Workers Compensation - Proceedings to obtain compensation - Determination of claim - Review of determination and re-opening of case - Generally - Tasmania - Review of Tribunal ruling - Jurisdiction - New matter arising.

G L & V N Barber Pty Ltd v Ryan [1999] TASSC 5; [1999] 8 Tas R 308, considered.

Tubemakers of Australia Limited v Kurz 4/1998; Viney v Roney Management Pty Ltd [1996] TASSC 27; (1996) 6 Tas R 240, referred to.

Workers Rehabilitation and Compensation Act 1988 (Tas), s81A

Judgment Number: [2000] TASSC 82

1 The appellant employer seeks review of a determination of the Workers Compensation (Rehabilitation and Compensation) Tribunal ("the Tribunal") that it had no jurisdiction to hear a reference made in accordance with the Workers Rehabilitation and Compensation Act 1988, s81A.

2 On 8 September 1997, the respondent, employed as a nurse with the Royal Hobart Hospital, made a claim for compensation in accordance with the Act, s34. The event giving rise to the claim was said to have occurred on 25 August 1997 when:

"Release tilt mechanism on a bed to raise foot of bed. Full weight of bed taken when release jilted off."

3 The injury caused by the event was "lower back strain". The accompanying medical certificate stated the cause of injury (identified as an aggravation of an existing condition) to be:

"weight of bed falling on arms while adjusting it - sharp jolt to back".

"exacerbation of back pain - left paraspinal muscle spasm and lumbosacral pain".

4 The appellant did not dispute the claim and commenced payment of weekly compensation and expenses. Between September 1997 and March 1998 similar certificates were provided to the appellant. A regime was introduced whereby the respondent performed some paid activity classified as "rehabilitation hours", received compensation payments on the basis of "unfit hours", and was paid a portion of her salary by way of allocation against leave and sickness entitlements. Records for the relevant period disclose the following apportionment:

5 Medical certificates supplied during that period provided for such a rehabilitation regime with a typical example stating:

"4 hours/day Mon, Tues, Thurs, Fri Duties as detailed on return to work Program".

6 On 5 March 1998, the medical certificate contained a reference, for the first time, to:

The appellant did not dispute liability in relation to that claim and the regime which included the continued payment of compensation for portion of the loss of wages. The records show the following apportioned payments made between 7 March 1998 and 23 April 1999:

7 The medical certificates consistently referred to the existence of "depression" during that period, by reference to the notations "see previous certificate" and "as per return to work program 21/12/98".

8 On 26 April 1999, the respondent presented a medical certificate which stated, as a provisional diagnosis:

"Acute adjustment disorder. Work related stress 'depression' plus symptoms as per previous certificates"

"... per previous certificates plus insomnia, anxiety, [arrowdown] appetite".

In relation to modification of duties as previously certified in accordance with the rehabilitation regime, the medical practitioner stated:

"It is inappropriate for Fiona to be working in Occupational Health & Safety given the fact that she has a Workers Compensation Claim currently".

9 It was this claim which the appellant sought to refer to the Tribunal in accordance with the Act, s81A. The referral related to the claim as and from 19 April 1999 (the commencing date stated in the certificate of 23 April) on the ground that:

"the worker is not incapacitated for work as certified"

whilst the notice to the respondent stated that the basis of the referral was that:

"there is insufficient evidence that you are incapacitated by an injury or disease that has arisen out of and in the course of your employment and to which your employment has contributed to a substantial degree."

10 The question of the existence and effect of an "acute adjustment disorder" was significant. In March 1998, a specialist occupational physician had reported to the appellant that:

"It was clear from the manner in which my interview with Ms Cook was conducted that she is upset with the turn of events which have occurred over the past four weeks. She had elected to attend university with a view to moving away from the nursing profession believing that she could not and should not return to those activities.

Ms Cook has had two significant episodes which have left her with ongoing symptoms of back pain: the first occurred in 1994 and the second in September 1997. I note that you have elected a date of 25/08/97 which is probably the incident that Ms Cook referred to as being September.

It was clear that Ms Cook has worked hard to regain fitness, has participated in physiotherapy and an exercise program which involved significant swimming.

I have read the opinions of Mr Roth and Mr Mills and have viewed the MRI scans, the most recent of which confirmed that there was no significant abnormality detected on the lumber spine.

It was my opinion that Ms Cook suffers with low back pain which is similar to a substantial proportion of the population. I do not share the opinion that Ms Cook cannot return to nursing activities. I believe that she could successfully return to nursing duties, certainly those which she was performing whilst participating in a rehabilitation program which involved the anaesthetic/recovery room.

Ms Cook suffers with low back pain which has been aggravated or brought on by the injuries but I do not accept that there is permanent damage in her back. It is important that Ms Cook learns how to manage her symptoms. In many respects she had come to terms with this before the recent aggravation and subsequent emotional upsets associated with her being prevented from attending university. If she wants to then Ms Cook should attend university if she believes that this is a career development for her, but there is no reason why she should go to university to study psychology on the basis that she has got permanent back damage.

Ms Cook clearly believes that she has significant back damage and does not wish to risk further injury. She has developed an avoidance complex whereby she is frightened for fear of causing herself significant damage and as a result is not coping well. Coping strategies are essential and with time I believe that she will approach the future with a degree of confidence.

At present Ms Cook is psychologically distraught and her rehabilitation potential has been compromised. Ms Cook could continue in the recovery room and theatre but I do not believe that Ms Cook has a high motivation to return to work at present. This may change in time.

I can accept the opinion of Mr Roth that she has a 5% residual disability at present but I do not believe that this is permanent.

Ms Cook has substantially recovered from the physical effects of the injury for which this claim was lodged. She has not, however, recovered from a psychological viewpoint and most certainly is not coping well with her back pain and the manner in which she perceives that she has been treated.

Although the physical recovery is complete I cannot state that the worker has made a complete recovery because of this psychological component.

It is clear that there has been a significant confrontation between Ms Cook and the workers compensation department at the Royal Hobart Hospital. It is important that the lines of communication are kept open and a satisfactory outcome is eventually achieved.

Ms Cook's feelings about the manner in which she has been treated are real but are inappropriate for the long term.

Should you have any queries in respect of this report and opinion please contact me."

11 There is a significant difference between a claim based on physical disability and the onset of psychological impairment arising from the effects of such injury. A report prepared by a clinical psychiatrist for the purpose of the referral stated:

"Ms Cook's situation seems to have changed very little. On her history, she becomes particularly worked up about the prospect of returning to work in the vicinity of Mr Cookson even though she depicts his behaviour in the workplace as her manager as impeccable.

As she presents today, there is [sic] no particular signs of psychological disorder. She reports that nausea has diminished but that she remains depressed. However, there are no clinical signs of depression. In particular, her affect was unremarkable, her speech was spontaneous, fluent and varied in tone, and there were no abnormalities to her posture, facial expression or eye contact. In addition, she is able to participate in various diversionary activities whereas someone who is clinically depressed would probably withdraw from these. Thus, although she may feel depressed about her situation, I would not regard this to be to a degree that would constitute a psychiatric disorder.

I have some concerns that substance abuse may be complicating the situation. During 1998 her use of alcohol was a problem to the degree that her liver function tests became abnormal. She ceased drinking, but has now resumed which, given that history, may be unwise. In addition, her use of analgesics appears to have climbed.

I am unable to see any psychiatric disorder which would prevent Ms Cook from working, or from participating in a return to work programme. I will leave opinions concerning the effect of her back disorder on her work capacity to those with expertise in the area."

(1) Whether the respondent suffered from a condition described as an "acute adjustment disorder".

(2) Whether the condition was caused by the event occurring on 25 August 1997.

(3) Whether the effect of the condition was such as to prevent the respondent from continuing with the rehabilitation programme in place since late 1997.

13 The Tribunal concluded that it had no jurisdiction to entertain the referral. It determined that in accordance with the decision of the Full Court in G L & V N Barber Pty Ltd v Ryan [1999] TASSC 5; [1999] 8 Tas R 308 there had been no interruption to the continuity of certification and that accordingly the initial acceptance by the respondent of the claim precluded subsequent referral. It concluded that:

"... even though the diagnosis has changed and it appears as if a fresh condition is now being claimed for and the remedies in the Act available to the employer under Section 86, Section 81A(5), and Section 88 are the appropriate Sections for the employer to use. Given Dr Sale's opinion I would have thought that those Sections could be invoked. However, I appreciate the real difficulty the employer has in this case where what appears to be a fresh condition is being claimed for. There certainly may well be a dispute about the question of whether or not the stress condition arose out of the original injury and was a consequence of it, but that issue cannot be litigated on the authority of Barber v Ryan (supra) where there has been continuity of certification."

(a) to pay compensation by way of weekly payments for an injury referred to in section 81(1); or

(b) to pay the cost of any benefits payable under Division 2 of Part VI in respect of the injury

must, within 14 days of receiving the claim for compensation in respect of the injury to the worker

(c) serve the worker with written notice that the employer disputes liability

(i) to pay compensation by way of weekly payments and must inform the worker of the reasons for disputing liability; or

(ii) to pay any benefits payable under Division 2 of Part VI in respect of the injury and must inform the worker of the reasons for disputing liability; and

(2) An employer who refers a matter to the Tribunal under subsection (1) must, at the time of referring the matter to the Tribunal, advise the Tribunal in writing whether or not weekly payments are being made to the worker pending determination of the matter by the Tribunal.

(5) Notwithstanding that liability has not been disputed in accordance with subsection (1) or section 81AA(3), an employer who wishes to dispute liability to continue to pay compensation by way of weekly payments for an injury referred to in section 81(1) or to pay the cost of any benefits payable under Division 2 of Part VI in respect of the injury may, at any time after the expiration of the period referred to in subsection (1) of this section or section 81AA(3), as the case may be, refer the matter to the Tribunal."

15 The appellant did not purport to refer the matter by reference to subs (5). I do not understand the basis for that decision although the terms of subs (5), namely "at any time after the expiration of the period referred to in subs (1)" precludes a consideration of whether, irrespective of the intent of the appellant, the referral ought nevertheless have been regarded as one validly made within the ambit of subs (5). There has been limited judicial consideration of this provision (see Muir v Dance [1997] TASSC 12; (1997) 7 Tas R 1, G L & V N Barber Pty Ltd v Ryan (supra) par21) and it may be that the appellant anticipated evidentiary problems if that course had been followed.

16 In Tubemakers of Australia Limited v Kurz 4/1998 Crawford J was required to consider the effect of a medical certificate which included a psychological condition in addition to an existing physical injury. Crawford J stated at 5:

"Both of the medical certificates of Dr Barnes certified that the respondent was suffering from the left shoulder injury and from work related stress or depression and that he was unfit for any work for the periods stated in the certificates. If the certificates had made no mention of the work related stress, but had instead only referred to the left shoulder injury, the appellant would have had no argument. I do not see how the inclusion of another medical complaint can change that. It may reasonably be inferred from the certificates either that each complaint was the cause of the respondent being unfit for any work or that both complaints in combination with each other were the cause of that. In either case, it would not make any difference to the appellant's liability to continue the payments at the rate being paid at the time of termination in February 1997. Counsel for the appellant complained that the certificates were ambiguous, and that the appellant did not know whether the left shoulder injury was the cause of one per cent or ninety-nine per cent of the unfitness. But it is reasonable to assume from the certificates that what Dr Barnes was certifying was that to some extent at least the left shoulder injury was part of the cause and that is a complete answer. In such a circumstance the appellant is obliged to pay the weekly compensation at the same rate as before. If it wishes to terminate or reduce the weekly payment it may only do so by proceeding under s86 or s88."

17 Crawford J based his conclusion on what had been earlier stated by Zeeman J in Viney v Roney Management Pty Ltd [1996] TASSC 27; (1996) 6 Tas R 240 at 246, in the following terms:

"I do not consider that anything said in Pasminco Australia Ltd v Simmons Serial No A50/1993 provides authority for the proposition that where a worker who has been wholly incapacitated provides further certificates certifying to partial incapacity the employer is unilaterally entitled to reduce the weekly payment. Where a worker in receipt of a weekly payment in respect of an incapacity certified as being total incapacity subsequently submits a certificate of partial incapacity that worker is entitled to continue to receive a weekly payment at the same rate until such time as it is reduced in accordance with s86 (if that section is available) or the Tribunal makes an order to that effect pursuant to s88. On the hearing of a reference under s88 in such circumstances, the Tribunal is to have regard to the relevant provisions of s69. An application of those provisions may require a reduction of the weekly payment but that is not necessarily the case where a worker has regained some capacity for work but retains some incapacity."

18 I do not disagree with either of those reasons for judgment. The employer is not entitled to alter payment unilaterally unless it does so in accordance with the Act, ss69, and 86. It is required to continue to make payments in accordance with its earlier acceptance of liability. The question is whether an employer has power to refer a dispute to the Tribunal where the terms of the certification provide for greater entitlement because of changed medical circumstances. The provisions of the Act, s86 apply where the employer claims entitlement to terminate or reduce a weekly payment and not to where the terms of a certificate could increase the entitlement. In this case the employer is seeking to dispute liability in relation to a matter which might result in increase. There are problems with a referral made in accordance with the Act, s88, which entitles the Tribunal to terminate, reduce or, subject to the limitations prescribed by s69, increase the payment. Here the employer seeks to dispute liability in relation to a new condition said to be a consequence of the original event causing injury.

19 The appellant sought reference of the claim based on the diagnosis of "acute adjustment disorder". It had neither disputed liability nor sought referral for the earlier claims which were accompanied by certification referring to "depression". In my opinion, failure to dispute the claim made on 5 March 1998 does not preclude the right to dispute the existence of an "acute adjustment disorder". Reference to "depression" did not amount to identification of an injury or medical condition other than in the most general way. It did no more than refer to a general condition or state associated with the effects of the physical injury. The diagnosis of an "acute adjustment disorder" identified an illness or psychological condition in a clearly identifiable manner.

20 The appellant contends that the altered nature of the claim permits challenge in accordance with the principles stated by the Full Court in Barber v Ryan (supra). The claim is one based on total incapacity whereas previous to April 1999 it had been for partial incapacity only. The claim introduces a psychological, as distinct from a physical, and as such constitutes a fresh claim.

21 Although the court in G L & V N Barber Pty Ltd v Ryan (supra) was concerned with a claim made after a break in the continuity of certification, the decision related to the nature of a fresh claim. The learned Chief Justice stated at par21:

"On presentation of such claims, the employer has the option of a referral to the Tribunal or of acceptance of liability. Some observations in previous cases about the finality of an acceptance of liability may have overstated the position or may have been perceived to have stated a position that for all purposes liability is accepted. That is not the case, as Freemasons Homes of Southern Tasmania v Greenwood (supra) makes clear. An employer "still has the right to seek relief for payment under ss81A(5), 86 or 88 and may, on such an application, challenge the worker's right to payment" (at 450). But in any event, in my view, a failure to dispute liability under ss81AA or 81A does not result in the employer being taken to have accepted liability in respect of every claim for compensation, as s81AB may superficially suggest."

"A new claim, whether it be for weekly payments where an initial claim for benefits only has been made (or vice versa), or for weekly payments where earlier payments have been lawfully terminated under s86, or have lawfully ceased due to the expiry of a medical certificate and the absence of a fresh one, is not one in respect of which the employer is taken to have accepted liability because he failed to refer some earlier claim in accordance with ss81AA or 81A."

22 In Tubemakers (supra) Crawford J considered the effect of the emergence of a psychological disability from an existing physical injury when he said at 5 - 6:

"I also comment that it may well be that the work related stress or depression certified by Dr Barnes to have been suffered by the respondent has itself resulted from the left shoulder injury. If the stress or depression was caused by the left shoulder injury then it may be arguable that the incapacity resulting from it may appropriately be regarded as resulting from the left shoulder injury for the purposes of the Act. In FAI General Insurance v Morrisson [1993] TASSC 115; (1993) 2 Tas R 9 I considered a case in which a disease (post traumatic stress disorder) followed upon physical injuries suffered at work, and at 19 determined that the right to compensation for any incapacity caused by both the physical injuries and the post-traumatic stress disorder vested at the time of the original injuries and that the development of the disease as a consequence of the physical injuries did not affect the legal consequence that the physical injuries were the foundation of the worker's right to compensation. I particularly refer to that case because at the hearing of this case counsel for the appellant tendered in evidence before the Tribunal a letter from Dr Barnes dated 30 April 1997, which explained, it seems to me, that as a direct result of stresses suffered by the respondent consequent upon the effects of the left shoulder injury, he developed a depressive disorder. If that is so then it may well be, although I make no determination about the matter, that any incapacity for work as a result of the depression should be treated by the parties as an incapacity resulting from the left shoulder injury."

That might well be the case here and would require resolution by the Tribunal, but it does not deprive the Tribunal of power to determine that dispute.

23 In this case the claim made by the respondent differed in two significant respects to that initially made. The first is that, for the first time, a claim for compensation was dependent, at least in part, on a psychological condition said to have arisen as a result of the initial event. The second is that the claim sought weekly payments based on total incapacity rather than partial, as previously made. The effect of the claim was to end the process of work rehabilitation and to substantially change the nature of the claim. By reason of those two changes, the claim and certification made in April 1999 constituted a fresh claim which permitted the appellant to dispute liability. It was entitled to refer the question of whether the medical condition referred to existed, and if so, whether it was a consequence of the event occurring in August 1997.

24 The Motion to Review is upheld. The order made by the Tribunal on 22 June 1999 is quashed and the matter remitted to be determined in accordance with law.