Denn v Midland Brick Co Pty Ltd

[1985] HCA 26

High Court of Australia|1976-01-12|Before: Dawson JJ, Kennedy J

View original source

At a glance

Source facts

Court

High Court of Australia

Decision date

1976-01-12

Before

Dawson JJ, Kennedy J

Source

Original judgment source is linked above.

Judgment (90 paragraphs)

[1]

High Court of Australia Gibbs C.J. Mason, Wilson, Brennan and Dawson JJ. Denn v Midland Brick Co Pty Ltd [1985] HCA 26

[2]

ORDER Appeal allowed with costs. Set aside the order of the Full Court of the Supreme Court of Western Australia and in lieu thereof order that the appeal to that Court be dismissed with costs.

[3]

On 12 January 1976 the appellant, while in the course of his employment with the respondent company, suffered an accident which caused injury to his brain and left him permanently incapacitated. In consequence he became entitled to receive compensation under the Workers' Compensation Act 1912 W.A., as amended ("the 1912 Act"). Under that Act the entitlement of a worker to weekly payments during an incapacity ceased "if and when the total weekly payments for that incapacity reaches the prescribed amount, unless the Board has made or makes an order to the contrary under section 29(7)(aa)" of that Act: see cl. 1(c) of the First Schedule. The amount payable for the reasonable expenses of medical treatment and hospital treatment and maintenance was limited to a sum "not exceeding, in the aggregate, a sum equal to 10 per cent of the prescribed amount, unless the Board finds that in the particular circumstances of the case, that amount is inadequate": par. (c)(i) of the proviso to cl. 1(c) of the First Schedule. By 19 June 1981 the appellant had received the prescribed amount (which was then $51,646) by way of weekly payments and had received a sum which considerably exceeded 10 per cent of the prescribed amount by way of medical expenses. On 31 August 1981 he applied to the Workers' Compensation Board of Western Australia for orders that he receive weekly payments of compensation, and the cost of medical expenses, above the prescribed amount. On 30 April 1982 the Board ordered (inter alia) as follows:

[23]

An entitlement of a worker to weekly payments for a disability under this Act ceases if and when the total weekly payments for that disability reaches the prescribed amount, unless the Board has made or makes an order to the contrary under section 122 In addition to those weekly payments, a sum is payable equal to reasonable expenses incurred (inter alia) for medical attendance and treatment and charges for hospital treatment and maintenance "but not exceeding, in the aggregate, a sum equal to 10 per cent of the prescribed amount, unless the Board finds, that in the particular circumstances of the case, the amount for such expenses is inadequate ": cl. 17(1) of Sched. 1. Although it is clear that initially the disabled worker is entitled to medical and hospital expenses as well as the weekly payments, it by no means follows that once the prescribed amount has been reached the totally disabled worker who is receiving the benefit of payments which cover all his ordinary living expenses is entitled to receive the weekly payments in full. The provisions of s. 122, which have their counterpart in the provisions of the legislation of Victoria and South Australia, have received judicial consideration. It was held by this Court in Harrington v. Harrington [3] that under the corresponding provisions of the South Australian legislation the prescribed amount is not intended to be an appropriate standard for the majority of cases, and that it is not intended that the maximum should be fixed at a level which will provide less than complete compensation or that an amount greater than the prescribed amount should only be fixed if special circumstances are shown. That however does not mean that the provision that payments cease when they reach the prescribed amount is an empty formality. Once the limit fixed by the prescribed amount has been reached the worker's qualified right to a continuance of the weekly payment ceases, and the Board must decide whether those payments should continue. In so deciding it has a very wide discretion; it is entitled, and in my opinion bound, to consider all "the circumstances". The financial situation of the worker and of his family, if any, form part of the circumstances of the case; indeed it was said in Collins v. Epworth Hospital [4] , that circumstances of that kind "appear to be very relevant". I agree that such circumstances are relevant; there is simply no reason to exclude them from consideration. Where the payments in respect of hospital expenses provide, on a permanent basis, for the cost of the accommodation and maintenance of the disabled worker (particularly one who has no dependants), he might receive more than fair and adequate compensation if he received in addition the weekly payments, at least if they were paid to him in full. Put in another way, the fact that his maintenance is fully provided for is a benefit relevant to be considered once the prescribed amount has been reached. The effect of the order providing for hospital maintenance is a matter which the Board has to consider in its discretion. 1. (1981) 155 C.L.R. 317. 2. [1959] V.R. 586, at p. 589.

[53]

Clause 7(3) of Sched. 1 of the new Act continues the scheme in force under the Act whereby the entitlement of a worker to weekly payments ceases if and when the total of such payments reaches the amount prescribed by the statute unless the Board makes such order as to the total liability of the employer for such payments as the Board thinks proper in the circumstances: s. 122, new Act; s. 29(7)(aa), the Act. It is therefore for the worker to show the presence of such circumstances as will lead the Board to think it proper to require weekly payments to be continued notwithstanding that the prescribed amount has been reached. In the present case the factor which appears to have influenced the Board is the consideration that the appellant has lost two-thirds of his working life and the enjoyment of an earning capacity as a carpenter in that time. There may be cases where that consideration is an important factor but it cannot be taken as the determinant in every case. If it were, it would mean simply that a totally and permanently incapacitated worker is entitled to weekly payments for the balance of what would have been his working life subject only to the formality of an order under s. 122 of the new Act. A relevant circumstance in the present case is the very limited opportunity that the appellant has to utilize for his own purposes any moneys that he may receive. There may be cases where the loss of earning capacity, if not replaced by compensation in the form of weekly payments, would make a considerable impact on the amenities which would go to make up his way of life. Here, however, if it be correct for the Board to take the invalid pension into account, the findings made by the Board show that in present circumstances he is as well provided for as money can achieve. The answer given in Harrington to the second question I have set out makes it clear that the actual needs of the appellant are to be taken into account and that the existence of an order obliging the employer to continue to meet medical and like expenses is a relevant consideration. In my opinion, the approach of the Full Court with respect to the economic needs of the appellant was entirely consistent with the guidance provided by the decision in Harrington.

[56]

The provisions of the Act which contribute to a relevant perception of its purpose may be described briefly. Section 3 states expressly that a purpose of the Act is to make provision for the compensation of workers who suffer a disability. "Disability" includes a personal injury by accident arising out of or in the course of the employment: s. 5(1). If a disability occurs, then subject to the Act the employer is liable to pay compensation in accordance with Sched. 1. Clause 7(1) of the Schedule provides that subject to s. 56 (which terminates the worker's entitlement to weekly payments on his reaching the age of sixty-five years) and sub-cl. (3) a worker is entitled during total incapacity for work resulting from the disability to a weekly payment equal to his weekly earnings. As I have already said, sub-cl. (3) provides that the entitlement of a worker to weekly payments for a disability ceases if and when the total weekly payments for that disability reach the prescribed amount unless the Board makes an order to the contrary under s. 122. With all respect to those who may think differently, I am unable to perceive the purpose of the Act to be to oblige an employer to compensate a totally and permanently incapacitated worker with weekly payments equal to what he would have earned throughout the whole of his working life to age sixty-five without regard to his needs or his capacity to use the money so provided. Clause 7(1) expressly subjects the entitlement to weekly payments to the prescribed maximum and sub-cl. (3) only authorizes payments in excess of that maximum if the Board makes an order to the contrary. Section 122 enables the Board to make such an order in the case of a totally and permanently incapacitated worker if it thinks it proper in the circumstances to do so. If "the circumstances" do not admit of consideration of the financial situation of the worker and the adequacy of his resources when measured against his needs, then what is the point of conferring any discretion on the Board? The power of the Board to make any order under s. 122 is predicated on the existence of total permanent incapacity so that theoretically it could be said of every applicant under the section that he is to be compensated for the loss of his earnings to age sixty-five. So to construe the section is to eliminate any effective discretion in the Board. The consequence of such a construction in the present case is to secure to the worker an entitlement in the form of weekly payments for the rest of his working life amounting to several hundred thousand dollars which he has no prospect at all of being able to use. I do not think it can be the purpose of the Act to impose such an economic burden on industry.

[87]

If an incapacitated worker receives weekly payments at the rate prescribed by cl. 7(1) in addition to the benefit of an order covering the cost of his board and lodging in an institution, he might be better off financially than he would have been if he had not been incapacitated, for he would have had to bear that cost out of his own resources had he not been incapacitated. The Act makes no provision for reduced weekly payments to take account of the benefit that an incapacitated worker receives when his board and lodging are covered by payments made under an order in respect of medical and like expenses. But if an order made in respect of medical and like expenses (whether under proviso (c)(i) to cl. 1(c) of the First Schedule to the 1912 Act or under cl. 17 of the First Schedule to the 1981 Act) entitles an incapacitated worker in receipt of weekly payments to the benefit of free board and lodging, that consequence flows from statutory provisions which cannot be read so as to ensure that the cost of board and lodging falls on the worker. In the 1912 Act, the sum payable under proviso (c)(i) in respect of medical and like expenses is stated to be "in addition to the compensation payable under this clause", that is, in addition to the weekly payments at the rate prescribed by cl. 1(c) of the First Schedule. In the 1981 Act, the sum payable under cl. 17 of the First Schedule in respect of medical and like expenses is stated to be "[i]n addition to weekly payments of compensation payable". The 1912 Act and the 1981 Act equally prescribe that those sums, whatever they may be, should be paid cumulatively upon the prescribed weekly payments. Neither party submitted that the second order made by the Board on 30 April 1982 did not cover the cost of the appellant's board and lodging at the Applecross Nursing Home. Assuming that that order did ensure the benefit of free board and lodging for the appellant, the question is whether that benefit furnishes a ground for refusing to allow the continuance of prescribed weekly payments after the prescribed amount was reached. Although the discretion is conferred upon the Board in general terms, it must be exercised in accordance with any policy that inheres in the statute. Assuming that an order in respect of medical and like expenses confers the benefit of free board and lodging, the policy of the statute is that the appropriate measure of compensation for a totally incapacitated worker who is entitled to such an order extends to free board and lodging in addition to weekly payments. The discretion to allow that measure of compensation to continue after the prescribed amount is reached cannot be exercised adversely to the worker on the ground that the statutory policy is too generous to him and too onerous upon his employer.