The Grounds of Appeal
38 Though the Notice of Appeal raised seven alleged grounds of appeal, only two grounds were pressed in oral argument. These are:
"1. The Deputy President erred in law in finding that the Arbitrator was in error in not considering the impact of the agreed 15% permanent loss of efficient use of Mr Muir's right arm at or above the elbow on his ability to earn in the labour market available to him.
2. The Deputy President erred in law in considering that the Consent Award of 15% permanent loss of efficient use of Mr Muir's right arm at or above the elbow under Section 66 of the Workers Compensation Act 1987 was indicative of a partial incapacity under Section 40 of the Workers Compensation Act 1987 ."
39 Mr Rickard, counsel for the Appellant, submitted that an award under section 66 of the Compensation Act "does not engage" section 40 of that Act. I take that submission to be that the making of an award under section 66 is dependent upon different concepts to those upon which the making of an award under section 40 depends, in consequence of which one cannot infer from the making of an award under section 66 that any award should be made under section 40.
40 Mr Rickard reminded us that the pre-1 January 2002 version of section 66 of the Compensation Act is based on section 16(1) of the Workers Compensation Act 1926 (the "1926 Act"). Both were based upon a table that provided a tariff for the loss of particular bodily parts or bodily functions. In Jones Bros Bus Company Pty Ltd v Baker (1992) 26 NSWLR 322 Kirby P (with whom Gleeson CJ and (in this respect) Clarke JA agreed) said, at 325, that section 16 of the 1926 Act established:
"… a relatively objective system in the sense that the percentage loss calculated was concerned with the loss of the full efficient use of the specified limb or function across the generality of workers. It was not concerned with the particular impact of the loss of function of the particular worker, having regard to his or her peculiar employment activities. To the extent that such activities were relevant, their impact was left to be determined by the provisions of the Act dealing with other entitlements, notably those to weekly compensation for total or partial incapacity."
41 Mr Rickard also referred us to Lovett Building Company Pty Ltd v Burns (1993) 29 NSWLR 475 at 484, where Clarke, Handley and Sheller JJA said, concerning section 66 of the Compensation Act:
"The scheme set up under the Act is, in respect of the loss of efficient use of a limb, conceptually similar to the scheme under the 1926 Act. For this reason, and another mentioned below, the system can be regarded as a relatively objective one in that one is only concerned to measure, relevantly, the loss of efficient use of a limb. For this purpose it is irrelevant whether for instance, the worker is a violinist or a labourer. The court is required to determine what are the permanent disabilities suffered by the worker in the relevant limb and then to assess the extent to which that disability diminishes the efficient use of that limb. The scheme is objective in the sense that no account is to be taken of the effect that the permanent disability has upon the worker in his or her work as, for instance, a violinist."
42 Their Honours went on to agree with the remarks of Kirby P in Jones Bros Bus Company, that I have already quoted.
43 The reference to a violinist in the passage just quoted is to an example frequently given in explaining the notion of incapacity as used in the Workers Compensation Act. That example was clearly expressed by Mahoney JA (with whom Hope and Samuels JJA agreed) in Yacob v Arnotts Snack Products Pty Ltd [1982] 1 NSWLR 632 at 636, that:
"… the loss of a finger on his left hand would be disastrous for a violinist, but might result in no relevant incapacity for a trial lawyer."
44 By contrast with section 66, Mr Rickard submits, section 40 is concerned with providing compensation measured solely by reference to the circumstances of the particular worker in question. He refers us to Arnott's Snack Products Pty Ltd v Yacob [1985] HCA 2; (1985) 155 CLR 171 at 176-178, to the effect that "incapacity for work" means a physical incapacity for actually doing work in the labour market in which the employee was working or might reasonably be expected to work, and that compensation is awarded for that incapacity only where it reduces the employee's ability to sell his labour in the open market. As Mason, Wilson, Deane and Dawson JJ said of the analogue of section 40(1) in Arnott's at 178:
"Under s 11(1) an applicant's entitlement to compensation will depend on his loss of earning power. This flows, not from the concept of partial incapacity for work, but from the nature of the express limitation which the sub-section places on the amount of compensation payable."
45 Mr Rickard also referred us to Brown v Lewis [2006] NSWCA 87; (2006) 65 NSWLR 587. Though that was a case arising under the Motor Accidents Compensation Act 1999 (the "MAC Act") that Act contains provisions somewhat similar to those of the Compensation Act, requiring assessment to be made of the degree of permanent impairment of a person as a consequence of an injury, and economic loss that arises as a consequence of the injury. Under the MAC Act the role that the percentage incapacity plays is different to the role played by an assessment of loss of percentage use under section 66 Compensation Act - under the MAC Act having a degree of permanent impairment greater than 10% is a precondition to the award of certain heads of damage, rather than being in itself occasion for an award of damages. Mr Rickard drew our attention to the remarks of Mason P (with whom Santow and McColl JJA agreed) at [23], that,
"Extreme caution is required before anything relevant or useful could be extrapolated from a certificate under s 61(2) for the purpose of calculating economic loss. Section 61(2)(a) only deals with the threshold issue whether the degree of permanent impairment is greater than 10 per cent. Section 133 points to information … that does not concern itself with the economic consequences of injury, and excludes information … that may be critically important to assessing economic loss. In short, the statutory concept of (permanent) "impairment" is not to be equated to the notion of incapacity (permanent or temporary) that may be a stepping-stone in a case involving damages for economic loss. … Those provisions do not engage the statutory concept of "permanent impairment".
It is conceivable that matters certified or reported in the reasons of the medical assessor may have bearing on factual issues touching damages for economic loss. But everything would depend on the nature of the particular inquiry. Some injuries that would not produce a greater than 10 per cent degree of permanent impairment would have catastrophic economic impact on some plaintiffs (for example, the violinist who lost the tip of a finger). Conversely, some injuries that produced a greater than 10 per cent degree of permanent impairment would have minimal economic impact on most plaintiffs."
46 I do not, with respect, find those remarks of Mason P of assistance in the present case. They depend on peculiarities of the concept of "impairment" as used in the MAC Act.
47 Even so, Mr Rickard is correct in submitting that one cannot infer, from an award having been made in favour of a worker under section 66 of the Compensation Act, that that worker is entitled to any award at all under section 40 Compensation Act. If the Deputy President had argued that, because the Worker had received an award under section 66, he must be entitled to an award under section 40, the Deputy President would have been committing an error of law, in consequence of which the appeal would have succeeded.
48 It is here that Mr Rickard's argument encounters an insuperable difficulty. The Deputy President did not reason in the way Mr Rickard submits he did. Though Mr Rickard concentrated his attack on the conclusion that the Deputy President reached at [94]-[95] of his reasons (quoted at para [36] above) that conclusion is a continuation of the process of reasoning expressed in paras [83]-[84] of his reasons (quoted at para [31] above). Taking his reasons as a whole, the Deputy President recognised that the Worker had a physical impairment, namely the 15% permanent loss of his right arm at or above the elbow, and a "proven incapacity on the labour market" (at [94]), in the form (at least) of his being unable to do the job he had previously had with the Appellant. The Deputy President recognised, it seems to me, that before such a proved incapacity resulted in an award of compensation under section 40, that incapacity had to, in fact, reduce his earning capacity, in the labour market as it was actually available to him, below the level of earnings he would have made if uninjured. Such a requirement arises, as the Deputy President recognised at [83] of his reasons, from the words of section 40(2)(b). The error that the Deputy President saw in the Arbitrator's reasoning was that the Arbitrator had not paid attention to the practical realities of the Worker, in his injured condition, actually being able to get and keep a job. The VCC reports did not address the Worker's practical prospects in the labour market. Rather, they assessed his physical and mental capacities, and matched them to the tasks required to be performed in various jobs. That the Worker had the physical and mental capacity to carry out the tasks involved in some particular job is not sufficient to establish that there was a realistic prospect that anyone would actually give him such a job, or that he would be able to keep it. A further enquiry was needed concerning those matters, and it was that further enquiry that, in the Deputy President's view, the Arbitrator had failed to carry out.
49 As I read it, section 40(1) sets as an upper limit on the amount of weekly compensation "the reduction in the worker's weekly earnings". Section 40(2) requires calculation of 'the reduction in the worker's weekly earnings" to be carried out in three steps. The first is ascertaining (as required by section 40(2)(a)) the likely weekly earnings of the worker if he or she had remained uninjured and kept on doing work comparable to that being done at the time of the injury. The second is ascertaining (as required by section 40(2)(b)) the amount the worker is actually earning, or would be able to earn in "some suitable employment". The third is to take the difference between those two amounts. Ascertaining, for the purpose of the second of these steps, the amount the worker would be able to earn in "some suitable employment" is required to be done in accordance with section 40(3), which in turn brings in the factors listed in section 43A(1).
50 Those factors are all ones that concern the practical realities of the worker, in his or her injured condition and with his or her actual age, abilities, limitations and circumstances in life, being able to get and keep employment. In my view the Deputy President was right in taking the view that the practical realities of the Worker actually getting and keeping a job, in his injured condition, were required to be assessed. Further, in my view the Deputy President was right in reaching the conclusion that the Arbitrator had not assessed those practical realities.
51 In his conclusion at [94]-[95], that I have set out at para [36] above, the Deputy President to some extent foreshadowed the result of carrying out that factual enquiry, when he said that the incapacity that the Worker had would "ordinarily be reflected in a reduced earning capacity", and that there is "the real probability" based on his unsuccessful efforts to obtain employment that he will suffer longer periods of unemployment. However, these are put as factual matters, not as matters of law.
52 In my view, the decision of the Deputy President is not erroneous in point of law.