Comcare v Bozicevic, Tomo & Comcare v Cauci, Sam & Comcare v Jukic, Pero

[1997] FCA 288

CATCHWORDS

WORKERS' COMPENSATION - Commonwealth employees - degree of permanent impairment of the employee is less than 10% - compensation for - available to persons with compensable impairment prior to 1988 Act - transitional provisions of 1988 Act - new requirement that degree of permanent impairment be greater than 10% - effect of.

WORKERS' COMPENSATION - Commonwealth employees - non-economic loss - lump sum compensation for - available to persons with compensable permanent impairment prior to 1988 Act - transitional provisions of 1988 Act - exclusion of new rights where no previous entitlement in respect of "injury, loss or damage" - meaning of.

Compensation (Commonwealth Government Employees) Act 1971 (Cth) - s 39
Safety, Rehabilitation and Compensation Act 1988 (Cth) - ss 4(1), 24, 27, 28(1), 123A, 123, and 124

Comcare v Miles (1995) 56 FCR 448
Schlenert v AOTC (1994) 49 FCR 139
John v Federal Commissioner of Taxation (1989) 116 CLR 417

COMCARE -v- TOMO BOZICEVIC
No. VG 375 of 1996

COMCARE -v- SAM CAUCI
No. VG 376 of 1996

COMCARE -v- PERO JUKIC
No. VG 377 of 1996

CORAM:    FOSTER, CARR & NORTH JJ
DATE:     23 APRIL 1997
PLACE:    MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA )
  )
VICTORIA DISTRICT REGISTRY       )    No. VG 375 of 1996
  )
GENERAL DIVISION                 )

BETWEEN:COMCARE

Applicant

AND:TOMO BOZICEVIC

Respondent

**************

IN THE FEDERAL COURT OF AUSTRALIA )
  )
VICTORIA DISTRICT REGISTRY       )    No. VG 376 of 1996
  )
GENERAL DIVISION                 )

BETWEEN:COMCARE

Applicant

AND:SAM CAUCI

Respondent

**************

IN THE FEDERAL COURT OF AUSTRALIA )
  )
VICTORIA DISTRICT REGISTRY       )    No. VG 377 of 1996
  )
GENERAL DIVISION                 )

BETWEEN:COMCARE

Applicant

AND:PERO JUKIC

Respondent

JUDGES MAKING ORDERS:    FOSTER, CARR & NORTH JJ

DATE:     23 APRIL 1997

PLACE:    MELBOURNE

MINUTE OF ORDERS

THE COURT ORDERS THAT:

1.   The appeal be dismissed.

2.   The appellant pay the respondents' 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       )    No. VG 375 of 1996
  )
GENERAL DIVISION                 )

BETWEEN:COMCARE

Applicant

AND:TOMO BOZICEVIC

Respondent

**************

IN THE FEDERAL COURT OF AUSTRALIA )
  )
VICTORIA DISTRICT REGISTRY       )    No. VG 376 of 1996
  )
GENERAL DIVISION                 )

BETWEEN:COMCARE

Applicant

AND:SAM CAUCI

Respondent

**************

IN THE FEDERAL COURT OF AUSTRALIA )
  )
VICTORIA DISTRICT REGISTRY       )    No. VG 377 of 1996
  )
GENERAL DIVISION                 )

BETWEEN:COMCARE

Applicant

AND:PERO JUKIC

Respondent

CORAM:    FOSTER, CARR & NORTH JJ

DATE:     23 APRIL 1997

PLACE:    MELBOURNE

REASONS FOR JUDGMENT

FOSTER & NORTH JJ:    This is an appeal from a decision of the Administrative Appeals Tribunal ("the Tribunal") constituted

by Olney J (Presidential Member), in which his Honour set aside three reviewable decisions of a delegate of Comcare Australia ("Comcare").  Each decision related to a claim for compensation made by one of the respondents under the Safety Rehabilitation and Compensation Act 1988 (Cth) ("the 1988 Act").  Each claim raised questions for consideration which were common to all three matters.  Those questions involved the interpretation of the transitional provisions of Part X of the 1988 Act.  The disposition of each claim depended upon the answers to those questions.  Accordingly, the matters were heard together by  his Honour.  Likewise the appeals from his Honour's decision have been heard together by this Court.

BACKGROUND FACTS
Tomo Bozicevic
         Bozicevic claimed compensation for partial binaural hearing loss suffered between 1 September 1971 and 30 November 1988 whilst employed by Australian Defence Industries.  His work involved his being surrounded by machines and metal presses in a large factory area which was extremely noisy.  Bozicevic claimed for 15.5% permanent partial hearing loss.  His claim was rejected by a determination made on 16 February 1995 and a reviewable decision made on 22 February 1995.

Sam Cauci
         Cauci claimed compensation for hearing loss suffered between 1 September 1971 and 18 August 1986 whilst employed by the Department of Defence.  His work exposed him to noise associated with the engines of large trucks and semi-trailers operating in the confined space of a warehouse.  Cauci claimed for 8% permanent partial hearing loss.  His claim was rejected by a determination made on 3 February 1995  and reviewable decision made on 21 February 1995.

Pero Jukic
         Jukic claimed compensation for hearing loss suffered between 1 September 1971 and 30 November 1988 whilst employed by Australian Defence Industries.  His work exposed him to the noise of machines turning bullets and also various presses. Jukic claimed for 6.5% permanent partial hearing loss.  His claim was rejected by a determination made on 20 March 1995 and reviewable decision made on 30 March 1995.

It was not contested before the Tribunal that each of these men ("the respondents") had suffered the degree of permanent partial hearing loss claimed as a result of the workplace exposure referred to.

The question posed for his Honour, in each case, was whether on a proper construction of the relevant legislative provisions, the respondents were entitled to succeed in their claims, which will be fully described below.  At the time when the claims were made the operative legislation was the 1988 Act which had come into effect on 1 December 1988.  However, at the time when each appellant had suffered his relevant injury, the legislation then in force was the Compensation (Commonwealth Government Employees) Act 1971 (Cth) ("the 1971 Act").  Certain provisions of this latter Act were given continued operation by transitional provisions of the 1988 Act to which reference will be made hereunder.

THE LEGISLATION
It is not disputed that the hearing loss suffered by each of the respondents would have entitled him to compensation under s 39 of the 1971 Act, and that the same hearing loss would fall within the concept of "permanent impairment" in the 1988 Act (s 4(1)).

It was claimed by the respondents that, by virtue of transitional provisions in the 1988 Act, they were each entitled to compensation pursuant to s 24 and s 27 of that Act.  Those sections, so far as relevant, provide as follows:-

"24. (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.

(2) ...

(3) Subject to this section, the amount of compensation payable to the employee is such amount, as is assessed by Comcare under subsection (4), being an amount not exceeding the maximum amount at the date of the assessment.

(4) The amount assessed by Comcare shall be an amount that is the same percentage of the maximum amount as the percentage determined by Comcare under subsection (5).

(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.

(7) ... where Comcare determines that the degree of permanent impairment of the employee is less than 10%, an amount of compensation is not payable to the employee under this section.

(8) ...

(9) For the purposes of this section, the maximum amount is $80,000.

1. 27. (1) 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.

(2) The amount of compensation is an amount expressed by Comcare under the formula:

($15,000 x A)  +  ($15,000 x B)

where:

Ais the percentage finally determined by Comcare under section 24 to be the degree of permanent impairment of the employee; and

Bis the percentage determined by Comcare under the approved Guide to be the degree of non-economic loss suffered by the employee."

It may be noted that the 1988 Act, by s 27, introduced into the scheme of Commonwealth employee compensation the concept of additional compensation for non-economic loss which had not previously appeared in the legislation. This additional compensation was claimed by the respondents.

The "approved Guide" referred to in s 24(5) is the "Guide to the assessment of the Degree of Permanent Impairment" prepared by Comcare from time to time under the authority of s 28(1) of the 1988 Act. His Honour set out relevant portions of this document in his judgment. We do not find it necessary to repeat that operation in these reasons. Suffice it to say that reference to "permanent impairment" in ss 24 and 27 would appear to equate with the concept of "whole person impairment" referred to in the Guide and that, as a result of the application of relevant provisions of the Guide, each of the respondents would be determined as having a degree of permanent impairment of less than 10%. This being so, if the amount of compensation payable to the appellants were to be assessed directly under provisions of s 24 they would be rendered ineligible for the payment of compensation by virtue of s 24(7). Another consequence would be that they would not qualify for additional compensation under s 27(1) because no compensation would be payable to them under s 24.

His Honour held that these results were avoided because of the application of the transitional provisions to be found in Part X of the Act, the relevant sections being s 123A and s 124. These sections provide as follows:-

"123A.  A reference in this Part to an injury suffered before the commencing day is a reference to an injury within the meaning of whichever of the 1912 Act, the 1930 Act or the 1971 Act was in force when the injury was suffered, as that Act was then in force.

124.(1) Subject to this Part, this Act applies in relation to an injury, loss or damage suffered by an employee, whether before or after the commencing day.

(1A) Subject to this Part, a person is entitled to compensation under this Act in respect of an injury, loss or damage suffered before the commencing day if
compensation was, or would have been, payable to the person in respect of that injury, loss or damage under the 1912 Act, the 1930 Act or the 1971 Act.

(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 in force when the impairment or death occurred.

(4) The amount of compensation (if any) that a person is, by virtue of this section, entitled to receive 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 day, shall be the same as the amount of the compensation that would have been payable to that person, if this Act had not been enacted, under:

(a)where the impairment or death occurred before the commencement of the 1930 Act - the 1912 Act;

(b)where the impairment or death occurred after the commencement of the 1930 Act but before the commencement of the 1971 Act - the 1930 Act as in force when the impairment or death occurred;  or

(c)in any other case - the 1971 Act as in force when the impairment or death occurred."

THE TRIBUNAL'S REASONS

His Honour noted that, in relation to s 123A, it was common ground that each of the applicants had suffered prior to the commencing day (1 December 1988) an injury within the meaning of the 1971 Act.  It was also conceded that their injuries would have entitled them to compensation under the 1971 Act as in force when the injuries were suffered. This brought them within the provisions of s 124(1A) and took them outside the disentitling provisions of s 124(2).

As the applicants had not received compensation under the 1971 Act for their hearing losses they were not disentitled to compensation under the 1988 Act through the application of s 124(3).

Accordingly, unless otherwise disentitled, the appellants were entitled to receive compensation under the Act in the amount provided for in s 124(4).

His Honour went on to conclude that s 124(4) required the result that the applicants were to receive compensation in amounts calculated in accordance with s 39 of the 1971 Act.  In so doing, he acknowledged that he was differing from views expressed obiter by Hill J in Comcare v Miles (1995) 56 FCR 448. Those views were to the effect that the 10% threshold imposed by s 24(7) would operate to deny compensation otherwise payable under s 124(4)(c) in circumstances, such as the present, where the degree of impairment did not rise to that threshold. The appellant submits that the views expressed by Hill J are correct and should be adopted by this Court. The submission is pivotal to the appellant's arguments. We shall refer to it later.

His Honour, having differed from Hill J in this respect, and having held that the respondents were entitled to compensation under s 24 of the Act went on to consider whether they were also entitled to additional compensation under s 27 of the Act. 

In this regard, he pointed out that s 124(4) of the 1988 Act dealt only with the amount of compensation payable under s 24. It did not refer to compensation payable under s 27 nor did it have any general application to compensation payable under the Act. In such circumstances the question was simply whether the respondents qualified for the payment of additional compensation under s 27 in accordance with the terms of that section. He held that as they were entitled to compensation "payable in respect of the injury under s 24", Comcare was liable to pay the additional compensation in accordance with the section. His Honour observed that the same conclusion had been reached by Sheppard and Einfeld JJ (Lockhart J dissenting) in Schlenert v AOTC (1994) 49 FCR 139. He relied, in particular, on a passage from the judgment of Sheppard J (at 150-151) to which reference will be made later.

Accordingly, his Honour set aside the relevant reviewable decisions and remitted each matter to the Tribunal for reconsideration on the basis that the applicants were entitled to receive lump sum compensation for hearing loss calculated in accordance with s 39(4) of the 1971 Act and were also entitled to additional compensation calculated in accordance with s 27 of the 1988 Act. 

THE CASE ON APPEAL
In the appeal the appellant, Comcare, submitted that the Tribunal was in error in two respects. First, his Honour should have held, as a matter of construction of the relevant sections that s 24(7) operated to deny compensation to the respondents, it being contended that the Tribunal should have followed Hill J's obiter dicta in Miles. 

If this argument be accepted then no compensation would be payable to the respondents under s 124(4) and s 24 of the 1988 Act, with the further result that no compensation could be paid under s 27.

Secondly, it was submitted that the decision of the majority in Schlenert was incorrect and that we should follow the reasoning of the dissenting judgment. If we were so persuaded, then we would hold that the respondents were not entitled to additional compensation under s 27 of the 1988 Act.  We shall consider these submissions in order.

The first submission is based upon the following passage from the judgment of Hill J in Miles:-

"The complaint on behalf of Comcare is that the determination by the tribunal of a figure of 10% permanent impairment, while applicable if the 1988 Act had prescribed the relevant compensation was inapplicable to a calculation under s 39. So, it was said, that the tribunal had clearly applied the wrong legislative test.

At first blush the submission might be thought to have weight. It ignores, however, the provisions of s 24(7) of the 1988 Act. In my opinion, the proper interpretation of s 24, in a case to which the transitional provisions of s 124 of the 1988 Act apply, is that while compensation will be determined in accordance with the 1971 Act (and in a case such as the present, s 39) the benefit which is deemed to be payable under s 24 of the 1988 Act will nevertheless not be payable if the degree of permanent impairment of the employee is less than 10%. That seems to follow from the clear words of s 24(7). The legislative policy of the 1988 Act is to restrict compensation to cases of some seriousness with 10% incapacity as the threshold, not only with respect to cases arising after the commencement of the 1988 Act, but also with respect to claims subject to the transitional provisions of s 124. In my view, the 10% threshold thus applies whether the ultimate amount of compensation is determined in accordance with the method of calculation actually set out in s 24 or whether, in a transitional case, it is to be determined under s 39. Both methods are treated as determinations under s 24 of the 1988 Act.

In other words, had the tribunal decided in the present case that the degree of permanent impairment caused by Ms Miles' injury was less than 10%, no amount of compensation at all would have been payable to her.   However, that is not what the tribunal found.   The tribunal found that she had in fact suffered permanent impairment of 10%, with the
consequence that the limitation on compensation contained in s 24(7) did not apply."

We have already referred to the fact that this passage is obiter, in that, the 10% threshold having been reached, there was no basis for the application of s 24(7). However, it is a considered passage which the Tribunal, obviously, would have followed had it not been satisfied that a difference construction of s 124(4) of the 1988 Act was appropriate. 

The Tribunal disagreed with Hill J as to the legislative policy referred to in the passage cited.  In the Tribunal's view, the policy to be discerned in the transitional provisions of Part X was "a policy of preserving the rights of injured employees which have accrued under previous legislation in accordance with the relevant provisions in force at the time the injury had occurred".  His Honour pointed to the detailed provisions which were repeated in ss 124(2), (3) and (4) as apparently giving effect to this policy.

We agree.  Whatever may be said as to the underlying policy of the 1988 Act, it is to the policy behind the transitional provisions that attention must be directed.  In our opinion that policy is clearly one of the preservation of accrued rights under relevant earlier legislation in respect of employment injuries suffered before the commencing date of the 1988 Act.

Apart from policy considerations, the language of s 124, in our opinion, points in the same direction. 

Section 124(1) makes the 1988 Act applicable to an injury, loss or damage, whether suffered "before or after the commencing day".  The 1988 Act therefore covers all injuries in respect of which compensation is sought irrespective of when they occurred.

However, s 124(1) is expressly made "subject to this Part".  Subsections 124(1A) and (2) then make specific provision in respect of "injury, loss or damage suffered before the commencing day".  In such a case entitlement, or disentitlement, to compensation is to be determined in accordance with earlier legislation appropriate to the time of the occurrence of the injury, loss or damage.

Similarly ss 124(3) and (4) deal with compensation "under s 24 ... in respect of a permanent impairment ... that occurred before the commencement day". Entitlement and disentitlement are determined by the relevant predecessor Act in force when the impairment occurred.

Section 124(4) is of particular importance. It deals with "the amount of compensation (if any) that a person is by virtue of this section entitled to receive under s 24 ... in respect of a permanent impairment" occurring before the commencing day. It then provides that the amount of compensation payable is to be the same as would have been payable "if this Act had not been enacted" under (relevantly to this case) "the 1971 Act as in force when the impairment ... occurred" (s 124(4)(c)).

In our view, the effect of this section is to use s 24 of the 1988 Act as a vehicle for the delivery to a successful applicant of an amount of lump sum compensation for permanent impairment, calculated in all respects as though it were payable under the 1971 Act. The reference to s 24 is, in our view, not intended to import into the operation of s 124(4) the terms of s 24(7) which could have the effect of nullifying accrued rights under the 1971 legislation which it was the object of Part X to preserve. This is the more apparent when it is considered that s 24 provides for the degree of permanent impairment to be determined by Comcare under the provisions of the approved Guide. The approved Guide can have no application in the context of the 1971 Act. It applies only to calculations made under s 24 in respect of the 1988 Act. Accordingly, in our view, it cannot have been contemplated that calculations provided for by s 24, based upon the Guide, and including the disentitling calculation provided for in s 24(7), would have any bearing upon the amount of compensation available for permanent impairment under s 124(4).

This construction receives emphasis from the words in s 124(4), "as ... if this Act had not been enacted".  In our opinion, the legislature, by use of those words, was giving a clear direction that an employee's entitlement to lump sum compensation for a permanent impairment under the predecessor legislation was not to be adversely affected by any provision of the 1988 Act applicable to determinations under s 24 in respect of injuries occurring after the commencement date.

We are also of the opinion that the words "if any" in s 124(4), contrary to Comcare's submission, do not require consideration as to whether s 24(7) affects entitlement to compensation under the section. If the legislature had so intended it would, in our view, have said so in express words. The presence of the words is, in any event, explicable on the basis of the disentitling provisions in ss 124(3)(a) & (b).

We decline, with respect, to follow the dictum of Hill J in Miles. The first submission is, therefore, rejected. Section 24(7) does not operate to preclude the award of compensation to the respondents pursuant to s 39 of the 1971 Act. Nor does it, by precluding the payment to the respondents of compensation under s 24, debar them from receiving additional compensation under s 27.

We turn then to the second submission.  This can be upheld only if we differ from the decision of the majority in Schlenert.  It is appropriate to set out the passage from the
judgment of Sheppard J (at 150-151) which was followed by the Tribunal.  The passage reads as follows:-

"A fundamental consideration is that the Act applies to injuries and losses suffered by employees before the commencement of the Act:  s 124(1).   A reading of subss (1A) and (2) of s 124 shows that such an employee is not entitled to compensation under the Act if compensation was not payable in respect of loss or injury under the applicable former Act, in this case, the 1971 Act.   Although those provisions limit or qualify employees' rights of recovery, they do not confer them.   The rights of recovery are conferred by s 124(1) of the current Act.

Plainly enough, the 1971 Act made no provision for compensation for non-economic loss. It follows, according to the respondent's submissions, that that concludes the case against the applicant. That view of matters has been accepted by those who have so far had to consider the matter. Against that view is the fact that the applicant has established that, within the opening words of s 27, his injury did result in a permanent impairment and that compensation for that impairment was payable under s 24. It was payable under s 24 because of the operation of s 124(1). The fact that the injury occurred prior to the coming into force of the Act was not a relevant consideration. The further provisions of s 124 modified the applicant's entitlement by enacting that there was to be no entitlement to compensation if compensation was not payable for the injury or loss under the 1971 Act.   One therefore needs to consider the relevant provisions of the current Act (s 27) and then to consider whether the right which is conferred is circumscribed in some way by provisions of the 1971 Act. Under s 27, Comcare is liable to pay the additional compensation for which s 27 provides if compensation for the impairment is payable under s 24. There is no issue that compensation for the injury was payable under s 24 restricted though the amount of it was by the provisions of the 1971 Act which quantified it.

It is perfectly true, as counsel for the respondent submitted, that s 24 is a more extensive provision than s 39 of the 1971 Act. The maims for which its table provides compensation are specified with particularity. Nevertheless, as in this case, there will be impairments which fall within both provisions. If an impairment does fall within the former provision, compensation under s 24 will be payable. If it is payable, the additional
compensation provided for in s 27 will also be payable. The fact that s 27 provides for a different kind of compensation, ie compensation for non-economic loss, is not to the point. The matters which must be present for an award of compensation under s 27 exist - a permanent impairment and an entitlement to an award of compensation under s 24."

We would also refer to the immediately following paragraph from his Honour's judgment which reads as follows:-

"For the purposes of s 124(1A) and (2) it is to s 24 that one must look. In my respectful opinion, the error into which those who have earlier decided this question have fallen has been to go directly to s 27. If this were the correct course, it would follow that the applicant was not entitled to compensation under s 27 because compensation for non-economic loss was not payable under the 1971 Act. But compensation of the kind provided for in s 24 of the current Act was payable under s 39 of the 1971 Act. That in my view was enough to trigger the applicant's entitlement to compensation under s 27. That is what s 27 says. Thus the language of s 124(2) does not modify or limit in any relevant way the operation of s 27."

(See also per Einfeld J at 152-3)

Counsel for Comcare submits that we should prefer the reasoning of Lockhart J in his dissenting judgment. In his Honour's opinion an award of additional compensation under s 27 was unavailable to an employee claiming in respect of an injury occurring before the commencing day. This was because the claim was necessarily brought under the transitional provisions with the result that, in his Honour's view, it faced an insuperable obstacle in s 124(2). That section, as has been seen, provided that such an injured employee was not entitled to compensation "in respect of an injury, loss or damage suffered before the commencing day" if such compensation was not payable under the 1971 Act (s 124(2)(c)).  His Honour said, in respect of the operation of this sub-section, (at 142):-

"Subsection (2) of s 124 ensures that no compensation is payable under the 1988 Act in respect of an injury, loss or damage suffered before 1 December 1988 unless there was an entitlement to compensation under the enactment which was in force at the time when the injury, loss or damage was suffered - in the present case the entitlement of the applicant to compensation arose under the 1971 Act.

After the commencement of the operation of the 1988 Act, which carried with it the repeal of the 1971 Act, liability for injury sustained before 1 December 1988 arises from and is based upon the 1988 Act.  But the effect of subs (2) of s 124 is to ensure that entitlements that arose before 1 December 1988, though determined under the 1988 Act, are only payable if they would have been payable under the 1971 Act.  Subsection (2) denies the availability of the benefits of the 1988 Act in respect of injury, loss or damage suffered before 1 December 1988 where they would not have been compensable under the 1971 Act."

As the 1971 Act made no provision for compensation for non-economic loss, s 124(2) effectively prevented any claim being made for such a loss in respect of a pre-commencement date injury. Hence, no claim was available for additional compensation under s 27 of the 1988 Act. 

We accept, with respect, that there is cogency in his Honour's view.  However, it does not persuade us to differ from the majority decision.  We should, of course, as a matter of courtesy, follow that decision unless satisfied that it was
clearly wrong (John v Federal Commissions of Taxation (1989) 116 CLR 417 at 438-9. We are not so satisfied.

In these circumstances, it is neither necessary nor desirable that we rehearse, in these reasons, the considerations that led Sheppard and Einfeld JJ to the conclusions that they reached. The judgment of Sheppard J contains a full exposition of the relevant sections of each Act, their construction and effect. We are satisfied that, although the view is undoubtedly open that the policy of Part X was to preserve but not to improve the rights of injured employees to whom its provisions applied, the analysis of the sections undertaken in Sheppard J's judgment demonstrates that it was the intention of the legislature to provide for the payment of additional compensation under s 27 of the 1988 Act to employees who had suffered a permanent impairment compensable in accordance with s 39 of the 1971 Act by virtue of the operation of ss 124(1), 124(4) and s 24 of the 1988 Act.

We are of the opinion that the same result is achieved by approaching the problem of construction in a related but slightly different way.  Section 124(2) applies to compensation in respect of an injury, loss or damage.  Similarly, ss 124(3) and (4) apply to compensation in respect of a permanent impairment. Section 27(1) deals with the situation where an employee is entitled to compensation under s 24 in respect of an injury which "results in permanent impairment; in such circumstances Comcare must pay additional compensation in respect of that injury for any non-economic loss etc" [emphasis added].

A distinction is, therefore, made by the 1988 Act between compensation in respect of an injury for a loss and compensation in respect of a loss. Section 124(2) is concerned with injury, loss or damage in respect of which compensation is claimed, not with the areas of loss in respect of which that compensation is payable. An employee suffering a work-related injury resulting in permanent impairment before the commencing date would be disentitled from receipt of additional compensation under s 27 if that impairment was one in respect of which he was not entitled to receive compensation of a lump sum under the 1971 Act. If he were so entitled, however, then he would be entitled to receive compensation quantified under s 39 of the 1971 Act by force of s 24 of the 1988 Act, with the concomitant result that he would also be entitled to additional compensation under s 27 of the 1988 Act for non-economic loss.  That compensation would not be in respect of a loss within the meaning of s 124(2).

As was pointed out in argument, the Tribunal's decision leads to the anomalous position that, by virtue of s 124(3)(a) injured employees who had received lump sum compensation before the commencement date would be disentitled to receipt of additional compensation under s 27, whereas those so injured who had not received lump sum compensation before the commencing date but who qualified to receive it under s 124(1), 124(4) and s 24 after the commencing day would be so entitled. However, as Lockhart J remarked in Schlenert (at p 145) "the existence of anomalies rarely assists in the process of interpreting statutes where their language is tolerably clear ...". As his Honour pointed out "it is easy to find anomalies arising from transitional provisions in legislation of the kind with which this case is concerned". It is clear that anomalies result, whichever construction of s 124(2) is adopted. Their existence cannot determine the proper construction of the sections in question.

For these reasons we dismiss these appeals with costs.

I certify that this and the preceding twenty (20) pages are a true copy of the reasons for judgment herein of Foster and North JJ.

Associate:

Date:   23 APRIL 1997

A P P E A R A N C E S

COUNSEL FOR THE APPELLANT:   MR P J HANKS
                   WITH     MRS J BONSEY      

INSTRUCTED BY:              AUSTRALIAN GOVERNMENT SOLICITOR

COUNSEL FOR THE RESPONDENT:  MR S McCREDIE

INSTRUCTED BY:              MESSRS BEHAN & SPEED

DATE OF HEARING:            6 MARCH 1997

DATE OF JUDGMENT:           23 APRIL 1997

IN THE FEDERAL COURT  )
OF AUSTRALIA  )
VICTORIA DISTRICT REGISTRY            )         Nos. VG 375, 376 & 377 of 1996
GENERAL DIVISION  )

On appeal from the Administrative Appeals Tribunal

B E T W E E N :  COMCARE

Appellant
  - and -

TOMO BOZICEVIC, SAM CAUCI
  and PERO JUKIC

Respondents

CORAM:      Foster, Carr & North JJ
DATE:           23 April 1997
PLACE:        Melbourne

REASONS FOR JUDGMENT

Introduction

CARR J:

I have had the advantage of reading Foster and North JJ's joint reasons for judgment in draft form.  I agree that these three appeals should be dismissed and am in general agreement with the reasons, expressed in the joint judgment, why that should be so.  I am also indebted to Foster and North JJ for setting out the factual and legislative context.  However, I propose to publish these short, concurring reasons for judgment.

The Applicant's Case

First, the applicant submits that the Tribunal's decision has placed the respondents in a position of special advantage as against:

(a)a fellow employee suffering an identical injury before 1 December 1988 but who claimed compensation promptly.  That person would have received compensation for economic loss, for percentage loss of hearing but no compensation for non-economic loss; and

(b)a fellow employee who suffered an identical injury on or after 1 December 1988 and also claimed compensation promptly.  That person would have received compensation for economic loss under the 1988 Act but no compensation for percentage loss of hearing or non-economic loss. 

On the basis of these anomalies, the applicant says that it is most unlikely that Parliament intended to offer workers injured before 1 December 1988 such a significant reward for having delayed making their claims for compensation. 

In my view, there are two answers to this submission.  The first is that, as Lockhart J pointed out in Schlenert v. Australian and Overseas Telecommunications Corporation (1994) 49 FCR 139 at p.145:

"It is easy to find anomalies arising from transitional provisions in legislation of the kind with which this case is concerned; but as so often happens anomalies can be pointed to either way."

Secondly, the correct approach is properly to construe the legislation.  As Lockhart J also said in Schlenert (at the same page):

"Ultimately, s.124 and the other sections of the relevant legislation must be construed in accordance with the accepted principles of construction."

Next, the applicant argues that:

.the basis for the employee's entitlement to compensation is s.24 of the 1988 Act;

.if no compensation is payable under that section, any entitlement to compensation conferred by s.124(1) of the 1988 Act cannot extend to compensation for permanent impairment; and

.in particular, if the degree of impairment of an employee is less than 10% then the terms of s.24(7) are said explicitly to qualify the right conferred by s.24(1).

The applicant relies, to a considerable extent, on a passage from the reasons for judgment of Hill J in Comcare v. Miles (1995) 56 FCR 448 at p.453. In that case Hill J's construction of these two sections can be seen to have been based on what was perceived as being the legislative policy. His Honour said:

"The legislative policy of the 1988 Act is to restrict compensation to cases of some seriousness with 10% incapacity as the threshold, not only with respect to cases arising after the commencement of the 1988 Act, but also with respect to claims subject to the transitional provisions of s.124."

It is common ground that Hill J's observations in that regard are obiter dicta. In that case, Ms Miles was found to have satisfied the 10% test.  It was not necessary for the Judge to decide what would have been the case if she had not done so. 

Next, the applicant relies upon the words "(if any)" in s.124(4) as supporting the proposition that s.124 should be read as being subject to s.24(7). In my opinion, those words do not support the proposition to the extent claimed. The words "(if any)" can be seen as having other work to do. They refer to situations in which s.124 might be regarded as conferring an

entitlement to compensation under s.24, but which entitlement is excluded by another provision of s.124. For example, s.124(3) excludes entitlement where the person has already received a lump sum under the 1971 Act or was not entitled to receive a lump sum in respect of impairment under that Act.

The applicant submitted that the prefatory words "Subject to this Part" in s.124(1) and (1A) did not mean that s.124 overrides any disentitling provisions contained elsewhere in the 1988 Act.  In oral submissions, Mr P.J.Hanks, counsel for the applicant, pointed out that the words are not "subject only to this Part".  In my view, this is too fine a distinction.  Section 124 makes it clear that the Act is to apply in relation to an injury suffered before the commencing day, subject to Part X.  If there is any inconsistency between the application of the rest of the Act and Part X, then, for reasons which I develop below, Parliament's intention is clearly that Part X should prevail.

The applicant submitted that Olney J erred in assuming that the Full Court in Schlenert did not consider the degree of permanent impairment required if s.24(7) were relevant. With respect, I think that Olney J was correct in his assumption. Nowhere in Schlenert did any of the members of the Full Court consider s.24(7). Nothing in the passages cited to us justifies an inference or implication that the members of the Full Court in Schlenert assumed that the 10% threshold applied, and that Mr Schlenert thereby qualified for compensation for permanent impairment. Mr Hanks referred us to certain passages in the reasoning of the Tribunal in that case which in turn set out passages from the applicant's counsel's submissions. One of those submissions referred to s.24(7). However, in my opinion that is

not a proper basis for the assertion that the Full Court in Schlenert gave its decision on the basis that the applicant satisfied s.24(7) of the 1988 Act. They simply did not deal with that matter.

Section 27

The applicant put forward two independent reasons why it maintained that the respondents could not qualify for compensation for non-economic loss under s.27 of the 1988 Act.

The first was that s.24(7), construed in accordance with the submissions summarised above, precluded the payment of compensation to the respondents, thereby denying an essential condition of entitlement to compensation under s.27. In view of the conclusions, drawn above, in relation to s.24, it is not necessary to consider that argument.

Alternatively, the applicant contended that the decision in Schlenert was wrong and should not be followed. This argument was based on the proposition that the references in s.124(1A) and (2) to "injury, loss or damage" should be read "distributively". They were to be construed as meaning that although a person might be entitled to compensation under the 1988 Act in respect of an injury, [loss or damage] suffered before the commencing day, compensation is not payable in respect of any [injury] loss [or damage] under the 1988 Act, if compensation was not payable in respect of that loss under the 1971 Act.  The applicant relied upon the reasons of Lockhart J in Schlenert at p.142C-144B.

In my view, and with the greatest respect to Lockhart J, s.124(1A) and (2) should not be construed in that way. It seems to me that as a matter of statutory construction, one should look to the first head of entitlement in this matter, "injury", and find that compensation was payable in respect of "that injury". That means that an entitlement arises under s.124(1A) and no disentitlement results from the application of s.124(2). This legislation is beneficial in its nature. Where two constructions of such a provision are possible, that which favours the employee should be preferred: Wilson v. Wilsons Tileworks Pty Ltd (1960) 104 CLR 328 at p.335 (per Fullagar J); Johnston v. The Commonwealth (1982) 150 CLR 331 at pp.342-343 and Bird v. The Commonwealth (1988) 165 CLR 1 at pp.6,9.

Again the applicant pointed to anomalies.  However, for the reasons set out above, the fact that anomalies may occur does not justify a different construction. 

In my opinion, Parliament's intention can be discerned by approaching the matter as follows. The 1988 Act applies, subject to Part X of that Act, in relation to an injury suffered by an employee whether before or after 1 December 1988 - see s.124(1). Section 14 relevantly provides 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. Section 24 provides for the case where such impairment is permanent, by imposing a liability on Comcare to pay compensation "in respect of the injury". Sections 124(1A) and (2) respectively provide (so far as presently relevant) that a person is entitled to compensation under the 1988 Act in respect of an injury suffered before 1 December 1988 if compensation was or would have been payable to the person in respect of that injury under the 1971 Act, but not if it was not

so payable. In respect of permanent impairment occurring before 1 December 1988, s.124(3) provides that a person is not entitled to compensation under s.24 if the person was not entitled to a lump sum under the 1971 Act. Pausing there to relate those provisions to the respondents in these appeals, it is common ground that:

.each respondent suffered an injury before 1 December 1988;

.compensation was or would have been payable to each respondent in respect of that injury under the 1971 Act;

.the injury resulted in a permanent impairment which occurred before 1 December 1988; and

.each respondent was entitled to receive a lump sum in respect of that impairment.

In those circumstances, s.124(4) provides that the amount of compensation (if any) that each respondent is "by virtue of this section" entitled to receive under s.24 in respect of the permanent impairment shall be the same as the amount that would have been payable to that person, if the 1988 Act had not been enacted, under the 1971 Act. There is no dispute that under the 1971 Act each respondent would have been entitled to a lump sum calculated in accordance with s.39 of that Act, as a percentage of seventy per cent of the then current "prescribed amount", for partial loss of hearing.

In my opinion, it is difficult to imagine a clearer expression of Parliament's intention that, so far as these respondents are concerned, they are still entitled to receive that amount under s.24 of the 1988 Act. Section 24(7), which provides that an amount of compensation is not payable to an employee under s.24 where Comcare determines that the employee's

permanent impairment is less than 10%, stands in stark conflict with the intent expressed in s.124(4). As Olney J held, that apparent conflict is readily resolved by giving effect to the opening words of s.124(1) which read "Subject to this Part ..." (i.e. "Part X - Transitional Provisions, Consequential Amendments and Repeals"). Section 24, so Parliament has stipulated, must be read subject to Part X. To the extent that s.24 is inconsistent with s.124(4) then the latter must prevail. The result is that the 10% threshold limit applies only to permanent impairment occurring after 1 December 1988. Section 124(1A) was inserted in the Act by the Industrial Relations Legislation Amendment Act 1991 with retrospective operation from 1 December 1988. The explanatory memorandum for the Bill stated:

"The purpose of the proposed subsection is to remove any doubt that an employee continues to be entitled to compensation under the Act in respect of an injury, loss or damage suffered before the date of commencement of the Act (1 December 1988) if compensation was, or would have been, payable in respect of that injury under the repealed legislation."

Parliament did not intend to take anything away from these respondents. The next question is whether it intended to give them a new, additional, entitlement under s.27 for non-economic loss?

It seems to me that once each respondent can be seen to be entitled, under s.24 of the Act, to compensation in respect of their injury (as they are) then the answer to this question is clearly ‑ yes. As Sheppard J observed in Schlenert, that is what s.27 says. Its opening words are: "Where an injury to an employee results in a permanent impairment and compensation is payable 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". Again, the language is quite clear. If Parliament had intended to exclude employees in the category in which the respondents find themselves from entitlement under s.27 it would have been very easy to do so, either in s.124 or in s.27 itself. An example of such a provision can be found in s.124(5) which provides:

"(5)A person is not entitled to compensation under section 29 in respect of any period occurring before the commencing day."

See also s.124(8), (11) and (12).

CONCLUSIONS

For the foregoing reasons, and for the reasons expressed in the joint judgment of Foster and North JJ I would dismiss the appeals with costs.

I certify that this and the preceding eight

(8) pages are a true copy of the Reasons
  for Judgment of Justice Carr.

Associate:

Date:              23 April 1997

Counsel for the applicant:  Mr P J Hanks and Mrs J Bonsey
       Solicitors for the applicants:                  Australian Government Solicitor

Counsel for the respondents:                 Mr S McCredie
       Solicitors for the respondents:               Messrs Behan & Speed

Date of Hearing:  6 March 1997
       Date of Judgment:  23 April 1997