FEDERAL COURT OF AUSTRALIA

Westrupp v BIS Industries Limited [2015] FCAFC 173

THE COURT ORDERS THAT:

1.    The decision of the Administrative Appeals Tribunal (“the AAT”) made on 5 May 2015 (Westrupp and BIS Industries Ltd [2015] AATA 298) is set aside.

THE COURT DECLARES THAT:

2.    On the facts found by the AAT and those not in dispute, the applicant’s claim for compensation satisfied section 14 of the Safety, Rehabilitation and Compensation Act 1988 (Cth).

THE COURT ORDERS FURTHER THAT:

3.    The first respondent pay the applicant’s costs of the appeal and the proceedings before the AAT.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

The Court:

Introduction

1    In Comcare v PVYW (2013) 250 CLR 246 (“PVYW”), the High Court explained its earlier judgment in Hatzimanolis v ANI Corporation Ltd (1992) 173 CLR 473 (“Hatzimanolis”). The present appeal again requires consideration of Hatzimanolis, as now explained by PVYW.

2    The appeal is concerned with the scope of the expression “arising out of, or in the course of, the employee’s employment” in s 5A of the Safety, Rehabilitation and Compensation Act 1988 (Cth) (“SRC Act”) and, in particular, the liability of employers of “fly in/fly out workers” to pay compensation for injuries incurred in remote locations where employees are required to live and work but when they are not engaged in actual work.

3    The appeal is a statutory appeal under the Administrative Appeals Tribunal Act 1975 (Cth) (“AAT Act”) against the decision of the Administrative Appeals Tribunal (“AAT”). The AAT decision concerned a claim by an injured worker to compensation under the SRC Act.

4    Edward Westrupp is now a 62 year old man who in 2014 was employed as a silo operator by BIS Industries Limited (“the first respondent”) to work in Leinster, Western Australia, a remote outback mining town in the Goldfields region, north of Kalgoorlie. Leinster is a company town, operated by BHP Billiton Nickel West Pty Ltd (“BHP Billiton”), to which the first respondent was contracted. Mr Westrupp worked on a two-week roster followed by one week off. During the two-week period when he was required to work he resided at the Leinster Mining Camp in Leinster. His home, however, was far away, in Pine Hill, a suburb of Auckland, New Zealand.

5    Mr Westrupp suffered a shoulder injury on 26 March 2014, in circumstances we will explain. He was thereby incapacitated for work. He was entitled to compensation under s 14 of the SRC Act if his injury was an “injury” within the meaning of s 14 of the SRC Act. Section 14 of the SRC Act provides:

14    Compensation for injuries

(1)    Subject to this Part, Comcare is liable to pay compensation in accordance with this Act in respect of an injury suffered by an employee if the injury results in death, incapacity for work, or impairment.

(2)    Compensation is not payable in respect of an injury that is intentionally self-inflicted.

(3)    Compensation is not payable in respect of an injury that is caused by the serious and wilful misconduct of the employee but is not intentionally self-inflicted, unless the injury results in death, or serious and permanent impairment.

6    Section 4 of the SRC Act defines “injury” to have the meaning given by s 5A. Relevantly here, s 5A(1)(b) provides:

5A    Definition of injury

(1)    In this Act:

injury means:

…

(b)    an injury (other than a disease) suffered by an employee, that is a physical or mental injury arising out of, or in the course of, the employee’s employment; …

…

(Emphasis in original.)

7    In addition, s 6(1)(a) and (b) provide:

6    Injury arising out of or in the course of employment

(1)    Without limiting the circumstances in which an injury to an employee may be treated as having arisen out of, or in the course of, his or her employment, an injury shall, for the purposes of this Act, be treated as having so arisen if it was sustained:

(a)    as a result of an act of violence that would not have occurred but for the employee’s employment or the performance by the employee of the duties or functions of his or her employment; or

(b)    while the employee was at the employee’s place of work, for the purposes of that employment, or was temporarily absent from that place during an ordinary recess in that employment; …

8    Under the SRC Act, primary liability falls upon Comcare. However, the first respondent was licensed as an eligible corporation under Part VIII of the SRC Act by the Safety, Rehabilitation and Compensation Commission established under s 89A of the SRC Act. The licence permitted the first respondent to accept liability (s 108 of the SRC Act) and manage claims under the SRC Act in its own right (s 108B of the SRC Act).

9    Mr Westrupp’s claim was rejected by the first respondent on 26 May 2014. On 23 June 2014, that decision was affirmed by a “Reconsiderations Officer” from an independent reviewer, QBE Insurance Group Limited.

10    Further attention to the terms of those decisions is not required because on 16 July 2014, Mr Westrupp exercised his right to seek a review of the decision to refuse his claim by the AAT. The role of the AAT is to consider whether the decision under review should be affirmed, varied or set aside (AAT Act, s 43(1)).

11    In the present case, the decision of the AAT was that the decision made on 23 June 2014 should be affirmed.

The scope of the appeal

12    The appeal now before this Court arises under s 44 of the AAT Act. Section 44(1) of the AAT Act provides:

44    Appeals to Federal Court of Australia from decisions of the Tribunal

Appeal on question of law

(1)    A party to a proceeding before the Tribunal may appeal to the Federal Court of Australia, on a question of law, from any decision of the Tribunal in that proceeding.

(Notes omitted.)

13    The jurisdiction of the Court to hear and determine such appeals is conferred by s 44(3). When, as in the present case, the Tribunal’s decision was given by a member who was a Judge, that jurisdiction must be exercised by a Full Court (AAT Act, s 44(3)(c)).

14    The “questions of law” asserted to arise for consideration in the present case may be summarised as follows:

−    failing to provide sufficient reasons in various respects;

−    failing to make particular findings;

−    failing to apply the correct legal test;

−    “overlooking” particular evidence;

−    misunderstanding the effect of other evidence.

15    No objection was raised to the competency of the appeal and there is no doubt that the appeal raises questions of law in some respects. That said, however, there are a number of deficiencies with the notice of appeal. A mere allegation that the Tribunal erred in law in making (or not making) a particular finding is not to state a question of law (Australian Telecommunications Corporation v Lambroglou [1990] FCA 689; (1990) 12 AAR 515 at 524, approved by the Full Court in Haritos v Commissioner of Taxation [2015] FCAFC 92; (2015) 322 ALR 254 (“Haritos”) at [92]). Most of the asserted questions appear to do no more than that.

16    It is not always easy to identify a question of law, yet the Court has repeatedly stressed the importance of stating the question or questions of law with precision, most recently in Haritos. The existence of a question of law is not just “a qualifying condition to ground the appeal”, it is the very subject matter of the appeal (TNT Skypak International (Aust) Pty Ltd v Federal Commissioner of Taxation [1988] FCA 198 at 6; (1988) 82 ALR 175 at 178). An appeal “on a question of law” is an appeal limited to a question of law. For this reason, Hill J said in Copperart Pty Ltd v Commissioner of Taxation (1993) 26 ATR 327; 30 ALD 377 that the Court cannot find the facts for itself. That statement is subject, however, to the terms of s 44(7) and (8), which were inserted into the AAT Act in 2005, which permit the Court to find facts for itself in certain circumstances.

17    It is a vexed question whether an allegation that there has been a failure to provide adequate reasons raises a question of law (see the discussion in Millar v Commissioner of Taxation [2015] FCA 1104 at [74]-[78]). But the task of determining the content of the duty to give reasons and of deciding whether the duty has been discharged will involve questions of law. And it is a question of law to ask whether it was open to the Tribunal to draw a particular inference from the agreed facts or the facts as found (Hope v Bathurst City Council (1980) 144 CLR 1 (“Hope”) at 8-9; Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 355-356). Whether the Tribunal failed to apply the correct legal test is indisputably a question of law (Federal Commissioner of Taxation v Trail Bros Steel & Plastics Pty Ltd (2010) 186 FCR 410 at [13]). It is also a question of law to ask whether, on the facts found, the statutory criteria were satisfied (Hope at 7; Ergon Energy Corp Ltd v Commissioner of Taxation (2006) 153 FCR 551 at [51]).

Facts found by the AAT or not in dispute

18    Mr Westrupp was 61 years of age at the time of his injury. He resided in New Zealand. He was employed by the first respondent pursuant to a contract whereby he attended for shift work in Leinster for two-week periods, followed by one week’s respite. He was a “fly in/fly out” worker, although sometimes he drove to other parts of Western Australia rather than flying home to New Zealand.

19    Leinster was developed and built by a mining company “as a result of a State Agreement to provide accommodation and other facilities for mining operations located in the vicinity of the town” (AAT decision at [31]). (The mining company that now operates in Leinster is BHP Billiton). The AAT said (at [32]-[33]):

32.    Leinster is described as a closed town. … Only workers employed at or associated with the mining operations or in businesses that support the operations or the town can reside in Leinster. Tourists can stay in the caravan park or lodge and use facilities in the Leinster provided they pass through and do not remain permanently in the town.

33.    Accommodation is either residential occupying a house under a Tenancy Agreement or fly in/fly out occupying a Single Persons Quarter (‘SPQ’) room.

20    The first respondent was a contractor to BHP Billiton. Its employees were accommodated in Leinster, and were subject to the “Leinster Township and SPQ Village Rules”.

21    A document on the first respondent’s website, which was in evidence before the AAT, provided the following information about the living and recreation arrangements for employees at Leinster:

Accommodation

•    …

•    Camp rooms have en-suite bathrooms and TVs

•    Leinster has a tavern, gym, swimming pool, basketball, squash and tennis courts

•    …

22    When in Leinster, Mr Westrupp had accommodation in the Single Persons Quarters (“SPQ”). The SPQ was not far from two messes run by Spotless Catering under contract to BHP Billiton. Mr Westrupp ate breakfast and dinner at the dry mess and also took what he wanted for lunch. The dry mess was about 60 metres from his accommodation.

23    The wet mess (“the tavern”) was about 250 metres away from Mr Westrupp’s accommodation (no more than a three minute walk). The tavern provided drinks and had an “à la carte” menu and was able to be used by members of the public. There was also a (14 room) hotel in Leinster, known as “the lodge”.

24    Both the dry mess and the wet mess were open seven days a week.

25    The Village rules dealt with conduct in the SPQ, at the SPQ BBQ area, in the dry mess, at the tavern and in the town, as well as other matters.

26    The first respondent’s code of behaviour also applied to Mr Westrupp while he was in Leinster:

CODE OF BEHAVIOUR FIFO / DIDO OPERATIONS

…

This Code applies from the time an employee reports for duties, on a ‘fly in fly out’ or ‘drive in drive out’ site, until they have returned from their swing. This includes transit where it is Company or Customer provided transport, for example airport transit, flights, and bus transport. During this period the employee is representing Bis Industries and their behaviour is a direct reflection on the Company. Our priority is about employee safety and zero harm.

As such, this code applies to Bis Industries employees at all times, whether working or not on Company and Customer premises.

27    Mr Westrupp’s shift arrangements at the time of his injury were such that on the first week of his two-week duty period he worked day shift and then (commencing about 24 hours after a day shift) he worked night shift for a week. The incident described hereunder occurred on the evening of the final day shift, in the middle of his two-week duty period.

28    That evening Mr Westrupp went to the tavern with a friend. There is no suggestion he became intoxicated. The AAT found that he did not (at [17]). As Mr Westrupp and his companion were preparing to leave, and were standing outside the tavern, Mr Westrupp recognised a woman he had known since 2006 who was seated with others. The woman stood and hugged him (apparently indicating she was leaving Leinster, or was unlikely to see him again). One man seated at the same table spoke to Mr Westrupp aggressively, but Mr Westrupp walked away.

29    A short time later, outside the entrance to the tavern, while Mr Westrupp was in conversation with his companion and a BHP Billiton employee, the man who had spoken aggressively to him approached him and assaulted him. The assailant was another employee of the first respondent.

30    The AAT described those events as follows (at [22]-[24]):

22.    Outside the Tavern entrance the applicant stated that he had been in a conversation with Nathan, and a BHP employee by the name of Rangi. He noticed Mr Jones approaching them in an ‘aggressive manner, fists clenched by his side’.

23.    Mr Jones then grabbed the applicant by the T-shirt with both hands pushing and pulling him, ripping his T-shirt. The applicant had both hands in his pockets. Mr Jones then grabbed the applicant around the throat with both hands and started choking him. As the applicant could not breathe, he grabbed Mr Jones’s forearms and they both fell to the ground. As a result, Mr Jones was on top of the applicant and was swinging punches to the applicant’s head. The applicant was trying to protect his head with his left arm, as he could not move his right arm. Mr Jones was finally pulled off by a BHP employee.

24.    The applicant and others moved to the car park area where Mr Jones again attempted to punch the applicant in the head and chest area but missed. He was pushed away by Nathan and told to go home.

31    The medical evidence established (AAT decision at [43]-[44]):

43.    The fall which the applicant experienced at the time of the incident on 26 March 2014 caused substantial damage to an already abnormal right rotator cuff resulting in the symptoms he experienced, the ongoing impairment of his right upper limb following the injury and the requirement for surgery.

44.    All of the applicant’s current right upper limb impairment has occurred because of the injury sustained on 26 March 2014.

Some additional observations

32    There was no suggestion that Mr Westrupp was at any time in breach of the code of behaviour or any of the Village rules. However, it is an indication of the degree of direct control retained by the first respondent over both employees for the duration of the time they spent in Leinster (including at the camp and at the tavern), that their conduct was investigated by the first respondent, the assailant was found to be in breach of the code of behaviour, and the termination of the assailant’s employment was considered the likely outcome. And it is not without significance that, upon the conclusion of its investigation, the first respondent’s Employee Relations Team recommended:

Rebriefing of FIFO/DIDO Code of Behaviour, reminder of employee obligations when in Company provided accommodation.

(Emphasis added.)

33    One further matter might conveniently be mentioned at this point. The evidence before the AAT showed that, although employees of the first respondent were not directed that they should not leave Leinster during their two-week swing (e.g. on the longer overnight break between dayshift and night shift), they were expected to be properly rested when they commenced night shift the following day. Mr Westrupp said also that they were encouraged not to drive at night unless necessary, to avoid the danger of striking animals. Both elements may be seen to operate as a disincentive to leaving the camp unnecessarily during the two-week swing. In any event, Leinster is in a remote area in the Goldfields region about 965 km north east of Perth; driving out for an overnight stay should not be seen as a casual undertaking.

34    It seems obvious that the first respondent should be taken to have accepted (and expected) that Mr Westrupp would make use of the facilities provided at Leinster, including the tavern, as incidents of his employment.

The AAT’s reasons

35    Based on the facts recounted above, after setting out the parties’ submissions, the whole of the conclusions by the AAT concerning the application to the facts of the statutory content of s 5A of the SRC Act were stated, briefly, in the following paragraphs:

64.    I agree with the submission of the respondent that the interval found to have occurred in this application is of a different type to that to which the principles in Hatzimanolis are applicable. Those principles having been understood to have sought, and achieved, a connection or association with employment, it follows that in the absence of such principles being applicable there is nothing upon which to find that the injury arose out of the applicant’s employment or in the course of that employment: PVYW at [60]. In any event I consider that there is nothing in the evidence to support a finding that the words in s 5A (b) of the SRC Act can be satisfied.

65.    If Hatzimanolis is applicable, I do not consider that the applicant has established that the applicant’s injury was brought about by reason of an activity or the place at which he was when the injury occurred. The applicant was not engaged in any activity. The place was the Tavern. The establishment and provision of the Tavern (even if able to be established as being on behalf of the respondent) does not create a liability on the respondent ‘for everything that occurs whilst the employee is present at that place or not’: PVYW at [45]. In any event, the place was not causative of the applicant’s injury.

36    Separately, the AAT stated the whole of its conclusions about the application to the facts of the statutory content of s 6(1)(a) of the SRC Act as follows:

67.    I agree with the submission of the respondent that the assault which resulted in the injury to the applicant was of a personal nature, arising from the applicant having been hugged by a woman to whom he was saying farewells. There was no nexus between the employment or the performance by the applicant of the duties or functions of his employment and the assault. It is therefore unnecessary to consider the decision in Military Rehabilitation & Compensation Commission v Roberts (2007) FCA 1 that where an injury occurs in a private dispute s 6(1) of the SRC Act has no application in any event.

37    Similarly, the AAT stated the whole of its conclusions about the application to the facts of the statutory content of s 6(1)(b) of the SRC Act as follows:

68.    … The evidence has established that the applicant was at the tavern for the purposes of meeting a friend and having a beer with him, not for any purpose related to his employment. There was no ordinary ‘recess’ here: the applicant was between two ordinary discrete periods of employment.

38    Those statements of the AAT’s conclusions involved a very summary rejection of Mr Westrupp’s arguments, in favour of the first respondent’s. Perhaps that was because the AAT had formed the view that the conclusions were so inevitable that little further explanation was required.

39    However, we have come to the view, based on the facts as found by the AAT and those not in dispute, that the conclusions are legally unsound when regard is had to the principles which the AAT set out to apply.

The High Court authorities

40    In Hatzimanolis, the High Court reviewed a range of earlier cases and set out, advisedly, to state a general guiding principle, as follows (at 484):

[I]t should now be accepted that an interval or interlude within an overall period or episode of work occurs within the course of employment if, expressly or impliedly, the employer has induced or encouraged the employee to spend that interval or interlude at a particular place or in a particular way. Furthermore, an injury sustained in such an interval will be within the course of employment if it occurred at that place or while the employee was engaged in that activity unless the employee was guilty of gross misconduct taking him or her outside the course of employment. In determining whether the injury occurred in the course of employment, regard must always be had to the general nature, terms and circumstances of the employment “and not merely to the circumstances of the particular occasion out of which the injury to the employee has arisen”.

(Emphasis added, footnote omitted.)

41    It is not necessary, in the light of the High Court judgment in PVYW, to say anything further at this stage about Hatzimanolis. What first requires attention are the majority reasons in PVYW. We will return to Hatzimanolis later.

42    The majority judgment in PVYW sounded an early warning against an approach (at [9]):

9    … that, absent gross misconduct on the part of an employee, an employer who requires an employee to be present at a particular place away from their usual place of work will be liable for any injury which the employee suffers whilst present there. …

(Emphasis added, footnote omitted.)

43    Their Honours then gave particular attention to a case which was discussed in Hatzimanolis, and to which the statements of principle made in Hatzimanolis were explicitly accommodated: Danvers v Commissioner for Railways (NSW) (1969) 122 CLR 529 (“Danvers”).

44    The majority judgment in PVYW summarised part of the reasoning in Hatzimanolis as being to the following effect:

29    … Where an employee is required to live in a remote location for a period until a particular work-related undertaking is completed, the notion of an overall period or episode of work could apply to that whole period. Thus, on the facts in Danvers, it might be concluded that the time spent at the remote location and in the accommodation provided by the employer constituted one whole period of work, rather than a series of discrete periods. In such a circumstance, an injury which occurs in an interval between periods of actual work might more readily be understood as being within the course of employment than one occurring after working hours in the ordinary situation.

and:

32    An employer’s inducement or encouragement may create an interval according to Hatzimanolis, but it is not itself a sufficient condition for liability. Further factual conditions necessary for the application of that principle are stated in the passage, following the word “Furthermore”. There, it is said that an injury sustained in such an interval will be in the course of employment if it occurred at that place or while the employee was engaged in that activity. It will be so considered unless the employee has been guilty of gross misconduct.

33    To these conditions it is added, in similar words to those used in Danvers, that it will always be necessary to have regard to the “general nature, terms and circumstances of the employment” in determining the overall question, whether the injury occurred in the course of employment. Attention is not to be focused just upon the occasion giving rise to the injury.

(Footnote omitted.)

45    That is not to say that the circumstances of the injury are not relevant. Their Honours went on (at [38]):

38    … For the principle in Hatzimanolis to apply, the employee must have been either engaged in an activity or present at a place when the injury occurred. The essential inquiry is then: how was the injury brought about? In some cases, the injury will have occurred at and by reference to the place. More commonly, it will have occurred while the employee was engaged in an activity. It is only if and when one of those circumstances is present that the question arising from the Hatzimanolis principle becomes relevant. …

and:

38    … When injury occurs at and by reference to a place, the question is: did the employer induce or encourage the employee to be there? …

46    It is clear from what follows in the majority judgment that the idea of an injury which occurs “at and by reference to a place” may require close examination on the facts of the particular case. In PVYW itself, mere presence at the place where the injury occurred was insufficient to establish that the injury occurred “by reference to” the place (although it occurred “at” the place (see at [45])). By contrast, the majority held (at [40]):

40    … An injury occurs at a place when the circumstance of the injury is referable to the place. The circumstances of Danvers, which was the basis of this criterion of liability, make this plain. They explain why the mere presence of an employee at a place in circumstances where an injury is associated with that place may be sufficient to bring that injury within the course of the employee’s employment.

47    The explanation continued (at [44]):

44    Attention must then be directed to the circumstances of the employee’s death in Danvers. He died because the van in which he was required to live caught fire. His death occurred by reference to that place and that circumstance. The place where an employee is required to be assumes particular importance when it is the cause of an injury or death. This is not to inject notions of causation into the application of the principle, just as the statement that an injury occurred as a result of being engaged in an activity does not involve such notions. To identify the relevant connection does not raise any question about causation. It simply identifies the circumstance in which the injury is suffered. It is that circumstance which must be the subject of the employer’s inducement or encouragement.

48    With respect to their Honours, some interpretation of this passage is required to avoid the possibility of confusion. The “circumstance” referred to cannot be that the van caught fire, because that was not induced or encouraged by the employer. The circumstance must, therefore, have been that the employee was present (as a result of inducement or encouragement) at the place where the fire occurred. Furthermore, their Honours are at pains to explain in the same passage that notions of causation are not involved. Read with the statement in [40], set out above, their Honours appear to say that mere presence at a place (where an employee is induced or encouraged by his employer to be) may be enough if something happens there which causes injury or death, although that hypothesis cannot (on their Honours’ reasoning) extend to injury or death which is the result of an employee’s own conduct. That potentially complicating feature was set aside in Danvers itself, as their Honours observed at [42]. It was, however, a feature of PVYW. It is not a feature of the present case.

49    At [59] and [60] their Honours say:

59    This is not to suggest that there should be added to the application of the principle in Hatzimanolis a separate test of connection or association. That would run counter to what Hatzimanolis sought to achieve and the method by which it did so. …

but:

60    The principle in Hatzimanolis should nevertheless be understood to have sought, and achieved, a connection or association with employment. …

50    Their Honours then say:

60    … for an injury occurring in an interval in a period of work to be in the course of employment, the circumstance in which an employee is injured must be connected to the inducement or encouragement of the employer. An inducement or encouragement to be at a particular place does not provide the necessary connection to employment merely because an employee is injured whilst engaged in an activity at that place.

51    We understand the distinction to be, where a “place” is involved, that not every injury arising from every activity will be in the course of employment – i.e. mere presence does not necessarily supply the requisite connection, although it may do.

52    The final conclusion in the majority judgment in PVYW was stated as follows (at [61]):

61    It may be accepted that the purpose and the effect of the principle stated in Hatzimanolis was to create an interval between periods of actual work, to better explain the connection that an injury suffered by an employee in certain circumstances has to the employment. It did so by reference to the fact that the employer induced or encouraged the employee to do something or be somewhere in particular and the fact that the employee did so and was injured. The two circumstances identified by Hatzimanolis were where an injury was suffered by an employee whilst engaged in an activity in which the employer had induced or encouraged the employee to engage; or where an injury was suffered at and by reference to a place where the employer had induced or encouraged the employee to be. An injury sustained in these circumstances may be regarded as sustained in the course of the employee’s employment. Properly understood, whilst the inducement or encouragement by the employer may give rise to liability to compensation, it also operates as a limit on liability for injury sustained in an overall period of work.

53    It is important, in our respectful view, to recognise that those concluding remarks affirm the existence of two streams of analysis having their origins in two different circumstances – activity and place. Despite the obvious possibility for overlap on the facts of particular cases, we do not understand the majority judgment in PVYW to say that satisfaction of both tests is required as a condition for liability. Such a combined or composite test could not have been satisfied in Danvers.

54    We take it, therefore, that it is not necessary to ask whether the place at which the injury occurred and the activity in which the employee was engaged were each induced or encouraged by the employer. Such an approach would be inconsistent with the explanation given in PVYW about the process of reconciliation amongst Danvers, Hatzimanolis and PVYW itself. However, in some cases (and PVYW was one such case) the employee’s own conduct might indicate a lack of connection with employment.

Application of the law to the facts

55    There is no basis to suggest that the tavern was an inherently dangerous place, although such a finding might not resolve very much in itself. On the other hand, these is no basis to think, on the findings made by the AAT, that Mr Westrupp contributed to his own injury, or was engaged in any activity which caused that injury.

56    The injury was caused by external factors imposed upon Mr Westrupp while he was present in the camp (the AAT referred to it as the SPQ Leinster Mining Camp) in accommodation supplied as an incident of his employment. It should be accepted that he was engaged in recreational activities. He was assaulted by another employee of the first respondent while they were both subject to the code of conduct, precisely because they were both at the camp. There does not seem to us to be anything exceptional in taking a drink at the wet mess operated by BHP Billiton’s contractor, which was available to residents in the camp a short walk from the SPQ and which was an adjunct to the accommodation provided by Mr Westrupp’s employer.

57    In Hatzimanolis the High Court referred to, and cast no doubt upon, a concession made in that case (recorded at 485) that “the appellant would have been in the course of his employment while working at the mine, travelling to and from the mine, eating and sleeping and even enjoying recreational activity at the camp”. The concession was obviously made to draw a distinction (unsuccessfully as it happened) between matters admittedly in the course of employment and the circumstances in which the injury to Mr Hatzimanolis occurred: on a long day trip (800 kms or so) well away from the mine site for the purpose of sightseeing. However, there is no reason to doubt that the concession was a proper one.

58    Shortly before the concession was referred to the judgment said (at 484-485):

… While on location at Mt. Newman, the respondent provided him with free accommodation and full board in a “camp” which included some recreational facilities. In these circumstances, the whole period during which the appellant was engaged in working at Mt. Newman constituted an overall period or episode of work. The outing in the course of which the appellant sustained his injuries took place in an interlude or interval in that overall period or episode of work.

59    The same conclusion must be reached in the present case. Mr Westrupp was induced to be at the camp during his swing. He was injured at that place. He was not guilty of gross misconduct. The general nature, terms and circumstances of the employment confirm that the injury occurred in an interval in an overall period of work.

60    In the earlier statement on page 484, for which Hatzimanolis still stands as authority, the High Court said:

… an interval or interlude in an overall period or episode of work will ordinarily be seen as being part of the course of employment if the employer, expressly or impliedly, has induced or encouraged the employee to spend the interval or interlude at a particular place or in a particular way. Indeed, the modern cases show that, absent gross misconduct on the part of the employee, an injury occurring during such an interval or interlude will invariably result in a finding that the injury occurred in the course of employment. …

61    In the present appeal, the first respondent submitted that Mr Westrupp “was working on a permanent basis at Leinster” and that his injury was therefore suffered “between two discrete shifts or periods of work”. This contention was to the effect that there was no overall period of work to consider. Rather, Mr Westrupp resided at Leinster and had, after his shift, in effect gone “home” and then out for purely personal social reasons.

62    In our view, this contention is untenable on the facts found by the AAT to which we referred earlier. Mr Westrupp resided in New Zealand. The submission took no account of the fly in/fly out nature of the employment and the strictly temporary nature of the accommodation in the SPQ. It took no account of the one week period between periods of work. As in Hatzimanolis, at least the periods when Mr Westrupp was at Leinster, subject for the entirety of those periods to the first respondent’s code of behaviour, should be regarded as overall periods of work in each case.

63    In the present case, the only question which might arise from PVYW is whether Mr Westrupp is entitled to compensation because the employer induced or encouraged him to spend an interval or interlude at a particular place and he did so in a way which maintained a sufficient connection with his employment.

64    The AAT’s reasons appear to treat the “place” of the injury as the tavern. In our view, this is too confined. It does not sufficiently take into account the “general nature, terms and circumstances of the employment”. The injury to Mr Westrupp may as easily have occurred at any of the other facilities provided in association with, and as part of, the camp – e.g. “gym, swimming pool, basketball, squash and tennis courts” or at the SPQ BBQ area.

65    As Toohey J said in Hatzimanolis (at 491) regard must be paid to activities which “the respondent saw as making the working conditions more attractive than they would otherwise be”. There was no reason in the present case to regard the tavern as a place unconnected with the employment.

66    Furthermore, the approach taken by the AAT does not sufficiently recognise the breadth of the concept of “encouragement”. That was an issue directly addressed in Comcare v Mather (1995) 56 FCR 456 (“Mather”), where Kiefel J said (at 462-463):

In my view “encouragement” is not to be taken as of narrow meaning and limited to some positive action and in specific terms which might lead the employee to undertake a particular activity or attend at a particular place. The two particular cases which their Honours in Hatzimanolis were concerned with in this context, Commonwealth v Oliver (1962) 107 CLR 353 and Danvers v Commissioner for Railways (NSW) (1969) 122 CLR 529 involved, respectively, an expectation of presence coupled with a recognised practice and making available facilities for an employee’s use. The facts in Hatzimanolis did not require the Court to discuss in greater detail what was encompassed by the phrase “induced or encouraged”. To be said to have, expressly or impliedly, induced or encouraged an undertaking or presence at some location could refer to, by way of example only, requirements, suggestions, recognition of practices, fostering of participation, or providing assistance and may include the exercise of discretion or choice on the part of the employee. Further attempt at definition would be fruitless. In each case, the question will be whether the attendance at the place at which or the undertaking in which the employee is involved when injured in an interval falls within the ambit of statements, acts or conduct made by the employer and what may be said to logically arise from them. And in each case, importantly, they must be viewed in the background of the particular employment and the circumstances in which the employer [sic: employee] is then placed.

(Emphasis added.)

67    If Mr Westrupp had been injured by a fire at his quarters while sleeping (Danvers) or whilst showering (Comcare v McCallum (1994) 49 FCR 199 (“McCallum”)) or had been struck by a car while returning to his accommodation (Mather; see also Watson v Qantas Airways Ltd (2009) 75 NSWLR 539) (“Watson”)) or had been assaulted by strangers while returning to his quarters after a meal and a few beers (Kennedy v Telstra Corporation (1995) 61 FCR 160 (“Kennedy”)), then, on the authority of Danvers, and cases in this Court and in other courts which have applied Hatzimanolis, he would have been entitled to compensation. We do not understand those authorities to have been overruled, expressly or by implication, by PVYW. The circumstances of the present case, in our view, are not materially different.

68    In our view, the AAT’s approach was too narrow. It paid insufficient attention to the general nature, terms and circumstances of the employment. It gave too much prominence “to the circumstances of the particular occasion” (Hatzimanolis at 484) and “focused just upon the occasion giving rise to the injury” (PVYW at [33]). When it is recognised that Mr Westrupp was only in Leinster, and at the camp, as an incident of his employment, that he was under the control of the first respondent throughout his time in Leinster, and that he was or would be expected to use facilities put in place by BHP Billiton, for which the first respondent took the benefit for its own employees as incidents of their engagement, then it seems to us, with respect, that the AAT misapplied the legal principles which govern the proper statutory construction to be given to s 5A of the SRC Act.

Question of law

69    The notice of appeal is deficient as earlier indicated. However, for the reasons already given, the present seems to us to be a case where it is appropriate to conclude (as the Full Court said in May v Military Rehabilitation and Compensation Commission [2015] FCAFC 93;(2015) 322 ALR 330 (“May”) at [174]):

[174]    … In the tribunal’s reasoning, and its approach to its fact finding, the court is able to see the manifestation of the construction error, and the misapplication of the statutory concept of injury …

70    In Watson, the New South Wales Court of Appeal identified an error on a question of law in a case involving the application of the principles in Hatzimanolis in the following terms (at [43]):

43        The error of law, here, arose from the failure of the Deputy President to direct himself in accordance with the reformulated test in Hatzimanolis. In our view, the Deputy President effectively asked himself the wrong question. …

71    We take the same view, with respect, of the decision of the AAT in the present case. The AAT erred here “on a question of law”.

72    The Full Court in May also said (at [186] and [231]):

[186]    What is and is not an “injury” for the purposes of s 4(1) of the SRC Act involves a statutory concept. It is apparent from the large number of authorities in state and federal jurisdictions, to some of which we have referred, that what can constitute an injury for the purposes of workers’ compensation regimes may require constructional choices. …

…

[231]    … the tribunal proceeded on a misconstruction of “injury” in s 4, then applied that misconstruction to the facts as found by it which led it, erroneously, … to impose restrictions and limitations not present in the statutory concept of injury: …

Conclusion about s 5A of the SRC Act

73    For the above reasons, upon the correct application of the law, the injury occurred in an interval or interlude between actual periods of work, but in an interval or interlude in an overall period or episode of work as directed by Hatzimanolis, taking into account the explanation given in PVYW. Impliedly, if not expressly, the first respondent induced or encouraged Mr Westrupp to spend his time between shifts at Leinster in the vicinity of the camp, including at the tavern if he so chose. Mr Westrupp was not acting so as to take himself outside the course of his employment. He was not guilty, either, of serious and wilful misconduct so as to disentitle him to compensation (SRC Act, s 14(3)).

74    The injury arose, therefore, in the course of Mr Westrupp’s employment and he was entitled to compensation.

75    On that basis, we will uphold the appeal and set aside the decision of the AAT.

76    It is not necessary that the matter be returned to the AAT for further hearing because, once the law is correctly applied to the facts found by the AAT or not in dispute, there can be only one outcome.

77    However, there are some other matters to address.

Section 6 of the SRC Act

78    The AAT rejected an argument that s 6(1)(a) of the SRC Act applied. The AAT found, for the reasons given by Tamberlin J in Kennedy, that no liability in the first respondent arose in that way. Tamberlin J said (at 170):

I do not think that the requirement of this provision has been met in the present circumstances. On a commonsense and practical application of the “but for” test, there is no causal nexus between the employment or the performance by the employee of the duties or functions of his employment and the assault. The assault arose from the confrontation of two groups late at night which was not related in any way to the performance by the applicant of the duties or functions in his employment.

79    Similarly here, it cannot be said that the assault would not have occurred but for Mr Westrupp’s employment. That involves a causal test, which is not satisfied. The absence of such a causal test (see PVYW at [44]) is significant for the application of s 5A(1), but the presence of such a causal connection is vital for s 6(1)(a).

80    We also agree with the AAT that s 6(1)(b) was not engaged. Although the injury occurred during an interval or interlude in an overall period of work at a place where Mr Westrupp was induced or encouraged by the first respondent to be, it may not be said that he was temporarily absent from his place of work “during an ordinary recess” such as, for example, on a lunch break.

Comcare submissions

81    The AAT decision was handed down on 5 May 2015 and the original appeal was filed on 1 June 2015. The parties were notified on 27 August 2015 that the appeal was listed for hearing on 12 November 2015.

82    One week only before the hearing of the appeal, Comcare invoked a statutory right to be joined as a party to the proceedings under s 108C(8)(b) of the SRC Act. As no party objected, and the listed hearing of the appeal was not jeopardised, the occasion did not arise to consider whether Comcare had waived its statutory right by not exercising it in a timely fashion.

83    Comcare should not assume that it may engage the provisions of s 108C(8)(b) simply at a time of its own choosing, regardless of prejudice to the parties or potential disruption to the Court’s arrangements. The right given by s 108C(8)(b) of the SRC Act is not so unqualified that it may not be lost by inactivity or delay.

84    In its written submissions, Comcare did not address the question of whether the AAT made an error of law or, indeed, whether a question of law arose for consideration in the appeal. Rather, Comcare’s submissions were directed to a proposal that the Court should find that the AAT was obliged to follow a particular three-step “process” proposed by Comcare in arriving at its decision. Such a finding would, no doubt, be understood by the AAT as a direction from this Court as to how it should go about reasoning to its conclusions in further cases of this kind, and other cases. The proposal was not confined to cases of the present kind concerning injuries which occur in intervals or interludes in overall periods of work. Indeed, it extended to cases of injury occurring during periods of actual work, a subject not addressed by Hatzimanolis or PVYW.

85    In our view, Comcare sought some form of advisory opinion, extending well beyond the parameters of the present case. That should not be encouraged. Moreover, it is not the function of this Court to tell members of the AAT, in advance, how to discharge that part of their duties and responsibilities which involves stating the particular reasons for decisions in individual cases. Detection of error (i.e. on a question of law) in a particular case may expose a problem in a way which helps to avoid error in future cases but, conceptually, that is quite a different thing.

86    In our view, Comcare’s submissions should not be accepted or acted upon.

Some further observations

87    We wish also to make some further final comments of a more general nature.

88    Hatzimanolis was an activity case. Perhaps it could not have succeeded as a place case (although that is by no means certain, as Mr Hatzimanolis was simply a passenger in the vehicle at the place where it rolled over on a trip found to have been endorsed by his employer). PVYW was a place case; it could not have succeeded as an activity case, applying the tests in Hatzimanolis. Cases such as McCurry v Lamb (1992) 8 NSWCCR 556 and Inverell Shire Council v Lewis (1992) 8 NSWCCR 562 (which were decided by the NSW Court of Appeal shortly after Hatzimanolis, and were discussed by the Full Court of this Court in Comcare v PVYW (2012) 207 FCR 150) were also place cases. By contrast, Mather and McCallum are best seen as involving both elements. The present case could reasonably be seen in the same way.

89    In the present case, Mr Westrupp was engaged in a recreational activity which was endorsed by the first respondent. He was using a facility which was an integral aspect of the facilities provided for the use of employees, as were the other facilities we have mentioned.

90    On the facts found by the AAT and those not in dispute, that activity was one in which he engaged in an interval or interlude in an overall period of work. It was in the course of his employment, applying the test in Hatzimanolis. For that additional reason, he would be entitled to compensation under s 14 of the SRC Act, unless disqualified by serious and wilful misconduct (s 14(3)).

Costs

91    The applicant sought costs of the appeal and is entitled to those costs. The applicant also sought his costs of the proceedings before the AAT.

92    Section 67 of the SRC Act deals with costs in proceedings before the AAT arising under the SRC Act. Section 67(1A)(b), (1) and (8) provide:

67    Costs of proceedings before Administrative Appeals Tribunal

(1A)    In this section, responsible authority, in relation to a determination, means:

…

(b)    if the determination affected a Commonwealth authority, or a corporation, that holds a licence under Part VIII authorising acceptance of liability for claims in respect of which the determination is made—that authority or corporation; …

…

(1)    Subject to this section, the costs incurred by a party to proceedings instituted under this Part in respect of that reviewable decision shall be borne by that party.

…

(8)    Where, in any proceedings instituted by the claimant, the Administrative Appeals Tribunal makes a decision:

(a)    varying a reviewable decision in a manner favourable to the claimant; or

(b)    setting aside a reviewable decision and making a decision in substitution for the reviewable decision that is more favourable to the claimant than the reviewable decision;

the Tribunal may, subject to this section, order that the costs of those proceedings incurred by the claimant, or a part of those costs, shall be paid by the responsible authority.

(Emphasis in original.)

93    The first respondent is a responsible authority within the meaning of this section in that it was “a corporation, that holds a licence under Part VIII authorising acceptance of liability for claims in respect of which the determination is made”.

94    The power and discretion to award costs which is given by the SRC Act may be distinguished from the absence of such a general power and discretion in the AAT under the AAT Act (cf. Frugtniet v Tax Practitioners Board (No 2) [2015] FCA 1171).

95    The AAT made no order for costs in the matter before it, but as we propose to grant relief directly (to reflect what in our view the AAT should have decided) we regard it as appropriate that the applicant should also have his costs of the AAT proceedings.

Orders

96    We will order that the decision of the AAT be set aside. We will make a declaration that, on the facts found by the AAT and those not in dispute, the claim for compensation satisfied s 14 of the SRC Act. We will order that the first respondent pay the applicant’s costs of the appeal and the proceedings before the AAT.

Associate:

Dated:    4 December 2015