Comcare v Laidlaw

Federal Court of Australia|1999-02-02|Before: Finn J

REASONS FOR JUDGMENT 1 Such is the history of this matter that one of the two basic issues that Comcare, the applicant in this appeal from the Administrative Appeals Tribunal ("the Tribunal"), sought to have resolved, has since been determined by the decision of the Full Court of this Court in Australian Postal Corporation v Burch (1998) 156 ALR 483. Comcare had wished to contend that, for the purposes of the Safety, Rehabilitation and Compensation Act 1988 (Cth) ("the SRC Act"), "disease" and "injury" provide mutually exclusive bases for the recovery of compensation for incapacity for work. By "mutually exclusive" I understood Comcare to mean that there could be no possible overlap between the two so that a condition that satisfied the definition of a "disease" for example was not capable as well of founding an "injury (other than disease)" claim. The decision in Burch's case is inconsistent with that contention, as are decisions of this and other courts on relevantly similar workers' compensation legislation: see eg Petkoska v Kennedy Cleaning Services Pty Ltd [1998] FCA 1289 and the cases referred to therein. I merely note that in the present matter Comcare has again sought formally to rely upon this contention while accepting that it must be unavailing. 2 The principal issue remaining to be resolved is of more narrow compass. It relates to the construction to be given s 7(6) of the SRC Act. In order to appreciate how this question arises it is necessary both to outline the statutory setting of s 7(6) and to refer briefly to the circumstances giving rise to this appeal.

13 The respondent, Gregory Keith Laidlaw, while an employee of the Department of Parks and Wildlife made a claim for compensation for an injury to his back (a disc prolapse) said to have been sustained while alighting from a lawn mower on 9 February 1995. He had a pre-existing back disease at the time (a lumbar disc disease). The claim he made was nonetheless for an injury, not for disease aggravation. 14 There is clear reason for its being so framed. Mr Laidlaw, on his own concession, had previously made a false representation to the Commonwealth concerning the condition of his back. For the purposes of this appeal it is accepted that representation would, by virtue of the disentitling provisions of s 7(7) of the SRC Act (above), have precluded his making a claim based on disease aggravation. 15 When the matter first came before the Tribunal (a further hearing resulted from a successful appeal to this court) it was found that while the 9 February 1995 incident constituted an aggravation of his back disease, it nonetheless constituted "an injury (other than a disease)" for the purpose of the SRC Act's s 4 definition of "injury". In consequence he did not need to found his claim on disease aggravation - a claim which because of s 7(7), would have been unsuccessful. The Tribunal found, correctly, that the disentitling provisions of s 7(7), while applying to "diseases", did not apply to frank injuries: see Health Insurance Commission v Van Reesch (1996) 45 ALD 302. 16 On appeal to this court it was conceded that the Tribunal did not address Comcare's central submission that, because of the alleged "deeming provisions" of s 7(6) of the SRC Act, the Tribunal could only deal with the claim as one of disease aggravation to the exclusion of frank injury. Because of this omission the decision of the Tribunal was set aside and the matter was remitted to a differently constituted provision to consider the application of s 7(6) in the circumstances. 17 On that reconsideration the Tribunal again decided that the applicant was entitled to compensation in respect of the injury sustained on 9 February 1995. Of the s 7(6) submission it observed: "14. The purpose of subsection 7(6) (and of section 7 in general) is to deal with those claims for incapacity arising from a disease. Such incapacity is to be compensable if any one of the "but for" criteria has been met. However, the incapacity may also be compensable outside these "but for" criteria. Subsection (6) is not a code. It does not restrict the areas of the origin of incapacity arising from disease. Its purpose only is to provide that if the incapacity can be shown to be in accord with one of the "but for" factors, then it will be deemed to be an incapacity resulting from the disease. If an applicant can show that his circumstances can be explained with reference to any of the three criteria then, so long as causation of the disease is sufficiently work-related, subsection (6) does no more than confirm that a compensable incapacity or impairment will have been demonstrated. The non-exclusive nature of the three factors has been confirmed by authority. 15. In Comcare Australia v Porter (1996) 138 ALR 469, at 476, Jenkinson J declined to restrict the effect of subsection 7(6) in these words: 'Attention was drawn in the explanatory memorandum concerning the bill for the 1971 Act to s 31(5). Notwithstanding the omission of any such a provision from s 7 of the 1988 Act, I interpret s 7(6) as merely adjunctive to s 14(1), and not as an exhaustive exposition of the meaning of the expression 'results in' when used in reference to disease or its aggravation. Not only does the expression 'shall be taken, for the purposes of this Act, to have resulted' suggest so much. Each of the subsections preceding s 7(5) and (6), other than s 7(4), in all of which that expression is found, is plainly adjunctive to s 14(1) in respect of its application to disease or its aggravation. And the considerations which each of the three paragraphs of s 7(6) raise may, in a large number of cases, be indeed "artificial in relation to fundamental ideas of medical science".' 16. The written submissions put before me by counsel for the respondent consisted largely of an examination of the record of material previously put before the Tribunal in an endeavour to demonstrate that one or more of the "but for" criteria had been met. In my view, this submission is misconceived. The three criteria are intended to assist an applicant to prove the necessary connection between incapacity and causation. They provide beneficial tests available to be called in aid if an applicant seeks to prove the necessary connection between incapacity and causation in the case of a disease. 17. However, the applicant's claim is not, and has never been, based upon a disease. The original claim for compensation was "in respect of a lumbar back injury sustained at work". The Tribunal found that there was such an injury, notwithstanding the fact that there had also been an autogenous disease. This being the case, any incapacity suffered by the applicant is to be measured against the standards to be applied to injuries rather than diseases, always assuming that there is such a valid distinction. In my view, therefore, subsection 7(6) had no application to the previous finding of the Tribunal and this, no doubt, is the reason why it was not dealt with in the reasons for decision. An attempt has been made by the respondent to apply the provisions of subsection (6) in an inappropriate way. In my view, it does not follow that simply because the conditions of any or all of the three criteria have been met then an applicant's claim must be based upon a disease. This is neither logical nor in accordance with authority. If there is a disease, then compensable incapacity may be demonstrated with reference to any of the three factors. It does not follow, however, that if any of the three factors is present then there must necessarily be a compensable incapacity arising out of a disease." 18 The Tribunal went on to confirm the finding of a discrete injury

The Present Appeal 19 The reason for this appeal is plain enough. Mr Laidlaw would not be entitled to claim compensation for the consequences of the 9 February incident if he had founded that claim on aggravation of a pre-existing disease and this because of the wilful and false representation (a nondisclosure) he previously made to the Commonwealth concerning his degenerative back condition: see SRC Act s 7(7). Is he nonetheless to be allowed to obtain compensation if, fortuitously, the circumstances of his disease aggravation also can be characterised as a frank injury? 20 The issue, it is accepted, is one of construction. And it likewise is accepted by Comcare that the earlier CCGE Act was so framed as to admit of a claim that circumvented that Act's equivalent to s 7(7): Health Insurance Commission v Van Reesch, above. But, it is submitted, that possibility is denied by the SRC Act and for either of two reasons. The first of these reasons, as I noted at the outset, is relied upon only formally as authority binding upon me is to the contrary: see Australian Postal Corporation v Burch, above. It is that "injury" and "disease" are mutually exclusive and cannot provide equally available bases for a given compensation claim. The second is that if the terms of s 7(6) are satisfied then any resultant compensation claim for incapacity is required to be made as a "disease-based" one only for the reason that the subsection itself deems the incapacity, "for the purposes of [the] Act", to have resulted from a disease or its aggravation. 21 Counsel for both parties have provided me with helpful and extensive submissions on the proper construction of s 7(6). While acknowledging the assistance I have received I do not intend to set those submissions out at length. 22 For my own part I cannot accept the interpretation pressed upon me by Comcare. As I noted earlier the scheme of the SRC Act is such that for incapacity for work to be compensable for a disease-based injury then (i) the relevant "ailment" or its aggravation must have been contributed to in a material degree by the employment of the claimant employee (the contribution requirement): SRC Act s 4 "disease"; and (ii) the disease must result in incapacity for work (the causation requirement): SRC Act s 14(1), s 19(1). 23 When one turns to s 7 of the SRC Act it is clear that several of its subsections relate solely to aspects of the contribution requirement: see s 7(1)(2) and (3). Several others, of which s 7(6) is one, relate in contrast solely to the causation requirement. And so it is that before the deeming effect of s 7(6) can be invoked by a claimant to show that his or her incapacity "resulted from" a disease or its aggravation that claimant must first satisfy the anterior condition that he or she suffers a s 4 "disease" with its attendant contribution requirement. The orientation of s 7(6) is, then, such as to make it merely adjunctive to s 14(1). In this, as Jenkinson J observed in Comcare Australia v Porter (1996) 138 ALR 469 at 476, it is not "an exhaustive exposition of the meaning of the expression 'results in' when used in reference to disease or its aggravation". 24 Put compendiously, if a claimant wishes to establish a liability in Comcare to compensate for a disease-based injury resulting in incapacity, he or she must first establish positively that a disease falling within the s 4 definition is suffered, but then, in making out the s 14(1) requirement that that disease has resulted in an incapacity for work, he or she can avail of the deeming effect of, but is not limited to, s 7(6). 25 I am unable to discern in the terms or purpose of s 7(6) a legislative intent, not only to facilitate proof of the s 14(1) causation requirement, but also and additionally to establish an exclusive priority in favour of a disease basis for compensation claims in circumstances where incapacity for work could properly be found to result from a disease because of the deeming effect of the subsection. The subsection simply does not address the choices open to an employee in formulating a claim. Insofar as it goes, its concern is with establishing the causation requirement once a claim has been founded on a "disease" as defined in s 4 of the Act. 26 I should add that I do not consider that s 7(6) is in any presently relevant respect different in its purpose and effect from s 31(4) of the CCGE Act notwithstanding, as I noted earlier, infelicity in the language of s 31(4). Nor do I consider that the reference to its deeming effect being "for the purposes of this Act" assists Comcare. That formula, while indicating the province of the subsection's application, throws no particular light on the burden of the subsection itself. Likewise I do not consider the general observations on the reforming purpose of the SRC Bill made by the Minister in his second reading speech illuminate in any way the construction to be given s 7(6). 27 The conclusion at which I have arrived is, of course, consistent with the more general view taken by the Full Court in Burch's case, as also of the Full Court in Van Reesch's case on the CCGE Act, on the possible overlap of injury and disease. A contrary conclusion would strip these decisions of much of their significance, itself a potent reason for pause. 28 Comcare's contention is in substance one founded on public policy. Its proper answering lies not in "adventurous" statutory interpretation but, if considered appropriate, in amendment of the legislation. 29 I conclude then that the Tribunal did not err in its treatment of s 7(6) of the SRC Act.

A Subsidiary Ground - Procedural Fairness 30 In allowing the appeal from the first Tribunal decision it was ordered (inter alia): "3. That the matter be remitted to a differently constituted Tribunal for consideration of the application of subsection 7(6) of the [SRC Act] to the evidence before the Tribunal." 31 Given the claim made by Mr Laidlaw and the view the Tribunal correctly took of s 7(6), that subsection could only be called into play if Mr Laidlaw was unable to establish his claim on the basis of "injury (other than disease)". The Tribunal agreed with the finding previously made that the evidence sustained a finding of frank injury. That finding was one it properly could make in giving the "consideration" required of it by the order of this court. 32 Because of its then preoccupation with the "mutual exclusivity" contention Comcare apparently did not envisage the making of such a finding prior to a determination of that contention. 33 Before the second hearing and coincidentally the decision of the Full Court in Burch's case, Comcare wrote to the Deputy Registrar of the Tribunal in (inter alia) the following terms: "At the re-hearing of this matter the respondent will be submitting to the Tribunal that the Order of Federal Court (sic) requires two potential questions to be considered:

The Tribunal is required to consider whether, on the evidence already presented, the requirements of section 7(6) of the Safety, Rehabilitation and Compensation Act 1988 are satisfied. If the Tribunal finds that the requirements of s 7(6) are satisfied this proceeding will conclude as the Federal Court has ordered that the Tribunal's previous findings in relation to s 7(7) stand.
If the Tribunal finds the terms of section 7(6) not to be made out, the Tribunal will need to determine whether the construction of the Safety, Rehabilitation and Compensation Act 1988, when taken as a whole, requires a "disease" and an "injury" to be considered as mutually exclusive of each other in the definitions contained in section 4. We respectfully suggest that the first of the above questions can be adequately addressed by written submissions. The Order of the Federal Court specifies that the Tribunal is to decide this issue on the evidence heard, and on findings made, by the previously constituted Tribunal. We consider that written submissions would save considerable time and cost to the parties and to the Tribunal. … However, if the Tribunal does not find the requirements of s 7(6) to be satisfied, we respectfully suggest that the second issue should not be determined by written submissions. We submit that the second question is a complex question, involving the construction of the relevant legislation, and could only be adequately dealt with by hearing of oral argument." 34 By letter of 11 February 1998 the District Registrar indicated to Comcare that the first of the above questions would be decided on the papers. 35 It would seem to be the case that Comcare considered the question whether Mr Laidlaw's condition should properly be characterised as a frank injury could only arise if the second of the above questions required determination. The reason for this would seem to be that both the s 7(6) and mutual exclusivity contentions were to the effect that Mr Laidlaw could only properly claim on a disease basis. It would only be if Comcare failed in both contentions that the question of whether Mr Laidlaw in fact suffered a frank injury could arise. And only then would the Tribunal be called upon to apply the principles stated in such decisions as Zickar v MGH Plastic Industries Pty Ltd (1996) 187 CLR 310 and Petkoska v Kennedy Cleaning Services Pty Ltd, above. 36 It would seem, unfortunately, that that is how Comcare interpreted the effect of the Tribunal's agreement to determine on the papers the first of the two questions noted above. 37 In the event the Tribunal did not consider it had to go on to the second question raised by Comcare. It considered its decision on the s 7(6) issue satisfied the orders made and sufficed to dispose of the appeal. Whatever the decision it may have arrived at if it had heard argument on mutual exclusivity - and it was that that Comcare sought - Burch's case has now settled that matter decisively for present purposes. Whether or not the Tribunal ought to have entertained that argument - I express no view on this - no purpose would be served in considering whether or not it erred in acting as it did. 38 It may well be unfortunate that Comcare did not anticipate that, in considering the application of s 7(6), the Tribunal would characterise the nature of the claim made and make findings thereon. As I earlier indicated, the Tribunal acted quite properly in so doing. And because the matter was dealt with on the papers with only written submissions being made, the misapprehension under which Comcare laboured was not exposed. For that state of affairs the Tribunal was in no way responsible nor has it committed any appellable error in deciding as it did. I would add that it does not appear on the material before me that the Tribunal was informed that, quite apart from its two contentions, Comcare wished to agitate the proper characterisation of Mr Laidlaw's condition under the Zickar principles. 39 In these circumstances I do not consider that a denial of procedural fairness has been demonstrated.

Conclusion 40 As the applicant has been unsuccessful in all of its grounds I will order that the application be dismissed. I certify that the preceding forty (40) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finn.

Associate: Dated: 2 February 1999 Counsel for the Applicant: Mr T Howe Solicitor for the Applicant: Blake Dawson Waldron

Counsel for the Respondent: Mr A Anforth and Mr T Thawley Solicitor for the Respondent: Maliganis Edwards Johnson

Date of Hearing: 23 October 1998 Date of Judgment: 2 February 1999

Government Employees) Act 1971(Cth)

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