BETWEEN : EDUCATION DEPARTMENT OF WESTERN AUSTRALIA

Workers' compensation - Arising out of and/or in the course of the employment - Teacher injured knee at work and was compensated to maximum prescribed amount - Injury to ankle sustained at home caused by the initial injury to the knee - Whether injury to ankle injury constituted a fresh disability - Generally, the question of whether incapacity for work results from a disability to be determined by the general principles of causation

Workers' Compensation and Rehabilitation Act 1981, s 5, s 18

Canale v Commissioner of Main Roads (1982) 1 WCR (WA) 163

Commissioner for Superannuation v Miller [1985] FCA 445; (1985) 8 FCR 153

F & T Grassi Pty Ltd v Ellendale Estate Pty Ltd [1985] WAR 294

Fenton (Pauper) v J Thorley & Co Limited [1903] AC 443

Hatzimanolis v ANI Corporation Ltd [1992] HCA 21; (1992) 173 CLR 473

Hughes v Gales (1995) 14 WAR 434

Kaiser v Burswood Resort (Management) Ltd [1999] WASCA 292

Kavanagh v The Commonwealth [1960] HCA 25; (1960) 103 CLR 547

Leggett v Argyle Diamond Mines Pty Ltd [2000] WASCA 182

Metropolitan Water, Sewerage & Drainage Board v Palella [1962] WCR (NSW) 54

Ogden Industries Pty Ltd v Lucas [1967] HCA 30; (1967) 116 CLR 537

Ptohopoullos v Transylvanian Timbers Pty Ltd [1974] WCR (NSW) 96

Re Monger Ex parte Ivey [1999] WASC 250

Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247

1 MALCOLM CJ: In my opinion this appeal should be allowed, the orders made by the learned Magistrate set aside, and the decision of the Review Officer restored. I have reached this conclusion for the reasons to be published by Ipp J with which I am in entire agreement.

2 IPP J: This appeal turns on a point of construction under the Workers' Compensation and Rehabilitation Act 1981.

"If a disability of a worker occurs, the employer shall, subject to this Act, be liable to pay compensation in accordance with Schedule 1."

Section 5 of the Act defines "disability" relevantly as meaning:

"(a) a personal injury by accident arising out of or in the course of the employment, or whilst the worker is acting under the employer's instructions;"

"Subject to section 56 and subclause (3) when total incapacity for work results from the disability a weekly payment during the incapacity equal to the weekly earnings of the worker calculated and varied in accordance with this Schedule."

4 It follows that when total incapacity for work results from a worker's "disability", the employer shall, subject to the Act, be liable to pay compensation equal to the weekly earnings of the worker (calculated in accordance with the Schedule). The Act imposes a limit constituted by a prescribed amount upon the compensation payments for which an employer is so liable.

5 The question for determination in this appeal is whether an ankle injury sustained by the respondent on 8 October 1997 is to be regarded as being part of or aggravating the disability caused by an earlier knee injury (sustained on 17 March 1992) or whether it is to be regarded as an entirely fresh disability with the effect that the prescribed amount, applicable to the disability brought about by the knee injury, is not applicable. I shall proceed to set out how the matter comes to this Court in this form.

6 On 17 March 1992 the respondent was a teacher employed by the appellant. On that date she fell while at work and injured her right knee. On various occasions thereafter, she aggravated the injury to her knee and often was required to stay away from work. She had recurrence of her knee problems throughout the period 1992 to 1994. In January 1995 her knee locked while she was at home and she fell. An operative procedure was carried out to her knee by an orthopaedic surgeon on 30 November 1995. In effect, for most of 1995, the respondent was incapacitated by the injury to her knee. In March 1996, the respondent commenced work again in a supernumerary position but as she was still affected by her knee injury she did not thereafter perform the duties as a teacher that she had undertaken before her injury.

7 Throughout the period from the date of the knee injury to July 1997, appellant accepted liability for the respondent's disability so caused. The appellant paid the respondent weekly amounts of workers' compensation during her incapacity for work over this period, as well as her medical expenses, in accordance with the Act. On 4 July 1997, however, the respondent's weekly payments of compensation reached the prescribed amount under the Act and were then terminated by the appellant.

8 On 24 and 25 September 1997 the respondent twisted her ankle. On 8 October 1997, while the appellant was at home on holiday, she injured her ankle again. This occurred while she was walking to her bedroom. The respondent's knee gave way, she fell and thereby injured her right ankle. The ankle was fractured, bruised and lacerated. This ankle injury is the subject of this appeal.

9 The respondent claimed workers' compensation from the appellant on the basis that the 8 October 1997 injury to her ankle constituted a fresh and different disability to which the prescribed amount applied anew. She also claimed that that injury was an exacerbation of the injuries which occurred on 24 and 25 September 1997. The Review Officer, however, found that the injury to the ankle on 8 October 1997 was caused by the initial injury to the knee. That injury had resulted in a weakness in the knee which had caused the knee to collapse and the respondent to fall while she was walking to her bedroom. That fall, in turn, had caused the ankle to twist. This, indeed, had occurred on each occasion that the ankle was hurt. The Review Officer accordingly found that the respondent's ankle injury suffered on 8 October 1997 was causally linked to the pre-existing knee injury.

10 The Review Officer held that the ankle injury was not a fresh disability and did not result in the establishment of a new prescribed amount in respect of which weekly payments of compensation should be made. He concluded that while the respondent's "entitlement to weekly payments was exhausted on 4 July 1997, she would nevertheless be entitled to payment of medical expenses and other statutory allowances in regard to her ankle injury".

11 The respondent appealed to the Compensation Magistrate, contending that her ankle injury constituted a fresh disability and the Review Officer was incorrect in rejecting this submission. The learned Magistrate upheld the appeal, largely on the view that Lindeman Ltd v Colvin [1946] HCA 35; (1946) 74 CLR 313 was authority to the effect that, in the circumstances, a fresh disability arose. The appellant appeals against this finding.

12 The question whether the ankle injury sustained by the appellant on 8 October 1997 is to be regarded as being part of or aggravating the disability caused by the knee injury sustained on 17 March 1992, or whether it is to be regarded as an entirely fresh disability, depends largely on the meaning of "disability" as it is defined in s 5 of the Act, and the words "results from" in the phrase "when total incapacity for work results from the disability" in cl 7(1) of Schedule 1.

13 In this regard it is to be noticed that the conditions, in the definition of "disability" in s 5 of the Act, namely, "arising out of ... the employment" and "in the course of the employment", are "alternative, not cumulative" (Pearson v Fremantle Harbour Trust [1929] HCA 19; (1929) 42 CLR 320 at 331). The difference between the two expressions was explained in Kavanagh v The Commonwealth [1960] HCA 25; (1960) 103 CLR 547 where Fullagar J said (at 558):

"[T]he effect of requiring a causal connexion between employment and injury is always attributed to the words 'out of' and not to the words 'in the course of'. (The words 'out of' do indeed import causation: the words 'in the course of' do not.) The conclusion seems inevitable that the main object of the changing of the conjunction was to eliminate the necessity of finding such a causal connexion. If there was such a causal connexion, the injury was to be compensable even though it did not occur while the worker was engaged in his employment or anything incidental to his employment. If, on the other hand, the injury occurred in the course of the employment, it was to be compensable even though no causal connexion could be found between it and the employment. And it necessarily follows, I think, that the words 'arising in the course of his employment' ought not to be regarded as meaning 'anything more or less than arising while the worker is engaged in his employment'. For I can find no tenable half-way house between this view and the view that the words in question have the same meaning as the words 'arising out of his employment'."

14 As the accident on 8 October 1997 occurred at the appellant's home and while she was on holiday, there could be no suggestion that the ankle injury occurred "in the course of the employment" of the respondent. The injury did not occur while the respondent was engaged in her employment or anything incidental to her employment.

15 The Review Officer found, nevertheless, that the injury was one "arising out of ... the employment". Hence, on that ground, he held that the personal injury so caused constituted a disability. The basis of the Review Officer's finding was that the ankle injury was brought about by the weakness to the knee. The knee injury was accepted by the appellant as having been caused by accident arising out of the respondent's employment. There was, therefore, a causal connection between the ankle injury and the respondent's employment.

16 The causal chain linking the ankle injury to the employment is analogous to the example postulated in Lindeman Ltd v Colvin by Latham CJ (at 317) where the learned Chief Justice observed that if the head injury sustained by the worker in that case (which arose out of his employment), made him dizzy so that he fell and thereby fractured his leg, then "it would be possible to hold that the leg injury arose out of the employment" (see also Dixon J at 321). In my view the Review Officer was correct in holding that the respondent's ankle injury was causally connected to and arose out of her employment with the appellant. The appellant sought to challenge this finding on the basis, in effect, that the ankle injury was too far removed from the employment, but in my view there is no substance in that argument.

17 Before coming to the main question in the appeal, I must refer to the learned Magistrate's reliance on Lindeman Ltd v Colvin. In that case the High Court was dealing with the issue of whether, a second, subsequent injury arose out of the worker's employment. The case was not concerned with the present question, namely whether a second injury has resulted in a fresh disability such that the total incapacity for work, referred to in cl 7(1) of the Schedule, is to be regarded as resulting from that disability and not from the disability brought about by the first injury. The learned Magistrate seems to have applied dicta in Lindeman Ltd v Colvin as if they laid down guiding principles concerning the fresh disability question to which I have referred. In so doing, his Worship, with respect, misunderstood the observations made by the High Court in that case.

18 The appellant's main argument is grounded on cl 7(1) of the Schedule. It was submitted that the respondent's disability caused by the ankle injury was part of or an aggravation of the disability caused by the knee injury. Therefore, it was said, the respondent's "total incapacity for work" (within the meaning of cl 7(1)) resulting from the disability caused by the ankle injury, was no different from her total incapacity for work resulting from the knee injury. On that basis, the weekly compensation payments payable to the respondent would be limited by the prescribed amount applicable to the disability caused by the knee injury.

19 The phrase "results from" was discussed by Mason JA in Migge v Wormald Bros Industries Ltd [1972] 2 NSWLR 29. Although his Honour was in dissent, in that case his reasons were approved by the High Court in Migge v Wormald Bros Industries Ltd (1973) 47 ALJR 236. Mason JA said at 43 - 44:

"Whether incapacity for work 'results from' an employment injury is a question of fact to be determined by the Workers' Compensation Commission ... The approach to be taken to that question, an approach which was endorsed by the House of Lords in Hogan's case [Hogan v Bentinck West Hartley Collieries Owners Ltd [ 1949] 1 All ER 588], was expressed by du Parcq L.J. in Rothwell v Caverswall Stone Co. Ltd. [[1944] 2 All ER 350, at p365]:

'In my opinion, the following propositions may be formulated upon the authorities as they stand: first, an existing incapacity "results from" the original injury if it follows, and is caused by, that injury, and may properly be held so to result even if some supervening cause has aggravated the effects of the original injury and prolonged the period of incapacity. If, however, the existing incapacity ought fairly to be attributed to a new cause which has intervened and ought no longer to be attributed to the original injury, it may properly be held to result from the new cause and not from the original injury, even though, but for the original injury, there would have been no incapacity'."

His Honour proceeded to give the example of negligent or inefficient treatment by a doctor that may amount to a new cause justifying a finding that the existing incapacity results from the new cause and does not result from the original injury.

20 In Kooragang Cement Pty Ltd v Bates (1994) 35 NSWLR 452 (at 463) Kirby P (with whom Sheller and Powell JJA agreed) observed that in determining whether death or incapacity results from a relevant work injury, "[w]hat is required is a commonsense evaluation of the causal chain" and stated (at 464):

"[A] point will sometimes be reached where the link in the chain of causation becomes so attenuated that, for legal purposes, it will be held that the causative connection has been snapped. This may be explained in terms of the happening of a novus actus. Or it may be explained in terms of want of sufficient connection. But in each case, the judge deciding the matter, will do well to return, as McHugh JA advised, to the statutory formula and to ask the question whether the disputed incapacity or death 'resulted from' the work injury which is impugned."

21 No mention is made in Kooragang Cement Pty Ltd v Bates of Migge v Wormald Bros Industries Ltd, but nothing said by Kirby P, in the former case, is inconsistent with the remarks of Mason JA. In my opinion the issue, as to whether incapacity for work results from a disability, has to be determined by the general principles relating to causation.

22 In this context, it is significant that, for the respondent to establish that she suffered from a disability within the meaning of s 5 of the Act, she has to contend that her ankle injury arose out of her employment. As explained, there is no basis for an argument that the ankle injury arose in the course of employment. This means that, to prove that her ankle injury arose out of her employment, the respondent has to rely on the knee injury. I have pointed out that this submission on the part of the respondent was upheld by the Review Officer. In so doing, the Review Officer found that the knee injury was an essential link that connected the ankle injury to the employment. It was implicit in this finding that the ankle injury was not a new supervening cause that broke the chain of causation. Put in another way, as a matter of commonsense, the Review Officer implicitly held that, the respondent's employment with the appellant is properly to be seen as having caused her disability brought about by the ankle injury: March v E & M H Stramare Pty Ltd [1991] HCA 12; (1991) 171 CLR 506; Medlin v State Government Insurance Commission [1995] HCA 5; (1995) 182 CLR 1.

23 This finding, and indeed the need for the respondent to rely on the contention that the ankle injury was causatively linked to her employment, is a fundamental obstacle to her contention that the ankle injury constitutes a fresh disability. In the present circumstances, where the disability relied on (caused by the ankle injury) is linked to the incapacity for work through a prior injury (to the knee) said to result in the same disability, the incapacity for work ought fairly to be attributed to the disability caused by the ankle injury only if that disability may properly be held, in effect, to be a new supervening cause. Put in the terms suggested in Medlin v State Government Insurance Commission, the issue is whether, as a matter of commonsense and experience, the incapacity is properly to be seen as resulting from the disability caused by the ankle injury (and not by the knee injury). This inquiry has to take place, however, in the context of a finding (and a submission by the respondent) that the ankle injury was causally linked to her employment by the knee injury (and, hence, the ankle injury gives rise to a disability). On this basis, it has to be (and is) a necessary part of the respondent's case that the ankle injury did not constitute a new supervening act, sufficiently attenuated from the employment, to break the chain of causation. That being so, in my opinion, it becomes impossible for there to be a finding that the ankle injury should be regarded as a new cause to which the respondent's incapacity should be attributed.

24 These difficulties aside, in my view, the facts disclose, in any event, that the respondent's present incapacity results from the original knee injury. At the time the ankle injury was sustained, the respondent was already incapacitated by the knee injury. By then her knee had been significantly weakened by the knee injury to the extent that she could not be employed to carry out her previous duties. For that reason, until about three weeks before the ankle injury was sustained, she was receiving workers' compensation payments (which had ceased only because they had reached the prescribed amount). The ankle injury merely aggravated the incapacity that had previously arisen. In my opinion, it did not constitute a new cause, giving rise to a new and different incapacity, from that brought about by the knee injury.

25 I would uphold the appeal, set aside the orders made by the learned Magistrate and restore the decision of the Review Officer.

26 PARKER J: For the reasons now published by Ipp J I agree that the appeal should be upheld, the orders made by the learned Magistrate set aside, and the decision of the Review Officer restored.