Did the primary judge commit an error of law?
35 Clearly, under s 21 of the PRS Act, the only question which the primary judge had power to decide was whether or not to confirm the respondent's decision under s 10B(3)(a) of the PRS Act that the appellant's incapacitating "Adjustment Disorder", certified under s 10B(1), was not caused by his being "hurt on duty" as defined. His Honour had no power under s 21 of the PRS Act to decide the anterior question, that is, whether or not the STC had correctly certified under s 10B(1) that the appellant was suffering from an "Adjustment Disorder" and was thereby rendered incapable of discharging his duties. So much was common ground between the parties and in accordance with authority: Saad v Commissioner of Police (1995) 12 NSWCCR 70 at 75F.
36 In determining causation under s 10B(3) of the PRS Act reference, in the first place, must be had to two sections of the WC Act: s 4 and s9A. So much follows from the definition of "hurt on duty" in s 1(2) of the PRS Act extracted at [5] above, whereby a member (or former member) is considered to be hurt on duty where their infirmity is such that if the member came under the WC Act they would be entitled to compensation in respect of that infirmity. Under s 9A(1) of the WC Act no compensation is payable unless the worker's employment was "a substantial contributing factor to the injury", while pursuant to s 4(1), a worker is only injured where the definition of 'injury' is satisfied: ie where there is a "personal injury arising out of or in the course of employment" (see also s 4(b) and (c))
37 Accordingly, the Commissioner of Police (or a Compensation Court judge making a determination under s 21 of the PRS Act), in determining if the infirmity was caused by the member being hurt on duty is required, as a primary threshold, to be satisfied of two matters. Firstly, that the employment concerned was a substantial contributing factor to the injury (i.e. the infirmity). Unless s 9A(1) is satisfied, the Commissioner of Police cannot find that the member was "hurt on duty". Secondly, that there is a personal injury in the sense that it arises out of or in the course of employment. The mere finding that both the employment was a substantial contributing factor and that the injury arose out of or in the course of employment is not necessarily determinative of the issue: other provisions of the WC Act may remove any entitlement to compensation, for example, s 14(2) concerning wilful misconduct of the employee. If, however, it is clear that either the employment was not a substantial contributing factor or that the injury did not arise out of or in the course of employment, then there is no causation for the purposes of s 10B(3) of the PSR Act: the infirmity was not caused by the member being "hurt on duty". The satisfaction of both s 9A(1) and s 4 therefore is a necessary but not always a sufficient condition of establishing that an infirmity was caused by the member being hurt on duty.
38 The fact that both s9A and s4 require independent satisfaction has been pointed out recently by this Court: in Mercer v ANZ Banking Group (2000) 48 NSWLR 740 at 747-748 per Mason P with whom Meagher and Beazley JJA agreed (where the phrase "arising out of or in the course of employment" was being considered in the context of s 9A(3)) and McMahon v Lagana [2004] NSWCA 164 at [25] and [33] per Hodgson JA with whom Santow JA and Stein A-JA agreed. Accordingly, an injury may arise out of or in the course of employment (and so satisfy s 4) but in circumstances where the employment may not be a substantial contributing factor to the injury (and thus not satisfy s 9A). This point is also made clear in the wording of s 9A(3). Conversely, in a given circumstance, employment may be considered to be a substantial contributing factor (and so satisfy s 9A) but the injury may not arise out of or be in the course of employment (and so not satisfy s 4).
39 Accordingly, where the Commissioner of Police does not find both s 9A(1) and s 4 satisfied, then causation is, quite simply, not established: the infirmity would not have been caused by the member being hurt on duty. If both s 9A(1) and s 4 are satisfied, then, as I have said above, while a necessary threshold has been satisfied the issue of causation has not necessarily been wholly determined in the sense that another factor, (for instance, wilful misconduct under s 14(2)) may remove any entitlement to compensation. Where this is the case, then the member will equally not have been "hurt on duty" as that term is defined in s 1(2) of the PRS Act.
40 Returning to the decision of the primary judge, it is first necessary to understand what Dr Champion was saying in the passages from his report set out in [27] above and which, as appears from the opening words of [26] of the primary judge's reasons, his Honour accepted as the basis for his decision.
41 The problem arises from the way Dr Champion expressed himself in the following passage from his report:
"…The extreme emotional response he describes and which has led to his retirement, may represent the development of constitutional anxiety and depression ie without any stressful precipitant, however this seems unlikely on the basis that there is no background to suggest a vulnerability to psychiatric disorder, in terms of predisposition."
42 In my opinion that part of this passage commencing with the words "however this seems unlikely" governs, and was intended to govern, only the immediately preceding words, "without any stressful precipitant". Accordingly, Dr Champion was not saying that it was likely that the appellant's constitutional anxiety and depression (and depression was clearly part of, or at least a symptom of, his "adjustment disorder") was due to predisposition without the trigger of a stressful precipitant. On the contrary, Dr Champion was conveying that the appellant's emotional responses were triggered by stressful precipitants. The relevance of Dr Champion's reference to the "development of constitutional anxiety" was that it was his opinion that the underlying cause of the appellant's "extreme emotional response" was his constitutional anxiety. Accordingly, although stressors triggered his symptoms, the underlying cause of his emotional responses was not work related but, as the primary judge described it, a function of his personality or, as Dr Champion described it, due to the development of constitutional anxiety.
43 In my opinion, a fair reading of Dr Champion's summary reveals that he was not seeking to deny the diagnosed condition of "Adjustment Disorder". Rather, he was opining that it was related to the probable development by the appellant of constitutional anxiety and not to his work as a police officer. That this is so is confirmed by Dr Champion's opinion, reproduced by the primary judge in [23] of his judgment, that he did not
"…believe that the various experiences referred to by Mr Larson whilst working as a police officer produced any psychiatric disorder or play any role in current claims of incapacity."