Hills v Pioneer Studios Pty Limited [2016] HCATrans 27 (12 February 2016)

Last Updated: 16 February 2016

[2016] HCATrans 027

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Sydney No S163 of 2015

B e t w e e n -

KATHRYN HILLS

Applicant

and

PIONEER STUDIOS PTY LIMITED

Respondent

Application for special leave to appeal

BELL J
GAGELER J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 12 FEBRUARY 2016, AT 9.54 AM

Copyright in the High Court of Australia

MR B.J. GROSS, QC: May it please the Court, I appear with MR G.J. TANNER, for the applicant. (instructed by Carroll & O’Dea Lawyers)

MR L. KING, SC: May it please the Court, I appear for the respondent. (instructed by Bartier Perry)

BELL J: Yes, Mr Gross.

MR GROSS: Your Honours, Justice Basten quoted at pages 39 and 47, paragraphs 15 and 35 respectively, passages in the judgment of this Court in Hatzimanolis which were adopted in PVYW that:

an injury is more readily seen as occurring in the course of employment when it has been sustained in an interval or interlude occurring within an overall period or episode of work than when it has been sustained in the interval between two discrete periods of work.

The present case, obviously, concerned that second situation. Your Honours, at page 39, paragraph 16, Justice Basten said that the Deputy President would err in point of law if:

he applied the reasoning in PVYW (and thus Hatzimanolis), without proper regard to that distinction –

Then at page 47, paragraph 34, Justice Basten stated that:

The “camp” cases –

his expression not mine –

where the worker is required to find accommodation away from home whilst on the job and such accommodation is provided by the employer, engage the principle in Hatzimanolis -

Then in the next paragraph at paragraph 35, page 47, Justice Basten said:

There is an important limitation on the scope of that principle [in Hatzimanolis] . . . where the worker is engaged for regular hours and goes home after work -

which, of course, is the present case situation. The important limitation, well, it was never exactly clearly identified. But, in any event, Justice Simpson at page 58, paragraph 62 - - -

BELL J: Mr Gross, just before you go to Justice Simpson’s reasons, can I just take you back to application book 39, to paragraph 17? Justice Basten first discusses Hatzimanolis, noting the distinction between what his Honour describes as the “camp” cases and a case of this kind, but then his Honour says:

There is, however, a second way in which the Deputy President appears to have erred, which requires reference to the factual findings –

that were made and his Honour says that he will deal with that matter first, and that was his Honour’s view, that the Deputy President had made the same error as in the first decision.

MR GROSS: Your Honour, can I jump forward to deal with that particular argument?

BELL J: Yes.

MR GROSS: As your Honour points out, Justice Basten actually in two places, first of all paragraph 17 on pages 39 to 40, and paragraph 36 on page 48, concluded that the Deputy President made an error in point of law by identifying the scope of the applicant’s employment by reference to the applicant’s subjective understanding or view of what the respondent employer required or expected, instead of the Deputy President characterising the course of the employment objectively.

Your Honours, we submit that there is no such error and we adopt what Justice Simpson, the dissenting judge, said on this issue at pages 72 to 73, paragraphs 108 to 112.

BELL J: But is that the issue on which Justice Basten’s reasons turned and, in that case, is the central issue, as it were, as between the majority and the minority, a consideration of whether or not it was open to the Deputy President to make the finding that he did?

MR GROSS: Your Honours, there were several planks to the reasoning. Could I endeavour to sequentially go through them and identify those? It is not just the subjective versus objective error, it went beyond that.

GAGELER J: I would be interested in how you make this into a High Court point as well.

MR GROSS: Yes. Your Honours, in Hatzimanolis, if we go to the passage quoted at page 47, paragraph 35, if I could just summarise the main point. There is a quotation from Hatzimanolis, the High Court said that it would be error:

to hold that an employee was within the course of employment whenever the employer had authorized, encouraged or permitted the employee to spend the time during an interval between periods of actual work at a particular place or in a particular way.

Then the Court said that for the employer to encourage a worker to visit a doctor would not bring that attendance on a doctor within the course of employment. Now, your Honours, the Deputy President was well aware of this passage and explicitly quoted it at page 20, paragraph 71, the paragraph starting with, “It is important to note”, so the Deputy President was quite aware of that particular consideration.

We contend that analogising the present case to that mundane example was error, that on the factual findings correctly made by the Deputy President, the present case fell well outside the scope of this kind of example in that going to a doctor is a purely personal act by the worker as a private citizen in the general community and has nothing to do with employment. So bare encouragement not enough and, of course, this is a case where the relevant encouragement and inducing related to a work event that is a work farewell party which the respondent’s managing director should be held for the party employing Mr Buchanan.

Your Honours, the Deputy President made various factual findings which were accepted by Justice Simpson as well which brought the present case comfortably within the principles in Hatzimanolis and PVYW. Briefly, the respondent through its managing director, Mr Ludbrook, told Mr Buchanan that the party to be held at the respondent’s premises that Saturday night would be a farewell party for Mr Buchanan who was leaving the respondent.

It is also found that in nominating the party as a farewell party Mr Ludbrook intended that staff members of the respondent would attend the party to farewell Mr Buchanan and you cannot have a farewell unless there are people doing the farewell and plainly expected that staff members would communicate with each other that the party was a farewell party. The findings were that Ms Martel had been told in the presence of the applicant that she was to give directions and training to the applicant and Ms Martel, who was in charge of inducting and advising the applicant, encouraged her to attend the party to meet photographer clients, be with her fellow workers and be a good part of the team.

Your Honours, Justice Basten concentrated unduly upon the written statement given by Mr Ludbrook as having some primary importance in terms of fact finding, but the fact was that Mr Ludbrook caused his employee, Mr Buchanan, to be in charge of the organisation of the party including having a security guard and including Mr Buchanan having charge of security of guests’ bags in a locked equipment room, and it was Mr Buchanan who was organising the party at Mr Ludbrook’s request who was accompanying the plaintiff to go down the stairs and caused her to go down the stairs to look for the bag in the locked equipment room and she fell over the balcony and suffered injury.

GAGELER J: Mr Gross, I am sorry, this was an appeal on a question of law to the Court of Appeal.

MR GROSS: Indeed.

GAGELER J: Now, do you say that in analysing the evidence there was some error of principle on the part of the Court of Appeal?

MR GROSS: Your Honour, yes. In treating the – first of all, there was an error of principle in taking fact finding and making alternative factual findings when in fact there was no such error of law involved, ignoring very careful and detailed factual findings by the Deputy President. Secondly, we say that in terms of what is the coverage of workers as to the course of the employment in this more conventional situation, what Justice Basten has done is, in effect, created confusion as to how that limitation or qualification on Hatzimanolis operates, leaving matters totally unclear as to what the situation is as to their coverage.

BELL J: Justice Basten did not make an alternative factual finding, did he? Justice Basten concluded that it had not been open as a matter of law to the Deputy President to make the finding that the Deputy President made.

MR GROSS: The fact finding was in two areas, your Honour. First of all, his Honour found at page 45, paragraph 29, that Mr Ludbrook in speaking to the applicant inquiring whether she intended to attend the party was not a relevant inducement or encouragement which would support her being in the course of the employment by attending the party, and so he seized upon that particular matter, but in isolation from all of the other evidence as to the circumstances in which she was induced and encouraged to attend the party.

The second error found by Justice Basten was at page 42, paragraph 25, where Justice Basten found that the Deputy President erred in law because it was not open to conclude:

that attendance at the party was an activity undertaken by the respondent in the course of her employment –

unless he expressly rejected certain aspects of written statements by Mr Ludbrook and to a less extent Ms Martel, but the Deputy President had gone through those matters and the totality of the evidence in finding what Mr Ludbrook and Ms Martel had actually said and done. The mere fact that there were some written statements which they had made earlier which put a different complexion on things did not require that those statements be given a primacy over the rest of the evidence, including the oral evidence that was given in the proceedings, and also the statements which were given to the police.

So his Honour treated as an error of law failure to have regard to factual statements of the written kind which implicitly had not been accepted by the trial judge who made contrary findings based upon the totality of the evidence. So that seizing upon this particular aspect of evidence as being something which was in fact determinative or of overpowering effect compared to the rest of the evidence was not a proper exercise of the appellate function which is confined to errors in point of law.

Your Honours, we submit that the findings of fact made by the Deputy President had to be taken into account and had to be given acceptance because of the nature of the appellate jurisdiction, and in discarding these Justice Basten went beyond the proper appellate role.

Your Honours, another mistake which I wish to take your Honours to briefly, an alternative case was that the injury arose out of the employment. There was a finding made by the Deputy President that the injury did arise out of the employment. Justice Basten dismissed this part of the applicant’s case by wrongly treating the Deputy President as having reasoned that if the injuries arose in the course of the employment they also arose out of the employment.

Beyond this, Justice Basten totally failed to consider the applicant’s separate argument the injury arose out of the employment, that is, that the employment caused or attributed to the occurrence of the injury which, of course, happened on the respondent’s premises on its stairs. Justice Simpson at page 70 to 71 in paragraphs 100 to 101 found no error here and confirmed that the Deputy President separately found injury arose out of the employment and those findings by the Deputy President are at page 24, paragraph 90.

Now, there is an error of principle if on appeal on a question of law the Court of Appeal has, in effect, refused to consider the alternative case brought by the applicant that the injury arose out of the employment, and the analysis by Justice Basten just will not withstand scrutiny by reference to the way the case was argued and the determination made by the Deputy President. So there is a question of principle, we say, in relation to the exercise of the appellate function. There has to be a proper hearing of an important part of the applicant’s case. So we would add that as an extra matter of principle.

We would also add, and I know this is covered in the written submissions, that the way the Court of Appeal has dealt with it has left an area of confusion as to what relevant distinctions are to be drawn between the two separate classes of cases in this area and we would submit that the legal profession and the courts would benefit from the High Court clarifying this matter. Your Honours, I think that completes what I wish to say.

GAGELER J: I just wanted to ask you one question. At paragraph 36, page 48, the passage you took us to in Justice Basten’s judgment, the correct test according to his Honour about line 30:

depends on an objective characterisation of the employer’s requirements and expectations –

et cetera. Now, do you dispute that as a correct statement?

MR GROSS: No, that is a correct statement but, of course, if you are going to draw that distinction you have to have regard to the objective characteristics which are found by the Deputy President and which are clear on the evidence and there are certain objective features in terms of the party being organised as a farewell party, the applicant is a new employee who needs to, as it were, be introduced to clients and become part of a working team and the like. So, when one takes those facts, which one can characterise as objective, and add them altogether, as found by the Deputy President, you already have that requirement satisfied and it is not appropriate to - - -

BELL J: Was there evidence concerning the nature of the applicant’s employment?

MR GROSS: Yes, what her duties were and what she needed to do in order to perform those duties properly. Incidentally, Justice Simpson pointed out that the question of whether the objective characteristics of the employment were properly defined did not appear to be within the grounds of appeal that were argued or the matters as argued at trial or before the Deputy President. So that bit took us all a bit by surprise, but we would submit that that test was fully satisfied and Justice Basten, having identified that as an important factor, failed to have regard to the evidence which bore upon the objective characterisation of the employer’s requirements and expectations.

GAGELER J: So on this part of your case your real point is that his Honour was wrong in inferring error of law - - -

MR GROSS: Yes.

GAGELER J: - - - application of wrong legal test by the Commissioner.

MR GROSS: Yes. Your Honours, I have nothing further, thank you.

BELL J: Yes, Mr King.

MR KING: Your Honours, on the last point, with all respect to my learned friend, the position about the objective basis for evaluating the applicant’s employment is not as strong as he put it by a good margin. If your Honours go to page 42 of the book, immediately above paragraph 25, the last question in the cross-examination of Ms Martel, she points out that there was no obligation to liaise with photographers at parties.

If your Honours then go to our argument at page 101, the last paragraph, or really the whole of paragraph 10, at the foot of that we endeavour to point out that the evidence was skimpy and there was a complete absence of evidence about whether she would have to socialise, et cetera.

Your Honours, in answer to my learned friend generally, in my submission, the position is this, that the two errors of law identified by Justice Basten and agreed in by Justice McColl were correctly identified. There is no need to revisit Hatzimanolis and the Comcare Case. Those cases show that there is a distinction between the two situations. The camping case where the workers are away from home for a prolonged period, which was those two cases, and then the distinction is between that sort of case and this case. There is no suggestion that relevant considerations do not overlap and they were treated as overlapping in the Court of Appeal.

The point of distinction which was not observed by the Deputy President is that it is harder in a case like this to make out the basis of a claim. My learned friend said that the Deputy President had proper regard to it but, your Honours, as we say in our written argument and I will repeat it here, on page 20 in paragraph 71 of his reasons where my learned friend, with all respect, rather blandly said that the Deputy President set out the relevant part of Hatzimanolis.

The Deputy President left out completely the immediately following paragraph, which is the critical one, which is cited – it is referred to in our argument and I think it is cited by Justice Basten which says that where you have regular hours of work it is more difficult to show that a situation like this is compensable. Perhaps, your Honours, rather than - - -

GAGELER J: I am sorry, Mr King, where were you taking us to, page 62 did you say?

MR KING: This is page 20 of the book - - -

BELL J: Page 20.

GAGELER J: I am sorry.

BELL J: Mr King, the passage that the Deputy President set out included the well-known illustration from Danvers of the instruction by the employer or the encouragement to the worker to see his doctor after employment. It might be stretching things a bit to conclude that the Deputy President was not, in light of that, aware of the distinction between what might be described factually as a “camp” case and a case such as this where injury occurs between daily periods of work.

MR KING: Well, your Honour, he did not mention it and - - -

BELL J: Well, surely the purpose of setting out the passage that included the doctor example is to indicate the Deputy President’s awareness of that distinction.

MR KING: Well, your Honour, this Court specifically said in Hatzimanolis that it is more readily seen as a compensable situation when you are away than in this situation. That is the distinction which the majority said - - -

BELL J: Indeed.

MR KING: - - - was not observed and it does not appear, with all respect, that it was. There was great focus on the subjective view of the applicant. In point of principle, in my submission, on this part of the decision, there is no real difference between Justice Simpson and the other two members in the majority and there is no need for this Court to intervene. At bottom, what is left is a factual decision which, with respect, Justice Bell identified earlier when my learned friend was on his feet. The nature of the decision of the majority is that, on the evidence, it was not open to the Deputy President to make the factual finding or findings that he did that there is a critical factual finding about inducement and encouragement.

You have got two members of the Court of Appeal saying the evidence did not rise that high, one saying it did. There is no question of

the majority arrogating to itself a non-jurisdictional right to make fresh findings. All they did was, contrary to my learned friend’s submission, look at the evidence, analyse the findings and say they are not supported. Your Honours, that is an everyday decision, not something which should trouble this Court and it is not to be seen as wrong, in any event. Your Honours, that is what I say by way of answer.

BELL J: Thank you, Mr King.

MR GROSS: Very briefly, your Honours. My learned friend took your Honours to Ms Martel’s evidence where she said that it was not her job as the applicant’s job to liaise with photographers at parties, and my learned friend also referred at page 101 of the book to the respondent’s own written submissions. At the bottom of page 101, the last four lines:

There was an absence of evidence about whether she would have to socialise with or entertain customers, especially photographers, at events like parties or otherwise, as a term or condition of her employment.

Now, obviously people do not get signed up in detail to these terms of employment and contractual obligations are only a small part of the overall course of employment but, your Honours, it is important to note in this context that the Deputy President found – if your Honours would just go to the bottom of page 85, found that Ms Martel “spoke to” the applicant in the following terms. There was a debate as to whether it was Ms Martel or Mr Ludbrook but in the end it was found by the Deputy President at page 22, paragraph 29, line 9 that it was Ms Martel who spoke to her as described in such terms. If your Honours would just go to that paragraph, this is the applicant’s statement describing the conversation:

“Some time in the week before Saturday 13 March 2004 (when the party was held), either Richard Ludbrook or Jennifer Martel –

and it has been found by the Deputy President it was Jenny Martel –

said to me at work words to the effect of ‘we are going to have a farewell party here for Alistair (Buchanan) on Saturday night. Alistair’s leaving to become a freelance photographer. It would be good if you came to the party. Most of the people from here will be there. We are having the party in one of our studios here. There will be a lot of our clients and photographers who we hire equipment to who are going to be at the party. This will be a good chance for you to be able to meet a lot of the clients that we do business with and to get to know them better’.

Now, the finding that Ms Martel said that negates that passage in the evidence and, of course, there was ample evidence that her duties were managing the equipment room and hiring out equipment to photographers, so that there is that correlation on those findings. That is all I wish to say. Thank you.

BELL J: Thank you, Mr Gross.

We are of the opinion that the application does not raise any question of principle suitable for the grant of special leave. Special leave is refused with costs.

AT 10.21 AM THE MATTER WAS CONCLUDED