TITLE OF COURT: SUPREME COURT OF TASMANIA (FULL COURT)

Workers Compensation - Causal relation between injury and incapacity or death - Incapacity or death due to two causes - Disease deemed by legislation to be suffered when incapacity first arises - Disease possibly caused by employment injury for which compensation was paid some years before - Necessity for determining whether later incapacity resulted from earlier injury - Whether deeming provision applied if it did.

Workers Rehabilitation and Compensation Act 1998 (Tas), ss3(5), 25(1)(1A) and 69(1).

FAI General Insurance v Morrisson [1993] TASSC 115; (1993) 2 Tas R 9; Baker v Dixon [1999] TASSC 28; Kooragang Cement Pty Ltd v Bates (1994) 35 NSWLR 452; Jones v Devonfield Enterprises [1996] TASSC 11; (1995) 5 Tas R 345, applied.

Judgment Number: [2001] TASSC 43

1 The respondent was employed as a technical officer at the Repatriation General Hospital. On 14 December 1994, she became incapacitated for work with a diagnosis of depression. She made a claim for compensation under the Workers Rehabilitation and Compensation Act 1988 ("the Act") which was accepted. Compensation was paid. She returned to work on 28 February 1995. She again absented herself from work in March 1998. On 16 March, she claimed compensation. The appellant disputed liability.

2 The respondent referred her claim for compensation to the Workers Rehabilitation and Compensation Tribunal, pursuant to s42. In the reference, she claimed payment of compensation "consequent upon further incapacity arising on or about 5 March 1998 caused by a major depressive illness sustained by the applicant for and in the course of her employment with the Royal Hobart Hospital in or about December 1994". Following a contested hearing, the Tribunal dismissed her reference. She successfully appealed to a judge, who held that errors of law were made by the Tribunal, and ordered that the Tribunal's order be set aside and that the matter be remitted to the Tribunal for rehearing by a different Commissioner. From those orders this appeal has been brought. The appellant maintains that the learned judge made errors of law and a factual error and that the original order of the Tribunal should be restored.

3 At the hearing before the Tribunal, the respondent contended that since March 1998, she had been suffering from the same medical condition that had incapacitated her in 1994; that the condition arose out of and in the course of her employment; that her employment contributed to a substantial degree to the onset of the condition; and that she had been totally incapacitated for work as a result of the condition since March 1998. The appellant contended that the 1998 condition was not the same condition as the one that incapacitated the respondent in 1994; that the 1998 condition constituted a separate "disease" from the other; and that compensation was not payable in respect of her incapacity in and after March 1998 by reason of the provisions of the Act, s25(1A).

4 The Act, s3(1) contains the following definitions:

"'disease' means any ailment, disorder, defect, or morbid condition, whether of sudden or gradual development;

5 The following relevant provisions are contained in s25:

(b) a worker suffers an injury, which is a disease, arising out of and in the course of his employment and to which his employment contributed to a substantial degree,

his employer is, except as is otherwise provided by this Act, liable to pay compensation in accordance with this Act -

(1A) Compensation is not payable under this Act in respect of a disease which arises substantially from

(a) reasonable action taken in a reasonable manner by an employer to transfer, demote, discipline or counsel a worker or to bring about the cessation of a worker's employment; or

(b) a decision of an employer, based on reasonable grounds, not to award or provide a promotion, transfer or benefit in connection with a worker's employment; or

(c) reasonable administrative action taken in a reasonable manner by an employer in connection with a worker's employment; or

(d) the failure of an employer to take action of a type referred to in paragraph (a), (b) or (c) in relation to a worker in connection with the worker's employment if there are reasonable grounds for not taking that action ...".

6 Another provision that is significant in this case is s3(5), which reads as follows:

"(5) For the purposes of this Act, where a worker suffers an injury that is a disease, that injury shall be deemed to have occurred

(a) on the day on which the worker became totally or partially incapacitated by reason of that injury; or

(b) if a day cannot be ascertained under paragraph (a), on the day on which a medical practitioner has certified that the worker was first incapacitated by reason of that injury."

7 If the injury, which was a disease, was a new one, in the sense that it did not result from the 1994 disease and was first suffered by the respondent in March 1998, then all of those provisions applied to the case, and it would have been necessary for the respondent to establish (inter alia) that her injury, which was a disease, arose out of and in the course of her employment by the appellant and that her employment contributed to it to a substantial degree (s25(1)(b)), but she would have been liable to lose her claim for compensation if the appellant was able to establish that her disease arose substantially from one of the circumstances particularised in s25(1A)(a) - (d). The respondent lost her reference before the Tribunal for that reason. If, on the other hand, she was able to establish that her March 1998 incapacity resulted from the 1994 injury, she would not have been so liable to lose her claim, for subs(1A) was inserted into the Act by the Workers Rehabilitation and Compensation Reform Act 1995, which commenced on 16 August 1995 and which did not apply retrospectively to claims for compensation based on diseases constituting injuries that, for the purposes of the Act, were suffered before that commencement. The critical issue before the Tribunal was, to adopt ungrammatically the words used in s69(1), whether her 1998 "incapacity for work results from an injury suffered by" her in 1994.

8 Before the Tribunal, conflicting expert evidence was given by the respondent's treating psychiatrist, Dr Weidmann, and a consultant psychiatrist engaged by the appellant, Dr Sale. Dr Weidmann's evidence was that the respondent had suffered from "major depression" from 1995 through to 1998, and that she continued to suffer from that condition when she became incapacitated in March 1998 because of it. The learned Commissioner rejected that evidence and preferred the evidence of Dr Sale. He found that there was a major depressive illness in 1995, from which the respondent recovered so as to no longer suffer the diagnostic criteria for that disease; that the respondent continued to suffer some symptoms suggestive of an ongoing depression (but not of a severity to warrant a diagnosis of a disease); and those symptoms became worse in the period leading up to March 1998, when they manifested themselves to an incapacitating extent. He found that the respondent's incapacity for work commenced on 5 March 1998 and, having regard to the provisions of the Act, s3(5)(b), that date was therefore the deemed date on which the disease, from which she was suffering and which caused that incapacity, was suffered. The learned Commissioner found that the injury (that is, the disease) which was the immediate cause of the incapacity, was a depressive illness, but it was not a major depression. It was "an adjustment disorder with depressive symptoms or some form of situational depressive illness" as had been outlined by Dr Sale.

9 It was not essential to the respondent's success that she establish that there was an ongoing disease from 1994 or 1995 to 1998 which caused the March 1998 incapacity. The medical condition from which she suffered and which caused her incapacity in March 1998, may not have been exactly the same medical condition as the one from which she suffered in 1994 and which caused her incapacity then, but that does not necessarily mean that the later condition and incapacity did not result from the earlier condition which was accepted as a compensable injury. A simple example can illustrate the point. A compensable injury might be a fractured knee resulting in an incapacity for a time. Some years later, the worker might suffer from and be incapacitated again, but this time by arthritis in the knee joint or some psychiatric disease, perhaps some form of depression, as a result of the original injury. That injury, involving fractures of the bones, would not be the same condition as the subsequent diseases, osteoarthritis and the depressive illness, but that would not mean that they did not result from the original injury. If they did result from it, the worker would be entitled to payment of compensation because of their effect, but the injury amounting to the foundation for that entitlement would be the original injury to the knee, the fracture, and not the later diseases. FAI General Insurance v Morrisson [1993] TASSC 115; (1993) 2 Tas R 9 at 19; Baker v Dixon [1999] TASSC 28 at par20. Further, the deeming provisions of s3(5) would not be applicable in such a case. The date of the suffering of the relevant injury would be that of the original injury.

10 Before the Tribunal, it was submitted for the respondent that the evidence established that she did not recover from the 1994 major depressive illness and that she became incapacitated again by reason of that initial disease, in March 1998, with that disease having been suffered to a lesser extent during the intervening period. The learned Commissioner said that he did "not accept that this proposition is sustainable either on the evidence or as a matter of law". It was open to the learned Commissioner not to accept that the proposition had been sustained on the evidence, but the reference to it not being sustainable as a matter of law was erroneous, for there was nothing in the law which stood in the way of such a proposition being sustained by the respondent and if successful, of her winning her claim for compensation arising out of the March 1998 incapacity, but based on the 1994 injury (which was a disease).

11 As mentioned, the learned Commissioner found that the immediate cause of the March 1998 incapacity was "an adjustment disorder with depressive symptoms or some form of situational depressive illness". The learned Commissioner, because of his misunderstanding of the law, considered that he was obliged to determine that the disease which caused the incapacity was deemed to have been suffered in March 1998, because of the provisions of s3(5), and that he was prevented by law from considering whether, as a fact, that incapacity resulted from the 1994 injury. I agree with what was said by the learned judge in the court below:

"Upon making a finding that the incapacitating disease in 1998 was a new adjustment disorder, rather than the old depression, the learned Chief Commissioner was obliged to consider whether or not the adjustment disorder resulted from the 1994 depression. The Tribunal's fact-finding task is not constrained by pleadings. The Tribunal is not obliged to choose between the competing contentions of the parties, but can make findings that are inconsistent with the case of each party."

12 Counsel for the appellant submitted that even if there was an error of law in something said by the learned Commissioner, his findings of fact would still have resulted in the Commissioner determining the case in favour of the appellant if the correct law had been applied. That submission must be rejected. What the learned Commissioner found as a fact was that what caused the 1998 incapacity was not the same disease as in 1994. He made no determination concerning whether the 1998 incapacity in fact resulted from the 1994 injury, and he did not do so because of his misunderstanding of the law.

13 The resolution of the question whether the 1998 incapacity resulted from the 1994 injury required the learned Commissioner to apply "a commonsense evaluation of the causal chain" in accordance with the principles of Kooragang Cement Pty Ltd v Bates (1994) 35 NSWLR 452 per Kirby P at 463 - 464; Jones v Devonfield Enterprises [1996] TASSC 11; (1995) 5 Tas R 345. If it was to be found that the 1998 incapacity did result from the 1994 injury (which was a disease) then the deeming provisions of s3(5) would operate to deem the date of the suffering of the injury as the date upon which the respondent was first incapacitated by it in 1994 and not the date upon which the 1998 period of incapacity commenced. In that event s25(1A) could not have operated to defeat the respondent's claim.

15 I have had the advantage of reading in draft form the reasons for judgment of Crawford J and agree with both his reasoning and conclusion.

17 I agree with the reasons for judgment prepared by Crawford J.