Denn v Midland Brick Co Pty Ltd

[1985] HCA 26

HIGH COURT OF AUSTRALIA

Gibbs C.J., Mason, Wilson, Brennan and Dawson JJ.

DENN v. MIDLAND BRICK COMPANY PROPRIETARY LIMITED

(1985) 157 CLR 398

3 April 1985

Workers' Compensation (W.A.)

Workers' Compensation (W.A.)—Compensation—Total and permanent incapacity—Weekly payments of compensation to cease when total payments reach prescribed amount—Power of Board to make contrary order—Matters to be taken into consideration—Receipt by worker of invalid pension—Receipt of sums for medical and hospital treatment—Relevance to Board's decision—Function of prescribed amount—Workers' Compensation Act 1912 (W.A.), s. 29(7)(aa), 1st Sch. cl. 1(c)—Workers' Compensation and Assistance Act 1981 (W.A.), s. 122.

Decisions

GIBBS C.J. On 12 January 1976 the appellant, while in the course of his employment with the respondent company, suffered an accident which caused injury to his brain and left him permanently incapacitated. In consequence he became entitled to receive compensation under the Workers' Compensation Act, 1912 (W.A.), as amended ("the 1912 Act"). Under that Act the entitlement of a worker to weekly payments during an incapacity ceased "if and when the total weekly payments for that incapacity reaches the prescribed amount, unless the Board has made or makes an order to the contrary under section 29(7)(aa)" of that Act (see cl.1(c) of the First Schedule). The amount payable for the reasonable expenses of medical treatment and hospital treatment and maintenance was limited to a sum "not exceeding, in the aggregate, a sum equal to ten per cent of the prescribed amount, unless the Board finds that in the particular circumstances of the case, that amount is inadequate" (par.(c)(i) of the proviso to cl.1(c) of the First Schedule). By 19 June 1981 the appellant had received the prescribed amount (which was then $51,646) by way of weekly payments and had received a sum which considerably exceeded 10 per cent of the prescribed amount by way of medical expenses. On 31 August 1981 he applied to the Workers' Compensation Board of Western Australia for orders that he receive weekly payments of compensation, and the cost of medical expenses, above the prescribed amount. On 30 April 1982 the Board ordered (inter alia) as follows:

"(1) The respondent pay the applicant weekly payments for total incapacity from 19 June 1981 and those weekly payments shall continue indefinitely subject, however, to the law relating to workers' compensation in force from time to time in this State, with liberty to apply.

(2) The respondent make, and continue to make, payments of medical and like expenses under the First Schedule clause 1(c)(i) of the Act notwithstanding they exceed the primary limit therein provided, with liberty to apply."

Thereafter the Board stated a case for the opinion of the Full Court of the Supreme Court of Western Australia. The case asked the following questions:

"(1) Did the Board err in law in making an order under section 29(7)(aa) without fixing therein the total sum which the ... respondent was liable to pay the applicant by way of weekly payments, either by specifying a total sum of money, or a finite period of time?

(2) Did the Board exercise its discretion properly or at all -

(a) in making an order having the effect that the respondent is required to make weekly payments beyond the prescribed amount, and

(b) to choose the proper form of order to be made?"

The respondent did not challenge the order made by the Board for the continuance of payments in respect of hospital and medical expenses and that part of the Board's order has not since been the subject of appeal. On 12 November 1982 the Full Court of the Supreme Court answered question 1 in the affirmative and held that it was unnecessary to answer question 2. The judgment is reported: see (1983) W.A.R. 1. The Court held that s.29(7)(aa) of the 1912 Act, which gave the Board jurisdiction, in certain circumstances, to make "such order as to the total liability of the employer for weekly payments as the Board thinks proper in the circumstances", did not empower the Board simply to remove the limit of liability fixed by the prescribed amount without specifying the total sum which the employer is liable to pay. Kennedy J. said, at p.8:

"An order that weekly payments shall continue indefinitely is not, in my opinion, an order as to the total liability of the employer, because it says nothing as to that total liability. Furthermore, the period for which weekly payments should continue was a matter to be dealt with under the ordinary provisions of the Act, once the new total liability was determined. I do not think that the Board had any power to order weekly payments to be continued 'indefinitely', regardless of the subsequent wording of its order. The proper approach was, therefore, in my view, to fix a specific sum as the new 'total liability' of the employer, although, no doubt, this would not prevent the Board from acting in the future under its powers contained in s 29(2) to reconsider and amend its order."

In view of the answer which the Court gave to the first question, their Honours did not think that the second question should be answered.

2. In the meantime, the 1912 Act had been repealed and replaced by the Workers' Compensation and Assistance Act 1981 (W.A.) ("the 1981 Act") which came into force on 3 May 1982 ("the proclaimed date"). On 9 December 1982 the appellant applied to the Workers' Compensation Board "for an order that the Workers' Compensation Board set a limit to the total amount of workers' compensation payable to the (appellant) pursuant to the order of the Full Court of the Supreme Court dated the 12th November 1982 ...". The application came before a Supplementary Workers' Compensation Board constituted under the 1981 Act. The Board held that the application was for a variation of the order of 30 April 1982, and that it was governed by the provisions of the 1981 Act and in particular by s.122 of that Act. The view that the application was to be determined under s.122 of the 1981 Act rather than under s.29(7)(aa) of the 1912 Act was confirmed by the Full Court of the Supreme Court in a decision given in subsequent proceedings on a stated case which the Full Court held that the Board was not competent to state, and no appeal was brought to this Court from that decision. It is accordingly unnecessary to canvass the transitional provisions of the 1981 Act on which the correctness of that view depends, and in any case the difference between the old and the new sections does not give rise to any issue which was raised on the present appeal to this Court.

3. Section 122 of the 1981 Act provides as follows:

"Where the Board considers that a disability

to a worker that is compensable under this Act has resulted in his permanent total incapacity for work, it may make, unless an order for redemption of the liability for the incapacity by payment of a lump sum has already been made under this Act, such order as to the total liability of the employer for the incapacity as the Board thinks proper in the circumstances but not exceeding -

(a) the weekly payments at the rate to which he is entitled at the date of the order for the period of the expectation of life of the worker; or

(b) if section 56 or Schedule 5 clause 2 applies in respect of the incapacity, up to the date when weekly payments would cease by reason of age,

whichever is the shorter."

The words of pars.(a) and (b) of s.122, which limit the total amount that may be fixed, did not appear in s.29(7)(aa), and, together with s.56 and cl.2 of Schedule 5, were held by the Board to have the effect that the total liability payable in respect of the period after the prescribed date could not exceed weekly payments at the rate to which the appellant was entitled at the date of the order (which the Board held was 30 April 1982) up to the date when the appellant would reach the age of 65. The Board calculated the maximum amount which it could award (including the $51,646 already paid) as $507,817.90, and, for reasons it will be necessary to consider, made the following order:

"(1) The respondent pay the applicant weekly payments of compensation as for total incapacity from the 19th day of June, 1981 at a rate calculated and varied in accordance with the First Schedule of the repealed Act until the 3rd day of May, 1982 and from that date in accordance with Schedule 1 of the Workers' Compensation and

Assistance Act 1981 until the total of weekly payments to the applicant including the $51,646.00 paid to the applicant until the 19th day of June, 1981 reach $507,817.90 or the applicant attains the age of 65, whichever is the earlier; and

(2) The respondent pay the applicant's costs of, and incidental to, this application for variation and proceedings in respect of it, those costs to be taxed in default of agreement."

4. After the proceedings by stated case had proved abortive, an appeal was brought by the present respondent to the Full Court of the Supreme Court under s.136 of the 1981 Act and s.3 of the Workers' Compensation and Assistance Amendment Act 1983. On such an appeal the practice and procedure of the Full Court is to be the same as though the appeal were from a single judge of the Supreme Court: s.137(1). The Full Court allowed the appeal and set aside par.(1) of the order of the Supplementary Board. An appeal has been brought from that judgment of the Full Court to this Court.

5. The Supplementary Board proceeded on the material which had been placed before the Board when it gave its decision on 30 April 1982. The effect of that material may be very shortly stated. The appellant was, on 30 April 1982, aged almost 33 and because of his injury he had lost over two-thirds of his normal working life. He was totally and permanently incapacitated, had severe intellectual impairment, and required permanent institutional care which he was obtaining at the Applecross Nursing Home. His sole source of income was an invalid pension, then $137.30 per fortnight, and an occasional small gift from his mother. From his pension he paid $135.80 towards his care and maintenance in the Applecross Nursing Home, the cost of which was $404.60 per fortnight, and the balance was paid by a Commonwealth subsidy. He needed care and assistance on those occasions when he left the nursing home for a short break. His mother received an old age pension and was unlikely to be able to assist him for long.

6. The unchallenged order made by the Board on 30 April 1982, that the respondent continue to make "payments of medical and like expenses", effected a marked improvement to the appellant's financial situation. It was no longer true that he had only $1.50 per fortnight for his personal expenses. It appears from the judgment of Burt C.J. in the Full Court that although the exact position when the application was before the Supplementary Board on the second occasion is not known, the Full Court was told by counsel for the appellant that at the date of the hearing of the appeal the nursing home fees were being paid by the respondent and the appellant was receiving his pension. The Supplementary Board did not mention the effect of the order that required the respondent to pay medical and hospital expenses and it is apparent that in reaching its decision it failed to take into account the effect of that order. It was for that reason that the Full Court held that the Supplementary Board had fallen into error.

7. Before us, it was submitted on behalf of the appellant that the duty of the Board was to determine the matter in the light of the facts as at 30 April 1982 and not in the light of subsequent developments. However, assuming that submission to be correct, the Supplementary Board nevertheless could not ignore the effect of the order which took effect on that date, provided, of course, that the 1981 Act, on its proper construction, did not require the effect of an order for the payment of hospital and medical expenses to be excluded from consideration in deciding whether an order should be made under s.122, and if so in what amount. It is trite law that an appellate court may and should review a judgment given in the exercise of a discretion if the primary tribunal has failed to give weight to a relevant consideration. It then becomes necessary to decide whether the fact that the order for hospital and medical expenses had been made and remained in force was a material consideration in the present case.

8. The basic provisions of the 1981 Act are similar to those of the 1912 Act. In the case of total or partial incapacity, the worker who suffers from a compensable disability is entitled to weekly payments during the incapacity (s.18 and cl.7(1) of Schedule 1) but that entitlement is expressly made subject to s.56 (under which weekly payments cease on account of age) and cl.7(3) of Schedule 1, which provides:

"An entitlement of a worker to weekly payments

for a disability under this Act ceases if and when the total weekly payments for that disability reaches the prescribed amount, unless the Board has made or makes an order to the contrary under section 122 ...".

In addition to those weekly payments, a sum is payable equal to reasonable expenses incurred (inter alia) for medical attendance and treatment and charges for hospital treatment and maintenance "but not exceeding, in the aggregate, a sum equal to 10% of the prescribed amount, unless the Board finds, that in the particular circumstances of the case, the amount for such expenses is inadequate ...": cl.17(1) of Schedule 1. Although it is clear that initially the disabled worker is entitled to medical and hospital expenses as well as the weekly payments, it by no means follows that once the prescribed amount has been reached the totally disabled worker who is receiving the benefit of payments which cover all his ordinary living expenses is entitled to receive the weekly payments in full. The provisions of s.122, which have their counterpart in the provisions of the legislation of Victoria and South Australia, have received judicial consideration. It was held by this Court in Harrington v. Harrington (1981) 55 ALJR 566; 35 ALR 587 that under the corresponding provisions of the South Australian legislation the prescribed amount is not intended to be an appropriate standard for the majority of cases, and that it is not intended that the maximum should be fixed at a level which will provide less than complete compensation or that an amount greater than the prescribed amount should only be fixed if special circumstances are shown. That however does not mean that the provision that payments cease when they reach the prescribed amount is an empty formality. Once the limit fixed by the prescribed amount has been reached the worker's qualified right to a continuance of the weekly payment ceases, and the Board must decide whether those payments should continue. In so deciding it has a very wide discretion; it is entitled, and in my opinion bound, to consider all "the circumstances". The financial situation of the worker and of his family, if any, form part of the circumstances of the case; indeed it was said in Collins v. Epworth Hospital (1959) VR 586, at p 589, that circumstances of that kind "appear to be very relevant". I agree that such circumstances are relevant; there is simply no reason to exclude them from consideration. Where the payments in respect of hospital expenses provide, on a permanent basis, for the cost of the accommodation and maintenance of the disabled worker (particularly one who has no dependants), he might receive more than fair and adequate compensation if he received in addition the weekly payments, at least if they were paid to him in full. Put in another way, the fact that his maintenance is fully provided for is a benefit relevant to be considered once the prescribed amount has been reached. The effect of the order providing for hospital maintenance is a matter which the Board has to consider in its discretion.

9. For these reasons, in my opinion, the Supplementary Board fell into error in failing to consider the effect of the order for payment of medical and hospital expenses.

10. It appears from its reasons that the Supplementary Board took the view that the payment of the invalid pension was not a relevant matter for consideration on a question arising under s.122. The Full Court disagreed with this conclusion. However, with all respect, I consider that the Board was correct in forming this opinion. The amount of an invalid pension is fixed only after the Director-General has had regard to the circumstances of the case, which would include the amount of workers' compensation which a disabled worker is receiving, and is intended to be a disposition in favour of the invalid pensioner intended for his enjoyment and not to provide any relief of any liability in others fully to compensate him: The National Insurance Company of New Zealand Ltd. v. Espagne (1961) 105 CLR 569, at p 573; Redding v. Lee (1983) 151 CLR 117. Although those were cases of damages for personal injuries caused by negligence, the discussion which those judgments contain of the nature and purposes of the invalid pension appears to me to be applicable to the consideration of the question whether the amount of an invalid pension is intended to relieve an employer of his obligation to provide workers' compensation.

11. It follows that, in my opinion, the Supplementary Board, in considering the application under s.122, was right in refraining from considering the receipt of the invalid pension but was wrong in failing to consider the effect of the order for payment of hospital and medical expenses. The weight which it should give to the effect of that order was of course a matter for the Board itself to consider in the light of the other circumstances of the case.

12. The proper course for the Full Court, in my opinion, was to remit the matter to the Supplementary Board for further consideration. I would allow the appeal and would order that the decision of the Supplementary Board be set aside and that the matter be remitted to that Board.

MASON J. I have had the advantage of reading the reasons for judgment prepared by Brennan J. For the reasons which he gives, I would allow the appeal, set aside the judgment of the Full Court of the Supreme Court and in lieu thereof order that the appeal to that court be dismissed.

2. I would only add that the Court in Harrington v. Harrington (1981) 55 ALJR 566; 35 ALR 587, in affirming the answers given by the Full Industrial Court and the Full Court of the Supreme Court of South Australia to questions I and III(a) of the case stated, was concerned to reject the argument that under s.51(4)(b) of the Workmen's Compensation Act 1971-1974 (S.A.) the sum of $25,000 should be treated as the standard total liability of an employer for most cases of total permanent incapacity for work. The Court was not called upon to deal with any specificity with the circumstances to be taken into account in fixing a greater amount. Accordingly, the acceptance of the answers given to questions I and III(a) by the courts below in Harrington cannot be regarded as determinative of this appeal.

WILSON J. On 12 January 1976 the appellant was working on the roof of a shed in the course of his employment by the respondent. He fell from the roof, suffering a fractured skull and serious brain injury which has left him totally and permanently incapacitated. At the time of the accident he was 26 years old. He received compensation in the form of weekly payments in accordance with the provisions of the Workers' Compensation Act 1912 (W.A.) as amended ("the Act") from the date of the accident until 19 June 1981 when the total of such payments amounted to $51,646.00. This figure was the "prescribed amount" within the meaning of the Act, with the result that in the absence of an order of a Workers' Compensation Board ("the Board") pursuant to s. 29(7)(aa) of the Act the appellant's entitlement to weekly payments ceased.

2. The appellant made application in December 1982 for such an order. Section 29(7)(aa) reads as follows:

"... where the Board considers that an injury to a worker that is compensable under this Act has resulted in his permanent total incapacity for work, making, unless an order for redemption of weekly payments by payment of a lump sum has already been made under this Act in respect of the injury, such order as to the total liability of the employer for weekly payments as the Board thinks proper in the circumstances; ..."

He also sought from the Board a finding such as is contemplated by par. (c) of the proviso to cl. 1(c) of the First Schedule. This proviso deals with the employer's obligation to pay what may be described loosely as medical and like expenses

"but not exceeding, in the aggregate, a sum equal to ten per cent of the prescribed amount, unless the Board finds that in the particular circumstances of the case, that amount is inadequate; ..."

It is a matter of record that at the time of the application the employer had already paid medical and like expenses in excess of $40,000.00 thereby greatly exceeding the 10% limit.

3. The Board delivered its decision on these applications on 30 April 1982. It accepted the medical prognosis that the appellant would require institutional care for the rest of his life. It found that he was receiving this care and maintenance in the Applecross Nursing Home at a cost at that time of $404.60 per fortnight. It described his disabilities in the following terms:

"Although the applicant can use a wheelchair he cannot walk because his spasticity makes his balance extremely precarious. His power of speech is limited. He cannot read apart from a few simple words such as Stop Signs. He cannot write because he cannot hold a pen in his right hand which was his writing hand before the accident. His ability to write is limited to signing his name with his left hand."

The Board found that the appellant's sole source of income was the invalid pension of $137.30 per fortnight and an occasional gift of $10.00 from his mother. It found also that he paid from his pension $135.80 towards his care and maintenance in the Applecross Nursing Home, the balance of $268.80 per fortnight being paid by a Commonwealth subsidy. It confirmed his total and permanent incapacity in terms of the Act and noted that he would be 33 years of age in May 1982. In the light of these facts the Board held that the appellant was entitled to an award of weekly payments for total incapacity from 19 June 1982, those payments to continue indefinitely, subject, however, to the law relating to Workers' Compensation in force from time to time. It further ordered the respondent to make, and to continue to make, payments of medical and like expenses under the First Schedule cl. 1(c) of the Act notwithstanding that they exceeded the primary limit therein provided.

4. At the request of the respondent, the Board stated a case, pursuant to s. 29(9) of the Act, for the decision of the Full Court of the Supreme Court of Western Australia on the following questions:

"(1) Did the Board err in law in making an order under Section 29(7)(aa) without fixing therein the total sum which the Appellant (Respondent) was liable to pay the Applicant by way of weekly payments, either by specifying a total sum of money, or a finite period of time?

(2) Did the Board exercise its discretion properly or at all - (a) in making an Order having the effect that the Respondent is required to make weekly payments beyond the prescribed amount, and

(b) to choose the proper form of Order to be made?"

Counsel were unable to explain the precise meaning of question (2)(b) but it is unnecessary to dwell upon it.

5. The Full Court, in a decision which is now reported ((1983) W.A.R. 1), unanimously answered question (1) in the affirmative and by majority held that question (2) "does not fall to be answered".

6. Thereafter the appellant returned to the Board, seeking a variation of the order made on 30 April 1982 with respect to the total liability of the employer for weekly payments so as to conform with the decision of the Full Court. In the meantime the Act had been repealed and replaced by the Workers' Compensation and Assistance Act 1981 (W.A.). That Act, as subsequently amended, will be referred to as "the new Act". The new Act contained a provision (s. 122) which corresponded broadly to s. 29(7)(aa) of the Act save that by virtue of s. 56 of the new Act a worker's entitlement to weekly payments ceased on his attaining the age of 65 years. Clause 17 of Schedule 1 of the new Act deals with payments of medical and like expenses, and corresponds precisely with par. (c) of the proviso to cl. 1(c) of the First Schedule of the Act. It is not suggested by either party that any question remains to be considered in the present case by reason of the enactment of the new Act.

7. The Board delivered its decision on 23 June 1983. Its reasons included a statement of the circumstances of the case together with its conclusion:

"The circumstances of this case are contained in the facts found by the Board as set out in the case stated. They of course include that the worker is totally and permanently incapacitated. It is clear also from the transcript that Denn's mother is on the age pension and it is unlikely that she will be in a position for long to give the applicant physical help if he wants to leave the nursing home for a short break; and it is also unlikely that she will be able to provide minor financial assistance frequently or for long. He certainly, if he wants that short break, will always need special transport; when he has taken such a break in the past it requires a bit of organisation in a taxi and the finance for it. He would have been only 33, a month after the judgment. His nett income at the time of the 30 April 1982 judgment was only $2.50 ($1.50) after he received the invalid pension and paid all but that amount over to the nursing home. The Board does not accept the respondent's argument that he can remain on social services (including the invalid pension) and thus limit the Board's discretion by saying that the applicant's needs are not great after the social services payout and the responsibilities transferred to them.

Assuming the applicant began his carpentry apprenticeship at the age of 16 the applicant has lost over 2/3 of his working life assuming it would have terminated at 65 but for the injury. The Board considers it proper in the circumstances to exercise its discretion by granting to the worker an extension of entitlement beyond the prescribed amount as at 19 June 1981 that is an extension of the total liability of the employer."

The Board thereupon varied its order of 30 April 1982 by substituting for the order then made with respect to weekly payments an order that:

"The Respondent pay the Applicant weekly payments of compensation as for total incapacity from the 19th day of June, 1981 at a rate calculated and varied in accordance with the First Schedule of the repealed Act until the 3rd day of May, 1982 and from that date in accordance with Schedule 1 of the Workers' Compensation and Assistance Act 1981 until the total of weekly payments to the Applicant including the $51,646.00 paid to the Applicant until the 19th day of June, 1981 reach $507,817.90 or the Applicant attains the age of 65, whichever is the earlier; ..."

The Board made it plain that it arrived at the figure setting the total liability of the respondent by assuring the appellant a continuation of weekly payments from 19 June 1981 to the date on which he would attain 65 years of age, a total period of 32 years and 49 weeks at the then current award rate for carpenters of $266.30 per week. The order made on 30 April 1982 with respect to the payment of medical and like expenses was not disturbed.

8. Exercising the right granted by s. 136 of the new Act, the respondent appealed to the Full Court from the order of the Board made on 23 June 1983. The Court (Burt C.J., Wallace and Brinsden JJ.) unanimously allowed the appeal and set aside the order. Their Honours held that the Board had erred in failing to take into account the effect of the order made on 30 April 1982 with respect to medical and like expenses, pursuant to which the respondent had, at the time of the Full Court hearing, already paid in excess of $92,000.00. The result of that order was that the appellant had been relieved of any financial responsibility for his care and maintenance in the nursing home and was left with his invalid pension intact from which to meet any additional or incidental expenses that he might incur. The Court held that on the findings made by the Board there was no basis on which the Board could think it proper in the circumstances to make an order in accordance with s. 122 of the new Act.

9. The appellant bases his attack on the decision of the Full Court on three grounds. First, he argues that their Honours erred in giving undue weight to the factor of economic need in reviewing the exercise of the discretion by the Board. Secondly, he says that the appellant's receipt of an invalid pension was irrelevant and should have been ignored. In this regard Counsel sought to draw an analogy with the calculation of common law damages for loss of earning capacity in cases of personal injury. Thirdly, it is submitted that if the Full Court was entitled to set aside the Board's order, it should then have sent the matter back to the Board in order that it might consider afresh whether the circumstances of the case called for any enlargement of the total liability of the respondent.

10. It is to be noted that s. 29(7)(aa) of the Act - and s. 122 of the new Act - yield no criteria by reference to which the exercise of the power conferred by those sections may be controlled. It is simply a question of what "the Board thinks proper in the circumstances". The provisions are comparable to s. 51(4)(b) of the Workmen's Compensation Act 1971-1974 (S.A.) which was considered by this Court on an appeal from the Supreme Court of South Australia in Harrington v. Harrington (1981) 55 ALJR 566; (1981) 35 ALR 587. In that case, the section provided that the total liability of an employer in respect of weekly payments in the case of total permanent incapacity was not to exceed the sum of $25,000 "or such greater amount as is fixed by the Court having regard to the circumstances of the case". In the course of his reasons, Gibbs C.J., with whom Mason and Aickin JJ. agreed, said (at p. 568 of A.L.J.R.; at p. 592 of A.L.R.):

"Speaking generally, therefore, the circumstances of the case which are relevant will not include those which relate to the manner in which the injury was suffered, the nature and consequences of the injury (except in so far as they establish that the workman is totally and permanently incapable of work) or the financial position of the employer. On the other hand, circumstances will be relevant if they tend to show that the maximum of $25,000 will provide inadequate compensation, particularly having regard to the age of the workman and to the amount of the weekly payment he would be entitled to receive under the Act, and also to the amount of any payments, allowances or benefits within the meaning of s. 68 of the Act that the workman is likely to receive. However, as was correctly said by King C.J. in the Full Court, it is not the function of the court to substitute a formula for the expression 'circumstances of the case'."

The reference to payments within the meaning of s. 68 is a reference to payments proceeding from the employer, but I would not understand his Honour to have intended to exclude payments emanating from other sources if the circumstances showed the workman to have received the benefit of them. In the result, the Court affirmed certain answers given by the Full Industrial Court of South Australia and approved by the Supreme Court to the questions in the case stated which are of particular relevance to this appeal. Those questions and answers appear at p. 568 of A.L.J.R.; pp. 591-592 of A.L.R. and are as follows:

ANSWERS OF

"CASE STATED FULL INDUSTRIAL COURT

I. Which, if any of the All such facts as bear upon

agreed facts, set out the actual economic in paragraph 4 of the consequences of the case stated, may the workman's incapacity as Court take into contrasted with the consideration to statutory maximum sum of determine whether the $25,000, and, in the total liability of the particular circumstances of employer in respect of this case, the age of the payments under section workman, the degree of 51(4)(b) should exceed economic incapacity which the sum of $25,000? has resulted from the relevant injury, and the lack of evidence of any moderating benefits result- ing to the workman from his employment in consequence of his injury and resultant incapacity.

III.If yes to question II - The same facts as are

relevant to a determination

(a) Which, if any, of that the total liability the agreed facts of the employer ought to set out in be increased beyond $25,000 paragraph 4 of the are also relevant to the case stated, is the fixation of actual quantum. Court entitled to However, care should be take into consideration taken to avoid double to determine counting, having regard to the quantum of the the provisions of section total liability of 59 of the Act, and also the employer in the possibility of respect of payments compensating beyond actual under section need. Due allowance should 51(4)(b) where the also be made for any Court decides to relevant contingencies fix a sum in disclosed by the evidence excess of $25,000? and which require moderation or adjustment of any figure initially computed."

I should mention that s. 59, referred to in the second answer, is the provision dealing with medical and like expenses.

11. Clause 7(3) of Schedule 1 of the new Act continues the scheme in force under the Act whereby the entitlement of a worker to weekly payments ceases if and when the total of such payments reaches the amount prescribed by the statute unless the Board makes such order as to the total liability of the employer for such payments as the Board thinks proper in the circumstances: s. 122, new Act; s. 29(7)(aa), the Act. It is therefore for the worker to show the presence of such circumstances as will lead the Board to think it proper to require weekly payments to be continued notwithstanding that the prescribed amount has been reached. In the present case the factor which appears to have influenced the Board is the consideration that the appellant has lost two-thirds of his working life and the enjoyment of an earning capacity as a carpenter in that time. There may be cases where that consideration is an important factor but it cannot be taken as the determinant in every case. If it were, it would mean simply that a totally and permanently incapacitated worker is entitled to weekly payments for the balance of what would have been his working life subject only to the formality of an order under s. 122 of the new Act. A relevant circumstance in the present case is the very limited opportunity that the appellant has to utilize for his own purposes any moneys that he may receive. There may be cases where the loss of earning capacity, if not replaced by compensation in the form of weekly payments, would make a considerable impact on the amenities which would go to make up his way of life. Here, however, if it be correct for the Board to take the invalid pension into account, the findings made by the Board show that in present circumstances he is as well provided for as money can achieve. The answer given in Harrington to the second question I have set out makes it clear that the actual needs of the appellant are to be taken into account and that the existence of an order obliging the employer to continue to meet medical and like expenses is a relevant consideration. In my opinion, the approach of the Full Court with respect to the economic needs of the appellant was entirely consistent with the guidance provided by the decision in Harrington.

12. If it be said that in Harrington the Court was not concerned with the question of needs, with the consequence that the authority of that decision cannot be relied upon to supply an answer to the problem raised by this case, nevertheless I do not shrink from asserting the relevance of need to the exercise of the discretion conferred by s. 122 of the new Act as to what is "proper in the circumstances". Section 18 of the Interpretation Act 1984 (W.A.) provides:

"In the interpretation of a provision of a written law, a construction that would promote the purpose or object underlying the written law (whether that purpose or object is expressly stated in the written law or not) shall be preferred to a construction that would not promote that purpose or object."

13. The provisions of the Act which contribute to a relevant perception of its purpose may be described briefly. Section 3 states expressly that a purpose of the Act is to make provision for the compensation of workers who suffer a disability. "Disability" includes a personal injury by accident arising out of or in the course of the employment (s. 5(1)). If a disability occurs, then subject to the Act the employer is liable to pay compensation in accordance with Schedule 1. Clause 7(1) of the Schedule provides that subject to s. 56 (which terminates the worker's entitlement to weekly payments on his reaching the age of 65 years) and sub-cl. (3) a worker is entitled during total incapacity for work resulting from the disability to a weekly payment equal to his weekly earnings. As I have already said, sub-cl. (3) provides that the entitlement of a worker to weekly payments for a disability ceases if and when the total weekly payments for that disability reach the prescribed amount unless the Board makes an order to the contrary under s. 122. With all respect to those who may think differently, I am unable to perceive the purpose of the Act to be to oblige an employer to compensate a totally and permanently incapacitated worker with weekly payments equal to what he would have earned throughout the whole of his working life to age 65 without regard to his needs or his capacity to use the money so provided. Clause 7(1) expressly subjects the entitlement to weekly payments to the prescribed maximum and sub-cl. (3) only authorizes payments in excess of that maximum if the Board makes an order to the contrary. Section 122 enables the Board to make such an order in the case of a totally and permanently incapacitated worker if it thinks it proper in the circumstances to do so. If "the circumstances" do not admit of consideration of the financial situation of the worker and the adequacy of his resources when measured against his needs, then what is the point of conferring any discretion on the Board? The power of the Board to make any order under s. 122 is predicated on the existence of total permanent incapacity so that theoretically it could be said of every applicant under the section that he is to be compensated for the loss of his earnings to age 65. So to construe the section is to eliminate any effective discretion in the Board. The consequence of such a construction in the present case is to secure to the worker an entitlement in the form of weekly payments for the rest of his working life amounting to several hundred thousand dollars which he has no prospect at all of being able to use. I do not think it can be the purpose of the Act to impose such an economic burden on industry.

14. Furthermore, it was not wrong for the Full Court to have regard to the appellant's entitlement to an invalid pension. The analogy which is attempted to be drawn between the assessment of compensation and the award of damages for personal injury arising out of the commission of a tort (cf. Redding v. Lee (1983) 151 CLR 117) is misconceived. An employer's liability in the former case does not flow from any wrongdoing on his part. He is not a tortfeasor. The circumstances of the case which a Board must consider when deciding whether it is proper to make an award under s. 29(7)(aa) of the Act (s. 122 of the new Act) will include all matters going to show the actual economic situation of the incapacitated worker.

15. The final submission of the appellant is that the Full Court should have returned the case to the Board to enable it to enter upon a fresh exercise of the discretion committed to it. In my opinion, there is no merit in the submission. Section 137 of the new Act deals expressly with the powers of the Full Court hearing an appeal under s. 136. Its powers are as ample as though the appeal were an appeal from a judge of the Supreme Court. It is true that the evidence taken by the Board was not before the Full Court but the findings which were made on that evidence were, and those findings were not the subject of any challenge. The Full Court took those findings and concluded that they were not capable of supporting an award in favour of the appellant. It has not been suggested that recourse to the evidence itself might lead to a different conclusion. There was therefore no point in sending the matter back to the Board.

16. In ruling on the operation of these provisions of the legislation, it is important to observe that the appellant is not precluded from making a further application to the Board for an award under s. 122 of the new Act should there be any material change in his circumstances in the future.

17. I would dismiss the appeal.

BRENNAN J. On 12 January 1976 the appellant, in the course of his employment by the respondent, fell from a roof and suffered personal injuries. He was then aged 26. His skull and right ribs were fractured, and he suffered a severe rotational brainstem injury resulting in spastic quadriparesis. He needs institutional care. He has been and is being cared for in the Applecross Nursing Home. He will not work again. He applied for and was paid compensation under the Workers' Compensation Act 1912-1981 (W.A.) ("the 1912 Act"). He received weekly payments of compensation in respect of his incapacity until 19 June 1981 when the aggregate of those payments reached $51,646.00, the amount prescribed for the purposes of cl.1(c) of the First Schedule to the 1912 Act. Clause 1(c), as amended by the Workers' Compensation Amendment Act 1981 (W.A.), provided that -

" the entitlement of a worker to weekly payments during an incapacity under this Act ceases if and when the total weekly payments for that incapacity reaches the prescribed amount, unless the Board has made or makes an order to the contrary under section 29 (7) (aa) of this Act, and there shall be no revival of, or increase in, that entitlement upon any subsequent increase in the prescribed amount."

In addition to weekly payments of compensation, payments were made in respect of his medical and hospital treatment pursuant to proviso (c)(i) to cl.1(c) of the First Schedule. The maximum sum payable for medical and hospital treatment was limited to a sum -

" not exceeding, in the aggregate, a sum equal to ten per cent. of the prescribed amount, unless the Board finds that in the particular circumstances of the case, that amount is inadequate".

2. The appellant applied for a determination as to the amount of compensation payable to him. The Supplementary Workers' Compensation Board ("the Board") made an order on 30 April 1982 that -

" (1) The Respondent pay (the Appellant) weekly payments for total incapacity from the 19th June, 1981 and those weekly payments shall continue indefinitely subject however, to the law relating to workers compensation in force from time to time in this State, with liberty to apply.

(2) The Respondent make and continue to make, payments of medical and like expenses under the First Schedule Clause 1(c)(i) (sic) of the Act notwithstanding they exceed the primary limit therein provided with liberty to apply."

3. The respondent asked for a case to be stated, pursuant to s.29(9) of the 1912 Act, for decision by the Full Court of the Supreme Court of the question, inter alia:

" (1) Did the Board err in law in making an order under Section 29(7)(aa) without fixing therein the total sum which (the Respondent) was liable to pay (the Appellant) by way of weekly payments, either by specifying a total sum of money, or a finite period of time?"

4. A case was stated by the Board on 14 July 1982 and, on 12 November 1982, the Full Court answered that question in the affirmative. No challenge had been made to the second order made by the Board, that is, the order with respect to medical and like expenses. That order remained in force. In the meantime, the 1912 Act had been repealed by the Workers' Compensation and Assistance Act 1981 (W.A.) ("the 1981 Act") which came into operation on 3 May 1982. Section 201(1)(e) of the 1981 Act continues in force those orders that were in force under the 1912 Act. The second order of the Board with respect to medical and like expenses thus continued in force under the 1981 Act. Provision was made also for uncompleted proceedings by s.201(1):

" (g) all applications, matters, and proceedings commenced under the repealed Act pending or in progress immediately before the proclaimed date may be continued, completed, or enforced under this Act subject to the repealed Act and subject to section 4 of this Act;

(h) applications, matters, and proceedings in respect of rights, duties, obligations, and liabilities arising under the repealed Act before the proclaimed date may be instituted, continued, completed, or enforced under this Act subject to the repealed Act and subject to section 4 of this Act;".

5. The Full Court disposed of the case stated without reference to the 1981 Act. It answered the question recited above in the affirmative, but it did not answer any other question in the case. Nor did the Full Court make any order in regard to the case except as to costs. On 23 December 1982 the matter again came before the Board, that is, before the Supplementary Workers' Compensation Board appointed or deemed to have been appointed under the 1981 Act. The Board understood that the application then before it was an application to vary the order made on 30 April 1982 "pursuant to the ruling of the Full Court on the case stated". It is unnecessary to consider whether the jurisdiction which the Board then proceeded to exercise was conferred by the 1981 Act or by that Act in combination with the provisions of the 1912 Act. The jurisdiction of the Board to entertain the application and to make an order has not been challenged and the verbal differences between the relevant provisions of the respective Acts do not affect the resolution of this appeal. Prior to 23 December 1982, the proceedings had been conducted on the footing that the 1912 Act applied, but when the Board gave its decision on 23 June 1983, it conceived itself to be bound also by the provisions of the 1981 Act. Under s.29(7)(aa) of the 1912 Act, the Board was empowered to make -

" where the Board considers that an injury to a worker that is compensable under this Act has resulted in his permanent total incapacity for work ... such order as to the total liability of the employer for weekly payments as the Board thinks proper in the circumstances".

6. Under s.122 of the 1981 Act, the Board is empowered to make -

" Where the Board considers that a disability to a worker that is compensable under this Act has resulted in his permanent total incapacity for work ... such order as to the total liability of the employer for the incapacity as the Board thinks proper in the circumstances but not exceeding -

(a) the weekly payments at the rate to which he is entitled at the date of the order for the period of the expectation of life of the worker; or

(b) if section 56 or Schedule 5 clause 2 applies in respect of the incapacity, up to the date when weekly payments would cease by reason of age,

whichever is the shorter."

7. By an order made on 23 June 1983, the Board ordered that its order of 30 April 1982 be varied -

" by substituting for it the following part (1):

'(1) The respondent pay (the appellant) weekly payments as for total incapacity from 19 June 1981 at a rate calculated and varied in accordance with the First Schedule of the repealed Act until 3 May 1981 (sic, semble 1982) and from that date in accordance with Schedule 1 of the Workers' Compensation and Assistance Act 1981 until the total of weekly payments to (the appellant) including the $51,646.00 paid to (the appellant) until 19 June 1981 reach $507,817.90 or (the appellant) attains the age of 65, whichever is the earlier.'"

No variation of the order with respect to medical and like expenses was made.

8. A dissatisfied party may appeal to the Full Court of the Supreme Court against a determination or order made by a Supplementary Board whether made under the 1912 Act or under the 1981 Act (s.136 of the 1981 Act and s.3 of the Workers' Compensation and Assistance Amendment Act 1983 (W.A.)). The Full Court may exercise the same powers on appeal from a Board as it may exercise on appeal from a judgment or order of the Supreme Court or a Judge of the Supreme Court and the Full Court is empowered "to make such orders as it thinks fit with regard to the appeal ..." (s.137 of the 1981 Act and s.3(3)(b) of the 1983 Amendment Act). The jurisdiction conferred upon the Full Court is intended to be exercised judicially, not administratively, but the appeal is not an appeal in the strict sense. The Full Court rehears the matter, but it is not required to hear the matter de novo (cf. Builders Licensing Board v. Sperway Constructions (Syd.) Pty.Ltd. (1976) 135 CLR 616). The appeal is not limited to questions of law. However, where the order appealed from is discretionary, the Board has not misunderstood the evidence given before it and no further evidence is admitted, an error of principle affecting the exercise of the discretion must appear before the order can properly be set aside. That is the established practice of appellate courts (see House v. The King (1936) 55 CLR 499; Gronow v. Gronow (1979) 144 CLR 513) as distinct from administrative review tribunals which ordinarily exercise a discretion according to their own view of the merits of the case (Drake v. Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577, at p 589).

9. The respondent appealed to the Full Court against the order made by the Board on 23 June 1983. The Full Court allowed the appeal and set aside the Board's order of that date, and now this appeal is brought from the judgment of the Full Court. The circumstances which led the Full Court (Burt C.J., Wallace and Brinsden JJ.) to allow the appeal were twofold. First, their Honours noted that when the order was made on 23 June 1983 the appellant had the benefit of the second order made on 30 April 1982 and that the charges for his care and maintenance in the Applecross Nursing Home were covered by that order. Secondly, the appellant had been receiving an invalid pension pursuant to the Social Security Act 1947 (Cth). On 30 April 1982, the Board had found that his pension was $137.30 per fortnight. At that time, the appellant had been left with only $1.50 after he paid the amount due from him to the Applecross Nursing Home. Once freed of the burden of nursing home charges, as Brinsden J. observed, the appellant had his pension "available for other expenses as, for example, clothing, taxi fares on those occasions when he leaves the nursing home to reside for a weekend with his parents, and incidentals". The invalid pension was not shown to be insufficient to cover reasonable expenditure on these items. Their Honours concluded that the appellant had no need of further weekly payments to support himself. The order in respect of medical and like expenses supplemented by the invalid pension were sufficient for his needs.

10. The provisions of s.29(7)(aa) of the 1912 Act and of s.122 of the 1981 Act are similar in meaning and purpose to the provisions of s.51(4)(b) of the Workmen's Compensation Act 1917-1974 (S.A.) considered by this Court in Harrington v. Harrington (1981) 55 ALJR 566; 35 ALR 587. The discretion conferred by each of those provisions is to be exercised having regard to the circumstances of the case. In Harrington Gibbs C.J. said, at p.568:

" Speaking generally, therefore, the circumstances of the case which are relevant will not include those which relate to the manner in which the injury was suffered, the nature and consequences of the injury (except in so far as they establish that the workman is totally and permanently incapable of work) or the financial position of the employer. On the other hand, circumstances will be relevant if they tend to show that the maximum of $25,000 will provide inadequate compensation, particularly having regard to the age of the workman and to the amount of the weekly payment he would be entitled to receive under the Act, and also to the amount of any payments, allowances or benefits within the meaning of s.68 of the Act that the workman is likely to receive."

That view, to which Mason and Aickin JJ. assented and to which I assent, supports what was said by Burt C.J. in the Full Court:

" (A)ny circumstances which leads one to the conclusion that the prescribed amount will provide inadequate compensation must be relevant and I would think that in many cases such a circumstance will be that the worker by reason of his disability has been put to an additional expense".

11. But what is adequate compensation with which the prescribed amount is to be measured? In my opinion, the answer to that question must be found in the provisions of the Act which spell out a disabled worker's entitlements apart from the limitation effected by the reaching of the prescribed amount. There is no other measure to which the Board may have reference in making the comparison between adequate compensation on the one hand and the prescribed amount on the other. The common law measure of damages for personal injury is clearly not appropriate.

12. A defined purpose of the 1981 Act is the compensation of workers who suffer a disability (s.3(a)(i)) and the prima facie entitlement of a worker who suffers an incapacity resulting from a disability is a payment of compensation from the date of incapacity (s.21). When total incapacity results from a disability, the worker is, subject to cl.7(3) of the First Schedule, entitled to "a weekly payment during the incapacity equal to the weekly earnings of the worker calculated and varied in accordance with this Schedule": cl.7(1) of the First Schedule. The period during which weekly payments are payable ends when the incapacitated worker attains the age of 65 unless his disability occurred after he attained the age of 64: s.56. In the absence of an order under s.122, however, weekly payments cease when the prescribed amount is reached (cl.7(3)). The weekly payments to be made pursuant to cl.7(1) of the First Schedule are not calculated according to the financial needs of the incapacitated worker but according to his weekly earnings. The measure of compensation which the Act regards as "proper in the circumstances" for incapacity to earn resulting from disability is the worker's earnings as "calculated and varied" in accordance with the First Schedule, subject to cl.7(3). If the statute prescribes the rate of weekly payments during the period from the date of incapacity to the age of 65 as the appropriate measure of periodic compensation for total incapacity to earn subject to cl.7(3), the adequacy of the amount prescribed by cl.7(3) must be tested against that measure. The prescribed amount is not to be given effect by the Board if it stands in the way of adequate compensation.

13. The receipt of an invalid pension while a worker is not receiving weekly compensation payments is irrelevant to his entitlement to receive weekly payments. Neither the 1912 Act nor the 1981 Act provide that the statutory entitlement to compensation is affected by the receipt of a pension or of any other subvention from a party who is not the worker's employer. An invalid pension does not fall within s.68 of the South Australian Act to which Gibbs C.J. referred in the passage cited from Harrington. Moreover, the maximum rate of an invalid pension is subject to the income test prescribed by s.28(2) of the Social Security Act and weekly payments at the rate prescribed by cl.7(1) would ordinarily have the effect of disentitling a worker from receiving an invalid pension while he is receiving his weekly payments. It may be that weekly payments might be more than a totally incapacitated worker requires to meet his needs. But compensation is not based on needs; it is compensation for incapacity to work and earn. It would be wrong to exercise the discretion conferred by s.122 as though the incapacitated worker is entitled to no more than what might be thought to be sufficient for his needs. The Full Court was in error in taking the appellant's needs to be the critical factor and in posing the question whether the invalid pension, coupled with the order in respect of medical and like expenses would be sufficient to meet those needs. The relevant question was whether adequate compensation would be paid to the appellant if the making of weekly payments was precluded once the prescribed amount was reached. The answer to that question is clearly in the negative. But was the Board in error in disregarding the benefits which the appellant was entitled to receive under the order in respect of medical and like expenses made by the Board on 30 April 1982?

14. If an incapacitated worker receives weekly payments at the rate prescribed by cl.7(1) in addition to the benefit of an order covering the cost of his board and lodging in an institution, he might be better off financially than he would have been if he had not been incapacitated, for he would have had to bear that cost out of his own resources had he not been incapacitated. The Act makes no provision for reduced weekly payments to take account of the benefit that an incapacitated worker receives when his board and lodging are covered by payments made under an order in respect of medical and like expenses. But if an order made in respect of medical and like expenses (whether under proviso (c)(i) to cl.1(c) of the First Schedule to the 1912 Act or under cl.17 of the First Schedule to the 1981 Act) entitles an incapacitated worker in receipt of weekly payments to the benefit of free board and lodging, that consequence flows from statutory provisions which cannot be read so as to ensure that the cost of board and lodging falls on the worker. In the 1912 Act, the sum payable under proviso (c)(i) in respect of medical and like expenses is stated to be "in addition to the compensation payable under this clause", that is, in addition to the weekly payments at the rate prescribed by cl.1(c) of the First Schedule. In the 1981 Act, the sum payable under cl.17 of the First Schedule in respect of medical and like expenses is stated to be "(i)n addition to weekly payments of compensation payable". The 1912 Act and the 1981 Act equally prescribe that those sums, whatever they may be, should be paid cumulatively upon the prescribed weekly payments. Neither party submitted that the second order made by the Board on 30 April 1982 did not cover the cost of the appellant's board and lodging at the Applecross Nursing Home. Assuming that that order did ensure the benefit of free board and lodging for the appellant, the question is whether that benefit furnishes a ground for refusing to allow the continuance of prescribed weekly payments after the prescribed amount was reached. Although the discretion is conferred upon the Board in general terms, it must be exercised in accordance with any policy that inheres in the statute. Assuming that an order in respect of medical and like expenses confers the benefit of free board and lodging, the policy of the statute is that the appropriate measure of compensation for a totally incapacitated worker who is entitled to such an order extends to free board and lodging in addition to weekly payments. The discretion to allow that measure of compensation to continue after the prescribed amount is reached cannot be exercised adversely to the worker on the ground that the statutory policy is too generous to him and too onerous upon his employer.

15. It was submitted that, when the prescribed amount is reached, a radical alteration of a worker's entitlements under the statute occurs. In one sense, that is clearly right: the statutory entitlement to weekly payments ceases unless an order is made. But it would not be right, in my opinion, to construe the statute as empowering the Board to refuse or to cut back the compensation to which an incapacitated worker is otherwise entitled merely because his incapacity for work has continued for so long that the prescribed amount is reached. In my opinion, the function of the prescribed amount is no more than this: once that amount is reached, the worker must make an application to the Board and satisfy it that he is so incapacitated that he would be entitled to further compensation as prescribed by the statute if the reaching of the prescribed amount is disregarded. The Board's satisfaction as to that matter is interposed as an administrative check upon the continuance of compensation payments. When the worker satisfies the Board that the prescribed amount will provide inadequate compensation - inadequate according to the statutory measure apart from the prescribed amount - he is entitled to an order which permits the continuance of his weekly payments under the statute. The prescribed amount may be likened to the maximum amount considered in Harrington which I regarded, at p.573, as "a provisional maximum, effective until the workman applies for an order fixing a greater amount and satisfies the court that a greater amount should be fixed in the circumstances of his case".

16. There can be no doubt as to the worker's permanent and total incapacity in this case and no doubt as to his entitlement to an order either under proviso (c)(i) to cl.1(c) of the First Schedule to the 1912 Act or under cl.17 of the First Schedule to the 1981 Act. If an order under s.29(7)(aa) of the 1912 Act or under s.122 of the 1981 Act or under both those provisions had not been made by the Board, he would not be entitled to adequate compensation. It follows that there was no error of principle which warranted the Full Court's setting aside of the Board's order of 23 June 1983. I would allow the appeal, set aside the judgment of the Full Court and in lieu thereof the appeal to that Court should be dismissed. The appellant is entitled to his costs here and below.

DAWSON J. I agree with the judgment of Brennan J. and I do not desire to add anything.

Orders

Appeal allowed with costs.

Set aside the order of the Full Court of the Supreme

Court of Western Australia and in lieu thereof order that the appeal to that Court be dismissed with costs.