Supreme Court of NSW|1998-07-13|Before: Mason P, Beazley JA, Stein JA

Workcover Authority of New South Wales v Walling and Anor Matter No Ca 40365/97 [1998] NSWSC 315 (13 July 1998)

WORKCOVER AUTHORITY OF NEW SOUTH WALES v STEPHEN WALLING & ANOR

The Supreme Court of New South Wales Court of Appeal

NATURE OF JURISDICTION: COMPENSATION COURT - TRUSS J

PARTIES: WORKCOVER AUTHORITY OF NSW V STEPHEN WALLING & ANOR

Workers' compensation - injury arising out of or in the course of employment - injury during interval at place of employment - whether necessary that activity be induced or encouraged by the employer

Workers' compensation - injury arising out of or in the course of employment - injury during interval at place of employment - worker thrown from trail bike during interlude in overall period of work - whether necessary that activity be induced or encouraged by the employer - Workers Compensation Act

Mr Walling ("the worker") was employed as a driller's offsider. His employer, the second respondent, operated four drilling rigs used in the coal mining industry. The rigs were kept on a farm property at Ravensworth. On the property was also a cottage leased to the employer in which the worker and other employees were accommodated. The remainder of the property was leased to a local farmer for grazing.

On the morning of the accident, the worker performed maintenance work on the rig at the Ravensworth property. At about 12 noon a female friend arrived on a pre-arranged visit. Upon her arrival, the worker ceased working and offered to take her for a ride on his trail bike on a portion of the property which was leased to the farmer, yet immediately adjacent to the cottage. When the bike stalled, the worker took it for a ride to warm it up. He drove the bike up a fairly steep embankment, hit a large mound of dirt and was thrown from the bike. The worker sustained a crush fracture to the L1 vertebra causing permanent impairment of the back.

The worker was awarded compensation by Truss CCJ. Her Honour held that the worker suffered injury in the course of his employment in accordance with the principles enunciated by the High Court in Hatzimanolis v ANI Corporation Ltd (1992) 173 CLR 463. Her Honour held that as the injury occurred at both the place of temporary residence and place of work it was not necessary that the worker be induced or encouraged by the employer to spend such interval in a particular way.

(1) Without endorsing the test indicated in the court below, it was no impediment to an award of compensation that the activity of trail bike riding was neither induced nor encouraged by the employer. The injury occurred during an interval or interlude in the worker's employment at his place of employment, which was probably sufficient to find that the injury occurred in the course of employment.

Hatzimanolis v ANI Corporation Ltd (1992) 173 CLR 463, applied. Inverell Shire Council v Lewis (1992) 8 NSWCCR 562, considered.

MASON P and BEAZLEY JA: This appeal, limited to errors of law, challenges an award of compensation made by Truss CCJ. Stated in bald legal terms, the issue is whether the permanent impairment suffered by the first respondent ("the worker") was the result of an injury sustained in the course of employment within the principles enunciated in Hatzimanolis v ANI Corporation Ltd (1992) 173 CLR 463.

The worker sustained a crush fracture to the L1 vertebra when thrown from a trail bike at Ravensworth in the Hunter Valley in 1992. He was totally incapacitated for a closed period in that year and partially incapacitated for a closed period between 1992 and 1995. He suffered permanent impairment of the back.

The second respondent ("the employer") is a Queensland company. As a result of erroneous advice, it did not take out a workers' compensation policy in New South Wales. Accordingly the appellant was joined in the proceedings below (cf Workers' Compensation Act 1987, s 139). The award in favour of the worker required the appellant to cause payment of compensation and costs out of the fund constituted in pursuance of s18 of the WorkCover Administration Act 1989; and ordered the employer to reimburse the appellant in respect thereof. In the appeal the employer adopted the submissions of the appellant.

The worker was aged 25 at the time of the accident. He had commenced employment as a driller's offsider a little over three months earlier. At the time he commenced employment he was living in Queensland.

The employer operated four drilling rigs used in the coal mining industry. It employed about 12 workers in the Hunter Valley, including the worker. The rigs, which were on the back of trucks, were kept on a farm property at Ravensworth, a small village roughly equidistant between Singleton and Muswellbrook.

On the property was a cottage in which the worker and other employees were accommodated by the employer, free of charge. Employees had the option of staying elsewhere, but at their own expense. Several did so. The cottage on the Ravensworth property was leased to the employer pursuant to an informal arrangement made with the Electricity Commission, the owner of the land. The property was of about 60-70 acres. The bulk of the land was leased by a local farmer for grazing. However, the employer had the right to use portions of it. The learned judge found that the injury was incurred on a part of that property leased to the farmer. Since however it was immediately adjacent to the cottage and in the general area of a well from which the employer was entitled to draw water as well as being but a short distance from a drill rig upon which the worker had been working, it was found that:

"By virtue of the proximity of the embankment [where the injury was incurred] to both the applicant's place of temporary residence and place of work on the day of injury he could not be considered to be temporarily absent from either at that time."

As indicated already, the employer kept its drilling rigs at the Ravensworth property. Teams travelled out from that property to different coal mines in the Hunter Valley each day. The worker worked six or seven days per week, having little time off. He was paid $100 per day for work which was of a significantly physical nature. Meal breaks occurred when time permitted and this depended upon the operation of the drill.

On the morning of the accident, 6 January 1992, the worker performed maintenance work on the rig at the Ravensworth property. At about 12 noon a female friend who worked on a nearby horse stud arrived on a pre-arranged visit. At that time the worker was working on a truck at the property. He had commenced work that day at about 6.30am. Upon the arrival of his girlfriend Joy Saunders, the worker ceased working and offered to take her for a ride on his 600cc trail bike that he had brought back with him on return from Queensland during the Christmas break. Miss Saunders mounted the bike, but it stalled. She then got off and the worker took it for a ride to warm it up. Rather than driving it up and down on a level gravel area, he chose to show off by driving the bike down and then back up a fairly steep embankment which was about 20 feet high. As he went up the embankment at an estimated speed of 60kph he entered a rocky area obscured by long grass. He failed to see a big mound of dirt which he struck. The impact caused both bike and rider to leave the ground. The rider flew through the air for approximately 30 metres. The fall caused the injury.

It was common ground that the worker was working away from his residence and living in accommodation provided free of charge by the employer as an incident of his employment.

The trial judge found that the worker suffered injury in the course of his employment and that (despite being reckless and foolish) he had not been guilty of misconduct, let alone gross misconduct. She accepted the worker's submission that his case fell squarely within the principles enunciated in Hatzimanolis. In doing so she made no finding that the riding of the trail bike was an activity induced or encouraged by the employer. Rather the award was based on the proposition that:

"Where a worker who is working at a particular locality away from his normal residence is injured during an interval or interlude at his place of employment, temporary residence or travelling between the two, the majority decision in Hatzimanolis does not require that the activity in which he is engaged at that time be incidental to his employment or temporary residence or that the worker be induced or encouraged by the employer to spend such interval or interlude in a particular way. In my view this latter requirement only applies to a situation where the interval or interlude is spent away from the place of employment or temporary residence."

It is this finding which is challenged as embodying an error of law.

In Hatzimanolis, the worker sustained his injury in the course of a trip to Wittenoom Gorge about 400 kilometres away. The Court found that the employer had not only arranged the outing but encouraged the applicant to attend. This was held sufficient to justify the award. We have already indicated that in the present case the activity of trail bike riding was not encouraged by the employer in the way that the trip to Wittenoom Gorge had been encouraged in Hatzimanolis.

In Inverell Shire Council v Lewis (1992) 8 NSWCCR 562 at 567, Handley JA observed that the interpretation by the High Court in Hatzimanolis "has expanded the meaning of the simple words (`in the course of his employment') far beyond what might be thought to be their ordinary and natural meaning". Be that as it may, this Court should follow a clear statement of principle enunciated by the majority of the High Court in a recent decision. Accordingly, in a case such as this, the principle upon which an employee's entitlements to compensation depends is governed, as the majority said, in Hatzimanolis at 483 by:

"... the characterisation of the period or periods of work of [the employee]... [F]or the purposes of workers' compensation law, an injury is more readily seen as occurring in the course of employment when it has been sustained in an interval or interlude occurring within an overall period or episode of work than when it has been sustained in the interval between two discrete periods of work. Where an employee performs his or her work at a permanent location or in a permanent locality, there is usually little difficulty in identifying the period between the daily starting and finishing points as a discrete working period. A tea break or lunch break within such a period occurs as an interlude within an overall work period. Something done during such a break is more readily seen as done in the course of employment than something that is done after a daily period of work has been completed and the employee returns to his or her home. (emphasis added).

The issues that were tendered by the appellants (the respondents below) were that the worker was not entitled to compensation for two reasons:-

1. At the time of injury he was engaged in an activity which was neither induced nor encouraged by the respondent; and

RELEVANCE OF ACTIVITY NOT BEING INDUCED OR ENCOURAGED BY EMPLOYER

The appellant challenged the reasoning in the passage we have quoted from the judgment of Truss CCJ. It was submitted that her Honour regarded the fact that the injury occurred at the place of employment or temporary residence as conclusive. Our attention was drawn to the following passage in the joint judgment of Mason CJ, Deane, Dawson and McHugh JJ in Hatzimanolis (at 485):

"Counsel for ANI conceded that `when a person such as the appellant has been taken to a remote part of Australia and has there performed work and is housed and fed there for the duration of the employment the course of employment will go beyond the hours at which the appellant is engaged in his actual work'. Consequently, he conceded that `the appellant would have been in the course of his employment while working at the mine, travelling to and from the mine, eating and sleeping and even enjoying recreational activity at the camp'. But he contended that it did not follow that the appellant was in the course of his employment `during the whole of the time' that he spent in the Mt Newman area. This contention is correct because the appellant would not necessarily be in the course of his employment while engaged in an activity during an interval or interlude in his overall period or episode of work if ANI had not expressly or impliedly induced or encouraged him to engage in that activity during that interval. In Goward v The Commonwealth (1957) 97 CLR 335, this Court upheld a finding that a railway worker, living in a camp as an incident of his employment, was not killed in the course of his employment when the evidence disclosed no more than that he had been struck by a train on a nearby railway line some hours after the cessation of actual work. While Goward was decided five years before Oliver and twelve years before Danvers, it is difficult to accept that it would be decided differently today, having regard to the primary findings of fact which were made in that case."

We have sympathy for the argument that there are difficulties in reconciling this passage with an earlier more categorical passage in the joint judgment at 483-4, especially the statement (at 484) that:

"... Oliver and the cases which follow it show that an interval or interlude in an overall period or episode of work will ordinarily be seen as being part of the course of employment if the employer, expressly or impliedly, has induced or encouraged the employee to spend the interval or interlude at a particular place or in a particular way. Indeed, the modern cases show that, absent gross misconduct on the part of the employee, an injury occurring during such an interval or interlude will invariably result in a finding that the injury occurred in the course of employment. Accordingly, it should now be accepted that an interval or interlude within an overall period or episode of work occurs within the course of employment if, expressly or impliedly, the employer has induced or encouraged the employee to spend that interval or interlude at a particular place or in a particular way. Furthermore, an injury sustained in such an interval will be within the course of employment if it occurred at that place or while the employee was engaged in that activity unless the employee was guilty of gross misconduct taking him or her outside the course of employment."

The difficulty lies with treating it as determinative that the injury was at a particular place, when (as the approval of Goward infers) it may make the world of difference that the injury occurs a short distance away from the remote camp or work location. Workers compensation law is used to drawing fine lines, but we have difficulty in seeing the principle which determines how defining the place of work and residence is always determinative in this area. Our difficulty stems from the passage at 485 that we have set out. See also Inverell Shire Council at 570-1 per Sheller JA. It is to be remembered that the place where the worker in the present case suffered his injury was slightly outside the apparent curtilage of the Ravensworth cottage/work place.

The remarks of Truss CCJ which are challenged should be read first, in the context of her findings that:

(a) the worker was living and working away from his Queensland residence;

(b) the injury occurred at both the place of temporary residence and place of work on the day of injury;

and secondly, and we would emphasise, the undisputed fact that the worker sustained his injury during an interval or interlude within an overall period of work (commencing on the day of injury or possibly a day or so earlier when the worker actually arrived at Ravensworth ready to start work).

In our view Truss CCJ was entitled to conclude that it was no impediment to an award that the activity of trail bike riding was neither induced nor encouraged by the employer. The injury occurred during an interval or interlude in his employment at a place which was contiguous to his place of employment such that there was no real issue but that he was at his place of employment. In our opinion, in this case, that is probably sufficient to find that the injury occurred in the course of employment. In any event, such a finding is supported by the other factors in this case, namely, the dual function of the respondent's property, its comparatively isolated location, the nature of the worker's employment there, his extended working hours and the fact that the injury occurred during what seems to have been a flexible lunch break.

For these reasons we would dismiss the appeal without endorsing the universal correctness of the proposition stated in the passage already quoted from the judgment of Truss CCJ. The appeal should be dismissed because that passage is to be read in the context of the facts of the particular case. In saying this we are not suggesting that the passage is at variance with what the majority of the High Court in Hatzimanolis said (at 483-4).

This concept comes into play because of the concluding words in the passage from the joint judgment in Hatzimanolis at 484 that has been set out above. It is not a statutory concept.

The dispute on this point involves an issue of fact. Even were we disposed to disagree with Truss CCJ, which we are not, no appeal would lie on this question.

Compensation Act 1987

WorkCover Administration Act 1989

Workcover Authority of New South Wales v Walling and Anor Matter No Ca 40365/97 [1998] NSWSC 315

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Workcover Authority of New South Wales v Walling and Anor Matter No Ca 40365/97 [1998] NSWSC 315 (13 July 1998)

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