J ROBINS (CHIPPENDALE) PTY LTD v SAKIC SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL KIRBY P, SAMUELS and PRIESTLEY JJA 21 September 1989, 21 September 1989 [1989] NSWCA 108 WORKERS' COMPENSATION — reconsideration of award Compensation Court Act 1984, s17(4) — employer claims award procured by fraud — judge dismisses claim — employer appeals — alleged lack of reasons for refusal of application for reconsideration — challenge to basis of decision in Compensation Court held: (1) The judge's reasons, although short, were adequate as disclosing the ground of his award. Soulemezis v Dudley Holdings Pty Ltd (1987) 10 NSWLR 247, 282 applied; Russell v F J Walker Pty Ltd (1989) AWCC par 7400, p48752; Maitland City Council Abattoir Dept v Sutcliffe (1989) AWCC par 74022, p 48773; Australian Electrical Industries Pty Ltd v Marlborough (1989) AWCC par 74029, p 48779 referred to; (2) The judge had not applied an incorrect test to the decision on the application and his references to fraud merely reflected and described the case which the employer had sought to prove before him. JUDGES - reasons - obligation to state ground for decision - what constitutes an error in point of law - Soulemezis v Dudley Holdings Pty Ltd (1987) 10 NSWLR 247, 282 applied - challenge to alleged lack of reasons should not be seen as a vehicle to circumvent the provisions of s2 Compensation Court Act 1984 limiting appeals to the Court of Appeal on facts. APPEAL - point of law - Compensation Court Act 1984 s32 - Azzopardi v Tasman UEB Industries (1985) 4 NSWLR 139, 156 applied - Edelsten v Ward [No2] (1989) 63 ALJR 345 referred to - observations by Priestley JA on the possible need to explore further the meaning of s32 Compensation Court Act 1984. Compensation Court Act 1984, s17, s32 Workers' Compensation Act 1926, s36(2). Workers' Compensation Rules, r26. ORDERS Appeal dismissed with costs. Kirby P The respondent to this appeal, whom it might be simpler to call the worker, and to call the appellant the employer, brought an application for determination in what was then the Workers Compensation Commission, on 7 December 1981 claiming incapacity as a result of an injury allegedly sustained on 8 May 1981 when she fell down some steps at her place of employment. The injuries sustained in that accident were slight, and the essence of the worker's case for compensation was that she had developed an anxiety state and depression which had prevented her working or at least from undertaking any but the lightest work. The application came before Judge Moroney in March 1983 and he made an award in the worker's favour on the 23rd of that month. It is evident that the learned Judge was in some doubt as to whether the worker had established the case she set out to make. In the course of argument the transcript reveals that he said: "I must say that until I heard from Dr McMurdo I had really strong reservations about the applicant's case quite frankly, but he has convinced me." 2 UNREPORTED JUDGMENTS Dr McMurdo has been qualified by the employer and was called by the employer, thus vindicating the highest traditions both of the Bar and of insurance companies, because as it turned out, it was his evidence, apparently, that tipped the scales in the worker's favour. After the award had been made, and while the worker was receiving compensation, an action which she brought as the plaintiff against the employer and, I infer, arising out of the same incident, came on for hearing in the Supreme Court. In the course of those proceedings a medical file relating to the worker from King George V Hospital was subpoenaed and produced, together with other medical evidence, and it is upon the information disclosed in this way that the present application for reconsideration of the award is essentially based. Dr McMurdo had said in essence that were there no other cause or possible cause for the worker's psychiatric condition, which he found to exist in fact, than the fall down the steps, he was prepared to conclude that her anxiety state and depression were causally linked to the injuries sustained in that way. The file from King George V Hospital, however, was capable of establishing that before the fall ever took placc the worker had been engaged in an extensive course of therapy designed to overcome her condition of infertility and enable her to become pregnant. The details of this therapeutic investigation, which included surgery, had not been revealed by her to doctors she had consulted for the purposes of the workers compensation proceedings or to doctors who had examined her on behalf of her employer. It was said that this therapy constituted the alternative cause to which Dr McMurdo had referred or, more specifically, an alternative cause which might satisfy that part of Dr McMurdo's opinion which I have mentioned. Armed with this information the employer then mounted an application under s17(A4) of the Act seeking reconsideration of the award. R26 of the rules under the Act deals with the procedure to be adopted in applications under s17(4) or under s36(2) which was its statutory predecessor. Amongst other things the rule in s2(e) requires specification of "The grounds upon which the application is made." Subr(f) is in these terms: "Any fraud or other improper means it is alleged has been used, specifying what the fraud or improper means consisted of and when, where, by whom and upon whom it is alleged to have been used." must be specified. Directly following the imperatives in the rules the employer in its application, in that part of the document headed Particulars under r26(2) in paragraph 7 asserted: "This application is made on the ground that the orders and awards in the first proceedings were procured by the respondent herein's fraud." The matter came again before Judge Moroney and before him the file of the previous workers compensation proceedings, the transcript of the worker's evidence in the Supreme Court and the files of King George V and Canterbury Hospitals were tendered. Dr McMurdo gave evidence his evidence being deseigned to show that the strain and anxiety which might well be suffered by an infertile woman anxious to conceive and bear children might have been a possible cause of the anxiety she demonstrated after the fall down the steps. I might trespass into the forbidden area of fact to this extent. As the President pointed out during argument, there was, of course, evidence amongst the material tendered in this last set of proceedings to the effect that before the fall, if I may URJ J ROBINS (CHIPPENDALE) PTY LTD v SAKIC (Kirby P) 3 horrow that phrase, the worker was apparently happy and unanxious, notwithstanding that she was in receipt of therapy for her infertility. The charge levelled against her must have includcd, by necessary implication, not merely the suppression of material in aid of a possibly genuine case, but the fabrication of a false case, since the whole of the complaint of anxiety following the fall must presumably have been a fabrication. She in fact attributed to the fall a condition of anxiety from which she had been suffering previously. The evidence I have referred to was given, and there were submissions made by counsel, and ultimately Judge Moroney dealt with the matter in this way. Indeed I think I should include in this judgment the whole of Judge Moroney's judgment which was to this effect: "This is an application pursuant to s17 subs(iv) of the Compensation Court Act 1984 to set aside an award made by me on the 23rd March, 1983. The grounds of the application are that the applicant worker gave false evidence before me in relation to her prior state of health, by that I mean her state of health prior to the injury the subject of the proceedings and also that she fraudulently misled the doctors who examined and treated her prior to the hearing and who gave evidence in the hearing before me. I have most carefully considered all of the evidence in this matter, that is this application, and I am far from satisfied that the employer has discharged the onus that rests upon it of proving the allegations to which I have referred. The onus required to be discharged is the civil onus. The evidence in this matter does not reach that stage. I am not satisfied on the balance of probabilities that the allegations made against the worker have been made out, to wit, committing perjury before me, and/or fraudulently giving medical histories to doctors. Indeed, I am left in the situation at the end of this present application of saying that on the state of the evidence I would this day make the same award in favour of the worker as I made on the 23rd March, 1983. The employer's application is dismissed with costs." From this it is apparent that the learned judge regarded the grounds of the application as being those which had been particularised, with a further and significant detail, that is to say, the additional charge of perjury. He said that he carefully considered the evidence and was not satisfied that the employer had discharged the onus of proving these very grave allegations. Indeed he ended by saying that notwithstanding the additional material, he would have made the same award in favour of the worker as he had made earlier. It is, of course, unnecessary for me to offer any view about the facts. Indeed, since the jurisdiction of this Court in these matters is confined to questions of law, the area of fact is, as I have said, forbidden. Hence it is not really to the point, though I will say it, to observe that it might well be that a not unreasonable participant in these proceedings might have thought that the case made by the employer had some substance. However, the learned judge did not think so and it is from that rejection that the employer brings this appeal. Necessarily the employer must conduct the strawless brickmaking exercise with which we have become familiar in this Court, by seeking to squeeze out points of law from what is a concrete-like set of facts. The appeal is put on various grounds in the written submissions, not all of which were pursued orally, but which were not withdrawn, and all of which I am bound to say lack any degree of substance. 4 UNREPORTED JUDGMENTS First of all it is said that his Honour erred in failing to supply reasons within the authorities which require the giving of reasons as an ordinary incident of the judicial process. With that principle | respectfully agree. I am, however, quite unable to see any brcach of it in this judgment. Then it is submitted - and this I think was the most substantial of the arguments put, that is to say, it was relied upon most strongly - that the learned judge in some way misconceived the nature of his jurisdiction and misunderstood the nature of the determination to be made. The submission is obviously stimulated by extreme irritation at the worker's failure to offer any evidence before Judge Moroney on the last occasion and thus her failure to expose herself to cross-examination. However that may be, in my view there can be no question here of a perverse exercise of discretion. While it may be true that s17 overall vests in the Court a discretion to reconsider or not, when a case is made such as that which was advanced here, the discretion necessarily depends upon the prior finding of fact in favour or against the party seeking reconsideration. That finding of fact is not a matter of discretion and is immune from our review. Mr Motbey for the employer sought to amend the Notice of Appeal by including a specific ground which the present Notice of Appeal lacks, complaining of the exercise or the wrongful exercise of discretion and that the finding was in some way perverse This application was in the event withdrawn. I should say for my own part I would have rejected it on the ground that it could not succeed for reasons which I will shortly mention. Furthermore, rolled up with this submission is that which contends that the ground of fraud was not a necessary ingredient in the application made. I agree, of course, that fraud is not the only ground upon which such an application may be mounted but there seems to me to be no doubt whatever that this application was based upon the allegation of fraud. Other matters than fraud, it is said were argued, but having gone through the transcript of the submissions made to Judge Moroney, it is clear to me that fraud, deceit and misrepresentation were the theme of the address. Misrepresentation is referred to at the outset. A few pages further on the complaint is made that the employer was entitled to have the case litigated on a proper footing and had been deprived of that right because of the serious miscarriage emanating from the worker's deliberate suppression of the truth, which is another way of identifying fraud. Then it is said: "On any view of it the testimony of the plaintiff before your Honour was perjured." And there followed a number of evocative complaints about the worker's failure to take the stand or come to the bible, and this part of the argument ends with the reference to the findings of the Commission - "being coloured by serious suppression of material facts", a complaint which is repeated in the same terms on the next page. Then the judge is referred to part of the evidence and it is said that Dr Godsall, one of the doctors in the case, had in front of him false evidence (that allegation is repeated) and false, of course, because the worker made it so. This is contrasted with the ideal, the minimal situation really rather than the ideal, which is said to be that the material should be examined and the case conducted "on a truthful footing without deception or guile or suppression of material." All of this, it seems to me, is consistent only with charges of fraud and that is made plain again at the very end of the argument when counsel speaks of the re-examination of the worker in the Supreme Court when she for the first time, URJ J ROBINS (CHIPPENDALE) PTY LTD v SAKIC (Priestley JA) 5 it would seem, "spills the truth out" and finally there is reference to the public interest in seeing that litigation is fairly conducted "and that there isn't fraudulent suppression of material." With all respect, I fail to see, in the light of that material, how it can be said that the application was advanced upon grounds other than fraud, deceit and dishonest suppression of relevant material. This was a very serious charge and it was for his Honour to be satisfied that the worker had deliberately made statements knowing them to be false, or had suppressed statements knowing them to be material, for the purpose of gaining an advantage for herself in advancing her case, and that indeed she had succeeded in that enterprise. Ican well understand why his Honour concluded on all the material before him that the case had not been made out, but whether his decision was right or wrong, it was clearly a decision of fact and raises no question of law which authorises our intervention. That picks up as well, I think, the fourth of the submissions made and the one that remains to be considered namely that which suggests, as I understood it, that somehow or otherwise, since there must have been a prima facie case of fraud, the failure of the worker to go into the witness box converted that prima facie case into a final and triumphant case on the facts. I think that it is only necessary to say that a body of evidence may yield evidence, proof of which, if believed, could sustain the issue. That is a prima facie case. However, without the addition of any material from either side, the tribunal of fact may then look at the body of evidence from the standpoint of weight or value and conclude that it does not in fact support the issue. There is a classic discussion of these questions by the late Glass JA in 55 ALJ 842 and the matter is discussed (not quite so directly) by this Court in Wentworth v Rogers (1984) 2 NSWLR 422. In short, I am unable to see any question of law which is thrown up for our decision and, that being so, we have no grounds for intervention. I would therefore dismiss the appeal with costs. Priestley JA I agree with the order which Samuels JA has proposed in the judgment to which I have just listened with admiration. I wish to add comments on one point only. Legislative restriction on factual appeals Appeals lie to this Court from the Compensation Court relevantly only on grievances in point of law (see Compensation Court Act 1984 s32). The stringency of that limitation upon appeals has been expressed by this Court in many decisions. It was most clearly stated in the opinion of the majority in Azzopardi v Tasman UEB Industries (1985) 4 NSWLR 139 at 156, a decision which has been applied many timcs sincc, and not only in the context of compensation appeals. See eg Haines v Leves (1987) 8 NSWLR 442, 469. Suggestions have been made from time to time by members of the Court that a wider ambit of appeal on appropriate conditions might be appropriate. (See eg Lladado Pty Ltd t/as Kambos and Sons v Krinis, Court of Appeal, unreported 5 March 1987; (1987) NSWJB 68 and Warley Pty Ltd v Adco Constructions Pty Ltd, Court of Appeal, unreported, 30 November 1988; (1988) NSWJB 212). However, those suggestions have resulted in no change in the law. S32 of the Compensation Court Act stands resolutely unreformed. The decision of the Court in Azzopardi appears to have received qualified endorsement in the High Court of Australia in the recent observations of Brennan J in Edelsten v Ward [No 1] (1989) 63 ALJR 345. However, as those observations 6 UNREPORTED JUDGMENTS were made shortly in the course of dismissing a special leave application, they may not represent the final word of the High Court on this point. This, then, was the major hurdle which the appellant faced in endeavouring to invoke our jurisdiction. It should be remembered that behind the principle in Azzopardi is a legislative policy of finality of litigation of factual disputes. Although, perhaps understandably in the present case, the appellant believes that the decision of Judge Moroney was perverse, it must be remembered that there will be other cases in which litigants in the position of the appellant have the benefit of a final decision. This is apparently what the legislature intended by providing, as it did, to restrict appeals to this Court in the way it did by s32 of the Compensation Court Act. Appeals on alleged inadequacy of reasons Following the judgment of McHugh JA in Soulemezis v Dudley Holdings Pty Ltd (1987) 10 NSWLR 247 at 282, a new basis has suggested itself to discerning legal practitioners in their attempts to circumvent the provisions of s32 and the stringent test of Azzopardi. It represents, in many cases, the latest effort co erect the strawless brick building to which Samuels JA has referred in this case. In Soulemezis, McHugh JA made it plain that a trial judge in the Compensation Court, and in other courts, must reveal the grounds which lead to his or her decision. This obligation does not necessarily require the exposure of the detailed reasoning that led to the determination of that ground. See also the decision of the High Court of Australia in Public Service Board of New South Wales v Osmond (1985) 159 CLR 656, 662. As a result of Soulemezis this Court has lately received a number of appeals from the Compensation Court in which the argument has been mounted that a party is aggrieved by the award in point of law by the want of reasons on the part of the first instance judge. In some cases the argument has succeeded. Thus, in Russell v F J Walker Pty Ltd (1989) AWCC par 74000 p 48752, it was held that the failure of the Senior Commissioner to provide adequate reasons or grounds for his decision was an error of law warranting the intervention of this Court. Samuels JA, who gave the leading judgment in that case, said that in his view it was desirable that the traditional formula referring to the "giving of reasons" should be abandoned in favour of a formula expressing the requirement to be the "sufficient disclosure of the grounds" for the conclusion reached. Perhaps encouraged by that decision another case came before the Court soon thereafter in Maitland City Council Abattoir Department v Sutcliffe (1989) AWCC par 74022 p 48773. In that case the alleged want of reasons by a judge of the Compensation Court for a discretionary decision to refuse an adjournment to a party was held by the Court not in the circumstances to constitute an error of law attracting the jurisdiction of the Court of Appeal under the Compensation Court Act In Australian Electrical Industries Pty Ltd v Marlborough (1989) AWCC par 74029 p 48779 a similar argument was advanced. In that case Meagher JA held that the statement of reasons by the Compensation Judge, although imperfect, was not so imperfect as to constitute an error of law. It was held that the reasons did sufficiently disclose the grounds for the finding of the judge at first instance. They thus barred the way to the jurisdiction of this Court which passes through the narrow door provided by s32 of the Compensation Court Act. From these and other cases it will be seen that a challenge to the alleged failure of a Compensation Court Judge to indicate the grounds of his or her decision will not be allowed to become a simple means of circumventing the clear purpose of s32. URJ J ROBINS (CHIPPENDALE) PTY LTD v SAKIC (Samuels JA) 7 The reasons must be read in their context. In the present case, as Samuels JA has demonstrated, Judge Moroney's reasons for judgment were short. However, the fundamental issue before his Honour was also a short one. There can be no real doubt about the grounds of his Honour's decision. If the sentence in his Honours reasons: "I am not satisfied on the balance of probabilities that the allegations made against the worker have been made out, to wit, committing perjury before me, and/or fraudulently giving medical histories to doctors" stood alone it might, in isolation, have suggested that his Honour had erroneously exercised his discretion to refuse a reconsideration of the award on the basis that the applicant for reconsideration had to prove perjury or fraud. Such a prerequisite would have imposed on the appellant too high a burden. Such is not required by the terms of s17(4) of the Compensation Court Act 1984. However, there are two answers to this criticism of what his Honour said despite the arguments urged upon this Court with vigour by counsel for the appellant. The first is that Judge Moroney's words must be understood in the light of the case which the appellant had brought before him on the application for reconsideration. In that case, as Samuels JA has abundantly demonstrated, the assertion was, as had been pleaded, that the worker was guilty of fraud. It was also, as the argument of counsel at first instance had in terms put it, that the worker had given false eviderce at the first hearing and had perjured herself. Therefore what Judge Moroney was doing in giving his reasons was merely to describe the appellant's case as it had been presented before him. It was accurately described. It was described in order to reject the case which the appellant had mounted. Secondly, and in any case, Judge Moroney went on to say, "Indeed I am left in the situation at the end of this present application of saying that on the state of the evidence I would this day make the same award in favour of the worker as I made on the 23rd March 1983." This passage shows that, far from accepting that the appellant had discharged the lower burden of proving an entitlement to reconsideration of the award, his Honour accepted that, at the end of the evidence, the evidence nonetheless sustained the award which he had earlier entered in favour of the worker. On this basis, by inference, he must have rejected the establishment of the claim by the appellant for reconsideration. He concluded positively that his original award should stand. On these bases, although I am not unaware of what has moved the appellant to bring the appeal, I am of the opinion that no grievance in point of law has been shown within the present authority of the Court that warrants or authorizes the intervention of the Court. Accordingly, I agree in the order that is proposed. Samuels JA Azzopardi's case presently stands as an authority providing the tule in this State governing which appeals may be and which appeals may not be brought to this Court from the Compensation Court. The case put for the appellant today was put in various ways, at least one of them being based on an argument not heralded in the Notice of Appeal and eventually not pursued in that particular form on behalf of the appellant. Each of the appellants arguments seem to me to involve the appellant in seeking to persuade the Court that either there was no evidence on particular matters or - and this is a description of the greater part of the appellant's submissions - that on the evidence the Compensation Court was bound to come 8 UNREPORTED JUDGMENTS to a particular conclusion of fact and exercise discretion under s17(4) of the Compensation Court Act in a particular way. There were two difficulties which became clear once it was recognised that the appellant's submissions fell into that form. The simpler difficulty to explain is that in regard to each of the critical propositions advanced on behalf of the appellant it was simply not right to say that the evidence before the trial judge was all one way. There was evidence in each instance which, if the trial judge was prepared to accept it, supported both his original determination and his later refusal upon reconsideration to alter his earlier determination. The second difficulty is a more complex one and is related to the ground of decision in Azzopardi. It seems to me to be sufficient to say in this appcal that on the footing that Azzopardi provides the binding rule in this State upon the words in s32 of the Compensation Court Act (which may have some difficulties and potentialities in them not yet explored), the question raised has to be dealt with today as a matter of fact or as involving challenges to matters of fact which this Court has no jurisdiction to entertain. Having referred to possible further cxploration of s32, I should explain that what I mean by that is that the relevant words do not simply say that there shall be no appeal involving a question of fact, they give a right of appeal to a party aggrieved by an award of the court in point of law. I say no nore about that today and it may be that those words are, as they have always been taken to be, a somewhat obscure way of saying that there is no appeal to this Court in regard to a matter of fact. I leave that for possible exploration in the future. The reasons I have earlier given state very briefly why I think this appeal must fail. | agree with the orders proposed. The order of the Court accordingly is appeal dismissed. The appellant must pay the respondent's costs. Counsel for the Appellant: SJ Motbey Solicitor for the Appellant: Rishworth Dodd and Menczel Counsel for the Respondent: P Stone Solicitor for the Respondent: Robert G Coshott and Associates