Comcare Australia (Department of Defence) v Maida

the tribunal's decision 7 Before the Tribunal, apart from the evidence of the respondent, evidence was given by a number of medical practitioners. The Tribunal referred generally to that medical evidence. Its findings include the following: "the Tribunal finds that the applicant had schizophrenia from April 1988. It further finds that the condition of schizophrenia suffered by the applicant in April 1988 is the same condition from which he has continued to suffer. Dr Ding and Professor Goldney both expressed the opinion that the applicant's condition could be said to be permanent (at least partially) prior to December 1988. Taking into account the evidence before it, the Tribunal accepts this proposition, and so finds that the applicant's condition of schizophrenia could be said to be permanent prior to December 1988." It thus expressly found that the applicant had a permanent schizophrenic condition prior to 1 December 1988, and that a permanent impairment flowing from his condition arose prior to 1 December 1988. 8 Section 28 of the SRC Act provided for the applicant to prepare a written document to be called "Guide to the Assessment of the Degree of Permanent Impairment" setting out inter alia criteria by which degree of permanent impairment is to be determined. The Tribunal concluded that, as at the end of November 1988, the "appropriate impairment rating for the applicant pursuant to Table 5.1 of the Guide" was 10%. 9 The Tribunal then addressed the evidence about deterioration in the condition of the applicant since 1 December 1988. It concluded on the evidence that, at the time of its determination, it was reasonable to conclude that the applicant needs supervision in the activities of daily living. The consequence of that finding, in practical terms, is that it concluded in accordance with Table 5.1 of the Guide that the respondent's condition had deteriorated since 1988 to a 30% current impairment. It therefore determined that the respondent was entitled to a lump sum payment of compensation under ss 24 and 27 of the SRC Act, and remitted the matter to the respondent for the calculation of the compensation payable. 10 The Tribunal then considered authorities as to how s 124(3)(b) of the SRC Act should be interpreted, including Department of Defence v West (1998) 156 ALR 651 (West). It concluded: "West draws a distinction between 'gradual worsening' and 'deterioration to an extent that it is properly to be characterised as a further or different impairment'. The difficulty presented in the present application is that the very nature of the condition is such that, unfortunately, a gradual deterioration of the condition is not uncommon. It is not akin to a person with an arm problem whose arm eventually falls off one day (to use a facetious example). It cannot be the intention of the legislature, or indeed of the majority in West, however, to exclude from consideration the type of psychiatric condition that manifests as in the present application, simply because a deterioration of the condition is hard to pin down as to the precise dates of change. What remains required by West is the qualitative and quantitative analysis of the evidence." The Tribunal's reasoning is then revealed in the following passage: "The Tribunal has found above that the applicant's condition has progressed from a 10% impairment pursuant to Table 5.1 of the Guide in 1988 to a 30% current impairment. Over this period of time, his level of impairment has increased by four increments according to the Table 5.1 levels, or deteriorated by some 20%. Such a change of itself, must be marked as significant alteration. Further, Dr Davis and Professor Goldney speculated that he might well currently have between a 30-40% impairment. In oral evidence, the Tribunal heard about the significant lifestyle and relationship effects resulting from the applicant's condition. As difficult as it was to elicit precise information from the applicant, the distinct impression remains that the impairment has a more serious impact now than in 1988, or for example, in 1991 when he was able to sustain a relationship. In 1995 he attempted to move out of home, and not being successful in this attempt, it does not appear that things have improved, certainly not in terms of the effects of the impairment, or in the nature of the impairment itself. Taking into account all of the evidence before it, the Tribunal is satisfied, and so finds, that, as a matter of fact, noting both the qualitative and quantitative aspects, the applicant's deterioration is such that it is properly characterised as a further or different impairment at the current time. There is a substantial increase in the level of impairment, and a distinct qualitative difference, in terms of the effect of the impairment upon the applicant."

the contention of the applicant 11 The applicant contends that the Tribunal erred in law in its consideration of the claim. It points to the findings that the respondent's impairment from schizophrenia occurred prior to 1 December 1988 and was then found to be "permanent". Consequently, on its face, there is no entitlement to receive a lump sum under s 24 of the SRC Act, because in respect of that impairment there was no entitlement to receive a lump sum payment of compensation under s 39 of the 1971 Act: s 124(3) of the SRC Act. It points out that the Tribunal specifically found that there was no change in the underlying patho-physiological condition of schizophrenia suffered by the respondent, as it remained from April 1988 until July 2001 (the time of the Tribunal's decision), but simply a gradual deterioration in the degree of impairment. There is, it contends, a difference between the concepts of "permanent impairment" and of "degree of impairment" under the SRC Act. Whilst the substantial worsening of the respondent's condition or level of impairment amounts to a change in the degree of impairment from his condition, the applicant contends that it does not give rise to a separate liability on its part to pay compensation under s 24 of the SRC Act because it does not constitute a "new impairment" under s 24 of that Act.

consideration 12 The parties referred extensively to decisions concerning the meaning and scope of s 124(3) of the Act. In the result, senior counsel for both parties accepted that the views of Merkel J (with whom O'Connor J agreed) in West correctly state the law as to the meaning and proper application of s 124(3) and s 24 of the SRC Act. The contentions, in my judgment, ultimately boiled down to the proper understanding of the Tribunal's findings and whether it applied those findings in the circumstances in accordance with West. 13 In West, the expression "a permanent impairment" in s 24(3) of the SRC Act was accepted as meaning the same as "a permanent impairment" in s 24(1) of the Act. The definition of "impairment" in s 4 of the SRC Act is defined as follows: " '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" is defined to mean likely to continue indefinitely. Senior counsel for the applicant contended that the concept of "a permanent impairment" in s 24(1), and as described in s 24(2), is a different concept from that of the degree of permanent impairment upon which the entitlement to a lump sum payment of compensation under s 24 or s 25 arises. It is clear that that is so. 14 The distinction was first recognised in Blackman v Australian Telecommunications Corporation (1990) 12 AAR 11. In that case the appellant had been diagnosed as having mesothelioma in November 1988, before the commencement of the SRC Act. As in the present matter, there was no provision for lump sum payment of compensation in respect of mesothelioma under the 1971 Act. The Court (Pincus, Foster and Hill JJ) decided in the circumstances that the appellant was not entitled to compensation under ss 24 and 25 of the SRC Act in respect of his permanent impairment, because it existed before the commencement of the SRC Act. It was argued on behalf of the appellant in that case that, although the appellant had only one disease and therefore only one "injury" as defined in s 4(1) of the SRC Act, because the degree of impairment consequent upon that injury had substantially worsened after the commencement of the SRC Act, that worsening itself constituted a fresh permanent impairment within the meaning of s 124(3) after the commencement of the SRC Act. The Court rejected that proposition. It said: "If the contention of [sic] behalf of the applicant is correct, then each time an impairment worsens significantly, there is a new impairment within the meaning of the 1988 Act. We cannot read the relevant provisions in this way. The scheme of the Act, in particular of ss 24 and 25, is not that as a disease progresses, the aggravation of its consequences constitutes a series of new impairments, each giving rise to a separate liability to pay compensation. If that were so, then small increments of aggravation of the impairment would not be compensable at all; for under s 24(7) there is no right to compensation if the degree of permanent impairment is determined to be less than 10 per cent. As an impairment worsens, further rights to compensation may accrue under s 25, but not because there is another distinct impairment. To achieve the result that a variation (substantial or otherwise) of the degree of impairment should be treated as a new impairment for the purposes of s 124(3), different language would have been necessary. The natural reading of 'impairment … that occurred before the commencement date' is such as to cover the case in which there is but a single impairment, which came into existence before the commencing date and thereafter fluctuated in intensity but generally worsened. The consequence is that the applicant is not entitled to compensation under ss 24 and 25 of the 1988 Act in respect of his permanent impairment, because it occurred, that is, came into existence, before the commencing date." 15 The concept of "permanent impairment" was further addressed in Brennan v Comcare (1994) 50 FCR 555. In that case the appellant had suffered a series of back injuries in employment in the years preceding the commencement of the SRC Act, and had undergone back surgery on 8 June 1988, again before the commencement of the SRC Act. The final determination of the degree of his permanent impairment could not be made at 1 December 1988, the date of commencement of the SRC Act, because his condition had not then stabilised. In mid-1989 the appellant attempted unsuccessfully to return to part time graduated work. Thereafter his back condition degenerated significantly, involving symptoms in his lower right leg and foot and very substantial impairment of activities. 16 Both at first instance (Neaves J, Commissioner for the Safety Rehabilitation and Compensation of Commonwealth Employees v Brennan (1993) 45 FCR 475), and on appeal (Burchett, Ryan and Gummow JJ) the Court concluded that the Tribunal had failed to answer the central question, namely whether in the circumstances of the case it could properly be said that prior to 1 December 1988 the appellant's impairment from damage to his back was likely to continue indefinitely and was therefore a permanent impairment. The matter was remitted to the Tribunal for re-consideration. Burchett J at 556 pointed out the distinction embodied in ss 24 and 25 between the concept of a permanent impairment, and of the degree of the impairment. His Honour's analysis of those provisions was carried into the proper construction of s 124(3). His Honour recognised at 557 that there may be a number of impairments arising at different times out of the same injury, and that it is only where the particular impairment occurred before the commencing date of the SRC Act that the exclusionary provisions of section 124(3) operate. His Honour said at 557-558: "Returning then to s 24, it seems quite clear that s 124 applies without difficulty to a case where a person injured before the commencing date did not suffer an immediate impairment, but the injury resulted in one after the commencing date. Equally, it seems to me, there is no difficulty about a case where there was an impairment before the commencing date in, say, one limb, but a new impairment developed in, say, another limb after the commencing date." It is not clear to me that Burchett J's views are consistent with the decision of the Full Court in Blackman. His Honour regarded the views of the Court in Blackman as obiter dicta, because on the facts there had been no significant increased disability after the commencement date of the SRC Act, and so no further impairment. Even if that case decided that the nature of an impairment consisting of the disability or other inevitable effect of a single diseased entity which gradually worsens is not itself a fresh impairment, on the facts found by the Tribunal in the case of Brennan, his Honour regarded it as possibly constituting "a significant new development … involving a loss of the use or malfunction of some part of the body, bodily system or function". If there had been a separate dysfunction appearing, Blackman would not apply. 17 Burchett J also expressly agreed generally with the reasons of Gummow J, but made some further comments about the proper construction of the SRC Act. Those comments seem to take the opposite view to Blackman to the extent that he said that an increase in the degree of impairment in respect of a permanent impairment could constitute a fresh impairment, at least under ss 24 and 25, because the original impairment will have been the subject of a "final assessment". 18 In my judgment, his Honour's view that an increase in the degree of impairment may itself constitute a fresh impairment is inconsistent with Blackman and it appears that his Honour may have recognised that. Gummow J, who delivered the other principal judgment, pointed out at 569 that there are at least three steps involved in determining whether a permanent impairment from injury occurred before the commencement date: firstly, the occurrence of an injury; secondly, the resulting impairment, as defined; and thirdly, that the impairment must have been permanent, i.e. likely to continue indefinitely. Each of those states of affairs must have been reached before the commencement date. His Honour at 570 recognised, as did the Full Court in Blackman, that s 24 and its supporting provisions distinguish between the existence of a permanent impairment and the degree of permanent impairment resulting from injury. His Honour said at 570 that he "would not disagree" with the first paragraph of the passage from Blackman quoted above. The second paragraph his Honour regarded as a passage "to be treated with some caution". He explained at 571: "As Burchett J points out in his judgment on the present appeal, s 24 imposes a liability upon Comcare where an injury results in a permanent impairment. The terms of the legislation are consistent with the imposition of distinct liabilities where an injury results in more than one permanent impairment, and in a particular case those results may be manifested sequentially rather than concurrently. There have been no findings of fact to indicate that the present case falls into that perhaps unusual category." He specifically rejected the contention that compensation becomes payable for the consequences, not the fact, of injury because the application of s 124(3) requires analysis of the steps leading to an entitlement to a payment of a particular amount under s 26 so that: "The exclusion from what is otherwise the operation of the 1988 Act under s 124(1) is brought about by a criterion which operates by asking whether a particular stage in that process of series of steps had been reached before 1 December 1988." Consequently, his Honour concluded that the Tribunal had erred in using the Guide prescribed in accordance with s 28(3) to determine whether the appellant in that case stumbled over the hurdle presented by s 124(3) of the Act. His Honour said at 575: "The Guide is to set out, relevantly, the criteria by reference to which the degree of permanent impairment shall be determined and the methods by which that degree shall be expressed as a percentage. The Guide is not entrusted with the task of specifying criteria for the determination of whether an impairment is permanent. It assumes permanent impairment. The criteria to which Comcare shall have regard in determining whether an impairment is permanent are specified in s 24(2), and have been set out earlier in these reasons." Ryan J adopted the reasoning of both Burchett J and Gummow J. 19 In Comcare v Levett (1995) 131 ALR 645 (Levett), the Full Court (Lockhart, Beazley and Moore JJ) upheld a decision of the Tribunal which had found that an injury suffered prior to 1 December 1988 which had not resulted in permanent impairment until after that date, did not in the circumstances disentitle the respondent from the benefits of the SRC Act. Their Honours at 650 noted that both Gummow J and Burchett J in Brennan expressed the view that Blackman should be treated with some caution especially on the question whether a gradual worsening of a condition can or cannot be seen as involving a fresh impairment. Their Honours shared that view. The case did not need to address the question further, because the Tribunal had found as a fact that there was no permanent impairment until after 1 December 1988. 20 The SRC Act is beneficial legislation which should be construed liberally. See per the Full Court in Levett at 649 and per Burchett J in Brennan at 559. Nevertheless, as Wilcox, Lindgren and Emmett JJ said in Hoyle v Telstra Corporation Ltd (1997) 75 FCR 390 at 394: "Upon analysis of the whole of s 124, we consider that it is clear that the Parliament proceeded on the basis that, where the entitlement to compensation under the Compensation Act has a relevant nexus with a period before the Commencing Day, the appropriate general principle should be that an employee is not to be deprived of any compensation that would have been payable under the 1971 Act but for its repeal, but is not to be entitled to any greater compensation than would have been payable under the Act." 21 The most recent decision of the Full Court on s 124 of the SRC Act is West. It is the decision which the Tribunal sought to follow. The Full Court was asked to address circumstances contained in an agreed statement of facts. It concluded that it could not resolve the case on the facts as so agreed, and that the Tribunal also could not do so. The matter was therefore remitted to the Tribunal for further consideration including the hearing of evidence. 22 The facts which were agreed indicated that the employee had suffered a serious back injury, for which he had undergone operative treatment in 1984. By 1 December 1988, he had a permanent impairment of his back by reason of a work injury. Applying the criteria for the application of s 124(1) and (3) as described by Gummow J in Brennan, he would apparently have been disqualified from further entitlement to compensation under the SRC Act. He claimed, however, further entitlement to compensation under s 24 of the SRC Act because his impairment had increased by 10% since 1 December 1988. Merkel J, with whom O'Connor J agreed, recognised that the policy underlying s 124, as also stated in Hoyle, is that where the entitlement to compensation under the SRC Act has a relevant nexus with a period before the commencement of that Act, an employee is not to be deprived of any compensation that would have been payable under the earlier applicable legislation, but is not to be entitled to any greater compensation than would have been payable under the repealed statutory scheme. In Hoyle, the Full Court concluded that employees who were totally incapacitated before the commencement date of the SRC Act as a result of injury which was compensable under the 1971 Act could not receive a lump sum payment under s 24 of the SRC Act which they were not entitled to receive under the 1971 Act. 23 Merkel J at 664 pointed out that the agreement of the parties did not contain sufficient detail about the nature of extent of the impairment or the patho-physiological condition that caused the initial permanent impairment and its subsequent deterioration or worsening. He said that: "… In my view a change of the underlying patho-physiological condition or a significant worsening of an impairment which is likely to have come about as a result of that change might be relevant factors in determining whether the permanent impairment that the respondent suffered at the date of the hearing was the same permanent impairment as that which he had suffered as at or prior to 1 December 1988." His Honour described the cases to which reference has been made above, and then concluded at 668: "The present state of the authorities can be summarised as follows: · the gradual worsening of a permanent impairment in accordance with its natural progress does not constitute a series of new impairments each giving rise to a separate liability to pay compensation: see Blackman at 14 and Brennan at FCR 570-1 per Gummow J; cf Brennan at FCR 558-9 per Burchett J; · the observation in Blackman at 14 that a permanent impairment which worsens significantly or is such that the variation between it and the earlier impairment is substantial does not result in a new permanent impairment is to be approached with 'some caution': see Brennan at FCR 558-9 and 560-1 per Burchett J and at 571 per Gummow J and Levett at FCR 20." 24 His Honour was therefore of the view that the early authorities left unresolved the question whether a deterioration in a permanent impairment which existed at 1 December 1988 is capable of constituting a new permanent impairment. His Honour also observed that the caution expressed in relation to Blackman by Burchett and Gummow JJ in Brennan and adopted by the Full Court in Levett suggested a reluctance to accept that a substantial variation, or a significant deterioration, in a person's permanent impairment is incapable of constituting a permanent impairment which is different from that which existed prior to the variation or deterioration. It is that question to which his Honour's reasons are then directed. 25 His Honour's conclusion is best encapsulated in a passage at 669 where his Honour said: "A loss of the entitlement conferred under ss 24 and 25 by reason of s 124(3) only occurs when the permanent impairment the subject of the claim is the permanent impairment that the employee suffered as at 1 December 1988. On my reasoning, and that of Burchett J in Brennan, where a change in a permanent impairment occurring after the commencement date is such that, quantitatively and qualitatively, it is properly to be characterised as a further or new impairment occurring after the commencing date it is compensable by a lump sum payment under ss 24 and 25. That conclusion is consistent with the language used and with the statutory policy to be discerned from ss 24, 25 and 124 of providing benefits to workers in respect of a further permanent impairment that occurs after the commencing day irrespective of whether the injury that resulted in the impairment occurred before or after the commencing day. It also avoids capricious and arbitrary outcomes under workers' compensation legislation, which is of a remedial nature and should be construed liberally: see Brennan at FCR 559 and the cases there referred to." However, the nature and extent of the loss of use or malfunction is critical to determining whether an impairment has changed to such an extent that it is a further or new impairment. Merkel J accepted that gradual worsening does not result in a series of separate or further impairments. Questions of fact and degree will be involved in making a qualitative assessment as to whether, in a particular case, the permanent impairment existing as at 1 December 1988 has deteriorated to an extent that it is properly to be characterised as a further or different impairment from that which existed at the commencement date. 26 In West, Heerey J reached the same conclusion, but for somewhat different reasons. His Honour pointed out that an impairment is something which commences at a particular point in time, and thus "occurs" and being permanent then continues. Consequently, as the respondent in that case had a permanent impairment by reason of loss of use or damage or malfunction of his back which had occurred before 1 December 1988, he had no further entitlement to a lump sum because the degree of that impairment had increased subsequent to that date. His Honour remarked at 659: "There is no question of any post-1988 'injury' being relevant to his present condition. There is no suggestion in the evidence of aggravation (including acceleration or recurrence). To be relevant for compensation purposes such aggravation would have had to arise out of or in the course of his employment by the Commonwealth." His Honour further pointed out that the agreed facts did not suggest that since 1 December 1988 the respondent had a new permanent impairment, but simply that in ordinary parlance he has had for many years a bad back which since 1988 has got worse. The permanent impairment which existed at 1 December 1988 continued, and it could not be said that the respondent now has two impairments in relation to his back. His Honour reserved the case where an employee's condition becomes after 1988 so different in its pathology or in its effect on the employee that an affirmative answer can be given to the question that there was a new impairment which occurred after 1988, but the agreed facts in that case did not support any such conclusion. The difference between the approach of Heerey J and of Merkel J (with whom O'Connor J agreed) may simply be a matter of degree but it is not necessary to address it in this instance. 27 In the light of that consideration, in my view it was appropriate for the Tribunal to follow the approach outlined by Merkel J in West. The issue is whether it did so. 28 In effect, in this matter, the applicant puts the following propositions which, in my view, correctly summarise the state of the law: "20.1 The progression of a disease or gradual worsening of the degree of an impairment does not constitute a new or distinct impairment. 20.2 If there is no change in the underlying patho-physiological condition causing an impairment, any worsening of that impairment will not constitute a new or distinct impairment. 20.3 A significant worsening of an impairment may constitute a new or distinct impairment, but only if there has been a change in the underlying patho-physiological condition, so that there has been a qualitative change to the impairment - that is, the development of a new impairment." 29 It was explained in contentions, by way of example, that if an underlying back condition produced back pain which gradually worsened there would on the applicant's argument be no new impairment, but if that underlying back condition produced symptoms and therefore disability in the leg or legs which did not previously exist, there would be in respect of the disability in the leg or legs a new impairment which would attract the operation of s 24 and associated sections. If, in addition, it could be demonstrated that a significant worsening in the disability in the back occurred, and that there was some underlying patho-physiological condition which changed so as to produce that significant worsening of symptoms, in that event there may well be a further new impairment. It was not fully explored whether that would be a new impairment per se, or a consequence of a further injury flowing as a natural and probable consequence from the initial injury. 30 Senior counsel for the respondent accepted that mere gradual worsening of a degree of impairment does not of itself entitle the respondent to a lump sum payment under s 24. In my view, that is an appropriate acknowledgement. It follows from the decision in West where Merkel J (with whom O'Connor J agreed) said at 670: "However, in reaching my conclusion, I do not disagree with the conclusion in Blackman that gradual worsening does not result in a series of separate or further impairments. Inevitably, questions of fact and degree are involved in making a qualitative assessment as to whether, in a particular case, the permanent impairment existing as at 1 December 1988 has deteriorated to an extent that it is properly to be characterised as a further or different impairment to that which existed at the commencement date." Senior counsel for the respondent contended that the Tribunal had properly understood, and applied, that test. It specifically found as par 51 of its reasons indicate, that there had been as a matter of fact "a further or different impairment" in the respondent's condition because of a substantial increase in the level of impairment, and a distinct "qualitative difference, in terms of the effect of the impairment upon the applicant". If the finding of fact made by the Tribunal had been of both a substantial increase in the level of impairment and a distinct qualitative difference, in terms of the effect of the impairment upon the applicant, in my judgment it would not be shown to have erred in law. It would have applied the law in accordance with West, and so not have fallen into error. 31 Senior Counsel for the applicant contended that, properly understood, the Tribunal took the view that an increase in the level of symptoms of itself may constitute a further or different impairment so as to fall under s 24(1). Upon careful consideration of the Tribunal's reasons, it is my view that that is the step which the Tribunal took. As noted, the Tribunal appears to have acknowledged the need to determine whether there is a "qualitative and quantitative" change in the respondent's condition so as to give rise to a fresh further impairment, but it then expressed the question as: "What remains required by West is the qualitative and quantitative analysis of the evidence." The Tribunal may have diverted its attention from the correct legal question by looking to a "qualitative and quantitative" analysis of the evidence, rather than to whether the evidence indicated a qualitative and quantitative change in the applicant's condition so as to give rise to a new permanent impairment. It remains to consider whether the Tribunal, in fact, determined whether there was a qualitative and quantitative change in the respondent's condition. 32 The Tribunal's analysis of the evidence discloses only an increase in the level of symptoms. That is, an increased level or degree of impairment. That accorded with the respondent's evidence that his impairment has a more serious impact now than in 1988. The respondent through senior counsel did not point to any evidence which might explain whether or how there was a qualitative change in the respondent's condition, that is some fresh or additional patho-physiological change in the condition. 33 There were only two explanations proposed on behalf of the respondent for the Tribunal's conclusion that "noting both the qualitative and quantitative aspects, the applicant's deterioration is … properly characterised as a further or different impairment". The first was that the use of the word "qualitative" by the Tribunal in its concluding paragraphs of its decision indicated that, at 1 December 1988, the diagnosis was not of schizophrenia, but of a schizophreniform disorder without the diagnostic features necessary to diagnose schizophrenia. Hence, it was argued, the current impairment was from a fresh or additional patho-physiological cause. There was medical evidence that, in early December 1988, certain of the doctors then treating the respondent had the view that the respondent's medical condition was then schizophreniform disorder rather than schizophrenia. However, the Tribunal positively found that the applicant had schizophrenia from April 1988, that is the same condition from which he has continued to suffer, and that it was permanent prior to December 1988 in the sense that it produced a permanent impairment by that time. Of necessity, s 124(3) of the SRC Act invites attention to the nature of the impairment at a prior point in time. The Tribunal made that finding. Consequently, where the Tribunal has used the expression in its conclusion of a "qualitative" difference in the respondent's condition, I do not think it is explained by reference to there having been an alternative diagnosis which, had the decision been made at December 1988, may have been the preferred diagnosis of the medical practitioners. The Tribunal positively found that the condition giving rise to the present permanent impairment is the same as that which caused the permanent impairment at 1 December 1988. 34 The alternative explanation put forward by senior counsel for the respondent is derived from a passage in a report of Professor Goldney, who saw the respondent first on 24 October 1995. In his report of 29 March 2001 (partly quoted by the Tribunal) the relevant passage is: "Mr Maida's current permanent impairment is partly qualitatively difference, but more specifically quantitatively different to the same impairment that he had had prior to 1 December 1988 …" However, that paragraph continued: "Thus, from the qualitative point of view, his symptoms have fluctuated and from the quantitative point of view they have certainly become more severe." In my judgment, there is no scope from that passage in his report, or in Professor Goldney's evidence, to understand that he was indicating a change in the underlying pathological condition of the respondent so as to support a finding of a qualitative change in his condition in the way explained by Merkel J in West. Nor does it appear that the Tribunal so understood that report. It appears clearly to have understood it in its terms. That is reflected in its findings, noted above, that the condition of schizophrenia suffered by the respondent in April 1988 is the same condition as that from which he has continued to suffer, and that it presented a permanent impairment prior to December 1988. The Tribunal was positively satisfied that the permanent impairment flowing from the condition arose prior to 1 December 1988. 35 The conclusion of the Tribunal that there was a "distinct qualitative difference" in the respondent's impairment after 1 December 1988 is said to be "in terms of the effect of the impairment upon the applicant". That indicates a focus upon the effect or degree of the permanent impairment rather than the nature of the permanent impairment. The degree of a permanent impairment, as noted earlier, is a different concept under the SRC Act from that of a permanent impairment. Moreover, as Gummow J pointed out in Brennan, the use of the Guide to the Assessment of the Degree of Permanent Impairment prepared pursuant to s 28 of the SRC Act as a step in determining the existence of a permanent impairment is erroneous. It is directed to the measure of the degree of permanent impairment, rather than to the existence of a permanent impairment. The Tribunal's use of Table 5.1 of the Guide to assist in determining that the respondent has a qualitatively different permanent impairment at the time of its determination from that which existed at 1 December 1988 is therefore inappropriate. It also indicates a focus upon the worsening of the degree of impairment as evidenced by its consequences, rather than upon the emergence of a new permanent impairment itself. 36 For those reasons, I have reached the conclusion that the Tribunal erred in law in its consideration of the respondent's claim. The appeal should be allowed, and the decision of the Tribunal should be set aside. 37 The applicant further seeks that the decision of the applicant's delegate that the respondent is not entitled to compensation under ss 24 and 27 of the SRC Act be affirmed. I am not disposed to adopt that course. It would have the effect of foreclosing any entitlement the respondent might have to lump sum compensation for a permanent impairment under the SRC Act. It therefore assumes that the Tribunal, properly applying the law, would have reached the conclusion that the respondent has suffered no further permanent impairment as a result of his schizophrenia after 1 December 1988. I am not confident that the Tribunal, properly applying the law, would reach such a conclusion. 38 A significant deterioration in the degree of permanent impairment from any injury may indicate that a discernible or measurable underlying pathological change has occurred. Examples readily suggest themselves. An employee may have a back injury producing lower back pain, and subsequently pain extending into the legs indicating the possibility of further pathological change in the lower back so as to impinge upon nerve roots which previously were unaffected. In the case of a condition such as schizophrenia, there may or may not be some further patho-physiological changes which account for a significant deterioration in symptoms. The Tribunal at one point described the significant worsening of the respondent's symptoms, and so of the degree of his permanent impairment, as being "marked by significant alteration". I have concluded that it then erred in failing to determine whether there had in fact been a qualitative change in the patho-physiological condition underlying his schizophrenia, and in regarding a change in the degree of his permanent impairment as itself constituting a new permanent impairment under the SRC Act. 39 However, the Tribunal might upon the whole of the evidence conclude that there had been some further patho-physiological change in his underlying condition. It may be satisfied that the deterioration in symptomatology is not indicative merely of the progression or gradual worsening of the degree of the respondent's impairment. It might of course also reach the view that there has been no change in the underlying patho-physiological condition so that the worsening of the degree of impairment will not constitute a new or distinct impairment. But I do not think it is for the Court to foreclose those options to the Tribunal when the Court has concluded that the Tribunal, through legal error, has not addressed the respondent's claim correctly. 40 I accordingly further order that the respondent's claim be remitted to the Tribunal for further hearing and determination in accordance with those reasons for judgment. 41 The applicant also complained that the Tribunal erred in making an order under s 67 of the SRC Act that the applicant pay to the respondent his costs of the application for review of the delegate's decision. It was contended that there was a breach of the rules of procedural fairness on the part of the Tribunal, as it had been arranged that it would have the opportunity to be heard on the question of costs before any order for costs was made. The respondent acknowledges the Tribunal erred in that respect. The Tribunal apparently overlooked the arrangement for the applicant to be heard on the question of costs. I also therefore set aside the Tribunal's order under s 67 of the SRC Act that the applicant pay to the respondent his costs of the application for review, and remit that issue also to the Tribunal for determination according to law. The outcome of the Tribunal's further consideration of the respondent's claim will no doubt have some relevance to whether any order for costs should be made under s 67 of the SRC Act. 42 I will hear the parties as to the costs of this appeal. I certify that the preceding forty-two (42) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield.

Associate: Dated: 28 October 2002 Counsel for the Applicant: Mr PJ Hanks QC with Mr J Wallace

Counsel for the Respondent: Mr J Tilmouth QC with Mr G Britton

Solicitor for the Respondent: Ryan Carlisle Thomas