New South Wales Court of Appeal CITATION: Toll Pty Limited v Craig Morrissey [2008] NSWCA 197 This decision has been amended. Please see the end of the judgment for a list of the amendments. HEARING DATE(S): 4 August 2008 JUDGMENT OF: Beazley JA at 1; Handley AJA at 15; McDougall J at 16 EX TEMPORE JUDGMENT DATE: 4 August 2008 1. The appeal is allowed; 2. The determination of the Acting Deputy President of 7 November 2007 is set aside; 3. The decision of the arbitrator dated 27 June 2007 is set aside; DECISION: 4. The dispute between the appellant and the respondent in the Workers Compensation Commission of New South Wales is to be returned to the Commission for determination; 5. Each party is to pay its and his own costs of the appeal; 6. The respondent is to have a Certificate under the Suitors' Fund Act 1951 if so entitled; and 7. The Court further orders that in respect of the hearing before the Deputy President each party is to pay his and its own costs. CATCHWORDS: WORKERS COMPENSATION – appeal from decision of arbitrator – appeal must be allowed unless error of arbitrator could not possibly have affected the result - EVIDENCE – workers compensation - subpoena for production – employer entitled to assess financial records of claimant LEGISLATION CITED: Workers Compensation Act 1987, s 40 House v King [1936] HCA 40; (1936) 55 CLR 499 CASES CITED: Mitchell v Central West Health Service (1997) 14 NSWCCR 526 Stead v State Government Insurance Commission [1986] HCA 54; (1986) 161 CLR 141 PARTIES: Toll Pty Limited (Appellant) Craig Morrissey (Respondent) FILE NUMBER(S): CA 40841/07 COUNSEL: D Nock SC; P Perry (Appellant) L King SC; P Regattieri (Respondent) SOLICITORS: Leigh Virtue & Associates (Appellant) M J Duffy & Son (Respondent) LOWER COURT JURISDICTION: Workers Compensation Commission of New South Wales LOWER COURT FILE NUMBER(S): WCC2123-2007 LOWER COURT JUDICIAL OFFICER: Arbitrator Bell; Acting Deputy President Handley LOWER COURT DATE OF DECISION: 27 June 2007; 7 November 2007 - 4 - IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40841/07 BEAZLEY JA HANDLEY AJA McDOUGALL J Ex tempore Monday, 4 August 2008 Toll Pty Limited v Craig Morrissey Judgment 1 BEAZLEY JA: The respondent was injured in the course of his employment with the appellant. Thereafter, he was partially incapacitated. He thus had an entitlement to weekly compensation under s 40 of the Workers Compensation Act 1987, if his ability to earn in some alternative employment was less than what he would have been earning but for the injury: see Mitchell v Central West Health Service (1997) 14 NSWCCR 526. 2 The respondent ceased his employment with the appellant and, for a period of time, worked as a truck driver for a company of which he and his wife were the principals. The company was incorporated in about October 2006 and it appears that the respondent worked as a truck driver for the company from then until about April 2007. 3 The appellant ceased making payments of weekly compensation, whereupon the respondent commenced proceedings, seeking weekly compensation on the basis of partial incapacity. 4 At a teleconference conducted on 2 May 2007, the appellant sought a Direction for Production requiring the production of the financial records and bank documents of the company. That application was refused. 5 Thereafter, on 15 May 2007, the respondent filed a statement of his evidence. In that statement, he said that he and his wife had caused a company, C & J Morrissey Transport Pty Limited, to be incorporated. Annexed to the statement was a schedule of wages that was said to record the respondent's earnings from that company. Other evidence indicates that the wages schedule was prepared by the respondent's wife. 6 The schedule records the receipt of wages from 12 December 2006 to 22 April 2007. Apart from a wage of $601 paid on 20 December 2006, the schedule records the payments of wages between 12 December 2006 and 1 January 2007 in gross amounts of $1,923.20 on 12 December 2006, $1,803 on 14 December 2006 and $1,269.80 on 1 January 2007. Thereafter, the schedule records the payment of a wage of $601 gross, apart from two payments – in one case a larger wage was paid and in another case a much lower wage was paid. 7 The matter came on for hearing before an arbitrator on 30 May 2007. On that occasion, the appellant renewed the application for the issue of a notice to produce. That application was only made formally, counsel for the appellant acknowledging the arbitrator's previous ruling. 8 The effect of the arbitrator's determination should be properly understood as refusing both applications for the issue of a notice to produce. 9 The appellant appealed and the matter was determined by Acting Deputy President Handley. Deputy President Handley identified the issue in the matter as being that the arbitrator made an error of law by refusing to issue a Direction for Production, requiring the production of financial records by Mr Morrissey and by the company, C & J Morrissey Transport Pty Limited. 10 The Deputy President found, correctly, that the arbitrator erred in refusing to give a Direction for Production of the documents. The Deputy President then stated that notwithstanding the arbitrator's error, he was not satisfied that the error would have affected the outcome of the matter. That finding was, however, erroneous. By stating the test that way, the Deputy President, in effect, reversed the onus. The correct test was that he should allow the appeal from the arbitrator, unless the error of the arbitrator could not possibly have affected the result: see Stead v State Government Insurance Commission [1986] HCA 54; (1986) 161 CLR 141 at 147. 11 Having regard to the respondent's claim for weekly compensation under s 40, the appellant was entitled to have access to the primary source material evidencing the respondent's earnings from the company. The schedule that was attached to the respondent's statement of evidence was an extract and was not the primary wages records. 12 As the Deputy President reversed the onus in the way that I have explained, the appeal to this Court is allowed. 13 The matter could also be approached on the basis that even if the Deputy President had not reversed the onus, he had asked himself the wrong question and the determination that he made, that he was not satisfied that the error would have affected the outcome of the matter, was not one that was reasonably open to him in the circumstances. On that approach, an error of law in the House v The King [1936] HCA 40; (1936) 55 CLR 499 sense has been established. Accordingly, for that reason also, the appeal should be allowed. 14 A question of costs, however, arises. The appellant's amended Notice of Appeal in this matter did not concisely identify the error of law that the Court was required to deal with. The respondent was also entitled to know the alleged error of law that the appellant relied upon in order to prepare his response to the appeal. In those circumstances, the Court wishes to hear from the appellant as to why the appropriate order for costs in this matter should not be that each party pay it and his own costs. 15 HANDLEY AJA: I agree with the reasons expressed by Justice Beazley. 16 McDOUGALL J: I also agree. 17 NOCK: I don't want to say anything about costs, your Honour. 18 BEAZLEY JA: The orders of the Court are as follows: 1. The appeal is allowed; 2. The determination of the Acting Deputy President of 7 November 2007 is set aside; 3. The decision of the arbitrator dated 27 June 2007 is set aside; 4. The dispute between the appellant and the respondent in the Workers Compensation Commission of New South Wales is to be returned to the Commission for determination; 5. Each party is to pay its and his own costs of the appeal; and 6. The respondent is to have a Certificate under the Suitors' Fund Act 1951 if so entitled. [FURTHER DISCUSSION AS TO COSTS] 19 BEAZLEY JA: The Court further orders that in respect of the hearing before the Deputy President each party is to pay his and its own costs. ********** 19/08/2008 - Catchwords - Paragraph(s) Coversheet 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.