Canute v Comcare

The High Court of Australia heard an appeal from Comcare concerning the appellant's entitlement to compensation for a permanent impairment. The appellant had sustained a physical back injury in the course of his employment, for which Comcare accepted liability and made an initial award of compensation based on a 12% whole person impairment. Subsequently, the appellant developed a mental injury, an adjustment disorder with anxious and depressed mood, which manifested later than the physical injury. Comcare denied further compensation for this mental injury, asserting that it did not represent an increase of at least 10% in the degree of permanent impairment, as required by section 25(4) of the *Safety, Rehabilitation and Compensation Act 1988* (Cth).

The central legal issue before the High Court was whether section 25(4) of the Act precluded Comcare from being liable to pay compensation in respect of the appellant's mental injury, which was diagnosed after the initial assessment of his physical injury. This involved determining whether the mental injury constituted a separate "injury" for the purposes of the Act, and how section 25(4), which deals with subsequent increases in impairment, interacted with section 24, which governs compensation for permanent impairment. The Court also considered whether a potential repugnancy arose between these sections if a condition could be both a distinct injury and a subsequent increase in impairment.

The High Court, allowing the appeal, reasoned that the Act requires Comcare to determine compensation by reference to each distinct "injury". The appellant's adjustment disorder was an "injury" in its own right, distinct from the initial back injury. Therefore, section 24 of the Act was applicable to this new injury, requiring Comcare to assess the degree of permanent impairment resulting from it. The Court found that section 25(4) was not intended to prevent compensation for a new and distinct injury that arises after an initial assessment, but rather to address subsequent increases in the degree of impairment from an already assessed injury. The majority of the Full Court had erred in treating the adjustment disorder as merely a consequential increase in impairment rather than a separate injury.

Consequently, the High Court allowed the appeal, set aside the orders of the Full Court, and varied the orders of Hill J. The matter was remitted to Comcare to determine an amount payable to the appellant assessed under sections 24 and 27 of the Act in respect of the adjustment disorder, resulting in a 10% degree of permanent impairment.