New South Wales Court of Appeal CITATION : McMahon v.Lagana & Anor. [2004] NSWCA 164 HEARING DATE(S) : 5 May 2004 JUDGMENT DATE : 27 May 2004 JUDGMENT OF : Hodgson JA at 1; Santow JA at 42; Stein AJA at 43 DECISION : Appeal dismissed.; If the respondent seeks an order for costs, it should within 14 days either submit a note that this is agreed, or else apply for an order for costs by written submissions, and in the latter case the appellant may reply by written submissions within a further 14 days. CATCHWORDS : WORKERS' COMPENSATION - Injury - Course of employment - Interval - Whether real connection between employment and injury - Whether employment a substantial contributing factor. LEGISLATION CITED : Workers' Compensation Act 1987 ss.4, 9A Dayton v. Coles Supermarkets Pty. Ltd. [2001] NSWCA 153 Hatzimanolis v.ANI Corporation Ltd. (1992) 173 CLR 473 Hope v. Bathurst City Council (1980) 144 CLR 1 CASES CITED : ICM Agriculture Pty. Ltd. v. Perry [2002] NSWCA 257 Inverell Shire Council v. Lewis (1992) 8 NSWCCR 562 McCurry v. Lamb (1992) NSWCCR 556 Mercer v. ANZ Banking Group Ltd. (2000) 48 NSWLR 740 TGT Transport v. Zammit [2000] VSCA 162 PARTIES : Christoper Michael McMahon - appellant Anthony Lagana & Joseph Lavella t/as The Vessel "Nimble II" - respondent FILE NUMBER(S) : CA 40868/03 COUNSEL : Mr. R.I. Harrington for appellant Mr. W.P. Kearns SC for respondent SOLICITORS : Lee Sames Egan, Lismore for appellant Lee & Lyons,Sydney for respondent LOWER COURT Compensation Court JURISDICTION : LOWER COURT WCC 2537/02 FILE NUMBER(S) : LOWER COURT Deputy President Dr. G. Fleming JUDICIAL OFFICER : IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40868/03 WCC 2537/02 HODGSON JA SANTOW JA STEIN AJA Thursday 27 May 2004 McMAHON V. LAGANA & ANOR. Judgment 1 HODGSON JA: On 1 September 2003, Deputy President Dr. G. Fleming affirmed the decision of the Workers' Compensation Commission constituted by an Arbitrator, that decision being an award for the respondent employer in a claim for compensation brought by the appellant worker under the Workers' Compensation Act 1987 (the Act). The appellant appeals to this Court from the Deputy President's decision. CIRCUMSTANCES 2 The appellant was born on 29 April 1975, and lived at Evans Head. 3 He was employed by the respondent as a deckhand on a fishing vessel named "Nimble II". He started working out of Ulladulla, over 500km from Evans Head, on 7 July 2001. 4 The vessel fished between Gabo Island, Victoria, and Southport, Queensland. As part of the appellant's employment, he lived on the boat unless it was fishing near Evans Head, in which case he would live at home. He lived on the boat not only while it was at sea, but also while it was moored. There were no set hours of duty while working on the vessel, and the appellant was required to go out and fish at short notice and at all hours, depending on weather conditions. 5 At the time of his injury, which occurred on 7 October 2001, the appellant was living on the vessel whilst it was moored at Ulladulla wharf. The vessel had set off to sea from Sydney Fish Markets on 4 October 2001; but due to mechanical problems, the vessel had gone to Ulladulla, arriving between 5am and 6am on Saturday 6 October 2001. During that morning, the appellant worked on the boat helping to unload the catch and clean the boat, finishing that work at about 12 noon. While he was cleaning the boat, the person who subsequently assaulted him spoke to him, asking how the fishing had gone. 6 In the afternoon, the appellant went to a local hotel to have a couple of drinks, then went back to the boat to have a rest and to have dinner. He returned to the hotel at about 8.30 that night. 7 On that occasion, the appellant had a further conversation with his subsequent assailant, and, upon leaving the hotel at about 2am on Sunday 7 October, and on the way back to the boat, got into a fist fight with the assailant when the assailant started punching him. After the appellant got back to the boat, the assailant came to the wharf where the boat was moored and called out to the appellant to come up. The appellant went onto the wharf, and the assailant produced a machete and attacked the appellant, causing him severe injuries. 8 The evidence of the appellant was that, at the time of the assault, he considered himself to be partially intoxicated but not drunk. It appears that that evidence was accepted. STATUTORY PROVISIONS 9 The appellant's entitlement to workers' compensation depends on two provisions of the Act, namely the definition of "injury" in s.4 and s.9A. Those provisions are as follows: 4 Definition of "injury" In this Act: "injury" : (a) means personal injury arising out of or in the course of employment, (b) includes: (i) a disease which is contracted by a worker in the course of employment and to which the employment was a contributing factor, and (ii) the aggravation, acceleration, exacerbation or deterioration of any disease, where the employment was a contributing factor to the aggravation, acceleration, exacerbation or deterioration, and (c) does not include (except in the case of a worker employed in or about a mine to which the Coal Mines Regulation Act 1982 applies) a dust disease, as defined by the Workers' Compensation (Dust Diseases) Act 1942 , or the aggravation, acceleration, exacerbation or deterioration of a dust disease, as so defined. … 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 applies. DECISION OF ARBITRATOR 10 The Arbitrator found that the appellant had finished work on the day prior to the assault, and had not resumed duties for the employer at that time; and that the events surrounding the injury were not arising out of, nor in the course of employment. He accepted the proposition that, if the appellant had been in employment (meaning in the course of employment) at the relevant time, it should be found that the employment was a substantial contributing factor to the injury. However, he did not accept that the appellant was in the course of employment at the time, and was not satisfied there was a causal linkage between the injury and the work that the appellant was required to perform. 11 Accordingly, the Arbitrator was not satisfied that the appellant had suffered an injury arising out of or in the course of employment (s.4) or that the appellant's employment was a substantial contributing factor to the injury (s.9A). DECISION OF DEPUTY PRESIDENT 12 The appellant appealed against the Arbitrator's decision, by leave granted on 11 July 2003. 13 The Deputy President found that the Arbitrator had made an error of law in the application of the definition of "injury" in s.4 of the Act, taking into account the broad test set down in Hatzimanolis v. ANI Corporation Ltd. (1992) 173 CLR 473. She found that the whole of the time the Nimble II was docked at Ulladulla Wharf and that the appellant was residing on the boat was an overall period or episode of work, and that after the appellant finished his duties on the boat at about midday on 6 October 2001, what followed was an interval or interlude in his overall period or episode of work. Her reasons were summarised in the following paragraph: Taking into account the broad test set down in Hatzimanolis and the findings of fact that are relevant to this issue, it is my view that the Arbitrator made an error of law in the application of the definition of injury, in section 4 of the 1998 Act, to the facts of this particular case. I find that Mr. McMahon did suffer an injury in the course of his employment as a deckhand on the Nimble II on the following basis: · At the time of the injury on 7 October 2001 Mr. McMahon was employed as a deckhand on the Nimble II. His hours of work were variable and dependent upon the weather and the potential catch. He had immediately returned to Ulladulla from fishing and had completed his duties on the vessel. However the point at which those duties would recommence, whether going to sea, attending to repairs on the vessel or other routine maintenance, was unpredictable. This was again dependent upon the weather conditions for fishing and the directions of his employer in relation to tasks to be done on the vessel. I consider that the whole of the time the Nimble II was docked at Ulludalla wharf and that Mr. McMahon was residing on the boat, was an overall period or episode of work. · Mr. McMahon finished his duties on the vessel around midday on 6 October 2001. What followed, i.e. Mr. McMahon's visit to the hotel and his return to the Nimble II, was an interval or interlude in his overall period or episode of work. · The provision of food and accommodation to Mr. McMahon on the Nimble II when it was docked at Ulladulla wharf was a condition of Mr. McMahon's employment. It amounts to an implied inducement to him to reside on the vessel during intervals in his employment. While not a condition of his employment, or an obligation on him, his residence on the boat had some benefit to the employer. · Having regard to the general nature of Mr. McMahon's employment, including the variability of his duties, the unpredictability of his hours of work, and the provision of food and accommodation on the vessel, I am satisfied that his injury occurred in the course of his employment. · Mr. McMahon's conduct during the interval in his employment, from midday 6 October 2001 until he returned to the Nimble II around 2.30 am on 7 October 2001, was not such as to take him outside of the course of his employment at the time the injury occurred. 14 I should add that the Deputy President confirmed a finding by the Arbitrator that the provision of security to the Nimble II was not a condition of the appellant's employment nor an obligation or requirement imposed upon him by his employer. 15 However, the Deputy President found to the effect that the appellant's employment was not a substantial contributing factor to his injury, within the meaning of s.9A. Her reasons were summarised in the following paragraphs: Taking these principles into account, I turn to the factors set out in section 9A (2) of the 1987 Act, and make the following findings; (a) the time and place of the injury. The injury occurred at around 2.30 am on 7 October 2001 at the Uludulla wharf, where the Nimble II was docked. (b) the nature of the work performed and the particular tasks of that work. Findings in relation to this matter are set out at paragraphs 30-33 above. It follows from these findings that Mr. McMahon was not performing any work or particular work tasks when he returned to the Nimble II on 7 October 2001, or when he went onto the wharf, where he was attacked. (c) The duration of the employment. Mr. McMahon was employed as a deckhand from around July 2001 until the time of his injury. (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. Mr. McMahon's injuries were suffered as a result of the attack on him with a machete; they are not such that they would likely have occurred at this time in his life for other reasons. The evidence is that Mr. McMahon had an earlier altercation with his attacker in the hotel, however the attack upon him on the wharf, in particular the severity of it, was not predictable. It is evident that if Mr. McMahon had not been a deckhand on the Nimble II it is unlikely that he would have been on the boat or the wharf at the relevant time. However this is saying no more than that the injury occurred 'in the course of employment'. (e) The worker's state of health before the injury and the existence of any hereditary (sic) risks. This is not relevant to this case. (f) The worker's lifestyle and his or her activities outside the workplace. Mr. McMahon's lifestyle did not contribute to his injury. Mr. McMahon was not performing any actual duties for his employer when he was attacked on the Ulladulla wharf on 7 October 2001. Nor was he performing duties that could be said to be incidental to his employment. He had finished his duties around midday. He had been enjoying himself at the local hotel, as he was perfectly entitled to do, in an interval in his employment. Having returned to the vessel to sleep for the night, he was lured onto the wharf and was the victim of a violent attack. The fact that he was working as a deckhand on the Nimble II and, as a consequence, was residing on the vessel, was a minor contributing factor to his injury. The causal connection between Mr. McMahon's actual duties and his injury is not established. 16 The Deputy President also considered whether the Arbitrator had provided adequate reasons for his decision, and held that he had done so. 17 In the result, she affirmed the Arbitrator's decision. GROUNDS OF APPEAL 18 The appellant appeals on the following grounds: 1. That the Deputy President erred in law holding employment was not a substantial contributing factor in that she failed to apply the principles set out in Mercer v ANZ Banking Group 20 NSW CCR 70 at page 81. 2 That the Deputy President erred in law in that she failed to give reasons as to why she considered the appellant's employment to be a minor contributing factor in the circumstances. 19 The respondent has put on a Notice of Contention, seeking to uphold the decision of the Deputy President on the ground that the injury did not arise in the course of employment. SUBMISSIONS 20 Mr. Harrington for the appellant submitted that the Deputy President had made three errors of law. 21 First, her finding that the injury was in the course of employment on the ground discussed in Hatzimanolis, involving a real connection between the employment and the injury, was of itself sufficient to establish that the employment was a substantial contributing factor, at least unless there was some excluding factor such as misconduct by the employee. No such excluding factor was suggested here. 22 Second, Mr. Harrington submitted that the findings of primary fact by the Deputy President were such that the statutory requirement of substantial contribution, if correctly interpreted, must be satisfied: cf. Hope v. Bathurst City Council (1980) 144 CLR 1. In particular, he submitted that on those findings, the appellant was by reason of his employment exposed to greater risk of injury of the kind he suffered because he was residing, not in a secure house, but in a boat next to a public wharf, and because the circumstances of his work and residence were such as would encourage him to spend time away from the place of residence in places such as hotels. Mr. Harrington submitted that this was a stronger case of causation by employment than Hatzimanolis, or McCurry v. Lamb (1992) 8 NSWCCR 556 or Inverell Shire Council v. Lewis (1992) 8 NSWCCR 562. 23 Third, Mr. Harrington submitted that the primary judge was in error in holding that there needed to be a causal connection between the injury and active duties performed on behalf of the employer. He submitted that, where injury was from a cause external to the employment, the question of whether the worker was actually performing positive duties was irrelevant. He referred to Mercer v. ANZ Banking Group Ltd. (2000) 48 NSWLR 740. He submitted that work would have been less of a contributing factor than in the present case if an employee performing active duties in a factory environment were to be injured by a deranged non-employee coming onto the factory premises, because in that case the employment would not have increased the exposure to such a risk, as it did in the present case. 24 Finally, Mr. Harrington submitted that the Deputy President's reasons were inadequate. 25 For the respondent, Mr. Kearns SC submitted that s.9A, and especially s.9A(3), makes it clear that the question whether employment is a substantial contributing factor to the injury is a separate question from whether the injury is in the course of employment: cf. ICM Agriculture Pty. Limited v. Perry [2002] NSWCA 257 at [17]. 26 Mr. Kearns submitted that "substantial" is an ordinary English word; and that the findings of fact by the Deputy President that the employment was a minor contributing factor and not a substantial contributing factor involved no error of law: see Dayton v. Coles Supermarkets Pty. Limited [2001] NSWCA 153 at [16] and [29]. 27 Mr. Kearns submitted that the ratio of Mercer appears at par.[35] of that decision as follows: I now return to the critical passage in the judgment under appeal. It is set out at [8] above. In my view, this betrays legal error because the absence of "employment characteristics" in the precise activity that led to the injury was treated as determinative. This is made clear by the concluding sentences (at 274): "The mere fact that the applicant did what she did when she did it is not sufficient of itself to make the employment a substantial contributing factor to the injury. In the relativities of things it was more a coincidence than a contribution." 28 That is, the ratio was that it was wrong to treat the absence of "employment characteristics" in the precise activity that led to the injury as being determinative, rather than merely a factor to be taken into account. What was important was the overall extent of the causal link: see also Mercer at [27]. 29 On the Notice of Contention point, Mr. Kearns submitted that the Deputy President made an error of law in the second-last dot point of the paragraph quoted in that she did not address the question required to be addressed by Hatzimanolis, namely, given that the injury occurred in an interval or interlude occurring within an overall period of employment, had the employer expressly or impliedly induced or encouraged the worker to spend the interval at a particular place or in a particular way: cf. TGT Transport v. Zammit [2000] VSCA 162 at [37] to [38]. Here, it could not be said that the employer induced or encouraged the worker to go to a hotel, to there become involved in an argument and a fist fight with the assailant, and later to go onto the wharf to continue his dealings with the assailant. 30 In reply, Mr. Harrington submitted that, although "substantial" was an ordinary English word, construction of the provision still required appreciation of legal issues relevant to that construction. 31 On the Notice of Contention, he submitted that the employer undoubtedly induced or encouraged the appellant to live on the boat, and the other events were reasonably incidental to these circumstances, as had been the case in Lamb and Lewis. In the former case, a worker was shot while in bed with a female employee in lodgings provided by the employer; and in the latter case, the worker was shot when attending a social activity in a caravan park, away from the caravan in which the worker was residing pursuant to arrangements made by the employer. DECISION 32 I accept Mr. Harrington's submission that, although "substantial" is an ordinary English word, the decision of a question whether employment was a substantial contributing factor to an injury is a question informed by legal considerations. However, in my opinion, the ultimate decision is a finding of fact, and is a matter of impression and degree: see Dayton at [29]. The appeal to this Court is on a question of law only. 33 It is clear that the question of substantial contributing factor is a distinct and additional question to that of the course of employment. Accordingly, in my opinion there was no error by the Deputy President by reason that the former question had been determined by determination of the latter question on the basis of the decision in Hatzimanolis; and in my opinion also, there was no error of law by reason that the primary facts as found amounted as a matter of law to a finding of the employment was a substantial contributing factor. No matter how the primary facts were found, there still had to be a judgment as to whether the employment was a substantial contributing factor to the injury. 34 Accordingly, if there is an error of law in the decision of the Deputy President, it must be either that the facts as found were so compelling that one can infer there was an error of law in interpretation of the provision; or that the Deputy President applied an incorrect criterion, or took into account an irrelevant consideration in reaching her conclusion. 35 As regards the latter alternative, in my opinion the Deputy President did not hold that there needed to be a causal connection between the injury and active duties performed on behalf of the employer, if the employment was to be a substantial contributing factor to the injury; but she did state that matter as a relevant consideration. In my opinion, the question whether the worker is performing positive employment duties or is merely in an interval between such duties, when the injury occurs, may be relevant to whether the employment was a substantial contributing factor to the injury; and it was relevant in this case: cf. Mercer at [13]. 36 As regards the former alternative, the matters referred to by Mr. Harrington, especially the circumstance that the living arrangements induced or encouraged by the employer could be considered as exposing the appellant to an increased risk of injury, could possibly have supported a finding that employment was a substantial contributing factor. However, there were countervailing factors, including the circumstance that the appellant was not performing any positive duties, and the circumstance that attendance at the hotel and subsequently going onto the wharf to continue dealings with the assailant, even if they might be considered as incidental to the circumstances of residence, were not themselves induced or encouraged by the employer. In my opinion, it could not be said that the facts were so compelling that the Deputy President's finding that the employment was a minor contributing factor and not a substantial contributing factor was one which indicated an error of law. 37 There was one statement by the Deputy President which in my opinion was not strictly correct as a matter of law. That is the statement that the circumstance that it was unlikely that the appellant would have suffered the injury, had not his employment brought him to Ulladulla and the wharf in particular, was no more than a circumstance making the injury one in the course of employment. In fact, that circumstance showed that the employment had some causal relevance to the injury, which is not present in every case where injury occurs in the course of employment. However, the Deputy President gave extensive reasons justifying her conclusion that the employment was not a substantial contributing factor, and I do not think such error as was involved in the statement I have identified vitiates those reasons. In fact, the reasons given by the Deputy President for her conclusion were extensive, dealt effectively with all the relevant facts, and made sufficiently plain the basis on which she reached her conclusion. 38 For those reasons, in my opinion the appeal should be dismissed. It is not necessary to determine the issue raised by the Notice of Contention. However, I would comment that in my opinion the employer did induce or encourage the appellant's living on the boat and his presence in Ulladulla; and in my opinion the relevant question is then whether the appellant's activities at the hotel and going onto the wharf can reasonably be considered as so incidental to what was induced or encouraged by the employer as to be within that inducement or encouragement. This in my opinion is a question of fact and degree. I am inclined to the view that the Deputy President should explicitly have addressed this question of inducement and encouragement, but that her conclusion was open. At best, if the Notice of Contention point had succeeded, it would have led to a new trial. ORDERS 39 For those reasons, in my opinion the appeal should be dismissed. 40 We have not heard submissions as to whether costs should follow the event in an appeal such as this by a worker. 41 If the respondent seeks an order for costs, it should within 14 days either submit a note that this is agreed, or else apply for an order for costs by written submissions, and in the latter case the appellant may reply by written submissions within a further 14 days. 42 SANTOW JA: I agree with Hodgson JA. 43 STEIN AJA: I agree with Hodgson JA. ********** Last Modified: 05/28/2004 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.