 'on the papers' "... Firstly, because Transcript of the proceedings have [sic] not yet been provided ... and secondly, because the matter and issues raised by the Appeal are complex and will require that the Appellant be given the opportunity of reviewing and supplementing its submissions at a Hearing."

The appeal file contains a 77 page transcript of the proceedings heard on 11 March 2005. A copy was sent to Fletcher under cover of a letter from the Commission dated 23 June 2005. Notwithstanding Fletcher's submission that it: "... is not yet in a position to finalise the Grounds of Appeal and submissions but will do so at the Hearing before a Presidential Member following receipt of Transcript of Proceedings and following the provision of documents admitted by the Arbitrator but not provided to the Respondent,"

The 'request' to the Commission for the provision of certain documents apparently in the Arbitrator's file post-dated the lodging of the appeal, and does not appear to have been pursued by Fletcher as set out in its letter to the Commission of 5 July 2005 referred to in paragraph 12 above.

However, the material requested, to which I will refer in more detail shortly, was contained in documents produced under direction and admitted by the Arbitrator into evidence "without objection" at the Teleconference on 2 February 2005 such that I cannot see the basis for Fletcher's assertion that this material was never served.

Section 354(6) of the 1998 Act provides: "(6) If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing."

Having carefully read the transcript, the extensive material before the Arbitrator and the submissions on appeal, I am satisfied that I have sufficient information within the meaning of section 354(6) and in accordance with Practice Direction No. 1 to proceed 'on the papers' and that this is the appropriate course in the circumstances. 90 Sections 354 (1), (6) and (7) of the WIM Act provide:

(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.

(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.

(7) An assessment or determination is to be made by the Commission having regard to such information as is conveniently available to the Commission, even if one or more of the parties to the assessment or determination proceedings does not co-operate or ceases to co-operate.

91 The Commission is not a court and is not expected to function as a court (see Alyuminium Louvres at [25] set out above).

92 The arguments that the Deputy President's discretion miscarried extended in places to an allegation that procedural fairness was denied in the process.

93 The employer submits that the Presidential member failed to give any or any adequate weight to the nature and complexity of the case. Had she done so, she would have opted for oral argument with the advantage of questioning and interaction which it offers.

94 This submission amounts to no more than complaint about the outcome of the exercise of the discretion. Under the section, the power is enlivened if the Commission "is satisfied that sufficient information has been supplied". The Presidential member addressed this matter and declared that she was thus satisfied. This conclusion was well open and it has not been shown to be erroneous in fact. 95 Next, the employer says that it flagged its intention to make further submissions orally at the hearing it had sought. It complains that the Presidential member did not notify the employer that she was contemplating dealing with the matter "on the papers", thereby arming the employer with the opportunity of putting in further submissions in writing.

96 However, the employer had no entitlement to or legitimate expectation of such notification. It knew that it was at least "on the cards" that the Commission might proceed on the papers. The employer sought to persuade the Commission otherwise but, on the evidence before us, it had no entitlement to presume a favourable response to the views it somewhat presumptously expressed through its solicitors.

97 The employer's submissions hint at the proposition that it was in some way misled into thinking that a hearing would be appointed. There is no evidence to suggest this. It seems to have done nothing to clarify the position. Its written submissions were dated 27 April 2005 and accompanied the Application. The transcript of the arbitration proceedings was sent to the employer by the Commission on 23 June 2005 (Red 529).. The Determination of the Acting Deputy President was issued on 14 June 2006.

98 The submissions that the Presidential member was in some way obliged to "seek clarification of the way in which the Appellant contended its submissions were relevant" (Ground 6(c)) seeks to impose a duty on which the statute is silent. Procedural fairness does not require this of a decision-maker: a reasonable opportunity to advance arguments is all that is required in a context where the issues are known or (as here) formulated by the party in question.

99 The detailed reasons provided in the Determination show that the presidential member understood the employer's submissions, addressing them in turn.

100 Next, it is submitted that the Presidential member had no proper regard to the fact that the worker had raised no objection to the employer's submission that an oral hearing should take place. Once again this seeks to read conditions into the statute that its language does not bear. The worker's failure to resist an oral hearing did not have the consequence that it became mandatory. Indeed, the paucity of the material filed by the worker would have been a factor capable of supporting the decision of the Commission to proceed as it did. The Commission's Practice Direction No 6 indicated an expectation that most applications for leave to appeal a decision of an Arbitrator would be determined on the papers unless the Presidential member otherwise directed.

101 Next it is submitted that the Presidential member denied procedural fairness when she failed to notify the parties that she had gone beyond the record of the arbitration in that she inspected the Arbitrator's notes of a teleconference of 2 February 2005 and proposed to have regard to them.

102 These notes would have been part of the Commission's records concerning the proceedings before it. The matters referred to in para 7 of the Determination of the Presidential member in relation to the teleconference of 2 February 2005 were and remain uncontroversial. They do no more than flag the issues addressed later in the arbitration.

103 In fact, it would have been remarkable if the Presidential member had failed to examine the Commission's whole file in the exercise of her "review" powers.

104 This ground also fails. Disposition 105 The appeal therefore fails and should be dismissed. Costs 106 An issue has arisen as regards the costs relating to a hearing in this Court on 9 March 2007.

107 This appeal was originally listed before a differently constituted bench for hearing on 9 March 2007. The legal representatives of the parties were generally ready to proceed, but there was a live dispute as to what had happened at the Arbitrator's telephone conference of 2 February 2005, particularly referable to the question whether certain reports were "admitted" into the Commission's file. This dispute had spilled over into disagreement about the completeness of the Red Book.

108 Senior counsel for the employer sought leave to file in court an affidavit upon which he intended to rely regarding that dispute. It was an affidavit of his instructing solicitor Mr Macken sworn 8 March 2007, ie the day before the hearing.

109 This led to the hearing being vacated with a series of consequential orders (CA Tr 09/03/07 p25). They included an order that the employer pay the worker's costs thrown away by the adjournment and an order that costs as between the employer and the insurer be reserved.

110 Subsequent to 9 March 2007, and in accordance with the directions then given, further affidavits were prepared and filed, essentially as to the contents of the Commission's record. There remained a live dispute on these matters until part-way through the hearing before the Court as presently constituted when senior counsel for the appellant indicated that he no longer pressed so much of Grounds 8 - 10 as dealt with this matter (see para 65 above). Argument on those grounds then shifted to address the question whether the parties had flagged their intention to rely upon the additional documents at the arbitration hearing.

111 In light of this the worker now seeks his costs incurred since 9 March 2007 for work done in relation to Grounds 8 - 10 and he seeks them on an indemnity basis. The insurer seeks a similar order, as well as an order for the costs thrown away by the adjournment of the hearing on 9 March 2007.

112 Since each respondent is entitled to an order for costs in his and its favour consequent on the dismissal of the appeal, the only live issue relates to the claim for costs to be assessed on the indemnity basis.

113 I consider that the employer should bear responsibility for the aborted hearing on 9 March 2007. The late filing of Mr Macken's affidavit made it inevitable that the hearing would have to be vacated; and most, if not all, of the affidavits prepared in response relate to the issue that was ultimately abandoned. These matters should have been brought to a head well before the original hearing date. The employer was the moving party in the appeal and its solicitor should have moved more promptly given that the problems were flagged in the appellant's own submissions of 3 October 2006.

114 I do not accept the employer's submission that the real cause of the hearing being vacated was the unwillingness of the respondents to accept the employer's proposals for dealing "on the run" (my words) with the issues raised by senior counsel for the appellant at the commencement of the hearing on 9 March 2007.

115 Nevertheless, I would not order costs to be assessed on an indemnity basis. There remains a live issue with regard to the procedural fairness arm of Grounds 8 - 10. And I can see no reason why costs on the ordinary basis will not fully and adequately compensate the respondents with reference to the work done on their behalf, responsive to the matters raised by Mr King SC on 9 March 2007 and thrown up by the affidavit of Mr Macken sworn the previous day.

116 For the avoidance of doubt I would add that I consider the reasonable costs incurred by the respondents in preparing the written submissions on costs should be regarded as falling within the respondents' costs of the appeal. Those submissions were prepared while this judgment stood reserved and they arise out of matters left outstanding in consequence of the directions given at the conclusion of the vacated hearing.

117 For the same reasons I cannot accept the employer's submission that the insurer pay the costs of the vacated hearing.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.

CITATION: FLETCHER INTERNATIONAL EXPORTS PTY LIMITED v BARROW & ANOR [2007] NSWCA 244

Aluminium Louvres & Ceilings Pty Ltd v Xue Qin Zheng [2006] NSWCA 34 Armao v Ladue Holdings Pty Ltd (1992) 8 NSWCCR 440 Berowra Holdings Pty Ltd v Gordon (2006) 225 CLR 364 CASES CITED: Cottons Glass & Aluminium Pty Ltd v Handsaker [2006] NSWCCPD 205 Fletcher International Exports Pty Ltd v Barrow [2006] NSWWCCPD 119 Kurrajong Holdings t/as The Gardeners Inn v Carrette [2004] NSWWCCPD 8 Perry v Tanine Pty Ltd t/as Ermington Hotel (1998) 16 NSWCCR 253 Watson v Hanimex Colour Services Pty Ltd (1991) 8 NSWCCR 190

Kurrajong Holdings t/as The Gardeners Inn v Carrett [2004] NSWWCCPD 8, Cottons Glass & Aluminum Pty Ltd v Handsaker [2006] NSWWCCPD 205; questioned, overruled.

(8) In proceedings before a court with respect to a claim for work injury damages (other than proceedings under section 235A or 235C or under the Crimes Act 1900 with respect to fraud), evidence of a statement made in proceedings before the Commission is not admissible unless the person who made the statement agrees to the evidence being admitted. 21 On 27 April 2005 the employer filed an Application to Appeal against Decision of Arbitrator. Only the worker was served with a copy of this process and only the worker filed a Notice of Opposition. The insurer appears to have been entirely overlooked at this stage of the proceedings. The insurer, which is a party in this Court, makes no complaint in this regard. 22 On 14 June 2006 the Application was determined on the papers by Acting Deputy President Moore. Leave to appeal was granted as required by s352(1) of the WIM Act. There was a detailed statement of reasons (see Fletcher International Exports Pty Ltd v Barrow [2006] NSWWCCPD 119). Orders were made, confirming some paragraphs of the Arbitrator's decision; revoking some paragraphs with the substitution of alternative orders; and ordering the employer to pay the costs of the appeal. 23 The proceedings in this Court are described by s 353 of the WIM Act as an appeal "in point of law". This Court's powers include the power to remit the matter to the Commission constituted by a Presidential member for determination by the Commission in accordance with any decision of the Court, as well as the power to make such other order in relation to the appeal is the Court thinks fit (WIM Act, s353(2)). 24 It is convenient to address the grounds of appeal in a particular order.

(1998) 16 NSWCCR 253

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