The Star Pty Ltd v Mitchison

1. [1]

   BEAZLEY P: I have had the advantage of reading in draft the reasons of Payne JA. I agree with his Honour’s reasons and proposed orders.

2. [2]

   McCOLL JA: I agree with Payne JA.

3. [3]

   PAYNE JA: This is an application for leave to appeal from the judgment of his Honour Judge McLoughlin SC in which his Honour determined on a separate question pursuant to r 28.2 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) that injuries the respondent suffered on the applicant’s premises did not occur in the course of his employment, nor arise out of his employment: Mitchison v The Star Pty Ltd (District Court (NSW), McLoughlin DCJ, 22 August 2016, unreported). The effect of this conclusion was that proceedings the respondent brought against the applicant to recover damages in respect of those injuries were not restricted by the operation of Pt 6 of Ch 7 of the Workplace Injury Management and Workers Compensation Act 1998 (NSW) (WIMA).

4. [4]

   For the reasons that follow I am of the view that leave to appeal should be granted, and the appeal should be dismissed with costs.

Background

1. [5]

   On 27 March 2012, “Marquee”, a new nightclub operated, managed and controlled by The Star Pty Limited (ABN 25 060 510 410) (The Star) located adjacent to the casino complex, held a “soft” opening for the purpose of testing the operation of the nightclub prior to the official opening to the public.

2. [6]

   As at 27 March 2012, the respondent was employed as a hotel bellboy at the hotel which was operated by The Star as part of the casino complex.

3. [7]

   The “soft” opening was organised by Ms Alexandra Bull, head of the Events Department at The Star, in March 2013. Ms Bull sent an invitation to the various heads of departments at The Star offering them a number of places for guests they each could invite from amongst the employees of The Star in their departments. The invitation sent out on a date which is unclear to the heads of all departments, stated:

4. [8]

   On 25 March 2012, the respondent was invited to attend the opening by his Bell Captain, whose name he thought was Raoul, while he was at work. He recalled Raoul saying to the hotel bellboys who were gathered as a group:

5. [9]

   The respondent did not receive any promotional material advertising the “soft” opening. The respondent gave evidence that at the time he was not aware that Marquee was owned and operated by The Star. He understood that Marquee was owned by a United States company that operated a nightclub of the same name in Las Vegas.

6. [10]

   Prior to 27 March 2012, the respondent decided to attend the nightclub that evening. At approximately 3pm on 27 March 2012, he finished his work shift as a bellboy. He changed and remained around the hotel complex until 5.30pm or 6pm before walking to the nightclub with Raoul. There was a large crowd so they went to the Sports Bar and returned to the nightclub around 7pm.

7. [11]

   The drinks at Marquee were free and the respondent did not need to show any identification or wear a wristband.

8. [12]

   At about 9pm, a mock fire drill was conducted in the nightclub without prior warning. The people present started moving in an uncontrolled herd-like manner towards the fire exit. On approaching the top of the flight of stairs, the respondent, surrounded by people who were pushing and shoving, lost his balance, fell down the stairs and suffered serious injuries.

9. [13]

   The respondent claimed and was paid workers compensation pursuant to the Workers Compensation Act 1987 (NSW) (WCA).

10. [14]

    On 11 February 2015, the respondent commenced common law proceedings against the applicant as occupier of the premises.

11. [15]

    On 30 September 2015, the applicant filed a notice of motion in the District Court of New South Wales seeking orders pursuant to r 28.2 of the UCPR that the Court determine separately the question of whether the respondent’s injury occurred “in the course” of his employment with the applicant.

12. [16]

    On 12 May 2017, the applicant filed and served a notice of motion in this Court seeking leave to amend its notice of motion filed in the District Court, seeking orders pursuant to r 28.2 of the UCPR that the Court also determine separately the question of whether the respondent’s injury was one “arising out of” his employment with the applicant.

Evidence before the primary judge

1. [17]

   The only communication from The Star to the respondent about the opening of the nightclub was as described at paragraph [8] above. The respondent was not paid to attend the nightclub. He knew that staff at The Star were invited but did not know that the event was not open to members of the public, nor did he know that it was for employees of The Star only. He believed that the event was intended to provide training for staff working at the nightclub for the grand opening which was to be held a week later. There were security guards at the soft opening but he did not recognise whether or not they were employed by The Star.

2. [18]

   Ms Bull, who was head of the Events Department at The Star, gave evidence that she was asked to invite 400 staff to the “soft” opening. She emailed all the general managers of The Star and the heads of department, attaching an invitation and nominating an allocation of guests they could each invite. She said the head of department at the time looking after bellboys was Mr Drew Schlezenger. Ms Bull was unaware whether Mr Schlezenger had spoken to the respondent or had passed on a copy of the flyer he was emailed. Mr Schlezenger did not give evidence. Ms Bull had not heard of an employee of The Star named Raoul.

3. [19]

   Ms Bull’s evidence was that there were two purposes for the event: first, for new staff of the nightclub to trial their service procedures; and secondly, to allow staff of The Star an opportunity to see inside the new nightclub which was soon to launch.

4. [20]

   Ms Bull agreed that it was not a requirement for staff members to attend the opening of the nightclub. Ms Bull was not aware of there being any other encouragement for staff members to attend, apart from issuing the flyer. She stated “[e]ach department looked after their own invitations directly to their staff”.

Primary judgment

1. [21]

   It was common ground at hearing that the injury had occurred during an interval between two discrete periods of work. The primary judge referred to the principles stated in Hatzimanolis v ANI Corporation Limited (1992) 173 CLR 473; [1992] HCA 21 and Comcare v PVYW (2013) 250 CLR 246; [2013] HCA 41.

2. [22]

   The primary judge found that the respondent’s injury did not occur whilst the respondent was in the course of his employment, nor did the injury arise out of his employment. In coming to this conclusion, the primary judge placed emphasis on the following findings of fact:

   1. (1)

      the employer did not require the respondent to attend the nightclub opening;

   2. (2)

      the employer had no expectation that the respondent would attend the nightclub opening; and

   3. (3)

      the respondent had no knowledge that the nightclub was owned and operated by his employer.

Leave to appeal

1. [23]

   Although the present is an appeal from an interlocutory decision, this application raises a short and sufficiently important point to warrant the grant of leave to appeal.

Application to adduce further evidence

1. [24]

   The applicant in its written submissions sought leave to adduce fresh evidence contained in an affidavit of Ms Courtney Therese Lee dated 18 November 2016, however that affidavit was not read on the appeal.

2. [25]

   Ground 5 of the draft notice of appeal stated:

3. [26]

   As Ms Lee’s affidavit was not read, ground 5 should be dismissed.

Remaining appeal grounds

1. [27]

   The applicant’s remaining appeal grounds are:

Application to amend the notice of motion

1. [28]

   At the hearing of the appeal it became clear that the motion filed by the applicant in the District Court was defective in that it identified the only question as being whether the injury to the respondent occurred “in the course of” his employment.

2. [29]

   It is clear that the parties and the primary judge had addressed a wider case, including whether the injury was one “arising out of [the respondent’s] employment”.

3. [30]

   Accordingly, senior counsel for the applicant made an application to amend the notice of motion filed in the District Court. The notice of motion in this Court provides as follows:

4. [31]

   Ultimately, the respondent did not oppose the making of that amendment. The amendment should be allowed.

5. [32]

   After the hearing of the case, the parties made written submissions about this additional aspect of the case, namely whether the respondent’s injury was one that “arose out of his employment” with The Star.

Relevant law

1. [33]

   It is important first to sketch the statutory background relating to this appeal. The first matter to notice is that, subject to various procedural and substantive restrictions, an injured worker has the right to sue an employer for common law damages. Section 151 of the WCA provides:

2. [34]

   The commencement of proceedings seeking common law damages for “work injury damages” is circumscribed in various respects. In particular, a “pre-filing statement” setting out various matters must be filed. Such a statement cannot be served unless various conditions are satisfied. Section 315 of the WIMA states:

3. [35]

   The conduct of proceedings for “work injury damages” is also affected by s 318 of the WIMA which provides:

4. [36]

   An important substantive difference between claims for common law damages generally and those relating to the “injury” to a “worker” is that s 151H of the WCA provides that an injured worker is entitled to damages only if the injury results in the death of the worker or a degree of permanent impairment that is at least 15%. There are also important limitations upon the recovery of certain types of damages in the case of common law claims for work injury damages however they are unnecessary to consider for the purposes of this appeal.

5. [37]

   Section 151H of the WCA provides:

6. [38]

   The critical question in this case is whether the claim made by the respondent is for “work injury damages”, which is the precondition to the application of ss 315 and 318, set out above.

7. [39]

   Section 250 of the WIMA provides relevantly for the purposes of a common law claim:

8. [40]

   Section 4 of the WCA provides relevantly:

9. [41]

   The definition of “injury” under s 4 of the WIMA is in relevantly identical terms:

10. [42]

    Accordingly, if the respondent’s injury met the description of “work injury damages”, being a personal injury “arising out of” or “in the course of” employment as defined in s 4 of the WCA and s 4 of the WIMA, it would be a claim falling within the provisions of ss 315 and 318 of the WIMA.

Applicant’s submissions

1. [43]

   The applicant submitted that the respondent’s injury was suffered in the course of his employment and arose out of his employment, and as such his right to commence common law proceedings against the applicant was restricted by Pt 6 of Ch 7 of the WIMA.

2. [44]

   That is, he would only be entitled to bring a claim for work injury damages against his employer if various pre-conditions set out ss 315 and 318 of the WIMA were met (for example, obtaining an assessment of permanent impairment of at least 15%, serving a pre-filing statement and attending a compulsory mediation). It was common ground that the respondent had not complied with these provisions and, as a result, the applicant submitted that the proceedings were not maintainable.

3. [45]

   It was common ground that if the respondent’s injury was suffered in the course of his employment or arose out of his employment, these proceedings should be dismissed. If, following that dismissal, the respondent intended to seek common law damages from his former employer, The Star, he would then need to commence fresh proceedings after complying with all of the procedural requirements of the WIMA and the WCA.

4. [46]

   It was submitted that whether an injury is suffered “in the course of” employment requires consideration of whether at the time he was injured the respondent was doing something that he was reasonably required, expected or authorised to do in order to carry out his duties. That is, a temporal connection is necessary.

5. [47]

   The applicant submitted that the respondent’s injury was suffered by reference to both an activity and a place: Comcare v PVYW. It was suffered whilst the respondent was attending a “mock service” evening that was being held at his employer’s premises. The event was not open to the general public, the respondent had been invited by his employer and only fellow employees attended the event. Further, the main purpose of the evening was to test and trial the new staff and new procedures of the Marquee nightclub that was due to open.

6. [48]

   The applicant submitted that the evidence makes it clear that the respondent was actively encouraged to attend the mock service evening by his employer:

   1. (1)

      he was undertaking a task that he had been requested to undertake by his employer, as an employee of The Star;

   2. (2)

      he undertook that task at his employer’s premises; and

   3. (3)

      the task was ultimately for his employer’s benefit.

7. [49]

   The applicant further submitted that while the respondent’s motives and beliefs may provide some evidentiary support for the proposition that he was in the course of employment, they do not form part of the relevant test. Rather, the employer determines the course of employment, and thus the characterisation of the occasion depends on an objective assessment of the conduct of persons in authority with the employer: Pioneer Studios Pty Ltd v Hills [2012] NSWCA 324 per Allsop P at [45].

8. [50]

   The applicant also relied upon the decisions in Comcare v Adrian John Mather (1995) 56 FCR 456; [1995] FCA 1216 and Kortegast v Williamson [2002] NSWSC 1134.

9. [51]

   “Arising out of” employment means arising out of the work that the respondent was employed to do and what was incidental to it; that is there must be a causal relationship between the accident and the respondent’s employment.

10. [52]

    The applicant submitted that the only people who were entitled to enter the Marquee on the evening of the accident were those employed by the applicant. There was no social relationship as such between the Marquee and the respondent and, accordingly, his presence at the evening was referable solely to his employment with the applicant.

11. [53]

    The applicant also submitted that given the respondent’s accident occurred at an event he was invited to attend by his employer, during a mock fire drill instituted by his employer, it follows that his accident arose out of his employment.

12. [54]

    In written submissions in reply filed on 30 May 2017, the applicant emphasised that in Stewart v Metropolitan Water, Sewerage and Drainage Board (1932) 48 CLR 216; [1932] HCA 45, at 224 Gavan Duffy CJ, Evatt J and McTiernan J quoted with approval the statement of Russell LJ in Lawrence v George Matthews (1924) Ltd (1929) 1 KB 1 that “sufficient causal relation or causal connection between the accident and the employment is established if the man’s employment brought him to the particular spot where the accident occurred, and the spot in fact turns out to be a dangerous spot”. (italics in original)

13. [55]

    Further, it was submitted that in Comcare v PVYW, although this issue was not specifically addressed, the hotel room where PVYW’s employment had taken her was “not a dangerous spot as such”. It was the act of PVYW or her acquaintance that created the danger in an otherwise non-dangerous spot.

Respondent’s submissions

1. [56]

   The respondent submitted that it was open to the primary judge to find that the injury did not occur in the course of his employment. The respondent made five overlapping submissions about this topic:

   1. (1)

      that the applicant had oversimplified the tests in Hatzimanolis and Comcare v PVYW. The question to be determined involved the notion of remoteness;

   2. (2)

      there was no evidence to suggest that the respondent was undertaking a task requested by his employer as asserted by the applicant. The respondent was not even aware that The Star operated the Marquee;

   3. (3)

      staff were not required or expected to attend the event. Only 400 out of a total of 4,000 staff attended;

   4. (4)

      there was no evidence that The Star encouraged staff to attend. An invitation to attend an event does not amount to encouragement to attend. The evidence regarding the invitation was limited and vague. The respondent gave evidence that he was told by his Bell Captain that the Marquee had invited The Star staff to attend; and

   5. (5)

      the purpose of the event was for new staff at the Marquee to trial their service procedures. There was no evidence to suggest that a collateral purpose of the event was to express gratitude to the staff for service on behalf of The Star or to increase morale amongst staff, or to cultivate a corporate culture.

2. [57]

   On 23 May 2017, the respondent filed additional submissions in respect of the issue “arising out of” employment. The respondent submitted that the starting point is to determine whether the activity or task that led to the injury was an activity or task falling within the tasks required by the contract of employment or was incidental to those tasks: Le Brocq v Workcover Authority of NSW [2008] NSWCA 125 at [25]; Hatzimanolis at [8]; Comcare v PVYW at [19] and [25].

3. [58]

   The respondent argued that there was no causal connection between the respondent’s employment and injury because there was nothing that the applicant did to extend the respondent’s hours or conditions of employment.

4. [59]

   The respondent relied on the decision of this Court in Pioneer Studios [2012] where an objective assessment of the applicant’s conduct (and of persons in authority) and what the applicant did or said so as to extend the work hours or conditions of employment were paramount considerations in determining whether the injury arose out of employment.

Consideration

1. [60]

   The applicant submitted that there was an irony in the present case in that the respondent when injured had immediately claimed and been paid workers compensation.

2. [61]

   The present claim for common law damages against his former employer, however, was based upon a foundation that the respondent was not entitled to be paid workers compensation. So much may be accepted.

3. [62]

   No doubt those advising the respondent have advised him that if he is successful in obtaining the relief he seeks in these proceedings, he will have established that he was paid workers compensation on the mistaken basis that he was entitled to those payments. The applicant’s workers compensation insurer would be entitled at common law to be repaid because of the mistake: David Securities v Commonwealth Bank of Australia (1992) 175 CLR 353; [1992] HCA 48. Whether, prior to obtaining any payment of common law damages, the respondent would have any defence to a claim seeking repayment of the workers compensation he had been paid, cannot be determined in these proceedings: cf Tran v Vo [2017] NSWCA 134.

4. [63]

   The applicant’s case was principally focussed on the submission that the respondent’s injury was one suffered in the course of his employment. The applicant’s submission that the characterisation of conduct or an occasion as being “in the course of” employment depends on an objective assessment should be accepted. Whether conduct or an occasion is “in the course of” employment depends on an objective characterisation of the employer’s requirements and expectations, though with no precise limitation to the contract of employment: Pioneer Studios [2012] per Allsop P at [45]; Pioneer Studios Pty Ltd v Hills [2015] NSWCA 222 per Basten JA at [36].

5. [64]

   To determine this question it is necessary to consider the decisions in Hatzimanolis and Comcare v PVYW where the High Court described in detail the meaning of the phrase “in the course of employment”.

6. [65]

   In Hatzimanolis the Court identified as a striking feature of the cases dealing with an injury to a worker which occurred in an interval between periods of actual work, that “the employer has authorised, encouraged or permitted the employee to spend his time during that interval at a particular place or in a particular way”. The Court went on to say at 484:

7. [66]

   In Comcare v PVYW, where the injury occurred away from the worker’s usual place of employment and at a time outside her usual working hours, the Court returned to this question. Critically, for present purposes, the High Court in Comcare v PVYW stated (footnotes omitted):

8. [67]

   The plurality, French CJ, Hayne, Crennan and Kiefel JJ, went on to conclude (footnotes omitted):

9. [68]

   This Court has had occasion to examine these cases in a not dissimilar context in Pioneer Studios [2012] and Pioneer Studios [2015]. The 2012 decision principally addressed the issue of “arising out of employment” and the 2015 decision principally addressed the issue of “in the course of employment”.

10. [69]

    In the Pioneer Studios cases, Ms Hills had sustained injuries during a social function held after hours at the premises of her employer. A person in authority with the employer had asked whether Ms Hills was attending the function, which the employer was permitting to be held at its premises, albeit that the employer had played no role in organising the function. Ms Hills gave evidence that she understood this enquiry to constitute a direction to attend the function. Relevantly, in respect to whether Ms Hills’ invitation to the function could be characterised as encouragement or inducement by her employer within the meaning of those terms described by the High Court in Hatzimanolis and Comcare v PVYW, Basten JA in the [2015] case noted at [29] and [33]:

11. [70]

    The legal principles to be applied were distilled by Basten JA at [34]-[35]. His Honour described an important limitation on the scope of the principle and an important distinction between the “camp” cases, where a worker is required by his employment to live away from home for a period, and cases where the worker is engaged for regular hours and goes home after work. His Honour said, at [34] (footnotes omitted):

12. [71]

    The important distinction between the “camp” cases and cases where the worker is engaged for regular hours and goes home after work to which Basten JA referred in Pioneer Studios [2015] at [34]-[35] is described in Hatzimanolis in the joint reasons at 482-483:

13. [72]

    The importance of this distinction is emphasised in Comcare v PVYW at [48]-[49].

14. [73]

    In the present case the respondent suffered injury in the interval between two discrete periods of work. The respondent was not working overtime and was not being paid. When the evidence of what the employer required or expected of the respondent is examined, it was limited to that given by Ms Bull, who appears to have been the guiding mind of The Star for this purpose. She gave evidence that there were two purposes of this event:

    1. (1)

       for new staff of the nightclub to trial their service procedures; and

    2. (2)

       to allow staff of The Star an opportunity to see inside the new nightclub soon to launch.

15. [74]

    The respondent played no part in this first purpose. He was not employed to trial service procedures at the nightclub. The second purpose, “to allow staff of The Star an opportunity to see inside the new nightclub” did not provide “encouragement” or “inducement” to attend such that the respondent was injured “in the course of” his employment. 4000 staff members of The Star were informed of the “soft” launch and only 400 people attended.

16. [75]

    Further, the only evidence of communication by the respondent’s employer which might have met the description “inducement” or “encouragement” to be at the nightclub was the Bell Captain Raoul’s statement that:

17. [76]

    These matters provide an insufficient basis to conclude that the respondent’s injury was suffered in the course of his employment in a case where injury is suffered in the interval between two discrete periods of work.

18. [77]

    Neither Comcare v Mather or Kortegast v Williamson lead to any different conclusion. Both cases were decided before Comcare v PVYW and each turned on factual findings absent in this case. Comcare v Mather was a “camp” case. The finding which Kiefel J made was that two soldiers stationed in Darwin had been encouraged by the grant of local leave to participate in drinking and socialising at hotels away from the camp. The circumstances of Mather are distinguishable from the present case. Comcare v Mather was a case relating to an injury sustained “during an interval occurring within an overall period or episode of work.” The present is not such a case. In Kortegast v Williamson the owner builder, Mr Williamson had encouraged the injured worker stay behind after work when the day was finished and drink beer with him. The case is clearly distinguishable from the present.

19. [78]

    The primary judge was correct to conclude that the injury did not occur in the course of the respondent’s employment.

20. [79]

    In Smith v Australian Woollen Mills Ltd (1933) 50 CLR 504; [1933] HCA 60 Starke J, at 517-518, addressed the meaning of the phrase “arising out of” in the then existing workers compensation legislation as follows:

21. [80]

    Starke J’s reference to Stewart v Metropolitan Water, Sewerage and Drainage Board was a reference to his own judgment in that case. In Stewart, his Honour explained that it was not sufficient to show that an injury was one “arising out of” employment merely to show that but for the employment, the worker would not have been at the scene of the accident.

22. [81]

    The decision of the other members of the majority in Stewart, Gavan Duffy CJ, Evatt J and McTiernan J, at 224, does not assist the applicant. In that decision their Honours explained, in a passage immediately below the one relied upon by the applicant, that for a worker’s employment to have “brought him to the particular spot”, it was a necessary to conclude that the place was one where the worker, whilst in the course of his employment, may properly and does come. The decision of the other members of the majority is thus consistent with Starke J on this issue.

23. [82]

    The applicant’s submission that the High Court’s decision in Comcare v PVYW is consistent with his submission about an injury “arising out of” employment should also be rejected. The issue was not addressed by the High Court in that case. It would be inconsistent with High Court authority, including Stewart, to conclude that it would be sufficient to show that an injury was one “arising out of” employment merely to show that but for the employment, the worker would not have been at the scene of the accident.

24. [83]

    In Badawi v Nexon Asia Pacific Pty Limited trading as Commander Australia Pty Ltd (2009) 75 NSWLR 503; [2009] NSWCA 324, Allsop P, Beazley and McColl JJA at [72]-[79] summarised the relevant principles in determining if an injury is one “arising out of … employment” thus:

25. [84]

    In Pioneer Studios [2012] Allsop P returned to this topic at [27]-[29]:

26. [85]

    Returning to the present case, the question posed is what (if anything) the respondent was in fact doing in his or her employment that caused or contributed to the “injury” as defined in s 4 of the WCA and WIMA.

27. [86]

    The submission that the injury suffered by the respondent was not one which “arose out of his employment” should be accepted. The respondent was a bellboy. He was not rostered to work at the time of the incident. He was injured during an interval away from the hotel which was his place of work. He was not required to be at Marquee nightclub at the time of the accident. The respondent went to the applicant’s separate premises, the Marquee nightclub not the hotel where he worked, although they are reasonably close by, not to perform work but to drink with colleagues.

28. [87]

    A conclusion that the injury was one arising out of employment cannot be drawn. The critical enquiry is what the respondent actually did in his employment. Nothing about what the respondent did as part of his employment caused the injury he suffered on this occasion. Stewart makes clear that it was not sufficient, as the applicant submitted, that the injury was one “arising out of” employment because “but for” the employment, the worker would not have been at the scene of the accident.

29. [88]

    The applicant fails in the challenge to the primary judge’s finding that the respondent’s injury was not one arising out of his employment.

30. [89]

    Ground 6 of the notice of appeal challenged a number of the primary judge’s factual findings. No written or oral submissions were addressed to this ground, presumably on the basis that the further evidence on appeal which was foreshadowed was not read.

31. [90]

    Ground 6 should be dismissed.

Conclusion and orders

1. [91]

   For the foregoing reasons the appeal should be dismissed. The following orders should be made:

   1. (1)

      Leave granted to amend the notice of motion filed by the applicant in the District Court on 30 September 2015 in the form contained in the applicant’s notice of motion dated 12 May 2017;

   2. (2)

      Leave to appeal granted;

   3. (3)

      Appeal dismissed;

   4. (4)

      Applicant to pay the respondent’s costs of the appeal as agreed or assessed.