Australia: To Command Or To Serve?

Leave to appeal was sought from an Arbitrator's decision in the Workers Compensation Commission (Commission) by the appellant, Mr Lawrence-Plant (Appellant). The respondent to the appeal was the company established by the Appellant by whom he was employed, Bluey's Hire (Respondent). The Appellant had filed four previous Applications to Resolve a Dispute, all of which were discontinued. The Appellant contended that he had suffered psychological injury during and in the course of his employment with the Respondent between 1 January 2001 and 31 August 2004 due to the financial mismanagement of the company by the Respondent's accountant.

The Appellant, in his fifth Application to Resolve a Dispute, ultimately forming the basis of the subject appeal, sought weekly benefits, medical expenses and lump sum compensation for the injuries alleged. The Arbitrator found in favour of the Respondent on the basis that the Appellant was not a "worker" as intended by section 4 of the Workplace Injury Management and Workers Compensation Act 1998 (1998 Act). However, even if the Appellant could establish that he was a "worker", the evidence indicated that his psychiatric condition was a consequence of his role as a director of the Respondent company and not as a worker.

The issues considered on appeal were whether the Arbitrator erred in finding that the Appellant was not a worker; whether the Arbitrator erred in finding that the Appellant had not suffered an injury; and whether the Arbitrator erred in finding that employment was not a substantial contributing factor to the injury alleged.

The Appellant's appeal was lodged outside the 28 day time period allowed by section 352(4) of the 1998 Act and ultimately leave had to be sought for an extension of time. This was denied. Regard was had to section 352 of the 1998 Act to ensure that the monetary thresholds as indicated at section 352(2) had been met. Further, Rule 16.2(11) of the Workers Compensation Rules 2006 enables the Commission to exercise its discretion in granting leave. No criteria or qualification is given in the exercise of that discretion. In referring to decided cases, particularly Gallo v Dawson [1990], the Commission concluded that where it can be demonstrated that to not allow an extension of time would result in an injustice to the Applicant, it was able to exercise its discretion. A number of factors are to be taken into account including, among other things, the history of the proceedings, whether any exceptional circumstances existed, the nature of the litigation and conduct of the parties.

The Appellant submitted that the appeal had been filed out of time due to a delay in receiving Counsel's advice. Arising from the Arbitrator's finding at first instance that the Appellant's claim had been brought without justification, the Appellant submitted that Counsel's advice was imperative to the issue concerning prospects of success. Despite the validity of the submission, nothing was offered to explain the delay in obtaining that advice.

In considering whether an 'exceptional circumstance' existed in creating the delay, the Commission stated that each case had to turn on its own merits, and while there was no definite formula in deciding same, administrative errors or inadvertences did not constitute exceptional circumstances. Rather, these circumstances are uncommon, special and out of the ordinary. It was also noted by the Commission that the Application was the fifth filed by the Applicant without any relevant new material.

The Commission indicated that even if exceptional circumstances existed that would warrant the granting of an extension of time, the appeal itself had little prospect of success. The essential feature of the definition of a "worker" as contained in section 4 of the 1998 Act was a "contract for service". In considering whether such a contract existed, regard was had to Stevens v Brodribb Sawmilling Co Pty Ltd [1986] and that there was no evidence that the Appellant had received remuneration from the Respondent, other than director's fees. No other evidence established that he was a servant, rather than a controller.

With respect to the Appellant's employment being a substantial contributing factor to the injuries alleged, the Commission agreed with the Arbitrator's decision that even if the Appellant satisfied the definition of "worker", the evidence supported the view that his injuries arose from his role as a director/owner of the company, not employee. If the Appellant was both director and worker, then any compensable injury must be as a result of his capacity as a worker. Given that the psychological injuries were a result of the financial affairs being mismanaged by an accountant, it was closely related to his role as director, particularly noting it was those affairs that led him into bankruptcy and to lose his home. Had he been a mere employee, he could have "walked away" and found alternate employment, as no personal guarantees would usually be required of an employee in those circumstances.

Lawrence-Plant v J & S Plant Pty Ltd T/as Bluey's Hire deregistered) [2009] NSWWCCPD 64 (10 June 2009)

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