t/as Ray White (Belconnen) v Lyristakis

Federal Court of Australia (Full Court)|2002-05-17|Before: Dowsett JJ, Miles JJ

SPENDER and MILES JJ: 1 This is an appeal (brought pursuant to leave) against a judgment of the Supreme Court of the Australian Capital Territory given on 1 November 2001 allowing an appeal against a decision of the ACT Magistrates Court made under the Workers Compensation Act 1951 (ACT) (the Act). 2 The decision of the Magistrates Court, which was accompanied by written reasons, was delivered on 30 March 2001. It was recorded in a formal document signed by the Magistrate on 29 May 2001 in the following terms: "ORDER On 30 March 2001 the Court found: 1. The applicant suffered a compensable personal injury, as defined by the Act, during the course of his employment with the respondent. 2. The applicant has not suffered any incapacity at all." 3 The judgment of the Supreme Court was in the following terms: "1. The appeal be upheld. 2. The order dismissing the appellant's application for compensation be set aside. 3. The matter be remitted to the Magistrates Court for determination according to law of the amount, if any, that should be paid to the appellant as compensation for the partial incapacity caused by the stress and depressive illness which developed during the course of his employment with the respondent. 4. The parties have liberty to re-list the matter at short notice to resolve the issue of costs." 4 The grounds of appeal pursued in this Court in the appeal from the Supreme Court are: "1. The court erred in disturbing the finding of the magistrate that the respondent was not incapacitated as this was a finding clearly open on the evidence and was supported by the weight of the evidence. 2. The court erred in disturbing the magistrate's finding that the respondent suffered no economic incapacity and was not entitled to compensation. 3. Having found that there was inconsistency between the magistrate's acceptance of certain medical reports and her finding that she was not satisfied that the respondent was incapacitated at all, the court failed to consider that issue but instead remitted a limited question which reversed the magistrate's finding on this issue without reason or consideration." 5 It may be desirable to make some preliminary observations about the nature of the proceedings below and of the nature of the appeal to this Court. The proceedings in the Magistrates Court were by way of arbitration pursuant to what was s 24 of the Act (now s 195). The jurisdiction to hear and determine appeals from the Magistrates Court exercising the power of arbitration under the Act was conferred by what was s 26 of the Act (now s 197) which provided as follows: "26 Appeals (1) Where a committee or the Magistrates Court gives a decision or makes an order or award with respect to any matter which may be or is required to be settled by arbitration under this Act, any party tothe arbitration may appeal from the decision, order or award to the Supreme Court. (2) The Magistrates Court (Civil Jurisdiction) Act 1982, part 21 applies in relation to an appeal under subsection (1) - (a) as if it were an appeal from a judgment or order of a kind specified section 387(2) of that Act; and (b) in the case of an appeal from a decision, order or award by a committee - as if the decision, order or award was a decision, order or award of the Magistrates Court." 6 Section 393(1) which is within Part XXI of the Magistrates Court (Civil Jurisdiction) Act 1982 (ACT)(the Magistrates Court (Civil Jurisdiction) Act)provides as follows: "393 Powers of Supreme Court on appeal (1) On an appeal, the Supreme Court may - (a) affirm, reverse or vary the judgment or order appealed from; or (b) give the judgment, or make the order, that, in all the circumstances, it thinks fit, or refuse to make an order; or (c) set aside the judgment or order appealed from, in whole or in part, and remit the proceedings to the Magistrates Court for further hearing and determination, subject to the directions that the Supreme Court thinks fit; or (d) award execution from the Supreme Court or remit the proceedings to the Magistrates Court for the execution of the judgment or order of the Supreme Court. 7 It is not necessary to refer to the "unlimited" jurisdiction of the Supreme Court discussed in Kelly v Apps (2000) 98 FCR 101; [2000] FCA 687. 8 The nature of an appeal from a single judge to a Full Court of this Court has been the subject of some recent decisions of the Full Court, notably, Branir Pty Limited v Owston Nominees (No 2) Pty Limited [2001] FCA 1833, in which Drummond and Mansfield JJ concurred with the judgment of Allsop J. The observations of Allsop J were adopted by another Full Court in Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd [2002] FCAFC 157. Amongst the observations of Allsop J were the following: "[28] …First, the appeal court must make up its own mind on the facts. Secondly, that task can only be done in the light of, and taking into account and weighing, the judgment appealed from. In this process, the advantages of the trial judge may reside in the credibility of witnesses, in which case departure is only justified in circumstances described in [various authorities]. The advantages of the trial judge may be more subtle and imprecise, yet real, not giving rise to a protection of the nature accorded credibility findings, but, nevertheless, being highly relevant to the assessment of the weight to be accorded the views of the trial judge. Thirdly, while the appeal court has a duty to make up its own mind, it does not deal with the case as if trying it at first instance. Rather, in its examination of the material, it accords proper weight to the trial judge's views. Fourthly, in that process of considering the facts for itself and giving weight to the views of, and advantages held by, the trial judge, if a choice arises between conclusions equally open and finely balanced and where there is, or can be, no preponderance of view, the conclusion of error is not necessarily arrived at merely because of a preference of view of the appeal court for some fact or facts contrary to the view reached by the trial judge. [29] The degree of tolerance for any such divergence in any particular case will often be a product of the perceived advantage enjoyed by the trial judge. Sometimes, where matters of impression and judgment are concerned, giving 'full weight' or 'particular weight' to the views of the trial judge might be seen to shade into a degree of tolerance of divergence of views …. In such cases the personal impression or conception of the trial judge may be one not fully able to be expressed or reasoned …. However, as Hill J said … 'giving full weight' to the view appealed from should not be taken too far. The appeal court must come to the view that the trial judge was wrong in order to interfere. Even if the question is one of impression or judgment, a sufficiently clear difference of opinion may necessitate that conclusion. [30] From these principles of how the appeal court should undertake its task, the following can be said about the approach of those conducting an appeal. The proper approach is not to ask the court to survey all the evidence, directed by the otherwise unassailable findings on credit, and to ask it to arrive at its own conclusions, without 'essaying the necessary task of positively demonstrating that the trial judge was wrong': …. It is not appropriate to treat the appeal as though it were a new trial on the evidence and constrained merely by the unassailable factual findings. Error must be demonstrated … The views and conclusions of the trial judge ultimately have to be shown to be wrong. They should not be laid to one side and a simple re-argument of the case take place." 9 Two further observations may be made for the purposes of the present appeal. This is a re-hearing not of the arbitration in the Magistrates Court but of the appeal from the Magistrates Court to the Supreme Court. The second is that the nature of the appeal to the Supreme Court is of similar character to that conferred on this Court and the principles and observations referred to above were applicable in the Supreme Court as they are here. 10 The appeal to this Court can be successful only if error can be demonstrated in the judgment of the Supreme Court. The judgment must be shown to be wrong, not simply different from the judgment and any subsequent orders that this Court might have made if its task were to hear the appeal from the Magistrates Court. It is also useful to bear in mind the remarks of Branson J in Sydneywide Distributors about the scope of an appeal in so far as it is restricted by the grounds set out specifically in the notice of appeal. Her Honour said at [4] and [5]: "4. A ground of appeal is a basis upon which the appellant will contend that the judgment, or a part of the judgment, should be set aside or varied by the Court in the exercise of its appellate jurisdiction. Not every grievance entertained by a party, or its legal advisors, in respect of the factual findings or legal reasoning of the primary judge will constitute a ground of appeal. Findings as to subordinate or basic facts will rarely, if ever, found a ground of appeal. Even were the Full Court to be persuaded that different factual findings of this kind should have been made, this would not of itself lead to the judgment, or part of the judgment, being set aside or varied. This result would be achieved, if at all, only if the Full Court were persuaded that an ultimate fact in issue had been wrongly determined. The same applies with respect to steps in the primary judge's process of legal reasoning. Although alleged errors with respect to findings as to subordinate or basic facts, and as to steps in a process of legal reasoning leading to an ultimate conclusion of law, may be relied upon to support a ground of appeal, they do not themselves constitute a ground of appeal. 5. A useful practical guide is that a notice of appeal which cannot be used to provide a sensible framework for the appellant's submissions to the Full Court is almost certainly a notice of appeal which fails to comply with the requirements of O 52 r 13(2)(b). Neither the notice of appeal nor the document containing the revised grounds of appeal was, or could have been, so utilised in this case." 11 Also relevant to the nature of the appeal to this Court and from the Magistrates Court to the Supreme Court is the recent decision of the High Court in Pasini v United Mexican States [2002] HCA 3 in which a "long line of decisions" was followed to arrive at the conclusion that on review by this Court of a decision of a magistrate to extradite a person to another country, the Court is exercising judicial power notwithstanding that the decision under review was administrative in character and notwithstanding that the review was, according to the relevant legislation, to be by way of re-hearing. In accordance with Pasini and the authorities preceding it, it is clear that this Court is performing a judicial function in the exercise of judicial power in this appeal, as was the Supreme Court in determining the appeal from the Magistrates Court. It is not necessary to arrive at or express an opinion whether the arbitration in the Magistrates Court was judicial or administrative in character.

FACTS 12 The facts not in controversy were as follows. The respondent had been employed by the appellant in its real estate business in Canberra between 16 February 1998 and 26 February 1999. In the earlier part of that period he worked as a trainee in property management. In the latter part he worked as a property inspector. Although he may have worked full-time at some stage during the later period, he was employed for three days a week. During the whole of the time he was subjected to stress arising out of the nature of his duties, but more particularly from a disharmonious relationship with another employee. The stress was such that he stopped working for the appellant on 26 February 1999 and consulted his general practitioner. Medication was prescribed. Since then, to the date of the hearing in the Magistrates Court, the respondent had not worked for the appellant nor engaged in employment of any kind except for what he did for Lyros Pty Limited. 13 Before, during and since working for the appellant the respondent was engaged in attending to a building maintenance and insulation business conducted by a company, Lyros Pty Limited. The respondent and his wife were the only directors and shareholders of that company. During at least part of his time when employed by the appellant, the respondent was spending two days a week attending to the business of the company, which included carrying out maintenance for the appellant as well as maintenance and other insulation work generated by Lyros Pty Limited. 14 After he had stopped working for the appellant the respondent continued to attend to the affairs of his business and showed himself to be able to carry out the physical tasks involved in the demolition of a house and in supervising the work of others without any obvious signs of stress or depression. The business ran into financial difficulties. The respondent's marriage broke up. He moved to the south coast of New South Wales where he continued to carry out work of the nature he had always done for Lyros Pty Limited. He applied for a variety of positions in employment but was unsuccessful.

FINDINGS IN THE MAGISTRATES COURT 15 The Magistrate found at [52] that: "…any difficulties [the respondent] may have in finding employment additional to the conduct of his insulation and maintenance business cannot in any meaningful way be attributed to the injury…" and, at [54], that [the respondent] had failed to establish both that - "by reason of his injury he is unable to sell his labour in any market reasonably available to him." and that - "…by reason of his injury the amount he has been capable of earning… has been reduced below what he was earning immediately prior to sustaining the injury." 16 There are two findings here. The first is to the effect that the respondent had not established that he was totally incapacitated for work. The second is to the effect that the respondent had not proved that his partial incapacity (if any) for work has resulted in any diminution in earnings which is capable of supporting an award of weekly compensation. These findings make it clear that the Magistrate did not hold that the respondent's depressive condition was not causally related to his "compensable injury". The finding expressed in the terms of the formal order signed by the Magistrate on 24 May 2001, and the final sentence of the reasons handed down on 30 March 2001, that "the applicant has not suffered any incapacity at all" are ambiguous and it is unfortunate that they may have given rise to misunderstanding. They should be read in the light of the undisputed facts and the more precise findings set out in the Magistrate's reasons and summarised above.

JUDGMENT OF THE SUPREME cOURT 17 In the Supreme Court, Crispin J accepted that some incapacity for work does not of itself warrant an award of compensation and that for an award to be made entitling an injured worker to weekly compensation it had to be shown that the incapacity had led to a loss of earnings calculated in accordance with the formula contained in Sch 1 to the Act. His Honour considered that there was material before the Magistrate which had been overlooked and upon which a finding could be made as to the earnings the respondent received from the appellant during the period of his employment by the appellant. His Honour considered further at [23] that he was "unable to be satisfied that the Magistrate had accepted or would have accepted that, whilst [the respondent] had been able to work he had been unable to earn any net income." His Honour noted further what he considered to be the conflict between the findings of the Magistrate and the acceptance of the medical evidence and concluded that "in all the circumstances" there was no alternative but to allow the appeal and to remit the matter to the Magistrates Court for the purpose of making an award of weekly payments for the respondent's partial incapacity resulting from his injury. 18 His Honour came to the conclusion that the Magistrate had overlooked the evidence called to prove the respondent's pre-injury earnings as required for the application of the formula laid down in Sch 1 and that that evidence "clearly provided a basis upon which a finding could have been made as to the earnings the appellant received from the respondent during the relevant period." His Honour considered also that the Magistrate had not made a finding that during the time he had been able to work in his business the respondent had been unable to earn any "net income". His Honour concluded his reasons with these words at [23]‑ [24]: "It should also be noted that her Worship had expressly said that she had not been satisfied that the [respondent] had any 'incapacity at all' and there is an apparent inconsistency between that finding and the acceptance of all the evidence in the medical reports to which I have referred, that has not been resolved. In the circumstances I see no alternative but to order that the matter be remitted to the Magistrates Court for re-hearing of the question as to what compensation, if any, should be paid to the [respondent] for the partial incapacity resulting from the stress and depressive illness which arose during the course of his employment with the [appellant]." 19 As already indicated, we do not consider that the finding recorded in the formal order that the respondent had "not suffered any incapacity at all" must, in the light of the other findings, mean that the incapacity described in the medical evidence had not led to a situation where, on an application of formula as set out in Sch 1 to the Act, any monetary sum could be fixed for the purpose of awarding payments of weekly compensation to which the respondent would be entitled. It remains to determine whether on the rest of the evidence before the Magistrate, the order of the Magistrate should have been set aside and the matter remitted to the Magistrates Court for determination of the amount, if any, that should be paid to the respondent for the partial incapacity resulting from the injury in question. 20 The relative informality by which questions of compensation are settled by arbitration in the Magistrates Court under the Act has led to difficulties in determining this appeal. 21 Section 24 of the Act provided that all matters and questions (other than prosecutions for offences) arising under the Act shall, where no other provision is made in the Act, in the absence of agreement be settled by arbitration in accordance with what was Sch 4 (now contained in the Regulations). There was nothing in Sch 4 which needed to be reproduced in these reasons. There was nothing in it which empowered the Magistrate to make orders of the nature which are recorded in the present matter. There were oblique references in Sch 4 of the Act to the power to make an award, for instance in r 12. There are some provisions about how "any sum awarded as compensation" is to be dealt with. For instance there is power to make an order relating to an agreement procured by fraud and the like: r 9(c),(e). Rule 6A provides that the procedure of the court is within the discretion of the court and that it is not bound by rules of evidence and shall act according to equity and good conscience and the substantial merits of the case and without regard to technicalities and legal forms. But nowhere is there a conferral of power to make an order dismissing an application for compensation. 22 It will be observed that the second of the orders made in the Supreme Court was that "the order dismissing the appellant's application for compensation be set aside". No order was made by the Magistrates Court in those terms. The "order" of the Magistrate was expressed only in terms of findings. The findings so expressed had the effect of an award refusing the application for weekly payments of compensation. In the conventional language of arbitration, the order might have been expressed better as an award for the respondent. Accordingly, it would have been appropriate for the Supreme Court to treat the appeal to it as an appeal against an award for the respondent.

THE WORKERS COMPENSATION ACT 23 The key section of the Act for the purpose of the present matter was s 7 (now s 30) which provided: "7 Compensation for personal injury

(1) Where a worker suffers personal injury arising out of or in the course of the worker's employment, the employer is liable to pay compensation in accordance with schedule 1. (2) Where a worker is required by the terms of his or her employment, or is expected by his or her employer, to attend a trade, technical or other training school, that employment is, for this Act, to be taken to include that attendance. (3) If it is proved that the injury to a worker is attributable to the worker's serious and wilful misconduct, any compensation claimed in respect of that injury shall, unless the injury results in death or serious and permanent disablement, be disallowed. (4) Compensation shall not be payable where the injury to, or death of, a worker is caused by an intentionally self-inflicted injury. (5) An amount of compensation payable under a provision of this Act in respect of an injury is, unless the contrary intention appears, in addition to any amounts of compensation paid or payable under any other provision of this Act in respect of that injury." 24 It is to be observed that compensation is payable under the Act otherwise than pursuant to s 7 and not only by way of weekly payments in the case of total or partial incapacity resulting from the injury. Compensation is also payable, for instance, for medical treatment, loss of body parts, and certain other conditions and losses resulting from the injury in question, and in at least some of these instances no question of incapacity for work may arise. It would be a mistake to think that incapacity for work is a necessary concept underlying the scheme of compensation established by the Act. 25 Schedule 1 of the Act makes provision for "scale and conditions of compensation". In particular par 1(b) fixes rates of compensation where "the worker is totally incapacitated for work by the injury, in respect of the period of the worker's incapacity". Paragraph 1(c) fixes other rates "when the worker is partially incapacitated for work by the injury". In the latter case the amount is a weekly payment during his or her incapacity - "(i) of the amount (if any) by which the weekly amount that he or she is earning, or is able to earn in some suitable employment or business, after the injury is less than his or her weekly pay at the date of the injury, or of the amount of $57, whichever is the less; or (ii) of the amount (if any) by which the weekly amount that he or she is earning, or is able to earn in some suitable employment or business, after the injury is less than the weekly amount that would have been payable to him or her under paragraph (b), if he or she had been totally incapacitated; whichever is the greater." 26 The terms "incapacity", "total incapacity" and "partial incapacity" were not defined. The terms "total incapacity" and "partial incapacity" did not appear in the Act itself, except in s 7C (now s 35) with regard to "deemed total incapacity for work", which appears to be of little assistance for present purposes. 27 "Injury" was defined in s 6 to mean any physical or mental injury (including stress) and includes "aggravation, acceleration or recurrence or (sic) a pre-existing injury". It may be noted that "totally incapacitated" is now defined in s 6 and "partially incapacitated" is defined in s 7. The definition of "injury" is now in s 4.

CONCLUSION 28 Some guidance about how to approach the issues in the present case is provided in the judgments of the members of the Full Court of this Court in (an appeal from the Supreme Court under the Ordinance as the legislation then was) Barbaro v Leighton Contractors Pty Ltd (1980) 44 FLR 204 (Smithers and Franki JJ, Connor J dissenting). In that case, Smithers J said at 208: "It is fundamental to the issues raised in the proceedings that the entitlement if any of the appellant depended upon the provisions of s. 7 of the Ordinance to the effect that in the case of compensable personal injury the liability of the employer is to pay compensation in accordance with the First Schedule to the Ordinance. The First Schedule is headed "Scale and Conditions of Compensation". Paragraph 1 provides that: '1. The amount of compensation shall be - (a) where the death of the workman results from the injury - … [a sum specified]; (b) where the workman is totally incapacitated for work by the injury - a weekly payment during his incapacity of … [sums specified according to circumstances] …; and

(c) where the workman is partially incapacitated for work by the jury - a weekly payment during his incapacity … [sums specified according to circumstances] ….' It appears to me that in the proceedings before the magistrate, the issues before the court were: (a) whether pursuant to par 12 of the First Schedule there was in respect of the period between March 1977 and 20th May, 1977, any liability in the respondent to pay compensation on the basis either of total or partial liability; (b) whether as at and from 20th May, 1977, there was a liability in the respondent to pay compensation in accordance with par 1(b) of the First Schedule; and, (c) if the answer to issue (b) be in the negative, whether as at and from 20th May, 1977, there was a liability in the respondent to pay compensation in accordance with par 1(c) of the First Schedule. In proceedings for compensation where weekly payments have not theretofore been made and there is no previous award, the workman would bear the onus of proof of injury, of that injury having arisen out of or in the course of his employment, and of the extent to which the saleability of his labour in the market was reduced by his injury." 29 After reviewing the evidence, the judgments below and some of the authorities, in particular J & H Timbers Pty Ltd v Nelson (1972) 126 CLR 625 and Commonwealth v Muratore (1978) 141 CLR 296, Smithers J concluded that the finding of the Magistrate that he was not satisfied that the appellant suffered any "economic loss" by reason of the injury during the period referred to, was open to the Magistrate on the evidence and should not be disturbed. 30 Smithers J went on to consider a submission by counsel that either the Magistrate should have of his own motion suggested an adjournment for the purpose of giving the worker an opportunity to call further evidence, or, that being an experienced tribunal, the Magistrate should have recognised the impossibility of a worker proving evidence of the comparison of earnings he might have earned and was now earning and made a kind of experienced assessment on a broad basis. His Honour concluded as follows at 229 - 230: "The procedure to which Mr Costigan refers is no doubt very sound in ordinary case when physical incapacity is the governing factor and general bona fides are apparent. But in a case like the present it is impossible to feel any satisfaction that the court has anything like a true picture of the appellant concerning his conduct in relation to earning money. Accordingly, like the Magistrate, I could not feel on a balance of probabilities that the appellant has satisfied me that during the relevant period he suffered any economic loss."

31 Franki J, in a separate judgment, expressed himself in similar fashion at 253 as follows: "… no assessment of money payable for partial incapacity can be made without an assessment of the amount which the appellant was earning or able to earn in some suitable employment or business. Although a tribunal which handles regularly large numbers of workmen's compensation cases may draw upon certain of its judicial knowledge (eg J H Timbers v Nelson per Gibbs J (105)), it is different when a court such as this is considering this matter. It is appropriate to note that the learned magistrate held that he was not satisfied that the appellant had suffered any economic loss in the relevant period." 32 This Court is, and the Supreme Court was, in a similar position to that described in the judgments of Smithers and Franki JJ. There is a reasoned decision of the Magistrate in which she expressed scepticism at least as to the evidence and the bona fides of the worker in relation to his post injury physical and emotional incapacity for work and as to his post injury earnings. The Magistrate accepted that there had been compensable injury in the nature of stress but was clearly not satisfied that the respondent had suffered, as a result of that injury, any economic loss in the period between the cessation of his employment with the appellant and the date of the hearing. 33 Furthermore, the Magistrate at [48] was not satisfied that there was any material upon which she could make a finding under par 1 of Sch 1(c)(i) relating to the respondent's weekly pay at the date of his injury (which date was never specified) and of the weekly amount that he was earning or was able to earn in some suitable employment or business after the injury or, alternatively, of the weekly amount that would have been payable to him if he had been totally incapacitated. Those were necessary findings before an award of weekly compensation could be made. 34 The conclusions of the Magistrate on these matters, on the state of the evidence and on her assessment of the respondent as a witness of credit, were well open to her. We cannot agree with his Honour that the evidence in the form of the Clerks (ACT) Award - National Wage Case June 1998 Adjustment provided a basis for a finding as to the respondent's earnings whilst in the employ of the appellant, a necessary but not sufficient finding before any award could be made pursuant to Sch 1. As in Barbaro v Leighton there was no application for an adjournment on behalf of the respondent to supplement the inadequate evidence called. The case was fully fought. 35 In our view, the Supreme Court was wrong in deciding that the Magistrate erred in failing to find that the worker had sustained a compensable injury for which weekly compensation should be awarded. It is unfortunate that in the last sentence of her reasons and in the formal order signed on 29 May 2001, her finding is stated in terms that the respondent "has not suffered any incapacity at all". Clearly, what was meant was that the respondent had not discharged the onus of proving "economic incapacity" resulting from the depression that the stress of working for the appellant had produced. But on proper analysis there was no error on the part of the Magistrate in not being satisfied that the appellant had made out a case for an award of payments of weekly compensation. 36 The appeal should be allowed, the orders of the Supreme Court set aside and the Magistrate's award in favour of the appellant be restored. The respondent should be liable for the appellant's costs of the appeal to this Court. I certify that paragraphs numbered 1 to 36 are a true copy of the Reasons for Judgment herein of the Honourable Justices Spender and Miles. Associate: Dated: 21 August 2002

AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY A 67 OF 2001

BETWEEN: ARGUS REAL ESTATE HOLDINGS PTY LIMITED t/as RAY WHITE (BELCONNEN)

DOWSETT J: 37 I have read the reasons prepared by Spender and Miles JJ where the facts of the case are sufficiently outlined. Pursuant to subs 7(1) of the Workers Compensation Act 1951 (ACT) (the "Act"): "Where a worker suffers personal injury arising out of or in the course of the worker's employment, the employer is liable to pay compensation in accordance with Schedule 1." 38 The magistrate (Ms Doogan) found that the respondent (the applicant at first instance) had suffered psychiatric illness arising out of, or in the course of his employment with the appellant (the respondent at first instance). See [41] - [42] of her reasons. The cause of this illness appears to have been friction between the respondent and another employee. It seems that the respondent was particularly sensitive to such friction. I will describe his illness as "depression". It is not disputed that this amounted to an injury suffered in the course of his employment, but its consequences are in dispute. Pursuant to subs 26B(1): "Where a worker makes a claim for weekly compensation payments the employer shall, within the prescribed period, in accordance with the direction of the employer's insurer (if any) - (a) commence making weekly compensation payments in accordance with Schedule 1; or (b) reject the claim by written notice to the worker." 39 Other provisions in Part VIA deal with termination of such payments. I need not deal with those provisions for present purposes. Where there is any dispute as to the obligation to pay compensation, it is to be settled by arbitration pursuant to Part VI. That was the process undertaken by the magistrate in the present case. 40 The amount of compensation payable is primarily prescribed by clause 1 of Schedule 1. Subclause 1(a) prescribes the amount of compensation for death; subcl 1(b) prescribes the amount in the case of total incapacity; and subcl 1(c) prescribes the amount for partial incapacity. Although the respondent appears to have sought to establish total incapacity, the magistrate rejected that claim but considered the possibility of partial incapacity. Subclause 1(c) provides that the amount payable pursuant to s 7 is: "where the worker is partially incapacitated for work by the injury - a weekly payment during his or her incapacity - (i) of the amount ( if any) by which the weekly amount that he or she is earning, or is able to earn in some suitable employment or business, after the injury is less than his or her weekly pay at the date of the injury, or of the amount of [$295], whichever is the less … ." 41 The incapacity referred to in both subcl 1(b) (total incapacity) and subcl 1(c) (partial incapacity) is incapacity for work caused by injury suffered in the course of the worker's employment. Compensation will only be payable if such an injury has caused an incapacity of that kind. Clause 4 of Schedule 1 provides: "For the purposes of this Schedule - (a) 'pay' means the salary or wages of the worker, and includes - (i) where at the date of the injury the worker was engaged in part-time work - his or her earnings from any other employment; and (ii) unless otherwise prescribed - any allowance payable to the worker in respect of his or her employment … ." 42 To calculate the amount payable pursuant to s 7, it is necessary, firstly, to identify any period during which the worker was incapacitated by his or her work-related injury. It is then necessary to identify his or her wage level at the time of injury including, in the case of a part-time worker, income from other work. Finally, it is necessary to identify his or her weekly earnings in each week during the period of incapacity. 43 Prior to the respondent's injury he was working for the appellant and also conducting his own maintenance and insulation installation business. He was still involved in that business at the time of the hearing at first instance and was unable to say that he had been impeded by the consequences of his injury in performing such activities. It was largely for this reason that the magistrate held that the respondent had failed to establish total incapacity. I can see no sensible basis for any other conclusion. Thus the relevant question was whether or not the evidence demonstrated partial incapacity for work for any period of time from the date of termination of his employment with the appellant (26 February 1999) until the date of the hearing. 44 Dr Middlemiss saw the respondent on 26 February 1999 and reported: "My diagnosis was depression, reactive to his work situation. There is, in my view, a direct relationship between his condition and the employment situation on the date above. I understand he is no longer physically in that situation but the mental stresses from conflict in negotiations are continuing - the risk of ongoing disorder is strong." 45 Ms Goyen, a psychologist, saw him on two occasions in August 1999 and observed that: "The high level of depression has not lowered since leaving his employment. He attributes this to ongoing stressors directly and indirectly related to the work issues (eg insurance claim, inability to return to work etc) he has faced. In addition to the Depression Mr Lyristakis is clearly demonstrating significant Stress and Anxiety responses that have occurred subsequent to the difficulties he experienced at work." 46 However Ms Goyen also observed:

"I am of the opinion that Mr Lyristakis is fit to return to work in at least a part-time capacity, however, do not believe that he has recovered sufficiently to return to pre-injury employment as a Property Manage/Inspector for Ray White Real Estate. While the original sources of stress remain present at his former employer Mr Lyristakis is likely to experience marked aggravations of his condition. If rehabilitation or mediation had been implemented soon after Mr Lyristakis went off work there may have been an opportunity for resolution of the issues that resulted in stress. As these options were not employed at this time it is unlikely that they would be of benefit this long after the climax of Mr Lyristakis' stress. Mr Lyristakis advised that he would 'find it hard to be a Property Manager for a Real Estate Agent again' as he harbours ongoing fears about being 'caught in the same sort of situation' and 'be burned again'. He told me that he 'could do anything except similar types of work at Real Estate Agents' including manual work, driving and even a return to a different Government Department." 47 As to prognosis Ms Goyen opined: "It is difficult to predict when Mr Lyristakis will recover, if at all, as the course of major depression is often unpredictable. As Mr Lyristakis' condition does appear to have been the result of exposure to specific stressors it would be expected that recovery would occur faster when all issues related to his work stressors are removed (including currently stressful insurance issues directly related to the claim that continued to trigger emotional reactivity and anxiety). It is also my opinion that Mr Lyristakis will experience a marked decline in symptoms through the combination of psychological intervention and gaining employment in a new, meaningful job." 48 Dr Scott, an occupational physician saw the respondent on 3 April 2000 and formed the view that he had "… a personality problem such that he is likely to be stressed in most situations especially if he has to be responsible to, or answer to others." He doubted whether he would be able to work in other industries, earning a wage equivalent to that earned previously. Dr Scott appears to have assumed that the respondent was suffering from depression as a result of his prior employment without, himself, making any such diagnosis. Dr Knox, a consultant psychiatrist, saw the respondent at some time prior to a report dated 3 November 2000 and some time after Dr Scott's report of 31 May 2000. He reported that: "Mr Lyristakis is not fit to return to work with Ray White Real Estate, and I do not believe that he is, or will become fit to return to similar duties, or indeed other duties which bring him into contact with managers who are likely to be demanding, or for that matter frankly hostile. Mr Lyristakis' sensitivity to unpleasant work environments was brought to the fore in his public service positions in some instances, and he has been again traumatised by the alleged behaviour of the two individuals mentioned above at Ray White Real Estate. Mr Lyristakis is best suited to working by himself where he is able to direct his own activities, work at his own pace, and not need to deal with forceful managers." 49 Dr Scott also appears to have accepted (rather than found) that the respondent was suffering from depression as a result of the effects of his employment experiences. Finally, Dr George saw him on 9 April 1999. He reported: "Whilst he does give symptoms suggestive of a depressive mood state and even a major depression I am not impressed with the way he describes his symptoms. Despite the fact that he said he felt quite suicidal with respect to his work situation he had not communicated the depth of his depression to his wife. He said he did not do this because he 'did not want to worry her'. This seems quite incongruous when he described to me that he was so deeply depressed. However I believe that the benefit of the doubt should be given him only under one circumstance. I believe that a factual report should be gained in this situation. If objective reporting indicates that he was indeed harassed in the work place then I believe that a diagnosis of Adjustment Disorder with anxious and depressed mood is justifiable. However, I believe that he is fully recovered from this disorder at the present time if it did exist. If the factual report does not support his claims then I believe that his leaving work was more an emotional reaction." 50 Subsequently, such a report was submitted to Dr George who concluded that he was "unable to accept that Mr Lyristakis' leaving work was substantially work-related." The content of the factual report is not revealed in Dr George's report, but the magistrate said (at [28]) that he was supplied with the respondent's version of events. 51 It is necessary to distinguish between the injury suffered by the respondent in the course of his employment and any incapacity caused by it. A further distinction must be drawn between any particular sensitivity which may be a feature of the respondent's personality and the effects upon that sensitivity of his experiences in the workplace. Normally, one would expect those effects to abate once he was removed from the environment in question although, of course, he would remain sensitive to similar pressures should they be experienced in other employment. His peculiar sensitivity is not in any sense attributable to his employment with the appellant. I doubt whether the medical practitioners have consistently made these distinctions. Nonetheless, at least some of the medical evidence supports the proposition that the respondent continued to suffer symptoms attributable to his employment well after he left such employment, which symptoms may have affected his capacity to work. Dr George's opinion was to the contrary. 52 As I have said, the magistrate rejected any suggestion of total incapacity and found that the respondent had not been incapacitated in conducting his business. However that did not dispose of the question of partial incapacity. He claimed that he was not able to pursue employment such as that undertaken with the appellant prior to his injury. Of course, such an incapacity would not necessarily have caused any loss of income so as to entitle him to compensation. He might, for example, have worked longer in his business, with increased income from that source. The magistrate considered these matters at [47] - [54] of her reasons. It is necessary to examine this reasoning in some detail. 53 In [48] the magistrate referred to the alleged absence of evidence concerning the respondent's earnings as an employee of the appellant and to the evidence concerning the basis of that employment. Having addressed these matters she concluded: "Consequently, regarding the question of the applicant's incapacity, I can only compare his self-employment earnings prior to and during his employment by the respondent with his self-employment earnings since 26 February 1999." 54 This appears to mean that because of the absence of evidence concerning the respondent's "actual earnings as an employee of the appellant" it was not possible for the magistrate to determine whether or not he had suffered any loss other than in connection with his business. At [49] the magistrate discussed the evidence concerning the financial position of that business. In so doing, she seems to have differentiated between neither the respondent's position and that of the company which was conducting the business, nor the profitability of the business as revealed by the accounts and any return to the respondent. The paragraph concludes with the following passage: "Mr Stretton suggested to the applicant that there was not a day since February 1999 when the applicant had not performed work such as that shown on the video recording of 28 April 2000. The applicant replied that insulation work was easy and not too heavy and he did not have a boss." 55 The magistrate may have misunderstood this aspect of the evidence. At TS 98 Mr Stretton (counsel for the appellant) asked: "There has not been a day, I suggest to you Sir, since February 1999 when you would not have been able to undertake the sort of work that we saw you performing on the video on 28 April 2000?" 56 Although the respondent's answer was somewhat disjointed, he seems to have claimed that insulation work was quite simple. However his rather lengthy answer concluded with the words: "… its hard for me to agree to say that I could do that type of work from February 1998 to now." The question had of course focussed on February 1999. He was then asked: "Well you can't point to a single day when you weren't able to, can you?" Again, he declined to comment. 57 I have been unable to find any evidence that the respondent had actually performed work in his business on every day since he ceased employment with the appellant, but it was a reasonable inference from his evidence that he was at no time prevented from performing work in that business. Indeed, the evidence seems to have suggested that he was more actively engaged in that business after ceasing employment than he had previously been. Thus he could not have suffered any loss of income from that business as a result of any such incapacity. This seems to have been the magistrate's meaning when at [53] she observed: "In short, the applicant was self-employed in his maintenance and insulation business immediately prior to his employment with the respondent and, on all accounts, continued to work in those businesses during and after his employment with the respondent ceased. It may well be that the applicant says that the businesses are not profitable but that does not establish the applicant's incapacity." 58 At [50] and [51], the magistrate considered certain statements in the authorities concerning compensation for injury. I doubt whether those decisions have much relevance for present purposes, given the express wording of subcl 1(c) of Schedule 1. At [52], the magistrate pointed out that the respondent had performed a variety of jobs over the years and that since February 1999, he had applied for jobs in marketing, as a clerical worker, as a truck driver, as an oyster worker and as a forklift driver. The magistrate then concluded: "On the evidence before me, any difficulties he may have in finding employment additional to the conduct of his insulation and maintenance business cannot in any meaningful way be attributed to the injury which he suffered in his employment with the respondent. Any such difficulty results from the general condition of the employment market which, in his case, may be exacerbated now by the fact that he chose to move to the South Coast, where there are fewer employment opportunities than in Canberra." 59 The respondent submitted that there was no evidence to support the conclusion that there were fewer job opportunities on the South Coast than there were in Canberra. However that inference may have been reasonably open on the respondent's evidence at TS 44-45. 60 I have already set out the content of [53]. The magistrate concluded at [54]: "In my view, the applicant has failed to establish that by reason of his injury he is unable to sell his labour in any market reasonably available to him … . On the contrary, he has worked almost continuously since 26 February 1999, including for a period after he relocated to the South Coast. As well, the applicant has failed to establish that by reason of his injury the amount he has been capable of earning from the sale of his labour following the sustaining of the injury has been reduced below what he was earning immediately prior to sustaining the injury. On the evidence before me I cannot be satisfied that the applicant suffered any incapacity at all." 61 As I have said, the evidence justified the magistrate's conclusion that the respondent suffered no loss of capacity to work in his own business. However, immediately prior to termination, he was also earning wages as an employee of the appellant, in which capacity he has not subsequently earned income. The respondent asserted that since the injury he had not been able to undertake such, or similar employment and that this was attributable to his injury. As I have shown, the medical evidence offered some support for that assertion. The magistrate appears to have dealt with this matter in two ways. Firstly, at [48], she concluded that even if there were such incapacity (other than in connection with his business), it was impossible to calculate the amount of loss flowing from it because of the state of the evidence concerning the respondent's employment with the appellant immediately prior to termination. Secondly, at [52], the magistrate concluded that: "… any difficulties he may have in finding employment additional to the conduct of his insulation and maintenance business cannot in any meaningful way be attributed to the injury which he suffered in his employment with (the appellant)." 62 Neither conclusion is entirely satisfactory. As to [48], Ms Maughan said that the respondent had been employed upon the basis of the ACT Clerks' Award. The award was in evidence. It prescribed a weekly rate for full-time employees, an hourly rate for part-time employees and a separate hourly rate for casual employees. There was conflicting evidence as to the respondent's employment status. Ms Maughan said that he was initially employed for three days per week, later for five days and, at the time of his termination, for three days per week. The respondent's evidence was particularly confusing. He agreed that he was initially employed for three days per week (TS 9-10). He must have agreed that he was subsequently employed to work for five days per week because at TS 15-16, he said that his working week was later reduced by agreement to three days, on the basis that he would be paid at the same rate as when he was working a five-day week. The matter was also addressed at TS 43 and TS 88. At the latter reference the respondent claimed that notwithstanding the agreement, he continued to work a five-day week until his termination. Had the magistrate been satisfied that the respondent had been working five days per week at that time, the full-time award rate would presumably have applied. In the absence of such satisfaction, it may have been more difficult. There appears to have been no evidence as to the respondent's hours per week, which figure would have been necessary in order to calculate part-time or casual wages. This evidentiary problem may have been difficult to resolve, but it would only have arisen if the magistrate had concluded that the respondent was not employed on a full-time basis immediately prior to termination. These matters were not addressed. 63 I turn to [52] and to the conclusion that any difficulty experienced by the respondent in finding employment other than in his business was not attributable to incapacity. It must be kept in mind that the magistrate was concerned with the whole of the period from the date of termination until the hearing. If the respondent had lost income because of work-caused incapacity for any part of that period, then he was entitled to compensation for that part. Had the magistrate accepted Dr George's evidence to the exclusion of that of the other medical witnesses, she may well have concluded that the respondent had not been incapacitated at any time. It seems that the magistrate accepted the medical evidence that he had suffered an injury in the course of his employment. This appears particularly at [39] of the judgment. However she seems not to have addressed the differences of opinion as to whether there was any incapacity from that injury and as to the period for which it may have endured. Of course, the medical evidence depended inevitably upon the information provided by the respondent to the various practitioners. Had the magistrate concluded that because of her views of his evidence, she should give no weight to one or more of the medical opinions, it would have been appropriate for her to have taken that course. However there is no suggestion that she did so. It was necessary that the magistrate address the medical evidence which suggested an ongoing depressive condition, either rejecting that evidence or, if accepting it, determining whether or not it had caused any incapacity for work. The absence of any express findings concerning these matters leads me to conclude that the magistrate did not address them. 64 It follows that the magistrate has misunderstood the respondent's case or failed to deal with it on the available evidence. Although my reasons are somewhat different from those of Crispin J, I conclude that his Honour was correct to refer the matter back to the magistrate. However the third order made by Crispin J assumes that the respondent suffered a partial incapacity. That question should be left to the magistrate. The whole of the proceedings should be remitted back to her for determination in accordance with law. To that extent I would allow the appeal from the decision of Crispin J and vary order 3 to read: "The matter be remitted to the Magistrates Court for determination according to law." 65 I would otherwise dismiss the appeal. 66 As to costs, the appellant has been only partially successful. However, in order to correct the error in the order made by Crispin J, it would have been necessary to canvass many of the matters canvassed in connection with the broader issues raised by the notice of appeal. The order which I propose is clearly more favourable to the appellant than was that made by Crispin J. In those circumstances I would order the respondent to pay the appellant's costs of the appeal to this Court. As to costs below, no order was made in the Magistrates Court. Crispin J made no order as to the costs of the appeal before him but gave the parties liberty to re-list the matter for the purpose of resolving questions of costs. This appears to have been at least partly because his Honour had not disposed of all grounds of appeal. It may be better to leave questions of costs arising out of the proceedings before Crispin J for determination by his Honour in the way contemplated in that order, taking into account the outcome of the appeal to this Court. I certify that paragraphs numbered thirty-seven (37) to sixty-six (66) are a true copy of the Reasons for Judgment herein of the Honourable Justice Dowsett.

Associate: Dated: 21 August 2002 Counsel for the appellant: Mr G Stretton Solicitor for the appellant: Minter Ellison Counsel for the respondent: Mr R Mildren Solicitor for the respondent: Vandenberg Reid Date of hearing: 17 May 2002 Date of judgment: 21 August 2002

at 17 May 2002) Magistrates Court (Civil Jurisdiction) Act 1982(ACT)

Magistrates Court (Civil Jurisdiction) Act 1982(ACT)

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Judgment (14 paragraphs)

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Cases Cited (8)