Workers' compensation - Disability - Degree of permanent disability said to be 22 per cent at time of assessment - Condition still unstabilised - Should be further review to enable full evaluation of disability - Whether "unequivocal" statement that disability permanent - Director rejecting referral - Correct test - Medical report to indicate degree of permanent disability

Workers' Compensation & Rehabilitation Act 1981 (WA), s 93D(6)

Edwards v Westaff (Australia) Pty Ltd & Anor, unreported; CM(WA); 179/03; 9 March 2004

1 ROBERTS-SMITH J: This matter first came before me for hearing as a special appointment on Friday 19 March 2004. The potential contradictor (the respondent) had filed a notice that he would abide the court's decision and did not intend to appear. However, there was no appearance for the applicant. As a result, I ordered the application be struck out for want of prosecution.

2 Later that day, the applicant's solicitors advised that counsel had not appeared as a result of a domestic medical emergency, which they explained. They requested the application be re-listed. It was accordingly re-listed before me on the afternoon of 22 March.

3 On that day, in light of counsel's explanation for his non-attendance on the earlier occasion, and the order I made then not having been perfected, I recalled it and set it aside.

4 The substantive matter is the return of an order nisi for a writ of mandamus made by Pullin J on 24 February 2003, calling upon Mr Ross Monger, Director of Workcover WA to show cause why a writ of mandamus should not be issued against him for the purpose of compelling him to accept the referral of the applicant worker's question of his degree of disability by Form 22 dated 5 June 2002.

"1. The report of Dr Kennedy dated 4 June 2002, and accompanying the Form 22 filed on 5 June 2002, did comply with s 93D(6) of the Act.

2. The report of Dr Kennedy indicated Dr Kennedy's opinion that the worker's relevant degree of disability was not less than a relevant level.

3. The Director misstated the applicable law in asking (and/or answering) the question whether or not the said report 'unequivocally' stated that the Applicant's disability is permanent."

6 On 4 January 2002 the applicant was in the employ of Malcolm Thompson Pumps Pty Ltd as a fitter. He was required to attend a job at Kailis warehouse in Canningvale, where a freezer was reported to have a motor problem. The applicant was assisted by two co-workers and they agreed they would need to remove the fan situated above the roof of the freezer to gain access to the motor. While the two co-workers were pushing the fan, the applicant was in a squatting position. He suddenly felt the roof collapse, causing him to fall approximately three metres. He seriously injured his back.

7 The applicant was taken to Fremantle Hospital where a radiological examination of his lumbar spine demonstrated that he had a fracture of the first lumbar vertebrae and retropulsion of bone fragments into the spinal canal. He remained in Fremantle Hospital until 9 January 2002 and was then transferred to St George Bedbrook Spinal Unit, Royal Perth Hospital, Shenton Park campus, where he remained until 13 January 2002. The applicant was fitted with a Jewett thoracolumbar brace and underwent physiotherapy. He has also been treated by Dr John Ker, consultant rehabilitation physician.

8 About 11 January 2002, the employer's insurer admitted liability and commenced weekly payments.

9 As part of the preparation for the worker's compensation application (the Form 22) the applicant's solicitors, Evangel Taylor, referred him to Dr David Kennedy. They wrote to Dr Kennedy on 9 May 2002 requesting a report.

11 The applicant filed a Form 22, with which was included a report from Dr Kennedy dated 4 June 2002, on 5 June 2002.

12 About 11 June 2002 the applicant's solicitors received a letter from the Director dated 7 June 2002 rejecting the application on the grounds that Dr Kennedy's medical report stated the applicant's condition was still quite unstabilised and he believed that the relevant level of disability claimed is not permanent.

13 For present purposes, the relevant portion of Dr Kennedy's 4-1/2 page report dated 4 June 2002 is as follows:

"Mr Urquhart sustained a significant injury to his thoracolumbar spine as a consequence of an industrial accident on 4 January 2002. The injury resulted in a compression fracture of the 1st lumbar vertebra with significant anterior wedging, and Mr Urquhart has been advised by his treating specialist, Mr John Ker, that there has been fusion of two vertebrae during the healing process of this fracture.

Mr Urquhart also sustained damage to the myofascial structures supporting the lower thoracic and lumbar regions of his spine, and continues with an intensive spinal rehabilitation program.

The fracture of the 1st lumbar vertebra is not currently associated with any neurological compromise.

Mr Urquhart is currently incapacitated for his pre-injury occupational duties or any employment for which he has the appropriate education, skills training and work experience, and he will need to undergo a rehabilitation program with a return-to-work trial when cleared to do so by his treating specialist. He may be able to resume a return-to-work trial within the next four to six weeks, dependent upon the results of follow-up x-rays of his lumbar spine.

Mr Urquhart will continue to require physiotherapy over the next twelve to twenty-four months at a cost of approximately $1000 per annum, with review by his general practitioner and treating specialist costing approximately $700 per annum.

Mr Urquhart's prognosis is fair, as it is probable that in the long term he will experience significant problems in his thoracolumbar spine due to the nature and extent of the damage sustained to the 1st lumbar vertebra and the effect that this damage will have upon the associated lower thoracic and upper lumbar vertebrae.

Mr Urquhart was assessed in accordance with the Workers' Compensation and Rehabilitation Act of WA 1981 (as amended in October 1999) utilising the Second Schedule.

At the time that he was assessed, pursuant to Item 36A of the Second Schedule, Mr Urquhart has permanent loss of efficient use of his back of 22%.

Mr Urquhart's condition is still quite unstabilised, as the injuries to his thoracolumbar spine occurred only five months ago. He should be reviewed in six months to enable full evaluation of the loss of spinal function as a result of the injuries sustained at the time of the industrial accident on 4 January 2002.

14 In his letter of 7 June 2002, the Director wrote:

"The Form 22 indicates the disability to be 'back injury' which occurred on 4 January 2002.

I note Dr Kennedy's report states in part:

'At the time that he was assessed, pursuant to Item 36A of the Second Schedule, Mr Urquhart has a permanent loss of efficient use of his back of 22%.

Mr Urquhart's condition is still quite unstabilised, as injuries to his thoracolumbar spine occurred only five months ago. He should be reviewed in six months to enable full evaluation of the loss of spinal function as a result of the injuries sustained at the time of industrial accident on 4 January 2002.'

Part of my function in relation to a worker's referral under section 93D(5) is to examine the medical evidence produced pursuant to section 93D(6).

In my view the report does not unequivocally state that the worker's right shoulder disability is permanent. The comments made by Dr Kennedy in the penultimate paragraph: 'Mr Urquhart's condition is still quite unstabilised...' and 'He should be reviewed in six months to enable full evaluation of the loss of spinal function...' leads me to believe that the degree of disability is not permanent at the level claimed.

For the above reasons I am not satisfied you have provided the medical evidence necessary to indicate a permanent degree of disability above the relevant level claimed. Accordingly I am unable to process the referral."

15 The applicant's submissions may succinctly be summarised in the following way.

16 First it is submitted that the report of Dr Kennedy provided an "indication" of a "relevant level" of disability and that this does not require a wholly accurate or definitive certification. Secondly, it is submitted that even if it were to be assumed that the worker would improve, there is no "contrary indication" shown in the report that the worker would recover to such an extent that his degree of disability would drop below the "relevant level" (16 per cent).

17 Counsel relies particularly upon the decisions of the Full Court of this Court in Girrawheen Tavern v Joseph [2003] WASCA 244 and Clough Engineering v Thomas [2004] WASCA 36.

18 In Girrawheen Tavern, the issue of permanent disability arose on the report of a doctor which described the relevant disability as "... a severe emotional disturbance which has helped to exacerbate and perpetuate the degree of pain perceived by the patient and has given rise to a vicious cycle of pain, anxiety and emotional hurt". The report went on to state that the cycle was well-established and would continue "until some significant event takes place". In the doctor's opinion the most significant event of this nature "would be to finalise this claim as soon as possible".

19 Parker J would have allowed the appeal, being of the view that the report itself sufficiently evidenced that the disability constituted by or arising from the respondent's emotional disturbance may not be permanent ([17]). The Director, and the review officer, were therefore precluded from accepting at face value that the reported disability was permanent in the relevant sense. There was no other evidence on the issue.

20 His Honour agreed with Wheeler J that the reasons in Re Monger; Ex parte Dutch [2001] WASCA 220 at [61]- [62] commend the view that it is not a requirement of s 93D(6) of the Workers' Compensation & Rehabilitation Act 1981 ("the Act") that, for the purposes of that subsection, a medical practitioner's report must make express reference to an assessment according to the applicable statutory criterion. His Honour noted that in particular, as was said in Dutch at [61], in the absence of contrary evidence the Director may accept at face value medical evidence which indicates that the degree of disability is not less than the relevant level and to accept that the assessment was made in accordance with s 93D(2). Finally, his Honour agreed that for the reasons indicated by Wheeler J, a relatively non-technical and generous approach would appear appropriate to the question whether a medical report satisfies the requirements of s 93D(6). I also respectfully agree that that is the correct approach to be taken of this legislation.

21 Wheeler J (with whom McKechnie J agreed) came to the opposite conclusion in respect of the issue of "permanent disability".

22 Her Honour set out [60]-[62] of the judgment of Malcolm CJ (with whom other members of the court agreed) and then added (at [32]):

"The later case of Re Monger; ex parte United Construction Pty Ltd [2002] WASCA 253 contains an analysis of why it is that considerations of fairness and convenience tell against too fine an analysis of the initial medical report. Those considerations include the lack of legal qualifications of review officers, the statutory requirement that they act informally and quickly, and the likelihood that the initial report will often play no significant role in the ultimate decision as to the worker's degree of disability (per Anderson J, pars [39], [45], [46]). To these, I would add what appears to me to be the unfairness inherent in having the availability of common law rights depend upon a close analysis of a document produced by a medical practitioner, who is not legally trained and whose primary focus must necessarily be diagnosis and treatment, rather than satisfaction of detailed legal requirements. All these considerations suggest that, as Malcolm CJ appears to have accepted in Dutch, a relatively non-technical and generous approach should be used in determining whether a report complies with s 93D(6)."

23 Wheeler J considered that a permanent disability is one which, having regard to current knowledge about the available treatment and about the circumstances of the individual worker, is likely to continue indefinitely ("Macquarie Dictionary": "permanent; lasting or intended to last indefinitely; not temporary") (viz [35]).

24 On that understanding she concluded it was open to hold that the doctor was expressing the view that the disability was permanent. She referred to his description of a "vicious cycle" which was "well established" and which he had no doubt would continue "until" some significant event took place. In her Honour's view, that description arguably fell well short of indicating that the finalisation of the worker's claim would lead to a resolution of the psychological problems. It was the only event which the doctor imagined apparently had the capability to end the cycle, but his reference to it was not a prediction that it would in fact have that effect.

25 The point was the subject of further consideration by the Full Court in Clough Engineering v Thomas. In that case both Steytler and Hasluck JJ accepted the view expressed by Olsson AUJ in Re Croser; Ex parte Rutherford [2001] WASCA 422; (2001) 25 WAR 170 who, after mentioning that the words "permanent" or "permanently" are not defined in the Act said (at [94]) that "all of the dictionary definitions of those words convey the notion of that which is continuing indefinitely (ie for the foreseeable future), or enduring, as opposed to temporary". Steytler J pointed out (at [4]) that the "foreseeable future" to which Olsson AUJ was referring was one which was expected to endure indefinitely.

26 Hasluck J (with whom McKechnie J agreed) was also of the view that the operative test is to be found in Re Croser. His Honour noted (at [50]) that Barker J in Re Alexeef; Ex parte Paul [2002] WASC 291 had also accepted the touchstone of the test whether or not a disability is "permanent" or "temporary" is to be found in the observation of Olsson AUJ at [94] in Re Croser, that a condition will be permanent if it is considered likely to continue indefinitely, that is, for the foreseeable future, or enduring, as opposed to temporary.

27 In Thomas the issue arose because of a finding by the review officer that the respondent was suffering from a hard core of psychiatric illness referable to the accident which, despite treatment, would persevere for the foreseeable future. The review officer went on to hold that ([65]):

"The symptomology which is extraneous to this hard core will gradually disappear with the treatment to be administered over the foreseeable future but the hardcore will persist and it is in respect of that that I consider both doctors have given their assessment. I therefore find that the evidence satisfies me that the worker's psychiatric condition is both a consequence/symptom of the nominated disability within the meaning of section 5 of the Act and that it is permanent in the Kinsella sense."

28 The review officer was there referring to Kinsella v Seton Catholic College, unreported; CM (WA); 112/00; 22 February 2001 in which the Compensation Magistrate noted that permanent impairment or a permanent degree of disability might possibly be characterised as one that will last forever, that will last or continue indefinitely, that is more likely than not to persist in the foreseeable future or that is stabilised, and unlikely to change substantially. The review officer in Thomas applied the Kinsella test by asking whether or not the disability was more likely than not to persist in the foreseeable future.

29 Hasluck J was not persuaded that there is any significant difference in the way in which the notion of a permanent disability was described by the Full Court in Re Croser and the way in which it was described by the Compensation Magistrate in Kinsella, so that when the review officer purported to apply the latter to the circumstances of that case, he was speaking essentially of a disability that was enduring, in that it would continue for the foreseeable future ([87]).

30 The question then arose as to whether the conclusion of the review officer could be said to conform to the test in circumstances where further treatment is contemplated and there is a suggestion that it may lead gradually to a disappearance or amelioration of some of the symptomology. He was not satisfied that any error of law was disclosed. In his Honour's view ([90]):

"... it is clear from the passage in question that Review Officer Warwick has identified a hardcore of psychiatric illness which will persevere for the foreseeable future, and his comments concerning treatment relate only to certain outward or extraneous manifestations of the underlying condition. This view appears to have been open on the evidence before him, and is consistent with the notion that medication will often relieve discomfort without necessarily curing or removing the underlying condition."

31 The first thing that may be said about Dr Kennedy's report is that there is no suggestion it is statutorily deficient in any other respect than failing to indicate a permanent degree of disability not less than the level claimed.

32 The second thing is that there is nothing inconsistent in stating the worker has suffered a permanent loss of function of 22 per cent but that as his condition is still quite unstabilised, he should be reviewed in six months to enable full evaluation of the loss of spinal function.

33 Taking a "relatively non-technical and generous approach" and noting there is an absence of evidence to the contrary, the most obvious and reasonable understanding of what Dr Kennedy meant by that, is that the worker's permanent loss can presently be assessed to be 22 per cent, but as his condition has not stabilised, the extent of permanent loss could later be assessed as greater than 22 per cent.

34 At this threshold jurisdictional stage, there are only two relevant levels of permanent disability. They are not less than 16 per cent and not less than 30 per cent (s 93E of the Act). The effect of the statutory provisions was explained by Malcolm CJ in Dutch to be to create three categories of injured workers. The first is of workers with a disability of less than 16 per cent. They can claim workers' compensation and have no right of action for damages at common law. The second is of workers who have a disability of between 16 per cent but less than 30 per cent. They are required to make an election within a strict time limit whether to receive statutory benefits or to exercise their right of action at common law. The third category comprises workers whose disability is determined to be 30 per cent or more. They are entitled to exercise their common law rights without any limitation on the amount of damages and are entitled to receive statutory benefits in the meantime.

35 The referral was put forward on the basis the degree of permanent disability was not less than 22 per cent. A reasonable reading of Dr Kennedy's report is that it is at least 22 per cent, but could later be assessed to be more than that, once the worker's condition stabilises.

36 It would be contrary to the legislative purpose to strain the construction of Dr Kennedy's report so as to read it as indicating a possibility that in the foreseeable future the degree of permanent disability could be something less than 16 per cent - and unless it were to be less than 16 per cent it could not affect the referral.

37 The Director approached his task by asking whether the report "unequivocally" stated the worker's disability is permanent.

38 All that is required under s 93D(6) of the Act is medical evidence from a medical practitioner "indicating" in the medical practitioner's opinion the degree of disability is not less than the relevant level.

39 To indicate something is to point towards, or to state or express something briefly, or in a general way. To require an "unequivocal statement" of something is to require substantially more than an indication of it.

40 The doctor did in fact expressly state the assessed level of disability was permanent. There was no "equivocation" about that, but in any event, to require an "unequivocal" statement to that effect is to add, to the detriment of the worker, a gloss which is not to be found in the legislation and which is contrary to the legislative purpose.

41 Although the application purports to set out three grounds, the first two are simply statements. The real ground of the application is the third. That asserts that the Director mis-stated the law in asking (and/or answering) the question whether or not the report "unequivocally" stated that the applicant's disability is permanent.

42 For the reasons given above, that ground has been made out.

43 The order nisi for mandamus will be made absolute.