Evans v OTC/Telstra Pty Ltd

[1998] NFSC 2

SUPREME COURT OF NORFOLK ISLAND

WORKERS’ COMPENSATION – assessment and amount of compensation – appeal from determination of Employment Tribunal – whether claim for lump sum compensation can include specific amount to compensate for loss of amenities and of enjoyment of life, in addition to the lump sum otherwise calculated in accordance with Employment Act 1988.

Employment Act 1988 ss 28, 30, 31, 32, 43

Teubner v Humble (1963) 108 CLR 691, cited.

ARTHUR EVANS  V  OTC/TELSTRA PTY LTD

SC 3 OF 1998

JUDGE:        BEAUMONT CJ.
PLACE:        SYDNEY (Heard on Norfolk Island)
DATE:          4 SEPTEMBER 1998

IN THE SUPREME COURT
OF NORFOLK ISLAND	SC 3 OF 1998

BETWEEN:	ARTHUR EVANS APPELLANT
AND:	OTC/TELSTRA PTY LTD RESPONDENT
JUDGE:		BEAUMONT CJ.
DATE OF ORDER:		4 SEPTEMBER 1998
WHERE MADE:		SYDNEY

ORDERS:

1. The appeal is dismissed with costs.

IN THE SUPREME COURT  No. SC 3 of 1998

Of NORFOLK ISLAND

IN THE MATTER of an appeal pursuant to section 91 of the Employment Act 1988

BETWEEN:  ARTHUR EVANS

Appellant

AND:             OTC/TELSTRA PTY LTD

Respondent

REASONS FOR JUDGMENT

BEAUMONT CJ:

INTRODUCTION

This appeal from a determination of the Employment Tribunal raises an important question of law as to the meaning and operation of Part III (ss 26-47) of the Employment Act 1988 (“the Act”).  Part III deals with compensation for work-related accidents.  In the present case, a claim for lump sum compensation seeks to include a claim for a specific amount to compensate for loss of amenities AND of enjoyment of life, in addition to the lump sum otherwise calculated in accordance with the Act.  The question for determination, one of law, is whether, on the true construction of the Act, such an additional claim is open

The provisions of Part III that are presently relevant, are as follows:

Section 30(1), in dealing generally with compensation, provides:

“30.     (1)       Where an employee suffers incapacity the employer shall pay to the employee periodical compensation in accordance with this section.”

Section 28(1), in dealing with the meaning of “incapacity”, defines “incapacity” to include –

“(a)     Personal injury by reason of a work-related accident… suffered by an employee as a result of which there is a loss or diminution of the employee’s capacity to earn”. [Emphasis added]

Section 28(2) provides:

“(2)     For the purposes of subsection (1), the physical and mental consequences of personal injury referred to in paragraph (1)(a), or of a work-related accident, constitute incapacity in relation to an employee where, as a result of those consequences, there is a loss or diminution of the employee’s capacity to earn.”

Section 28(3), which is central to the appellant’s present argument, provides:

“(3)     Loss of amenities and of enjoyment of life because of permanent loss or impairment of a bodily or mental function of an employee by reason of an occurrence or condition specified in subsection (1) constitutes incapacity for the purposes of this Part, whether or not the loss or impairment results in a loss of diminution of the employee’s capacity to earn.” [Emphasis added]

Sections 30(3) and (6), in dealing with compensation for partial incapacity, provide:

“(3)     A reference in this section to partial incapacity, in relation to an employee, is a reference to diminution, whether temporary or permanent, of the employee’s capacity to earn by reason of the incapacity of the employee. [Emphasis added]

…

(6)        Where an employee suffers partial incapacity compensation shall be paid at a rate calculated in accordance with subsection (4) as if the employee had suffered total incapacity, less the proportion of that rate that is equal to the proportion by which the employee’s capacity to earn is not affected by the incapacity.”

(Section 30(4) provides for compensation for total incapacity.)

Section 30(8) provides:

“(8)     Compensation under this section is not payable –

(a)after the date of death of an employee;  or

(b)in respect of a period after the expiration of 2 years from the commencement of a period of incapacity, [Emphasis added]

whichever first occurs.”

Sections 31(1) and (2), in dealing with compensation for permanent loss or impairment of function, provide:

“31.     (1)       Where an employee suffers incapacity within the meaning of subsection 28(3), the employer shall pay to the employee lump sum compensation in accordance with this section.

(2)Compensation under this section –

(a)is payable in addition to any other compensation payable in accordance with this Part;

(b)subject to paragraph (c), shall be an amount calculated in accordance with section 32;  and

(c)shall not exceed the prescribed amount.”

[The “prescribed amount” at the time was $116,637.]

Section 32 (which is also central to the appeal) in dealing with the assessment of permanent loss or impairment of function, provides:

“32.     (1)       Subject to subsection (2), where an employee who suffers incapacity does not completely recover from the incapacity –

(a)the Medical Superintendent;  or

(b)in the case of an employee not ordinarily resident in Norfolk Island – a person appointed by instrument in writing signed by the executive member,

shall make an assessment of the employee in order to ascertain whether the employee has suffered permanent loss or impairment of bodily or mental function within the meaning of subsection 28(3) and the percentage, if any, of the loss of impairment. [Emphasis added]

(2)        An assessment under subsection (1) shall be undertaken when the Medical Superintendent, or, where paragraph (1)(b) applies, a person referred to in that paragraph, considers that the degree of incapacity suffered by the employee has stabilised.

(3)An assessment under subsection (1) shall be in writing and shall –

(a)set out the nature and percentage of the permanent loss or impairment of function, if any;  and

(b)be served on the employer and employee.

(4)In making an assessment under this section –

(a)regard shall be had to – [Emphasis added]

(i)the Schedule, so far as it is applicable;  and

(ii)the tables of relative impairment set out in the work entitled Guides to the Evaluation of Permanent Impairment prepared by the Committee of the American Medical Association on Rating of Mental and Physical Impairment and as last published by the Association, so far as applicable to permanent loss or impairment of a bodily or mental function;  and

(b)regard may be had to reports or advice obtained from another medical practitioner or person practising a specialty referred to in subparagraphs (a)(ii) to (viii) of the definition of ‘medical treatment’ in subsection 26(1). [Emphasis added]

(5)        Subject to subsections (6) and (7), an assessment made under this section of the percentage of permanent loss or impairment of function suffered by an employee entitles the employee to payment of lump sum compensation, in accordance with section 31, of an amount equal to that percentage of the amount prescribed under paragraph 31(2)(c).

(6)        An employee is not entitled to lump sum compensation under section 31 where –

(a)the percentage specified in an assessment made under this section is 2% or less;  or

(b)the employee has been given a notice in writing signed by the employer requiring the employee to attend for assessment under this section at a time and place specified in the notice, and the employee has failed or refused to attend without reasonable excuse.

(7)        Where the percentage specified in an assessment made under this section is 90% or more, the employee in relation to whom the assessment was made is entitled to be paid an amount equal to the amount prescribed under paragraph 31(2)(c).

(8)       For the purposes of sections 76 and 85, the preparation under this section of an accurate and reasonable assessment is an act required by this Act to be done.”

(Section 76 deals with the powers of the Employment Conciliation Board on the lodging of a complaint.  Section 85 deals with the powers of the Employment Tribunal [“the Tribunal”] to make orders.  Although mentioned in the course of the appellant’s arguments, nothing appears to turn on them, or on s 32(8) for present purposes.)

Items 34 and 35 of the Schedule provide:

“34.     Lumbar spine

(a)Mild to moderate persistent muscle spasm with pain, with moderate degenerative lipping revealed by x-ray

(b)Fracture:

(i)Vertebral compression 25%, 1 or 2 adjacent vertebral bodies, little or no fragmentation, no definite pattern or neurologic changes

(ii)Vertebral compression 50%, 1 or 2 adjacent vertebral bodies, little or no fragmentation, no definite pattern or neurologic changes

(iii)In cases similar to those mentioned in subparagraph (ii), but with successful fusion, mild pain

35.Neurogenic low back pain – disc injury

(a)Surgical excision of disc, no fusion, good result, no persistent sciatic pain

(b)Surgical excision of disc, no fusion, moderate persistent pain and stiffness aggravated by heavy lifting with necessary modification of activities

(c)Surgical excision of disc with fusion, activities of lifting moderately modified

(d)Surgical excision of disc with fusion, persistent pain and stiffness aggravated by heavy lifting necessitating modification of all activities requiring heavy lifting.”

Section 43(1), in providing that compensation under Part III is in substitution for other claims, provides:

“43.     (1)       Subject to subsection (3) [which is presently immaterial], where an employee –

(a)       suffers incapacity;

(b)would have suffered incapacity but for the fact that the employee did not suffer a loss or diminution of the employee’s capacity to earn;  or

(c)dies as a result of an occurrence or condition specified in subsection 29(1),

no proceedings for damages or compensation arising directly or indirectly out of –

(d)an injury or condition out of which the incapacity arose;

(e)an injury or condition out of which incapacity would have arisen had the employee suffered a loss or diminution of the employee’s capacity to earn;  or

(f)a death as a result of an occurrence or condition specified in subsection 29(1),

shall be heard or determined except in accordance with this Act, whether instituted by the employee or another person, and whether under a rule of law, enactment or law in force in Norfolk Island. [Emphasis added]

…

(8)        It is the intention of the Legislative Assembly that compensation payable under this Act in respect of incapacity or death arising out of, or in the course of, employment is to be in substitution for damages recoverable or payable in respect of the incapacity or death whatever the cause of action or basis of liability and whether the cause of action is actionable at the suit of, or the liability is enforceable by, a person suffering incapacity or some other person.” [Emphasis added]

BACKGROUND
The applicant has appealed from a determination of the Tribunal to award him lump sum compensation in an amount of $17,495.55 pursuant to s 31(1) of the Act.  In assessing this lump sum, the Tribunal ruled that, on the true construction of the Act, no separate allowance could be awarded for any loss of amenities.

There is no dispute about the primary facts.  The appellant suffered a lower back injury in a work-related accident in the course of his employment with the respondent.  The appellant received periodic compensation under s 30 of the Act for the maximum statutory period of two years.  An assessment of 15 per cent permanent loss or impairment of function pursuant to s 32 was made by Dr Fletcher, a Medical Superintendent.  As has been noted, no separate allowance was made for loss of amenities.  The Tribunal accepted that Dr Fletcher’s assessment, i.e. 15 per cent of the prescribed amount of $116,637, viz $17,495.55, but rejected the appellant’s separate claim for loss of amenities.

The grounds of the appeal

Under s 92(1) of the Act, this Court has general jurisdiction to hear and determine an appeal on any question, whether of fact or law.  However, as has been said, the primary facts were not in contention.  The grounds of appeal, upon analysis, in truth raise for consideration only one question, a legal question, and that is, as previously stated, whether a claim for lump sum compensation can include a specific amount to compensate for loss of amenities and of enjoyment of life, in addition to the lump sum otherwise calculated in accordance with the Act.

On behalf of the appellant, Mr Cook Q.C., made the following submissions:

• Insofar as it deals with compensation, the Act should be construed beneficially to employees.

• It is clear from the language of s 28(3) that the Act recognises damage in the form of loss of amenities.

• The common law recognises loss of amenities as a item of damage separate from, and irrespective of, any economic loss.

• Although regard may be legitimately had to the factors specified in s 32, they are not, on the true construction of the Act, to be interpreted in any exclusive sense in the making of an assessment of compensation.

Conclusions on the appeal

I have difficulty accepting the appellant’s argument.

It is, of course, true that, in a claim for compensation for personal injury, the general law recognises “loss of amenities” as a legitimate item of damage in its own right.  This head of damage is intended, at common law, to give recompense for the mental suffering and feelings of frustration that result from the victim’s inability to take part in activities [see Teubner v Humble (1963) 108 CLR 491 per Windeyer J, at 506-8; R.P. Balkin, JLR Davis, Law of Torts at 381-2].  That is to say, at common law such an intangible loss is taken into account in assessing “general damages” [see P.S. Atiyah, Accidents, Compensation and the Law at 203].

It is also true that s 28(3) mentions loss of amenities and of enjoyment of life, but the language of that provision refers to such a loss for a specific purpose only, that is, to deem an incapacity to exist even where there is no reduction in earning capacity, if there is a permanent loss or impairment of function.  It is significant, in this respect, that s 28(3) is located in a provision dealing with the statutory meaning of “incapacity”, whereas compensation and its assessment are dealt with in subsequent provisions, notably in ss 31 and 32.

If there were any doubt that s 28(3) does no more than deem any incapacity to exist, that doubt is removed by reference to the explanatory memorandum accompanying the Act.  The memorandum states [clearly with reference to s 28(3) at p 11] that “compensation is payable for permanent loss of function even if the loss or impairment does not result in a loss or diminution of the employee’s capacity to earn”.  Earlier, under the heading “Compensation for permanent loss of function”, the memorandum states [again clearly by reference to s 28(3) as picked up by s 31(1) at p 10]:

“An employee is entitled to compensation for permanent loss of function – that is the loss of amenities and of enjoyment of life because of permanent loss or impairment of a bodily or mental function by reason of a personal injury by reason of a work-related accident…” [emphasis added].

As has been noted, s 31(1) picks up s 28(3), with the consequence that a “deemed” incapacity, within the meaning of s 28(3), will give rise to a statutory obligation to pay lump sum compensation.  The amount of that lump sum, as s 31(2) prescribes, is to be calculated in accordance with s 32.  In other words, whilst s 28(3) provides a basis or platform for qualification for lump sum compensation, it does not bear upon the manner of calculation of such compensation.  That is done by s 31 alone.  And there is nothing in s 31, express or implicit, to suggest that loss of amenities should be the subject of a free-standing award of compensation.  What is required by ss 31 and 32, and all that is required, is an assessment of the percentage loss of impairment of function, which in accordance with the terms of s 32(5), entitles the employee to that percentage of the prescribed amount.

In my opinion, as a matter of construction of Part III, whether looked at as a whole purposively as a scheme, or considered in its terms literally, the conclusion is inevitable that although a loss of amenities may import incapacity and thus qualify an employee to claim a lump sum, such a loss cannot be the subject of a free-standing separate claim for an amount of compensation, or be otherwise taken into account in calculating or increasing the amount of the lump sum compensation payable.  That amount must be calculated in accordance with ss 31 and 32, which operate as an exclusive code in this area.  This was, in essence, the approach taken by the Tribunal.

The appeal must be dismissed, with costs.

I certify that this and the preceding eight (8) pages are a true copy of the Reasons for Judgment herein of the Honourable Chief Justice Beaumont

Associate:

Dated: 4 September 1998

Counsel for Applicant:	A. Cook QC
Counsel for Respondent:	G. Gray
Date of Hearing:	24 and 25 August 1998
Date of Judgment:	4 September 1998