Reilly v Workcover Corporation/Mmi Workers Compensation

4 This gave Barwick CJ in Darling Island Stevedoring and Lighterage Co Ltd v Hankinson [1967] HCA 10; (1967) 117 CLR 19 at 25 and 26 cause to observe (albeit in the context of a claim for weekly payments) that:-

"The relevant question in the case of an injury is whether incapacity resulted from it. It is not, as in the case of an action at law based on negligence, what damage has the injured party sustained. Thus cases such as Watts v Rake [1960] HCA 58; (1960) 108 CLR 158 and Purkess v Crittenden [1965] HCA 34; (1965) 114 CLR 164, in so far as they deal with the possible effect of a pre-existing condition upon the amount of an award of damages in such an action, are not in point in connexion with a claim under the Workers Compensation Act."

5 On 14 September 1999 we published reasons in this matter wherein we indicated, in respect of the compensable disability that the worker sustained on 10 November 1996 ("the later disability"), that the lump sum compensation that she had received under the s 43 of the Act in respect of the compensable disability that she sustained on 21 February 1993 had to be taken into account through the application of both the then reg 16a of the Workers Rehabilitation and Compensation (General Regulations) 1987, now reg 25, and s 43(6).

6 However on the facts as they had been presented to us we had some concerns as to whether the percentage loss of function of the worker's lower back and lumbar spine attributed to her later disability had been properly assessed. We thought that the agreed figure might have contained some discount to reflect the pre-existing loss. We therefore allowed the parties an opportunity to revisit this issue and adjourned our final determination of the matter.

7 It would seem that our concerns were well founded. The parties now advise us that in accordance with our reasons they agree that the worker sustained a 25 per cent permanent loss of function of her lower back and lumbar spine as a result of the compensable disability she sustained on 10 November 1996, in lieu of the figure of 22.5 per cent that was previously agreed to be the percentage loss.

8 Notwithstanding this agreement, the parties remain in dispute. They are unable to agree what is the proper outcome of the application of reg 25.

9 It is agreed that as a result of the compensable disability the worker sustained on 21 February 1993 she suffered a five per cent permanent loss of function of the lower back and lumbar spine. It is also agreed that in relation thereto she received an amount of $3760 pursuant to the Act.

10 In order to explain the competing submissions by the parties it is necessary for us to set out the calculation prescribed by reg 25. It is as follows

"Third Schedule - Aggregation of two or more disabilities

25 Pursuant to clause 5 of the third schedule of the Act, the following is prescribed as the principle to be applied if a worker is entitled to compensation in respect of two or more disabilities to which that schedule applies:

P is the worker's percentage entitlement of the prescribed sum;

P1, P2, P3, P4 ... are the percentages of the prescribed sum that are payable under this principle for the various disabilities, calculated as follows:

and so on, where a, b, c, d and so on are the percentages that would be individually applicable to the disabilities if there were no question of aggregation."

11 Both parties are agreed for the purposes of this calculation that a = 4, that is 80 per cent of five per cent; and b = 20, that is, 80 per cent of 25 per cent.

12 The worker asserts that the correct calculation is as follows:-

13 The worker then asserts that what she is entitled to is P1 + P2. That is 23.2 per cent of the relevant prescribed sum, being $102600, thereby entitling her to $23803.20. In accordance with our earlier reasons the amount of $3760 must be deducted from this leaving, on the worker's calculation, a net amount payable to her of $20043.20.

14 The respondent contends that on the worker's approach she is being doubly compensated for the injury sustained by her on 21 February 1993. It says that the worker's entitlement is not P1 + P2 but simply P2, the worker having already received P1. Thus, it asserts that the worker's prima facie entitlement is $19699.20 being 19.2 per cent of $102600, such that her net entitlement after deduction in accordance with s 43(6) is $15939.20.

15 Underpinning the approach that the worker urges us to adopt seems to be the mistaken belief that the assessment of the percentage loss resulting from the later disability has been moderated to reflect the pre-existing loss of function. For the reasons previously published by us it should not have been and we assume that the new agreed assessment reflects that fact.

16 We therefore agree with the respondent's approach.

17 Where the equation speaks of P = P1 + P2 + P3 + P4 + ... and so on, it clearly contemplates that the aggregation of P1 + P2 and so on only applies when none of those payments have been made. Where they have been paid, they are not to be added to the further entitlement that the application of the regulation produces.

18 Having already received P1 the worker's only outstanding entitlement is in respect of P2. From that figure, for the reasons previously published, the amount of $3760 must be deducted.

19 Accordingly, we order that the respondent pay the applicant an amount of $15939.20 on account of the permanent loss of function to her lower back and lumbar spine sustained by her on 10 November 1996.