SAS Trustee Corporation v O'Keefe

Court of Appeal (NSW)|2011-08-10|Before: McColl JA, Basten JA

Appellant: Mr D J Russell SC / Mr N Ghabar Respondent: Mr T M Ower / Mr M N Hammond Solicitors:

Appellant: Smuts McKenzie Lawyers Respondent: Walter Madden Jenkins File Number(s): 2010/228072 Decision under appeal Date of Decision: 2010-06-11 00:00:00 Before: Curtis DCJ File Number(s): RJ00607/09

HEADNOTE [This headnote is not to be read as part of the judgment] In July 2006 the respondent, former Sergeant John Paul O'Keefe, was discharged from the NSW police, on the basis that he was incapable of performing ordinary police duties due to a degenerative condition of his lumbar spine. A certificate was issued, in April 2006, under s 10B(3)(a) of the Police Regulation (Superannuation) Act 1906 (NSW) certifying that the infirmity was caused by the respondent being 'hurt on duty', with the dates of injury specified as 1 April 1998, 21 January 1999 and a final incident on 31 May 2005, which ultimately resulted in his medical discharge. In November 2007 the respondent applied for a 'gratuity', being a lump sum compensation payment, and on 1 January 2009 the SAS Trustee Corporation (STC) awarded the respondent a payment in the sum of $7,500. The respondent appealed to the District Court, where he was successful in his appeal and on 11 June 2011 the trial Judge, Curtis DCJ, substituted an award of $34,075. The difference between the assessment undertaken by the STC and that undertaken by the District Court turned on identification of the date of the injury suffered and the application of certain transitional provisions in respect of the change in the basis of assessment, for compensation of injured police, which occurred in 2002. The STC appealed, as of right, to this Court. The issue for determination on appeal was whether the primary judge erred in quantifying the amount of the gratuity by reference to the injuries which occurred before 2002 on the basis of the law as then in force. The Court held allowing the appeal : (per Handley AJA, McColl JA agreeing) 1, The Commissioner is to decide whether or not the injury to which the claim related was caused by being hurt on duty, with the decision being made in the context of the claim, reflecting the nature of the claim and the relevance of the injury. The only relevant claim was made on 8 November 2007: [1] and [61] - [62]. Day v SAS Trustee Corporation [2009] NSWCA 222; SAS Trustee Corporation v Pearce [2009] NSWCA 302 applied. 2. The delegate's hurt on duty decision identified a single injury caused by the nature and conditions of the claimant's employment over a 17 year period and this was the only injury for which he was entitled to compensation. The award of compensation could only be based on injuries identified in the hurt on duty decision: [1], [53] - [54] 3. The primary judge did not find a frank injury, in which case a claim for gratuity fell within s 16(1)(a)(ii) of the Police Regulation (Superannuation) Act 1906 (NSW) and the injury was deemed to have happened on the date of the claim, being 8 November 2007. Any earlier claim for weekly compensation under s 16(1)(a)(1) was therefore irrelevant: [1], [91] - [100] and [105] - [107]. Rail Services Australian v Dimovski [2004] NSWCA 267, 1 DDCR 648; GIO Workers Compensation (NSW) Ltd v GIO General Ltd (GIO) (1995) 12 NSWCCR 187, 196 per Sheller JA; P&A Berkeley Challenge Pty ltd v Alfonzo ( Berkeley ) (2000) 49 NSWLR 481, 487 per Priestley JA; and Stone v Stannard Bros Launch Services Pty Ltd [2004] NSWCA 277, 1 DDCR 701; Alto Ford Pty Ltd v Antaw (1999) 18 NSWCCR 246 referred to. (per Basten JA, dissenting) 4. The certificate of infirmity related to a number of injuries over a period of time, not to a condition of gradual onset or a pre-existing condition which had been aggravated or exacerbated during the course of employment: [31] - [33]. 5. Quantifying the amount of gratuity should have been undertaken by reference to those separate injuries, which occurred both before and after 1 January 2002. The degree of impairment which occurred prior to 1 January 2002 was correctly assessed under the old regime and the further degree of impairment resulting from the later injury under the new legislation. No error of law was identified in the approach adopted by the District Court: [23], [40] - [41]

Judgment 1McCOLL JA : I agree with Handley AJA's reasons and the orders his Honour proposes. 2BASTEN JA : In April 2006 former Sergeant John Paul O'Keefe (the respondent) obtained a medical discharge from the NSW Police, on the basis that he was incapable of performing ordinary police duties due to a degenerative condition of his lumbar spine. A delegate of the Commissioner of Police issued a certificate under s 10B(3)(a) of the Police Regulation (Superannuation) Act 1906 (NSW) ("the Superannuation Act ") certifying that the infirmity was caused by the respondent being "hurt on duty". 3On 8 November 2007, the respondent applied for a "gratuity", being a lump sum compensation payment, pursuant to s 12D of the Superannuation Act . On 1 January 2009, the SAS Trustee Corporation (the applicant, known in the Superannuation Act as the "STC") awarded the respondent a payment in the sum of $7,500. 4Pursuant to s 21 of the Superannuation Act , the respondent appealed to the District Court. He was successful in his appeal and was awarded an amount of $34,075. 5The amount in issue being in excess of $20,000, the STC appeals as of right to this Court, as a party to proceedings in the District Court which is "aggrieved by an award of the Court in point of law": District Court Act 1973 (NSW), s 142N(1). 6The difference between the assessment undertaken by the STC and that undertaken by the District Court turned on identification of the date of the injury suffered by the respondent and the application of certain transitional provisions in respect of the change in the basis of assessment which occurred in 2002.

Statutory scheme 7It is necessary to start with the legislative scheme for compensation of injured police which, from time to time, has given rise to issues of construction, resulting from its awkward drafting. 8A "worker" who has received an injury is entitled to compensation under the Workers Compensation Act 1987 (NSW), assessed in accordance with procedures set out in the Workplace Injury Management and Workers Compensation Act 1998 (NSW) ("the Workplace Injury Act "). However, the definition of "worker" expressly excludes "a member of the Police Service who is a contributor to the Police Superannuation Fund under the Police Regulation (Superannuation) Act 1906 ": Workplace Injury Act , s 4(1), worker, exception (a). However, relevantly for present purposes, provisions of the Workers Compensation Act are picked up and applied to the police. Thus, a gratuity is permitted under s 12D of the Superannuation Act in the following circumstances: " 12D Gratuities to members hurt on duty in respect of loss of limbs, medical expenses etc (1) STC may pay to a member of the police force who is hurt on duty or to a former member of the police force who was hurt on duty when he or she was a member of the police force a gratuity of such amount as STC determines, not exceeding the amount that, in the opinion of STC, would have been payable to the member or former member under Divisions 3, 4 and 5 of Part 3 of the Workers Compensation Act 1987 if the member were, or the former member had been, a worker for the purposes of that Act. (2) STC may pay a gratuity to a member of the police force under this section notwithstanding that the member is not discharged from the police force as a result of being hurt on duty. (3) STC shall not grant a gratuity under this section to a member or former member of the police force unless: (a) an annual superannuation allowance is payable to the member or former member under section 10 in respect of an infirmity of body or mind arising out of the same injury to which the claim for the gratuity relates, or (b) where an annual superannuation allowance is not so payable, the injury to which the claim for the gratuity relates is determined, pursuant to subsection (4) or on appeal, to have been caused by the member being hurt on duty or the former member having been hurt on duty when he or she was a member of the police force. (4) Where a member or former member of the police force claims a gratuity under this section (otherwise than in respect of an injury referred to in subsection (3)(a)), the Commissioner of Police must: (a) decide whether or not the injury to which the claim relates was caused by the member being hurt on duty or the former member having been hurt on duty when he or she was a member of the police force, and (b) give written notice of the decision to STC and to the claimant." 9A number of points need to be made in relation to the operation of this provision. First, despite the discretionary language of s 12D(1), the STC accepts that in circumstances where a worker would be entitled to a certain amount by way of lump sum compensation under the identified provisions of Part 3 of the Workers Compensation Act , that is the amount that the police officer should receive. 10Secondly, sub-s (3) involves two mutually exclusive conditions for payment of a gratuity. Paragraph (a) operates where an annual superannuation allowance is payable under s 10 "in respect of an infirmity ... arising out of the same injury to which the claim for the gratuity relates". Paragraph (b) operates in all other cases. Where an annual superannuation allowance has been granted, the infirmity will have been certified by the Commissioner as being caused by the member being "hurt on duty", pursuant to s 10B(3)(a) (commonly referred to as a "s 10B(3) certificate"). The alternative course requires the Commissioner to decide a similar, though not identically worded question, namely whether "the injury to which the claim relates" was caused by the member being hurt on duty. 11Thirdly, and significantly for the present matter, for the purpose of a s 10B(3) certificate, the Commissioner is required to decide "the date or dates" on which the member was hurt on duty. For reasons which are unclear, there is no such express requirement in s 12D(4). 12Before leaving these provisions, it is convenient to note the definition of "hurt on duty" in the Superannuation Act : " 1 Name of Act, commencement and definitions ... (2) In this Act, except to the extent that the context or subject-matter otherwise indicates or requires: ... hurt on duty , in relation to a member of the police force, means injured in such circumstances as would, if the member were a worker within the meaning of the Workers Compensation Act 1987 , entitle the member to compensation under that Act." 13On 1 January 2002 changes to the calculation of lump sum compensation introduced by the Workers Compensation Legislation Amendment Act 2001 (NSW) ("the 2001 amending Act") came into operation. Prior to those amendments, lump sum compensation benefits were calculated in accordance with the table to Div 3 of Pt 3 of the Workers Compensation Act , commonly known as the "table of maims". The table provided for compensation for permanent injuries by specifying a percentage of a maximum amount payable which, in 1998, was $100,000. The 2001 amending Act repealed provisions providing for lump sum compensation for loss, assessed in accordance with the table, omitted the table itself and provided an entitlement to compensation for "permanent impairment". The difference between assessment under the old provisions and assessment under the new provisions is reflected in the differing awards of the trial judge and the STC. Accordingly, the critical question was which provisions applied, or, if both, in what manner they applied. 14The amendments relating to lump sum compensation appeared in Sch 3 of the 2001 amending Act. The transitional provisions were found in a new Pt 18C introduced into Sch 6 of the Workers Compensation Act by Sch 4 of the 2001 amending Act. Relevantly, cl 3 of Pt 18C, as enacted, provided: " 3 Amendments to lump sum compensation provisions (1) The amendments made by Schedule 3 to the 2001 amending Act do not apply in respect of an injury received before the commencement of the amendments (even if the injury is the subject of a claim made after the commencement of the amendments) ...." 15There were additional provisions in respect of contribution to permanent impairment of a "previously non-compensable impairment", relating for example to psychological injury, which have no relevance for the present case. The critical issue for the present case turned on when the "injury" was "received".

Nature and date of injury 16The claim for a gratuity was made by letter from the respondent's solicitors dated 8 November 2007. The claim was expressed by reference to a medical report of Dr Scougall, which was enclosed. Dr Scougall made three assessments. The first two, under the pre-2002 compensation regime, included: (a) 20% impairment of back, and (b) 8% permanent loss of the efficient use of his left leg at or above the knee. He noted there was no deduction for any pre-existing condition. Dr Scougall then apportioned the injuries on the basis that 5/6 ths were received prior to 1 January 2002 and 1/6 th of each assessment was attributable to the nature and conditions of his work thereafter. Dr Scougall assessed the part apportioned to the post-1 January 2002 period according to the assessment of permanent impairment required by the Workplace Injury Act . 17Dr Scougall identified the first cause of injury as occurring on 28 July 1988, when the respondent was putting equipment into the back of a station-wagon. He was unfit for work for a period of approximately 12 days. He suffered a further injury in similar circumstances on 7 April 1998 and was off work "for some time". On 27 January 1999 there was a further aggravation resulting in two days off work. There were two incidents in 2005, which ultimately resulted in his medical discharge on 14 July 2006. 18The s 10B(3) certificate identified the dates of injury as 7 April 1998, 27 January 1999 and a date in May 2005. (The 2005 date does not seem to accord with the dates given in his claim for medical discharge, nor the dates identified by Dr Scougall, but nothing appears to have turned on this item.) Each of the earlier dates was identified by Dr Scougall as the date of an incident aggravating his back pain. However, importantly, there was no reference in the s 10B(3) certificate to the initial injury on 28 July 1988, although that had been identified by the respondent in his claim for medical discharge. Clearly, if there were separate injuries received before and after 1 January 2002, inclusion of the 1988 incident was of importance to the respondent. 19The respondent might, perhaps, have appealed against the failure of the s 10B(3) certificate to include the earlier date, but he did not. The benefit to the respondent of the s 10B(3) certificate was that it identified three discrete dates of injury and thus, at least by inference, three separate dates on which injuries occurred. Whether it could properly be said that the annual superannuation allowance, payable on the basis of the s 10B(3) certificate was in respect of an infirmity arising out of an injury which was not the "same injury" to which the claim for the gratuity related is doubtful. If it were the same injury, no further certificate under s 12D(4) should have been obtained. However, both parties, implicitly in the District Court and expressly in this Court, said that the claim for the gratuity did not arise out of the same injury. Accordingly, the Court should proceed on that assumption. 20On 19 January 2009 the respondent obtained a further certificate from the Commissioner, this time under s 12D(4). The Commissioner affirmed that the respondent's "injury to his back was caused by the member being hurt on duty". The certificate also identified the condition of the respondent's left leg as being as being referred pain from his back. On one view, that meant that no separate assessment could be made in respect of his left leg, but the symptoms were to be included in the assessment of the injury to his back. 21The s 12D(4) certificate went further: it specified, under the heading "Date of injury", "Nature and Conditions of employment between 28 July 1988 and 24 November 2005". In substance the dispute between the parties turned on the relevance and effect of that statement. On the view adopted by the STC, the injury so identified involved the aggravation, acceleration, exacerbation or deterioration of a disease, for the purposes of s 16(1) of the Workers Compensation Act and, by operation of that section, the injury was deemed to have happened either at the time of the worker's incapacity or, if incapacity had not resulted from the injury, at the time of the claim for compensation. Both dates being after 1 January 2002, nothing turned on which was accepted. 22The STC contended that the proper approach was "to construe the decision of the Commissioner as finding the date of incapacity as [24] November 2005 for the purpose of s 16(1)(a)(i)" of the Workers Compensation Act . That date was the last occasion on which he undertook active work with the NSW Police. 23The respondent, by contrast, asserted that the claim had related to a number of independent injuries, contributing to a single impairment. It was, accordingly, appropriate for the STC, and on appeal the District Court, to assess those independent events separately. Accordingly, the degree of impairment which occurred prior to 1 January 2002 was to be assessed under the old regime and the further degree of impairment was to be assessed under the new legislation.

Approach of District Court 24After referring to the transitional provision, the primary judge identified the substantial question, at [12], as "When did the plaintiff's injury or injuries occur?" He noted the submission for the STC that because there was "only one pathology", there was only one injury. He rejected that reasoning as unsound and continued at [23]: "There may be several episodes of aggravation of pre-existing disease, each of which may give rise to a discrete claim for lump sum compensation. Although the underlying disease is constant there is no reason to suppose that it may not be serially and permanently aggravated to an increasing extent." 25Immediately prior to reaching that conclusion, his Honour noted that although there were multiple injuries before 1 January 2002, they could be aggregated, pursuant to s 322(3) of the Workplace Injury Act for the purpose of assessing the degree of permanent impairment. As both parties accepted, his Honour was in error in that respect, s 322(3) referring to "more than one injury arising out of the same incident". Clearly there were separate incidents involved. 26Although it appears that his Honour applied that principle in identifying the pre-January 2002 degree of impairment, which was assessed as having arisen "in or about 1999" (at [26]) the appellant did not suggest that this was a material error requiring that the judgment be set aside if it were otherwise appropriate to assess part of the impairment on the pre-2002 regime.

Construction of certificate 27The function of the STC under s 12D is to assess the amount of the gratuity which is payable. A condition of granting a gratuity is a decision of the Commissioner that the injury was caused by the member being hurt on duty. The Workers Compensation Act , prior to 2002, provided for compensation for loss to be calculated by reference to the impairment or incapacity caused by an injury. The definition of "hurt on duty" requires identification of an injury and the circumstances in which it occurred. Because a certificate of the Commissioner (whether under s 10B(3) or s 12D(4)) is a pre-condition to the grant of a gratuity, it is the Commissioner who must first identify the relevant injury. Thus, if a former member of the police force came to the STC with a claim for a gratuity which appeared, perhaps in part, to relate to an injury which had not been the subject of certification by the Commissioner, no gratuity would be payable in respect of that injury. It is therefore correct to say, in one sense, that the STC (and the District Court) were required to "construe" the s 12D(4) certificate. By that, it should be understood that they were required to identify the injury or injuries to which the certificate related. The STC argued that the certificate related to a single "injury" to the respondent's back, the cause being identified, in effect, as the "nature and conditions of employment", as they existed over a 17 year period. 28The proper interpretation of the certificate is, the parties accepted, a question of law. There was no contention that this was not an appeal within the terms of s 142N. The Court should proceed on that assumption. 29The term "injury" is not defined in the Superannuation Act . However, the definition of "hurt on duty" means that a certificate of the Commissioner as to that characterisation must incorporate the notion of injury as defined in s 4 of the Workers Compensation Act : " 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 ...." 30Although a degenerative condition of the spine might not, in common parlance, be described as a "disease", it has long been accepted that the word "disease" in the Workers Compensation Act is "apt to describe any abnormal physical or mental condition that is not purely transient": see Commissioner for Railways v Bain [1965] HCA 5; 112 CLR 246 at 272 (Windeyer J). The appellant's approach is not to be rejected on that ground. However, underlying s 4(b)(ii) is the concept of a disease which has an origin outside the employment situation but which is aggravated by, for example, the conditions of employment. The Commissioner did not make a finding that the respondent suffered from an injury in this sense. The other parts of the definition involve an injury or disease to which the employment contributed: see also s 9A(1) in respect of the need for a "substantial contributing factor". 31Section 15 of the Workers Compensation Act refers to diseases "contracted by a gradual process": neither party sought to rely upon that provision in the present case. Section 16 is designed to identify the time at which an injury which "consists in the aggravation ...of a disease" shall be deemed to have happened. The STC relied upon s 16, as noted above, on the basis that the Commissioner had identified an injury which "consists in" the aggravation of a disease. However, the certificate did not use that language. Nor, as in other cases, was there reference to a deemed or "notional" date of injury, from which it may be inferred that the injury fell within the terms of either s 15 or s 16 of the Workers Compensation Act . The s 12(D)(4) certificate stated that the Commissioner's delegate, in granting the certificate, acted in accordance with legal advice given to the Police Superannuation Advisory Committee on 28 April 1999. That advice does not appear in the material before the District Court, nor is it clear that it was incorporated into the certificate. On the other hand, the certificate purported to be "a decision ... on the injury to which the claim relates". The claim asserted that the respondent was suffering from "a compensable impairment" as a result of his work-related "physical injuries". As has been noted, the claim adopted the analysis and opinion of Dr Scougall, who identified a number of injuries, some of which were said to have temporary effects, the implication being that others resulted in permanent impairment. Because the certificate expressly identified the date of injury as a period encompassing all of the incidents referred to by Dr Scougall, it may be inferred that the certificate accepted the claim in respect of each of those injuries. Had it been intended to reject some of those injuries, as not falling within the terms of the certificate, it would reasonable be expected that the rejections would have been identified. 32Further support for this view may be obtained from a recommendation from a claims officer dated 7 January 2009, which appears to be counter-signed by the delegate who provided the s 12D(4) certificate and dated on the same day as the certificate. The recommendation is in language which reflects the terms of the certificate: "In light of the member's extensive history of reported injury between the years 28 July 1988 and 24 November 2005 and the previous certifications in terms of s 10B(3)(a), it is recommended that the nature and conditions of his employment be accepted as being hurt on duty." 33In the section of the recommendation headed "Background", specific reference was made to the fact that injuries had been accepted as "hurt on duty" on 28 July 1988, 22 March 1989 and 23 October 1989. Reference was also made to Dr Scougall's report and the s 10B(3)(a) certificate of 19 April 2006, which identified three specific dates of injury, as noted above. This contextual material supports the view that the certificate related to a number of injuries over a period of time, and not to a condition of gradual onset or a pre-existing condition which had been aggravated or exacerbated during the course of employment.

Relevance of section 16 34The STC's argument turned on the assumption that the primary judge had applied s 16 in reaching his assessment of compensation payable. Although the reasoning is not pellucid, the better view is that his Honour did not adopt such an approach. He summarised the STC's submission below at [13]-[16], commencing with the proposition that "the injury consists of the aggravation of a disease being a degenerative condition of the spine" to which s 16 applies: at [13]. In that event, the submission continued, "in respect of multiple aggravations of a disease, compensation may only be awarded for one aggravation, that is the most recent aggravation, and the date of the most recent aggravation is, pursuant to s 16, the date of the most recent incapacity or the date of the claim": at [15]. 35Having set out the submission, his Honour noted that the respondent suffered "injury and incapacity" on three occasions prior to 2002. He continued at [18]: "S 16 deems injury to have occurred at each of those respective dates, and as at each date, he was entitled to make a claim for lump sum compensation if permanent impairment resulted from the injury. Those claims would have been determined pursuant to the table of maims." 36There is authority for the proposition that where a worker claims compensation in respect of what has conventionally been described as a "frank injury", s 16 of the Workers Compensation Act does not apply: Rail Services Australia v Dimovski [2004] NSWCA 267; 1 DDCR 648 at [29] (Handley JA), [68] (Hodgson JA) and [85] (Young CJ in Eq). The reasoning is that, although the two limbs of the definition of "injury" in s 4(b) may well be sub-categories of the general definition in s 4(a), ss 15 and 16 respectively are intended to pick up the two sub-limbs of paragraph (b): see [29**] above. Thus, the Court has identified the object of s 16 as being "to provide a worker with recourse against one employer where there were several whose employment of the worker substantially contributed to the aggravation, acceleration, exacerbation or deterioration of a disease": Australian Conveyor Engineering Pty Ltd v Mecha Engineering Pty Ltd (1998) 45 NSWLR 606 at 616 (Sheller JA). Sheller JA continued: "This object is achieved if the phrase 'consists in the aggravation ... of a disease' is construed to refer to an injury by aggravation but not to a personal injury which aggravates the effects of a previously existing disease. In short, s 16 is confined to what are entirely aggravation injuries. The distinction was well recognised when the forerunner of the section was introduced into the Workers' Compensation Act 1926 ." 37Following that line of authority, there was an inconsistency in the reasoning of the primary judge at [18]. Given his identification of three separate and discrete events involving injuries and consequent incapacity, s 16 was not relevant. 38In any event, no error in law was demonstrated in the approach adopted. As the cases discussed by Handley AJA reveal, the date provided by application of s 16 as the deemed date on which the injury happened, may well depend upon how the injury is defined in the claim. For example, a permanent impairment claim, to which s 16(1) applies by virtue of s 16(3), may be identified in different ways, depending upon the circumstances. Section 66 of the Workers Compensation Act provides that a worker who "receives an injury that results in permanent impairment is entitled to receive from the worker's employer compensation for that permanent impairment": s 66(1). There would appear to be no constraint on a worker claiming such compensation in respect of several identified injuries. 39Critical to the approach adopted by the primary judge, was his reading of the transitional provision set out at [13**] above. He identified the purpose of that provision as being "to ensure that the new regime did not apply in respect of an injury received before the commencement of the amendments even if the injury is the subject of a claim made after the commencement of the amendments ": at [19] (emphasis in original). The numerous amendments to the Workers Compensation Act have resulted in diverse transitional provisions. The transitional provisions in respect of claims under s 66, for lump sum compensation were applied in, eg, Alto Ford Pty Ltd v Antaw [1999] NSWCA 234; 18 NSWCCR 246 at [9], and Stone v Stannard Brothers Launch Services Pty Ltd [2004] NSWCA 277; 1 DDCR 701 at [40]-[44]. The comparison between the provisions is instructive. Thus, in Schedule 6, Part 6, cl 3A(2) provides: "(2) If any such loss is taken (by section 15, 16, 17 or any other provision of this Act) to have happened before the commencement of Division 4 of Part 3 of this Act, the amount of compensation payable for the loss under that Division is to be determined .... " 40Reference to the injury being taken "to have happened" tracks the language of the sections referred to, particularly ss 15, 16 and 17; nothing turns on the substitution of "taken" for "deemed". By contrast, cl 3 of Part 18C is differently phrased. It states that the 2001 amending Acts do not apply "in respect of an injury received" before their commencement; nor is there any reference to ss 15, 16 and 17. It is not necessary to determine how the transitional provision would operate in respect of an injury purely by way of aggravation of an existing condition and thus falling solely within the terms of s 16. Relevantly for present purposes, the transitional provision addresses the possibility that an injury may have been "received" before the commencement of the amendments, rights in respect of which are preserved. Accordingly, the primary judge did not err in recognising and awarding compensation on the basis of the identified injuries which were received before the commencement of the amendments and resulted in permanent impairment.

Conclusions 41Adopting that approach, the primary judge did not err in point of law in approaching the task of quantifying the amount of the gratuity by reference to injuries which occurred both before and after 1 January 2002. Because, absent such error, the STC did not seek to have the award set aside, the appeal should be dismissed. The STC should pay the costs of the respondent in this Court. 42HANDLEY AJA : General 43This is an appeal under s 142N of the District Court Act from the decision of Curtis DCJ of 11 June 2010. The Judge allowed Mr O'Keefe's appeal under s 21 of the Police Regulation (Superannuation) Act 1906 (the 1906 Act) from the decision of the Corporation (STC) of 1 June 2009 that he was entitled to a gratuity of $7500 under s 12D(1) for 6% whole person impairment due to injuries to his lumbar spine. 44The trial Judge substituted an award of $34,075. The STC's appeal to this Court, as conducted, was limited to a question of law. A challenge to a ruling on evidence was not pursued. 45I have had the benefit of reading the reasons for judgment of Basten JA in draft. His Honour sets out the facts, the history of the proceedings, and the relevant statutory provisions. Much of this was common ground but as I have the misfortune to differ from his Honour's ultimate conclusion I will have to cover some of the same ground again. 46Sergeant, now Mr O'Keefe (the claimant), was discharged from the police force on 14 July 2006 (CB 89, 104) after being certified under s 10B(1) on 3 April 2006 (CB 140) incapable of exercising the functions of a police officer due to the degenerative condition of his lumbar spine. 47On 19 April 2006 (CB 142) the Commissioner's delegate decided, under s 10B(3)(a), that the claimant's certified infirmity was caused by him being hurt on duty. The dates of injury specified were 7 April 1998, 21 January 1999 and 31 May 2005. The certificate entitled the claimant to an additional superannuation allowance. 48On 8 November 2007 the claimant's solicitors made a claim for lump sum compensation under s 12D (CB 46). 49The claim was supported by a medical report by Dr Scougall of 4 September 2007 which was enclosed. 50Section 12D(1) provides for payment of a "gratuity" to a former member of the police force who was hurt on duty. The gratuity, which is payable as of right, must not exceed: "... the amount that ... would have been payable to the ... former member under Divisions 3, 4 and 5 of Part 3 of the Workers Compensation Act 1987 [the 1987 Act] if the former member had been a worker for the purposes of that Act." 51Section 12D(3) provides: "STC shall not grant a gratuity under this section to a ... former member of the police force unless: (a) an annual superannuation allowance is payable to the ... former member under s 10 in respect of an infirmity ... arising out of the same injury to which the claim for the gratuity relates, or (b) where an annual superannuation allowance is not so payable, the injury to which the claim for the gratuity relates is determined, pursuant to subsection (4) or on appeal, to have been caused by ... the former member having been hurt on duty when he ... was a member of the police force." The s 12D(4) decision 52On 19 January 2009 (red 7) the Commissioner's delegate made a decision under s 12D(4) which relevantly provides: "(4) Where a ... former member of the police force claims a gratuity under this section (otherwise than in respect of an injury referred to in subsection (3)(a)), the Commissioner of Police must: (a) decide whether or not the injury to which the claim relates was caused by ... the former member having been hurt on duty when he ... was a member of the police force, and (b) ... ". 53The delegate referred to the claim "in respect of a permanent disability ... resulting from a duty related injury" and continued: "In terms of s 12D(4)(a) of the [1906 Act] ... I have decided that former Sergeant O'Keefe's injury to his back was caused by the member being hurt on duty. Date of injury: Nature and Conditions of employment between 28 July 1988 and 24 November 2005". 54The delegate found a single injury during the period identified which ended on the last day the claimant performed duties in the police force. 55It was common ground below and in this Court that s 12D(3)(b) was the relevant provision and subs (4) was enlivened. Like Basten JA I see no reason to reject this consensus. Indeed, as will appear, I consider that this view was correct. The s 12D(4) decision identified the relevant injury 56The claimant did not appeal from the s 12D(4) decision. In Saad v Commissioner of Police (1995) 12 NSWCCR 70, 75 in an appeal from a decision under s10B(3)(a), Rolfe AJA, who delivered the principal judgment, said of the unappealed certificate under s 10B(1), that the trial Judge "was bound to accept, as she did, that the appellant was suffering from the infirmity" certified, and (at p 76) the only issue was whether the appellant had been hurt on duty. This decision was followed in Murray v Commissioner of Police [2004] NSWCA 365 at [29] per Tobias JA who delivered the principal judgment. 57In Day v SAS Trustee Corporation [2009] NSWCA 222 ( Day ) the Commissioner made a decision under s 12C(2) that the former member died as a result of being hurt on duty. STC awarded his widow a pension but her claim to a higher pension was dismissed by the District Court. 58An appeal to this Court was allowed because the trial Judge's reasons were inconsistent with the Commissioner's decision which bound the parties and the Judge: per Giles JA at [31], [33], [62], [66], [68], per Ipp JA at [75], per Basten JA [89], [90]. 59In SAS Trustee Corporation v Pearce [2009] NSWCA 302 ( Pearce ) the former police officer had been certified incapable under s 10B(1) and discharged. The Commissioner decided, under s 10B(3)(a), that the officer's infirmities had been caused by being hurt on duty. It was common ground that s 12D(3)(a) was the relevant provision [63] and that s 12D(3)(b) and (4) were not engaged. Basten JA, with whom Beazley JA agreed, held that STC, and on appeal the Court, could not determine issues which the 1906 Act committed to the decision of the Commissioner [69], [96], [100]. 60Section 12D(4)(a) provides that the Commissioner is to decide "whether or not the injury to which the claim relates was caused by the [claimant] having been hurt on duty". The only relevant claim was that made on 8 November 2007. 61In Day Basten JA said [89] of the Commissioner's hurt on duty decision under s 12C(2): "That decision will be made in the context of a claim; it will therefore reflect the nature of the injury which was the subject of the claim and the circumstances said to give rise to the causal connection with the deceased's employment. Despite the division of responsibilities, the Commissioner and the Respondent must address the same injury and the same set of circumstances. These will also define the subject matter of the proceedings in the District Court on an application for a determination in respect of a decision by either the Commissioner or the respondent." 62Basten JA made the same point in Pearce at [122] when he said of the Commissioner's hurt on duty decision under s 10B(3)(a) that: "The Commissioner had identified the only relevant 'injury'". In my judgment this statement and the earlier statement in Day are applicable, mutantis mutandis, to this s 12D(4) hurt on duty decision. 63Section 12D(4)(a), unlike s 10B(3)(a), does not in terms authorise the Commissioner to determine the date or dates on which the claimant was hurt on duty. However the s 12D(4) decision did this by determining that the claimant was hurt on duty between the specified dates. 64As Basten JA said in Commissioner of Police v Kennedy [2007] NSWCA 328 at [55]: "The interrelationship of ss 10, 10B and 12D thus supports the conclusion that the function of the Commissioner is the same in each case and is limited to determining the causal connection between the infirmity or injury and the officer's employment." 65The delegate's hurt on duty decision identified a single injury caused by the nature and conditions of the claimant's employment over a 17 year period and this was the only injury for which he was entitled to compensation. If there were other injuries they were not compensable because there was no relevant hurt on duty decision. The decision below is affected by legal error because the Judge based his awards on injuries not identified in the hurt on duty decision. The relevant injury: the facts 66Dr Scougall recorded (CB 88) back injuries sustained by the claimant on 28 July 1988, 2 December 1988, 2 March 1989, 23 October 1989, 7 April 1998, 2 June 1998, 2 September 1998, 21 January 1999, 31 January 2005 and 24 November 2005. The claimant did not attend for duty after 24 November 2005 (CB 89, 104). 67The injury on 28 July 1988 occurred while the claimant was lifting 30 kg. He was off work until 9 August "returning then to his full pre-injury work and hours". However he continued to suffer "recurring episodes of pain across his low back and symptoms in his left leg". 68He had a recurrence of back and leg symptoms and lost three days off work from 2 December 1988. On 2 March 1989, on his way to work, his stationary vehicle was struck from behind. He experienced neck, back and leg pain. He did not lose time for work and recovered. He had a fall at work on 23 October 1989 which temporarily aggravated his back symptoms but lost no time from work. 69He had a further injury on 7 April 1998 while lifting equipment into a station wagon and had time off work. Dr Scougall said that this was another temporary aggravation. 70He had a further injury at work on 2 June 1998 which caused a temporary aggravation of his back and legs symptoms and he was off work for three days. He had another temporary aggravation of his back pain at work on 2 September 1998 without loss of time. He had another aggravation on 27 January 1999 and lost two days from work. 71He had a further temporary aggravation on 31 January 2005 when moving heavy equipment and lost five days from work. He had his last aggravation on 24 November 2005. 72When examined by Dr Scougall on 4 September 2007 the claimant was suffering symptoms in his back and left leg. He denied having any back problems prior to the first injury on 28 July 1988. The doctor had the benefit of radiological examinations of the claimant's lumbar spine. The earliest of 2 August 1988 showed "some degenerative changes in the lumbar spine" particularly at the L3/4 and L4/5 levels. An x-ray of 17 April 1998 confirmed degenerative changes of those levels as did a CT scan of 4 June 1999. The latter showed no evidence of mechanical nerve root compression. An MRI of 10 March 2005 showed posterior bulging in association with the degenerative changes but no obvious nerve root compression. 73The doctor diagnosed (CB 91) chronic "soft tissue injuries" in "the disc (sic) at the lower lumbar area where there is evidence of some degenerative changes". He concluded (CB 92): "The findings indicate that the incident at work on 28 July 1988 and the subsequent nature and conditions of his work until the commencement of Sick Report on 24 November 2005 are substantial contributing factors to the development of the lesions diagnosed in his lower back." 74The other contributing factor was the degenerative changes demonstrated on the radiology since 2 August 1988. The relevant injury: the law 75The claim for a lump sum gratuity under s 12D(1) invoked the definition of hurt on duty in s 1(2) of the 1906 Act: "... means injured in such circumstances as would, if the member were a worker within the meaning of the [1987 Act], entitle the member to compensation under that Act." 76Section 12D(1) incorporates Division 4 of Part 3 of the 1987 Act which includes s 66 (compensation for permanent Injuries) and s 67 (compensation for pain and suffering). 77Until 1 January 2002 s 66 provided compensation for permanent injuries in the Table of Maims in Division 4 which included "Permanent impairment of back" (the old provisions). 78The Workers Compensation Legislation Amendment Act 2001 (Act No 61 of 2001) which relevantly commenced on 1 January 2002, made whole person impairment the basis for assessing lump sum compensation (The new provisions). The appeal turns on the effect of the transitional provisions in Part 18C of Schedule 6 in the 1987 Act. 79Clause 3(1) of Pt 18C as amended, provides: "(1) The lump sum compensation amendments do not apply in respect of an injury received before the commencement of the amendments (even if the injury is the subject of a claim made after the commencement of the amendments) ...". 80STC assessed the claimant's gratuity under the new provisions at $7500. Curtis DCJ assessed gratuities of $31,575 under the old provisions for an injury before 1 January 2002 and $2500 under the new provisions for an injury since (red 14). 81The question is whether, and to what extent, the claimant's injury or injuries were received before 1 January 2002. 82Injury is relevantly defined in s 4 of the 1987 Act as: "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) ... ". 83The trial Judge found [17] that the claimant first suffered injury and incapacity on 28 July 1988, and suffered further injuries and incapacity on 2 June 1998 and 27 January 1999. He said [18] that s 16 of the 1987 Act "deems injury to have occurred" at each of those dates so that the claimant was entitled to claim lump sum compensation "if permanent impairment resulted from the injury". Thus the Judge found that the claimant's rights to lump sum compensation for an injury accrued when that injury caused incapacity. In my judgment, for the reasons that follow, this involved legal error. 84The Judge rejected STC's submission that there was only one injury and held [23] that "There may be several episodes of aggravation of a pre-existing disease, each of which may give rise to a discrete claim for lump sum compensation." 85The Judge's important findings were in [24], and [26]. In [24] he accepted the opinion of Dr Matalani. In [26] he found that "in or about 1999" the claimant "suffered the aggravation of a pre-existing disease, being lumbar degeneration " and was entitled to compensation pursuant to s 66 of the 1987 Act in respect of "further impairment resulting from that injury". 86The relevant reports by Dr Matalani are those of 2 March (CB 80), and 29 April 2010 (CB 86). The latter contained the doctor's assessment of the claimant's pre-January 2002 impairment. His diagnosis (CB 83) was: "... multiple lower back injuries at work. This resulted in acceleration of L3/4 and L4/5 disc degenerative disease." 87In his later report Dr Matalani assessed the permanent impairment in the claimant's back at 20% with 10% permanent loss of efficient use of his left leg at or above the knee. He continued: "85% of the above impairment is attributable to the injury on 28 July 1988 and subsequent exacerbation caused by the nature and conditions of his employment before January 2002." 88Thus Dr Matalani assessed the permanent impairment of the claimant's back at the date of his examination in March 2010, and apportioned it on a causation basis as at 1 January 2002. He did not separately assess the permanent impairment caused by the injury on 28 July 1988 and that caused subsequently before January 2002. 89The Judge found that the pre-2002 permanent impairment assessed by Dr Matalani [26]-[27] already existed in January 1999 [25]. Section 16 of the 1987 Act 90The claimant was paid compensation for all time lost due to incapacity prior to 24 November 2005. His claim under s 12D was for lump sum compensation. STC contended that it fell within s 16 of the 1987 Act which deemed the injury to have happened on 8 November 2007 when the claim for lump sum compensation was made. 91Section 16 relevantly provides: "(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 the employment that was a substantial contributing factor to the aggravation, acceleration, exacerbation or deterioration. (2) ... (2A) ... (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) ...". 92The relationship between ss 4(a), 4(b)(ii) and 16 of the 1987 Act was considered in Rail Services Australia v Dimovski [2004] NSWCA 267, 1 DDCR 648. The Court held that a frank injury to an area of the body affected by a disease falls within s 4(a) and should be compensated independently of s 16: Handley JA at [29], Hodgson JA at [68], and Young JA at [85]. 93The point was encapsulated by Hodgson JA at [68]: "Section 16 applies only if the injury 'consists in' the aggravation etc of a disease. If there is an event that satisfies par (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 supported a case under par (b)(ii) does not mean that this injury 'consists in' the aggravation of a disease". 94The Dimovski point does not arise because the Judge did not find a frank injury, but an injury within s 16, [18], [25], [26]. The question is whether the date of that injury was fixed by the date of incapacity in accordance with s 16(1)(a)(i), as the Judge held, or by the date of the claim for lump sum compensation in accordance with s 16(1)(a)(ii) as Mr Russell contended. 95The Court has decided that incapacity in s 16(1)(a)(i) means incapacity for which weekly compensation is or can be claimed: GIO Workers Compensation (NSW) Ltd v GIO General Ltd (GIO) (1995) 12 NSWCCR 187, 196 per Sheller JA; P&A Berkeley Challenge Pty ltd v Alfonzo ( Berkeley ) (2000) 49 NSWLR 481, 487 per Priestley JA; and Stone v Stannard Bros Launch Services Pty Ltd [2004] NSWCA 277, 1 DDCR 701 ( Stone ) at [5] per Handley JA, and [37] per Hodgson JA. 96These cases also decided that s 16(1)(a)(i) only applies to a claim for weekly compensation, and that the section fixes different dates of injury for different purposes. In GIO at 196 Sheller JA, who gave the principal judgment said, of the comparable provision in s 15(1)(a)(i), that the reference to incapacity was "a reference to the incapacity for which compensation is claimed". He added (p 196) that whether there was an incapacity or death claim "In neither case does it matter that there were earlier periods of incapacity resulting from the injury." 97In Alto Ford Pty Ltd v Antaw (1999) 18 NSWCCR 246 Sheller JA, who gave the principal judgment, held [13] that the trial Judge had not erred in law in finding [12] that the deemed date of injury for the incapacity claim was in January 1992 while the deemed date of injury for the s 66 claim was in July 1996. 98In Berkeley [2000] 49 NSWLR 481 at [28]-[30], Priestley JA, who gave the principal judgment, held that s 16(1) refers to incapacity creating an entitlement to weekly compensation. He added [32] that s 16(3) "appears reasonably plainly to serve the function of fixing dates for injuries entitling a worker to compensation ... under s 66 and s 67." 99In Stone (2004) 1 DDCR 701 Handley JA referred to these cases and said [10]: "Even if s 16(1)(a)(i) was capable of operating in this case to fix a date for the worker's incapacity injury, we should nevertheless follow [ Antaw ] where this Court specifically held that s 16(1) could fix different dates for incapacity and impairment injuries and, in the latter case the relevant date was the date of the claim." 100In the same case Hodgson JA, with whom Mason P agreed, referred [34] to the submission of counsel for the worker that the injury for the purposes of ss 66 and 67 occurred when the claim was made and said [36], [38]: "In my opinion the decision in GIO shows that one must relate the question of the time of death or incapacity under s 16(1)(a)(i) to what is being claimed. Where, as in GIO itself, what is being considered is not a worker's claim based on incapacity, but a dependant's claim based on death, the fact that there was incapacity prior to the worker's death is irrelevant. The relevant time for the purposes of s 16(1)(a)(i) is the time of death ... In the present case, the claim ... is ... for a loss ... within s 66(1), which ... is itself to be treated as an injury within s 16(1), as provided by s 16(3). Each such loss or injury was ... included in the amended claim on 10 June 2003; and thus could not have caused incapacity prior to 20 June 1987: in my opinion, this plainly follows from Antaw ". 101The cases establish that if the claim is for lump sum compensation any earlier claim for weekly compensation is irrelevant. Any injury by permanent impairment (s 16(3)), is deemed to have happened when the lump sum claim is made. 102Compensation under s 66 and the Table of Maims is only payable for permanent impairment. 103The Judge found [17] injury and incapacity on 28 July 1988, 2 June 1998 and 27 January 1999, but his only finding of permanent impairment was in [26]: "... in or about 1999 [the claimant] suffered the aggravation of a pre-existing disease, being lumbar degeneration and that he was entitled to claim compensation pursuant to s 66 of the Workers Compensation Act 1987 in respect of further impairment resulting from that injury." 104Although the aggravations prior to 27 January 1999 caused short periods of incapacity, for which compensation was claimed and paid, these periods of incapacity are irrelevant. 105Since the claim fell within s 16(1)(a)(ii) the injury was deemed to have happened on 8 November 2007, and thus, for the purposes of the transitional provisions, after the lump sum compensation amendments took effect on 1 January 2002. The Judge erred in law in concluding otherwise. 106In this case s 16 operates to the detriment of the claimant because of the transitional provisions. In general, and for most of its history, the section and its predecessor have operated for the benefit of workers. Absent s 16 a worker with a 17 year history of a degenerative condition and back problems at work, possibly with multiple employers, would face many difficulties. He would have to prove each permanent impairment caused by the injuries to establish entitlements to compensation at the rates applicable at the dates of those injuries. 107Absent s 16, proof of a frank injury on 27 January 1999 would not have entitled the claimant to compensation for earlier or later aggravations, and the gratuity would be based on the rates applicable in January 1999 without the benefit of subsequent indexation. Section 322(3)_ of 1998 Act 108The Judge found [20] the claimant changed his job early in 1999 because of his back problems and undertook bench work which did not involve heavy lifting (CB 23-24). He found that the claimant became partially incapacitated in 1999 [21] and referred to the s 12D(4) decision which "recorded the dates of injury as being 'between 28 July 1988 and 24 November 2005'". 109In [22] he found that "there were multiple injuries before 1 January 2002" which could be aggregated under s 322(3) of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act). This provides: "(3) Impairments that result from more than one injury arising out of the same incident are to be assessed together to assess the degree of permanent impairment of the injured worker." 110In this case there were multiple incidents and s 323(3) can have no application. The Judge's conclusion involved further legal error. Conclusions 111Mr Ower referred to Tysoe v Commissioner of Police (2002) 23 NSWCCR 417 where Nielson J considered s 10B(3)(a) and (4) as they stood before their amendment by Act No 25 of 2007. Since that Act adopted Nielson J's construction of the earlier provisions the case does not assist the claimant. 112Mr Ower also relied on s 322(2) of the 1998 Act which provides: "Impairments that result from the same injury are to be assessed together to assess the degree of permanent impairment of the injured worker." 113Assuming, in favour of the claimant, that this section applies to assessments under the 1906 Act, it adds nothing where the only injury is deemed to have happened on the date of the claim. 114The Judge's award is thus vitiated by several legal errors and must be set aside. The application of correct legal principles to the findings of a s 16 injury entitles STC to an order restoring its determination of 1 June 2009. 115In my opinion the following orders should be made: (1) Appeal allowed with costs. (2) Set aside the decision of the District Court of 11 June 2010 and in lieu thereof substitute an order that the appeal to that court be dismissed, with no order as to costs. (3) The respondent to have a certificate under the Suitors' Fund Act 1951 (NSW).

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. Decision last updated: 26 October 2011

Suitors' Fund Act 1951(NSW)

Workers Compensation Legislation Amendment Act 2001(NSW)

(1999) 18 NSWCCR 246

(1995) 12 NSWCCR 187

(2002) 23 NSWCCR 417

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