Pioneer Studios Pty Ltd v Hills

Applying the terms of s 9A(2), I am satisfied that the connection between the employment and the worker's injury was real and of substance."

The grounds of appeal 23The notice of appeal identifies three grounds, as follows: "1.There is no evidence supporting the following critical findings: (a)That the appellant encouraged or induced the respondent to attend the party on Saturday 13th March 2004; or (b)That the respondent's injury arose out of the course of her employment with the appellant; or (c)That the respondent's employment with the appellant was a material contributing factor to her injury. 2.The learned Deputy President misdirected himself by failing to properly formulate the extended course of employment permitted by Hatzimanolis v ANI Corporation Limited (1992) 173 CLR 473. 3.The learned Deputy President misdirected himself in considering whether s 9A Workers' Compensation Act 1987 applied by failing to place due emphasis upon the concept of substantial contributing factor." (emphasis in original)

The arguments of the parties 24The appellant maintained the evidential challenge to the question of encouragement and the question of clients. There is a significant argument that Ms Hills' evidence was reconstruction and that there was to some significant degree an unreliable foundation for these conclusions and, to a degree, a misdirection by the Deputy President in relation to how the Senior Arbitrator had dealt with Ms Hills' evidence. Also, the evidence as to meeting clients was weak at best. However, because of the views I express below, it is unnecessary to conclude whether there was a misdirection and legal error in the fact-finding process.

Disposition 25In Badawi, the Court was concerned with the correctness of the expression of views of Mason P (Meagher and Beazley JJA agreeing) in Mercer v ANZ Banking Group Ltd [2000] NSWCA 138; 48 NSWLR 740. In one respect, the majority in Badawi (Allsop P, Beazley JA and McColl JA) was of the view that Mercer was wrong: the relationship between "arise out of" and "a substantial contributing factor", and Mason P's view that the former was more stringent than the latter (see generally Badawi at 516-520 [49]-[71]). In other respects, Mercer read with Badawi remains binding authority. In particular, the following propositions are relevant. 26First, the phrase "the employment" in s 9A(1) bears the same meaning as "employment" in the phrase "arising out of or in the course of employment" in s 4: Badawi at 516 [48(7)]; and Mercer at 745 [13]. 27Secondly, the meaning of "employment" was discussed in Badawi at 518-519 [61]-[67]. In that discussion at 519 [67], what Mason P said in Mercer at 745 [13] was approved: "It is common ground between the parties and well established by earlier authority that, when s 9A(1) speaks of 'the employment concerned' being a substantial contributing factor to the injury, the legislation is not referring to the fact of being employed, but to what the worker in fact does in the employment: see Federal Broom Co Pty Ltd v Semlitch (1964) 110 CLR 626 at 632-3, 641. In other words, one starts with the actual and not the hypothetical, with what (if anything) the worker was in fact doing in his or her employment that caused or contributed to the 'injury' as defined in s 4. See also Stanton-Cook [v TAFE Commission (NSW) [1999] NSWCC 5; 17 NSWCCR 632]." 28The discussion of "arising out of ... employment" in Badawi at 520-522 [72]-[79] did not qualify that. Indeed, the discussion of the judgment of Starke J in Smith v Australian Woollen Mills Ltd [1933] HCA 60; 50 CLR 504 reinforces it: see Badawi at 521-522 [71]-[78]; and see also Roncevich v Repatriation Commission [2005] HCA 40; 222 CLR 115 at 125 [22]-[25]. 29In circumstances where it is not expressly concluded that the injury arose in the course of employment and thus where, on this hypothesis, the injured worker was not at work, it is not apparent how the Deputy President could draw any conclusion about the injury arising out of employment or employment being a substantial contributing factor without considering the kinds of matters to which Mason P referred in Mercer at 745 [13]. This is not to confine "arising out of" to what is required of an employee but rather what she in fact does in the employment. This would require focus upon what was the employment, not what Ms Hills thought was the employment. 30On this basis, the learned Deputy President has failed to direct himself according to law. 31Many of the considerations of the function being a "work function" may go to support an argument that the injury occurred in the course of employment in the extended sense discussed in Hatzimanolis v ANI Corporation Ltd [1992] HCA 21; 173 CLR 473. Though, it should be said, some of the passages in Hatzimanolis (see, for example, at 482) may tend to the conclusion that Ms Hills' injuries did not occur in the course of her employment. That, however, was not how the matter was in terms approached by the Deputy President expressly. 32On the other hand, if implicit in some of the findings (such as the reference to "by her employment" in [143(f)] that is quoted above) and in the whole approach of the Deputy President is a conclusion that at the time of the injury Ms Hills was in the course of employment, that conclusion has been reached without reference to the principles in Hatzimanolis. Further, that conclusion has been reached significantly by reference to Ms Hills' understanding of what happened, rather than by reference to the facts of what the employer actually did on and in respect of the evening in question by reference to the employment relationship. 33The matter should be remitted to the Workers Compensation Commission to be dealt with according to law. 34The orders that I would make are: (1) Appeal allowed; (2) Set aside the decision of the Workers Compensation Commission made on 1 June 2011; (3) Remit the matter to the Workers Compensation Commission for consideration according to law; (4) Respondent pay the appellant's costs of the appeal. 35BASTEN JA: I agree with the orders proposed by the President and with his reasons, to which I add the following. 36In circumstances where the appeal to this Court is limited to points of law, it should be accepted that the Commission's determination as to whether there is a causal connection demonstrated between an injury and employment will usually be unreviewable. However, this Court may intervene if it can be demonstrated that the Commission applied an erroneous legal principle, that there was no material before the Commission to support the findings of fact, or that, on the findings made, and upon the assumption that the correct legal principle was applied, only one conclusion was reasonably open, not being the conclusion reached by the Commission. 37The core element of a worker's course of employment will be attendance at a workplace or carrying out work functions, during usual business hours. The nature of the core will vary depending on the nature of the work. Over the years, the boundaries have tended to erode. Thus it is now well accepted that social events (such as the office Christmas party) and recreational activities (such as trips on days off work for employees required to remain at remote locations) can well form part of the course of employment. Such events and activities tend to be marked by the employer's commitment of time and resources to organising the events and encouraging staff to attend. The fact that clear boundaries have been eroded does not mean that there are no boundaries; rather, the further from the core one moves the closer scrutiny of the circumstances involved. 38In Roncevich v Repatriation Commission [2005] HCA 40; 222 CLR 115, the High Court considered an application for compensation by a soldier who was injured when he fell inside his barracks after returning inebriated from the Sergeant's Mess. The entitlement to compensation was satisfied if the injury "arose out of" his defence service, the last concept being the equivalent of employment. The Court was satisfied that "whether an event arises in the course of an activity, or as here, out of 'an activity', depends upon such circumstances as the nature of the person's employment, the circumstances in which it is undertaken, and what, in consequence, the person is required or expected to do to carry out the actual duties": at [23] (McHugh, Gummow, Callinan and Heydon JJ). On the facts of the case, the plurality held at [24]: "There is little doubt in this case that there was a requirement, albeit not one to be found in formal military orders, and an expectation, of attendance at the Sergeant's Mess and the consumption in some quantity, even perhaps to be point of intoxication short of physical incapacity, of alcoholic drinks." 39Thus, where there was no necessary criterion to be satisfied beyond the causal connection, the case was assessed by reference to a 'requirement' (of an informal kind) and an 'expectation' to attend a social function. No lesser connection should be accepted where the employment must be a "substantial contributing factor": Workers Compensation Act 1987 (NSW), s 9A. Counsel for the respondent submitted that the language in Roncevich was explicable by the military context in which it arose, but in fact it was taken from the judgment of Dixon J in Henderson v Commissioner of Railways (WA) [1937] HCA 67; 58 CLR 281, which had nothing to do with a military setting. 40As explained by Murphy J in Telstra Corporation Ltd v Bowden [2012] FCA 576 at [91] the High Court, in Hatzimanolis v ANI Corporations Ltd [1992] HCA 21; 173 CLR 473, provided an expansive view of the concept of "employment": however, that proposition should be understood by reference to the circumstances of the case. In Hatzimanolis the Court was dealing with an injury arising during an interval between periods of work; it rejected authority that the activity giving rise to the injury must have been undertaken "in order to carry out [the worker's] duties": at 482. 41Hatzimanolis was not referred to by the Deputy President, perhaps because it is understood to deal with the second limb of the definition of injury, namely an injury "in the course of" employment. As counsel noted, in Tarry v Warringah Shire Council [1974] WCR 1 at 8, Samuels JA stated that, "it cannot be right to determine matters which arise under the first leg of the definition by debating questions of the scope of employment". In the context, the reference to "the scope of employment" was a reference to the second limb, namely "the course of employment". However, Samuels JA continued: "The question which we have to determine is to be answered by inquiring whether there was a causal connection between the employment and the injury." 42It follows that whatever may have been meant in this context by the scope of the employment, there is an essential requirement to identify the employment in order to determine the relationship between the injury and the employment. 43As explained by Allsop P, the Deputy President did not address the evidence in these terms. Although the Deputy President referred to the party being a "work function", because one of its purposes was to farewell a departing employee, and because it provided an occasion for the respondent to mix with other staff and possibly with clients, that does not necessarily result in the injury arising in the course of the worker's employment. While, it could not be said that such a finding was not open, the question is whether the correct criterion was addressed. 44If the respondent had been encouraged to go to Friday night drinks at a local pub where staff and clients regularly mixed casually, her attendance on such an occasion would probably not have been in the course of her employment. The fact that the party was held on work premises, as a result of the circumstances explained in the reasons of the Deputy President, would be relevant, but by no means conclusive, in favour of the whole evening becoming part of the "course of employment", if not for all staff who attended, at least for the respondent. How much weight that circumstance should be accorded is, no doubt, a matter for the Commission. 45In finding that her attendance was in the course of her employment, if that were the finding to be inferred, the Deputy President focussed squarely on the worker's subjective "impression" and that she "felt" she should attend for "work purposes" - at [125]; her being "actuated to attend" - at [126] and [136], and by reference to her response to encouragement, at [142]. None of these findings is sufficient to engage the conclusion that her attendance was in the course of her employment. Her motives and beliefs may provide some evidential support for a conclusion that she was in fact attending in the course of her employment, but they do not form the relevant test. The course of employment is determined by the employer. The view of Mr Ludbrook would be more significant than that of a new probationary member of staff. However, even his views would not be decisive: the characterisation of the occasion will depend upon an objective assessment of the conduct of persons in authority with the employer, where such authority extends to determining the work hours and conditions of employment of staff. Although there was no express finding as to the relevant persons, it may be inferred that Mr Ludbrook was the primary person in authority; whether Ms Martell had such authority is at best doubtful on the evidence. 46Accordingly, there can be no implicit finding that the worker's attendance was in the course of her employment for the necessary assessment of the causal connection because the issues critical to such a finding were not addressed. It was not necessary that the temporal element be satisfied; however, the nature of the link with her employment, objectively determined, was critical. 47In Roncevich the High Court held that the Tribunal had failed to pose and answer the correct question, and thereby erred in law: at [28]. (In this case, it is necessary for the appellant to identify a decision of the Deputy President in point of law, which was erroneously determined, but nothing was seen to turn on this aspect of s 353 of the Workplace Injury Management and Workers Compensation Act 1998 (NSW).) The judgment concluded that, whilst an affirmative answer was available on the whole of the evidence in Roncevich, it was not appropriate for the courts to determine the ultimate question of the appellant's entitlement, that question being remitted to the Tribunal. The same result is required in this case. 48HOEBEN JA: I agree with the President and with the additional remarks of Basten JA. 49ALLSOP P: I also agree with the additional remarks of Basten JA. The orders of the Court are as I have proposed. 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. Decision last updated: 08 October 2012