Rail Services Australia v Dimovski & Anor

Court of Appeal (NSW)|2004-08-11|Before: Handley JA, Hodgson JA, Young CJ

CITATION : Rail Services Australia v Dimovski & Anor [2004] NSWCA 267 HEARING DATE(S) : 17/02/2004 JUDGMENT DATE : 11 August 2004

JUDGMENT OF : Handley JA at 1; Hodgson JA at 38; Young CJ in Eq at 72 DECISION : 1. Appeal against the awards in favour of the worker, the first respondent, dismissed with costs.; 2. Motion for summary dismissal of the appeal filed by the first respondent dismissed with costs.; 3. Appeal against the award for the State Rail Authority, the second respondent, allowed.; 4. The award in the Compensation Court in favour of the second respondent set aside.; 5. Order that the proceedings be remitted to the District Court to hear and determine the appellant's claim for apportionment or contribution from the second respondent.; 6. The second respondent is to pay one-half of the appellant's costs of the appeal excluding any costs payable by it to the first respondent.

LOWER COURT Compensation Court JURISDICTION : LOWER COURT CC 5731/01 FILE NUMBER(S) : LOWER COURT Ashford CCJ JUDICIAL OFFICER :

THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40686/02

HANDLEY JA HODGSON JA YOUNG CJ in Eq

11 AUGUST 2004 RAIL SERVICES AUSTRALIA v STEVE DIMOVSKI & ANOR CATCHWORDS RES JUDICATA - issue estoppel - no estoppel in changing situation

WORKERS COMPENSATION - injury - disease - frank injury - workers compensation - causation - results from injury

WORKERS COMPENSATION - causation - results from two or more injuries - apportionment or contribution FACTS

The worker injured his left knee working for the State Rail Authority prior to 1 July 1996 on which date that corporation became two corporations, the appellant was created, and the worker's employment was transferred to it. In October 1996 the worker settled his claim under s 66 for loss of the use of his left leg by a consent award based on a 25% loss. He injured his left knee and back working for the appellant on 28 May 1998. He ceased work on 20 August and was terminated on 6 January 1999. He began to favour his left leg and as a result suffered an overuse injury to his right leg on and after March 1999. He claimed lump sum compensation under ss 66 and 67 from both corporations.

The Compensation Court assessed the loss of the use of the worker's left leg at 25% and made no further award for that leg. However it made awards under s 66 for impairment of the back and the loss of the use of the right leg which exceeded the threshold in s 67 and made an award for pain and suffering under that section. It treated the case as covered by s 16 and refused to award the appellant apportionment or contribution from the State Rail Authority under s 22. On appeal HELD: (1) The 1996 consent award created issue estoppels but these did not compel the Court to award additional compensation for the 1998 injury to the left leg: O'Donel v Commissioner for Road Transport (1938) 59 CLR 744 applied; (2) The awards for the back and the right leg were the result of the same injury within s 67 and the worker was entitled to retain his award under that section: Sidiropoulos v Able Placements Pty Ltd (1998) 16 NSWCCR 123 approved; (3) The 1998 frank injury to the left leg was not an aggravation of a disease injury with s 16: Colliar v Bulley (2000) 19 NSWCCR 302 not followed; (4) The appellant could therefore claim apportionment or contribution under s 22 from the State Rail Authority. ORDERS

Appeal against the awards in favour of the worker, the first respondent, dismissed with costs.

Motion for summary dismissal of the appeal filed by the first respondent dismissed with costs.

Appeal against the award for the State Rail Authority, the second respondent, allowed.

The award in the Compensation Court in favour of the second respondent set aside.

Order that the proceedings be remitted to the District Court to hear and determine the appellant's claim for apportionment or contribution from the second respondent.
The second respondent is to pay one-half of the appellant's costs of the appeal excluding any costs payable by it to the first respondent.

THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40686/02

HANDLEY JA HODGSON JA YOUNG CJ in Eq

11 AUGUST 2004 RAIL SERVICES AUSTRALIA v STEVE DIMOVSKI & ANOR Judgment 1 HANDLEY JA: This appeal involves a dispute between two State trading corporations as to their liability for workers compensation payments to Mr Dimovski who worked for the second respondent before his employment was transferred by statute to the appellant. In June 1995 while working for the second respondent he injured his left knee, and after time off he returned to light duties. On 1 July 1996 the State Rail Authority became two corporations, the second respondent retained the name and continued to operate the train service while the appellant assumed responsibility for the railway network. 2 On 8 July 1996 the worker returned to full duties with the appellant but had continuing problems with his left knee. On 16 October 1996 he settled his compensation claim against the second respondent for an award for 25% loss of the use of his left leg at or above the knee and a lump sum for pain and suffering. 3 On 28 May 1998 the worker injured his left knee and back working for the appellant. He returned to work on light duties on 18 July but ceased work on 20 August. He remained off work and was officially terminated on 6 January 1999. Shortly afterwards he began to experience symptoms in his right leg. 4 His application for compensation was heard by Ashford CCJ who made awards of weekly compensation and lump sum awards for 10% permanent impairment of the back, 10% loss of the use of the right leg at or above the knee and a further award for pain and suffering. 5 The awards for weekly compensation and the back are not in dispute. The award for the right leg is challenged, and if this is set aside the worker would fall below the threshold and lose his award for pain and suffering. The appellant also seeks apportionment or contribution from the second respondent. 6 The worker alleged that he sustained two injuries to his left leg while employed by the appellant, one as a result of the nature and conditions of his work between 1 July 1996 and 15 August 1998, and the other the frank injury on 28 May (red 25 para 48). The Judge found that he sustained both injuries (red 26 para 50). Although satisfied that he had suffered these injuries she found that he "now has 25 per cent loss of the left leg at or above the knee". She noted that the prior award had been made by consent and said it was "possibly not reflective of an accurate assessment". She made no award for the left leg. 7 She then found that "as a result of the further injury to his left leg" the worker began to favour that leg and as a result developed symptoms in his right leg. This finding supported the award for the right leg. The Judge followed the majority decision of this Court in Colliar v Bulley (2000) 19 NSWCCR 302 and held that s 16 applied so that the whole award had to be met by the appellant. 8 One submission by Mr King SC for the appellant can quickly be disposed of. He submitted that there was no satisfactory evidentiary foundation for the finding that the additional injury to the left leg caused the injury to the right leg but it was supported by the evidence of the worker (black 27) and evidence in report form from medical experts (blue 27, 59, 70). 9 Mr King submitted that the Judge erred in law in failing to give effect to the estoppel created by the consent award by finding that although the worker had suffered further injuries to his left leg his current loss of use was still only 25%. A consent judgment can create res judicata estoppels: Spencer Bower, Turner & Handley "Res Judicata" 1996 pp 21-2. The estoppels flowing from the consent award bound the second respondent as a party and the appellant as a privy in interest, as the second respondent's statutory successor: Spencer Bower & Ors (above) pp 119-22. 10 The argument based on issue estoppel involved two propositions. The first was that the consent award conclusively determined that as at 16 October 1996 the worker had a permanent impairment of his left leg at or above the knee of 25% which was the result of an injury or injuries sustained in the employment of the second respondent. This is correct. The second was that he suffered two further injuries to his left leg in the employment of the appellant, one from the nature and conditions of his work, and the other the frank injury on 25 May 1998. This was also correct. 11 If these further injuries caused other than temporary aggravations of the worker's condition they must have increased the impairment in his left leg. The Judge did not find that they only caused temporary aggravations, but nevertheless found no increased impairment. Accordingly it was submitted that she had disregarded the estoppel. Mr King relied strongly on her statement that the consent award was "possibly not reflective of an accurate assessment". 12 These submissions must be rejected because they are contrary to the principles established in O'Donel v Commissioner for Road Transport (1938) 59 CLR 744. A decision that a worker's total blindness between 14 September 1934 and 15 February 1935 arose from an injury in the course of his employment was held not to issue estop the employer from contending that his blindness after 15 February 1935 arose from other causes. Evatt J said at 763: "The argument involves and is based upon the fallacy that where an issue between A and B related to a state of things which is capable of subsequent alteration, the conclusive determination in A's favour of that state of things as at one date plus conclusive proof that up to a later day there has been no alteration of such state of things establishes in A's favour as against B an estoppel as to the state of things existing at the later day … this method, thought logically sound, is not permitted by law … The unsuccessful party is bound by the authoritative determination of every fundamental issue but when a distinct and separate issue arises subsequently, he is not bound to submit to the second issue being established by the combination of a former issue with additional evidence, no matter how strong such evidence may be." 13 An example given by Evatt J illustrates the effect of his reasoning on the valuation of land. He said that a judicial valuation as at one date with evidence that there had been no change in value up to a later date would not issue estop the parties as to the value at the later date. The analogy is that a judicial valuation at one date plus evidence of a subsequent increase in value would not require a judicial valuer to find a higher value at the later date. Equally a binding determination of the extent of impairment at one date plus evidence of further injuries did not require the Judge to find increased impairment at the later date. 14 The Judge's remark that the consent award was "possibly" not an accurate assessment did not contravene res judicata principles. She had to determine the extent of the impairment at the date of trial. The consent award involved admissions by the parties and these, coupled with the presumption of continuance, were of some weight. However there was much other evidence, lay and expert, relating to the worker's impairment at the later date and the weight to be given to the admissions and the presumption of continuance was a question of fact for the Judge. 15 Her task was to assess the extent of the worker's current impairment following the later injuries without legal constraints flowing from the earlier award. Having made her assessment she was not obliged to find an explanation for the discrepancy. There were a number of possible explanations and her tentative speculation about one was simply irrelevant. Its disclosure did not reveal legal error. 16 The next points taken by the appellant were based on the interaction of the frank injury in 1995 during employment with the second respondent and the nature and conditions of work injury and the 1998 frank injury during employment with the appellant. The Judge held that the later injuries fell within s 16. 17 Section 16 applies where the injury consists in the aggravation etc of a disease, and sub-section (1)(b) provides that in such a case compensation is payable by the employer who last employed the worker in employment that was a substantial contributing factor. The section is based on para (b) of the definition of injury in s 4 which includes in sub-para (b)(ii) the aggravation etc of a disease where the employment was a contributing factor. 18 Section 16(2) makes limited provision for contribution to be recoverable from a previous employer, but this is only available from a previous employer who employed the worker within 12 months before his death or incapacity. Section 16(2) did not apply because the worker's incapacity arose more than 12 months after his employment with the second respondent. 19 The appellant sought to bring itself within s 22, the general apportionment and contribution section. Its only other attack was directed to the award for pain and suffering under s 67(1). The right to such an award depends on the lump sum awards under s 66 passing a monetary threshold. The section enables two or more awards for losses to be aggregated, but only if they were "losses as a result of the same injury". 20 Where apportionment or contribution is sought under s 22 the Court's first task is to determine the compensation payable to the worker: Sutherland Shire Council v Baltica General Insurance Co Ltd (1996) 39 NSWLR 87 (Baltica). Clarke JA there held that the power to award apportionment or contribution under s 22 does not affect the rights of the worker which must be determined independently. He also held (at p 99) that s 22 did not affect the established tests for causation under s 25 (in the case of death) or s 33 (in the case of incapacity). Although he did not consider ss 66 and 67 in terms his reasoning is equally applicable to both. The decision of Neilson CCJ in Sidiropoulos v Able Placements Pty Ltd (1998) 16 NSWCCR 123, 128 (Sidiropoulos) to this effect is, with respect, clearly correct. 21 The worker remained at work on 28 May 1998 and worked one day on light duties the following week but was then off work until July. He then performed light duties until he ceased work on 20 August. Dr Habib examined him on 10 August and found clinical evidence of an anterior cruciate ligament rupture and a medial meniscal lesion in his left knee. These findings were confirmed by an MRI in January 1999. It is clear therefore that the worker suffered a frank injury to his left knee on 28 May. 22 Although the Judge found that the case fell within s 16 she did not find that the worker was suffering from a disease in his left knee and Dr Habib did not state that he was. The Judge said that the worker had suffered injury to his left leg in the employment of the second respondent, and that employment with the appellant "was causative of an aggravation of that injury". This was not a finding that he suffered from a disease in his left knee. 23 The trial Judge followed the majority decision of this Court in Colliar v Bulley (2000) 19 NSWCCR 302 but did not refer to Lyons v Master Builders Association of New South Wales Pty Ltd (2003) 25 NSWCCR 422 (Lyons) where Neilson CCJ held that Colliar v Bulley was inconsistent with the earlier decision of this Court, again by majority, in Australian Conveyor Engineering Pty Ltd v Mecha Engineering Pty Ltd (1998) 45 NSWLR 606. He reviewed both decisions, preferred the reasoning in Australian Conveyor Engineering, and declined to follow Colliar v Bulley. 24 In Colliar v Bulley the majority comprised Meagher JA and Davies AJA. Priestley JA dissented. Davies AJA, with whom Meagher JA simply concurred, decided that a worker's employment could contribute to the aggravation etc of a disease either by its long term effects or by a single incident, and that s 16 applied in both situations. He also held, in accordance with authority, that s 16 contained a special code which excluded the general provision for apportionment and contribution in s 22: MLC Insurance Ltd v Pinto 1994) 10 NSWCCR 101 CA; Yates Bros (Stratford) Pty Ltd v Neil [1999] NSWCA 108 at [14]; Colliar v Bulley at 327. 25 Colliar v Bulley did not necessarily raise any question about the relationship between s 16 and the definition of injury in s 4. Davies AJA also said at pp 324-5: "The trial Judge found that Mrs Bulley's injury on 6 October 1995 was an injury 'being in the nature of a further aggravation of degenerative changes'. That finding accorded with the medical evidence which the trial Judge accepted … If there was any injury other than an aggravation to the ongoing arthritic condition in Mrs Bulley's knees, it was not identified in the evidence or by the trial Judge.

Mrs Bulley's injury satisfied the terms of s 16 in that it consisted in the aggravation … of a disease. The finding by the trial Judge, which was based on the evidence, was that the nature of Mrs Bulley's injury was an aggravation of degenerative changes. No other injury was identified or relied on." 26 On that view of the facts the injury at work in October 1995 was not a frank injury within para (a) of the definition in s 4, but was only within para (b)(ii) of the definition. This may not have been a correct interpretation of the trial Judge's findings because he also found that the worker "suffered a frank injury to the knee". However Davies AJA did not base his decision on his characterisation of the injury. He concluded at p 326: "I do not accept that an injury, which constitutes an aggravation … of a disease and to which the employment has contributed, falls outside s 16 simply because the claim for compensation was or could have been framed in terms of para (a) of the definition." 27 In Lyons a bricklayer suffered two frank injuries to his left knee, the last in February 2000, while employed by the respondent. He ceased work for personal reasons but resumed work as a bricklayer for a different employer about 15 months later. After some months he had to give up that work because of continuing problems with his left knee. An MRI scan of the left knee in April 2000 showed a partial tear of the anterior cruciate ligament, a strain of the medial collateral ligament and low-grade chondromalacia patellae. 28 The worker claimed compensation from the first employer who argued, in reliance on Colliar v Bulley, that the case fell within s 16 and that the second employer who last employed the worker in employment that was a substantial contributing factor was liable to the exclusion of the former employer. Neilson CCJ rejected this submission saying at pp 429-30: "As to the respondent's reliance on … Colliar v Bulley I must point out that it is completely inconsistent with the earlier decision of the Court of Appeal in Australian Conveyor Engineering Pty Ltd v Mecha Engineering Pty Ltd (1998) 45 NSWLR 606 … In my view, the weight of the judicial opinion in the Court of Appeal is in favour of the correctness of Australian Conveyor Engineering . … where there are two inconsistent decisions of an intermediate appellate court, the first in time ought to be followed … Here I have found a frank injury initiated chondromalacia patellae which is a degenerative disease process. That should be an injury simpliciter within s 4 and one does not need to have recourse to … s 16 … Indeed, if I might respectfully say so, the majority decision in Colliar v Bulley really fails to distinguish between the receipt of the injury or the injurious event and the pathology arising from the event …

Here, the injury, meaning the pathology, was received in a frank incident on 12 February and was not by way of a disease process … Accordingly, both on the factual basis - that is, I am not persuaded that there was any relevant aggravation … by the applicant's work with [the later employer] … and because of the state of the law … I reject the respondent's submission that the case is governed by Colliar v Bulley and that no compensation is payable by the respondent." 29 The Judge's findings in this case [para 21] establish that the worker suffered a frank injury to his left knee on 28 May 1998 which caused the pathology found by Dr Habib on 10 August that was confirmed by the MRI in January 1999. She found that this injury aggravated the effect of the earlier injury sustained while he was employed by the second respondent. As such the injury fell within para (a) of the definition in s 4. As previously noted she did not find that the worker was suffering from a disease. Nor did she find that the worker's employment with the appellant after the injury on 28 May "was a substantial contributing factor to the aggravation" (s 16(1)(b)). If Colliar v Bulley is authority for the proposition that an injury of this nature is within s 16 I would decline to follow it for the reasons given by Neilson CCJ in Lyons. In my judgment the frank injury to the left knee was not within s 16. 30 The appellant acknowledged that the Judge had aggregated her awards for impairment of the back and for the loss of use of the right leg at or above the knee to find that the threshold in s 67(1) had been met. I have already disposed of the only challenge to these individual awards but the appellant contends that they cannot be aggregated because the back injury was sustained on 28 May 1998 while the injury to the right knee was sustained in and after March 1999. It was submitted that these losses were not the result of the same injury. 31 In s 67(1) the words "same injury" do not refer to the pathology in the worker's body, because the section permits the aggregation of two or more losses which result from the same injury and each loss will reflect its own pathology. The "same injury" can only refer to injury in the sense of the injurious event, to borrow the language of Neilson CCJ in Lyons [para 27]. It is important to note, as Windeyer J said in the High Court that in the present inquiry "the Court is concerned with genesis rather than revelation". See Lyons at 428. In this case the injurious event occurred on 28 May during employment with the appellant. The only question could be whether the injury to the right knee was "a result of" this injury. 32 The Judge evidently found that it did because she aggregated that injury with the back injury. She said: "I am satisfied that as a result of the further injury to his left leg in the employ of the second respondent the applicant began to favour that leg and as a consequence developed symptoms in his right leg." 33 These findings are supported by evidence and the only challenge available to the appellant is a submission that it was not open to the Judge, as a matter of law, to find that the pathology in the right knee was a result of the injury to the left knee. However this Court held in Kooragang Cement Pty Ltd v Bates (1994) 35 NSWLR 452 that there is no such principle. Kirby P said in that case at 462: "… it has been well recognised in this jurisdiction that an injury can set in train a series of events. If the chain is unbroken and provides the relevant causative explanation of the incapacity or death from which the claim comes, it will be open to the Compensation Court to award compensation under the Act." In that case this Court upheld an award based on a fatal heart attack in 1992 which was found to be the result of an injury at work in 1981. 34 The fact that nine or ten months intervened in this case before pathology became evident in the worker's right leg does not exclude a finding of fact that it was a result of the injury to the left. For the same reason the intervening use by the worker of both legs, his conscious or unconscious decision to favour his left, and the pre-existing pathology in that leg do not, as a matter of law, invalidate her Honour's finding that the pathology in the right leg was a result of the frank injury to the left on 28 May 1998. 35 Since s 22 in its current form does not affect the test of causation that the Compensation Court is bound to apply before making awards under ss 66 and 67, and compensation must be assessed before apportionment and contribution are considered, the injury or injuries to his left leg that the worker suffered while employed by the second respondent are ignored at this stage of the inquiry. The cumulative affect of all injuries to the left leg which caused one loss of its efficient use at or above the knee are treated as a result of the last causative injury. See Sidiropoulos at 125 and 128. The appeal against the lump sum awards therefore fails. 36 Section 22(1) provides that if the incapacity or loss suffered by a worker "results from more than one injury" liability to pay compensation is to be apportioned by the Compensation Court. Sub-section (1A) provides that incapacity, loss or liability that "results partly from one injury and partly from one or more other injuries is taken to have resulted from more than one injury". Since I have concluded that the Judge's finding as to the injury on 28 May 1998 established, as a matter of law, that the injury fell within para (a) of the definition of injury and not within para (b)(ii) and s 16(1) the appellant was entitled to claim apportionment or contribution from the second respondent under ss 22 and 22A. The applicable tests were stated by Clarke JA in Baltica at 94: "The introduction into sub-section (1) of the wider meaning of the expression 'results from more than one injury' means … that the trial Court is concerned to have regard to more than one test. The first is the old test and the second is the new test in which the Court's attention is directed to the question whether the incapacity results partly from one and partly from one or more other injuries. Not only is there an additional test but it is one which is not to be found in other parts of the Act.

These tests, in terms, require the Court to determine, whenever apportionment is sought, whether the incapacity results from more than one injury. In considering that question the Court is first obliged to inquire whether the incapacity, in strictness, resulted from more than one injury. However the answer to that question will not necessarily provide a resolution of the claim for the Court may be required to go further and inquire whether the incapacity resulted partly from one injury and partly from another injury or other injuries. Both tests give rise to questions of fact …

What is involved in the wider test introduced by s 22(1A) is an inquiry whether the incapacity was so connected with a number of injuries that, as a matter of ordinary commonsense and experience, it should be regarded as having resulted partly from all or any of them." 37 The Judge having held that the 1998 injuries fell within s 16 did not further consider the appellant's claim against the second respondent. In this respect the appeal succeeds and the claim for apportionment or contribution must be remitted to the District Court for determination. The following orders should be made:

Appeal against the awards in favour of the worker, the first respondent, dismissed with costs.

Motion for summary dismissal of the appeal filed by the first respondent dismissed with costs.

Appeal against the award for the State Rail Authority, the second respondent, allowed.

The award in the Compensation Court in favour of the second respondent set aside.

Order that the proceedings be remitted to the District Court to hear and determine the appellant's claim for apportionment or contribution from the second respondent.

The second respondent is to pay one-half of the appellant's costs of the appeal excluding any costs payable by it to the first respondent. 38 HODGSON JA: On 10 July 2002, Ashford CCJ disposed of proceedings in which the first respondent (the worker) has sought compensation from the second respondent (SRA) and the appellant (Rail Services). The primary judge made awards against Rail Services by way of weekly compensation on the basis of partial incapacity from 6 January 1999 to date and continuing, lump sum awards for 10% permanent impairment of the back and 10% loss of the right leg at or above the knee, and $10,000 in respect of pain and suffering; and made an award for SRA. 39 Rail Services appeals against this decision.

CIRCUMSTANCES 40 On 6 June 1995, the worker suffered an injury to his left leg in the course of his employment with SRA, with whom he had been employed since 25 January 1990. He was off work for a time, and then returned to light duties. 41 On 1 July 1996, part of the undertaking of SRA was transferred by statute to Rail Services; and the employment of the worker was thereby transferred to Rail Services. 42 On 8 July 1996, the worker returned to full duties with Rail Services but had continuing problems with his left leg. 43 On 16 October 1996, the worker settled a compensation claim brought against SRA for an award for 25% loss of the left leg at or above the knee, and a lump sum for pain and suffering. 44 On 20 May 1998, the worker injured his left knee and back in the course of his employment with Rail Services. He remained at work that day, worked the next day on light duties, but was then off work until July 1998. Then he performed light duties, until he ceased work on 20 August 1998. He has never returned to work. His employment by Rail Services was terminated on 6 January 1999. 45 In about March 1999, he began to experience symptoms in his right leg.

DECISION OF PRIMARY JUDGE 46 As against SRA, the worker relied on a nature and conditions claim for the period 25 January 1990 to 30 June 1996, and on frank injuries on 9 May 1994 and 6 June 1995. 47 Against Rail Services, the worker relied on a nature and conditions claim for the period 1 July 1996 to 15 August 1998, and a frank injury on 28 May 1998. 48 The primary judge found that the worker suffered an injury to his left leg in the employment of SRA on 6 June 1995, and also further injuries to his left leg in the employment of Rail Services between 1 July 1996 and 15 August 1998, and also on 28 May 1998; but found that the worker "now" had a 25% loss of the left leg at or above the knee (the same as in the consent award of 16 October 1996). 49 The primary judge also found that, by reason of the further injuries to the left leg, the worker began to over use that leg, and that caused symptoms in the right leg; and on that basis, made the award based on 10% loss of the right leg at or above the knee. 50 The primary judge found that the worker suffered 10% permanent impairment of the back as a result of the injury on 28 May 1998; and that, when aggregated, the awards of compensation for the back and right leg crossed the threshold necessary for an award for pain and suffering under s.67 of the Workers Compensation Act 1987 (the Act). 51 The primary judge held that the worker's continuing incapacity arose at the time he ceased work with Rail Services; and that the employment by Rail Services caused the back injury, and also caused aggravation of the left leg injury and thereby the right leg symptoms. The primary judge held that the provisions of s.16 of the Act applied, and that, in accordance with Colliar v. Bulley (2000) 19 NSWCCR 302, the award should be met by Rail Services alone.

ISSUES ON APPEAL 52 Rail Services raised three issues against the worker: 1. That there was no satisfactory evidence supporting the finding concerning the right leg. 2. That the judgment was vitiated by error in the way the primary judge dealt with the effect of the earlier consent award. 3. That aggregation was not available to support the award for pain and suffering. 53 Rail Services also alleged error in the primary judge's application of s.16 of the Act so as to make Rail Services entirely responsible for the continuing weekly compensation.

STATUTORY PROVISIONS 54 The appeal requires reference to the definition of injury in s.4 of the Act, the provisions of ss.16, 22 and s.67(1), (1A) and (2) at the relevant time. Those provisions are as follows: 4 Definition of "injury" In this Act: injury : (a) means personal injury arising out of or in the course of employment, (b) includes: (i) a disease which is contracted by a worker in the course of employment and to which the employment was a contributing factor, and (ii) the aggravation, acceleration, exacerbation or deterioration of any disease, where the employment was a contributing factor to the aggravation, acceleration, exacerbation or deterioration, and (c) does not include (except in the case of a worker employed in or about a mine to which the Coal Mines Regulation Act 1982 applies) a dust disease, as defined by the Workers' Compensation (Dust Diseases) Act 1942, or the aggravation, acceleration, exacerbation or deterioration of a dust disease, as so defined.

16 Aggravation etc of diseases - employer liable, date of injury etc (1) If an injury consists in the aggravation, acceleration, exacerbation or deterioration of a disease: (a) the injury shall, for the purposes of this Act, be deemed to have happened: (i) at the time of the worker's death or incapacity, or (ii) if death or incapacity has not resulted from the injury - at the time the worker makes a claim for compensation with respect to the injury, and (b) compensation is payable by the employer who last employed the worker in employment that was a substantial contributing factor to the aggravation, acceleration, exacerbation or deterioration. (2) Any employers who, during the 12 months preceding a worker's death or incapacity or the date of the claim (as the case requires), employed the worker in any such employment shall be liable to make to the employer by whom compensation is payable such contributions as, in default of agreement, may be determined by the Compensation Court. (2A) The Compensation Court is to determine the contributions that a particular employer is liable to make on the basis of the following formula, or on such other basis as the Court considers just and equitable in the special circumstances of the case:

where: C is the contribution to be calculated for the particular employer concerned, T is the amount of compensation to which the employer is required to contribute, A is the total period of employment of the worker with the employer during the 12 month period concerned, in employment that has been a substantial contributing factor to the aggravation, acceleration, exacerbation or deterioration concerned, B is the total period of employment of the worker with all employers during the 12 month period concerned, in employment that has been a substantial contributing factor to the aggravation, acceleration, exacerbation or deterioration concerned. (3) In this section, a reference to an injury includes a reference to a loss or impairment for which compensation is payable under Division 4 of Part 3. (4) This section does not apply to an injury to which section 17 applies.

22 Compensation to be apportioned where more than one injury (1) If: (a) the death or incapacity of a worker, or (b) a loss suffered by a worker as referred to in Division 4 of Part 3, or (c) a liability under Division 3 of Part 3 to a worker, results from more than one injury to the worker, liability to pay compensation under this Act is to be apportioned in such manner as the Compensation Court determines. (1A) Death, incapacity, loss or liability that results partly from one injury and partly from one or more other injuries is taken to have resulted from more than one injury. (2) Liability to pay compensation under this Act includes: (a) the liability of an employer (including an employer who is a self-insurer), and (b) the liability of an insurer under a policy of insurance in respect of the payment of that compensation (including a direct liability to the worker), and (c) a liability under the Uninsured Liability and Indemnity Scheme, and (d) in the case of a worker who is partially incapacitated for work, a liability that arises because the worker is entitled to be compensated under this Act as if totally incapacitated. (3) Liability to pay compensation under this Act is not to be apportioned by the Compensation Court if the parties to whom the liability relates have agreed on the apportionment. (4) Liability to pay compensation under this Act may be apportioned by the Compensation Court even though it is the liability of a single insurer in respect of different periods of insurance, but only if the employer or the Authority applies for such an apportionment. (5) The Compensation Court may, on the application of any insurer or employer concerned or of the Authority, determine a dispute as to whether: (a) liability to pay compensation under this Act should be apportioned under this section, or (b) any such liability should be apportioned under this section in respect of different injuries. The determination of the Compensation Court has effect despite any agreement on apportionment if the application for determination was made by an employer (in the employer's own right) or the Authority. (6) (Repealed) (7) A person who is liable to pay compensation under this Act is not entitled in any proceedings under this Act to a reduction in that liability by apportionment on account of the existence of any other person who is also liable to pay any part of that compensation unless that other person is a party to the proceedings. (8) This section applies to any liability arising before or after the commencement of this Act.

67 Compensation for pain and suffering (1) A worker who has suffered a loss mentioned in the Table to this Division (or 2 or more of any such losses as a result of the same injury) is entitled to receive from the worker's employer by way of compensation for pain and suffering resulting from the loss or all those losses, in addition to any other compensation under this Act, an amount not exceeding $50,000. (1A) Because there is a distinction between injury and loss resulting from an injury (and compensation is payable under this section only for pain and suffering resulting from a loss), the pain and suffering for which compensation is payable under this section does not include pain and suffering that results from the injury but not from the loss. (2) This section does not apply if the compensation paid or payable under section 66 for the loss or all those losses is less than 10 per cent of the maximum amount from time to time referred to in section 66 (1). …….

NO EVIDENCE 55 In my opinion, there was evidence to support the primary judge's finding concerning the right knee. In addition to the material referred to by Handley JA, Dr Mahoney in his report dated 13 April 2001 stated that the worker "added that in April 1999 he noticed added pain in his right knee which he relates to over use of the right knee in order to protect the left". That hearsay statement by the worker was admissible as evidence of the fact asserted: see s.60 of the Evidence Act 1995.

CONSENT AWARD 56 It was submitted in effect that the judgment was vitiated by inconsistency said to arise by reason of the conclusive effect of the previous award establishing 25% loss of the left leg at or above the knee as at 16 October 1996, the primary judge's findings of substantial further injuries to the left leg, and the primary judge's finding that the worker "now" had 25% loss of the left leg at or above the knee. It was also submitted that the primary judge's attempted avoidance of that inconsistency by noting that the prior award was by consent and "possibly not reflective of an accurate assessment" was an error that vitiated the judgment. 57 The inconsistency point was supported by submissions concerning issue estoppel. However, although an issue estoppel binds the parties as to the issues actually determined, they are not bound in relation to any different issue, not even where the combination of the original issue and extremely strong evidence would support a finding on the second issue: see O'Donel v. The Commissioner for Road Transport and Tramways (NSW) (1938) 59 CLR 744 at 763. 58 This principle applies clearly in cases where an issue estoppel concerns a matter involving an element of prediction for the future. An award for permanent impairment of an arm (say) involves a conclusion not merely to the present state of the arm but also as to whether and to what extent that state will change in the future. Suppose a worker is given a lump sum award on the basis of 100% permanent impairment of both arms. An unexpected development in medical science restores the use of the arms. The worker returns to work with the original employer and is injured in the course of lifting a heavy object. The employer could not rely on an estoppel preventing the worker from proving the accident, on the basis that he was estopped from alleging that he used his arms. 59 It was open to the primary judge to find that there were significant further injuries, and also to find that the worker's present impairment in respect of the left leg at and above the knee was 25%. The primary judge did not have to explain how this was reconciled with the previous award. If a finding that the previous award was incorrect had been an essential part of the judge's reasoning, this may have vitiated the decision; but her tentative suggestion to that effect was not part of her reasoning.

AGGREGATION 60 In order to pass the threshold provided by s.67(2), it was necessary that the losses that were aggregated be "2 losses as a result of the same injury". 61 The frank injury on 28 May 1998 caused the loss in relation to the back, and was a substantial contributing cause to the loss in relation to the right leg; and this was sufficient. The primary judge held that "the further injury to the left leg in the employment of [Rail Services]" caused the symptoms in the right leg; and this could include both the nature and conditions injury between 1 July 1996 and 15 August 1998 as well as the frank injury. But the terms of the finding, and the fact of aggregation, show that the primary judge did consider the frank injury as being at least a substantial contributing cause.

APPORTIONMENT 62 Rail Services submitted that the case was within s.22 of the Act, so that it was entitled to a contribution from SRA. Determination of this question requires consideration of two Court of Appeal cases: Colliar, and the earlier decision of Australian Conveyor Engineering Pty Ltd v. Mecha Engineering Pty Ltd (1998) 45 NSWLR 606. 63 In Mecha, a worker was injured in a fall on 11 February 1992 in the course of his employment by the first employer in that case: the fall aggravated and made symptomatic a pre-existing degenerative change in his back. The worker suffered further injury to his back between 13 November 1995 and 29 April 1996, due to the nature and conditions of his employment with a second employer. The primary judge made an award of weekly compensation from 29 April 1996, and apportioned liability under s.22. The first employer appealed. 64 The Court of Appeal by a majority (Sheller and Powell JA, Fitzgerald AJA dissenting) dismissed the appeal. The majority held that, although the injury on 11 February 1992 could fall within either paragraph (a) or (b)(ii) of the definition in s.4, the words "injury consists in the aggravation…of a disease" in s.16(1) should be construed as not referring to something which is an injury independently of its aggravating effects on a previously existing disease, but as being confined to what are entirely injuries by aggravation. 65 In Colliar, a worker was employed from 14 March 1989 to 23 September 1991 by the first employer in that case as a labourer picking mushrooms, and gradually developed burning and stiffness in the knees, and continued in this employment with a second employer (who purchased the first employer's business) until 15 December 1992, during which time the problems with the knees became worse. Following a period of unemployment, the worker was employed by a third employer as a domestic. The worker continued to have problems with her knees. On 6 October 1995, there was an incident at work with the third employer when the worker crashed onto her knees in a spa. After that, she returned to work only one day because of pain in her knees, and ceased work on 15 December 1995. The primary judge found two injuries, namely a nature and conditions injury with deemed date 15 December 1992, and a frank injury on 16 October 1995; and made an apportionment under s.22. The second employer appealed. 66 By majority (Meagher JA and Davies AJA, Priestley JA dissenting), the Court of Appeal allowed the appeal. Davies AJA (with whom Meagher JA simply concurred) said [at 68] that there was no identification of any injury on 6 October 1995 other than an aggravation of the ongoing arthritic condition; but also said [at 72] that he did not accept that an injury which constitutes an aggravation of a disease and to which the employment has contributed falls outside s.16 simply because the claim for compensation was or could have been framed in terms of paragraph (a) of the definition. He referred to Mecha. He noted that Mecha did not refer to another decision, MLC Insurance Ltd v. Pinto (1994) 10 NSWCCR 101, a case which decided that s.16 excluded the operation of s.22 in cases where it applied; and he held that in the circumstances Mecha could not be regarded as binding authority. 67 The two decisions were considered by Neilson CCJ in Lyons v. Master Builders Association of New South Wales Pty Ltd (2003) 25 NSWCCR 422. He took the view that the two cases were inconsistent, and that the first of the two should be followed; and also expressed the opinion that the majority in Colliar failed to distinguish between the injurious event and the pathology resulting from the event. 68 In my opinion, the decision in Mecha is to be preferred. Section 16 applies only if the injury "consists in" the aggravation etc of a disease. If there is an event that satisfies paragraph (a) of the definition of injury, and if that is the injury relied on and proved, the circumstance that it aggravated the disease and thus could have supported a case under paragraph (b)(ii) does not mean that this injury "consists in" the aggravation of a disease. One strange result of the contrary view would be that a frank injury relied on and proved would, if it happened to aggravate a disease, and if incapacity did not commence immediately, be deemed under s.16(1)(a) to have happened at some time other than when it in fact happened.

69 As to the appropriate course to be taken when there are two inconsistent decisions of this Court, the later decision would prevail if it was given pursuant to the grant of leave to challenge the earlier decision. However, where as here that is not the case, I agree with Young CJ in Eq. that there is no generally applicable rule determining which decision prevails. 70 In the present case, compensation is payable by Rail Services for incapacity resulting from two injuries, namely a nature and conditions injury and a frank injury on 28 May 1998. The former could possibly be considered an injury under paragraph (b)(ii) and falling within s.16(1); but the latter could not. Accordingly, the application of s.22 was not excluded by s.16. The primary judge should have considered whether the incapacity of the worker giving rise to the entitlement to weekly compensation resulted partly from injury occurring in the course of the worker's employment by SRA, as well as from injuries occurring in the course of his employment with Rail Services.

CONCLUSION 71 I agree with the orders proposed by Handley JA. 72 YOUNG CJ in EQ: I have read in draft the reasons of Handley and Hodgson JJA. I too agree with the orders proposed by Handley JA but wish to make a few observations of my own. 73 As to issue estoppel, I agree with what has been written by my brethren. 74 The problem is that in para 33 of her reasons her Honour the trial judge referred to a consent award of 16 October 1996 in respect of a 25% loss of the left leg. Then in para 50 she says: "In my view the applicant now has 25 per cent loss of the left leg at or above the knee. I note the prior settlement to have been by consent, and possibly not reflective of an accurate assessment." 75 I agree with the submission of Mr L King QC for the appellant, that in accordance with O'Donel v Commissioner for Road Transport and Tramways (1938) 59 CLR 744, her Honour was not prevented from coming to the conclusion that the worker had suffered a further injury to his left leg so that his loss was now 25 per cent even though there had been a finding that it had been 25 per cent before the last frank injury. However, I also agree with his further submission that her Honour was not entitled to say that the consent award was possibly not reflective of an accurate assessment of the worker's then disability. 76 The next matter about which I wish to say something is what the NSW Court of Appeal should do if there are two previous decisions of the NSW Court of Appeal which are inconsistent. 77 With respect to those who take a different view, I do not consider that the rule is that when all things are equal one follows the first decision. 78 In Minister of Pensions v Higham [1948] 2 KB 153, 155, Denning J, as he then was, said: "I follow the general rule that where there are conflicting decisions of courts of coordinate jurisdiction, the later decision is to be preferred, if it is reached after all consideration of the earlier decision." 79 In Colchester Estates (Cardiff) v Carlton Industries plc [1986] Ch 80, 85, Nourse J, as he then was, said in following Denning J, that the reason for this rule was that: "It is desirable that the law, at whatever level it is declared, should generally be certain. If a decision of this Court, reached after full consideration of an earlier one which went the other way, is normally to be open to review on a third occasion when the same point arises for decision at the same level, there will be no end of it. … There must come a time when a point is normally to be treated as having been settled at first instance. I think that should be when the earlier decision has been fully considered, but not followed, in a later one." 80 In the present situation, the decision of this Court in Australian Conveyor Engineering Pty Ltd v Mecha Engineering Pty Ltd (1998) 45 NSWLR 606 appears to be inconsistent with the later decision of this Court in Colliar v Bulley (2000) 19 NSW CCR 302. 81 In Lyons v Master Builders' Association of NSW Pty Ltd (2003) 25 NSW CCR 422, Neilson CCJ considered the two cases mentioned in the previous paragraph which he said were two completely inconsistent decisions of a Court of Appeal (see [21] at p 429). He said however at [22]: "The principle is clear that, where there are two inconsistent decisions of an intermediate appellate court, the first in time ought to be followed." His Honour gives no authority for that proposition and with great respect, it is incorrect. 82 It should be noted, however, that in Lyons his Honour did not just blindly follow his so-called principle, but noted that if one counted heads of Judges of Appeal the weight of judicial opinion was in favour of the correctness of Australian Conveyor Engineering. 83 What is odd in the present case is that the Court in Colliar was fully aware of the Mecha case because it is cited. The present point was not at the forefront of the minds of the Judges who decided Colliar and it would appear that in the midst of the complications created by the statute, the significance of Mecha on the present point was not appreciated. 84 Because leave is required before a previous decision of this Court can be challenged in this Court, the number of occasions where the present sort of problem can arise will be extremely limited, namely to those cases which unwittingly slip through the leave net or cases such as the present. I do not consider there should be some artificial rule that compels this Court prima facie either to follow the first or the last of the previous decisions. If there is to be a rule, then I would prefer one which says that the subsequent decision, at least if it has referred to the previous decision and given good reasons for not following it, should be preferred. However, as under the Court of Appeal system in NSW the leave procedures rule out the situation referred to by Nourse J of Judges continually reconsidering points, it would seem to me that the better rule is that when a problem like this occurs, the Court hearing the matter needs to re-evaluate the law afresh. 85 In my opinion, the Mecha view is correct and I am comforted that my brethren have reached the same conclusion. 86 Accordingly, I agree with the orders proposed by Handley JA. **********

Last Modified: 08/11/2004 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.

(2000) 19 NSWCCR 302

(2003) 25 NSWCCR 422

(1998) 16 NSWCCR 123

(1994) 10 NSWCCR 101

(2000) 19 NSW CCR 302

(2003) 25 NSW CCR 422

At a glance

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Judgment (44 paragraphs)

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Cases Cited (11)