FAUSTO FRIERE v ANI CORPORATION LTD t/as BRADFORD KENDALL FOUNDRIES SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL SAMUELS AP, PRIESTLEY and HANDLEY JJA 21 June 1991, 21 June 1991 [1991] NSWCA 96 COMPENSATION COURT — whether reasons so insufficient as to be error of law — Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 and Russsell v F J. Walker Ltd, unreported, 10 February 1989, referred to. Priestley JA This is an appeal from Judge Moroney of the Compensation Court. He, in turn, had heard an appeal from a Commissioner of that Court. The ground of appeal from the Commissioner's decision to the judge - with whose decision it is necessary for this court, in turn, to deal - was that the Commissioner's reasons for entering an award for the respondent were so insufficient as to amount to an error of law. Judge Moroney held on that point that, although the judgment of the Commissioner was a little unusual and a little hard to understand, nevertheless the reasons were sufficient to prevent the conclusion that the deficiencies amounted to an error of law. In this court Judge Moroney has been said to be wrong in law in failing to hold that the Commissioner was wrong in law because of the insufficiency in expression of his reasons. Other matters have been argued in this court but, since in my opinion and with respect to Judge Moroney, he was in error in failing to hold that the Commissioner had made the suggested error of law, I will not go into those other matters. The proceedings before the Commissioner were a claim by a worker which, as framed in his amended particulars, was a claim for total/or partial/or notional total incapacity from a specified date and the sections specified as giving ground to the claims were 9, 11(1) and 11(2) of the Workers' Compensation Act 1926. The evidence at the hearing revolved mainly around work issues. The claimant asserted that his work had been such as to cause injury of gradual onset to him. I am not using those words as terms of art but simply as a very shorthand description of the claimed injury, the detail of which it is not necessary to go into. There was medical evidence supporting his claim. There was medical evidence tendered by the respondent which left it open to the Commissioner to find - if he thought that was the correct finding on everything before him - that the applicant's injury was not work related and that certain symptoms which he undoubtedly had - in a physical and objective sense - were not connected with what he claimed to have suffered by way of injury at his work. There were a number of doctors' reports. Only one doctor gave evidence viva voce and that was Dr Hall, whose evidence was given in the applicant's case. In his reasons for his decision the Commissioner very briefly outlined the history of the applicant's claim and then - on the second page of his reasons as printed in the appeal book - there appeared four paragraphs bearing directly on the question whether he gave sufficient reasons to explain the decision which he thereafter announced. I will not incorporate the four paragraphs verbatim in these reasons 2 UNREPORTED JUDGMENTS but, to identify them for the purpose of understanding what follows, I note that the first of the four paragraphs began, "Dr Hall", the second "I believe", the third "For the applicant" and the fourth "His evidence". It was asserted on behalf of the respondent that the second of these paragraphs was a clear and unequivocal finding as to the essential fact in issue in the case, namely, that there was no relationship between the applicant's work and his claimed incapacity. The submission was that this finding showed -as fully as was necessary - the ground even although it did not show the detailed reasoning in support of the critical finding of fact and the decision. If it were possible to accept that the second paragraph filled the description bestowed upon it by counsel I would agree with him that this ground of appeal should be rejected. However, looking solely at that paragraph, I have considerable doubts myself whether it does fulfil that description. I will come back to that in a moment. Whether or not that be right, however, when that paragraph is considered, together with the first paragraph and, in particular, the fourth although the third also plays a part in raising questions about exactly what was the Commissioner's reason for what he said in the second paragraph, and for his award - it seems to me that the assertion of counsel for the respondent cannot be accepted. Before giving brief but, I hope, sufficient reasons for saying that, I should mention that there was considerable debate about what was the right test by which to decide whether the reasons are so deficient as to amount to an error of law. The case usually mentioned in this connection is Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247. Since that case was decided there have been numerous cases in this court in which the test stated in it has been followed and, in some ways, elaborated. At p 282 McHugh JA said something relied upon by the respondent here which has frequently been adopted as correct in later cases and that is that what is decisive so far as the question of whether an error of law has been committed is concerned is that the judgment in question reveal the ground for, although not the detailed reasoning in support of and here I vary the words of his Honour slightly - the critical finding of fact. That was said in regard to a case where no appeal lies against the finding of fact. It is suggested by McHugh JA elsewhere in his reasons - and it also is suggested in later decisions of this court - that in cases where the appeal lies generally or otherwise it is not confined to an appeal against a finding of fact - the test is more stringent. In one of those later cases, also from the Compensation Court, Russell v FJ Walker Ltd (unreported, 10 February 1989), Samuels JA, in reasons which formed the basis of the decision of the court, referred to what had been said by McHugh JA in Soulemezis, adopted the three reasons for the rule which were specifically referred to by McHugh JA at p 279 and added a fourth, and then went on to say: "It is perhaps desirable that the traditional format when it refers to giving of reasons should be abandoned in favour of some other proposition. The problem really involves the question of whether a judicial officer has sufficiently explained why he or she has come to the conclusion in question." Returning to the four paragraphs important in the present case - and in order to consider them in the light of the statement in the rule developed by this court and Soulemezis and the later cases, and assuming for the moment that par 2 standing alone would have constituted revelation of the ground of the Commissioner's decision - it seems to me that the instant one reads on down through para3 and para4, the explanation, which might have otherwise been WRWSTO FRIERE v ANI CORPORATION LTD tas BRADFORD KENDALL FOUNDRIES (Priestley JA) afforded by that paragraph, becomes quite clouded over. The Commissioner went on, in the fourth paragraph, to make statements quite unnecessary for him to make if the second paragraph were indeed the true basis of his decision, assuming that it means what the respondent says it means. It was submitted for the respondent that the fourth paragraph was merely surplusage and should not be read as qualifying in any way the second paragraph. Again, if I were able to accept that explanation of the fourth paragraph, I would agree with respondent's counsel that this ground of appeal should not succeed. However, although I would not go so far to say that I know what the Commissioner was really intending by the fourth paragraph, it conveys to me the very real possibility that he was considering as still open - either open or necessary for decision notwithstanding what he had said in the second paragraph - questions going to the applicant's claim for an award either for partial incapacity or deemed total incapacity. I would mention here also that - although apparently the case began on the footing that the relevant section was s11 of, what I will call, the old Workers' Compensation Act - by the time addresses were complete it would seem - as counsel for the respondent has contended - that the Commissioner and the counsel both for the applicant and respondent were proceeding on the basis that the relevant sections were s38 and s48 of the new Act. Bearing that in mind, par 4 may be explicable upon the basis the respondent contends for but simply does not strike me as truly being on that basis. It is simply, in my opinion, on the face of it, inconsistent with the second paragraph having the meaning that "the applicant loses the case because I, the Commissioner, do not accept his evidence and his medical evidence to the effect that the total or partial incapacity is work related". I have not yet mentioned the first of the four critical paragraphs. That paragraph refers to the evidence of the doctor called in the applicant's case. It is debatable, and was debated at great length, whether that paragraph was simply a recounting of the applicant's case, or indicated the acceptance by the Commissioner of the evidence of Dr Hall there outlined. It reads to me more as the acceptance of his evidence than a statement of it to be rejected in the subsequent paragraph. I would arrive at that conclusion simply on reading paral and para2 in the Commissioner's reasons. If it is permissible in considering this conclusion, to use what was said in the course of the argument and is recorded in the transcript, for the purpose of seeking to understand what the Commissioner was intending to convey in his reasons, it would be significant that the Commissioner spoke in several places with approval of Dr Hall, referring to his frankness and desire to assist the Commissioner, and, that as far as I can see in the transcript, there was no hint of the kind of criticism of him which would be necessarily inherent in the meaning which the respondent seeks to attribute to par 2. I return now to the meaning of par 2. The words used in the paragraph in describing the applicant's condition are undoubtedly taken directly from the fifth page of a report by Dr Reid which was in evidence. When the two paragraphs on that fifth page are read from which the words in the second paragraph in the Commissioner's reasons are taken - again I will not set them out, I will simply say in order to identify them they are the paragraphs, the first of which begins - "Tt might be that Mr Freire..." - when those two paragraphs are read they do not appear to me to support the factual conclusion which, according to the respondent, is inherent in par 2. When these matters are taken into consideration all together I do not think that it can be said that the Commissioner succeeded in 4 UNREPORTED JUDGMENTS sufficiently explaining why he had come to the conclusion that he must enter an award for the respondent. I am not clear whether he accepted or rejected the evidence of Dr Hall, or whether, for that matter, he thought that the two paragraphs on p 5 of Dr Reid's report justified the assertion that he made in the second paragraph of the four critical paragraphs in his reasons. I am not clear whether the fourth paragraph was surplusage or was a way of dealing with a claim for total or partial incapacity which he did not think he had disposed of to that point in his reasons. Not knowing these things prevents understanding his reasons. The various reasons described in Soulemezis and Russell, including the one mentioned in the latter case by Samuels JA, all seem to me to be sound reasons for supporting the rule which has emerged since Pettit v Dunkley and has developed to the stage it has now reached. I do not think any of the objectives which those four reasons describe was achieved in the present case. The result is that, in my opinion, there was an error of law made by the Commissioner in failing sufficiently to explain why he came to his conclusion. There was a subsequent error of law by Judge Moroney in coming to the conclusion that the Commissioner had not made that error of law. I would uphold the appeal and set aside the award for the respondent so that the matter might be remitted to the Compensation Court to be disposed of there according to law. Samuels JA I agree. Out of deference to Mr Timbs' argument I will add a word or two for myself. I think that there are three propositions, perhaps, which are useful to have in mind when dealing with an appeal on the ground that the reasons below were inadequate. This is particularly so when the appeal comes from the Compensation Court. 1. This court will not encourage the use of that ground as a substitute where no other question of law is available. I appreciate that, since the recent amendments to s32 of the Compensation Court Act, that apprehension now has diminished justification. 2. The principle which regulates the judicial duty to give reasons may be said to involve "the question of whether a judicial officer has sufficiently explained why he or she has come to the conclusion in question, " (Russell v FJ Walker, unreported, Court of Appeal, 10 February 1989) a decision to which Priestley JA referred. That test is necessarily lacking in precision but no more exact criterion can reasonably be established. It is essentially an area in which room must be left for value judgments by the appellate Court. 3. Determinations whether in particular cases the principle has been satisfied will essentially turn upon the facts of the case, that is to say, upon the terms of the judgments. In the present case I share the doubts which Priestley JA has advanced. The Commissioner commences by quoting a passage from the report of Dr Portek who thought that the worker had not suffered a significant soft tissue injury. The Commissioner then turns to the evidence of Dr Hall, who was the only doctor who gave oral evidence. Passages in the transcript indicate that the Commissioner took a very favourable view of Dr Hall's testimony. The reference to what Dr Hall said seems to me to tend to establish a case of aggravation. Aggravation was asserted in the application which was based alternatively upon total and partial incapacity. The reference to "constitutional degenerative changes" appears to rely upon what was said in a report by Dr Reid. No other assessment or analysis of the medical opinions appears. WRWSTO FRIERE v ANI CORPORATION LTD tas BRADFORD KENDALL FOUNDRIES (Handley JA) It seems to me quite possible that, as Priestley JA suggests, the Commissioner accepted Dr Hall, and Dr Reid's basic finding as well, but was inclined to think, and this is well open I would have thought, that although the autogenous disability was the basic cause of the worker's incapacity, the nature of his employment contributed as well. That may be so but it by no means clearly appears. However, it seems to me that he would scarcely - that is the Commissioner - have gone on to say what he did unless he was building, as it were, upon the initial finding. But I must say that the nature of the edifice he constructed is by no means plain to me. This is a case in which I do not understand from the judgment the reason for the Commissioner's conclusion, that is to say, his award for the employer. I do not know why he concluded that the worker was not entitled to an award at all, even on the ground of aggravation of a constitutional condition, limited, maybe, to partial incapacity. Hence it seem to me that the reasons are inadequate and I would agree with the orders which Priestley JA proposes. Handley JA I also agree with the orders proposed by Priestley JA and with the reasons which have been given by my brethren. However, myself, and again out of deference to the submissions of Mr Timbs, I would add certain brief remarks of my own. In my opinion the principal difficulty in upholding the decision of the Commissioner and the learned judge in this case is that there is no clear basis for concluding that the Commissioner intended to reject the worker's case as a whole by his findings in the second paragraph, as it has been referred to, in the reasons for judgment of my brother Priestley. It does not appear that the Commissioner was aware his findings in that paragraph had had that result. Moreover, there is nothing in the remaining paragraphs of the Commissioner's decision which indicate that he was aware either that he had already decided the case in the second paragraph, or that he was not still dealing with live issues in the proceedings. Subject to those brief observations of my own I agree, as I have said, with the reasons for judgment of the other members of the court. SAMUELS JA: The orders of the court are these: the appeal is allowed with costs; the award of the Compensation Court is set aside; the matter is remitted to the Compensation Court to do therein as shall be just and in accordance with the judgment of this court. The respondent to the appeal may have a certificate under the Suitors Fund Act in respect of the costs of the appeal if entitled. 1. Appeal allowed with costs. 2. Award of Compensation Court set aside. 3. Matter remitted to Compensation Court. 4. Respondent to have Suitors' Fund Certificate. COUNSEL FOR THE Appellant MS M. BEAZLEY QC / R MONTGOMERY COUNSEL FOR THE Respondent: JA. TIMBS QC / WJ ROCHE SOLICITORS FOR THE Appellant: PETER BOUZANIS and CO SOLICITORS FOR THE Respondent: MORAY and AGNEW