Welcome to the October 2013 issue of the Edwards Michael Lawyers eBulletin.

High Court Rejects CSR Appeal

On 6 September 2013, Employers Mutual successfully resisted an attempt in the High Court by CSR to appeal from the Court of Appeal decision in CSR Timber Products PTY Limited v Weathertex Pty Limited [2013] NSWCA 49.

The issue in the proceedings was whether a last employer which attracted 100% liability for a Disease pursuant to the “deeming” provisions of the Workers’ Compensation Act, 1987 could recover compensation paid from an earlier employer which negligently caused the disease.

CSR sought to argue that Section 151Z recovery can only be effected from “some person other than the worker’s employer” and that as it was also an employer of the worker the legislation did not allow recovery.  It also sought to argue that the circumstances of injury were incapable of creating a liability in CSR because the injury was deemed to occur with Weathertex, the last employer.

The Court of Appeal rejected both arguments.  Firstly, it accepted Weathertex’s argument that “employer” described in Section 151Z(1) of the 1987 Act in fact means “employer liable to pay compensation”.  Thus, there is no impediment to an employer with a deemed statutory liability to pay compensation from recovering under Section 151Z from an earlier employer not so liable to pay compensation.

Secondly, the Court of Appeal determined that as the claim involved only one injury (a Disease in the nature of nasal adenocarcinoma) then there is no impediment to recovery when it is alleged that the same injury was caused in circumstances which are alleged to give rise to Common Law liability on the part of an earlier employer.

The High Court refused CSR’s application for Special Leave to Appeal.  The Court of Appeal decision therefore stands as binding authority, allowing recovery claims to be pursued by last employers who have attracted 100% liability pursuant to the deeming provision of the Act from earlier employers who may in fact have caused the Disease in negligent circumstances.

Court of Appeal Considers Section 11A Issues

In Northern NSW Local Health Network v Heggie [2013] NSWCA 255, the Court of Appeal allowed an appeal from a Decision of Deputy President O’Grady of the Workers Compensation Commission which overturned an Arbitrator’s determination that psychological injury was wholly or predominately caused by reasonable action by an employer with respect to discipline.

Basten JA was critical of the Deputy President’s focus on evidence relating to the period after the worker’s employment was suspended.  His Honour found that the Deputy President incorrectly relied on the subjective decision-making of the employer, rather than undertaking an objective consideration of the reasonableness of the decision based on information available at the time the decision was taken.

Sackville AJA provided a helpful summary of the legal principles:-

(i)        A broad view is to be taken of the expression “action with respect to discipline”. It is capable of extending to the entire process involved in disciplinary action, including the course of an investigation.

(ii)       Nonetheless, for s 11A(1) to apply, the psychological injury must be wholly or predominantly caused by reasonable action taken or proposed to be taken by or on behalf of the employer.

(iii)      An employer bears the burden of proving that the action with respect to discipline was reasonable.

(iv)       The test of reasonableness is objective. It is not enough that the employer believed in good faith that the action with respect to discipline that caused psychological injury was reasonable. Nor is it necessarily enough that the employer believed that it was compelled to act as it did in the interests of discipline.

(v)        Where the psychological injury sustained by the worker is wholly or predominantly caused by action with respect to discipline taken by the employer, it is the reasonableness of that action that must be assessed. Thus, for example, if an employee is suspended on full pay and suspension causes the relevant psychological injury, it is the reasonableness of the suspension that must be assessed, not the reasonableness of other disciplinary action taken by the employer that is not causally related to the psychological injury.

(vi)       The assessment of reasonableness should take into account the rights of the employee, but the extent to which these rights are to be given weight in a particular case depends on the circumstances.

(vii)      If an Arbitrator does not apply a wrong test, his or her decision that an action with respect to discipline is or is not reasonable is one of fact.

Sackville AJA also emphasised that facts or circumstances that were not known or ascertainable when the employer took disciplinary action should not have a material bearing on a determination as to the reasonableness of that action.

Contributory Negligence Finding Overturned

In Mungekar v Hermes Precisa Pty Limited [2013] NSWCA 225 the Court of Appeal overturned a finding of a District Court Judge that a worker who attempted to lift a heavy steel plate was one third responsible for his injuries on the basis of contributory negligence.

The Trial Judge was influenced by evidence that the Plaintiff had previously experienced symptoms in his back following an earlier incident as a result of ignoring instructions not to lift.

The Court of Appeal found that it was not open to the Trial Judge to conclude that the worker’s failure to adhere to a previous instruction had any bearing on the liability issues in terms of the lifting activity which was being undertaken at the time of injury.

The Court of Appeal noted that at the time of injury the Plaintiff was working in accordance with the culture and practice of the employer and that he was under pressure both from supervisors and other employees to work at a fast pace.

The Court of Appeal therefore set aside the finding in relation to contributory negligence and ordered the employer to pay 100% of the Plaintiff’s damages.

Recoveries for Injuries at Domestic Premises

Issues often arise in recovery actions for workers such as Domestic Carers who suffer injuries whilst visiting domestic homes.

A decision of the Court of Appeal in Panther v Pischedda [2013] NSWCA 236 highlights some of the issues and provides some helpful guidance in relation to how these cases should be presented.

The decision involved an injury sustained by a tenant who slipped and fell whilst descending a steep driveway to the rented premises.  Significantly, no handrail was provided and an alternative means of access, being a set of steps, was obstructed by a hedge.

The Court declined to disturb the Trial Judge’s finding that the condition of the driveway created a risk of injury which was not insignificant within the meaning of Section 5B(1)(b) of the Civil Liability Act 2002, and that the owners knew or ought to have known of the risk that existed within the meaning of Section 5B(1)(a) of that Act.

The Court also accepted the Trial Judge’s determination that a reasonable person in the position of the owners would have responded to the identified risk by either installing handrails or trimming the hedge so that access could be made through the hedge (Section 5B(1)(c) of the Civil Liability Act).

Work Injury Damages – Limitations Issues

A number of Plaintiff practitioners have recently been relying on a Supreme Court decision of Adamson J in Opoku v P & M Quality Smallgoods Pty Limited (2012) NSW SC 478 to support an argument that time does not commence to run for Section 151D purposes until assessment of 15% Whole Person Impairment.  Adamson J found that the cause of action for Work Injury Damages did not accrue until that date.

Truss DCJ roundly rejected this approach in Benton v QBE Workers Compensation (NSW) Limited [2013] NSW DC 107.  Her Honour did not feel bound the Supreme Court decision in Opoku and preferred to rely on contrary Court of Appeal decisions to find that time commences to run from the date of physical injury.

Work Capacity Decision Extinguishes WCC Award

In Molloy v Racing NSW Insurance Fund (20 August 2013) Delegate Wayne Cooper of the WorkCover Independent Review Office determined that making a Work Capacity Decision immediately extinguishes any jurisdiction in relation to Awards of weekly benefits formerly held by the Workers Compensation Commission.