(5) Respondent to pay the appellant's costs of the appeal and to have a certificate under the Suitors Fund Act if otherwise qualified.
37 BASTEN JA: Since 1 January 2002 lump sum compensation payments have been available to injured workers under the Workers Compensation Act 1987 (NSW) for non-economic loss, including loss resulting from psychological injury, where the injury results in a level of "permanent impairment": Pt 3, Div 4. A member of the police force who is "hurt on duty" may claim such a payment as a "gratuity" not exceeding the amount which would have been payable had the officer been a worker for the purposes of the Workers Compensation Act: Police Regulation (Superannuation) Act 1906 (NSW) ("the Police Superannuation Act"), s 12D.
38 On 8 September 2006, Senior Constable Anthony Raymond Pearce (the respondent) was discharged on medical grounds from the NSW Police Force. He sought from the appellant (referred to in the Police Superannuation Act and hereunder as the "STC") a "gratuity" in accordance with s 12D(3) of the Police Superannuation Act. By a decision notified to the respondent on 27 September 2007, the STC declined to grant the gratuity sought. It did so on the basis, at least implicitly, that his psychological injuries were sustained before 1 January 2002.
39 On 18 December 2007 the respondent commenced proceedings in the District Court seeking a determination that he had suffered "a 17% whole person impairment as a result of his psychological injuries". On 12 August 2008, the District Court (Hughes DCJ) found that the respondent suffered from "a whole body impairment of 15.3% as a result of psychological injuries". The Court reached that figure by attributing 10% of the total impairment to psychological injuries received before 1 January 2002. The STC seeks to appeal from that determination.
Scope and nature of appeal
40 The jurisdiction of the District Court invoked by the respondent is described as "residual jurisdiction" and was conferred on the Court by the Compensation Court Repeal Act 2002 (NSW). Relevantly for present purposes, it was engaged by the respondent as a person who considered himself aggrieved by "a decision made by STC on a matter that arises under [the Police Superannuation Act] by reason of a member of the police force being hurt on duty": Police Superannuation Act, s 21(1)(a). The power conferred on the District Court was either to confirm the decision of the STC or set aside the decision and replace it with a different decision: s 21(4). The District Court could only make a decision which the STC could have made and the Court's decision is deemed to be a decision of the STC: s 21(5) and (6). The Court had limited powers to award costs: s 21(8)-(10).
41 In exercising its powers in the residual jurisdiction, the Court is required to make a decision "on the real merits and justice of the case" and is not bound to follow "strict legal precedent": District Court Act 1973 (NSW), s 142J(1)(a) and (b). A decision of the Court is protected by a privative clause which purports to preclude review of the Court's decision otherwise than by way of a statutory appeal under s 142N: see s 142J(1)(c). The right of statutory appeal, invoked by the STC in the present case, is available to "a party to any proceedings before the Court in its residual jurisdiction" which is aggrieved by "an award of the Court in point of law": s 142N(1). The term "award" is defined to include "interim award, order, decision, determination, ruling and distinction": s 142M(1).
42 The STC was joined as defendant to the proceedings commenced in the District Court. The appropriateness of that course was not in issue in the present appeal, nor was any question raised as to the right of the STC to appeal to this Court under s 142N. Perhaps curiously for a person properly joined as a party in the District Court, the STC is expressly given a right to be represented at a hearing in the District Court: Police Superannuation Act, s 21(3).
Issues
43 The first ground of appeal relied on by the STC was a failure on the part of the District Court judge to give "adequate reasons" for his decision. This was dealt with as the primary ground in argument before this Court. Whether such a ground was properly open was not directly addressed. However, given that the subject matter of an appeal under s 142N is in effect a decision of the District Court in point of law, it is at least open to doubt as to whether the ground relied upon involved a challenge to any such decision, explicit or implicit: see Day v SAS Trustee Corporation [2009] NSWCA 222. Furthermore, it may be doubted whether his Honour in fact failed to give reasons for findings which he made, as opposed to failing to consider certain matters which may have been material, in point of law. The ground is not made good: see [117]-[121] below.
44 The second ground of appeal alleged a failure "to properly construe and apply s 323 of the Workplace Injury Management Act", being a reference to that provision in the Workplace Injury Management and Workers Compensation Act 1998 (NSW) ("the Workplace Injury Act"). That provision required a deduction from an assessment of permanent impairment for any proportion of the impairment due to a previous injury. Where the deduction could not readily be assessed, the statute permitted, subject to a qualification, a 10% deduction to be assumed. The STC said that the section was applicable, but that the evidence justified a far higher deduction which meant the 10% rule could not apply. The respondent by way of his notice of contention stated that s 323 was inapplicable. One consequence of that approach may have been that his Honour was in error in reducing the degree of permanent impairment from 17% to 15.3%. Nevertheless, the respondent did not seek to cross-appeal, but merely to uphold the assessment in the District Court. The respondent's contention should be accepted.
45 The third ground of appeal complained of a failure to address the submissions by the STC regarding the appropriate discount to be applied pursuant to s 323 of the Workplace Injury Act. That ground may have been characterized as a form of procedural unfairness, although it is not immediately clear that such a ground would fall within the terms of the statutory right of appeal. The substance of the ground will, in any event, be considered below in discussing the operation and application of s 323.
46 Ground 4 concerned the failure of the trial judge to address the evidence of Dr Gertler, with respect to the appropriate apportionment of permanent impairment as a result of events which occurred before 1 January 2002. That ground could have required attention to the transitional provisions with respect to the amendments permitting lump sum compensation payments for psychological injury, which commenced on 1 January 2002. The evidence was the subject-matter of the submissions relied on under ground 3, and was thus directed to the operation of s 323.
47 Finally, the respondent contended that the decision of the primary judge should be upheld on a separate basis, namely that the psychological injury which he suffered in the course of his employment was a "disease" for the purposes of the Workers Compensation Act and that it was deemed to have arisen on 10 November 2005, pursuant to s 15(1) of the Workers Compensation Act. That submission raised a further procedural difficulty, namely that it sought to uphold a decision which was otherwise erroneous in point of law by relying upon a finding which, at best, was a mixed finding of fact and law and was not made by the trial judge. Where the jurisdiction of this Court is limited by statute to a decision of the District Court in point of law, it may be that this Court should not grant relief if it is satisfied that the error of law was not material to the ultimate determination made in the District Court. However, it is difficult to see how this Court could uphold the decision of the District Court on the basis of a finding of fact (or fact and law) which was not made by the District Court and was not the only finding open, had that Court addressed the question. Although the contention cannot be determinative of the appeal, it will be necessary to say something about the point of statutory construction on which it was based, in order to understand the scheme of the legislation.
48 In the course of oral submissions in this Court, counsel for the STC relied upon the operation of cl 3(2) of the transitional provisions in relation to amendments to the Workers Compensation Act made in 2001, including the definition in sub-cl (3). The reduction provided by sub-cl (2) required an assessment of "any proportion" of the permanent impairment which was "due to something that occurred" before the commencement of the amendments. Counsel for the respondent somewhat plaintively remarked (Appeal Tcpt, 25/06/09, p 24), "I don't suppose it would assist me to make the observation that the transitional provisions didn't form any part of the grounds of appeal in this case". Whilst that statement was true, the oral argument embraced the transitional provisions and, subject to a question as to costs, there was no contention on the part of the respondent that he was unable to deal with the arguments or was otherwise prejudiced by the matter being raised in an informal manner. The operation of the transitional provisions had been the subject of debate in the District Court. For the reasons explained below, the transitional provisions were material and should have been addressed by his Honour in resolving the extent to which the assessment of permanent impairment should have been reduced because of events causing impairment which had happened prior to 1 January 2002.
Factual background
49 The subject-matter of the appeal being limited to a decision of the District Court in point of law, the factual background can be briefly stated. The respondent, having joined the police force in 1982, was exposed to a number of confronting and traumatic experiences over the following two decades. On 28 February 2005 he commenced a period of sick leave, from which he did not return. On 28 October 2005 his solicitors wrote to the STC seeking a medical discharge as a result of work-related psychiatric conditions. They enclosed a report from Dr Leonard Lambeth, a consultant psychiatrist. (Although it does not appear from the evidence, it may be assumed that a similar letter was sent to the Commissioner of Police.)
50 Dr Lambeth, in a report dated 24 October 2005 concluded, without doubt, that the respondent was suffering from "post-traumatic stress disorder - chronic - severe" and "major depression - chronic - moderate": report, p 5. Dr Lambeth further expressed the view that it was "much more probable than not" that his work as a police officer was the substantial contributing factor to his infirmity and that he was to be regarded as "100% totally incapacitated" for work.
51 The history of the respondent's experiences in the police force are helpfully set out in a report dated 25 June 2005, prepared by Dr Kym Kilpatrick, a psychologist. Dr Kilpatrick identified symptoms of stress and trauma as early as 1984, following the respondent's discovery and recovery of two drowned children (report, p 3). The following year he was involved in a cliff rescue at Garie Beach to the south of Sydney when the rotor of a helicopter caused a rock slide from which the respondent received lacerations to the head, whilst attempting to cover the body of the person being rescued. In 1987 the respondent was assaulted by two men in his local pub after being recognised as a police officer. However, the most significant incident occurred on 21 January 1988 when he was attacked by a man with an axe raised in each hand. The respondent fired at the man, causing his death. Two months later there was a further incident involving the capture of an escaped prisoner in bushland.
52 As a member of the dog squad, the respondent was involved in numerous searches for armed and dangerous offenders in the period 1991 to 1996. Dr Kilpatrick referred to three specific incidents of note in 1994. In one case, the respondent was asked to provide support and assistance to a fellow officer who had shot and killed an escaped prisoner in Brisbane. Despite his assistance, the officer shot himself on return to work. In the same year the respondent was fired upon whilst attending a siege at Petersham in Sydney. Further, in June 1994 allegations were made about him at the Wood Royal Commission. Although he was cleared of any impropriety, the experience was clearly stressful.
53 On 21 December 1999 the respondent was asked to assist fellow officers who had been involved in a shooting at Albury and, on 9 January 2000, was involved with another officer in attempting to negotiate the end of a siege involving a woman armed with a knife. During the negotiations, the woman started to cut her arms and sawed under her chin, thrusting the knife into the cavity of her mouth.
54 There were a series of further incidents after 1 January 2002. On 13 September 2003, the respondent was involved in a siege at Glenn Innes, during which an individual poured a large volume of petrol into the body of his car whilst parked next to bowsers at a petrol station. He sat in the car all night with a lighter in his hand, igniting the car at 8am the following morning. The respondent was involved in removing the burning body from the car in an unsuccessful attempt to save the man's life.
55 On 4 February 2004 the respondent with a group of officers approached a large marijuana crop at Torrington, the officers being armed only with pistols. Shots were fired by an offender with a rifle who later decamped. In September 2004 he was involved in another siege involving a man barricaded inside a house and threatening to injury himself with an axe.
56 A number of medical reports were tendered at the hearing in the District Court, some of which are not in evidence before this Court. Those which were in evidence included three reports of Dr Lambeth, whose diagnoses have been noted above. Dr Lambeth also made an assessment of "whole person impairment" in accordance with the WorkCover Guidelines for the evaluation of permanent impairment as required by s 322 of the Workplace Injury Act, in a claim for compensation under the Workers Compensation Act. He assessed the respondent's whole person impairment at 17%: report, 24 October 2005.
57 In a further report of 28 March 2006, he expressed the view that "the event of 1998 was the initiating event with respect to his post-traumatic stress disorder". This would appear to have involved a typographical error in respect of the date, as it appears from his earlier report that he was referring to the fatal shooting in 1988. He said that the respondent was "then a vulnerable person and subsequent events … have exacerbated the post-traumatic stress disorder". He sought to answer a question as to whether post-traumatic stress disorder ("PTSD") would resolve and stated:
"The immediate symptoms certainly can resolve, but it is my experience that when the patient is placed back in any situation which could have any reminders of the original initiating event, there is a very strong likelihood that the symptoms will again reoccur and be exacerbated."
58 Dr Lambeth further expressed the view that whilst PTSD is a disorder which "does to some extent" go into remission, it should basically be seen as "being controlled rather than a disorder that is cured".
59 The respondent also saw Dr Robert Gertler, at the request of STC. Dr Gertler's report, dated 27 June 2007, described the respondent's medical condition as "consistent with" the earlier diagnosis of chronic post-traumatic stress disorder and major depression: report, p 4. He also agreed that the respondent was incapable of undertaking any work at all.
60 Dr Gertler made an assessment under the WorkCover Guidelines, arriving at a whole person impairment of 15%. (It appears to have been common ground during the proceedings that there was an arithmetical error in that calculation and that the correct calculation would have accorded with Dr Lambeth's.) Dr Gertler was then asked and answered the following questions (report, p 6):
"After arriving at your WPI Assessment please indicate what proportion of the WPI, if any, would you ascribe to
a. Any pre-existing psychological condition.
There is no evidence that Mr Pearce suffered from a psychological condition prior to the onset of the post-traumatic stress disorder and depression.
b. The consequential effects of any physical injury.
None.
c. Any event that occurred before 1 January 2002.
The cardinal event was the shooting which took place in 1988. The majority of events which occurred after that time did so before 1 January 2002. As such, the proportion of WPI which can be attributed to events prior to 1 January 2002 would be almost 100%."
61 Other reports in evidence before this Court included a report from Dr Peter Anderson of 4 November 2005 and a report from Dr Frank Spruce of 29 June 2005. Each was a consultant psychiatrist and neither expressed a view significantly inconsistent with those noted above.
62 Various steps were then taken under the Police Superannuation Act, the legal significance of which will be addressed below. The claim process commenced with a document headed "Claim for hurt on duty benefits" lodged by the respondent and dated 2 March 2005. In a supporting letter dated 31 March 2005, the respondent identified numerous occasions on which he had been exposed to "horrific and disturbing incidents", commencing with what he described as the "Original Injury", in January 1988. The response to that claim is not revealed in the papers, but is not presently relevant.
63 On 28 October 2005, the respondent's solicitors wrote to the administrator of the STC seeking payment of a gratuity under s 12D of the Police Superannuation Act. The respondent first sought that payment prior to obtaining an entitlement to an annual superannuation allowance. As a result, the Commissioner of Police issued a certificate under s 12D(4) determining that the injury to which the claim related was caused by the member being hurt on duty. However, before the claim for a gratuity was dealt with by the STC, the respondent became entitled to an annual superannuation allowance. It was common ground between the parties that the decision of the STC was made on the basis that par (a) of sub-s 12D(3) was engaged: see [67] below.
64 On 31 August 2006 the STC certified that the respondent was incapable on the basis of a number of infirmities, including "chronic/severe post-traumatic stress disorder; and chronic/moderate major depression".
65 On 27 September 2006 the Commissioner of Police certified that the respondent's infirmity was caused by him having been hurt on duty and identified dates of injury for each of the particular infirmities. The first item on the list read, "10 November 2005 (PTSD, notional)". The meaning of that certificate remained a live dispute on the appeal.
66 On 27 September 2007 the STC notified the respondent's solicitors of its decision. It granted payments by way of gratuity in respect of a number of injuries, but not for "the psychological injuries sustained on the notional date of 10 November 2005". It was the last decision which gave rise to the appeal to the District Court.
Statutory structure
(a) Police Superannuation Act
67 A claim for a gratuity in the nature of a lump sum compensation payment under the Workers Compensation Act engaged s 12D of the Police Superannuation Act, the operative part of which stated:
" 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.
…
(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."
68 Although the allowance is described as "payable … under section 10", that section does not appear to provide for a decision that an allowance is payable in any particular case. However, that is not of present concern; of more direct relevance is the provision made for certification in s 10B:
" 10B Medical examination of disabled member and determination of whether hurt on duty
(1) An annual superannuation allowance or gratuity must not be granted under section 10 to a member of the police force who is discharged unless STC (having regard to medical advice on the condition and fitness for employment of the member) has certified the member to be incapable, from a specified infirmity of body or mind, of personally exercising the functions of a police officer ….
…
(3) Where a member or former member of the police force is duly certified under subsection (1) …, the Commissioner of Police shall:
(a) decide whether or not the infirmity to which the certificate 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, as the case may be, and the date or dates on which the member or former member was hurt on duty, and
(b) give the member or former member written notification of the decision."
69 The Police Superannuation Act involves a division of responsibility for decision-making between the Commissioner of Police and the STC. The power to determine the nature and extent of injury and the compensation payable is conferred on the STC, while questions involving the causal connection between an injury and employment, that is whether the member was "hurt on duty", are assigned to the Commissioner: see Commissioner of Police v Kennedy [2007] NSWCA 328 at [42]. Thus, for a superannuation allowance to be payable under s 10, the STC must have certified that the member was "incapable, from a specified infirmity of body or mind": s 10B(1). It appears that, on 31 August 2006, a delegate of the STC gave a certificate identifying a number of infirmities, including "chronic/severe post-traumatic stress disorder" and "chronic/moderate major depression". (This appears from the certificate given by the Commissioner's delegate for the purposes of s 10B(3)(a), dated 27 September 2006. The STC certificate was not in evidence, but nothing turned on that. There is no doubt that a delegate of the STC had certified the respondent to be incapable and had specified the relevant infirmities.)
70 The Commissioner was required to certify under s 10B(3)(a) not merely that the specified infirmities were caused by the member being hurt on duty, but also the date or dates on which the member was hurt on duty. The Commissioner's decision, as set out in the written notification of 27 September 2006, identified various dates for particular injuries, most of which are irrelevant for present purposes. The critical date in relation to PTSD was identified as 10 November 2005 and was described as "notional". No date was specified in relation to depression, but it was reasonable to assume that, as demonstrated in the psychiatric reports, this was a co-morbidity with PTSD and nothing turned on that omission.
71 Because of the division of responsibility between the Commissioner and the STC, it is necessary to understand what the Commissioner certified and what the STC was required to determine under s 12D(1). That in turn requires an understanding of the inter-relationship of the Police Superannuation Act and the Workers Compensation Act.
(b) Workers Compensation Act
72 The term "hurt on duty", used in the Police Superannuation Act, is defined to mean "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": Police Superannuation Act, s 1(2), hurt on duty. The Workers Compensation Act does not use the term "injured" but does speak of "injury" and, as will be seen, refers to an injury which has "happened" and an injury which has been "received". The Act defines injury in the following terms in s 4:
" 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 …."
73 The references in par (a) to an injury "arising out of" and in par (b), with respect to a disease, to the employment being a contributing factor, are of less relevance than they once were, because s 9A(1) generally (with certain irrelevant exceptions) precludes a payment of compensation in respect of any injury "unless the employment concerned was a substantial contributing factor to the injury".
74 There are other provisions in the Workers Compensation Act which the Commissioner may need to consider in particular circumstances in determining whether an injury would be compensable under that Act. The respondent argued in the present case that either or both of ss 15 and 16 may have been relevant. The operative parts of those sections read as follows:
" 15 Diseases of gradual process - employer liable, date of injury etc
(1) If an injury is a disease which is of such a nature as to be contracted by a gradual process:
(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 to the nature of which the disease was due.
(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 employment to the nature of which the disease was due 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 Commission.
…
(4) In this section, a reference to an injury includes a reference to a permanent impairment for which compensation is payable under Division 4 of Part 3.
…