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[2006] HCA 47
appellant. Appeal allowed with costs. The Full Court orders were set aside. In their place, Hill J's order was varied to set aside the AAT decision and direct Comcare to determine an amount payable under ss...
The High Court held that the appellant's later adjustment disorder had to be considered as its own injury, rather than merely added to the impairment previously assessed for his back injury. The whole-person calculation in the Guide measures impairment, but does not decide whether there is a separate statutory injury. Because the earlier assessment concerned a different injury, the 10 per cent threshold for later increases in s 25(4) did not prevent a separate assessment of the adjustment disorder.
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Kenneth Canute was employed by the Department of Defence as a civilian contractor doing cleaning and maintenance work. He injured his back at work on 19 February 1997 and again on 7 September 1998. After the second incident, he was unfit for work for about two years. Comcare accepted liability for an aggravation of a lumbar disc condition, described in its decision as an “aggravation of displacement of intervertebral disc-lumbar” sustained on 7 September 1998 [19–20].
8 cited instruments linked from this judgment.
In 1999, Canute claimed permanent injury compensation for his back condition. A medical practitioner assessed impairment relating to his back and right leg, while attributing half of his condition to a pre-existing condition. In February 2000, Comcare made an award based on 12 per cent whole-person impairment and also awarded non-economic loss under s 27 [21].
A later claim, lodged in July 2002, identified both the back condition and “Adjustment disorder with depression”. The accompanying form described ongoing depression as an impairment. Comcare rejected the claim for further permanent impairment compensation because it considered the increase in whole-person impairment to be below the 10 per cent threshold in s 25(4) [22].
The AAT accepted that the adjustment disorder was assessed as a 10 per cent whole-person impairment under Table 5.1 of the Guide. It nevertheless treated the mental condition as a subsequent impairment arising from the same physical injury. Applying the Guide's Combined Values Chart to the earlier 12 per cent and the new 10 per cent produced 21 per cent. Because that was not an increase of 10 per cent over the earlier assessment, the AAT found no further lump-sum compensation payable [23–24].
Hill J set aside the AAT decision, reasoning that the Tribunal had to consider whether the adjustment disorder was itself an injury under the Act. The Full Court majority considered that the AAT had erred but upheld the result, while Gyles J dissented [25–28]. The High Court allowed Canute's appeal. Its order directed Comcare to determine an amount payable under ss 24 and 27 in respect of the adjustment disorder with anxious and depressed mood, assessed at 10 per cent permanent impairment under Table 5.1 [43]. The order directed a determination of the amount; the judgment did not itself specify a dollar amount.
The central statutory starting point was s 24(1). It provides for compensation where “an injury” results in permanent impairment, and makes Comcare liable “in respect of the injury” [5]. Section 24(5) requires Comcare to determine the degree of permanent impairment “resulting from an injury” under the approved Guide [5–6]. The Court treated the injury as the gateway to, and the boundary of, the assessment. The assessment method does not replace the statutory question of what injury caused the impairment.
The Court examined the Act's definitions. “Injury” includes a disease, a physical or mental injury arising out of or in the course of employment, and certain aggravations. “Impairment” refers to loss, loss of use, damage or malfunction of a body part, system or function; “permanent” means likely to continue indefinitely [8, 11]. The Act's wording permits an employee to sustain more than one injury and more than one impairment. The Court stressed that injury does not mean the workplace incident itself, nor does it mean the employee's overall condition after that incident [10–11].
The Guide uses impairment percentages and a Combined Values Chart to combine impairments into a whole-person percentage [13]. But the Court held that this calculation must be applied through the statutory concept of injury. The Guide gives content to the degree of impairment resulting from an injury; it does not decide whether two conditions are one injury or two. As the Court put it, “The statutory criterion of an ‘injury’ is antecedent to the concept of ‘whole person’ impairment, not the other way around” [37].
Comcare's argument depended on treating the adjustment disorder as a consequential or secondary aspect of the earlier back injury. The Court found no textual basis in the Act for a distinction between primary and consequential injuries that would exclude the later condition from the definition of injury [34]. The fact that the adjustment disorder was connected with the earlier injury did not eliminate the need to ask whether it independently met the statutory definition.
The Court also addressed s 25(4). That provision states that, after a final assessment of impairment, no further amounts are payable for a subsequent increase unless that increase is at least 10 per cent [17]. The Court read it in the context of the scheme in s 24 and the statutory requirement to assess impairment resulting from an injury. It held that s 25(4) concerns a later increase in the kind of impairment previously assessed, rather than a separate injury resulting in its own impairment [36]. Because the earlier assessment related to the back injury and the adjustment disorder was separate, the provision did not bar the new assessment.
This construction also avoided the claimed conflict between ss 24 and 25(4). The Court found it possible to give effect to both: s 24 applies to a separate injury, while s 25(4) applies to a qualifying later increase in previously assessed impairment [35–37]. It rejected the idea that the Guide's whole-person approach should override the Act's injury-based structure.
Before the High Court decision, the AAT had treated Canute's adjustment disorder as a subsequent psychological consequence of the earlier back injury and combined its 10 per cent impairment with the previous 12 per cent assessment [23–24]. The Full Court majority accepted that the adjustment disorder was an injury, but treated the combined impairment calculation as engaging s 25(4), so that the less-than-10-per-cent increase defeated the claim [27].
The High Court rejected that approach for the statutory provisions and facts before it. It held that the relevant question began with whether the condition was a separate injury. If it was, s 24 required an assessment of the impairment resulting from that injury. The whole-person calculation could not be used to turn the new injury into impairment attributable to a different, previously assessed injury [36–38].
The decision therefore clarifies the relationship between the Act's injury-based liability and the Guide's impairment methodology. It does not remove the Guide from the assessment process: s 24(5) continues to require use of the approved Guide. Rather, the statutory sequence is that injury is identified first, and impairment resulting from that injury is then assessed under the Guide [14–15, 37].
The judgment does not establish that every later psychological or physical condition is necessarily a separate injury. It decides the statutory treatment of a condition accepted in this case as an injury, with a separate impairment, distinct from the previously assessed back injury. Nor does it decide every circumstance in which s 25(4) applies. The Court's construction concerns a “subsequent increase” in impairment following a final assessment, read in the context of a separate injury that must be individually assessed [36].
The order also matters to the limits of the decision. The High Court did not calculate the compensation sum. It directed Comcare to determine an amount payable under ss 24 and 27 in respect of the specified adjustment disorder and 10 per cent impairment [43].
At [14], the Court said: “The Guide is to be approached through the prism of each ‘injury’.” In plain English, the Guide's percentage calculations are not a free-standing exercise in measuring a person's overall condition. The assessment must be connected to the particular statutory injury being considered.
At [36], the Court stated that s 25(4) “does not include a separate ‘injury’ resulting in a separate permanent impairment which must be individually assessed.” This explains why the previous 12 per cent back assessment did not automatically absorb the adjustment disorder. A later, distinct injury does not become merely an increase in the impairment previously assessed just because a combined-values method can add the percentages together.
At [37], the Court said: “The statutory criterion of an ‘injury’ is antecedent to the concept of ‘whole person’ impairment, not the other way around.” In plain English, identify the injury under the Act first. The whole-person impairment method cannot be used to avoid assessing a condition that meets the Act's injury definition.
At [38], the Court warned that Comcare's construction risked treating all injuries suffered after one workplace incident as a single injury. The statutory definition, the Court said, did not support treating injury as the totality of the effects of an accident. This is important where a later condition may be linked factually to an earlier event but still needs separate statutory analysis.
The decision is most directly relevant where a worker has received a final permanent impairment assessment for one injury, and later claims compensation for another condition said to be a separate injury arising from employment. The question is whether the later condition independently falls within the statutory definition of injury and produces a separate permanent impairment, rather than merely representing a subsequent increase in impairment from the injury previously assessed.
A fact pattern resembling Canute would involve: an accepted initial physical injury; a final assessment of impairment attributable to that injury; a later mental or physical condition; evidence or an accepted finding that the later condition is itself an injury; and a dispute about whether a combined percentage calculation engages the threshold in s 25(4). The case indicates that the later condition cannot be treated as part of the previous injury solely because it is consequential in time or causation, or because the Guide's Combined Values Chart produces a combined percentage [31–38].
The judgment does not decide disputes about whether a condition is in fact an injury, whether it arose out of or in the course of employment, whether it is permanent, or whether the evidence supports a particular impairment percentage. It proceeded on the basis that the adjustment disorder was an injury and that the AAT had assessed its impairment at 10 per cent under Table 5.1 [9, 41–42]. Those matters remain separate questions in other cases.
The supplied judgment contains no later decisions applying, distinguishing or reconsidering Canute v Comcare. It would therefore be unsafe, on this source alone, to describe the case's subsequent treatment or to assert that a later court has followed or limited it.
Within the proceedings themselves, the High Court reversed the Full Court majority's construction and adopted the approach consistent with Hill J's conclusion that the adjustment disorder had to be examined as a possible injury in its own right [25–28, 43]. The High Court did not adopt the Full Court majority's treatment of the whole-person calculation as decisive of whether s 25(4) barred compensation.
The judgment cited Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 382 [70] in discussing the claimed conflict between statutory provisions [37]. It did not attribute to that case the specific injury-related rule decided in Canute. Its own construction rested on the language and structure of ss 24 and 25, and the Act's definition of injury.
The Court expressly left undecided Canute's alternative argument that, if the psychological condition were treated as an impairment attracting s 25(4), there had been no “final assessment” for that provision's purposes [40]. That issue was unnecessary to resolve once the Court concluded that the adjustment disorder was a separate injury outside the relevant s 25(4) calculation.
Other questions remain dependent on statutory wording and facts. The judgment does not define every boundary between a separate injury and a later increase in impairment arising from the same injury. It does not determine how s 25(4) applies where a later condition is not accepted as a distinct injury, or where the employee claims an actual increase in the same impairment previously assessed. Nor does it decide what evidence is required to establish that a later condition is a separate statutory injury.
The Court also referred to changes to the approved Guide. It noted that the first edition applied to the claims in the proceedings and described its subsequent revocation and replacement for specified later claims [12 n 6]. The decision's reasoning about the statutory relationship between injury and impairment is tied to the provisions considered by the Court; the applicable Guide and statutory wording for a later claim would need to be checked against its relevant dates and governing materials.
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Source: the High Court of Australia (www.hcourt.gov.au). Converted to plain text by ZoeLaw. Not the official version.
HIGH COURT OF AUSTRALIA
GUMMOW ACJ,
KIRBY, CALLINAN, HEYDON AND CRENNAN JJ
KENNETH CANUTE APPELLANT
AND
COMCARE RESPONDENT
Canute v Comcare
[2006] HCA 47
28 September 2006
S154/2006
ORDER
1. Appeal allowed with costs.
2. Set aside the orders of the Full Court of the Federal Court of Australia made on 16 December 2005, and in their place order that:
(a) Order 1 made by Hill J on 1 April 2005 be varied so that it reads:
1. The decision of the Administrative Appeals Tribunal dated 21 June 2004 be set aside and in place thereof direct that Comcare determine an amount payable to the Applicant assessed under ss 24 and 27 of the Safety, Rehabilitation and Compensation Act 1988 (Cth) in respect of an injury, being an adjustment disorder with anxious and depressed mood resulting in a degree of permanent impairment of the Applicant of 10 per cent as assessed pursuant to Table 5.1 of the Guide.
(b) Appeal otherwise dismissed with costs.
On appeal from the Federal Court of Australia
Representation
L T Grey with J P Mrsic for the appellant (instructed by Carroll & O'Dea)
P J Hanks QC with B H J Dube for the respondent (instructed by Phillips Fox Lawyers)
Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.
CATCHWORDS
Canute v Comcare
Workers compensation − Injury and impairment − Liability of Comcare to pay compensation in respect of an injury which results in a permanent impairment pursuant to s 24 of the Safety, Rehabilitation and Compensation Act 1988 (Cth) ("the Act") − Where Comcare required to determined the degree of permanent impairment resulting from an injury under the approved Guide − Where s 25(4) of the Act provides that no further compensation payable in respect of a subsequent increase of less than 10 percent in the degree of impairment where Comcare has made a final assessment of the degree of permanent impairment of the employee − Where the worker sustained a physical injury to the back and also a mental injury being a post traumatic stress disorder − Where the mental injury manifested itself later in time than the physical injury − Whether s 25(4) of the Act precluded Comcare from being liable to pay compensation in respect of the mental injury because it resulted in an increase of less than 10 percent in the degree of impairment of the employee.
Statute − Statutory construction − Whether repugnancy arises between s 24 and s 25(4) of the Act in circumstances where something is both an injury and produces a subsequent increase in the degree of permanent impairment of the employee.
Safety, Rehabilitation and Compensation Act 1988 (Cth), ss 4, 14, 24, 25(4).
GUMMOW ACJ, KIRBY, CALLINAN, HEYDON AND CRENNAN JJ. This appeal from the Full Court of the Federal Court (French and Stone JJ; Gyles J dissenting)1 raises a question of the construction and application of Div 4 of Pt II of the Safety, Rehabilitation and Compensation Act 1988 (Cth) ("the Act"). The issue involves the proper principles to be applied in determining the liability of Comcare under the Act in respect of a psychiatric injury sustained by the appellant employee, Mr Canute, subsequently to an initial physical injury he suffered. Both injuries arose out of, or in the course of, his employment.
The appellant had claimed, and was awarded, lump sum compensation in respect of the physical injury. The majority of the Full Court reversed the orders of Hill J2 setting aside a determination made by the Administrative Appeals Tribunal ("the AAT"). The AAT had denied to the appellant further lump sum compensation in respect of the psychiatric injury.
If the appellant is successful in this Court, the effect in ordinary circumstances would be to restore the orders made by Hill J, setting aside the AAT's decision and remitting the matter for redetermination. However the appellant also seeks an order to substitute the decision which the AAT should have made. Before looking to the facts, it is necessary to consider the legislation; without an appreciation of the legislation, the course of events does not assume its significance.
The Act
"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."
Succeeding divisions of Pt II make separate provision as to the quantum of compensation for which Comcare is liable in different categories of "injury": "Injuries resulting in death" (Div 2); "Injuries resulting in incapacity for work" (Div 3); and "Injuries resulting in impairment" (Div 4).
"(1) Where an injury to an employee results in a permanent impairment, Comcare is liable to pay compensation to the employee in respect of the injury.
(2) For the purpose of determining whether an impairment is permanent, Comcare shall have regard to:
(a) the duration of the impairment;
(b) the likelihood of improvement in the employee's condition;
(c) whether the employee has undertaken all reasonable rehabilitative treatment for the impairment; and
(d) any other relevant matters.
(3) Subject to this section, the amount of compensation payable to the employee is such amount, as is assessed by Comcare under subsection (4), being an amount not exceeding the maximum amount at the date of the assessment.
(4) The amount assessed by Comcare shall be an amount that is the same percentage of the maximum amount as the percentage determined by Comcare under subsection (5).
(5) Comcare shall determine the degree of permanent impairment of the employee resulting from an injury under the provisions of the approved Guide.
(6) The degree of permanent impairment shall be expressed as a percentage.
(7) Subject to section 25, if:
(a) the employee has a permanent impairment other than a hearing loss; and
(b) Comcare determines that the degree of permanent impairment is less than 10%;
an amount of compensation is not payable to the employee under this section.
(7A) Subject to section 25, if:
(a) the employee has a permanent impairment that is a hearing loss; and
(b) Comcare determines that the binaural hearing loss suffered by the employee is less than 5%;
an amount of compensation is not payable to the employee under this section.
(8) Subsection (7) does not apply to any one or more of the following:
(a) the impairment constituted by the loss, or the loss of the use, of a finger;
(b) the impairment constituted by the loss, or the loss of the use, of a toe;
(c) the impairment constituted by the loss of the sense of taste;
(d) the impairment constituted by the loss of the sense of smell.
(9) For the purposes of this section, the maximum amount is $80,000."
Section 24(1) is the general provision imposing liability upon Comcare to pay compensation where an injury results in a permanent impairment. However, s 24(4) renders s 24(5) the central provision. Section 24(5) requires Comcare to determine "the degree of permanent impairment of the employee"; this is to be expressed as a percentage (s 24(6)). The compensation payable under s 24(1) is the equivalent percentage of the "maximum amount" (s 24(3), (4), (9)), subject to the threshold in s 24(7). The content of the phrase the "degree of permanent impairment of the employee" is not specifically stated in the Act; that is left to the "approved Guide" (s 24(5)), discussed later in these reasons.
Some attention must now be given to the defined terms. For the purposes of this appeal, important defined terms within s 24 are "injury" and "impairment" together with "permanent".
"Injury"
"injury means:
(a) a disease suffered by an employee; or
(b) an injury (other than a disease) suffered by an employee, being a physical or mental injury arising out of, or in the course of, the employee's employment; or
(c) an aggravation of a physical or mental injury (other than a disease) suffered by an employee (whether or not that injury arose out of, or in the course of, the employee's employment), being an aggravation that arose out of, or in the course of, that employment;
but does not include any such disease, injury or aggravation suffered by an employee as a result of reasonable disciplinary action taken against the employee or failure by the employee to obtain a promotion, transfer or benefit in connection with his or her employment."
Sections 6, 6A and 7 are facultative provisions; they indicate (in a non‑exhaustive fashion) when an injury may be treated as having arisen out of, or in the course of, employment for the purposes of the Act. This operation is not called in question in this appeal.
The definition of "injury" requires some elaboration. Separate provision is made as to the meaning of "disease"3, in terms similar to those pertaining to physical or mental injuries within pars (b) and (c) of the definition of "injury". The primary concept in the definition of "disease" is "ailment", meaning "any physical or mental ailment, disorder, defect or morbid condition (whether of sudden onset or gradual development". The appellant's case is that his adjustment disorder met this description and so was "an injury" within the "disease" category. This was accepted by all members of the Full Court4.
At this juncture, three things may be observed about the concept of "an injury". First, the Act does not oblige Comcare to pay compensation in respect of an employee's impairment; it is liable to pay compensation in respect of "the injury". Secondly, the term "injury" is not used in the Act in the sense of "workplace accident". The definition of "injury" is expressed in terms of the resultant effect of an incident or ailment upon the employee's body. Thirdly, the term "injury" is not used in a global sense to describe the general condition of the employee following an incident. The Act refers disjunctively to "disease" or "physical or mental" injuries and, at least to that extent, it assumes that an employee may sustain more than one "injury". The use in s 24(1) of the indefinite article in the expression "an injury" reinforces that conclusion.
"Impairment"
"impairment means the loss, the loss of the use, or the damage or malfunction, of any part of the body or of any bodily system or function or part of such system or function;
...
permanent means likely to continue indefinitely".
The definition of "impairment" (and by extension the concept of "permanent impairment") is expressed in terms of effects on bodily parts, systems and functions. This disaggregated sense of the word is reinforced by the use of the indefinite expression "a permanent impairment" in s 24(1). Textually, the Act assumes that "an injury" may result in more than one "impairment".
"(a) criteria by reference to which the degree of the permanent impairment of an employee resulting from an injury shall be determined;
(b) criteria by reference to which the degree of non‑economic loss suffered by an employee as a result of an injury or impairment shall be determined; and
(c) methods by which the degree of permanent impairment and the degree of non‑economic loss, as determined under those criteria, shall be expressed as a percentage."
It is the first edition of the Guide which is relevant to these proceedings5, and it is this which is identified in references in what follows to "the Guide".
Part A of the Guide is concerned with permanent impairment, and Pt B is concerned with non‑economic loss. Part A gives effect to the definition of "impairment" in s 4(1) of the Act by a structure which compiles descriptions of impairments into groups according to body system and by expressing each impairment as a percentage value of the functional capacity of a normal healthy person. The Guide then contains a "Combined Values Chart" in Table 14.1. This enables each impairment expressed as a percentage to be combined "to give the total effect of all impairments ... as a percentage value of the employee's whole bodily system or function". The Guide claims, in this way, to import the notion of "whole person impairment" from the American Medical Association's Guides.
However, it is important to remember that recourse to the criteria and methodologies set out in the Guide is only necessary once the key statutory criterion of the occurrence of "an injury" (which resulted in at least one permanent impairment) has been fulfilled. The Guide is to be approached through the prism of each "injury". The terms of s 24(5) are quite clear; Comcare is to assess the degree of permanent impairment of the employee "resulting from an injury". Similarly, in s 24(7), the threshold permanent impairment of the employee of 10 per cent affects the amount of compensation payable "under this section"; that is, "in respect of the injury" (s 24(1)).
The scheme of the Act proceeds in this way from the occurrence of "an injury", in the defined sense. As previously remarked, the Act assumes that more than one "injury" may occur. Therefore it is not correct to say that s 24(5) imports a "whole person" approach to the determination of the degree of permanent impairment. That ignores the centrality of "an injury" to the scheme upon which Comcare's liability to compensate depends.
Section 25(4)
It is appropriate first to refer to s 25(1). This makes provision for an employee to request Comcare to make an interim determination in certain circumstances. Upon receiving such a request, Comcare "shall" make an interim determination of the degree of permanent impairment and compensation payable in respect thereof. Section 25(2) is in similar terms to s 24(4) and mandates the percentage for the amount to be awarded. Section 25(3) provides for adjustments to be made when a final determination is made after an interim determination.
The operation of s 25(4) is at issue in this appeal. It must be read together with s 25(5), which has an almost identical structure. The two sub‑sections state:
"(4) Where Comcare has made a final assessment of the degree of permanent impairment of an employee (other than a hearing loss), no further amounts of compensation shall be payable to the employee in respect of a subsequent increase in the degree of impairment, unless the increase is 10% or more.
(5) If Comcare has made a final assessment of the degree of permanent impairment of an employee constituted by a hearing loss, no further amounts of compensation are payable to the employee in respect of a subsequent increase in the hearing loss, unless the subsequent increase in the degree of binaural hearing loss is 5% or more."
It is clear that s 25(5) is intended to represent a particular qualification to the more general rule expressed in s 25(4). Both those sub‑sections attained their present form following amendments made in 2001, when specific provision was made in Div 4 of Pt II for hearing loss6. At the same time, sub‑ss (7) and (7A) of s 24, which impose threshold percentage levels of impairment before compensation is "payable", were amended to their present form. Those two sub‑sections are expressed to be "subject to section 25", and are displaced where an interim determination of the degree of impairment of the employee is made pursuant to that latter section.
The facts
The facts relevant for the purposes of this appeal are undisputed and fall into quite a narrow compass. The appellant was born in 1957 and was employed by the Department of Defence as a civilian contractor engaged in cleaning and maintenance duties. He injured his back in the course of his employment on 19 February 1997 and again on 7 September 1998. The appellant was unfit for work for approximately three weeks following the first incident, and for two years following the second incident.
On 4 November 1998, the appellant lodged a claim for rehabilitation and compensation with Comcare, citing the second incident as the occasion of his injury. Comcare allowed his claim on the basis that he had sustained work-related "aggravation of displacement of intervertebral disc‑lumbar sustained on 7/9/1998". Comcare accepted liability up to and including 7 June 1999, and told the appellant that further medical evidence would be required to support a claim for compensation beyond that date.
On 14 September 1999, the appellant lodged with Comcare a claim for permanent injury compensation. On this form the appellant's doctor recorded a diagnosis of his condition as "L5/S1 spondylolisthesis", and described his impairment as "[c]hronic severe back pain radiates down (R) leg". The assessing medical practitioner, Dr Lewington, assessed the appellant as having a 15 per cent whole person impairment with respect to his back injury and a 10 per cent whole person impairment with respect to his right leg. However, he assessed that 50 per cent of the appellant's condition was attributable to a condition pre‑existing the work injuries. Accordingly, by letter dated 9 February 2000, Comcare made "an award of 12% whole person impairment" under s 24 of the Act, based upon the Combined Values Chart in the Guide. This amounted to $13,731.28. Comcare also awarded the appellant $15,876.80 for non‑economic loss under s 27 of the Act.
On 4 July 2002, the appellant lodged a second claim for permanent injury compensation. This form, which was lodged after the appellant had been referred to a psychiatrist, recorded a diagnosis of "1) L5/S1 spondylolisthesis" and "2) Adjustment disorder with depression" and described the impairment as "1) chronic severe low back pain" and "2) ongoing depression". By letter dated 29 September 2002, Comcare denied liability on the basis that the appellant had not shown an increase in whole person impairment of at least 10 per cent, as required by s 25(4) of the Act. An internal reconsideration within Comcare requested by the appellant affirmed that decision.
The AAT decision
"Mr Canute has a permanent impairment of his back and subsequently permanent impairment arising out of the same physical injury but producing a psychological sequelae. Hence multiple impairments arising from the same incident, a physical impairment and a psychological impairment."
It may be observed that the AAT here treated the concept of "injury" as co‑extensive with the workplace incident which produced the impairments. As indicated earlier in these reasons, the term "injury" is not so defined by the Act.
The decision of Hill J
"The fact that the two injuries were caused by a single event ... is not a relevant question under the Act. The Act is concerned with injuries, not incidents."
This is correct, having regard to the considerations discussed earlier in these reasons.
"[t]he measure of compensation is determined by reference to percentage impairment. However, the right to compensation is created by the occurrence of an injury."
His Honour concluded that the AAT had fallen into error because it characterised the adjustment disorder merely as "psychological sequelae" of the back injury, without considering whether it itself was "an injury".
The Full Court judgment
On appeal to the Full Court, the majority (French and Stone JJ) held that, while the AAT had erred, it had come to the right result. The error identified by the majority was not the same as that identified by Hill J. The majority acknowledged that the adjustment disorder was "plainly" an injury for the purposes of the Act11. For the majority, the error by the AAT was in assuming that an injury which is consequential upon a compensable injury is necessarily to be treated as an increase in the level of impairment attributable to that injury without addressing the relevant question; this was whether the adjustment disorder was an "impairment". Having posed that question, the majority answered it affirmatively and supported the application by the AAT of s 25(4).
In his dissenting reasons, Gyles J endorsed the reasons of Hill J and added some reasons of his own. His Honour essentially was of the view that there was no ground for not applying s 24 to the psychiatric injury, given it was "an injury" for the purposes of the Act, and that, on its proper construction, s 25(4) could not affect this conclusion.
The submissions on appeal
On appeal to this Court, the appellant supported the reasoning of Hill J and of Gyles J that the Act requires Comcare to determine separately the impairments arising from each injury. The appellant submitted that, since the adjustment disorder was "an injury" resulting in a separate impairment, s 24 should have been applied and that should have been the end of the inquiry. Given the primacy of the concept of "injury" within the compensatory scheme, the terms of the Act mandate the operation of s 24 in respect of that "injury", in the manner for which the appellant contends. Such an outcome has both logic and simplicity to commend it. Where something is "an injury", why should not the quantum of compensation payable in respect of it be determined in the same manner for that "injury" as for any other?
The effect of the reasoning of the majority in the Full Court, supported by Comcare on this appeal, denies that outcome. The reasoning must be examined, resulting as it does in disapplying s 24 (and indeed s 14(1)) of the Act to something which, on its face, is within the terms of that section.
As previously indicated, the Full Court majority found error in the AAT having proceeded on the basis that an injury which is consequential upon a compensable injury is necessarily to be treated as an increase in the level of impairment attributable to that injury without addressing the relevant question of whether the adjustment disorder was an "impairment"12. The manner in which the majority put what they saw as the relevant question was inaccurate, because it departed from the terms of s 25(4). That paragraph does not inquire as to whether there is a new "impairment" resulting from the previous injury; it inquires as to whether there has been a "subsequent increase in the degree of impairment [that is, permanent impairment of an employee]". That question can only be answered by reference to the Guide (s 25(4)). In practice, and in circumstances such as those that obtain here, the occurrence of a new impairment will invariably lead to an increase of that nature by operation of the Combined Values Chart. The reasoning of the majority indicates that in substance this is what they meant13.
For the majority, it was critical that the "injury" constituted by the adjustment disorder could also be described as contributing to a "subsequent increase in the degree of impairment" attributable to the earlier back injury in respect of which a final determination had been made (for the purposes of s 25(4)). This was possible because of the breadth of the statutory definition of "impairment". In those circumstances, the majority construed the Act as requiring that the relevant condition only be treated as going to "impairment" and not as a separate "injury" resulting in an impairment. Upon that reasoning the injury constituted by the adjustment disorder did not give rise to a separate liability under s 24 of the Act because it was also an impairment resulting from the back injury.
"Under the existing Act [the Compensation (Commonwealth Government Employees) Act 1971 (Cth)], lump sum payments are made on the basis of a table of maims, with the level of payment being determined having regard to the loss, or loss of the efficient use, of various parts of the body. That approach has been abandoned and the level of payments in future will be determined using a 'whole person' approach, similar to that used under the Veterans' Entitlements Act 1986."
Secondly, the majority referred to a legislative policy of imposing limits on recoverable compensation15. Comcare submits that s 25(4) should be construed as a further limit on recoverable compensation, applying in cases where multiple impairments result from the same "injury".
Construction of the Act
"the policy of [the Act] seems to require such an injury to be treated as an aspect of the impairment created by the initial injury".
It is clear from the context that what was being referred to was what the majority described as a "consequential injury", a notion supported by Comcare in terms of "primary" and "secondary" injuries. Comcare's case depends upon confining the meaning of "injury" to exclude such "consequential injuries". However, there is no foundation in the Act for any such distinction between "an injury" and a consequential or secondary injury. Neither of these qualifiers finds any expression in the Act. The Act speaks exclusively in terms of "an injury".
In effect, the majority appears to have discerned a repugnancy or conflict between s 24 and s 25(4). That is said to arise in the particular circumstance where something can answer the description of "an injury" and also would, if it were taken into account in a s 25(4) inquiry, produce a "subsequent increase in the degree of impairment" from that found by Comcare in a "determination of permanent impairment of the employee" made in respect of a different injury.
However, there is no relevant conflict between the provisions. As Gyles J demonstrated in the Full Court, it is possible to construe the reference in s 25(4) to a "subsequent increase in the degree of impairment" as referring to an increase based upon increases in the same kind of "impairment" which had rendered Comcare liable and upon which the final assessment had previously been made17. His Honour referred to s 25(5) as an expression of that very construction, albeit with greater particularity (making special provision with respect to one kind of permanent impairment). In referring to increases in the degree of impairment, s 25(4) does not include a separate "injury" resulting in a separate permanent impairment which must be individually assessed. Since the adjustment disorder had nothing to do with the impairments previously assessed by Comcare resulting from the back injury, s 25(4) was inapplicable. If this construction is open, why should the Court regard s 24 and s 25(4) as repugnant in the circumstances of this case, as Comcare would have it? The approach of Gyles J is not only plausible, but preferable. It gives effect to the terms of s 24, and produces a separate assessment in respect of each injury.
Even if there was a relevant conflict in these circumstances, the approach by the Full Court majority to resolving that supposed conflict reversed the hierarchy of the provisions of the Act18. It is true that the Guide seeks to provide for the assessment of "the degree of permanent impairment of the employee" on a whole of person basis. But, as indicated earlier in these reasons, s 24(5) of the Act imposes a duty upon Comcare to determine "the degree of permanent impairment of the employee resulting from an injury". It is the occurrence of "an injury" which both actuates and defines the ambit of Comcare's duty pursuant to s 24 of the Act. Once that duty has been performed, sub‑ss (3) and (4) of s 24 operate, in a self‑executing way, to quantify the amount of compensation payable by Comcare. That amount is payable in satisfaction of Comcare's liability which arises "in respect of the injury" under s 24(1). The Act only adopts the "whole person impairment" approach with respect to permanent impairments resulting from each "injury". That "whole person" approach cannot properly be used to deny the applicability of s 24 to something which corresponds to the legislative definition of an "injury". The statutory criterion of an "injury" is antecedent to the concept of "whole person" impairment, not the other way around.
Conclusion and orders
For the foregoing reasons, the appeal should be allowed with costs. In his Notice of Appeal, the appellant seeks orders effectively substituting the decision the AAT ought to have made. It is said that it would be futile to remit the matter to the AAT where all the parties accept that the adjustment disorder was "an injury" and there is a finding by the AAT with reference to the Guide that that injury resulted in a degree of permanent impairment of 10 per cent.
Comcare emphasised that there had been no appeal or cross-appeal by the present appellant to the Full Court against the orders made by Hill J. However, had the AAT directed itself to the question of whether the adjustment disorder was an "injury" for the purposes of the Act, as Hill J found it ought to have done, there was only one order it properly could have made, given the assessment of the impairment proceeding from the adjustment disorder. That was the view of Gyles J in the Full Court19, and it should now be accepted.
The following orders should be made:
(1) Appeal allowed with costs.
(2) Set aside the orders of the Full Court of the Federal Court of Australia made on 16 December 2005, and in their place order that:
(a) Order 1 made by Hill J on 1 April 2005 be varied so that it reads:
"1. The decision of the Administrative Appeals Tribunal dated 21 June 2004 be set aside and in place thereof direct that Comcare determine an amount payable to the Applicant assessed under ss 24 and 27 of the Safety, Rehabilitation and Compensation Act 1988 (Cth) in respect of an injury, being an adjustment disorder with anxious and depressed mood resulting in a degree of permanent impairment of the Applicant of 10 per cent as assessed pursuant to Table 5.1 of the Guide."
(b) Appeal otherwise dismissed with costs.
Comcare v Canute (2005) 148 FCR 232. ↩
Canute v Comcare (2005) 40 AAR 327. ↩
Section 4(1) provides:"disease means:(a) any ailment suffered by an employee; or(b) the aggravation of any such ailment;being an ailment or an aggravation that was contributed to in a material degree by the employee's employment by the Commonwealth or a licensed corporation." ↩
(2005) 148 FCR 232 at 234, 253. ↩
The first edition of the Guide was approved by the Minister of State for Industrial Relations by notice dated 27 July 1989. It was revoked pursuant to s 28(2) of the Act on 1 September 2005 in respect of claims under ss 24, 25 or 27 of the Act received after 28 February 2006, as set out in the Guide to the Assessment of the Degree of Permanent Impairment prepared by Comcare by instrument dated 1 September 2005, and approved by the Minister on 30 September 2005. A motion in the Senate to disallow the second edition of the Guide was negatived on 29 March 2006. ↩
Safety, Rehabilitation and Compensation and Other Legislation Amendment Act 2001 (Cth), Sched 2, Pt 9, Items 54‑55. ↩
(2005) 148 FCR 232 at 252, 253. ↩
(2005) 40 AAR 327 at 336. ↩
(2005) 40 AAR 327 at 336. ↩
(2005) 40 AAR 327 at 336. ↩
Canute
Comcare [2006] HCA 47;
(2006) 229 ALR 445
(2006) 80 ALJR 1578
(2005) 148 FCR 232
(1998) 194 CLR 355
Appeal allowed with costs. The Full Court orders were set aside. In their place, Hill J's order was varied to set aside the AAT decision and direct Comcare to determine an amount payable under ss 24 and 27 in respect of the adjustment disorder with anxious and depressed mood, assessed as causing 10 per cent permanent impairment under Table 5.1 of the Guide. The appeal was otherwise dismissed with costs.
The majority identified a legislative policy to support this construction with reference to two considerations. First, their Honours referred to the importance of the "whole person" approach in the scheme of the Act, referring to the Minister's Second Reading Speech, where he said14:
Comcare's preferred construction of the Act also distorts the statutory definition of "injury" in a further way. The task of determining for the purposes of s 25(4) whether there has been "a subsequent increase in the degree of impairment" necessitates reference to the Guide, by reason of s 24(5). But, it is to be recalled, the inquiry mandated by that sub‑section is as to the degree of permanent impairment of the employee "resulting from an injury". To treat as going to that inquiry something which independently satisfies the statutory definition of "an injury" tends to conflate into one all injuries suffered after one workplace incident. The flow‑on effect in terms of s 24 thereby distorts the concept of "injury" so as to assume the sense of the totality of the effects of a workplace accident, contrary to the terms of the definition.
It should be added, for completeness, that the policy of the Act, discerned by the majority in the Full Court, of restricting liability to pay compensation, does not assist Comcare. The Act does impose limits upon Comcare's liability to pay compensation. Section 24(4) provides that lump sum compensation must be a percentage, and not exceed the "maximum amount", of $80,000 and sub‑ss (7) and (7A) of s 24 deny compensation unless the degree of permanent impairment exceeds a specified threshold percentage. However, this policy does not dictate that something which falls within the definition of "an injury" in respect of which Comcare's liability arises, ought to be excluded from the definition. Nor is it of any relevance to the proper construction of the Act that, as Comcare pointed out, the approach for which the appellant contends operates to his advantage but may operate to the disadvantage of other claimants in other circumstances.
These conclusions mean that it is unnecessary to consider the appellant's alternative argument. This was that, if the psychological injury were to be treated as an "impairment" which attracted the operation of s 25(4), then there had been no "final assessment" for the purposes of that section. Further written submissions were received from both Comcare and the appellant on this point, but it need not be pursued.
(2005) 148 FCR 232 at 234. ↩
(2005) 148 FCR 232 at 234, 252‑253. ↩
(2005) 148 FCR 232 at 252. ↩
Australia, House of Representatives, Parliamentary Debates (Hansard), 27 April 1988 at 2193. ↩
(2005) 148 FCR 232 at 252. ↩
(2005) 148 FCR 232 at 252. ↩
(2005) 148 FCR 232 at 253. ↩
cf Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 382 [70]. ↩
(2005) 148 FCR 232 at 254. ↩