Telstra Corporation Limited v Treloar

1 Mr Treloar suffered severe and permanent facial disfigurement from skin cancers resulting from the conditions of his employment with Telstra Corporation Limited ("Telstra"), and the treatment to remove those cancers. At the time, workers' compensation for injuries suffered by an employee of the Commonwealth or of a prescribed authority of the Commonwealth (Telstra was such an authority) was governed by the Compensation (Commonwealth Government Employees) Act 1971 (Cth) ("the 1971 Act"). 2 By virtue of his injury, Mr Treloar was entitled to compensation under s 41 of the 1971 Act, subsection (1) of which provided: "The compensation payable under this Act in respect of an injury that results in severe and permanent facial disfigurement to an employee is such amount, not exceeding $14,000 or such higher amount as is prescribed, as is determined in accordance with this section, and that compensation is payable to the employee." He made a claim for compensation but the claim was wrongly refused. Before the decision denying compensation could be reconsidered or reviewed, the 1971 Act was repealed and replaced by the Safety, Rehabilitation and Compensation Act 1988 (Cth) ("the 1988 Act") which came into force on 1 December 1988. Notwithstanding the repeal of the 1971 Act, Mr Treloar was still entitled to receive compensation for his injury. The transitional provisions in Part X of the 1988 Act make provision for the payment of compensation to an employee who has suffered a compensable injury when the 1971 Act, or earlier workers' compensation legislation, was in force. In particular, s 124(1) provides in substance that the 1988 Act applies in relation to injuries, loss or damage suffered by an employee before or after 1 December 1988 and s 124(1A) states that the compensation that is payable to a person entitled to compensation under the 1988 Act in respect of an injury suffered before 1 December 1988 is that which would have been payable to that person under the relevant earlier legislation. There are certain restrictions and limitations imposed upon the right to receive compensation in respect of an injury suffered before 1 December 1988 which will be mentioned later. 3 Section 14 of the 1988 Act provides, so far as is here relevant, that Comcare is liable to pay compensation in accordance with the Act in respect of an injury suffered by an employee if the injury results in impairment. The injury suffered by Mr Treloar resulted in a permanent impairment for the purposes of 1988 Act. Section 24 of the 1988 Act provides for the calculation and payment of compensation in respect of an injury which results in a permanent impairment. The amount of compensation payable under s 24 is determined by assessing the degree of permanent impairment as a percentage and multiplying that percentage by $80,000. However, s 24(7) provides that compensation is not payable in circumstances where Comcare determines that the degree of permanent impairment is less than 10%. One limitation on the operation of the 1988 Act, as it applies to injuries suffered before 1 December 1988, is that by virtue of s 124(1) and (1A) the amount of compensation that a person is entitled to receive under s 24 in respect of a permanent impairment, must be the same as the amount of compensation that would have been payable under the relevant repealed Act: see s 124(4). Accordingly, and this was not in dispute, the amount of compensation to which Mr Treloar was entitled under s 24 was limited to the amount he would have received under s 41 of the 1971 Act. 4 On 5 May 1988 the decision not to pay compensation to Mr Treloar was reviewed under s 62 of the 1988 Act and it was decided that he should receive lump sum compensation of $4,500 in respect of his claim. The compensation was payable under s 24 of the 1988 Act. That amount was determined in accordance with s 41 of the 1971 Act. 5 An employee who suffers an injury after 1 December 1988 that results in permanent impairment is entitled not only to compensation in respect of that injury under s 24 of the 1988 Act, but also to compensation under s 27. Section 27(1) provides: "Where an injury to an employee results in a permanent impairment and compensation is payable in respect of the injury under section 24, Comcare is liable to pay additional compensation in accordance with this section to the employee in respect of that injury for any non-economic loss suffered by the employee as a result of that injury or impairment." The amount of compensation payable is to be assessed in accordance with the formula set out in subsection (2). One element in that formula is the degree of permanent impairment suffered by the employee, expressed as a percentage, as determined under s 24. 6 Mr Treloar was of opinion that he was also entitled to additional compensation in accordance with s 27, notwithstanding that he had suffered his injury before 1 December 1988. He applied for compensation under that section but his application was denied. Mr Treloar sought review of that decision by the Administrative Appeals Tribunal under s 64 of the 1988 Act. The sole issue that was before the Tribunal was whether "as a matter of law [Mr Treloar] is entitled to compensation under s 27 of the 1988 Act". 7 The Tribunal found in favour of Mr Treloar, holding that he was entitled to additional compensation. The Tribunal said that it was bound to come to that conclusion in view of two decisions of the Full Court of the Federal Court, Schlenert v Australian and Overseas Telecommunications Corporation (1994) 49 FCR 139 and Comcare v Bozicevic (1997) 74 FCR 260. 8 To understand the effect of these decisions, and the reason for the Tribunal's reliance upon them, it is necessary to make further reference to s 124 of the 1988 Act. We have already noticed the restriction that subsection (4) imposes upon the operation of subsections (1) and (1A). Subsections (2) and (3) should also be mentioned. They provide: "(2)A person is not entitled to compensation under this Act in respect of an injury, loss or damage suffered before the commencing day if compensation was not payable in respect of that injury, loss or damage: (a) where the injury, loss or damage was suffered before the commencement of the 1930 Act - under the 1912 Act; (b) where the injury, loss or damage was suffered after the commencement of the 1930 Act but before the commencement of the 1971 Act - under the 1930 Act as in force when the injury, loss or damage was suffered; or (c) in any other case - under the 1971 Act as in force when the injury, loss or damage was suffered. (3) A person is not entitled to compensation under section 24 or 25 in respect of a permanent impairment, or under section 17 in respect of the death of an employee, being an impairment or death that occurred before the commencing date, if: (a) the person received compensation of a lump sum in respect of that impairment or death under the 1912 Act, the 1930 Act or the 1971 Act; or (b) the person was not entitled to receive compensation of a lump sum in respect of that impairment or death: (i) where the impairment or death occurred before the commencement of the 1930 Act - under the 1912 Act; (ii) where the impairment or death occurred after the commencement of the 1930 Act but before the commencement of the 1971 Act - under the 1930 Act as in force when the impairment or death occurred; or (iii) in any other case - under the 1971 Act as in force when the impairment or death occurred." 9 The object of s 124 is to ensure that an employee who is entitled to workers' compensation under the 1971 Act or under earlier repealed legislation does not lose that entitlement by reason of the repeal of those Acts, by providing that the 1988 Act applies to injuries suffered before the commencement of the 1988 Act and that the compensation that is payable to the injured employee is the same as it would have been under any of the repealed Acts. In other words, speaking generally, s 124 attempts to bring about a situation where an injured employee is neither worse-off nor better-off in consequence of the passing of the 1988 Act and the repeal of the earlier workers' compensation Acts: see generally Hoyle v Telstra Corporation Limited (1997) 75 FCR 390 at 392, 394 and 398. 10 In Schlenert the Full Court was concerned with an employee who had suffered a work related injury before 1 December 1988 which was compensable under the 1971 Act. The injury resulted in a permanent impairment and the employee was therefore entitled to compensation under s 24 of the 1988 Act. The question that arose for consideration was whether the employee was also entitled to additional compensation under s 27. The employer argued that because compensation for non-economic loss was not payable under the 1971 Act, or any of its predecessors, it would be inconsistent with the objects of s 124 to permit the employee to recover "additional compensation" under s 27. Particular reliance was placed on s 124(2) which denies entitlement to compensation in respect of injury, loss or damage if that injury, loss or damage was not compensable under the 1971 Act. The employer submitted that it was not correct to construe subsections 124(1A) and (2) as if the reference to compensation did not include "additional compensation" under s 27. 11 The employer's submissions were accepted by Lockhart J who held that the employee was not entitled to any compensation under s 27. But the arguments did not convince the majority, Sheppard and Einfeld JJ. They held that, on the proper construction of the statute, an injured employee's entitlement to compensation under s 27 depended only upon the satisfaction of two conditions, the existence of a permanent impairment and an entitlement to compensation for that impairment under s 24. Accordingly it did not matter, so the majority held, that compensation of the kind payable under s 27 was not payable under the 1971 Act. What was important they said, was that the language of s 124(2) did not limit the operation of s 27. Thus it followed that if compensation was payable under s 24 because of the operation of s 124, additional compensation was payable under s 27. 12 The same result was reached by the Full Court in Bozicevic. That also was a case where an employee had suffered an injury causing permanent impairment before 1 December 1988. The employee was entitled to compensation for that injury under s 24 of the 1988 Act. The employee also sought compensation under s 27. The Full Court was asked to reject that claim on the ground that Schlenert had been wrongly decided and that the views of Lockhart J should be preferred. The Court (Foster, Carr and North JJ) declined the invitation to reconsider Schlenert and found in favour of the employee. Carr J, in separate reasons, considered that subsections 124(4), (5), (8), (11) and (12) confirmed the view that had been reached by the majority in Schlenert. In passing, we note that Hoyle, another decision of the Full Court, referred to Schlenert with apparent approval, although it does not appear to have been argued in that case that Schlenert was incorrectly decided. 13 There is a feature of this case that distinguishes it from the facts under consideration in Schlenert and Bozicevic. In each of those cases the injured employee was entitled to compensation under the table of maims found in s 39 of the 1971 Act. Neither employee had been entitled to compensation under s 41 of the 1971 Act. The Tribunal regarded this difference as immaterial, saying: "The Tribunal is unable to draw any significance from the fact that compensation for facial disfigurement was provided for under s 41 rather than s 39 of the 1971 Act. The clear words of s 41 give no indication that compensation for facial disfigurement is considered any different to compensation for the conditions which are compensable under s 39. In the Tribunal's opinion, this is an insufficient basis on which to distinguish the present case from the decisions in Schlenert and Bozicevic." In the result, applying the ratio of Schlenert and Bozicevic, the Tribunal "determine[d] that [Telstra], having decided that [Mr Treloar] is entitled to compensation under s 24 of the 1988 Act, is also liable to pay compensation to [Mr Treloar] under s 27". 14 Telstra appeals this determination pursuant to s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) which is limited to appeals on questions of law. Telstra contends that the question of law that arises is the proper construction of Part X of the 1988 Act, and in particular the proper construction of s 124. It identifies the alleged error of law as the failure by the Tribunal to construe s 124 so as to restrict the entitlement to compensation that is payable under s 24 and s 27 to the type of compensation that had been payable under the 1971 Act. It was not suggested that this did not raise a question of law: see generally Collector of Customs v Agfa-Gevaert Ltd (1995-96) 186 CLR 389. 15 Recognising the difficulty that confronts it in light of the decisions in Schlenert and Bozicevic, Telstra relied upon the difference in facts between this case and the earlier decisions. It also put forward arguments to support its general contentions that were different from the arguments raised in Schlenert and Bozicevic. In particular it argued that the effect of s 124(4), which limits the amount of compensation that an injured employee is entitled to receive under s 24 to that which would have been payable to that person under one of the repealed Acts, limits Mr Treloar's entitlement under the 1988 Act to such sum as he would have received under s 41 of the 1971 Act. It points out that the effect of subsection 124(4) had not been considered by the majority in Schlenert. Nor had it been considered by Foster and North JJ in Bozicevic. 16 In support of its contentions, Telstra relies on the manner in which the Tribunal found that compensation under s 27 was to be calculated as demonstrating the flaw in the Tribunal's reasoning, and, by inference, in demonstrating the error in the reasoning of the majority in Schlenert and all the judges in Bozicevic. The Tribunal noted that the compensation to which Mr Treloar was entitled should be assessed in accordance with the formula in s 27(2) which is based upon a determination under s 24 of the degree of permanent impairment that he suffered. Telstra points out that to assess compensation that is payable under s 24 there is no need for there to be a determination of the degree of permanent impairment suffered by Mr Treloar because his entitlement under s 24 is calculated under s 41 of the 1971 Act. It also placed reliance on the limitation contained in s 24(7), namely that if the degree of permanent impairment of an employee is less than 10 per cent, no compensation is payable under s 24. 17 Telstra says that it would be impermissible for a person with an impairment which was permanent before 1 December 1988 to be entitled to a benefit under s 24 of the 1988 Act without the need to establish a permanent impairment of 10 per cent or more but, in relation to s 27, to be required to have an assessment made, purely notionally, of the percentage determined under s 24 to be the degree of that permanent impairment. Telstra accepts that the restriction imposed by s 24(7) does not operate in the case of an employee whose entitlement to compensation under s 24 arises by s 124(1A). In that circumstance the amount of compensation is that provided for in s 124(4), namely the amount that would have been payable under the repealed Act. But Telstra says that it would be impermissible to require a person, who did not need to establish a permanent impairment of 10 per cent or more in order to be entitled to a benefit under s 24, to have an assessment made, purely notionally, of the percentage determined under s 24 in relation to the employee's claim under s 27. 18 We do not agree that this is a flaw in the reasoning of the Tribunal, provided it is accepted that Schlenert and Bozicevic were correctly decided. In that event, the amount of compensation payable under s 24 is not dependent upon a calculation of the degree of permanent impairment. It is true that the amount of compensation payable under s 27 is dependent upon that calculation. Thus, provided there is an entitlement to compensation under s 24, there must be an assessment of the degree of permanent impairment for the purpose of determining the claim under s 27. To describe this calculation as notionally made under s 24 may be an accurate description of what occurs, but it does not deny the need for it to occur. In the end, if there is an error, it is not to be found in the reasoning of the Tribunal but in the cases upon which it relied. 19 This brings us directly to the point of distinction between this case and the facts under consideration in Schlenert and Bozicevic. The employee in each of those cases was entitled to compensation under s 39 of the 1971 Act which was determined by reference to the percentages in the table of maims set out in s 39(4). Here Mr Treloar was entitled to compensation under s 41 which involves no assessment whatsoever of percentages. As Telstra points out, that section proceeds by reference to a lump sum. 20 The point of difference between the two classes of case cannot be denied. But the difference is of no relevance to the application of the principle established in Schlenert and followed in Bozicevic. That principle is that if an employee is entitled to compensation under s 24 in respect of an impairment which was permanent before 1 December 1988, the employee is also entitled to additional compensation under s 27. The additional compensation is not affected by the amount of compensation that is payable under s 24 nor by the manner in which it is calculated. The compensation payable under s 24 is the amount the employee would have received under the relevant repealed Act. But compensation under s 27 is not dependent upon the calculation of that amount. Accordingly, the earlier cases are not relevantly distinguishable. 21 Telstra submits that there is a further difference between this case and the earlier cases. It asserts that compensation payable under s 41 of the 1971 Act in respect of an injury that results in severe and permanent facial disfigurement includes that which is referred to as compensation for "non-economic loss" and is now compensable under s 27. Telstra argues that to allow an employee to recover non-economic loss twice (once under s 41 and again under s 27) would be contrary to the principles of Part X of the 1988 Act. But it is no more contrary to those principles than the decisions in Schlenert and Bozicevic would permit. In each of those cases the employee was entitled to compensation under the 1988 Act which was of a character that was not payable under any repealed Act. This was recognised as anomalous but was held to be the product of the proper construction of the statute, a construction which was arrived at by taking other more compelling considerations into account. If Telstra is correct, certain employees may now be entitled to recover non-economic loss twice. That is the result of the construction placed upon s 24 by the earlier decisions. If those decisions were correctly decided, it is but one more anomaly that is brought about by a proper construction of the enactment. 22 In the end, as we think counsel for Telstra recognised, the only basis for setting aside the decision of the Tribunal is if we hold that Schlenert and Bozicevic were wrongly decided and we agree to depart from them. The question is whether we should reconsider those decisions. This is a matter of no small interest. Recently there have been a number of occasions when a Full Court has reconsidered an earlier decision of another Full Court. Sometimes a court of five judges has been empanelled to reconsider an earlier appellate decision. In these circumstances it is as well to express our view on the circumstances in which a Full Court may properly reconsider one of its earlier decisions, particularly when that decision concerns the construction of a statute. Different considerations may apply in other areas of law. 23 The doctrine of stare decisis takes its name from the Latin phrase "stare decisis et non quieta movere" which translates as "stand by the thing decided and do not disturb the calm". It is a doctrine based on policy. The rationale for the doctrine can be grouped into four categories: certainty, equality, efficiency and the appearance of justice. Stare decisis promotes certainty because the law is then able to furnish a clear guide for the conduct of individuals. Citizens are able to arrange their affairs with confidence knowing that the law that will be applied to them in future will be the same as is currently applied. The doctrine achieves equality by treating like cases alike. Stare decisis promotes efficiency. Once a court has determined an issue, subsequent courts need not expend the time and resources to reconsider it. Finally, stare decisis promotes the appearance of justice by creating impartial rules of law not dependent upon the personal views or biases of a particular judge. It achieves this result by impersonal and reasoned judgments. 24 In Australia, however, intermediate appellate courts regard themselves as free to depart from previous decisions: Nguyen v Nguyen (1990) 169 CLR 245 at 268-270. This is not so in England where until 1966 even the House of Lords regarded itself as bound by its own decisions. In Young v Bristol Aeroplane Co Limited [1944] KB 718 at 729-730 the Court of Appeal held that, in the exercise of its civil jurisdiction, it should follow its own previous decisions unless a case fell within one of three exceptional situations: (a) where there were conflicting decisions; (b) where a previous decision, though not expressly overruled, was inconsistent with a decision of the House of Lords; (c) where a previous decision was given per incuriam in the sense that the court had overlooked a relevant statute, acted in ignorance of a previous decision of its own or of a court of co-ordinate jurisdiction. 25 As has been recognised in this country, rigid adherence to the doctrine of precedent preventing a court from overruling its own earlier decisions cannot be justified. Experience and better reasoning, academic and judicial criticism, the observation of unintended consequences, and other factors, may demonstrate judicial error or the need to reconsider a statement of legal principle. However, in those jurisdictions where a superior court will overrule its own decision it is by no means clear in what circumstances it will undertake that task. In the absence of firm rules to indicate when a court will review an earlier decision, there is a risk that reviews will be occasioned by subjective reference to judges' political, social, judicial or moral philosophies. 26 Speaking generally, appellate courts accept that they should act with caution before reviewing an earlier decision: see, eg, Clutha Developments Pty Ltd v Barry (1989) 18 NSWLR 86 at 99-101. Courts have said it may be done if the earlier decision is "manifestly wrong" or "clearly erroneous", or if "strong reasons" are shown, or if the "maintenance [of the earlier authority] is contrary to the public interest": see the examples given by Aickin J in Queensland v Commonwealth (1977) 139 CLR 585 at 620ff; see also Transurban City Link Ltd v Allan (1999) 168 ALR 687 at 694. But, apart from suggesting caution, the cases provide little real guidance as to the circumstances in which it will be appropriate to review an earlier decision. 27 The problem is very real when what is at issue is the construction of a statute. For one thing, statutory language is often ambiguous. Courts can struggle to determine the legislative intent. It is often impossible to discover any legislative intent. In many instances the generality of the statutory language is deliberate and allows the courts to develop a body of law to fill the gaps. This may lead to disagreement among judges about what the statute means. It would be sound policy that once that intent has been discerned by an appellate court then that should be the end of the matter. 28 The view which we prefer is that unless an error in construction is patent, or has produced unintended and perhaps irrational consequences not foreseen by the court that created the precedent, the first decision should stand. In other areas of the law a precedent may be reconsidered if its underlying reasoning is outdated or is inconsistent with other legal developments. Perhaps, with some modification, in some instances these factors could also be applied to cases concerned with the construction of statutes. Accordingly, we venture to suggest it would be on a rare occasion that an intermediate appellate court (contrast the position of the High Court, as to which see Babaniaris v Lutony Fashions Pty Ltd (1987) 163 CLR 1) will allow an issue concerning the construction of a statute, past and closed and especially a repealed statute, to be thrown open, producing as it clearly will, uncertainty, disruption to the conduct of affairs, a sense of grievance in those who may consequently receive treatment less favourable than that received by others under the same statute and additional cost and expense. In this case, the number of individuals who will relevantly be affected by the construction of the statute may be assumed to be, by reason of the passage of time, relatively small. 29 Returning to the instant case, we accept that it is arguable that the reasoning of Lockhart J in Schlenert is to be preferred to that of the majority. Indeed, in the absence of authority, we may well have taken the same view of the legislation as his Honour did. However, as we have said, in a case involving the construction of a statute it is no surprise that the language employed is found to be ambiguous in the strict sense (capable of two or more meanings) or in the general sense (of doubtful meaning). In refusing special leave to appeal in Schlenert, Mason CJ, speaking for the court, observed that the issue sought to be raised in the proposed appeal was a question of statutory construction turning on the meaning of particular words and their context in a complex statute (Telstra Corporation Ltd v Schlenert (1994) 18 Leg Rep page SL 4). Where the competing views have been exposed and analysed in such a case, and a particular construction is reached and, as in this case, is confirmed by a later decision, there will rarely be occasion to enquire into the matter again. In this case, no clear or patent error has been demonstrated. The decisions were not per incuriam. It has not been demonstrated that the construction preferred by the earlier courts has produced unintended consequences such as to throw real doubt on the decision. No court in another jurisdiction has arrived at an opposite result on similar legislation. To the extent that it is suggested that the construction preferred by the earlier courts does not reflect the intention of the legislature, it may be noted that Parliament could have, but has not, moved to amend the legislation. In other words, no basis has been demonstrated for the reconsideration of the earlier decisions. 30 We would dismiss the appeal with costs. I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Branson and Finkelstein.