YAVUZ TRADING PTY LTD v YAVUZ SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL PRIESTLEY, SHELLER and CRIPPS JJA. 18 June 1992, 25 February 1993 [1993] NSWCA 297 The respondent was injured at work and paid compensation from the date of injury until 7 August 1987. A question then arose whether there was a continuing incapacity after that date and whether the respondent was a "worker" for the purposes of the legislation. The Commissioner found she was not a "worker". The respondent appealed to the Compensation Court claiming the Commissioner erred in this finding and had failed to give adequate reasons for his decision. Judge Moroney found the Commissioner had erred in not giving adequate reasons. The appellant then appealed to the Court of Appeal claiming the judge erred in finding the Commissioner failed to give adequate reasons. Held: The judge erred in holding that the Commissioner failed to adequately state his reasons that the respondent was not a "worker". The meaning of "review" under s36 Compensation Court Act is wide. It was not the judge's function to deal with the appeal as if it was on a question of law only. The judge did not exercise the jurisdiction he was required to exercise under s36 Compensation Court Act. Mansini v Director General of Education, Compensation Court, 30 January 1990 Coulton v Holcombe (1986) 162 CLR 1 Housing Commission of New South Wales v Tatmar Pastoral Co Pty Ltd and Penrith Pastoral Co Pty Ltd [1983] 3 NSWLR 78 Pettitt v Dunkley [1971] 1 NSWLR 376 Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 Rajski v Bainton, Court of Appeal, 6 September 1991, unreported Marjorie Selena Russell v FJ Walker Ltd, 10 February 1989, Court of Appeal, unreported Watson v Hanimex Colour Services Pty Ltd, 13 September 1991, Court of Appeal, unreported Boston Clothing Co Pty Ltd v Margaronis, 6 August 1992, Court of Appeal, unreported Agfa Gavaert Ltd v Lee, Court of Appeal, 1 May 1992, unreported. Compensation Court Act 1984, s36 Workers Compensation Act 1926, s42Q Workers Compensation Act 1987, S110 Priestley JA I agree with Cripps JA. Sheller JA I have had the benefit of reading the judgment of Cripps JA and agree with it and the orders therein proposed. Cripps JA This is an appeal from a decision of Judge Moroney in the Workers Compensation Court upholding an appeal against the decision of Commissioner Cook rejecting Mrs Yavuz's claim for weekly payments of compensation. The appeal to the Court of Appeal is on a question of law only. On 22 April 1987, Mrs Yavuz injured her back, chest and left elbow when she slipped on a wooden stairway at her place of work. She was paid compensation from the date of the injury until 7 August 1987. Later she made an application (undated) for an award of weekly compensation from the 7 August 1987 and continuing. Her application was referred to Commissioner Cook for determination. By the time the matter came on for hearing, there were two issues 2 UNREPORTED JUDGMENTS for determination. First, was Mrs Yavuz relevantly a worker within the meaning of the legislation and, second, whether her undisputed injury resulted in any incapacity after July 1987. Commissioner Cook dismissed her application because he was not satisfied she was a "worker". He made no finding on the issue of incapacity. Mrs Yavuz appealed to the Worker's Compensation Court. She alleged that Commissioner Cook "erred in law" in holding that she was not a worker. She also alleged that he "erred in law in failing to give adequate reasons for his decision". In her appeal she sought orders that she was a worker, that the award of Commissioner Cook be set aside and that the matter be remitted to him to make a determination "in relation to injury and incapacity". The first ground of appeal, viz, that Commissioner Cook erred in holding she was not a worker, appears to have been abandoned. It was assumed by all parties, including the judge, that the appeal was on a question of law only. Moroney CCJ was of the opinion that Commissioner Cook erred in law in that he failed to state adequately his reason for determining that he was not satisfied that Mrs Yavuz was a worker. He upheld the appeal and ordered that the matter be listed for hearing pursuant to the directions of the Chief Judge of the Court. Yavuz Trading then appealed to the Court of Appeal. Its ground of appeal was that Moroney CCJ erred in law in "finding that Commissioner Cook failed to give sufficient reasons for his decision of 11 April 1989 in matter No: CR 6302 of 1987 (Husniye Yavuz v Yavuz Trading Pty Ltd)". As I have said, the appeal is limited to questions of law. Upon the appeal coming on for hearing, the Court was informed that Mrs Yavuz had left the country and that her solicitors had ceased acting for her. The Court was concerned that she may not have had notice of the appeal. The appeal was adjourned. Upon the matter being relisted, the Court received evidence by way of affidavit that she was aware of the appeal. In the circumstances, it was deemed proper for the appeal to proceed. Mrs Yavuz did not appear. The proceedings before Moroney CCJ were heard in November 1989. He published his decision on 14 December 1989. Although he dealt with the application as if it were an appeal limited to questions of law, that was not his function. He was required to review Commissioner Cook's decision pursuant to s36 of the Compensation Court Act 1984. The legislative history of appeals from Commissioners to Judges of the Court and scope of those appeals are set out in a decision of Judge Burke in Mansini v Director General of Education (Compensation Court, 30 January 1990, unreported). For present purposes, it is to be noted that until 1 October 1989 there was an appeal from a Commissioner to a Judge on a question of law (s42Q of the Workers Compensation Act 1926 as replaced by s110 of the Workers Compensation Act 1987). S110 was repealed as from 1 October 1989. Thereafter decisions of Commissioners were reviewable pursuant to the provisions of s36 of the Compensation Court Act 1984. S36 provides: "(1) Where a commissioner or registrar makes a decision or does any other act in any proceedings, the Court may, on application by any party, review the decision or act, and may make such order by way of confirmation, variation or discharge or otherwise as the Court thinks fit. (2) Any such application for review must be made within the time and in the manner prescribed by rules of Court." URJ YAVUZ TRADING PTY LTD v YAVUZ (Cripps JA) 3 As will be seen, I am of the opinion that the learned judge erred in law in holding that Commissioner Cook failed adequately to state the reasons for his decision that he was not satisfied that a contract of service existed between the parties. However, even if I had come to a contrary conclusion, it would, in my opinion, have been necessary to set aside Moroney CCJ's decision and to remit the matter to the Compensation Court for Mrs Yavuz's application for review to be dealt with according to law. Moroney CCJ did not review Commissioner Cook's decision. He did not do so because the parties did not ask him to review the decision. Everyone assumed the appeal was limited to questions of law. Ordinarily, the parties are bound by the way proceedings are conducted (see Coulton v Holcombe (1986) 162 CLR 1). However, in the present case, Moroney CCJ did not exercise the jurisdiction he was required to exercise. And that, I think, mandates that his decision be set aside and the matter remitted to him to be dealt with according to law. As I have said, I think the learned judge erred in law in holding that Commissioner Cook gave legally insufficient reasons. Although Mrs Yavuz had claimed she was a worker employed by Yavuz Trading Pty Ltd, there was a great deal of material, as the judge pointed out, suggesting she was not. As he said, there was "ample evidence justifying Commissioner Cook's conclusion". It was submitted that Moroney CCJ was correct in his conclusion that Commissioner Cook erred in law because Commissioner Cook failed to make clear whether he acceded to the submission made by Yavuz Trading that there was no evidence of a contract of service or whether he was saying there was evidence of a contract of service but that he did not accept the evidence of Mrs Yavuz. The circumstances when inadequate reasons amount to an error of law have been examined in a number of decisions (see Housing Commission of New South Wales v Tatmar Pastoral Co Pty Ltd and Penrith Pastoral Co Pty Ltd [1983] 3 NSWLR 78, Pettitt v Dunkley [1971] 1 NSWLR 376, Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247, Rajski v Bainton, Court of Appeal, 6 September 1991 unreported, Marjorie Selena Russell v FJ Walker Ltd 10 February 1989, Court of Appeal, unreported). As Mahoney JA observed in Raiski v Bainton, there is no mechanical formula for determining what reasons must be given. It is recognised that a judge need not deal with every submission and is not required to record the whole of the evidence. However, where a conclusion is at the heart of the dispute as it was in the present case, there is an obligation to explain how a conclusion is arrived at. What is decisive is whether the decision the subject of criticism reveals the ground for, although not the detailed reasoning in support of, the finding of fact which led to the dismissal of the application. The case made by Yavuz Trading Pty Ltd was that Mrs Yavuz was not a worker. Commissioner Cook referred to the circumstance that she was a director of Yavuz Trading and that her tax returns for the relevant years showed earnings from sources other than salary or wages. He referred to a declaration by Yavuz Trading which showed the company had only one employee for the relevant period. That employee was a Miss Ahmet. He referred to the submission made on behalf of Mrs Yavuz that because premiums were paid on behalf of four workers it could be inferred that she was one of them and he was asked to accept her evidence that she worked five days a week and performed menial tasks. It was submitted that her tax returns referring to "directors' fees" were for "taxation purposes only". Commissioner Cook said: "In considering the evidence as a whole, I am not satisfied that a contract of 4 UNREPORTED JUDGMENTS service existed between the applicant and respondent and accordingly find that she is not a worker to whom the Act applies. I enter an award in favour of the respondent." In my opinion, it has not been demonstrated that Commissioner Cook failed to discharge the legal obligation referred to above. It is clear that he did not accept the evidence of Mrs Yavuz. It is true that Commissioner Cook referred to submissions being made that there was "no evidence" of a contract of service. The difference between a submission that there is no evidence upon which a certain finding can be made and a submission that that finding ought not be made on the evidence is one that is not easily recognised by the legally uninitiated. A fair reading of Commissioner Cook's decision reveals, in my opinion, the reasons why he concluded that he was not satisfied that a contract of service had been established. For this reason, I would uphold the appeal. Mr Sharpe, on behalf of Yavuz Trading, has also submitted that a judge exercising the jurisdiction under s36 to review a decision of a Commissioner is not entitled to make findings that insufficient reasons were given. Bearing in mind that Moroney CCJ approached the appeal from Commissioner Cook upon the basis that it was limited to a question of law and in so doing simply adopted the submissions put before him, it is somewhat surprising that Mr Sharpe should feel entitled to raise on the appeal that the learned judge failed adequately to exercise the jurisdiction under s36. However, it is necessary to make some observations concerning the ambit of "review" under s 36 to illustrate why it is that even if Judge Moroney had not erred in law in his conclusion concerning the reasons of Commissioner Cook the matter would still have to be remitted to the Compensation Court to be dealt with according to law. In Watson v Hanimex Colour Services Pty Ltd (13 September 1991, Court of Appeal, unreported) Kirby P considered the ambit of "review". He said (at page 16): "The power to confirm, vary, discharge or make orders as provided by s36(1) makes it plain that the judge constituting the Court for the purpose of the 'review', has a very large power which he or she must exercise in disposing of the review jurisdiction once it is invoked." Later, and in dealing with the extent and scope of the power, he said (at 19): "The fact that there is a decision of the Commissioner which is being 'reviewed' postulated that the Judge of the Compensation Court will not start with a blank page but with a formal decision of a person who, in making it, is 'taken to be the court'. Thus, unless the 'review' persuades the judge that the order being reviewed should be varied, discharged or otherwise disturbed, the order under 'review' will stand and be binding between the parties. This suggests the need, on the part of the aggrieved party, to provide some proper basis for disturbing the decision under challenge. Invoking the review procedure does not sweep aside the effect of the decision. It remains valid, unless the Judge, on review, otherwise orders." When reviewing a decision, it is open to a judge to permit evidence to be adduced before the court which may be a repetition of the evidence taken before the Commissioner or entirely fresh evidence not before the Commissioner. The wide powers of the court on review were discussed by Burke CCJ in Mansini and his observations were approved by the Court of Appeal in Boston Clothing Company Pty Ltd v Margaronis (1992) 27 NSWLR 580. In Boston Kirby P noted that Watson was reconsidered in Agfa Gavaert Ltd v Lee (Court of Appeal unreported 1 May 1992). In the present case, it would have been open to Moroney CCJ to have directed that Commissioner Cook provide reasons if those URJ YAVUZ TRADING PTY LTD v YAVUZ (Cripps JA) 5 reasons were necessary for the proper discharge of the review function. For example, a judge would be entitled, in my opinion, to ask the Commissioner, in an appropriate case, whether, and if so what, findings of credit had been made. It would seem to me that the ambit of review includes making a finding (if the circumstances are appropriate) that a Commissioner had failed to make clear his reasons and a direction that reasons be furnished where those reasons are needed. I note R26B of the Rules of Court provides that where a decision of commissioners is the subject of an application for review the Commissioner shall prepare and furnish to the Court a report as to all findings of fact made and inferences drawn. In the present case, Moroney CCJ did not review the decision. He determined (in my opinion erroneously) that Commissioner Cook failed to give sufficient reasons. In my opinion, the following orders should be made: 1. Appeal upheld. 2. Decision of Moroney CCJ set aside and the matter remitted to the Compensation Court for the review to be determined according to law. 3. Respondent to pay appellant's costs of the appeal. Respondent to have a certificate under the Suitor's Fund Act 1951. Counsel for the Appellant: JL Sharpe Solicitors for the Appellant: Vandervords Counsel for the Respondent: N/A Solicitors for the Respondent: N/A