Stone v. Stannard Brothers Launch Services Pty. Ltd. [2004] NSWCA 277

LOWER COURT Compensation Court JURISDICTION : LOWER COURT CC12483/01 FILE NUMBER(S) : LOWER COURT Burke AJ JUDICIAL OFFICER :

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40949/03 CC 12483/01

MASON P HANDLEY JA HODGSON JA

Wednesday 18 August 2004 STONE V. STANNARD BROTHERS LAUNCH SERVICES PTY. LTD. Judgment 1 MASON P: I agree with Hodgson JA. 2 HANDLEY JA: In this appeal I have had the benefit of considering the judgment of Hodgson JA in draft. I adopt his statement of the facts, the history of the proceedings, and the text of the relevant legislation. 3 The worker's skin disease caused by prolonged exposure to the sun in the course of his employment fell within s 16 of the Workers Compensation Act 1987 because it was contracted prior to the commencement of his employment with the appellant but was aggravated by it. The worker had been totally incapacitated for work since a back injury in 1985 and is not entitled to weekly compensation under s 40 for incapacity resulting from his skin disease. However his back injury did not bar claims he was entitled to make for his skin disease under ss 66 and 67. 4 Section 16(1)(a) relevantly deems an injury within the section to have happened either at the time of the worker's incapacity or if incapacity has not resulted from the injury at the time the worker makes his claim for compensation. Section 16(3) provides that injury includes a permanent impairment for which compensation is payable under s 66. 5 Incapacity referred to in s 16(1)(a) does not mean physical incapacity for work in the sense explained in Arnotts Snack Products Pty Ltd v Yacob (1985) 155 CLR 171 but means the incapacity for which weekly compensation is claimed. See GIO Workers Compensation (NSW) Ltd v GIO General Ltd (1995) 12 NSWCCR 187 (GIO), 196 per Sheller JA and P & O Berkeley Challenge Pty Ltd v Alfonzo (2000) 49 NSWLR 481 (Berkeley Challenge), 487 per Priestley JA. No such claim for weekly compensation was or could be made in this case. 6 The trial Judge held that incapacity, meaning incapacity in the Arnotts Snack Products sense had occurred prior to 30 June 1987 so that the worker's s 16 injury occurred at that time and therefore before the commencement of the 1987 Act. There was evidence to support these factual findings but on the authorities referred to they addressed an incapacity for work which was not that referred to in s 16(1)(a). The trial Judge erred in law in making these findings and his award must be set aside. 7 The evident purpose of s 16(1)(a) is to fix a precise date for a s 16 injury. Where the worker claims or could claim weekly compensation for incapacity the section enables this to be done. Where the worker suffers gradually increasing incapacity but makes no claim for weekly compensation the section cannot do this. 8 The operation of s 16(1)(a) in relation to s 66 claims was considered by this Court in Alto Ford Pty Ltd v Antaw (1999) 18 NSWCCR 246 (Alto Ford) and in Berkeley Challenge. In the earlier case the worker made claims for both weekly and lump sum compensation. The trial Judge held that the deemed date of injury under s 15 for the purposes of the claim for weekly compensation was in January 1992 when he ceased work and for the purposes of his lump sum claim was in July 1996 when that claim was made. This Court held that these decisions were not vitiated for error of law. See per Sheller JA at 252-3, 256-7. The case is authority for the proposition that s 16 may fix different dates for incapacity and impairment injuries. 9 In Berkeley Challenge, which was a s 16 case where the worker claimed both weekly and lump sum compensation, the trial Judge found that the incapacity for which weekly compensation was claimed occurred when the worker ceased work in February 1996. She also held that this was the date of her injury for the purposes of her ss 66 and 67 claims although these were not made until 30 July 1997. Priestley JA held that the Judge's decision was correct (at 487-8). However in that case the appeal did not require the Court to choose between 11 February 1996 and 30 July 1997 as the date of injury for the purposes of the ss 66 and 67 claims but between dates before and after 31 December 1995 when the appellant insurer came on risk. 10 In the present case where there was and could be no claim for weekly compensation s 16(1)(a)(i) did not fix a date on which the impairment injury happened. Accordingly s 16(1)(a)(ii) applied and this injury is deemed to have occurred when the claim for lump sum compensation was made. 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 the Alto Ford case 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. 11 I therefore agree with Hodgson JA that the impairment injury is deemed to have commenced either in 2001 or in 2003. I express no view on the effect of the transitional provisions which do not apply in this case. The orders he has proposed should be made. 12 HODGSON JA: On 2 October 2003, Burke AJ in the Compensation Court made an award that the respondent/employer pay the appellant/worker a lump sum payment of $790.00 in respect of a 10% severe facial disfigurement, s.60 expenses and costs. The appellant appeals from that award, claiming that he should have been awarded a total lump sum of $25,000.00. 13 The appellant's claim before the primary judge had identified the relevant injury as being a skin damage condition, a disease of gradual onset pursuant to ss.15 and 16 of the Workers' Compensation Act 1987 (the 1987 Act) caused and/or aggravated by the nature and conditions of his employment as a waterside worker involving exposure to the sun. Relevantly, he claimed: (d) Section 66 lump sum of $8,000.00 in respect of severe facial disfigurement equivalent to at least 10% of a most extreme case of severe facial disfigurement.

(e) Section 66 lump sum of $5,000.00 in respect of severe bodily disfigurement equivalent to at least 10% of a most extreme case of severe bodily disfigurement.

(f) Section 67 lump sum of $12,500.00 in respect of pain and suffering equivalent to at least one quarter of a most extreme case of pain and suffering. 14 The primary judge accepted that the appellant's skin damage condition was a disease which he suffered prior to employment by the respondent; and that such disease was thereafter aggravated by the nature and conditions of his employment with the respondent; and he found accordingly that this constituted an injury with s.4(b)(ii) of the 1987 Act. 15 The question then arose as to when the injury for which compensation was claimed occurred. If it occurred before 4pm on 30 June 1987, when the 1987 Act came into operation, the transitional provisions in Pt.6 of Schedule 6 of the 1987 Act had the effect of restricting the amount of compensation which could be awarded. If it occurred after that time, the appellant could receive the full compensation provided by the 1987 Act, including compensation for bodily disfigurement and resulting pain and suffering. 16 This question fell to be determined in accordance with s.16(1) of the 1987 Act, which relevantly provided as follows:

16 Aggravation etc of diseases - employer liable, date of injury etc (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 employment that was a substantial contributing factor to the aggravation, acceleration, exacerbation or deterioration.

17 The appellant's claim for compensation was made in December 2001, (or perhaps more accurately, on 10 June 2003 when paragraphs (d), (e) and (f) set out above were apparently added by amendment) so that this was the date of injury unless, prior thereto, incapacity had resulted from the relevant injury. Since the aggravation of the appellant's disease continued until he ceased employment, the primary judge considered that any incapacity prior to that date would be irrelevant, and neither party disputes that view. The question addressed by the primary judge was whether the appellant suffered incapacity as a result of the relevant injury between the end of his employment on 16 December 1985 and the commencement of the 1987 Act at 4pm on 30 June 1987; and the primary judge answered this question in the affirmative, resulting in the very small lump sum payment referred to above.

CIRCUMSTANCES 18 In order to fully understand the issues, it is necessary to set out the circumstances and evidence in a little more detail. 19 The appellant was born in 1941. He commenced to work on the waterfront in 1961, first as a deckhand, and ultimately as a skipper, generally on tugboats. Some years later, he commenced working for the respondent, and he continued to work for the respondent for some years before his employment ended on 16 December 1985. 20 About three years after he started work on the waterfront, the appellant became aware of "sunspots" appearing on his face. He went to the doctor, and had them burnt off. 21 Over the years, he had more spots appearing on his face, and also on his arms, back and chest, and he saw the doctor and had spots burnt off. On each occasion, he took a day off to see the doctor, although the sunspots did not otherwise prevent him from working at any stage. 22 On 16 December 1985, he had an accident in which he injured his back, and he has not worked since that time. He was paid compensation in respect of his back. According to the respondent's answer to the appellant's application, the back injury culminated in common law damages proceedings and redemption proceedings in the Compensation Court, which were resolved by a Compensation Court redemption for $180,000.00 and a common law judgment for $70,000.00. 23 After the appellant finished work, spots continued to appear, and the appellant continued to have them removed. There were three cancerous spots, two on the nose and one on the eyelid, that required surgical removal. At the time of the hearing, the appellant had three other spots that would require surgical removal. 24 There were medical reports in evidence. 25 First, there was a report from Dr. Cassano who had been treating the appellant regularly since 1987, initially for multiple solar keratoses on his face. He had referred him to a surgeon, Dr. Simons, for solar keratoses and skin cancers. The appellant had need of treatment at least yearly, and sometimes every few months. After treatment for skin cancers, he would have been unable to work for seven to fourteen days. 26 There was a report from Dr. Simons that he first saw the appellant in July 1998, and that on that occasion, and again in 2000, he had removed skin cancers. 27 There was a report from Dr. Lobel, who examined the appellant on 5 March 2003. He said that much of the skin damage due to sun exposure is acquired by the age of twenty, but that the condition is cumulative and permanent; and his opinion was that there was a substantial contribution to the appellant's condition from his employment as a waterside worker over the years 1960 to 1986. He said that both malignant and pre-malignant lesions would continue to appear, even without further sun exposure. He said that, by reason of the appellant's skin disease, he should be considered unfit for work in outdoor employment. He assessed the appellant as having severe facial disfigurement of 10% compared to a most extreme case, and severe bodily disfigurement of 10% compared to a most extreme case.

DECISION OF PRIMARY JUDGE 28 The primary judge accepted the medical evidence, and formulated the question set out earlier in this judgment. He referred to the report of Dr. Cassano, and continued: If the applicant presented in May 1987 with multiple keratoses requiring either cryotherapy or electrocautery (?) as suggested by Dr Cassano it seems highly probable that such treatment would have been provided by the doctor. Indeed, the doctor suggests that such treatment was provided on many occasions prior to the referral to Dr Simons. If such treatment was provided for multiple keratoses, as is inferentially suggested by Dr Cassano, then it appears probable that at least a short period of incapacity would have ensued. Dr Cassano indicates that since the first consultation on 6 May 1987 the applicant has required active treatment on many occasions, at least at yearly intervals. If that were so from May 1987 it seems probable that it was also so prior to May 1987; that is, in the relevant 18 months prior to 30 June 1987. Such treatment would appear to necessarily involve some period of incapacity. Even in the absence of such active treatment it seems that the presence of multiple lesions would suggest a limitation on the type of work which the applicant could reasonably be expected to perform.

In other words, that he would have limitations in the type of work he should do and - medically advisable for him to do and that of limitation of itself would, in my view, constitute an incapacity, it therefore appears to me probable that prior to 30 June 1987 the applicant was incapacitated as a consequence of such lesions. It follows therefore that the date of injury within the present s 16 or the former s 7(4) would have been prior to 30 June 1987.

GROUNDS OF APPEAL 29 The appeal from the Compensation Court lies only on questions of law. The relevant grounds of appeal were to the effect that the primary judge erred in law in finding that the appellant's date of injury was before 4pm 30 June 1987, in equating the appellant's need for treatment with incapacity, and in calculating the appellant's entitlements in accordance with the Workers' Compensation Act 1926 (the 1926 Act) and not the 1987 Act. 30 Three propositions were developed in argument before this Court: 1. The primary judge applied the wrong test for incapacity. 2. The relevant incapacity was that arising from the disfigurement, not the underlying disease, as had been assumed by the primary judge. 3. The loss for which the appellant sought compensation was an occupational disease, so the relevant transitional provisions provided for compensation calculated at the time of commencement of the 1987 Act. 31 I will consider propositions 1 and 2, and then proposition 3.

TEST FOR INCAPACITY Statutory Provisions 32 In addition to s.16(1) of the 1987 Act, it is necessary also to have regard to s.16(3), s.66(1) and s.67(1) of that Act, as they were prior to the 2001 amendment, that took effect from 1 January 2002. Those provisions were as follows: 16(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.

Compensation for permanent injuries 66(1) A worker who has suffered the loss of a thing mentioned in the Table to this Division as the result of an injury is entitled to receive from the worker's employer by way of compensation for the loss, in addition to any other compensation under this Act, the amount equal to the percentage of $100,000 set out opposite to that loss in that Table.

Compensation for pain and suffering 67(1) A worker who has suffered a loss mentioned in the Table to this Division (or 2 or more of any such losses as the result of the same injury) is entitled to receive from the worker's employer by way of compensation for pain and suffering resulting from the loss or all those losses, in addition to any other compensation under this Act, an amount not exceeding $50,000.

Submissions 33 Mr. McManamey for the appellant submitted that the primary judge found incapacity prior to 30 June 1987 because he said that treatment involved a period of incapacity, and that the evidence indicated a lack of capacity to do outdoor work. On the first matter, the only evidence of treatment prior to 1998 was of burning off the spots, for which on each occasion the appellant only took the day off work; and it was only in 1998 and later that there was surgery of cancers requiring days of recuperation. Thus, there was no evidence of any time off work required for treatment or recuperation. The selection of the time for the treatment as being during work hours was merely a matter of convenience. As regards the second matter, Mr. McManamey submitted that there would be incapacity within s.16(1)(a)(i) only if the incapacity was that for which compensation was claimed (see GIO Workers Compensation (NSW) Ltd. v. GIO General Ltd. (1995) 12 NSWCCR 187) or at least if the incapacity gave rise to an entitlement to compensation (see P & O Berkeley Challenge Pty. Ltd. v. Alfonzo (2000) 49 NSWLR 481). 34 Further, Mr. McManamey submitted that in this case the relevant "injury" was the loss within s.66(1), being permanent disfigurement of the face and body: that was the final outcome which did not occur until this loss was assessed and claimed (see Alto Ford Pty. Ltd. v. Antaw (1999) 18 NSWCCR 246 at [18]) and, in any event, did not cause any incapacity (see GIO). 35 Mr. Parker for the respondent submitted that the decision in Arnotts Snack Products Pty. Ltd. v. Yacob (1985) 155 CLR 171 established that there was incapacity whenever there was reduced physical capacity, by reason of physical disability, for actually doing work in the labour market in which the employee was working or might reasonably be expected to work; and that was the test applied by the primary judge. The primary judge's finding was a finding of fact, against which there was no appeal. Furthermore, the primary judge was entitled to find, on the evidence, that there were periods of entitlement to compensation for incapacity, when the appellant had treatment.

Decision 36 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. 37 Berkeley Challenge shows that, if the claim under consideration is for weekly compensation based on incapacity, the relevant incapacity for the purposes of s.16(1)(a)(i) is incapacity giving rise to entitlement to weekly compensation. Thus, in such a case, incapacity first occurs when the physical incapacity results in some loss of wages, even if there had previously been incapacity in the Arnotts sense, not resulting in any loss of wages. 38 In the present case, the claim for facial disfigurement is a claim for a loss of a thing as the result of an injury, within s.66(1), which loss is itself to be treated as an injury within s.16(1), as provided by s.16(3). The same applies to the claim in respect of bodily disfigurement. Each such loss or injury was the disfigurement assessed by Dr. Lobel on 5 March 2003, and included in the amended claim on 10 June 2003; and thus could not have caused incapacity prior to 30 June 1987: in my opinion, this plainly follows from Antaw at par.[18]. For that reason, in my opinion the primary judge did make an error of law, and the appeal must be upheld. 39 Since I take that view, it is unnecessary to determine five other questions that have arisen on this aspect of the appeal: 1. Whether s.16(3) requires a distinction to be drawn between the loss and the disease which causes the loss, so that where the claim is for the loss and any incapacity results only from the disease and not from the loss (as is likely where the loss is disfigurement), s.16(1)(a)(i) cannot apply. 2. Whether s.16(1)(a)(i) cannot in any event apply where the claim being considered does not in any way depend either on death or incapacity. 3. Whether attendance on a doctor for treatment during working hours, when such attendance could have been outside working hours, can constitute incapacity for work. 4. Whether there is no incapacity within s.16(1)(a)(i) unless and until any physical incapacity has some economic effect. 5. Whether, in circumstances where a worker is totally incapacitated from an injury, and is being fully compensated for that injury, there can be incapacity subsequently arising from another injury in respect of which compensation is claimed: cf. s.48 of the 1987 Act.

TRANSITIONAL PROVISIONS Statutory Provisions 40 The parts of the 1987 Act relevant to this aspect of the case are s.15(1), s.71(3) as it was prior to the 2001 amendment, and cl.3A, 4 and 5 of Pt.6 of Schedule 6. Those provisions are 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.

71(3) In this section - "occupational disease" means - (a) loss of hearing due to boilermaker's deafness or any deafness of a similar origin; (b) total or partial loss of sight which is of gradual onset; or (c) any disease which is of such a nature as to be contracted by a gradual process.

3A Determination of amount of compensation for existing occupational diseases not compensated before commencement of Act (1) This clause applies to a loss of a thing as the result of an injury received before the commencement of Division 4 of Part 3 of this Act, being: (a) a loss which is an occupational disease within the meaning of section 71 of this Act, and (b) a loss for which the worker concerned had not, before that commencement, been awarded, or received or agreed to receive, compensation in accordance with section 16 of the former Act. (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 as if the relevant maximum amount under section 66 (1) of this Act were the maximum amount applicable on the commencement of that Division (namely, $80,000). (3) This clause is enacted to avoid doubt and, accordingly, is taken to have applied from the commencement of Division 4 of Part 3 of this Act.

4 Compensation for loss (except occupational diseases) payable under former Act for existing injury The amount of compensation payable to a worker who has suffered a loss of a thing mentioned in the Table to Division 4 of Part 3 of this Act (not being an occupational disease within the meaning of section 71 of this Act) shall be determined in accordance with section 16 of the former Act instead of Division 4 of Part 3 of this Act if the loss resulted from an injury received before the commencement of that Division.

5 Compensation not payable in respect of new item if it resulted from existing injury Compensation is not payable to a worker who has suffered a loss or impairment of a thing mentioned in the Table to Division 4 of Part 3 of this Act if: (a) it resulted from an injury received before the commencement of that Division, and (b) it is not a loss or impairment for which compensation was payable under section 16 of the former Act.

Submissions 41 Mr. McManamey submitted that the appellant's skin disease was plainly a disease of such a nature as to be contracted by a gradual process, within s.71(3); and therefore fell within cl.3A of the transitional provisions. 42 Mr. Parker submitted that, since this was a claim brought under s.16 and not under s.15, it was not a claim in respect of a loss which was an occupational disease, within cl.3A of the transitional provisions.

Decision 43 In my opinion, the circumstance that the appellant's claim was brought under s.16 does not prevent the injury in respect of which compensation was claimed from being an occupational disease within s.71. On the evidence and the primary judge's findings, plainly it was an occupational disease. 44 Accordingly, had the relevant incapacity occurred prior to 30 June 1987, cl.3A would have been the applicable transitional provision.

ORDERS 45 For those reasons, in my opinion the following orders should be made: 1. Appeal allowed. 2. Award set aside. 3. Matter remitted to the District Court to be dealt with in accordance with these reasons. 4. Respondent to pay the appellant's costs of the appeal, and to have a certificate under the Suitors' Fund Act if otherwise entitled. **********

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