FEDERAL COURT OF AUSTRALIA

Newport v Australian Postal Corporation [2015] FCAFC 194

THE COURT ORDERS THAT:

1.    The appeal be dismissed.

2.    The Appellant pay the costs of the Respondent.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

THE COURT

1    The Applicant, Ms Linda Newport, is a former employee of the Australian Postal Corporation (“Australia Post”). She worked for Australia Post for some 19 years.

2    While employed with Australia Post she suffered separate injuries to her right and left shoulder. She claimed compensation pursuant to the Safety, Rehabilitation and Compensation Act 1988 (Cth) (the “Compensation Act”). In July 2013 she was assessed as having:

    a 5% permanent impairment to her right shoulder; and

    a 6% permanent impairment to her left shoulder.

The medical practitioner who carried out the assessment (Dr Meegan) issued a further report in January 2014 indicating a combined assessment of 11% for the bilateral shoulder impairment.

3    In February 2014 Ms Newport’s claim for compensation was denied. Section 24(7) of the Compensation Act provides that compensation is not payable where “the degree of permanent impairment is less than 10%”. Neither impairment, it was determined, exceeded that minimum threshold. That decision was affirmed after reconsideration and by the Administrative Appeals Tribunal (the “Tribunal”): Re Newport and Australian Postal Corporation [2015] AATA 261. The Tribunal concluded that the “inevitable consequence” of the decision in Canute v Comcare [2006] HCA 47, (2006) 226 CLR 535 was that “because neither of her injuries has resulted in a permanent impairment of more than 10% … s 24(7) dictates that her impairments are not compensable”: [2015] AATA 261 at [38] to [39]. The facts upon which the Tribunal based its decision had been agreed between the parties.

4    Ms Newport now “appeals” to this Court pursuant to s 44 of the Administrative Appeals Tribunal Act 1975 (Cth). Although s 44(1) provides that a party “may appeal … on a question of law” to this Court, the proceeding that is brought is not an “appeal” but rather an application in the original jurisdiction of the Court: Drake v Minister for Immigration and Ethnic Affairs (1979) 46 FLR 409 at 410 per Bowen CJ and Deane J.

5    The issue sought to be resolved is whether the two separate assessments of permanent impairment can be combined such that the 10% threshold is met. It is common ground that this issue is a “question of law”.

6    The “appeal” from the decision of the Tribunal is to be dismissed.

The Compensation Act

7    A limited number of provisions of the Compensation Act assume relevance.

8    First, s 14(1) of that Act provides in relevant part as follows:

… Comcare is liable to pay compensation in accordance with this Act in respect of an injury suffered by an employee if the injury results in death, incapacity for work, or impairment.

Section 4 provides that the term “injury” is to have the meaning given to it by s 5A. Section 4 further provides that the term “impairment” is defined to mean “the loss, the loss of the use, or the damage or malfunction, of any part of the body or of any bodily system or function or part of such system or function”.

9    Second, s 24(5) and (6) provide as follows:

(5)    Comcare shall determine the degree of permanent impairment of the employee resulting from an injury under the provisions of the approved Guide.

(6)    The degree of permanent impairment shall be expressed as a percentage.

Section 24(7) thereafter provides in relevant part as follows:

… if:

(a)    …

(b)    Comcare determines that the degree of permanent impairment is less than 10%;

an amount of compensation is not payable to the employee under this section.

10    The assessments made in respect to Ms Newport’s impairments in July 2013, it may be noted, were carried out pursuant to the “approved Guide” prepared pursuant to s 28, namely the Guide to the Assessment of Permanent Impairment (edition 2.1) (the “Guide”). That Guide, in turn, contains “Principles of Assessment”, including the following:

Impairment is system or function based. A single injury may give rise to multiple losses of function and, therefore, multiple impairments. When more than one table applies in respect of that injury, separate scores should be allocated for each functional impairment. To obtain the whole person impairment in respect of that injury, those scores are then combined using the combined values chart (see Part 1, Appendix 1) unless the notes in the relevant section specifically stipulate that the scores are to be added …

…

Where two or more injuries give rise to different whole person impairments, each injury is to be assessed separately and the final scores for each injury (including any combined score for a particular injury) added together.

The Guide further provides in the Introduction to Part II of Division 1, which relates to “Upper Extremities”, as follows:

The WPI rating for one extremity may be combined with a WPI rating for the other upper extremity, except in the case of assessments under Table 9.14, where the notes appearing prior to Table 9.14 are to be followed.

“WPI” is an acronym for “whole person impairment”.

The decision in Canute & its aftermath

11    The decision relied upon by the Tribunal, and a decision of seminal importance to the manner in which the Compensation Act is administered, is the decision of the High Court in Canute v Comcare.

12    Mr Canute had been employed by the Department of Defence as a civilian contractor engaged in cleaning and maintenance duties. In 1998 he injured his back. Comcare awarded him lump sum compensation for 12% whole person impairment under s 24 of the Compensation Act. Mr Canute lodged a second claim for compensation in respect of an adjustment disorder with anxious and depressed mood arising from his back condition. The Tribunal assessed the whole person impairment arising from this adjustment disorder as 10%. But the Tribunal further found that the back injury and adjustment disorder combined produced a whole person impairment of 21%.

13    Of central relevance were s 25(4) and s 25(5) of the Compensation Act which at the time provided as follows:

(4)    Where Comcare has made a final assessment of the degree of permanent impairment of an employee (other than a hearing loss), no further amounts of compensation shall be payable to the employee in respect of a subsequent increase in the degree of impairment, unless the increase is 10% or more.

(5)    If Comcare has made a final assessment of the degree of permanent impairment of an employee constituted by a hearing loss, no further amounts of compensation are payable to the employee in respect of a subsequent increase in the hearing loss, unless the subsequent increase in the degree of binaural hearing loss is 5% or more.

Since the whole person impairment of 21% did not result in a 10% increase on the 12%, the Tribunal found that no further lump sum compensation was payable.

14    The decision was thereafter the subject of an appeal to the primary Judge, Hill J, who allowed the appeal and remitted the matter to the Tribunal: Canute v Comcare [2005] FCA 299, (2005) 87 ALD 11. There was subsequently a further appeal to the Full Court: Comcare v Canute [2005] FCAFC 262, (2005) 148 FCR 232. French and Stone JJ concluded that although the Tribunal had erred, it had nevertheless come to the right result. Gyles J dissented and agreed with Hill J. The High Court disagreed with the reasoning of French and Stone JJ and agreed with the approach of Hill and Gyles JJ. Gummow A-CJ, Kirby, Callinan, Heydon and Crennan JJ referred at the outset to the structure of the Compensation Act whereby compensation was payable in respect to an employee’s “injury” as follows:

[10]     At this juncture, three things may be observed about the concept of “an injury”. First, the Act does not oblige Comcare to pay compensation in respect of an employee’s impairment; it is liable to pay compensation in respect of “the injury”. Secondly, the term “injury” is not used in the Act in the sense of “workplace accident”. The definition of “injury” is expressed in terms of the resultant effect of an incident or ailment upon the employee’s body. Thirdly, the term “injury” is not used in a global sense to describe the general condition of the employee following an incident. The Act refers disjunctively to “disease” or “physical or mental” injuries and, at least to that extent, it assumes that an employee may sustain more than one “injury”. The use in s 24(1) of the indefinite article in the expression “an injury” reinforces that conclusion.

Their Honours then turned to the reasoning of French and Stone JJ and said:

[27]    … an injury for the purposes of the Act. For the majority, the error by the AAT was in assuming that an injury which is consequential upon a compensable injury is necessarily to be treated as an increase in the level of impairment attributable to that injury without addressing the relevant question; this was whether the adjustment disorder was an “impairment”. Having posed that question, the majority answered it affirmatively and supported the application by the AAT of s 25(4).

[28]    In his dissenting reasons, Gyles J endorsed the reasons of Hill J and added some reasons of his own. His Honour essentially was of the view that there was no ground for not applying s 24 to the psychiatric injury, given it was “an injury” for the purposes of the Act, and that, on its proper construction, s 25(4) could not affect this conclusion.

Their Honours continued:

[32]    For the majority, it was critical that the “injury” constituted by the adjustment disorder could also be described as contributing to a “subsequent increase in the degree of impairment” attributable to the earlier back injury in respect of which a final determination had been made (for the purposes of s 25(4)). This was possible because of the breadth of the statutory definition of “impairment”. In those circumstances, the majority construed the Act as requiring that the relevant condition only be treated as going to “impairment” and not as a separate “injury” resulting in an impairment. Upon that reasoning the injury constituted by the adjustment disorder did not give rise to a separate liability under s 24 of the Act because it was also an impairment resulting from the back injury.

In rejecting the approach of French and Stone JJ, their Honours said:

[34]     Reduced to its essentials, the conclusion of the Full Court majority depended upon the proposition that:

“the policy of [the Act] seems to require such an injury to be treated as an aspect of the impairment created by the initial injury.”

It is clear from the context that what was being referred to was what the majority described as a “consequential injury”, a notion supported by Comcare in terms of “primary” and “secondary” injuries. Comcare’s case depends upon confining the meaning of “injury” to exclude such “consequential injuries”. However, there is no foundation in the Act for any such distinction between “an injury” and a consequential or secondary injury. Neither of these qualifiers finds any expression in the Act. The Act speaks exclusively in terms of “an injury”.

A little later, their Honours said:

[37]     … It is true that the Guide seeks to provide for the assessment of "the degree of permanent impairment of the employee" on a whole of person basis. But, as indicated earlier in these reasons, s 24(5) of the Act imposes a duty upon Comcare to determine "the degree of permanent impairment of the employee resulting from an injury". It is the occurrence of "an injury" which both actuates and defines the ambit of Comcare's duty pursuant to s 24 of the Act. Once that duty has been performed, subss (3) and (4) of s 24 operate, in a self-executing way, to quantify the amount of compensation payable by Comcare. That amount is payable in satisfaction of Comcare's liability which arises "in respect of the injury" under s 24(1). The Act only adopts the "whole person impairment" approach with respect to permanent impairments resulting from each "injury". That "whole person" approach cannot properly be used to deny the applicability of s 24 to something which corresponds to the legislative definition of an "injury". The statutory criterion of an "injury" is antecedent to the concept of "whole person" impairment, not the other way around.

The decision of the Full Court was, accordingly, set aside. The order made by Hill J was varied such that the decision of the Tribunal was set aside and the matter remitted to the Tribunal to direct Comcare to “determine an amount payable to the applicant … in respect of an injury, being an adjustment disorder with anxious and depressed mood resulting in a degree of permanent impairment … of 10 per cent...”. See also: Comcare v Lofts [2013] FCA 1197 at [60], (2013) 137 ALD 522 at 534 per Mortimer J.

15    The decision in Canute was subsequently sought to be distinguished in Fellowes v Military Rehabilitation and Compensation Commission [2008] FCAFC 140, (2008) 170 FCR 531. Ms Fellowes was suffering from an injury both to her left and right knees. The injury to her left knee occurred first, in 1986. She then suffered an injury to her right knee in 1987. The Tribunal distinguished the decision in Canute on the basis that in that case two injuries had been suffered which resulted in separate and distinct impairments; on the facts in Fellowes, the Tribunal concluded that the cumulative effect of both injuries was 10%: Re Fellowes and Military Rehabilitation and Compensation Commission [2007] AATA 1740, (2007) 97 ALD 220. The Full Court concluded that it was not open to the Tribunal to determine that the degree of permanent impairment “resulting from” the second injury attracted a second 10% whole person impairment, as the classification of the degree of impairment was the same following the second injury as it had been immediately before. In the Full Court, French and Lindgren JJ concluded that it was necessary to make allowance for Ms Fellowes’ existing permanent impairment when determining the degree of permanent impairment “resulting from” the second injury.

16    Special leave to appeal to the High Court was granted. The High Court reversed the decision of the Full Court of the Federal Court: Fellowes v Military Rehabilitation and Compensation Commission [2009] HCA 38, (2009) 240 CLR 28. Hayne, Heydon, Crennan and Bell JJ summarised the competing arguments as follows:

The competing arguments

[16]    The appellant submitted that, each injury having led to a separate impairment, the degree of permanent impairment of the employee that resulted from the injury was determined by looking to the consequences that followed from that injury. The consequences to be identified, so the appellant submitted, were the consequences that followed from the particular impairment as that term is defined in the SRC Act. In this case, because there were two injuries and two impairments, two amounts of compensation should be awarded.

[17]    By contrast, the respondent submitted that what was to be determined under s 24(5) was the degree of permanent impairment of the appellant, fixed by reference to Table 9.5 of the Guide. That table classified the impairment of the appellant’s capacity to undertake the activities of daily living resulting from the second injury as the same as that which followed as a result of the first. Accordingly, so the respondent submitted, the degree of impairment resulting from the second injury, when assessed in accordance with the Guide, should be assessed as 0 per cent, a result expressly contemplated by s 28(5) of the SRC Act.

Their Honours concluded:

[21]    Once it is accepted, as it was in Canute, that the SRC Act hinges about the concept of “injury” and that “impairment” is to be identified in terms of effect on bodily parts, systems or functions, it follows that the appellant’s arguments are to be accepted and the respondent’s rejected. The conclusion reached by the Tribunal could be supported only by reading s 24(5) as directing, or permitting, Comcare to provide in the Guide for determination of the degree of permanent impairment resulting from an injury by reference to the pre-existing capacities of the particular applicant for compensation.

[22]    The argument that s 24(5) directs an approach of that kind (referred to in argument as a “whole person” approach) was expressly rejected by this Court in Canute and the respondent did not seek to reopen what was decided in that case. Rather, the respondent sought to emphasise that s 24(5) required application of the Guide and that s 28(1)(a) required Comcare to state, in the Guide, the criteria by reference to which the degree of permanent impairment resulting from an injury was to be determined.

…

[27]     It is, nonetheless, important to make the further point that, on its proper construction, s 24(5) of the SRC Act directs attention to the degree of impairment that results from the injury resulting in the impairment identified in s 24(1). The two sub-sections of s 24 are not to be read as requiring or permitting a different identification of “impairment” in their respective applications. In the application of both sub-sections the focus must fall upon “the loss, the loss of the use, or the damage or malfunction” (s 4(1), “impairment”) of a part of the body or a bodily system or function or part of a bodily system or function. And in the present case there were separate losses of use of, or damage to, two parts of the body.

[28]     In this last connection, the respondent submitted that, despite there having been separate injuries to each knee, there was in fact only a single effect on (a loss of use of) a bodily function (the function of using the lower limbs). It may be doubted that the function of using the lower limbs is properly described as a bodily function. But even if the words could be understood as extending thus far, the respondent’s argument, on examination, is no more than a restatement of the argument that the degree of impairment to be determined under s 24(5) is the degree of impairment as a whole person of the particular applicant for compensation. For the reasons already given, that construction should be rejected.

Again the decision of the Tribunal was set aside and the matter remitted with a direction that Comcare determine “the amount payable … in respect of an injury, being a right knee condition resulting in a degree of permanent impairment … of 10 per cent…”.

17    In commenting upon both Canute and Fellowes, Buchanan J in Broadhurst v Comcare [2010] FCA 1034, (2010) 189 FCR 561 at 572 observed:

[49]     In Canute and Fellowes the High Court decided that the SRC Act required the individual assessment of each permanent impairment and did not permit any such assessment to be reduced by reference to the occurrence or existence of another impairment, whether resulting from the same injury or earlier occurring. In Canute the High Court emphasised (at [15]) the centrality of “an injury” to the scheme upon which Comcare’s liability to compensate depends …

18    The decisions in Canute and Fellowes again came before a Full Court of this Court in Robson v Military Rehabilitation and Compensation Commission [2013] FCAFC 101, (2013) 214 FCR 1. Again the need separately to assess the degree of impairment resulting from each injury was emphasised. Mr Robson had been a member of the Australian Army. Over the years he suffered three injuries which attracted a right to claim compensation, namely:

    post-traumatic stress disorder arising from service in Rwanda with the United Nations Peacekeeping Force from August 1994 to February 1995;

    aggravation of that disorder resulting from a parachute accident suffered in February 2004, when he suffered fractures to both ankles, his pelvis and coccyx and a duodenal haematoma; and

    a major depressive disorder arising from the parachute accident.

The Administrative Appeals Tribunal declined separately to assess compensation for either the aggravation of the post-traumatic stress disorder or the major depressive disorder “because it felt that the medical evidence provided it with only a final overall assessment of the applicant’s psychological state.” Cowdroy, Buchanan and Katzmann JJ concluded that the approach of the Tribunal “was contrary to the directions given by the High Court in Canute and Fellowes”: [2013] FCAFC 101 at [24], (2013) 214 FCR at 6. In so concluding, their Honours reasoned in part as follows:

[31] The respondent attempted to defend the approach taken by the AAT by referring to an instruction in the Guide in the following terms:

6. Combined Impairments

… Where two or more injuries give rise to the same impairment a single rating only should be given.

[32] That is the same instruction with which the High Court dealt in Fellowes. The first difficulty with the argument is that the AAT made no reference to this instruction and did not implement it. Rather than concluding that the applicant’s MDD gave rise to the same impairment as the PTSD, the AAT declined to assess that separate condition at all upon the basis that the applicant’s overall condition reflected whole person impairment of 50%. The AAT then concluded that, as liability to that level had already been accepted, no further compensation was payable.

The decision of the Tribunal was, accordingly, set aside.

The facts of the present case

19    In rejecting the claim for compensation for the two injuries to Ms Newport’s right and left shoulders, the Tribunal concluded as follows:

[37]    Returning to the facts of this matter, there is no dispute that the applicant has suffered two separate shoulder injuries. It follows from Canute, in our view (and from the terms of the Guide, properly construed) that the provisions of the Guide must be applied separately to each injury, and the resulting impairments cannot be combined to arrive at an overall impairment rating, as they could if both impairments had resulted from a single injury.

[38]    Unfortunately for the applicant, this has the consequence that, as the High Court in Canute envisaged would occur in some cases, the construction of the Act adopted by the court operates to her “disadvantage”. That is because neither of her injuries has resulted in a permanent impairment of more than 10%, and therefore subs 24(7) dictates that her impairments are not compensable.

[39]    This is regrettable from the applicant’s point of view, but for the reasons we have given, we consider it to be the inevitable consequence of the High Court’s decision in Canute.

Concurrence is expressed with that reasoning.

20    On the facts of the present case, Ms Newport suffered two injuries – one to her right shoulder and another injury to her left shoulder. Each injury “actuates and defines the ambit of Comcare’s duty” to pay compensation: Canute [2006] HCA 47 at [37], (2006) 226 CLR at 548. There was no right to compensation in respect to either injury if “the degree of permanent impairment [was] less than 10%”: Compensation Act, s 24(7). Just as it is an erroneous approach to the application of the Compensation Act to aggregate the “whole person impairment” resulting from two injuries so as to deny compensation for each injury which exceeds the 10% threshold (Canute) and equally erroneous not to compensate a separate impairment resulting from a second injury which exceeds the 10% threshold (Fellowes), it is equally erroneous to aggregate two separate impairments resulting from two separate injuries so as to exceed the minimum threshold set by s 24(7). Just as an assessment of impairment cannot be “reduced by reference to the occurrence or existence of another impairment” (Broadhurst), an assessment cannot be increased by reference to another impairment. Each injury actuates a separate right to claim compensation. And compensation is payable in respect to each injury if the “impairment” that results from each “injury” exceeds 10%. But if the “impairment” in respect to each injury is less than 10%, the minimum threshold set by s 24(7) cannot be avoided by seeking to aggregate each separate “impairment”.

21    Those provisions of the Guide which permit a “WPI rating” to be “combined” cannot confer an entitlement to compensation which is denied by s 24(7) of the Compensation Act.

22    Although the terms of s 24(5) may permit “the degree of impairment” resulting from a second “injury” to be assessed by reference to the medical condition of an employee existing as at the time of a second or subsequent “injury”, it may be noted that:

    the Tables of the Guide pursuant to which Ms Newport’s injuries were assessed did not permit a second or later “impairment” to be assessed by reference to any prior or other “impairment” also then suffered by an employee;

and that:

    Dr Meegan did not do anything other than assess each “impairment” separately from each shoulder “injury”, as indeed for which Table 9.11 of the Guide provides. No medical assessment was attempted to be carried out which purported to assess “the [combined] degree of impairment” experienced by Ms Newport as a result of her injury to both shoulders. Dr Meegan’s 11% assessment was not a medical assessment of Ms Newport’s condition given her two injuries but rather a mere arithmetical task of adding the two separate assessments of 6% and 5%.

The circumstances in which individual parts of the Guide may permit separately assessed “impairment values” to be “combined” in a manner which is consistent with both s 24(5) and s 24(7) of the Compensation Act is not a question which need presently be addressed. Although reference was thus made to Table 9.14 of the Guide as an instance where the Guide expressly permits an assessment of impairments by reference to a “non-dominant extremity”, a “dominant extremity” and “both extremities”, it is unnecessary to express any view as to whether such a licence to “combine” impairments sits comfortably with s 24(5) and/or s 24(7).

23    In so concluding it is necessarily recognised that the construction of ss 14 and 24 now endorsed means that Ms Newport receives no compensation for either injury. The result of the decisions in Canute and Fellowes was that compensation was payable. But such differences in results in individual cases are not the product of any different construction being given to the same provisions of the Compensation Act but rather are dictated by the facts and circumstances of the different cases that come before Comcare and the Tribunal for resolution on their competing factual merits.

CONCLUSIONS

24    The appeal should be dismissed.

25    There is no error in the Tribunal refusing compensation for either injury where the impairment in respect to either injury is less than 10%, albeit in aggregate it may exceed 10%. In accordance with Table 9.11 of the Guide, Dr Meegan separately assessed the “impairment” resulting from the two “injuries”. Section 24(7) of the Compensation Act precludes separately assessed “impairments” resulting from separate “injuries” to be combined.

26    There is no reason why costs should not follow the event.

THE ORDERS OF THE COURT ARE:

1.    The appeal be dismissed.

2.    The Appellant pay the costs of the Respondent.

Associate:    

Dated:    23 December 2015