New South Wales Court of Appeal CITATION : GSF AUSTRALIA PTY LTD v ZLATA MISIC [1999] NSWCA 171 revised - 22/06/99 FILE NUMBER(S) : CA 40805/97 HEARING DATE(S) : 12 April 1999 JUDGMENT DATE : 12 April 1999 PARTIES : GSF AUSTRALIA PTY LTD v ZLATA MISIC JUDGMENT OF : Mason P at 1; Handley JA at 28; Stein JA at 29 LOWER COURT JURISDICTION : Compensation Court LOWER COURT FILE NUMBER(S) : 19274/96 LOWER COURT JUDICIAL OFFICER : Davidson CCJ COUNSEL : C E O'Connor QC/VJJ Webster (Appellant) S J Stanton/A Atic (Respondent) SOLICITORS : Bruce & Stewart (Appellant) Borak & Co (Respondent) CATCHWORDS : Injury at work - Appeal from challenge in Compensation Court to factual and credibility findings of Commissioner - Error of fact or law - Denial of procedural fairness DECISION : Appeal dismissed with costs THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40805/97 MASON P HANDLEY JA STEIN JA Monday 12 April 1999 GSF AUSTRALIA PTY LTD v ZLATA MISIC JUDGMENT 1 MASON P: The respondent slipped and fell at work on 6 September 1995. She has not since been in paid employment. Compensation was paid on a voluntary basis until 21 June 1996. Proceedings were brought in the Compensation Court for weekly payments from 21 June 1996, lump sum compensation under s 66 and 67 of the Workers Compensation Act 1987, s 60 payments, interest and costs. 2 The application was heard by Commissioner Hunt on 7 July 1997. The evidence before the Commissioner consisted of the oral evidence of the respondent, medical reports and certificates, photographs of the respondent's back and financial and earnings records. No doctor was called to give evidence on either side. There was a conflict in the medical evidence as to the nature of the injury, whether there was any permanent loss as a result thereof and whether any incapacity for work continued after 21 June 1996. 3 The appellant's case evidenced by its medical reports and the cross-examination of the respondent was that the respondent greatly exaggerated her symptoms. The appellant contended that there was back strain and no more and that the respondent had recovered by June 1996. 4 It was common ground that the absence of objective clinical signs of the injury did not preclude the making of an award as sought for this type of claim, but it was equally clear that credibility loomed large. 5 The Commissioner concluded that the respondent had suffered a five per cent permanent impairment of the back. He made an order under s 66 for the payment of a lump sum in respect of that loss. He also awarded the respondent s 60 expenses, costs and interest. He otherwise did not accept the respondent's claims. The key finding referable to the back was expressed in these terms. "On the medical evidence before me, there is no doubt that there was injury on 6 September 1995. Several attempts to diagnose the injury have failed to produce anything objectively. However, I am prepared to accept that there was some musculoligamentous injury to the low back. I assess a permanent impairment of five per cent." 6 The respondent appealed from the decision of Commissioner Hunt to Davidson, CCJ, pursuant to s 34A of the Compensation Court Act 1984. A right of appeal relevantly lay only in respect of a point of law. Judge Davidson upheld the appeal and remitted the matter to the Commissioner. 7 Pursuant to s 34A(4) of the Compensation Court Act, his Honour received further evidence in the form of an affidavit of the respondent's solicitor, Ms Borak. Ms Borak was cross-examined. 8 The appeal to Davidson CCJ proceeded on two grounds. 9 The first ground related to the following finding of the Commissioner. "The applicant said that there has been no real change in her condition since that time. She said that she is able to bend, to get her fingers to her knees, that she can lift up to five kilograms, that she can sit for up to one hour, although I note that she showed little sign of distress after one and a half hours in the witness box . She said that she can stand for half an hour to an hour but not in the one spot. She also said she is able to walk for about a half hour. (Emphasis added.) 10 The nub of the complaint was that, according to Ms Borak's affidavit, the respondent gave evidence in two stages; one stage of about an hour between approximately 12 noon and 1pm and the second stage of about half an hour between 2pm and 2.30pm. Indeed, there was some inconclusive evidence that there were further interruptions in the first portion of the evidence. 11 The Commissioner's clear inference that the respondent had been in the witness box for an unbroken period of one and a half hours was therefore challenged on its facts. 12 The point of law advanced was that counsel appearing for the respondent was not at any point asked during submissions, or at any other point of time during the trial, to comment on the Commissioner's observation that the respondent showed little sign of distress in the witness box. 13 The second ground of appeal before Judge Davidson relied upon the following finding of the Commissioner. "It was put to her that she had exaggerated her condition when seen by Dr Cowdery for the respondent. She said that there was no exaggeration but rather on that day she was very tired, having seen three doctors in the one day. Medical records available to the Court show that she saw Dr Cowdery for the respondent on 19 June 1996 and he was the only doctor seen that day. Dr Evans records seeing her on 20 June and her own doctors saw her in the case of Dr Wright on 24 May and in the case of Dr Mahoney on 29 May and 3 July. 14 It had been put to the respondent in cross-examination that she had been exaggerating when she gave a medical history to Dr Cowdery. Her answer was: "I don't think so, because in the same day I had to see three doctors. I was out all day going from one to the other and I was on my feet and really tired." 15 Ms Borak's affidavit established that the respondent had in fact seen three medical practitioners nominated by the appellant on 19 June 1997. By inference from the letter annexed to that affidavit, they were Dr Cowdery, a general surgeon in Parramatta (appointment at 9am), Dr Evans, an orthopaedic surgeon in Sydney (appointment at 12 noon) and Dr Westmore, a psychiatrist in Sydney (appointment at 4 or 4.30pm). The affidavit also established that nothing was raised, either by the Commissioner or counsel in addresses, in relation to the proposition that the respondent had not attended the three scheduled appointments on 19 June 1997. 16 Judge Davidson first addressed the appellant's submission that the Commissioner's two remarks, that is about his observation of the respondent in the witness box and about there only being one medical attendance on 19 June 1997 were mere "throwaway lines", having no bearing upon the decision to which he came. It was urged that neither side emerged with exactly the result for which they had contended before the Commissioner and that this corroborated the submission that the remarks on the credibility issues were very much en passant. 17 A similar submission was made in this Court. 18 The learned judge pointed out that the question of exaggeration by the respondent in relation to her symptoms lay at the heart of the dispute over the level of compensation payable to her and the critical assessment of the respondent's credibility as a medical historian and a witness in court. Judge Davidson rejected the appellant's submission in this regard. He concluded that the Commissioner must have taken into account the presentation of the respondent, both to the doctors and in court. Each of the statements challenged in the Commissioner's judgment were directed to those two aspects of the respondent's case. 19 I agree with this conclusion, particularly in the light of this being a case in which credibility was so significant. 20 The learned judge then considered whether the two passages revealed a denial of procedural fairness sufficient to trigger an appealable point of law. He held that they did. His Honour cited the reasoning of the High Court in Stead v State Government Insurance Commission (1986) 161 CLR 141, especially at 145, where it was said that: "Where...the denial of natural justice affects the entitlement of a party to make submissions on an issue of fact, especially when the issue is whether the evidence of a particular witness should be accepted, it is more difficult for a Court of Appeal to conclude that compliance with the requirements of natural justice could have made no difference." 21 Having found error in a point of law, the learned judge then determined to remit the matter to Commissioner Hunt and to make further orders. 22 In this Court, the appellant submitted that the passages complained of revealed no more than an error of fact. Reliance was placed upon Azzopardi v Tasman UEB Industries Limited (1985) 4 NSWLR 139. 23 As to the first passage relating to the Commissioner's observations of the respondent in the witness box, the appellant relied upon dicter in the judgment of Clarke JA in Government Insurance Office of New South Wales v Bailey (1992) 27 NSWLR 304 at 323D in support of the proposition that a judge is entitled to take into account his or her observations of a party when in the witness box as relevant to an issue such as the party's injuries without expressly raising the matter and inviting submissions. Hope JA agreed with the judgment of Clarke JA. There are indeed stronger statements to similar effect in the reasoning of a court comprising Kirby P, Meagher JA and Cripps JA in Videski v Australian Iron and Steel Pty Ltd Court of Appeal Unreported 17 June 1993. 24 I am inclined to think that Davidson CCJ was not entitled to treat this aspect of Commissioner Hunt's judgment as indicative of a denial of procedural fairness. However, I find it unnecessary to reach a concluded view on the matter. That is because I am in agreement with the learned judge's assessment of error in point of law as regards the second passage complained of. That passage records the Commissioner taking into account adversely to the respondent a finding that she saw only Dr Cowdery on 19 June 1997. This finding is not supported by the evidence. (Compare combined book 181.) Indeed, it is a finding contrary to what was put to the respondent in cross-examination immediately after the passage I have already referred to when she said that she was tired from having seen three doctors on the same day, because it was there put to her: Question "when you saw Dr Evans at the request of the insurance company again on the same day, 19 June this year". Answer "yes, I know." 25 More importantly, this was a finding in a matter of some materiality to the critical issue of the respondent's credibility as a medical historian and a sworn witness. It was a finding which should not have been made in the circumstances of this case without offering the respondent and her counsel at trial the opportunity to deal with it. 26 I have already indicated my agreement with Davidson CCJ's reasons as to the materiality of the reference made by the Commissioner to the fact that the respondent saw only one doctor on 19 June 1997. It is true that such materiality is diminished somewhat by the evidence indicating that Dr Cowdery was the first of the doctors seen by the respondent on that day. Nevertheless, I am of the view that the judge was correct in concluding that there was a procedural miscarriage in the nature of a denial of procedural fairness. In the circumstances of this case, the failure to confront the respondent or her counsel with the opportunity to give evidence or make submissions to explain or diminish the potentially adverse inference of exaggeration which was in fact drawn on this basis amounted to an error in point of law. 27 In my view the appeal should be dismissed with costs. 28 HANDLEY JA: I agree. 29 STEIN JA: I also agree. 30 MASON P: The appeal is dismissed with costs. ******* DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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