Comcare Australia v Mathieson

Case [2004] FCA 212

FEDERAL COURT OF AUSTRALIA

Comcare Australia v Mathieson [2004] FCA 212

WORKERS’ COMPENSATION – Commonwealth employees – liability for permanent impairment – employee suffered injury to both knees whilst performing naval duties – transitional provisions in Safety, Rehabilitation and Compensation Act 1988 (Cth) – permanent impairment occurring before 1 December 1988 – “commencing date” – significant deterioration of condition thereafter – whether new impairment – whether “quantitative” and “qualitative” change

ADMINISTRATIVE LAW – Administrative Appeals Tribunal – obligation to give reasons for decision – obligation to refer to evidence on which material findings based – whether failure to identify basis for finding that there had been “qualitative” change gives rise to error of law

Administrative Appeals Tribunal Act 1975 (Cth) ss 43(2), 43(2B) and 44
Safety, Rehabilitation and Compensation Act 1988 (Cth) ss 4(1), 24(1), (5), (6) and (7), 25(4) and 124(3)
Compensation (Commonwealth Government Employees) Act 1971 (Cth)
Commonwealth Employees’ Compensation Act 1930 (Cth)

Blackman v Australian Telecommunications Commission (1990) 12 AAR 11 at 14 not followed
Brennan v Comcare (1994) 50 FCR 555 discussed
Comcare v Levett (1995) 60 FCR 14 discussed
Department of Defence v West (1998) 85 FCR 491 at 505-506, 512 applied
Comcare Australia (Department of Defence) v Maida (2002) 36 AAR 69 at 79-80, 82-83 followed

Dornan v Riordan (1990) 24 FCR 564 referred to
Brackenberg v Comcare Australia (1995) 56 FCR 335 referred to
Australian Postal Corporation v Wallace (1996) 41 ALD 455 referred to
Ansett Transport Industries (Operations) Pty Ltd v Wraith (1983) 48 ALR 500 at 507 referred to
Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323 at 346 referred to

COMCARE AUSTRALIA v SCOTT MATHIESON

V740 OF 2002

WEINBERG J
12 MARCH 2004
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

V740 OF 2002

BETWEEN:

COMCARE AUSTRALIA
APPLICANT

AND:

SCOTT MATHIESON
RESPONDENT

JUDGE:

WEINBERG J

DATE OF ORDER:

12 MARCH 2004

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:

1.The appeal be allowed.

2.The decision of the Administrative Appeals Tribunal given on 26 September 2002 be set aside.

3.The matter be remitted to the Tribunal for hearing and determination according to law.

4.There be no order as to costs.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.


IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

V740 OF 2002

BETWEEN:

COMCARE AUSTRALIA
APPLICANT

AND:

SCOTT MATHIESON
RESPONDENT

JUDGE:

WEINBERG J

DATE:

12 MARCH 2004

PLACE:

MELBOURNE

REASONS FOR JUDGMENT

  1. This is an appeal on a question or questions of law from a decision of the Administrative Appeals Tribunal (“the Tribunal”) given on 26 September 2002. The appeal is brought under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) (“the AAT Act”). Although styled as an “appeal”, it is in fact an application in the original jurisdiction of the Court.

  2. This case is yet another in a series involving the interpretation of s 124(3) of the Safety, Rehabilitation and Compensation Act 1988 (Cth) (“

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AGLC
Comcare Australia v Mathieson [2004] FCA 212
Case
[2004] FCA 212
Decision Date

CaseChat Overview and Summary

Comcare Australia v Mathieson is a case concerning the interpretation of section 124(3) of the Safety, Rehabilitation and Compensation Act 1988 (Cth). The respondent, formerly a leading hand cook in the Royal Australian Navy, suffered injuries to both knees while serving in the Navy. Following his discharge in 1975, he worked intermittently until his incapacity necessitated a claim for lump sum compensation under section 24 of the 1988 Act. Comcare rejected his application, a decision the Tribunal overturned on review, leading to this appeal by Comcare. The core legal issue revolves around the interpretation of "permanent impairment" and the conditions under which a new impairment can be established, particularly in the context of ongoing degenerative conditions like osteoarthritis.

The court had to decide whether the Tribunal correctly interpreted the statutory provisions in finding that the respondent's condition constituted a new impairment, warranting compensation. The appeal hinged on whether the Tribunal erred in law by not requiring a qualitative change in the pathophysiological condition to constitute a new impairment. The court found that while there was merit in the approach taken by the Full Court in Blackman, it was not definitive and had been questioned in subsequent cases. Ultimately, the court accepted the argument that the Tribunal should have applied the "quantitative and qualitative" test as articulated in West, which requires an identifiable change in the underlying pathophysiological condition to recognise a new physical impairment.

In deciding the appeal, the court determined that the Tribunal did err by not applying the correct legal test in assessing the respondent's condition. The court held that the Tribunal's decision did not adequately address the need for a qualitative change in the underlying pathophysiological condition to constitute a new impairment. Consequently, the appeal was allowed, the Tribunal's decision was set aside, and the matter was remitted to the Tribunal for reconsideration according to law. No order was made regarding costs.

Orders

Orders of the court

1. The appeal be allowed.

2. The decision of the Administrative Appeals Tribunal given on 26 September 2002 be set aside.

3. The matter be remitted to the Tribunal for hearing and determination according to law.

4. There be no order as to costs.

Background

Background to the litigation

This case is yet another in a series involving the interpretation of s 124(3) of the Safety, Rehabilitation and Compensation Act 1988 (Cth) (“the 1988 Act”). That Act came into force on 1 December 1988 (“the commencing date”). It superseded the Compensation (Commonwealth Government Employees) Act 1971 (Cth) (“the 1971 Act”). There was also an earlier version of both Acts, namely the Commonwealth Employees’ Compensation Act 1930 (“the 1930 Act”).BACKGROUND The background to this application may be briefly summarised. The respondent was formerly a leading hand cook in the Royal Australian Navy. In 1963, he dislocated his left patella whist a member of the crew of HMAS Cerberus. He subsequently injured his right knee as well. On 7 June 1967, he had surgery on his right knee, and on 16 June 1972, he had surgery his left knee. In 1975, he was discharged from the Navy. Thereafter, he was engaged in various forms of employment until approximately 1994. Subsequently, he was unemployed for several years, until he took up prospecting in 1997. He then engaged in casual work in 1998. After that, the steadily deteriorating condition of his knees left him totally and permanently incapacitated. In 1998 and 1999, the respondent received weekly compensation for total incapacity by reason of osteoarthritis of the patello femoral joints of both knees. In 1999, he applied to the applicant for lump sum compensation pursuant to s 24 of the 1988 Act. That application was rejected on 28 September 2000. The respondent then applied to the Tribunal for review of that decision. The Tribunal granted that application, and the applicant now appeals against that decision.THE LEGISLATIVE CONTEXT In order to understand the issues raised in this appeal, it is necessary to set out in some detail the provisions of the 1988 Act that govern compensation for injuries resulting in permanent impairment. The claim sought to be established before the Tribunal was brought under s 24(1). That section provides:“(1)Where an injury to an employee results in a permanent impairment, Comcare is liable to pay compensation to the employee in respect of the injury.” It is also necessary to note the following subsections of s 24:“(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.” The expression “permanent impairment” in s 24(1) involves the use of words that are separately defined in s 4(1) as follows:“impairment means 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.…permanent means likely to continue indefinitely.” Sections 24 and 25 provide for a body established under the Act, namely the Commission for the Safety Rehabilitation and Compensation of Commonwealth Employees (“the Commission”), to determine compensation for permanent impairment. The amount of compensation to be paid is proportionate to the degree of permanent impairment, which is determined as a percentage. However, s 24(7) provides:“(7) Subject to section 25, if: (a) the employee has a permanent impairment other than a hearing loss; and (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.”

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

WEINBERG J

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Established by: WEINBERG J

Mr Gorton disputed Mr Hanks’ contention that the Tribunal had approached the case on the basis that a mere change in the measured assessment would constitute a new impairment. He submitted that the Tribunal’s reasons were plainly adequate to show the facts found, and the reasoning process that it had adopted. CONSIDERATION It is hardly satisfactory that there should be so much uncertainty regarding the construction of s 124(3) of the 1988 Act so long after its commencement. The applicant would undoubtedly succeed in this appeal if the approach taken by the Full Court in Blackman, and endorsed by Heerey J in West, were to be followed. However, in a number of cases, to which I have previously referred, serious reservations have been expressed as to the correctness of that approach. The most recent discussion by an appellate court of this issue appears in the judgment of Merkel J, with which O’Connor J agreed, in West. It was that approach that commended itself to Mansfield J in Maida. It is that approach that I propose to follow. Mr Hanks formally submitted that Blackman had been correctly decided, and that I should follow the reasoning in that case, rather than the view of the majority in West. I reject that submission. His alternative submission was that the Tribunal had erred in law by failing to apply correctly the “quantitative and qualitative” test enunciated in West. He further submitted that an essential element of that test was the requirement that there be an identifiable change in the underlying pathophysiological condition before there can be a new physical impairment. In my opinion, Mr Hanks’ alternative submission should be accepted. I should say that I have some reservations about the use of the expression “pathophysiological condition”. That expression is nowhere to be found in the 1988 Act, or in any relevant extrinsic material. Nonetheless, Merkel J, who used it repeatedly in his judgment in West, must have chosen to use it after careful consideration. The term “pathophysiological” is defined in the Oxford English Dictionary as “pertaining to pathophysiology”. That term, in turn, is defined as “the physiological processes associated with disease or injury; the study of such processes”. It appears to be a word that is understood in scientific circles, and seems to capture the essence of what Merkel J had in mind when he referred to a “qualitative” change in the nature of a permanent impairment. I appreciate that the test adopted in West can give rise to difficulties in borderline cases. Reasonable minds, including the reasonable minds of experts, can differ as to whether the level of deterioration in a person’s condition amounts to a new condition. Sometimes, there will be a clear, and readily ascertainable change in the pathophysiology of the condition. For example, a person who is HIV positive, and then develops AIDS, will almost certainly be regarded as having a new condition. Arthritic degeneration poses greater difficulties. At what stage does a change in the level of physical impairment, based upon a steady degeneration of that condition, amount to a new and different “permanent impairment”?