D L Z v TAC [2017] VSCA 134

22 The judge then recorded the respondent's submissions in opposition to the applicant's submissions as follows:

1. The submission that the cost of rent was a 'disability service' or a 'rehabilitation service' was in direct conflict with Salcedo and there was no basis for distinguishing Salcedo from the present case.
2. The space required to accommodate the applicant's equipment in close proximity to him does not fall within the definition of 'medical service'. The definition of 'medical service' had to be construed in combination with s 60(7) of the Act. When those two provisions are read together, s 60(7) operated to make the Commission not liable to pay for the costs of the provision of items such as accommodation, food or household or personal items, or the like, except to the extent to which such items are specifically covered by the definition of 'medical service'. The omission in the definition of 'medical service' of the costs of rent or accommodation costs is significant, indicating an intention by the Parliament that such items are not comprehended within the meaning of 'medical service'.
3. It would be necessary to do 'some violence' to paragraph (i) of the definition of 'medical service' in order to bring within it the cost of rent for physical space. The cost of rent for physical space was not contemplated within the examples provided in the section.

23 The judge, after making two preliminary observations, commenced his analysis of whether the premises that are required to house the applicant's carers and equipment comes within the definition of 'disability service', 'medical service' or 'rehabilitation service', by observing that it was not in dispute that the carer services, provided to the applicant at those premises, constituted a 'disability service', and that the equipment used by the applicant at those premises, and critical to maintain the applicant's life, came within the definition of 'rehabilitation service' in s 3, and also within paragraphs (g) and (h) of the definition of 'medical service'.[20] The judge then dealt with the applicant's then primary contention that the accommodation and storage required for the equipment and carer was 'part and parcel' of those services, observing that the expression 'part and parcel' came from the Court of Appeal's judgment in Salcedo where the Court described McRitchie as follows:

In McRitchie, the 'rehabilitation service' was essential to the wellbeing of the injured person, for the need was clear for special food, assistance with feeding, and so on. Payment of the 'bed fee' was justified because, although it included something for accommodation, albeit special accommodation, it was but part and parcel of the 'rehabilitation service' being provided: the cost of accommodation - the special accommodation - was incapable of being separated out.[21]

24 The judge accepted that there was no doubt that the storage or accommodation of the applicant's equipment and carer, at the applicant's premises, was a critical and indispensable aspect of the provision of the rehabilitation equipment and the services of the carer to the applicant. However, the judge said that, unlike in McRitchie, he did not consider that this storage or accommodation could properly be characterised as being 'part and parcel' of the provision of the equipment and those services to the applicant. Rather, as his Honour said, the accommodation made available could be (and was) 'disaggregated' from the equipment and the services of the carer.[22]

25 Next, the judge turned to Salcedo and concluded that the provision of the accommodation sought by the applicant, on the authority of Salcedo, was not a disability service or a rehabilitation service within the meaning of the Act. The judge held that both on the authority of Salcedo, and in 'plain parlance', the accommodation necessary to house the applicant's equipment and carer did not come within the definitions of 'disability service' or 'rehabilitation service'.[23]

26 The judge then turned to the question of whether the additional accommodation came within any of paragraphs (g)-(i) of the definition of 'medical services'. Having concluded that the additional accommodation did not fall within paragraphs (g) or (h), the judge said:

The critical question is whether it comes within paragraph (i) of the definition, namely, constituting the '... provision of anything needed to operate, run, maintain or repair any equipment referred to in paragraph (g) or (h)'.

Clearly, the accommodation, that is in question, is necessary to house or store equipment that would fall within paragraph (g) and paragraph (h) of the definition of medical services. However, such accommodation could not, as a matter of ordinary English, be characterised as something needed to 'operate, run, maintain or repair' that equipment, unless that phrase were given a strained or artificial meaning. The examples, provided under paragraph (i), are each items that readily respond to one or more of the verbs contained in that definition. Those examples form part of the section.[24] They are convenient to clarify, and to illustrate, the meaning of the terms used in the statutory provision.[25] In the present case, the examples reinforce the conclusion that the verbs 'operate, run, maintain or repair', in paragraph (i) of the definition of medical services, are to be accorded their ordinary and natural meaning. As such, I do not consider that they extend to cover the provision of accommodation necessary to locate and store the equipment that is required to maintain and treat the plaintiff.[26]

27 In his written case in this Court, the applicant sought to advance again all of the arguments that had been unsuccessful at VCAT and before the judge. In addition, it was submitted that Salcedo was plainly wrong and should not be followed by this Court. In oral argument, however, there was a substantial shift in emphasis by the applicant, and the applicant brought to the fore, and developed in greater detail, his contention that the extra accommodation needed to house the applicant's carer and life-sustaining equipment, backup equipment and supplies, came within paragraph (i) of the definition of 'medical service', as being 'the provision of anything needed to operate, run, maintain or repair' equipment that was covered by paragraphs (g) and (h) of that definition.

28 In its written case, the respondent maintained its arguments in opposition to the applicant's submissions, and supported the judge's reasons. In oral argument, and in opposition to what became the applicant's principal submission before us, the respondent relied upon the text and context of the relevant provisions in the Act to contend that the extra accommodation (rent) did not come within paragraph (i) of the definition of 'medical service'.

29 In submitting that accommodation (rent) did not come within paragraph (i) of the definition of 'medical service', the respondent however accepted that, for a catastrophically injured person who owned a property, there would not be any issue about compensability because the property could (and would) be modified pursuant to s 60(4). Senior counsel for the respondent fairly conceded that it was difficult to discern a legislative purpose for treating those who rented their homes differently from those who owned their homes, saying:

And the answer to that question is no more able to be proffered by the Commission than to observe as Justice Kaye did, that the Act provides that compensation, which it does, and not more and that is a matter for the legislature.

30 As part of its submissions on context, the respondent took us to the Second Reading Speech for the 2003 Act, in which it was stated that ordinary daily living costs, not specifically related to a claimant's injuries, were not compensable under the Act.

31 As part of its submissions about the statutory text, the respondent observed that accommodation and rent were not specifically referred to in paragraph (i), and were not ordinarily thought of as things that might constitute, or be described as, medical services. In making that submission, the respondent placed reliance upon those authorities that have said that, while the ordinary or dictionary meaning of a defined term in a statute is notionally displaced or altered by the statutory definition, the ordinary or dictionary meaning of a particular term may influence, or colour, a court's view of the defined meaning of the term.[27]

32 The applicant's contention that Salcedo is plainly wrong and should be overruled can be disposed of in short compass. While, prior to this Court's decision in Salcedo, it may have been arguable whether the accommodation costs claimed in that case fell within the definition of 'disability service' or 'rehabilitation service', Salcedo resolved that controversy. Moreover, while the applicant sought to contend that Salcedo was plainly wrong, no error of principle in the decision was identified by the applicant. The applicant, without identifying any actual error, merely asserted that the court in Salcedo had adopted too narrow a construction of the relevant provisions of the Act.

33 Further, and in any event, Salcedo is a decision that has stood for more than 16 years without it ever having been suggested that it was erroneously decided. Additionally, and of note, the Parliament has amended the Act many times since Salcedo was decided. Considerations of the kind referred to in Thompson v His Honour Judge Byrne,[28] and in this Court's decision in Starr v Greenfreight (Services) Pty Ltd[29] now militate against any reconsideration of Salcedo at this stage - the Parliament not having sought, in any of the many amending Acts enacted since Salcedo, to amend the definitions of 'disability service' and 'rehabilitation service' so as to alter their effect as they were construed in Salcedo.

34 In the applicant's written case, his next argument concerning Salcedo (if this Court did not accept that Salcedo should be overruled) was that the judge misapplied Salcedo. We reject this submission. The judge gave careful and detailed consideration to the reasoning in Salcedo, holding that, upon the reasoning in Salcedo, the applicant's present claim could not fall within the defined terms 'disability service' or 'rehabilitation service'. For the reasons given by the judge,[30] the judge was, with respect, plainly correct in the application of Salcedo.

35 Having regard to the way in which the applicant has altered the emphasis of his argument in this Court from the way in which the applicant's case was put at VCAT and in the Trial Division, what has now become central is whether the rent associated with the additional accommodation required by the applicant is capable of constituting the provision of something needed to 'operate, run, maintain or repair' life-saving and life-preserving equipment that falls within paragraphs (g) and (h) of the definition of 'medical service'. That is, in argument before us, the central question for this Court became whether that additional accommodation (rent) claimed by the applicant comes within paragraph (i) of the definition of 'medical service' in s 3(1) of the Act.

36 There is no doubt that the applicant has particular needs for the provision of particular equipment and services as a result of the catastrophic injuries he suffered in his transport accident. The evidence of the precise equipment and services needed by the applicant is, however, not entirely clear from the record produced in this Court. That said, the respondent very fairly conceded before us that if we were of the view that paragraph (i) of the definition of 'medical service' was capable of having operation, so that the matter would be required to be remitted to VCAT for rehearing in accordance with our reasons, then the respondent would not maintain that there was any deficiency in the record, and the respondent would also accept that the matter could be reheard at VCAT on evidence already given and upon any additional evidence that it might be thought necessary to call.

37 It is now necessary to construe paragraph (i) of the definition of 'medical service', by reference to its text, in its context, and bearing in mind the legislative purpose of the provisions of the Act.[31] We turn first to the text. The evidence discloses that the applicant has a need for additional space within his home to house the equipment he requires and which equipment clearly falls within the wording of paragraphs (g) and (h) of the definition of 'medical service'. Such equipment needs to be housed so that it can operate and does not break down or fall into disrepair. The housing (which in this instance is provided by rental accommodation) is needed to run, operate and maintain equipment and thus falls within the literal terms of the description contained in paragraph (i) of the definition. The examples at the foot of paragraph (i) form part of the Act,[32] are not exhaustive, and may extend, but do not limit, the meaning of paragraph (i) of the definition.[33] They simply identify things that paragraph (i) includes.

38 Equipment of the kind needed by the applicant to maintain his life cannot simply be operated out in the open and unhoused or otherwise than in direct proximity to the applicant. Provision must be made for its care, storage and maintenance, and for the storage of necessary supplies, so that it may be run and/or operated to perform its necessary and needed functions. In the end, precisely what is needed to operate, run, maintain or repair relevant equipment, including space at the applicant's place of residence for which rent is paid, will be a question of fact to be determined upon the evidence available to the parties.

39 The word 'anything' is itself contained in an inclusive definition of 'medical service'. It is to be given full force in the phrase 'the provision of anything needed to operate, run, maintain, or repair any equipment'. As a matter of ordinary language, if additional rental space is needed to run and maintain the equipment 24 hours a day, seven days a week, then provision of such space constitutes a 'medical service' and the applicant is entitled to recover his reasonable costs.

40 As to the respondent's argument that accommodation and rent are not ordinarily thought of as medical services,[34] it might be said that neither are electricity, water, lubricating oil, replacement filters or batteries - yet they are the examples given in the Act.[35] In summary, in our view the ordinary meaning of the text of paragraph (i) of the definition of 'medical service' would extend to the necessarily incidental supply of additional rental accommodation.

41 While the construction of the relevant provisions in the Act must start and end with the legislative text, each of the relevant provisions must be construed in its context - such context including the surrounding provisions of the Act. In this regard it is necessary to say something about s 60(7). As the judge noted, s 60(7) does not, of itself, create any entitlement to compensation for, or in respect of, the items referred to in it - including accommodation and related costs such as rent and bonds - unless those items are compensable by virtue of s 60(2)(a).[36] That said, if the inclusive definition of 'medical service' is not read as potentially extending to accommodation costs or rent and bonds, then one might ask rhetorically what is the point of s 60(7)(a)? On its face, s 60(7)(a) appears to contemplate that accommodation and rent is capable of constituting a 'medical service' or a 'hospital service' (but matters of accommodation and rent can hardly be relevant to a 'hospital service', as that expression is defined in s 3(1) of the Act). In turn, paragraph (i) of the definition of 'medical service', appears to be the relevant paragraph of the definition of 'medical service' that might be capable of encompassing matters of accommodation and rent.

42 To this extent the contextual consideration of the Act supports our reading of the text of the definition of 'medical service'. Furthermore, we do not see anything in the legislative history of the Act that suggests that compensation for this necessary extra space (either by way of rental assistance or otherwise) cannot be payable under the provisions of s 60 of the Act. Indeed, the fact that it is claimable under s 60(4) of the Act for a catastrophically injured claimant who owns his or her own home tells to the contrary.

43 We turn then to questions of purpose. The relevant objects of the Act are twofold. On the one hand, it is an object of the Act:

(a) to reduce the cost to the Victorian community of compensation for transport accidents;[37]

44 On the other hand, it is also an object of the Act:

(b) to provide, in the most socially and economically appropriate manner, suitable and just compensation in respect of persons injured or who die as a result of transport accidents;[38]

45 We accept the thrust of the respondent's case that in the context of the provision with which we are concerned the potential tension between these two objects is intended to be resolved by distinguishing between ordinary daily living costs on the one hand and additional costs incurred by way of and incidentally to the supply of medical services.

46 In the present case, the additional space in issue does not constitute space utilised for the purpose of everyday living. It does not give rise to a cost of ordinary daily living in the sense described in the Second Reading Speech for the 2003 Act, but to an additional living cost. Moreover, it is capable of disaggregation from ordinary living costs as contemplated in that speech. The applicant's claim is for the difference between the cost of renting for the purpose of ordinary daily living and the rental cost he must now incur to accommodate the equipment, care and supplies that he now requires.

47 It follows that neither the language nor the context nor the purpose of the definition support the view that the applicant has no entitlement.

48 Adopting a construction that promotes the purpose and object underlying the Act, we would conclude that the cost of additional space needed to operate the life-preserving equipment and necessary supplies of the applicant constitutes a 'medical service' as defined by paragraph (i) of the definition of that expression in s 3(1) of the Act. It may also be that, depending upon the evidence, the same may be said of the space needed to accommodate a carer charged with the task of operating, running and maintaining the equipment, and/or looking after and ensuring the applicant's survival.

49 It follows that, while there is no substance in grounds 1, 3, 4, 5 and 6(a) and (c), we would uphold the applicant's contentions in respect of grounds 2 and 6(b). While we note that the arguments upon which the applicant has succeeded before us were only substantially developed for the first time in this Court, the respondent, acting as a model litigant, very fairly took no point about the shift in the applicant's case from the way it was argued below to the way in which it was argued before us.

50 Indeed, the respondent made clear that its essential position is that it seeks clarification of its powers to make the payments in issue.

51 We will grant leave to appeal, allow the appeal, set aside the orders made in the Trial Division, and order that the matter be remitted for rehearing and determination at VCAT in accordance with these reasons.

[1] DLZ v TAC [2017] VSC 176 [6], [7] ('Reasons').

[2] DLZ v Transport Accident Commission [2016] VCAT 1154 ('VCAT Reasons').

[8] [2003] VSCA 51; (2003) 39 MVR 136 ('McRitchie').

[9] [2003] VSCA 226; (2003) 8 VR 276 ('Salcedo').

[10] (2013) 41 VR 112 ('Hogan').

[15] Victoria, Parliamentary Debates, Legislative Assembly, 16 October 2003, 1154-8 (Mr Hulls, Minister for WorkCover).

[17] Hogan (2013) 41 VR 112, 122 [49].

[21] Salcedo [2003] VSCA 226; (2003) 8 VR 276, 284 [22].

[24] Interpretation of Legislation Act 1984 (Vic) s 36(3A).

[25] DPP v Walters (a pseudonym) [2015] VSCA 303 [7]; Brooks v Federal Commissioner of Taxation [2000] FCA 721; (2000) 173 ALR 235, 252 [66].

[26] Reasons [49]-[50] (citations in original).

[27] See, eg, Greater Shepparton City Council v Clarke [2017] VSCA 107 [74], citing Manly Council v Malouf trading as Fusion Point [2004] NSWCA 299; (2004) 61 NSWLR 394, 396-7 [8]-[10]; Hastings Cooperative Ltd v Port Macquarie Hastings Council [2009] NSWCA 400 [17]; Heffernan v Comcare (2014) 2018 FCR 1, 9 [46]; British Amusement Catering Trades Association v Westminster City Council [1989] AC 147, 157.

[28] [1999] HCA 16; (1999) 196 CLR 141, 157 [40] (Gleeson CJ, Gummow, Kirby and Callinan JJ); 160 [53] (McHugh J).

[29] [2016] VSCA 213 [34].

[31] Cf s 35(a) of the Interpretation of Legislation Act 1984; and see Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory) [2009] HCA 41; (2009) 239 CLR 27; Certain Lloyd's Underwriters v Cross [2012] HCA 56; (2012) 248 CLR 378; Federal Commissioner of Taxation v Consolidated Media Holdings Ltd [2012] HCA 55; (2012) 250 CLR 503; Thiess v Collector of Customs [2014] HCA 12; (2014) 250 CLR 664; Talacko v Bennett [2017] HCA 15 [82].

[32] Interpretation of Legislation Act 1984 s 36(3A).

[33] Ibid s 36A(1).

[34] Cf Greater Shepparton City Council v Clarke [2017] VSCA 107 [74].

[35] See the examples given at the foot of paragraph (i) of the definition of medical services in s 3(1) of the Act.