RTA Presentation - Immunity under s.45 of the Civil Liability Act 2002

Wednesday, March 21, 2007

Printer Friendly Version

Section 45 of theCivil Liability Act 2002deals with the liability of "public and other authorities" in tort. S.45 is in the following terms:

45 Special Non-Feasance Protection for Road Authorities:

  (1)  A roads authority is not liable in proceedings for civil liability to which this Part applies for harm arising from a failure of the Authority to carry out road work, or to consider carrying out roadwork, unless at the time of the alleged failure the Authority had actual knowledge of the particular risk the materialisation of which resulted in the harm.

  (3)  In this section:

Carry out road work means carry out any activity in connection with the constructions, erection, installation, maintenance, inspection, repair, removal or replacement of a road work within the meaning of the Roads Act 1993.

Roads Authority has the same meaning as the Roads Act 1993.

There are a number of different kinds of persons and bodies that may be described as a Roads Authority. The RTA is a statutory authority constituted under the Transport Administration Act 1988 (NSW).

North Sydney Council v Roman (2007) NSWCA 27:

This was a decision of the Court of Appeal on 27 February 2007 following a District Court decision of Ainslie-Wallace DCJ.

The plaintiff, Maria Roman, was injured at night when she fell in a pot hole half a metre wide and four to five inches deep in Princes Street, McMahon's Point on 16 October 2001. The plaintiff sued North Sydney Council and was awarded damages of $475,485. The Council defended the proceedings alleging that it did not have actual knowledge of the pot hole and was therefore entitled to the statutory immunity given by s.45 of the Civil Liability Act 2002 ("CLA").

The evidence given in the District Court was that street sweepers often swept the gutters in Princes Street in the general area of where the pot hole was located. Council street sweepers were required to identify any hazards needing attention and report them to their superiors. The plaintiff argued that the trial judge was entitled to infer that the street sweepers had actual knowledge of the pot hole because of their familiarity with the area. It was argued that the knowledge of the street sweepers should be attributed to the Council.

The Council did not call any street sweepers to give evidence. It did however call evidence from their supervisor and from persons in the Council who were responsible for repairing pot holes. All of these witnesses testified that they did not know about the existence of the pot hole. Furthermore they said that had they been aware of the pot hole they would have regarded it as a hazard.

The trial judge inferred that the street sweepers had actual knowledge of the pot hole and that their knowledge should be attributed to the Council for the purposes of s.45. The judge also found that the Council had breached its duty of care by failing to have the pot hole repaired.

The majority of the Court of Appeal accepted that the Council was negligent in failing to have the pot hole repaired and would ordinarily have been liable to the plaintiff under general law principles.

The High Court in Brodie v Singleton Shire Council (2001) 206 CLR abolished the "immunity" of a roads authority for non-feasance, as distinct from active "misfeasance", in performing its statutory powers. The Government introduced s.45 of the Civil Liability Amendment (Personal Responsibility) Act 2002. In the second reading speech in Parliament on 19 November 2002, the Minister said (Hansard, NSW Legislative Council, 19 November 2002, P 6899):

"A Roads Authority" that has not exercised a discretionary power to mend, for example, a pot hole will not be liable unless it actually knew about the particular risk that led to the injury. This will reintroduce a protection for certain "non-feasance" on the part of roads authorities.

The majority of the Court of Appeal held that for the purposes of s.45 there must be a finding of actual knowledge in the mind of the officer within the Council having delegated authority to carry out the necessary repairs. The evidence given during the trial established that there was no Council officer at a decision making level who had "actual knowledge" of the pot hole and therefore the Council did not have such knowledge. Accordingly, the exception to s.45 was not engaged and the statutory immunity prevailed.

Does a Roads Authority owe a road user a non-delegable duty of care?

The High Court of Australia in Leichhardt Municipal Council v Montgomery (2007) HCA 6 handed down a decision on 27 February 2007 dealing with the issue of whether a roads authority owes a road user a non-delegable duty of care.

Leichhardt Municipal Council was a roads authority, within the meaning of the Roads Act 1993 (NSW) for Parramatta Road, Leichhardt. The Council had power to carry out work on the road. The footpaths on both sides of the road are part of the road for the purposes of the Roads Act. The Roads Act vested the road in the Council. Under s.71 the Council had power to carry out work on the road. The Council engaged a contractor, Roan Constructions Pty Ltd ("Roan Constructions") to do work on the footpath.

Work on the footpath was being carried out between 7.30 pm and 5.30 am four nights each week. The specifications required artificial grass or carpet to be placed on top of the disturbed area to provide clean access for pedestrians to commercial properties.

One evening in April 2001 Mr Montgomery walked across some of the carpet that had been laid by Roan Constructions. The trial judge found that the carpet had been carelessly placed over a telecommunications pit which had a broken cover. Mr Montgomery fell into the pit and suffered personal injuries.

There was no real dispute that Roan Constructions was liable to the plaintiff. The plaintiff sued both Roan Constructions and the Council. The plaintiff argued however that the Council owed the plaintiff a non-delegable duty of care, despite the fact that the footpath work was done by a contractor, Roan Constructions. This submission was accepted by the trial judge as well as the Court of Appeal. The Court of Appeal said:

"Where a road authority engages a contractor to do work on a road used by the public, such as to involve risk to the public unless reasonable care is exercised the road authority has a duty to ensure reasonable care is exercised; and the road authority will be liable if the contractor does not take reasonable care. However, the road authority will not be liable for casual or collateral acts of negligence by the contractor".

The High Court examined the nature of a non-delegable duty of care to a plaintiff. A prominent case in the area was Kondis v State Transport Authority (1984) 154 CLR 672 at 687 where the Court described it as "a special responsibility or duty to see that care is taken".

In certain situations the Court is willing to impose a special non-delegable duty of care. This duty will be imposed where a relationship exists between the parties which gives rise to a special responsibility or duty. Examples are the duty of a hospital to care for patients or a school authority that has special responsibilities in relation to children. If such a duty is imposed then a plaintiff is able to sidestep the general principle that a defendant is not vicariously responsible for the negligence of an independent contractor. Justice Kirby believed that the relationship between road authorities and road users should not be classified as one involving a non-delegable duty of care. Although road users can be significantly dependent on road authorities the Judge did not believe that the relationship involved a particular vulnerability and special dependence like the ones that exist between school authorities and pupils and hospitals and their patients.

Furthermore, the relationships where non-delegability has been accepted such as employer/employee, doctor/patient, school/pupils constitute closed, identifiable categories. Users of roads however are usually unknown and unknowable to road authorities. If the Court was to recognise a non-delegable duty of care in respect of road users this would be extremely burdensome and costly to road authorities.

Kirby J observed that the Council engaged Roan Constructions as an independent contractor for the purpose of delegating its responsibility to Roan on the understanding that Roan Constructions would be liable for its own acts and omissions. Roan Constructions was required to take out appropriate insurance to ensure that it was able to meet its liability. The Judge believed it would be unreasonable for the Council to be directly liable to the plaintiff, despite the fact that it was the acts and omissions of Roan Constructions that caused the plaintiff's injuries. The Judge held that the relationship of roads authorities and road users it not one that should attract a non-delegable duty of care.

Obvious Risk:

At Common Law the High Court has clarified that the obviousness of a risk does not mean that there is no duty of care. The question is whether a risk being obvious justifies nothing being done to prevent or warn against that risk; Mulligan, Vairy, Neindorf v Junkovic (2005) HCA 75.

In Mulligan the plaintiff's dive into an estuary from thigh level was seen to be such an obvious risk that it was not necessary to erect a warning sign, the risk being well known and likely. Variable depth in tidal estuaries was a common danger.

In Vairy the plaintiff dived from a rock platform at a beach where the sandy bottom was only at a depth of 1.5 metres. There had been a similar accident fifteen years beforehand and there was no warning sign. This was a narrow decision 4:3 in favour of the Council where the majority considered the obviousness of the risk of diving into water of an unknown depth was such that a sign was not required. The three Judges in the minority considered that the misleading attractiveness of the pursuit, exemplified by many people doing it, did not obviate the necessity to erect a sign, particularly as an accident had occurred fifteen years beforehand.

S.5F of the CLA states:

    5F meaning of "obvious risk"

  1. For the purposes of this Division, an obvious risk to a person who suffers harm is a risk that, in the circumstances, would have been obvious to a reasonable person in the position of that person.
  2. Obvious risks include risks that are patent or a matter of common knowledge.
  3. A risk of something occurring can be an obvious risk even though it has a low probability of occurring.
  4. A risk can be an obvious risk even if the risk (or a condition or circumstance that gives rise to the risk) is not prominent, conspicuous or physically observable.

Ss.5G and 5H provide as follows:

    5G   Injured Persons Presumed to be Aware of Obvious Risks

  1. In determining liability for negligence, a person who suffers harm is presumed to have been aware of the risk of harm if it was an obvious risk, unless the person proves on the balance of probabilities that he or she was not aware of the risk.
  2. For the purposes of this section, a person is aware of a risk if the person is aware of the type or kind of risk, even if the person is not aware of the precise nature, extent or manner of occurrence of the risk.

    5H   No Proactive Duty to Warn of Obvious Risk

  1. A person (the defendant) does not owe a duty of care to another person (the plaintiff) to warn of an obvious risk to the plaintiff.
  2. This section does not apply if:
    • the plaintiff has requested advice or information about the risk from the defendant, or
    • the defendant is required by a written law to warn the plaintiff of the risk, or
    • the defendant is a professional and the risk is a risk of the death of or personal injury to the plaintiff from the provision of a professional service by the defendant.
  3. Subsection (2) does not give rise to a presumption of a duty to warn of a risk in the circumstances referred to in that subsection.

S.5L provides as follows:

    5L   No Liability for Harm Suffered from Obvious Risk of Dangerous Recreational Activities

  1. A person (the defendant) is not liable in negligence for harm suffered by another person (the plaintiff) as a result of the materialisation of an obvious risk of a dangerous recreational activity engaged in by the plaintiff.
  2. This section applies whether or not the plaintiff was aware of the risk.

Great Lakes Shire Council v Dederer & Anor, Roads & Traffic Authority of NSW v Dederer (2006) NSWCA 101:

NSW Court of Appeal decision 5 October 2006

On 31 December 1998 plaintiff, who was 14 years of age, dived off the Foster/Tuncurry bridge into a tidal estuary. The water was nine metres below the point where the plaintiff dived. He dived into approximately two metres of water and struck his head on a sand bar. His injuries caused paraplegia.

If ever there was a case where a risk was obvious this would be the one. There were pictograph signs at the approaches to the bridge prohibiting diving and climbing on the bridge. The plaintiff had read and understood the signs, but ignored them. The bridge was used extremely often by adults and children as a jumping and diving platform. The RTA designed and constructed the bridge in 1959. The Council had control over the bridge given that it formed part of a public road. By 1990 the RTA was aware of people frequently jumping off the bridge. In that year it conferred with Police in an attempt to prevent this. The response of both defendants was to replace the existing pictorial signs with no diving pictographs in 1995. These had virtually no effect. The bridge had a horizontal railing from which the people could dive or jump. One issue for the trial judge and majority in the Court of Appeal was whether the installation of pool-type fencing may have deterred the practice.

The plaintiff sued the RTA before the commencement of the CLA. After the commencement of the CLA the plaintiff joined the Council to the proceedings. Thus the CLA applied with respect to the Council but not to the RTA. Nevertheless the Supreme Court trial judge Dunford J found against both. The RTA was 80% responsible and the Council 20%, with contributory negligence at 25%. Dunford J did not accept the activity as an obvious risk within s.5F. The plaintiff had seen many people jumping and diving off the bridge. He had observed vessels passing through the channel. These factors indicated to him that the water was deep. Having regard to his lack of maturity and young age the danger was not obvious.

All three judges in the Court of Appeal disagreed. With respect to the liability of the Council the risk of serious spinal injury flowing from the act of diving off the bridge should have been obvious to a reasonable fourteen and a half year old child, with knowledge of the area and conditions. The risk that materialised was an obvious risk of a dangerous recreational activity in which he was engaged and thus s.5L, as discussed below, also applied.

However the result was different against the RTA. In applying the common law, as discussed above, the RTA could not say that it had no duty of care because of the obviousness of the risk. The obvious risk was not a deterrent to the activity. The railing was easy to jump off. The high frequency of the activity, combined with the railings configured in such a way that it made it easy to jump or dive off, created an allurement to a young person such as the plaintiff. The fact that there were no prior injuries did not assist the RTA. That made it less likely that people would refrain from the activity. Thus it was not reasonable to do nothing. The majority in the Court of Appeal (Ipp and Tobias JA) considered that the handrail should have been modified or replaced by vertical railings such as pool-type fencing. In applying the Shirt test the majority ruled that the RTA has failed in its duty as the builder of the bridge to not modify the handrail and to not replace the existing sign with a sign warning of the shifting sands and variable depth. In dissent Justice Handley did not accept that the RTA had a responsibility to guard against an accident in 1998, having built the bridge in 1959. He considered at common law that the risk was so obvious that there was no breach of duty in not taking the further preventative measures considered by the majority.

The result of this case indicates that in certain cases there may be a difference when the same facts are considered with a view to common law liability and liability under the CLA. The common law has confirmed that obvious risk does not mean that there is no duty of care. The issue is whether the preventative action or lack of preventative action is reasonable. In Dederer the type of activity being a dangerous recreational activity meant that when s.5F, 5G and 5H were combined with s.5L, that the Council was not liable. However the RTA was liable at common law.

High Court Application for Special Leave to Appeal:

The RTA filed an application for special leave to appeal to the High Court which was heard on 2 March 2007 before Gleeson CJ and Callinan J.

Senior Counsel appearing for the RTA submitted that fourteen year old boys are strong enough to do terrible things to themselves and bold enough to be willing to take risks. The plaintiff knew of a risk. He also knew that diving off the bridge was a forbidden activity, because of a pictogram which he had no difficulty in interpreting "do not dive".

Counsel submitted that this case involves a question of what is to be done by way of reasonable response by a State Authority that has wide responsibilities over the whole of the State of NSW when a bridge is built in a way that has been normal for bridges for thousands of years that you can jump off it. Counsel submitted that rulings of the kind made by the Court of Appeal would lead to an absurd result where a bridge must be a cage. If it is not, then jumping is always possible.

The High Court granted special leave to appeal.

Evidence and Bias in the Commission:

The Court of Appeal in South Western Sydney Area Health Service v Edmonds (2007) NSWCA 16 handed down a decision on 16 February 2007 dealing with evidence and bias in proceedings before an arbitrator.

The worker suffered a frank injury to her right knee in May 1993 in the course of her employment with the Area Health Service. She claimed lump sum benefits under ss.66 and 67 of the Workers Compensation Act 1987 for her right knee injury and for problems with her lower back and left knee. The insurer accepted liability for the original injury but declined liability for the further problems on the basis of the worker's employment not being a substantial contributing factor.

When the matter came before an arbitrator for a teleconference, the arbitrator suggested that the Application to Resolve a Dispute ("ARD") be amended to allege injury by way of aggravation of a disease under ss.15 and 16 of the 1987 Act. The ARD was subsequently amended to plead disease.

The arbitrator subsequently heard the dispute and made a finding in the worker's favour on the basis of a disease. The arbitrator accepted the opinion of Dr Rivett that "in general all the problems are work-related".

The employer appealed to a Deputy President of the Workers Compensation Commission under s.352 of the Workplace Injury Management and Workers Compensation Act 1998. The employer argued that the arbitrator had prejudged the matter by suggesting the ARD be amended to plead a disease, and had demonstrated actual bias. The employer also argued that there was a lack of evidence to support the arbitrator's findings.

On the no evidence ground the Court acknowledge that in the Commission claims are conducted with a degree of informality and that the strict rules of evidence do not apply. Nevertheless, the Court said the Commission still has to ensure that evidence is logical and probative, is relevant to a fact in issue and that evidence based on pure speculation or unsubstantiated assumption is not accepted. The Court said it is desirable that experts' reports used in the Commission comply with the common law standards of admissibility which are intended to ensure they have probative value. The experts are obliged to explain the basis for their opinions.

The "no evidence" ground emphasises the need to closely examine evidence relied upon in the Commission to ensure that the opinions expressed by experts are relevant to the facts in issue and that the basis for the opinions is properly explained.

The employer failed in its argument of actual bias. The Court said that a party claiming actual bias on the part of an arbitrator or any decision maker carries a heavy onus of proof. A finding of actual bias will not be made lightly. Strong evidence is required.

The Court was of the opinion that before the arbitrator could be found to be guilty of pre-judgment sufficient to disqualify him from hearing the case, the employer had to prove that he was so committed to a conclusion "already formed as to be incapable of alteration, whatever evidence or arguments may be presented".

The Court believed the arbitrator was fully entitled to take into account a view he had formed when attempting to resolve the claim at the teleconference stage, when carrying out his decision making function as an arbitrator at the arbitration.

Actual bias is always very difficult to prove. It is quite common for an arbitrator to make their views known to both parties at the time of the teleconference. Clearly the Court takes the view that this is a legitimate exercise of the arbitrator's function in discharging the role of achieving a settlement acceptable to both parties. The worker can no doubt argue that the arbitrator is simply seeking to be persuasive and narrow the issues, but this does not warrant a conclusion that the arbitrator has already formed a view that is incapable of alteration.

Appeals Against Arbitrators' Decisions:

Lindsay Smith v RTA:

The worker commenced proceedings in the Commission against the State of New South Wales and the RTA for weekly compensation, s.60 expenses and lump sum benefits under ss.66 and 67.

The claim against the State arose from a motor vehicle accident in 1988 when the worker was driving a four wheel drive. The vehicle rolled over four times and he sustained injuries to his neck and back. Following this accident he had intermittent paid in his neck and lower back as well as headaches. There was also medical evidence of the worker suffering with psychiatric sequelae in 1994.

In 1995 the worker settled a claim against the State in the Compensation Court for lump sum benefits based on 20% impairment of the neck and 10% impairment of the back.

The worker then obtained employment with the RTA. On 12 October 2002 he was involved in another motor vehicle accident. There was medical evidence to the effect that the 2002 motor vehicle accident caused a one-fifth increase in impairment from the previous motor vehicle accident for his neck and back.

One of the issues for determination by the arbitrator was the cause of any ongoing incapacity suffered by the worker. The arbitrator found that the worker's psychiatric condition, which played a significant role in his incapacity, was caused solely by the motor vehicle accident with the RTA in 2002. This was, in my view, an obvious error as the treating psychiatrist, Dr Naidoo, specifically referred to the worker suffering periods of depression following his original motor vehicle accident with the State in 1988. Curiously, despite medical evidence to the contrary, the arbitrator stated that there was no indication of any specific psychological treatment prior to the second motor vehicle accident in 2002.

The arbitrator was of the opinion that the psychological injury became manifest as a result of the injuries sustained in the second motor vehicle accident with the RTA in 2002. This was also an error by the arbitrator. A treating specialist, Dr Blake, observed that a significant psychological factor appeared to be present in 1994, increasing the disability felt by the worker. Also another doctor referred to the worker suffering significant depression requiring treatment by 1999.

The arbitrator determined that the State has no liability for psychological symptoms because he found that they were not manifest before the change of employment.

The worker's employment with the RTA was terminated on 26 May 2005 allegedly because of misconduct. A letter written by the worker to the Finance Director of the RTA contained an acknowledgment by the worker that he had received a benefit in circumstances that involved a breach of ethics and misconduct. Neither of the injuries sustained in 1988 or 2002 led to the worker being unemployed after 26 May 2005. If the worker had not been dismissed the likelihood is that he would have continued to be employed by the RTA. It was argued that the worker's incapacity results from his misconduct and not from any injury sustained in the motor vehicle accidents.

The worker acknowledged in his evidence that he resolved his proceedings under s.84 of the Industrial Relations Act 1996 on 25 October 2006 by accepting the sum of $45,250. this amount represented 26 weeks of salary. It was argued that the worker was not entitled to recover weekly compensation payments for the first 26 week period from 1 January 2006 as he had in effect received wages to 10 July 2006 pursuant to the settlement of his unfair dismissal claim. The arbitrator rejected our argument and found that the worker was entitled to receive an award of weekly payments for the 26 weeks prior to 10 July 2006 which gave him a dual benefit which is not permitted by virtue of the provisions of s.46 of the 1987 Act. The arbitrator found in favour of the worker and awarded him weekly benefits. Furthermore, the arbitrator found that the worker's incapacity was caused solely by the injury sustained in 2002 with the RTA. An award was entered against the worker in favour of the State in respect of the 1988 accident.

An appeal has been lodged to the Deputy President against the decision of the arbitrator on the basis that the arbitrator misinterpreted the facts and misdirected himself that the change of employment by the worker from the State to the RTA on 4 December 1995 had any bearing on the issue of liability. The worker's claim for lump sum benefits under ss. 66 and 67 was referred to Dr Dixon, an Approved Medical Specialist ("AMS"). The doctor issued a Medical Assessment Certificate stating that the whole person impairment resulting from injuries sustained on 12 October 2002 is 11%.

An appeal has been lodged against the decision of the AMS submitting that Dr Dixon has fallen into error in failing to make a deduction under s.323 of the 1998 Act in respect of the lumbar spine equal to the deduction which Dr Dixon did make in respect of the injury to the cervical spine. Dr Dixon certified that the following deductions should be made:

  • Cervical spine: 5%
  • Lumbar spine: Nil

This is in glaring contradiction to the worker's own assessment of himself (as provided to Dr Blake) where he said the deductions should be:

  • Cervical spine: 80%
  • Lumbar spine: 80%

The discrepancy is so vast and so bereft of explanation that a fresh assessment should be directed.

Alternatively a submission has been made that the Appeal Panel should substitute its own findings for those made by Dr Dixon, to take into account the overwhelming evidence of very significant impairment of both neck and back prior to the 2002 injury. Furthermore, on 2 February 1995 the Compensation Court awarded the applicant, by consent, lump sums under s.66 for 20% permanent impairment of the neck and 10% permanent impairment of the back. To the extent that the findings of the AMS are inconsistent with prior awards, they cannot stand (Taylor v SMP Security (Newcastle) Patrol Services Pty Ltd (2005) NSW WCC MA 15).

Derek Sheppard v Roads & Traffic Authority:

The worker is employed by the RTA. He was living and working at the Nowra Motor Registry. He claimed that he was asked by the RTA to move from Nowra to work at the Blacktown Motor Registry and that the RTA agreed to pay for his costs of removal.

The worker took special leave from Wednesday 2 August 2006 to Friday 4 August 2006. He was entitled to three days special leave under the RTA relocation policy.

The removalists attended at the worker's house at Nowra on the Wednesday and packed items into boxes. On the Thursday the items were loaded into the truck which then took the household items to Picton where the worker was to live.

On the evening of Sunday 6 August 2006 the worker was travelling on a 750 Kawasaki motorcycle in a northerly direction along the F6 southern freeway near Berkeley, when he collided with a feral deer and was thrown off his bike onto the road, suffering injuries. A claim was made for weekly compensation payments and medical expenses.

The matter came before the arbitrator on 7 March 2007. There was a legal issue for the arbitrator to determine as to whether or not the worker suffered an injury in the course of his employment when he was thrown off his motor bike on the Sunday evening. The journey provisions under s.10 of the 1987 Act did not apply as it could not be said that the worker was injured whilst on a periodic journey between his place of abode and place of employment. The decision in Craske v Wiggan (1909) 2 KB 635 at 638 looked at the causal relationship between employment and injury. In that case the Court said:

"…it is not enough for the applicant to say 'the accident would not have happened if I had not been engaged in that employment or if I had not been in that particular place'. You must go further and say 'the accident arose because of something I was doing in the course of my employment or because I was exposed by the nature of my employment to some peculiar danger'."

If the RTA had sent the worker to a dangerous location such as Bali then there would be no disputing the fact that he would be exposed to some peculiar danger. In this case however the worker was simply driving along a normal road and could have been on his motorcycle for any reason.

The arbitrator found in favour of the worker. In support of her position she relied primarily on a decision of Judge Burke in the Compensation Court of Klevjer v Ambulance Service (NSW) (12 June 2001). In that claim the worker was employed by the Ambulance Service in Mt Druitt. The applicant applied for a transfer to work at Corrimal. The worker was entitled to be absent on paid work in order to make the move from one location to another. Other assistance was provided by the Ambulance Service. The worker was on a ladder trying to remove some pot plants at his old residence when he fell and injured himself.

Counsel who appeared for Klevjer argued that his client would not have been injured had he not been working. Judge Burke said that although the worker was up a ladder because he was moving this did not mean that the accident arose out of his employment. Furthermore, the Judge found that work was not a substantial contributing factor.

The decision in Klevjer is in fact very supportive of the argument presented on behalf of the RTA. There were no employment characteristics in the worker riding a motorbike on a Sunday night. The arbitrator admitted that if the Klevjer decision applies then the worker fails in his claim. The arbitrator distinguished the Klevjer decision however on the basis that Klevjer applied for a move. In the RTA case the arbitrator adopted the view that the RTA instigated the move which was a different situation. The arbitrator found that the injury arose in the course of employment and that work was a substantial contributing factor.

Mr Michael Cook of the RTA put up the idea to the worker about a move. It was more a consensual arrangement however. No direction or compulsion was given by the RTA for the worker to move.

The RTA is appealing against the decision of the arbitrator. The issue raised by the arbitrator, in my view, is not a point of real distinction as Judge Burke found in Klevjer that the employer benefited from the move. In the claim by Mr Sheppard the motorbike could be described as a personal effect. The motorbike was not used by the worker to get to work.

I believe the RTA has a good case. With respect to the arbitrator, I believe that the decision is wrong in law and is appellable. Even though the decision should be overturned on appeal, I acknowledge that it depends on which Presidential Member will be allocated to hear the appeal. In that sense it can be "the luck of the draw".

Edward Budge v RTA:

The worker injured his back on 19 August 2004 when lifting some equipment. The worker lodged a claim for compensation for permanent impairment and pain and suffering. Following the injury the worker was diagnosed as suffering from multiple myelomas, which his treating oncologist, Dr Jane Hill, concluded had weakened the underlying structure of Mr Budge's vertebrae.

The RTA relied on s.9A of the 1987 Act contending that work was not a substantial contributing factor. The RTA relied on the report of Dr Hill who expressed the view that the only substantial contributing factor was the underlying malignant process. Also there was a report of a radiologist, Dr Hashmi, who stated that the CT scan showed changes at every one of the vertebrae from T6 to S1, with all of those changes being osteolytic lesions, creating a "moth-eaten appearance".

The RTA relied on the Court of Appeal decision in Dayton v Coles Supermarkets Pty Limited (2002) 22 NSWCCR 46 in which the Court said that if an employment-related factor is minor in comparison it cannot be viewed as "substantial". In any event, Dr Hill did not believe that there was more than one factor.

Also Judge Neilson in the Compensation Court held in the matter of Maher v Brambles Australia Ltd (1998) 17 NSWCCR that "substantial" in s.9A means "large, great or weighty". Although the worker claimed that the lift he performed involved a weight of 80 kgs, it was argued that the triangular "pour" shown on photographs of the trailer would not have weighed this much in terms of the actual force required to be exerted by the worker.

The worker submitted that the fractures at T8 and L2 were caused by the lifting incident on 19 August 2004. This was supported by two doctors. Also the worker relied on the decision in Mercer v ANZ Banking Group Ltd (2000) 20 NSWCCR 70 in which the Court of Appeal indicated that "substantial contributing factor" is a less demanding test than "arising out of employment". The arbitrator was urged to find that the contribution made by the lift was "substantial".

The arbitrator found against the RTA and determined that employment was a substantial contributing factor under s.9A.

The RTA lodged an appeal against the arbitrator's decision. Acting Deputy President Robin Handley handed down a decision on 17 October 2006 dismissing the appeal. The Acting Deputy President considered that as the real issue in dispute involved the arbitrator's discretionary judgment as to whether or not the lifting incident at work was a substantial contributing factor to the injury, the RTA had the onus of establishing that the discretionary judgment exercised by the arbitrator was not fair and lawful and against the weight of the evidence. He believed that the RTA did not satisfy this onus of proof. The Acting Deputy President believed there was evidence to support the arbitrator's finding in relation to s.9A. This was despite the view of the worker's treating oncologist, Dr Jane Hill, which provided strong grounds to refute the worker's claim that work was a substantial contributing factor.

The problem with the wording contained in s.9A was commented upon by Giles JA in Dayton v Coles Supermarkets Pty Limited. The Judge noted some differences of opinion between the various judges in different cases and said that there will never be a definitive statement of what constitutes a "substantial contributing factor". The Judge said:

"It will forever remain a question of impression and degree in any particular case"

Giles JA said:

"His Honour said that the word substantial was a common English word conveying imprecise magnitude but an impression that something is serious, weighty, important, sizeable or large. He said that s.9A involved an analysis of causal factors which resulted in the injury and an elevation of the importance of the employment factors relative to the others and noted that it was the employment that must be a substantial contributing factor".

In the claim by Mr Budge both the arbitrator and the Acting Deputy President adopted the view that when the worker lifted some equipment on 19 August 2004 this had a role to play in the fractures at T8 and L2. Even though the worker's bones were fragile because of the underlying malignant process, and that, with time there would have been similar fractures, the Acting Deputy President believed that the bone fractures were caused by the incident on 19 August 2004. The Acting Deputy President therefore believed it was open to the arbitrator to find that employment was a substantial contributing factor to the injury.

The Court of Appeal has acknowledged that it is a question of impression and degree in any particular case. This means that an arbitrator has a discretionary judgment in deciding whether an incident was a substantial contributing factor to a worker's injury.

Substantial Contributing Factor: Section 9A:

Section 9A is a controversial area. The Commission adopts a broad interpretation of the section which results in claims being accept when it would seem, prima facie, that employment could have minimal or no contribution to the injury.

In Murray v Shillingsworth (2006) NSWCA 367 (20 December 2006) the worker who was employed as a cotton shipper, suffered a cerebral haemorrhage in the course of his job. The worker had consumed a number of beers the previous night. The worker was picking an object up from a table when he suffered a haemorrhage. The Court of Appeal accepted that the worker's employment was a substantial contributing factor to the cerebral haemorrhage.

There was medical evidence to the effect that dehydration is a contributing factor to a haemorrhage. The Court accepted that the worker's duties, in addition to his drinking beer the night before, entitled a conclusion to be made that employment was a substantial contributing factor. There was medical evidence presented in the original hearing about non-work related causes for the haemorrhage but the Court of Appeal held that it was open to accept the opinion of one doctor over the opinions of others. The treating neurosurgeon believed there was a link between the worker's employment duties, his dehydration and the cerebral haemorrhage.

Appeals against Medical Appeal Panel decisions:

Donald Monteith v Roads & Traffic Authority:

Donald Monteith was injured on 6 March 2002 when he was attempting to jump start a battery. The battery exploded with sufficient force to send Mr Monteith backwards into his assistant causing his workmate to be knocked over. Mr Monteith was struck in the face by acid and debris from the exploding battery.

There was a dispute about Mr Monteith's entitlement under ss.66 and 67 and the claim was referred by the Commission to an AMS, Dr Kenneth Howison, who did his assessment on 20 September 2005. The assessment dealt with the claim for hearing loss and also impairment in the sense of smell and of sight.

Dr Howison concluded there was a 6% whole person impairment (WPI). The doctor acknowledged that there was a pre-existing impairment because of a previous claim for industrial deafness which had been accepted. On the Table appearing on the final page of the Medical Assessment Certificate however, no deduction was made pursuant to s.323 of WIM.

On 24 March 1998 the worker reached an agreement with his previous employer CSR Ltd for payment of a lump sum under s.66 in respect of 9.2% binaural hearing loss.

The RTA lodged an appeal from the Medical Assessment Certificate. The Appeal Panel delivered its decision on 22 February 2007. The Panel accepted that Dr Howison had fallen into error by failing to make a deduction under s.323 of WIM for the pre-existing hearing loss. This was a pyrrhic victory however because the Appeal Panel, having upheld the RTA's appeal, believed it was appropriate to set aside the assessment of Dr Howison and have a fresh assessment conducted by Dr Brian Williams. This doctor found a 15% WPI for the worker's hearing loss, after deducting 25% for the pre-existing WPI, and a 5% WPI for the sense of smell.

The result was that the RTA faced a s.66 award for 21% WPI compared to 12% under the earlier assessment given by Dr Howison. This meant an increased liability of $11,250 under s.66.

If an Appeal Panel has made an error, then the appropriate course is to file a Summons in the Supreme Court, Common Law Division, Administrative Law List. The RTA would be required to prove that the Appeal Panel had erred in the way in which it dealt with the matter.

The first question is whether or not the Appeal Panel gave adequate reasons for its decision. The Appeal Panel did in fact give cogent reasons for setting aside the MAC. Therefore the reasons for setting aside the MAC were clear.

The complaint of the RTA was more that the new MAC was less favourable than the original MAC.

Section 328(4) of the WIM provides that an Appeal Panel may revoke a MAC and issue a new MAC. Section 326 applies to any new MAC.

Section 326 of WIM provides that assessments are conclusive of certain matters.

It cannot be argued that the Appeal Panel had power to issue a new certificate. The RTA could not therefore challenge the decision of the Appeal Panel to refer the matter to its own member, Dr Williams, for a new assessment.

Consideration was given to whether or not the RTA could argue that there was no challenge to the conclusion of Dr Howison in his assessment of 6% WPI. The only complaint was that Dr Howison had not made a deduction under s.323 of WIM to reflect the previous loss. This argument however could not succeed because once the Appeal Panel concluded that the MAC of Dr Howison was defective it was appropriate that the Panel set aside the defective certificate and have a fresh assessment made.

Furthermore, the Appeal Panel considered that Dr Howison had erred in a number of aspects and not just in his failure to make a deduction under s.323 for the prior loss.

The only other option was for the RTA to consider whether or not the fresh certificate issued by Dr Williams could be challenged. The assessment of Dr Williams of the worker's binaural hearing impairment was substantially higher than any of the four doctors who had provided reports. The opinions of the four doctors ranged from 10.3% to 23.3%.

The certificate of Dr Williams however did not contain any error. The doctor had not made a deduction for presbycusis which was correct because of the traumatic nature of the worker's hearing loss. The doctor made a 25% deduction to reflect the previous settlement.

Accordingly, the view was reached that there were no sustainable arguments in support of an application to the Supreme Court to have the Appeal Panel's decision set aside.

Quarterly Review Statistics of the Workers Compensation Commission for the period October to December 2006:

  • 11% of disputes were determined by an arbitrator. The others were settled or discontinued.
  • 13% of the appeals from the decisions of arbitrators were successful.
  • 15% of appeals from Medical Assessment Certificates were successful.

Permanent Impairment Claims:

If there is a dispute in relation to a worker's claim for permanent impairment, the matter can be referred to an AMS and a MAC is issued, which is presumed to be correct.

If a party is aggrieved by the MAC an appeal can be made to the Registrar of the Commission.

Before 1 November 2006 the Registrar had a "gatekeeper's" role and needed to be persuaded that a ground for appeal existed, in order to permit the appeal to proceed. The grounds were usually either that the assessment was made on the basis of incorrect criteria or the MAC contained a demonstrable error.

From 1 November 2006 the test is more difficult to satisfy. Section 327(4) of WIM reads as follows:

"The Appeal is not to proceed unless the Registrar is satisfied that, on the face of the application and any submissions made to the Registrar, at least one of the grounds for appeal specified in sub-section (3) has been made out".

The legislation does not provide any avenue for appeal against a decision of a Registrar. If a party is aggrieved by the Registrar's decision, the only option is to apply for judicial review which involves filing a Summons in the Supreme Court.

The Registrar therefore now has a greater responsibility and power in deciding whether or not an appeal should be allowed to proceed. The Registrar needs to be persuaded that the ground for an appeal has been established. This is likely to result in a reduction in the number of appeals that proceed. It may however result in an increase in the applications made to the Administrative Division of the Supreme Court seeking a judicial review of the Registrar's decision.

A judicial review in the Administrative Division of the Supreme Court does not entitle the Court to determine whether the Registrar was correct in determining whether the ground for an appeal has been established. The issue is whether or not the Registrar applied the correct test. This means that if the Registrar exercises the powers properly, it cannot be overturned by judicial review.

David Cooper
21 March 2007