New South Wales Court of Appeal CITATION : ICM AGRICULTURE PTY LTD v PERRY [2002] NSWCA 257 FILE NUMBER(S) : CA 40664/01 HEARING DATE(S) : 26 June 2002 JUDGMENT DATE : 8 August 2002 PARTIES : ICM AGRICULTURE PTY LTD v SIMON PERRY JUDGMENT OF : Mason P at 1; Meagher JA at 23; Handley JA at 24 LOWER COURT JURISDICTION : Compensation Court LOWER COURT WC 56537/99 FILE NUMBER(S) : LOWER COURT Hughes J JUDICIAL OFFICER : COUNSEL : Appellant: J Hislop QC/ R Hanlon Respondent: G Little SC/ R J Taylor SOLICITORS : Appellant: Henry Davis York Respondent: Wendy Baker CATCHWORDS : WORKERS COMPENSATION - whether employee injured in the course of employment - whether employee resided on the employer's property because he had been induced or encouraged to do so - when an injury is sustained where and while the worker is living on the employer's premises - whether employment a substantial contributing factor to the injury - whether trial judge adequately applied s 9A, Workers Compensations Act 1987 - whether s 9A satisfied merely because the injury arose out of or in the course of employment. (ND) LEGISLATION CITED : Compensation Court Act 1984 Workers Compensation Act 1987 Commercial Union Assurance Company of Australia v Ferrcom Pty Ltd (1991) 22 NSWLR 389 Danvers v Commissioner of Railways (NSW) (1969) 122 CLR 529 Dayton v Coles Supermarket Pty Ltd (2001) 21 NSWCCR 46 Hatzimanolis v ANI Corporation (1992) 173 CLR 473 CASES CITED: Healey v Delta Electricity (2000) 20 NSWCCR 491 Mercer v ANZ Banking Corporation Ltd (2000) 48 NSWLR 740 Muscat v Wollworths Ltd (2000) 20 NSWCCR 16 North Broken Hill Ltd v Tumes (1999) 18 NSWCCR 412 Vetter v Lake Macquarie City Council (2001) 202 CLR 439 Yates Property Corporation Pty Ltd (in liq) v Darling Harbour Authority (1991) 24 NSWLR 156 DECISION : See par 22. IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40664/01 MASON P MEAGHER JA HANDLEY JA Thursday 8 August 2002 ICM AGRICULTURE PTY LTD v Simon PERRY JUDGMENT 1 MASON P: This appeal challenges orders made by Judge Hughes awarding workers compensation to the respondent (the worker). The right of appeal is limited by s32 of the Compensation Court Act 1984 which relevantly provides: 32. Appeal to Court of Appeal from Judge on question of law (1) If a party to any proceedings before the Court constituted by a Judge is aggrieved by an award of the Judge in point of law or on a question as to the admission or rejection of evidence, that party may appeal to the Court of Appeal. (2) The Court of Appeal may, on the hearing of any appeal under this section, remit the matter to the Compensation Court for determination by the Compensation Court in accordance with any decision of the Court of Appeal and may make such other order in relation to the appeal as the Court of Appeal sees fit. …. 2 The notice of appeal asserts various errors of law in the finding that the worker suffered injury arising out of or in the course of his employment (cf Workers Compensation Act 1987, s4); and that the employment concerned was a substantial contributing factor to the injury (cf s9A). 3 The facts set out below emerge from the judgment or the unchallenged evidence of the worker whom the primary judge accepted as a witness of truth. 4 The worker was severely burned as a result of a fire on 20 December 1997. He was then asleep at the "barracks" at his place of employment on his employer's property called "Cowl Cowl Station", Hillston. The property is 85km x 20km in size. The appellant said that "the farm" was about 20km from Hillston, which I infer to be the distance between the accommodation and the town. Hillston is situated in a fairly remote part of central New South Wales. 5 The worker was employed as a lateral operator, engaged in the maintenance and repair of several items of irrigation machinery each costing $300,000. His job was to repair the equipment if anything went wrong and to make sure that the machines were in operation 24 hours a day. The job was effectively shared with another employee and the two men alternated on day and night shifts. It was a benefit to the employer having the worker on standby to attend any call-outs due to the failure of the equipment. 6 The worker did the night shift on the night of 19 December 1997. The next day he went into "town" to do some Christmas shopping. He came back to the property for a work Christmas party held on the evening of 20 December 1997. No question was raised as to whether the Christmas party itself arose out of or in the course of the employment, although there was unchallenged evidence that staff had been encouraged to attend and that the alcohol consumed was supplied by the employer (Black 20). 7 The worker said that when he left the party he was under the influence of alcohol and that he had not slept for at least 30 hours (Black 16-17). He retired to bed in his portable "Atco" unit on the property. It was a demountable structure which he had to himself. Approximately 12 of the 22 employees lived in accommodation on the farm with 10 of them living in town (Black 33). While asleep in bed the worker was injured in the fire which broke out in his unit. 8 The judgment contains no findings as to the cause of the fire, presumably because the matter was not raised as an issue for determination. There was some evidence which might have supported the view that the fire was caused by the worker smoking in bed (Blue 75-6) although there were other possibilities (cf Black 17). Since the absence of any such findings is not the subject of any complaint in the appeal I say no more on this topic. 9 The judgment records that the main dispute at trial turned on whether or not the worker was residing on the property in the Atco unit because he had been induced or encouraged to do so by the employer. On this matter, the judge made the following findings (at [4]): i) The cost of the Atco unit was $45 a week which was half the cost of the accommodation in town for a self-contained unit for a single person. Mr Hoppe gave that evidence. In fact in a more elliptical manner describing the cost in town being $90 if two shared where it would equate to the Atco unit; ii) I find that living in the Atco unit gave the employees access to a swimming pool and pay television which included channels unavailable on ordinary free-to-air television; iii) I find that is in considerable benefit to the company for the employees to live on the property, Mr Hanlon and Mr Hoppe quite properly agreed with that proposition; iv) Mr Hoppe conceded this; that is that the benefit to the company – and was quite bemused by all the argument about whether it was or not when questioned by me at page 24 of the transcript of 12 December 2000 the following exchange occurred: Question It is for the benefit of the company to keep those operators working for you. The whole of your evidence is that the thing that is not a benefit to the company is to have turnover for these operators. You want them to be happy, contented and stay. Answer: Yes. Question: The other way you do it is to give them accommodation. Answer: Yes - - and then he comments, "Yes, I clearly do not understand what all this is about"; v) I find that as a matter of fact that the cheaper provision accommodation (sic) , of pay television and the swimming pool was an inducement/encouragement for the employees to reside on the property; vi) I find, and it was admitted, that it was a benefit to the employer having an employee on standby to attend any call-outs due to the failure of the equipment in the lateral irrigation equipment. 10 These findings are relevant to the two issues agitated in this Court. Injury arising out of or in the course of employment? 11 Judge Hughes said (at [6]-[7]): Counsel have referred to me the cases of McCurry v Lamb (1992) 8 NSWCCR 556, Inverell Shire Council v Lewis (1992) 8 NSWCCR 562, Hatzimanolis v ANI Corporation (1992) 173 CLR 473. Turning now, after considering those authorities, I also make the following finding of fact; I find that Mr Perry was asleep when he began to be injured. In the words of Handley JA in McCurry v Lamb at 569 already cited: "The worker sustained his injuries 'at a particular place', namely, the camp, where the employer had induced or encouraged him to stay, and while he was doing something that was reasonably incidental to his temporary residence there, namely, sleeping." Accordingly, the worker received his injuries in the course of his employment. I am satisfied that the decisions of Hatzimanolis, McCurry v Lamb and Inverell Shire Council v Lewis support the proposition that if the employer encouraged or induced the employee to live on premises provided by the employer and was engaged in conduct that was reasonably incidental to his work then the worker is to be regarded as being injured in circumstances arising out of or in the course of the employment. I formally find that the applicant suffered injuries that arise out of or in the course of his employment. (I have corrected obvious errors in the transcription of this passage in the appeal book.) 12 The appellant challenged these findings in point of law on the basis that there was no evidence to support the conclusion that the employer had induced or encouraged the worker to live on-site. It was purely the worker's choice, so the argument went. And there was no evidence from the worker himself to the effect that his decision to live on-site was a conscious response to the employer's inducement or encouragement. Some initial reliance was placed upon Commercial Union Assurance Company of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389 at 418, although senior counsel ultimately accepted that this passage deals with the manner in which a tribunal of fact may draw inferences from available though exiguous evidence. 13 Alternatively, it was submitted that the cases cited by the primary judge deal only with "remote" work locations, whereas the location of "Cowl Cowl" did not satisfied such a legal requirement. It was submitted that Hatzimanolis requires that there be an overall period or episode of work to which the sleeping arrangements provided by the employer were incidental. 14 The latter submission misconstrues the passage in Hatzimanolis at 483 upon which it purports to rely. In fact the High Court indicates clearly that this is but an example of a situation where it will be open to conclude that an injury sustained where and while the worker is living on the employer's premises occurred in the course of employment (see also Danvers v Commissioner of Railways (NSW) (1969) 122 CLR 529 at 533, where the presence of hotel accommodation at a nearby village did not preclude the finding in the worker's favour). 15 Returning to the primary submission, there was ample evidence that the employer had expressly or impliedly induced or encouraged the worker to spend the intervals between his rostered shifts living at the "barracks". It is summarised in the passage set out above. The absence of a direction to live on site did not preclude the finding of inducement or encouragement (see Hatzimanolis at 481, 484). Employment a substantial contributing factor to the injury? Section 9A provides: 9A No compensation payable unless employment substantial contributing factor to injury (1) No compensation is payable under this Act in respect of an injury unless the employment concerned was a substantial contributing factor to the injury. (2) The following are examples of matters to be taken into account for the purposes of determining whether a worker's employment was a substantial contributing factor to an injury (but this subsection does not limit the kinds of matters that can be taken into account for the purposes of such a determination): (a) the time and place of the injury, (b) the nature of the work performed and the particular tasks of that work, (c) the duration of the employment, (d) the probability that the injury or a similar injury would have happened anyway, at about the same time or at the same stage of the worker's life, if he or she had not been at work or had not worked in that employment, (e) the worker's state of health before the injury and the existence of any hereditary risks, (f) the worker's lifestyle and his or her activities outside the workplace. (3) A worker's employment is not to be regarded as a substantial contributing factor to a worker's injury merely because of either or both of the following: (a) the injury arose out of or in the course of, or arose both out of and in the course of, the worker's employment, (b) the worker's incapacity for work, loss as referred to in Division 4 of Part 3, need for medical or related treatment, hospital treatment, ambulance service or occupational rehabilitation service as referred to in Division 3 of Part 3, or the worker's death, resulted from the injury. (4) This section does not apply in respect of an injury to which section 10, 11 or 12 apples. 16 Judge Hughes said (at [8]-[9]): Turning now to s9A I refer to the decision of Mercer v ANZ Banking Corporation Limited (2000) 48 NSWLR 740 and then to the subsequent judgments of his Honour Judge Neilson of this court; those cases being Muscat v Woolworths Ltd (2000) 20 NSWCCR 16 (given on 3 July 2000) and Healey v Delta Electricity (2000) 20 NSWCCR 491 (given on 25 July 2000). I was urged by Mr Hanlon not to follow Judge Neilson but then in the end as a matter of comity I follow the decision of his Honour Judge Neilson. In Healey he finds the answer to s9A in paragraph [25] at 496. He says: On my view that the applicant's injury arose out of and in the course of his employment, the test of substantial contributing factor is satisfied. For my reasoning in that regard see Muscat v Woolworths . Since I have found that the applicant's injuries arose out of or in the course of his employment and hence the test of substantial contributing factor is satisfied I find therefore the applicant is not held out of his judgment through the operation of s9A of the Act. (I have corrected obvious errors and inserted the law reports references.) 17 The parties agree that the last sentence misapplies the reasoning in Healey and Muscat. Nothing in those cases suggested that s9A is satisfied merely because the injury arose out of or in the course of employment. Nor does Mercer. Section 9A(3)(a) explicitly states that a finding that the injury arose out of or in the course of employment is not, in itself, a basis for a finding of substantial contributing factor. 18 No application to revisit the correctness of Mercer was pressed in the present appeal (cf Dayton v Coles Supermarket Pty Ltd (2001) 21 NSWCCR 46 at 52). 19 The appellant is entitled to have the award set aside. Remitter would normally follow in a case like the present, because the error of law affected the ultimate decision (cf Yates Property Corporation Pty Ltd (in liq) v Darling Harbour Authority (1991) 24 NSWLR 156 at 177) and because this Court lacks jurisdiction to make factual findings (North Broken Hill Ltd v Tumes (1999) 18 NSWCCR 412, Vetter v Lake Macquarie City Council (2001) 202 CLR 439 at 464). 20 The appellant resists this, arguing for an award in its favour on the basis that such a result is inevitable. I disagree. 21 Here there was a finding that the injury was incurred in the course of employment. There was also evidence capable of establishing that it arose out of the employment, but no finding to that effect is explicitly made (cf, however the passage containing the error of law). The underlying facts were, in my view, capable of establishing a substantial connection (I hasten to say that they do not mandate such a result). The question of how the fire started would be relevant to s9A, but it was barely explored and certainly not made the subject of findings. 22 I propose the following orders: 1. Appeal allowed. 2. Set aside award made on 1 August 2001. 3. Matter remitted to Compensation Court for further determination in accordance with the reasons of the Court of Appeal. 4. Respondent to pay appellant's costs of the appeal and to have a certificate under the Suitors' Fund Act, if qualified. 23 MEAGHER JA: I agree with Mason P. 24 HANDLEY JA: I agree with Mason P. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.