First plaintiff v Second defendant

2 Among other grounds, the plaintiffs contend that, in making this assessment, the panel failed to take s 91(3AAA) into account and thereby fell into jurisdictional error, in particular by failing to take relevant considerations into account, misunderstanding its statutory function and asking itself the wrong question.

3 Section 91(3AAA) provides:

Impairment from industrial deafness or a proportion of such impairment that occurs in circumstances that do not create a liability to pay compensation under this Act must be excluded from the assessment of deafness for the purposes of assessing the degree of impairment under this section.

4 In hearing loss cases, compensation is payable under s 88(2) (and related provisions) for impairment assessed under s 91(3) which specifies how, in percentage terms, the degree of whole person impairment resulting from diminution of hearing is to be assessed.

5 Section 91(3AAA) immediately follows s 91(3). On its face, s 91(3AAA) provides that industrial deafness or a proportion of it occurring in non-compensable circumstances is to be excluded from the assessment of deafness for the purposes of assessing the degree of impairment under 'this section', which includes s 91(3).

6 On a question referred pursuant to s 104B(9)(a), the panel was performing the function of assessing under s 91(3) the degree of whole person impairment resulting from diminution of hearing. But, when doing so, it did not apply s 91(3AAA). Contrary to the submissions of the agent of the authority, the panel

considered that in accordance with the Supreme Court decision of Holden & Anor v Henry Rundle & Kheo Tan Huynh [2011] VSC 663, the Medical Panel is to give an opinion only in relation to the total loss of hearing due to noise exposure.

Accordingly, the panel assessed the total degree of Mr Lord's impairment resulting from all hearing loss and did not attempt to disaggregate impairment occurring in compensable and non-compensable circumstances. That the panel so proceeded is made very clear by its reasons for decision which, incidentally, I regard as adequate.

7 In Holden Ltd v Rundle,[1] Osborn J held that, under the then provisions of the Act, which did not include s 91(3AAA), the panel was not required to exclude impairment or a proportion of it occurring in non-compensable circumstances when assessing the degree of impairment resulting from diminution of hearing under s 91(3). The function of the panel under s 91(3) was medically to determine the degree of the worker's impairment resulting from industrial deafness and, when doing so, 'it was not for the medial panel to disaggregate' any prior deafness.[2]

8 In the present case, Mr Lord had been most recently employed in the building industry in Victoria in circumstances creating a liability to pay compensation under the Act. But he had previously been employed in that industry in New South Wales in circumstances not creating any liability to pay such compensation. It was accepted that some of his impairment resulting from diminution of hearing occurred in compensable circumstances (the most recent employment in Victoria) and had to be included in the assessment of the percentage degree of impairment. The agent of the authority contended that some of it occurred in non-compensable circumstances (the past employment in New South Wales) and had to be excluded from the assessment of the percentage degree of impairment. Whether there was impairment of that latter kind, and whether any such impairment was capable of proper medical identification and exclusion under s 91(3AAA), were real questions which the panel did not go into. In purported reliance upon the decision of Osborn J in Holden Ltd, it simply ignored those questions and assessed Mr Lord's present impairment resulting from diminution of hearing on an aggregate basis.

9 In my view, in so doing the panel fell into the jurisdictional error of which the plaintiffs have complained. On the proper interpretation of the Act, s 91(3AAA) was applicable to the medical function which the panel was performing under s 91(3) of assessing the degree of Mr Lord's whole person impairment in percentage terms. If impairment from industrial deafness or a proportion of it occurring in non-compensable circumstances could have been objectively and scientifically ascertainable in the performance of that function, rather than guessed at or speculated upon, it should have been excluded from the assessment. The panel did not even attempt to do so.

10 Under the provisions of the Act, especially ss 88-91, industrial deafness has its own compensation regime. Although industrial deafness accumulates over time by virtue of innumerable tiny insults to the intricate working parts of the inner ear,[3] it is deemed to be a single injury[4] which has been sustained on a particular day.[5] The statutory function of the panel is medically to determine under s 91(3)[6] the worker's percentage degree of impairment resulting from that injury, not legally to determine under s 88 the amount of compensation which is payable in consequence.[7] The regime is obviously designed to provide compensation for workers for employment-related impairment resulting from diminution of hearing. The provisions of the Act must be interpreted with that beneficial purpose in mind. Therefore, 'where two constructions ... are possible that which is favourable to the worker should be preferred'.[8]

11 The jurisprudence of this court on the interpretation of the provisions governing assessment of impairment has been based on the conceptual distinction between industrial deafness as compensable injury and impairment resulting from diminution of hearing. By reason of that distinction, in Stojcevski v Nisselle[9] it was held by Smith J that the provisions of s 88(1),[10] which apply to the assessment of compensation for industrial deafness, did not affect the operation of the provisions of s 91(3), which apply to the assessment of impairment resulting from that cause.[11] In Holden Ltd, Osborn J agreed and held that s 88(1) 'is not ... relevant to the assessment under s 91 of the worker's degree of permanent impairment by the medical panel'.[12]

12 Based on the special nature of the regime and the conceptual distinction between industrial deafness as compensable injury under s 88(2) and impairment resulting from diminution of hearing under s 91(3), it was submitted for Mr Lord that s 91(3AAA) did not come into play and the panel was right to ignore the provision. On those submissions, the provision is conceptually confused in the way that it deals with industrial deafness in the assessment of impairment. It treats that orange and apple respectively as the same. They are not the same. Industrial deafness is not impairment. Industrial deafness is a physical condition. Impairment is a theoretical construct. The two statutory concepts and processes of assessment are distinct and not conflatable. Industrial deafness is deemed to be a single injury that has been sustained on a particular day. Impairment resulting from industrial deafness is ascertained by testing and then used in the determination of the percentage degree of whole-person impairment on an aggregate basis. Such impairment cannot be disaggregated without violence to the conceptual foundations of the regime. Therefore the provisions of s 91(3AAA) are incapable of being applied in this and perhaps any case.

13 There is much in these submissions which may be accepted but not the proposed interpretation of s 91(3AAA). In cases to which it applies, s 91(3AAA) (like s 88(1)) modifies the operation of the regime. That was the legislature's intention.

14 Section 91(3AAA) was enacted by the Transport Accident and Accident Compensation Legislation Amendment Act 2010 (Vic).[13] It was plainly intended to put beyond doubt that the kind of disaggregation which s 88(1) requires (when possible) in relation to assessment of compensation for industrial deafness under s 88(2) is also required (when possible) in relation to the assessment of the degree of whole person impairment in percentage terms resulting from that cause under s 91(3). It is not conceptually confused. It operates to ensure that, when properly ascertainable, the specified impairment resulting from diminution of hearing is to be excluded from the assessment of impairment which the panel is required medically to determine under s 91(3). What must be excluded is impairment or a proportion of it from industrial deafness which has occurred in circumstances not creating a liability to pay compensation under the Act. Subsection 91(3AAA) is to the assessment of impairment under s 91(3) what subs 88(1) is to the assessment of compensation in s 88(2). As s 88(1) requires (when possible) the disaggregation of industrial deafness, s 91(3AAA) requires (when possible) the disaggregation of impairment from that cause. It was designed to fill the gap to which Smith J referred in Stojcevski and Osborn J referred in Holden Ltd, and it does so.

15 Whether impairment from industrial deafness or a proportion of it has occurred in non-compensable circumstances, and whether any such impairment is capable of measurable ascertainment, is for the panel to determine in the individual case. As a medical opinion, it must have a proper factual and scientific foundation. If such impairment is so ascertainable, it must be excluded from the assessment under s 91(3). If is not so ascertainable, it cannot be guessed at or determined by speculation and therefore cannot be so excluded.[14] Under s 91(3AAB), impairment from industrial deafness is deemed to have occurred at a constant rate within the total number of years of exposure to industrial noise in employment, but only if the panel does not otherwise determine. Whether that rule of thumb is appropriate in the individual circumstances is also a matter for the medical opinion of the panel.

16 The panel did not approach its function in that manner. It simply ignored the application of s 91(3AAA). In so doing, it failed to take into account relevant considerations, misunderstood its statutory function and asked itself the wrong question. It thereby fell into jurisdictional error.

17 It is unnecessary to consider the other grounds of appeal.

18 The certified opinion of the panel dated 7 June 2012 will be quashed and the matter remitted back to the panel for reconsideration according to law. There is no basis for directing that a different panel must reconsider the matter.

[1] [2011] VSC 663 (16 December 2011) ('Holden Ltd').

[3] Commissioner for Railways v Bain [1965] HCA 5; (1965) 112 CLR 246, 251 (Barwick CJ); Accident Compensation Commission v Fletcher [1990] VicRp 10; [1990] VR 102, 111 (Marks J); Victorian Workcover Authority v Del Borgo [2004] VSCA 108; (2004) 9 VR 470, 491 [70] (Eames JA, Winneke P and Ormiston JA agreeing) ('Del Borgo').

[4] Definition of 'industrial deafness' and 'injury' in s 5(1).

[7] Del Borgo [2004] VSCA 108; (2004) 9 VR 470, 489 [62], 493-4 [84] (Eames JA, Winneke P and Ormiston JA agreeing).

[8] Wilson v Wilson's Tile Works Pty Ltd (1960) 104 CLR 328, 335 (Fullagar J); applied in the interpretation of analogous legislation in Victoria in Hegedis v Carlton and United Breweries Ltd [2000] VSC 380; (2000) 4 VR 296, 301-2 [32] (Ashley J) and Del Borgo [2004] VSCA 108; (2004) 9 VR 470, 488-9 [60] (Eames JA, Winneke P and Ormiston JA agreeing).

[9] [2003] VSC 466 (26 November 2003) ('Stojcevski').

Industrial deafness or a proportion of industrial deafness which has occurred in circumstances which do not create any liability to pay compensation under this Act shall be excluded from the assessment of deafness for the purposes of calculating compensation under this section.

[11] Stojcevski [2003] VSC 466 (26 November 2003) [47]-[48].

[12] Holden Ltd [2011] VSC 663 (16 December 2011) [97(c)] (see also [37]-[43]).

[14] Cf Alcoa Holdings Ltd v Lowthian [2011] VSC 245 (24 June 2011) [73] (J Forrest J).