Comcare v Wuth

Case [2017] FCA 433

FEDERAL COURT OF AUSTRALIA

Comcare v Wuth [2017] FCA 433

Appeal from: Re Wuth & Comcare (Compensation) [2015] AATA 947
File number: ACD 2 of 2016
Judge: RARES J
Date of judgment: 27 April 2017
Catchwords:

WORKERS’ COMPENSATION – Safety, Rehabilitation and Compensation Act 1988 (Cth) – s 24 – determination of percentage degree of permanent impairment where no quantitative percentage for condition in approved Guide or American Medical Association’s Guides to the Evaluation of Permanent Impairment (AMA Guides) – where Administrative Appeals Tribunal found employee’s pain-related impairment unrateable in accordance with Ch 18 of AMA Guides – whether Ch 18 of AMA Guides required award of no more than 3% for pain-related impairment – whether Tribunal required to make “clinical judgment” to determine percentage degree of permanent impairment under s 24(6)

WORKERS’ COMPENSATION – Safety, Rehabilitation and Compensation Act 1988 (Cth) – calculation of normal weekly earnings under s 8(1) – whether calculation of average number of hours worked in each week during the relevant period to be made by reference to agreed or paid hours rather than actual hours worked – whether Tribunal can use hypothetical not factual number of hours worked

ADMINISTRATIVE LAW – Safety, Rehabilitation and Compensation Act 1988 (Cth) – procedural fairness – where s 24(6) required Tribunal to award percentage for degree of permanent impairment – where expert medical evidence opined not possible to award a percentage degree of permanent impairment in accordance with approved Guide or AMA Guides – whether Tribunal required to inform parties it would determine percentage under s 24(6) – whether practical injustice shown
Legislation:

Administrative Appeals Tribunal Act 1975 (Cth) ss 33, 44

Public Service Act 1999 (Cth) s 26

Safety, Rehabilitation and Compensation Act 1988 (Cth) ss 4, 5A, 8, 9, 14, 19, 24, 27, 28, 64
Cases cited:

Broadhurst v Comcare (2010) 189 FCR 561

Comcare v Nicolas (2014) 225 FCR 369

Commissioner for Railways (NSW) v Agalianos (1995) 92 CLR 390

Commissioner of Patents v Emperor Sports Pty Ltd (2006) 149 FCR 386

Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355

R v Milk Board; Ex parte Tomkins [1944] VLR 187

Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam (2003) 214 CLR 1

Wilson v Minister for Aboriginal and Torres Strait Islander Affairs (1996) 189 CLR 1

American Medical Association, Guides to the Evaluation of Permanent Impairment (5th ed; 2001)

Comcare, Guide to the Assessment of the Degree of Permanent Impairment – Edition 2.1
Date of hearing: 23 June 2016
Registry: Australian Capital Territory
Division: General Division
National Practice Area: Employment and Industrial Relations
Category: Catchwords
Number of paragraphs: 86
Counsel for the Applicant/Cross-respondent: Mr PG Woulfe
Solicitor for the Applicant/Cross-respondent: Comcare
Counsel for the Respondent/Cross-applicant: Mr LT Grey
Solicitor for the Respondent/Cross-applicant: Pappas, J - Attorney

ORDERS

ACD 2 of 2016
BETWEEN:

COMCARE

Applicant/Cross-respondent
AND:

NICOLE WUTH

Respondent/Cross-applicant

JUDGE:

RARES J

DATE OF ORDER:

27 APRIL 2017

THE COURT ORDERS THAT:

1.The appeal be dismissed.

2.The…

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AGLC
Comcare v Wuth [2017] FCA 433
Case
[2017] FCA 433
Decision Date

CaseChat Overview and Summary

In Comcare v Wuth, the court considered an appeal and cross-appeal in a workers' compensation matter. Comcare, the appellant, challenged the Administrative Appeals Tribunal's (AAT) decision on two primary grounds: the Tribunal's interpretation of Chapter 18 of the American Medical Association’s Guides to the Evaluation of Permanent Impairment (AMA Guides) in assessing Ms Wuth's degree of permanent impairment, and the Tribunal's application of its own clinical judgment in determining this percentage, which Comcare argued denied it procedural fairness. Ms Wuth, the cross-appellant, argued that the Tribunal should have used a higher number of hours for calculating her normal weekly earnings under the Safety, Rehabilitation and Compensation Act 1988 (Cth).

The court examined whether the Tribunal had correctly applied the AMA Guides in assessing Ms Wuth's impairment and whether it was required to inform the parties that it would exercise its clinical judgment under s 24(6) of the Act. The court also considered whether the Tribunal should have used the actual hours worked by Ms Wuth, rather than the agreed hours, to calculate her normal weekly earnings under s 8(1) of the Act. The court noted that the Tribunal's calculation of normal weekly earnings should be based on the actual hours worked during the relevant period, as mandated by the Act, rather than the agreed or paid hours.

In its reasoning, the court found that the Tribunal had not erred in its interpretation of the AMA Guides but did find that it had erred in its calculation of Ms Wuth's normal weekly earnings. The court held that the Tribunal should have used the actual number of hours worked by Ms Wuth in its calculation, not the agreed hours. Consequently, the Tribunal's decision was incorrect and needed to be set aside. The court allowed the cross-appeal and substituted the Tribunal's decision with one that correctly calculated Ms Wuth's normal weekly earnings based on the actual hours worked. The appeal was dismissed as the court found no legal error in the Tribunal's assessment of impairment.

In summary, the court ordered that Comcare was liable to pay compensation to Ms Wuth based on the correct calculation of her normal weekly earnings. It also ordered that Comcare pay Ms Wuth's costs for the applications, while Ms Wuth was to pay Comcare's costs for the appeal and cross-appeal.

Orders

Orders of the court

1. The appeal be dismissed.

2. The cross-appeal be allowed.

3. Decision 1 made by the Administrative Appeals Tribunal in application 2014/0673 to affirm Comcare’s decision on 23 December 2013 be set aside and the following decisions be substituted in lieu thereof:

1. In Application 2014/0673, Comcare’s decision on 23 December 2013 is set aside and in substitution the following decision is made:

Comcare is liable, under s 19 of the Safety, Rehabilitation and Compensation Act 1988 (Cth), to pay compensation to the applicant in respect of her chronic migrainous headaches, on the basis that the average number of hours worked in each week by the applicant in her employment during the relevant period was 36.75 hours.

3. Comcare pay the applicant’s costs in Applications 2014/0673 and 2014/4007 pursuant to s 67(8) of the Safety, Rehabilitation and Compensation Act 1988 (Cth).

4. The applicant/cross-respondent pay the respondent/cross-applicant’s costs of the appeal and cross-appeal.

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

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

The NH figure in s 8(1) applies to facts, not hypotheses. The only relevant fact that the Tribunal needed in order to ascertain the NH value in s 8(1) was the actual average number of, namely, more than 36.75, hours a week that Ms Wuth worked in the relevant two week period. In her notice of cross-appeal Ms Wuth only sought a finding that the NH figure be 36.75 hours per week based on the Tribunal’s finding that in fact she worked in excess of that time during each of the two weeks in the relevant period. Accordingly, that figure should be used as the NH value in calculating her normal weekly earnings under s 8(1).Conclusion on cross-appeal For these reasons, I am of opinion that the Tribunal erred in failing to use 36.75 hours as the actual average number of hours worked to calculate Ms Wuth’s normal weekly earnings in accordance with s 8(1). The cross-appeal must be allowed with costs.Comcare’s appealIntroduction The issues in Comcare’s appeal centre principally around its contentions that, first, the Tribunal misconstrued or misapplied Ch 18 of the American Medical Association’s Guides to the Evaluation of Permanent Impairment (5th ed; 2001) (the AMA Guides) (as corrected in errata published in March 2002 (the 2002 errata)), the provisions of which applied to assessment of impairment in cases of migraine or tension headaches and, secondly, the Tribunal denied Comcare procedural fairness by determining for itself, using its own inexpert “clinical judgment”, that Ms Wuth’s degree of permanent impairment under s 24(6) of the Act was 14% after it had found that Ch 18 of the AMA Guides did not assign a percentage rating of impairment. I will set out the grounds of Comcare’s appeal, then, the relevant parts of the approved Guide and the AMA Guides (which, as will become apparent, are not easy to understand), before summarising the Tribunal’s reasoning and Comcare’s submissions. Comcare contended in the grounds in its notice of appeal that the Tribunal had:(1)misconstrued Ch 18 of the AMA Guides by concluding that Ch 18 did not provide impairment ratings for Ms Wuth’s chronic migrainous headaches condition;(2)misconstrued the “clinical judgment” impairment evaluation method in Section 1.5, pages 10-11, of the AMA Guides by concluding that Ms Wuth had an “unlisted condition” that fell to be evaluated under the clinical judgment impairment evaluation;(3)misapplied that evaluation by undertaking its own evaluation when there was no evidence from a physician on which to make such an evaluation;(4)denied Comcare procedural fairness because Comcare was not put on notice, and had no opportunity to make submissions in the event, that the Tribunal might attempt to undertake its own clinical judgment evaluation or might find that, using “clinical judgment”, Ms Wuth’s level of impairment was 14%. In the Tribunal, the parties tendered numerous medical reports, from not only Ms Wuth’s treating neurologist Associate Professor Raymond Garrick, but also others prepared for use as expert evidence in the hearing, including by Associate Professor White (tendered by Ms Wuth) and Dr Seneviratne (tendered by Comcare).

Ratio Decidendi

Legal Principle Established

Comcare argued that Ms Wuth had not been able to demonstrate any legal error in the Tribunal’s finding that her normal weekly earnings in the relevant period should be calculated using the value of 29.4 hours as her average number of hours worked in the relevant period for the purposes of the item NH in the formula in s 8(1). It contended that those were her agreed hours, under her contract, and represented the only hours which the Tribunal could use. It submitted that this finding was open to the Tribunal on all of the evidence relating to Ms Wuth’s employment terms and her agreement with the Department in November 2006 that she would work only four days or 29.4 hours per week, which had been based on medical advice in light of her condition. Comcare also relied on the fact that Ms Wuth was only paid for 29.4 hours per week in the relevant period of two weeks before the date of her injury. It also argued that the reference in s 8(1) to “the average number of hours worked in each week by the employee in his or her employment” had to be read as including the word “paid” before “hours”: i.e. the average number of paid hours worked. It contended that using any greater number of hours in applying the formula in s 8(1) would be contrary to the legislative intention, and it called in aid the decision of the Full Court in Comcare v Nicolas (2014) 225 FCR 369 at 376 [42].Consideration The ultimate finding that the Tribunal made was that the value of NH in the formula in s 8(1) used to calculate Ms Wuth’s normal weekly earnings was 29.4 hours. I am of opinion that this finding was not a finding of fact that was made under ss 8(1) and 9. That is because, the Tribunal’s ultimate finding was not based on the application of the actual facts that the Tribunal had found in the first sentence of [35] of its reasons, namely that Ms Wuth actually worked “extra hours”, being its earlier finding at [22] of its reasons, during “the relevant period”. The relevant period, as s 9(1) provided, was “the latest period of 2 weeks before the date of the injury during which the employee was continuously employed”, and the Tribunal had found that she “was working more than 36.75 hours a week”. There was no basis in the Act on which the Tribunal could ignore that Ms Wuth actually worked more than 36.75 hours in each of the two weeks immediately before 27 February 2007, as it did in [35], by “having regard to her agreed hours only” and using 29.4 hours a week instead in performing that statutory calculation in s 8(1). The Tribunal had to make the calculation of normal weekly earnings by following the steps mandated in the Act. The Tribunal noted that the parties had agreed that s 8(10) of the SRC Act had no application in the review. Normal weekly earnings meant, as s 4(1) provided, “the normal weekly earnings of an employee calculated under section 8”. That calculation depended on finding the value to be used for NH in the formula in s 8(1), namely “the average number of hours worked in each week by the employee in his or her employment during the relevant period”, where s 9(1) provided the only relevant criterion (unless one of the exceptions in s 9(2), (3) or (4) applied) for ascertaining “the relevant period”. The Tribunal did not find, and the parties did not argue, that any of s 9(2), (3) or (4) applied to displace the use of the two week period immediately before the date of the injury required by s 9(1) as “the relevant period” for the purpose of s 8(1). The calculation required by s 8(1) did not use, or require the use of, the agreed hours of employment. Rather, the calculation required the use of the actual hours “worked by the employee in … her employment” in each of the two weeks immediately before the date of the injury.