ABE GHALEB: Welcome to a special edition of the SRC Report. I'm Abe Ghaleb, I'm a Senior Associate here at McInnes Wilson Lawyers and I'm joined by Daniel D'Onofrio, who is also an Associate at McInnes Wilson Lawyers. So Dan, tell me what we're talking about today.
DANIEL D'ONOFRIO: So, today we're going through the case of Dring. It's a recent series of decisions which have been handed down, the most recent decision being that of The Full Court of the Federal Court of Australia relating to a lady by the name of Ms. Dring, who sustained an injury whilst she was attending an interstate conference for work.
ABE GHALEB: Do you want to take us through some of the facts of that?
DANIEL D'ONOFRIO: Absolutely. So Ms. Dring was an employee of Telstra where she worked for 14 years until she was made redundant. At the time of the subject incident Ms. Dring held the position of Senior Project Manager in Brisbane where she resided. On the 11th of April 2016 Ms. Dring travelled to Melbourne with the approval of Telstra to attend a series of workshops related to the project she was undertaking at the time. The workshops were held at the main Telstra office in Melbourne. Telstra met the costs of Ms. Dring's airfares, meals and accommodation whilst she was in Melbourne with respect to accommodation, Telstra had arranged and paid for Ms. Dring to stay at the Novotel on Collins Street for three nights. At approximately 5:00 PM on the 13th of April 2016, Ms. Dring left the workshop that she had been attending that day and returned to her hotel room where she met a friend, Ms. McKenzie.
Ms. McKenzie attended Ms. Dring's room, where they worked their way through nearly a bottle of champagne. They then departed the hotel and arrived at the restaurant, Lucy Liu, for dinner at around 8:30 PM that night. Ms. Dring and Ms. McKenzie remained at the restaurant until 11:30 PM. And during the course of their dinner, they both shared another bottle of wine, they did not have any other alcohol at dinner. On departing the restaurant, Ms. Dring and Ms. McKenzie walked to The Toff in Town bar where they consumed a cocktail each. They left the bar at approximately 1:30 AM on the following morning on the 14th of April 2016 and then returned to the Novotel by at about 2:30 AM. On arrival, they took the lift to the main reception on the sixth floor, where they were required to change lifts to proceed to the rooms. Prior to doing so, Ms. Dring decided to use the toilet located opposite the reception area.
As she exited the toilet, Ms. Dring slipped on some tiles outside the toilet area and fell landing on her left hip and buttock area. Ms. Dring claims that the tiles were wet as they had just been mopped while she was in the toilet, and she did not notice the wet floor sign that had been put out. Ms. Dring was assisted by reception staff and Ms. McKenzie, who was waiting in the reception area for Ms. Dring to return from the toilet. On the 15th of April 2016, Ms. Dring returned home to Queensland where she attended her general practitioner, Dr. Saline Lewis. She reported lateral hip pain and muscle spasm and soreness following the fall the previous day in Melbourne.
On the first September 2016, Ms. Dring submitted a claim for workers' compensation under the Safety, Rehabilitation and Compensation Act for a left hip contusion affecting the upper left leg and hip. She claimed that this was caused on the 14th of April 2016 by her slipping on a wet floor at the Novotel on Collins Street, Melbourne, where she had been staying for work. On the 13th of October 2016, Telstra determined it was not liable to pay workers' compensation under Section 14 of the SRC Act in respect to the claimed condition as it was viewed that although Ms. Dring had sustained an injury, it had not arisen out of or in the course of her employment with Telstra. This was affirmed by Telstra on initial review dated 9 December 2016.
ABE GHALEB: So then Ms. Dring's unhappy with that decision and she takes it to the Administrative Appeals Tribunal, isn't that right?
DANIEL D'ONOFRIO: That's correct. And could you mind taking us through that?
ABE GHALEB: Yeah, look, I will. And I think just before we do that though, what might be of benefit is we take a step back and talk briefly about a decision called Comcare v PVYW. And that's a 2013 High Court decision and it also dealt with injuries arising out of, or in the course of employment under the Safety, Rehabilitation and Compensation Act.
In that case, and in brief, Ms. PVYW, which is obviously a pseudonym, was injured whilst having sex in her motel room during an overnight work trip. And what the High Court said in that case is that for an injury occurring in an interval or interlude in a period of work to be considered in the course of employment, the circumstances in which an employee is injured must be connected to the inducement or encouragement of the employer.
So there's an inquiry that the court says must be taken and that is, essentially, "How is that injury brought about?" So in some cases, the injury is going to have occurred at and by reference to the place and in other times, the injury is going to be caused by an activity. So the question is, "Well, did the employer induce or encourage the employee to engage in that activity when the injury occurs by an activity?" And the other question is, "Well, if the injury occurs by reference at or to a place, did the employer encourage or induce the employee to be there?" And so we just tried to give some guidance to insurers and to employers about, in those particular circumstances, when does an injury arise.
Okay, so with that background in mind, let's talk about what happens at the Tribunal when Ms. Dring applies for review with the Administrative Appeals Tribunal.
The Tribunal says the injury in her case doesn't occur merely by reference to the place, rather it's also a result of the activities in which she's engaged without her employer's inducement or encouragement.
So they say, look, socializing with a friend for a period of more than eight hours until approximately 2:30 AM is an activity that just isn't encouraged or induced by the employer. And what the Tribunal said was, "Look, let's take a common-sense approach to this. And common sense would dictate that you would expect an employee who's required to be at work the following day to be securely in their hotel room, which has a serviceable bathroom, which wouldn't have exposed her to a risk of falling because it had been recently cleaned. It just wouldn't occur in those circumstances."
So the Tribunal says, "Look, it's fine to go out for dinner but you get to a stage where, due to the extent and duration of the personal activity, it breaks the nexus to employment and, therefore, the injury sustained doesn't arise out of, or in the course of employment, it simply occurs between two discrete periods of work."
What do you think about that, Dan?
DANIEL D'ONOFRIO: Abe, I think that's a really interesting issue and one of the biggest issues that emerges with respect to the Tribunal's decision, in my view, is the Tribunal's identification of how Ms. Dring's injury came about.
As we know from the summary you've just provided from PVYW, which is a really seminal case in the jurisdiction, it must first be determined how this injury came about. And as you say, the Tribunal concluded that Ms. Dring's injuries were a result of the social activities in which she had been engaged without her employer's inducement or encouragement. However, the Tribunal did not consider that there was sufficient evidence to establish that her injuries were a result of her intoxication following her social activities. And it made those remarks at the very end of its decision, where it noted that those are matters which had not been pressed and which it had not considered further.
But what I find difficult to reconcile is how this sits with the proposition that there must be a connection between the circumstance in which an employee sustains an injury and the employment.
Isn't it the case that Ms. Dring sustained her injury because of the hazard that was present at the Novotel? If we apply what the High Court said in PVYW, just as you've summarized about injury and place, wouldn't liability be in Ms. Dring's case as she was injured by something occurring to the premises or in other words, a defect with the premises by virtue of the hazard that was present on the floor outside the toilets, in the place in which Telstra had accommodated her?
ABE GHALEB: Yeah. And I guess what I understood the Tribunal was trying to make clear is that they weren't trying to provide a moral judgment here, they weren't saying there's an issue with Ms. Dring going out for a drink, there isn't an issue with her having dinner, but what you can't expect is for the employer to be responsible for everything that occurs within two discrete periods of work on a business trip. And I think what the Tribunal was saying is "Look, had she taken a common-sense approach where you have work the next morning and you are on a business trip, we would have expected you to be in your room asleep at 2:30 AM. And if that had been the case and even if you needed to use the bathroom at 2:30 AM, then you wouldn't have been exposed to that issue with the premises or defect with the premises."
The words that you used, the question must always be, is there still a nexus to employment? Because the question is, "have you suffered an injury arising out of, or in the course of employment?"
So in that sense, you must always bring it back to that question. And you can't have severed that injury if you were still in your hotel room at 2:30 AM.
DANIEL D'ONOFRIO: Yeah.
ABE GHALEB: That's how I understood it. But that's a good question because that's part of the argument that Ms. Dring runs when she goes to The Federal Court. So she appeals that decision to The Federal Court and Justice Snaden deals with it. I don't want to spend too much time here because his Honour dealt with the grounds contended by Ms. Dring, which are essentially this, the Tribunal has erred by concluding that the test of compensation has been narrowed so that where an injury occurs by reference to a place, the Tribunal has said, "Well, look, it doesn't arise by the place alone."
Rather what the Tribunal did was include an additional requirement that the activity had to also be encouraged or induced by the employer. And what Justice Snaden said was essentially this, "If Ms. Dring slipped over when she was returning to her hotel room at 10:30 PM at night, instead of 02:30 in the morning, then yes, a different outcome may have been warranted here." And the decision that the Tribunal made would have probably been clearer more so had the injury occurred if she was returning at 7:30 AM, but there's nothing incorrect by the Tribunal saying that the extent and duration of the personal activity which she undertakes results in a broken nexus with her employment. So Justice Snaden dismisses the appeal.
DANIEL D'ONOFRIO: Look, I think that's an interesting point and it's a point in which I hold a different view.
Again, I think The Federal Court here has missed the most fundamental issue which is, how did Ms. Dring sustain her injury? If we are to accept based on the High Court's reasoning in PVYW that Ms. Dring's injuries resulted by reference to a hazard present at the workplace, in this case, the Novotel, then it isn't necessary to impose an additional evaluative test to determine whether the activity she had been engaged in at the time were induced or encouraged by Telstra. Where I believe The Federal Court has become unstuck, is that it has done this very thing.
In my view, it has assessed Ms. Dring's injuries, which have occurred by reference to a safety issue or defect with the place by reference to the activities she was engaged in during the preceding eight hours.
Isn't this going beyond an assessment of the circumstances in which she sustained her injury? I think this is a really important point, noting what you'd said, Abe, earlier about how there was this common-sense application of the circumstances, is that really what we should be doing here, applying our common sense to an evaluative test which requires an individual to assess the circumstances in which the employee sustains the injury by reference to her employment or his employment?
Even if Ms. Dring's injuries occurred by reference to an activity, we must identify what that activity is, right? Here, there appears to be two activities in my view,
- one is the activity of using the toilet and
- two, is the activity of socializing after work.
But only one of these activities has been accepted as having resulted in Ms. Dring's injuries, and that's the use of the toilet. So then why then does it matter what time she used those facilities? Surely one would contemplate that a person travelling for work may use the common facilities of the hotel from time to time. It would be absurd to say that the fact that she used the common facilities of the hotel rather than her own toilet is a decisive factor in determining liability for consequential injuries, right?
ABE GHALEB: But I don't think that's what the court's actually saying because the court acknowledges that this woman can use the bathroom. I think what the court is saying is that it's a little unreasonable for you to be out in the lobby at 2:30 AM using the bathroom. And that's what Justice Snaden was saying, "Look, had it been 10:00 PM, well yes, you still may have been coming back to the hotel from dinner. It's completely understandable that you might be out there."
But this is where you take a common-sense approach and you say, "Look, what's expected from your employees who have work the next day? Work has put you up at this hotel room, we shouldn't have to spell out to a Senior Project Manager that you should probably be in your hotel room at 02:30 AM, not returning from a night out."
And in those circumstances, we, as the employer shouldn't be held responsible for everything that might occur. What the court, again, I think is trying to make clear is to say, "There isn't a moral judgment here, it's absolutely your entitlement to go out for dinner with your mate and to drink and to do as much socializing as you want. But there must come a time where you have severed that employment connection and had you not done this, you wouldn't have suffered the injury. So why should the employer be at fault?"
All right, well, look, let's go on then because Ms. Dring loses at The Federal Court level and she then appeals to The Full Federal Court, and that's constituted by Justices Flick, Rangiah and Wigney and again, Ms. Dring contends that this injury that she suffers is by reference to a place case, and it's not an activity case.
So it's inappropriate or impermissible for both the Tribunal and now the primary judge at The Federal Court to look it on the place test and consider the circumstances in which the injury occurred, including the activity that's being engaged in at the time when the injury occurs. And the court said, "Look, the way the High Court in PVYW referred to two circumstances in which an injury may be suffered, it was actually trying to assist everyone in the understanding of the phrase, "Arising out of, or in the course of the employee's employment."" The High Court doesn't say that those two things are exclusive. So if there's an injury by reference to a place, you must only look at the place and if this is an injury by virtue of an activity, you must only look at whether the activity was encouraged or induced.
The Federal Court says, "That's not what the High Court did." And, more importantly, what the High Court was trying to do was elucidate what the previous High Court decision in Hatzimanolis sought to do, which was create a connection between the injury, the circumstances in which the injury occurs, and the employment itself. So when the High Court in PVYW is talking about requiring an employer's inducement or encouragement of an employee to be present at a particular place or engage in a particular activity, that's because that encouragement is effectively the source of their liability and therefore the circumstances of the injury must correspond with what the employer induced or encouraged the employee to do.
So here, yes, it's encouraged or induced to be at the hotel, it's not encouraged or induced to be out and return to the hotel at 2:30 AM.
Justice Wigney also dismisses the appeal but writes a separate judgment. And that judgment is well worth reading because I think it's really well done, it says that PVYW, as well as Hatzimanolis, as well as Westrupp, all these decisions make it clear that it's an unacceptable extension for an employer to be held liable for everything that occurs while an employee is present at a place where the employer induced or encouraged them to be. That's just not what is understood by the term of: "Arising out of, or in the course of employment." And The Federal Court thinks the High Court just doesn't want that and never had wanted that.
What do you think about all that, Dan?
DANIEL D'ONOFRIO: Look, Abe, I must say, I'm like a man with a bone in this matter. I can't get over the fact that, again, this issue of the hazard, the wet floor. And what's perplexing to me about this decision of Justice Flick, firstly, is that he didn't even mention the fact that Ms. Dring sustained her injuries by reference to a hazard particular to the place she was accommodated at. And nor was there any discussion of what this may mean with respect to compensability for her injuries by reference to a place, it was just totally not even discussed. And I'm also doubtful that the primary judge didn't stray into error when upholding the conclusion that her personal activity resulted in a broken nexus to employment. And that's because the circumstances in which she sustained her injury were not referable to her socializing but the hazard with the Novotel, the wet floor. I keep saying this, Abe, I must sound like a broken record.
And then we go look at Justice Wigney, what did he have to say? Well, he did mention the wet floor, thank God. And that was a feature. He referenced it being a feature of her case but actually didn't proceed any further with any sort of evaluation of it, its importance, how it fits in potentially to the discussion about a reference to a place. And neither of them engaged with the comments made by, and when I say them, I say, neither Justice Flick nor Wigney engaged with the comments made by the plurality in PVYW that, where the employer puts an employee in a position where injury occurred because something to do with the place and in PVYW the example that was given there was, had the light fitting that fell on PVYW's head been improperly secured, then liability in those circumstances is justified.
Now for me, in my view, I would say that there's a lot of connection between a light fitting being improperly secured and a floor presenting a hazard due to an area that is wet. Now, the fact that PVYW was engaged in sexual activity at the time was not considered relevant in circumstances. And the same comparison, in my view could be made here, as shouldn't the social activities of Ms. Dring be considered relevant in this matter.
ABE GHALEB: No, I've got to disagree because the social activities are precisely what has brought her to the place at 2:30 AM. The employer says to her, "Go and stay at this hotel, we've booked a room for you." That's all well and good and had she been in the room when she slipped on some wet tiles or a light fitting had fallen out and struck her, I would completely agree with you that it's by reference to the place. But that's not what's occurred, you can't look at this, in my opinion, in a vacuum, you need to say, "She has gone out. She's gone out till 2:30 AM. She has used a lobby hotel toilet when in any other circumstances she would have been in her room."
It's those activities specifically, which the employer has not encouraged or induced her to do, which is what has brought on the injury and in that sense, the employment nexus is broken. And so I disagree, I think this is exactly what Justices Flick and Wigney do address, that PVYW doesn't say everything that happens at a place is covered, it isn't and that is just simply an unacceptable extension for workers' compensation.
DANIEL D'ONOFRIO: Yeah. Look, I agree with that. I do agree and I don't think it should be the case to capture everything that happens at a place. I feel like on a practical level, Abe, that this would just be so onerous on an employer, notwithstanding the fact that it is just absurd, but I suppose the final thought that I had was, what brought her to that location at that time of the morning? And it makes me again, think of PVYW and I know we've probably labored this to death already, but in that situation, in the circumstances of PVYW's case, wasn't it the case that what brought her to the hotel at that time of the day was the sexual activity she was about to engage in?
And surely it couldn't be said that, that sexual activity was with the inducement or encouragement of her employers and I think that, that was very clear in that matter that it wasn't. But even in those circumstances, the plurality of the High Court were willing to say, "Well, notwithstanding, what's brought her there, if that light secure was improperly fitted, and that fell on her head during a sexual act in which she was not induced or encouraged to engage in by the direction of our employer, then liability is justified." So if we apply that same reasoning here in Ms. Dring's case, then it shouldn't matter what brought her to that place, the fact of the matter is she is at that place and, certainly, I agree that we should be taking a view and taking an assessment of the circumstances, but how wide do we cast that net?
How wide of a net should we cast to determine other circumstances preceding the incident? Do we look at four hours, eight hours, two days, three days, the whole period?
In my view, I think taking a drastic example, it's taking eight hours and casting the mind all the way back that far, I think is far overextending it and then to apply a common-sense or some sort of moral flavour or embellishment on the assessment, I think it does lead The Federal Court and the Tribunal down a path of error. But look, that's my closing comments and I'll be waiting with bated breath to see whether High Court talks about this wet floor.
ABE GHALEB: Yeah. Well, look, I think that's absolutely right. I think chances are Ms. Dring is probably going to try the special leave to the High Court. It sounds like you think special leave is going to be granted?
DANIEL D'ONOFRIO: I think so. I really do think so. I think that there are certainly errors and there're issues that would benefit High Court's consideration. And I would certainly be interested to hear what the High Court has to say in relation to PVYW, I think even from what we've discussed already today, Abe, that there is, in my view, still a bit of uncertainty that arises, and probably a little is under-cooking the omelette there, I think there's a lot of uncertainty that arises with respect to the High Court's reasoning in PVYW and what that means with respect to place and activity cases, whether it is the case as Ms. Dring argues that provided one is satisfied, there's no need to consider the next, or whether there needs to be an assessment of both. So I'm interested to find out more.
ABE GHALEB: Look, me too. I'm just much more pessimistic for Ms. Dring.
And firstly, I guess I take the approach that Justice Wigney took. And he said, "Well, look, the Tribunal addressed the correct question. And its conclusion was a finding of fact, which was open to the Tribunal to find, but a different answer could have been provided." So he wasn't entirely convinced that there was an error of law and I take that same view. But look, putting that to the side, I just don't think special leave is going to be granted, I think the full bench has dived into this question sufficiently enough and indicated that ultimately you don't look at these injuries in a vacuum, you look at all the circumstances and sometimes like with Ms. Dring, there's simply a break in the employment nexus, which means you haven't suffered an injury arising out of, or in the course of employment.
So look, no doubt one of us is going to be proved right in the coming months.
Thank you very much for listening, this was our first special edition podcast. No doubt there'll be other interesting cases that are going to pop up and what we'll do is we'll have further special additions of these podcasts and we'll be sure to let you know once we hear if Ms. Dring seeks a special leave application to the High Court and what they decide. Thanks again.
DANIEL D'ONOFRIO: Thank you very much, everyone.
