FAI General Insurance Co Ltd (De-Registered) v Goulding - [2004] WASCA 167

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE FULL COURT (WA)

CITATION: FAI GENERAL INSURANCE CO LTD (De-Registered) -v- GOULDING [2004] WASCA 167

CORAM: MURRAY J
STEYTLER J
TEMPLEMAN J

HEARD: 13 MAY 2004

DELIVERED : 9 AUGUST 2004

FILE NO/S: FUL 49 of 2003

BETWEEN: FAI GENERAL INSURANCE CO LTD (De-Registered)
Appellant (Respondent)
AND
KAREN GOULDING
Respondent (Appellant)

Catchwords:

Workers' compensation - Interpretation of definition of "disability" - Stress related disease - Depression - Whether aggravation excluded from compensation

Legislation:

Workers' Compensation and Rehabilitation Act 1981 (WA), s 5(1), "disability", s 5(4)

Result:

Appeal dismissed

Category: A

Representation:

Counsel:

Appellant (Respondent) : Mr G R Hancy
Respondent (Appellant) : Mr B L Nugawela

Solicitors:

Appellant (Respondent) : Jackson McDonald
Respondent (Appellant) : Friedman Lurie Singh & D'Angelo

Case(s) referred to in judgment(s):

Canale v Commissioner of Main Roads (1982) 1 WCR (WA) 163

Case(s) also cited:

Nil

MURRAY J: I have had the advantage of reading in draft the reasons of Steytler and Templeman JJ. Their Honours' disagreement concerns the proper interpretation of the definition of "disability" in s 5(1) of the Workers' Compensation and Rehabilitation Act 1981 (WA) relative to the facts of this case.
The essential facts may be shortly stated by reference to the findings of the review officer. In May 1997, the respondent contracted the illness which was described as a major depression, a stress reaction syndrome. That was a "disease" as that term is defined in s 5(1) of the Act to include:
" … any physical or mental ailment, disorder, defect, or morbid condition whether of sudden or gradual development."
The cause of the disease was found to be a stress reaction to disciplinary processes to which the respondent had been subjected in her employment a few days before the diagnosis was made by the respondent's general practitioner, Dr Thomas. The review officer concluded that the disciplinary process to which the respondent had been subjected in her employment by the appellant was not unreasonable or harsh. The correctness of that finding is rightly not disputed by the respondent. Its significance will shortly emerge.
Dr Thomas treated the respondent for her depression while she continued at work, making no claim for compensation. Medication was prescribed and over the next few months her condition improved. On 26 November 1997, the respondent was, however, incapacitated for work by her illness which appears to have been aggravated or exacerbated in its symptoms by her reaction to stressful events at work, her incapacity to cope with an increasing workload made worse by a difficult to resolve computer failure. She "snapped" and ceased work.
She claimed workers' compensation. The claim was opposed by the appellant. Conciliation processes under the Act did not resolve the dispute, which was referred to a review officer. The review officer conducted a hearing, as a result of which the respondent's claim was rejected, essentially on the ground that what occurred to her in November 1997 was, as the review officer described it, a "mere recurrence" of a disease which was not compensable.
The respondent appealed to a compensation magistrate's court. That appeal succeeded and the case was referred back to the review officer for further consideration. This appeal is now brought from the compensation magistrate's court by the appellant, the respondent's employer, on a question of law, the proper interpretation of the definition of "disability" in the circumstances of this case.
By s 18 of the Act:
"If a disability of a worker occurs, the employer shall, subject to this Act, be liable to pay compensation … ."
It is evident therefore that what is compensable is that which is described by the Act as a "disability". That term is defined in s 5(1):
"'disability' means —
(a)a personal injury by accident arising out of or in the course of the employment, or whilst the worker is acting under the employer’s instructions;
(b)a disabling disease to which Part III Division 3 applies;
(c)a disease contracted by a worker in the course of his employment at or away from his place of employment and to which the employment was a contributing factor and contributed to a significant degree;
(d)the recurrence, aggravation, or acceleration of any pre-existing disease where the employment was a contributing factor to that recurrence, aggravation, or acceleration and contributed to a significant degree; or
(e)a disabling loss of function to which Part III Division 4 applies,
but does not include a disease caused by stress if the stress wholly or predominantly arises from a matter mentioned in subsection (4) unless the matter is mentioned in paragraph (a) or (b) of that subsection and is unreasonable and harsh on the part of the employer."
It will be seen that the word "disease", a term itself defined by the Act, as I have already noted, appears in pars (b), (c) and (d) of the definition. So far as par (d) is concerned, I agree with Templeman J that a "pre‑existing disease" is one which exists before the recurrence, aggravation or acceleration which will constitute the compensable disability, if causally related to the employment in the manner described by par (d). This paragraph is not, I think, limited to making compensable a disease which existed before the employment. But what is noteworthy about par (d) is that, unlike the situation under pars (b) and (c), where the disability is the disease, the disability under par (d) is the recurrence, aggravation or acceleration of the pre‑existing disease. Under par (d) there is a distinction between the disease and the disability and it is not the disease which constitutes the disability which is or may be compensable under the Act.
It is then necessary in this case to attend to the disqualifying circumstance to which the final part of the definition refers and it is necessary to set out the terms of s 5(4):
"For purposes of the definition of “disability”, the matters are as follows —
(a)the worker’s dismissal, retrenchment, demotion, discipline, transfer or redeployment;
(b)the worker’s not being promoted, reclassified, transferred or granted leave of absence or any other benefit in relation to the employment; and
(c)the worker’s expectation of —
(i)a matter; or
(ii)a decision by the employer in relation to a matter,
referred to in paragraph (a) or (b)."
As a matter of fact, this disease, the depressive illness, was found to have been caused by stress. That stress was found to have arisen wholly or predominantly from discipline in the course of the employment, one of the matters mentioned in s 5(4)(a). Further, as has been seen, that discipline was found not to have been unreasonable or harsh on the part of the employer.
The disease which was the depressive illness could not therefore be a disease constituting a disability within the meaning of par (c) of the definition. Although the terms of par (c) of the definition could obviously be satisfied in this case, because the disease was contracted by the respondent in the course of her employment at her place of employment and it was causally related to the employment in the way required, it was an excluded disease caused by stress in the circumstances described in the concluding portion of the definition. Therefore, if it had been the case that the respondent was initially incapacitated for work in May 1997, she could not then be said to have suffered a disability within the meaning of the Act which might be compensable under its terms.
To this point it would appear to be clear that the policy of the Act, to which its terms give effect, is to extend the concept of compensable disability to any work‑caused disease contracted in the course of the employment, whether at or away from the place of employment, provided that a disease caused by stress cannot constitute a compensable disability if the stress itself results from what may be described as the management processes referred to in s 5(4), unless those processes of the employer are seen to be unreasonable and harsh. (This case, of course, requires no consideration of the question whether the word "and" in that context actually means "or").
It is to be noted, however, that work‑related disease which is caused by stress will not be excluded from constituting a compensable disability unless the stress wholly or predominantly arises from a matter mentioned in s 5(4). That subsection, read with the definition of "disability", would therefore not exclude work‑related disease caused by stress arising simply out of the fact that the work itself is stressful.
The question which then arises relative to this case, when one turns to par (d) of the definition of "disability", is whether the disqualifying portion of the definition of "disability" is to be applied to a "pre‑existing disease" referred to in par (d). In my opinion, that is not the case.
The definition provides that the term "disability" means a disease in two cases, those referred to in pars (b) and (c), but does not include a disease in the circumstances described by the concluding words of the definition. In these cases therefore, the definition is so constructed that a disability may be a disease in nominated circumstances, but does not include a disease in certain more confined circumstances which constitute a subset of diseases of the kinds more generally described in pars (b) and (c) of the definition.
But that is not the way par (d) of the definition is constructed. In that case, the disability is not the disease itself, but the recurrence, aggravation or acceleration of a pre‑existing disease. It is the recurrence, aggravation or acceleration which must be causally related to the employment in the way described by the paragraph. The disease itself need have no causative relationship to the work. It simply has a prior existence. That being the case, it is to my mind inappropriate to apply the work‑related

exclusions in the concluding portion of the definition to the pre‑existing disease referred to in par (d) of the definition. All that is necessary in relation to that pre‑existing disease is that it is a "disease" as widely defined in s 5(1).

In my view, that construction of the definition is supported by the fact that under par (d) it is the work‑caused recurrence, aggravation or acceleration of the pre‑existing disease which constitutes the compensable disability, not the disease itself. And so the policy of the Act does not at that point require to exclude from the pre‑existing disease, a disease which would not be directly compensable for the reasons discussed above. It is consistent with that policy that a disease which, as in this case, would not itself have been compensable because of the circumstances of its contraction, may produce a compensable disability by way of work‑caused recurrence, aggravation or acceleration of the disease.
I note that in this case there appears to be no doubt, on the findings of the review officer, that the aggravation of the disease which finally incapacitated the worker was contributed to by the employment to a significant degree, by the combination of increasing workload and the difficult to resolve computer failure.
It follows that I would dismiss the appeal. That would leave intact the order of the compensation magistrate's court that the respondent's claim for compensation be remitted to the review officer for further consideration; to be further dealt with according to law.
STEYTLER J: As appears from the judgment of Templeman J, which I have had the advantage of reading, the respondent worker had, by 23 May 1997, developed symptoms indicative of a major depression. Depression is a "disease" as defined in s 5(1) of the Workers' Compensation and Rehabilitation Act 1981. That disease was contracted by the respondent while she was employed by the appellant. Her employment with the appellant was a contributing factor to the contraction of the disease and it contributed, in that regard, to a significant degree. However, the disease was not a "disability" under the definition of that term in s 5(1) of the Act and, hence, no compensation was payable in respect of it. That is because, while it fell within subs (c) of the definition ("a disease contracted by a worker in the course of his employment … to which the employment was a contributing factor and contributed to a significant degree"), it also fell within the exclusionary words of the definition, which provide that a "disability":

"… does not include a disease caused by stress if the stress wholly or predominantly arises from a matter mentioned in subsection (4) unless the matter is mentioned in paragraph (a) or (b) of that subsection and is unreasonable and harsh on the part of the employer".

The matters mentioned in s 5(4) are:
"(a)the worker's dismissal, retrenchment, demotion, discipline, transfer or redeployment;
(b)the worker's not being promoted, reclassified, transferred or granted leave of absence or any other benefit in relation to the employment; and
(c)the worker's expectation of -
(i)a matter; or
(ii)a decision by the employer in relation to a matter,
referred to in paragraph (a) or (b)."
The respondent's depression had been caused by stress. That stress had wholly or predominantly arisen from a matter mentioned in s 5(4)(a), being the disciplinary measures imposed upon the respondent (and her consequential fear of dismissal). Those disciplinary measures had been neither unreasonable nor harsh on the part of the appellant.
The respondent consulted her general practitioner, Dr Joseph Thomas, about her depression. He prescribed antidepressant medication and over the next few months her condition improved. Then, on 26 November 1997, she "snapped" at work (as Dr Thomas put it in his report dated 30 January 1998) as a result of increasing workloads and a recent computer failure that had not been resolved. Her previous symptoms returned and she was certified unfit to return to work. She claimed workers' compensation, but the appellant rejected her claim. The dispute between the appellant and the respondent was referred to a Review Officer.
Although the issue between the parties had not been argued quite in that way, the Review Officer treated it as being that of whether the respondent had suffered a "disability" within the meaning of subs (d) of the definition of that word in s 5(1). That subsection provides that one of the forms of "disability" for the purposes of the Act is:
"the recurrence, aggravation, or acceleration of any pre‑existing disease where the employment was a contributing factor to that recurrence, aggravation, or acceleration and contributed to a significant degree …".
The Review Officer was not satisfied, on the balance of probabilities, that the respondent had "suffered a recurrence, aggravation or acceleration of [her] depression to the extent that it is a separate disability within the meaning of section 5 of the Act". She said, in this respect, that (par 184 of her reasons):
"There is therefore a question whether the … [respondent's] condition on 26 November 1997 could be seen as a separate disability in its own right, within the definition of disability in Section 5(d) [sic] of the Act, as alleged by the … [respondent], or whether it can be seen as a 'mere' recurrence of a condition in respect of which she sought treatment on 23 May 1997. In the case of Canale v Commissioner of Main Roads (Workers' Compensation Board of Western Australia, application 50/59) N W Mews, Chairman, stated at page 164:
'Considerable confusion often arises as to what is a recurrence of an old injury, and what should be regarded as a new injury. It is not possible to lay down any rule to completely answer the problem in the multitudinous circumstances from which it arises. Generally however, I would say that an injury or condition recurred where it flared up either spontaneously or because of the ordinary stresses and strains of living and working, and that any consequent incapacity would be related to the original accident. On the contrary, even though the first injury left a weakness, even a great weakness and a potential site of trouble, where that trouble is precipitated by a new incident of an accidental nature such as could well originate trouble in its own right, then that trouble should be regarded as a new injury from which the later incident is the direct cause.'"
She then went on to consider the evidence which had been given by Dr Thomas, and also that of other medical practitioners, as follows (pars 185 ‑ 187 of her reasons):
"In this case, the reports of Dr Thomas show that the … [respondent] continued to suffer symptoms relating to her depression between May and November 1997. The … [respondent] said in her evidence that her symptoms of tearfulness, headaches, vomiting and diarrhoea had probably not started until September 1997, although she had tearfulness occasionally before May 1997. She had feelings of nausea, headaches and feeling upset occasionally from May 1997 but it increased from about June 1997 when they introduced the personal computers. She had attributed the overall work situation to her symptoms in May 1997. She also said that by June 1997 she started a downhi1l slide and was losing the power of concentration. Her evidence was also that the workloads were excessive throughout this period. Throughout this time she also told Dr Thomas that she was applying for other positions between May to December 1997. She did this because she didn't think she had a future with … [the appellant].
Dr Thomas, in his report of 8 February 1999, states that the … [respondent] suffered an exacerbation of her depressive symptoms in November 1997 as a result of work stresses. He states that … [the respondent's] psychological and emotional condition did arise from her employment with … [the appellant] and that her employment did significantly contribute to the onset of her condition. … By 26 September 2001 Dr Thomas states that the symptoms of depression were caused during the course of her employment with [the appellant], and there was no specific trigger in the form [of] a critical incident, true work trauma, dangerous or toxic work environment, and that the … [respondent] had mentioned several factors including pressure at work, disagreements with her supervisor, allegations about the standard of her work, and a stressful meeting with her superiors on 20 May 1997. He states that her depressive symptoms had manifested itself [sic] partly as a result of receiving criticism about her work culminating in discipline, but it was not the only factor.
Dr Febbo first saw the … [respondent] on 20 and 27 January 1998. He took a detailed history from … [her]. I note that the … [respondent] told Dr Febbo that her depressive symptoms had cleared up by May/June 1997. It appears to me that this is clearly not the case, given the history set out in Dr Thomas' notes and reports and the … [respondent's] own evidence. Therefore, as Dr Febbo is to some extent relying on the subjective presentation by … [the respondent] and as the history as given to him appears to have been inaccurate, I tend to discount his opinion as to causation and the exacerbation or aggravation in November 1997. Further, the report of Dr Finlay‑Jones dated 11 December 1999 does not in my view add anything of value for the applicant in relation to the causation issue, and neither does the report of Dr Tannenbaum, who saw her almost three years after the alleged date of disability."
The Review Officer then went on to conclude, in par 188, that she was:
"… not satisfied on the balance of probabilities that the … [respondent] suffered a recurrence, aggravation or acceleration of depression to the extent that it is a separate disability within the meaning of section 5 of the Act. I find that the … [respondent's] condition in November 1997 was a continuation of, and 'mere' recurrence of the depression from which she had been suffering since May 1997."

She said that, as that depression had been found to have been predominantly caused by excluded factors, the application must fail.
The respondent appealed against that decision to a Compensation Magistrate. The appeal lay pursuant to s 84ZN(2) of the Act, which provides for an appeal of that kind where a question of law is involved.
So far as is material to this appeal, the grounds of appeal to the Compensation Magistrate contended, in effect, that the Review Officer had applied the wrong test in deciding that the respondent's "disability" (presumably a reference to the respondent's depressive illness) had not been aggravated by events in the course of her employment with the appellant which occurred after the depressive illness had been contracted. The test in Canale v Commissioner of Main Roads (1982) 1 WCR (WA) 163, referred to by the Review Officer, was said to be inapplicable to the question whether there had been an aggravation of a pre‑existing disease as opposed to that of whether or not there had been a "new" injury for the purposes of par (a) of the definition of "disability".
That contention was upheld by the Compensation Magistrate. He said, in that respect, the following (par 22 of his reasons):
"With respect, however, it also seems to me that to invoke Canale's case in the context of the enquiry the review officer was making was, to say the least, unhelpful. In 1959, when that case was decided, liability to pay compensation arose (otherwise, of course, than in cases involving losses covered by the Second Schedule, and certain specified industrial diseases) if personal injury by accident arising out of or in the course of the worker's employment, or whilst the worker was acting under the employers instructions, was caused to a worker - see Section 7 of the Workers' Compensation Act, 1912‑1956. The legislation then was concerned, generally speaking, with 'injury by accident' (a concept involving a physiological change at a fixed point in time) and not with 'disability', and there was certainly nothing in the legislation equivalent to paragraphs (c) and (d) of the definition of 'disability' found in the Act today. To the extent that Canale's case remains relevant, it must be, I would have thought, in the context only of paragraph (a) of the definition of 'disability'."
He went on to say (pars 25 to 27 of his reasons) that:
"The question for the review officer was whether there had been in November a recurrence, aggravation or acceleration of a pre‑existing disease where the appellant's employment had been a contributing factor and had contributed to a significant degree. Given the existence of a pre‑existing disease (ie, the depression found by the review officer to have been contracted by the appellant in May), contributed to by the appellant's employment to a significant degree, then the review officer had to determine whether, in November, there had been (with acknowledgements to the Macquarie and Oxford English Dictionaries, whose definitions I paraphrase):
i)A return or renewal of, or reversion to, a state of depression;
ii)An increase in the intensity, severity, gravity or seriousness of the appellant's depression; or
iii)A quickening or hastening of the development of the appellant's depression.
The review officer might have disposed of the first possibility (and perhaps even the second and third possibilities) by her finding of fact that there had been a 'continuation' of the appellant's depression between May and November, which finding seems incompatible with a return or reversion to a previously existing state. Unfortunately, the finding is clouded somewhat by the conjoined notion of a 'mere' recurrence. While I understand that two concepts were being distinguished, it does seem odd, on the face of things, to say of something that it was not a recurrence (within the meaning of Section 5) because it was a 'mere' recurrence (within the meaning, presumably, of Canale's case). More importantly, it seems to me that attention to Canale's case may have caused the review officer to have focused on 'recurrence' at the expense of 'aggravation' and 'acceleration'.
In short, in my opinion, Canale's case had no part to play in the deliberations required of the review officer, and these grounds of appeal should be upheld. That result requires that the matter be remitted to the review officer for further consideration."
There is only one ground of appeal advanced in the appeal to this Court against the decision of the Compensation Magistrate, the appeal having been made, by leave, under s 84ZW of the Act. That ground is to the effect that the Compensation Magistrate erred in law in failing to hold that the depression from which the respondent suffered in November 1997 was found by the Review Officer to be a continuation of that from which she had suffered in May 1997, which was predominantly caused by discipline and the expectation of dismissal, and was therefore not a disability for the purposes of the Act.
In my opinion, this ground of appeal should succeed.
The respondent was able to make good her claim for compensation only if she could bring herself within par (d) of the definition of "disability", it being common cause that no other paragraph of that definition applies. It seems to me that the Review Officer correctly found that the respondent had failed to do so.
There is no challenge to the conclusion that the depression contracted by the respondent by 23 May 1997 was caused by stress which wholly or predominantly arose from disciplinary measures, which were neither unreasonable nor harsh, imposed on the respondent by the appellant. There could consequently be no challenge to the conclusion (and there is none) that, when regard is had for the concluding words of the definition to which I have earlier referred, that disease (I have said that the depression fell within the definition of that word in s 5(1)) was not a "disability" for the purposes of the Act and was consequently not compensable under the Act.
Equally, it seems to me, if, when the disease recurs or has been aggravated or accelerated, it is still correctly categorised as one which is caused by stress which wholly or predominantly arises from one of the matters mentioned in s 5(4), not being a matter mentioned in subs (4)(a) or subs (4)(b) that is "unreasonable and harsh" on the part of the employer, then it is still excluded, even if other matters in the course of employment have contributed to the recurrence, aggravation or acceleration. A recurring, aggravated or accelerated disease is still a disease and, if it is a disease of the excluded kind, then, on what I take to be the ordinary meaning of the words used, it is not a "disability" as that word is defined in s 5(1).
That conclusion seems to me to be reinforced by the fact that, were the position otherwise, the effect of the exclusion might be severely curtailed. The obvious purpose underlying the exclusion is to prevent the bringing of claims for compensation as a consequence of stress‑related diseases that wholly or predominantly arise out of specified incidents of the employment relationship which, by their very nature, are particularly stressful, but which are not harsh and unreasonable on the part of the employer. If a stress‑caused disease (as, for example, depression or an anxiety syndrome) arose out of one of the obvious stressors mentioned in s 5(4), any recurrence, aggravation or acceleration of it might well be significantly contributed to by other, ordinary, aspects of the employment relationship (see, in this respect, s 5(5) of the Act), as, indeed, may have happened in this case. There is nothing to suggest that the increasing workloads endured by the respondent, or the unresolved computer failure with which she had to deal, were or was such as should have caused her any health problems were it not for her pre‑existing condition. If, when it first occurs, the stress‑caused illness is excluded by the legislation, it is difficult to see why, if that illness remains wholly or predominantly a product of the same inducing factor, the legislation should not have intended also to exclude any recurrence, aggravation or acceleration of it brought about (perhaps inevitably) by such ordinary aspects of the employment relationship.
In this case the effect of what was found by the Review Officer was that the respondent had failed to satisfy her that the respondent's depression should, as at November 1997, be categorised in any other way

than as predominantly arising out of the stress caused by the taking of disciplinary measures, which were not unreasonable or harsh, against the respondent and by the respondent's consequential expectation of dismissal. The Review Officer considered that the respondent was consequently within the exclusionary words of the definition. It was in that sense that she found that the respondent's condition in November 1997 was merely a continuation or recurrence of an excluded illness and, hence, not compensable under the Act.

In my opinion, it was undoubtedly open to the Review Officer to arrive at that conclusion on the evidence to which she referred. I would consequently allow the appeal, set aside the decision of the Compensation Magistrate and substitute, in lieu, an order dismissing the appeal from the decision of the Review Officer.
TEMPLEMAN J: The essential question raised by this appeal is whether a review officer applied correctly the definition of "disability" in s 5 of the Workers' Compensation and Rehabilitation Act 1981 ("the Act"), in holding that the respondent worker's depressive illness was "a continuation of, and "mere" recurrence of "a pre‑existing illness caused by excluded factors, and was not, therefore, compensable under the Act.
The review officer's decision was the subject of a successful appeal by the present respondent to a Compensation Magistrate.
Relevantly, for present purposes, the learned Compensation Magistrate held that the review officer's reasons disclosed that she may have misdirected herself in applying the definition of "disability". The Magistrate therefore remitted the matter to the review officer for further consideration.
The appellant employer now appeals against the decision of the Compensation Magistrate. The employer's principal ground of appeal, in substance, is that the Magistrate erred in law in failing to uphold the review officer's finding that the depression from which the respondent was suffering in November 1997 was a continuation of the depression from which the respondent was suffering in May 1997, which was caused predominantly by discipline and the expectation of dismissal.

Background

The respondent was employed by the appellant as a workers' compensation claims officer. Her employment commenced in September 1996.

The appellant found her work environment to be very stressful: and she carried out her duties in a way which the appellant regarded as unacceptable. The respondent's team leader wrote to her on 30 October and 7 November 1996, criticising her work practices.
On 20 May 1997 the respondent received a letter from her divisional manager. The letter was very critical of the respondent's performance. In particular, the letter complained about the respondent's disregard of specific instructions from a superior and the "adversarial attitude" she was said to have adopted in dealing with claimants.
The letter set out the performance standards the respondent was required to adopt immediately and maintain at all times. She was told that her performance would be reviewed in one month's time. The letter stated:
"Should your behaviour not comply with these standards your position with the company will be reviewed; this review may result in the termination of your services."
On 23 May 1997, three days after receiving that letter, the respondent sought medical advice from her general practitioner, a Dr Thomas.
In a report prepared by Dr Thomas, he said the respondent had been a patient of his practice since December 1995 but that the consultation on 23 May 1997 was the first time she had mentioned problems at work. The respondent told Dr Thomas that the pressures of her work, a stressful meeting with her superiors on 20 May 1997 and the receipt on that day of the official letter of warning, had made her tense, agitated and depressed. Dr Thomas said the respondent's mood, sleep and appetite were affected: all these were symptoms of a major depression.
On 13 June 1997, Dr Thomas certified the respondent as being unwell due to "Depression/Stress Reaction". The respondent was given medical leave for one day and was prescribed anti‑depressant medication.
Dr Thomas said the respondent had several consultations over the next few months and that her symptoms were "generally improving with the medication". However, on 26 November 1997, the respondent was seen again after having "snapped" at work as a result of increasing workloads and a recent unresolved computer failure.
The applicant claimed workers' compensation, but her claim was rejected.
On 19 December 1997, the appellant applied to have the dispute referred for conciliation. She said she had been unable to work since 25 November 1997 by reason of "work related stress causing depression". (AB 143)
It is accepted by the appellant that the respondent was then suffering from a depressive illness. However, the appellant contends that the respondent was not suffering a disability within the definition of s 5 of the Act because her illness was caused by an excluded matter. In order to understand that submission, it is necessary to turn to the legislation.

The definition of "disability" in s 5 of the Act

"In Section 5 of the Act 'disability' and 'disease' are defined as follows:
'disability' means –
(a)a personal injury by accident arising out of or in the course of the employment, or whilst the worker is acting under the employer's instructions;
(b)a disabling disease to which Part III Division 3 applies;
(c)a disease contracted by a worker in the course of his employment at or away from his place of employment and to which the employment was a contributing factor and contributed to a significant degree;
(d)the recurrence, aggravation or acceleration of any pre‑existing disease where the employment was a contributing factor to that recurrence, aggravation, or acceleration and contributed to a significant degree; or
(e)a disabling loss of function to which Part III Division 4 applies,

but does not include a disease caused by stress if the stress wholly or predominantly arises from a matter mentioned in subsection (4) unless the matter is mentioned in paragraph (a) or (b) of that subsection and is unreasonable and harsh on the part of the employer; …
'disease' includes any physical or mental ailment, disorder, defect, or morbid condition whether of sudden or gradual development,
Section 5(4) provides as follows:
For purposes of the definition of 'disability', the matters are as follows –
(a)the worker's dismissal, retrenchment, demotion, discipline, transfer or redeployment;
(b)the worker's not being promoted, reclassified, transferred or granted leave of absence or any other benefit in relation to the employment; and
(c)the worker's expectation of –
(i)a matter; or

(ii) a decision by the employer in relation to a matter,
referred to in paragraph (a) or (b).

Section 5(5) provides as follows:
In determining whether the employment contributed, or contributed to a significant degree, to the contraction, recurrence, aggravation or acceleration of a disease for purposes of the definitions of 'disability' and 'relevant employment', the following shall be taken into account –
(a)the duration of the employment;
(b)the nature of, and particular tasks involved in, the employment;
(c)the likelihood of the contraction, recurrence, aggravation or acceleration of the disease occurring despite the employment;
(d)the existence of any hereditary factors in relation to the contraction, recurrence, aggravation or acceleration of the disease;
(e)matters affecting the worker's health generally; and
(f)activities of the worker not related to the employment."

The application of s 5 to the present case

Having regard to the definition of "disability" there is no doubt that the depression from which the respondent suffered from June 1997 onwards was a disease: it was a mental ailment, disorder, defect or morbid condition.
The review officer found that the respondent's depression was caused by stresses resulting from the discipline administered to her by the letter of 20 May 1997, but that it did not constitute a disability because the appellant's conduct was not "unreasonable and harsh" (AB 133).
It follows that the respondent would have been entitled to receive workers' compensation from 25 November 1997, only if the following conditions were satisfied.
(1)She had suffered a "recurrence, aggravation or acceleration" of her pre‑existing depression; and
(2)employment was a contributing factor to that recurrence, aggravation or acceleration.
Put another way, the respondent would have become entitled to receive workers' compensation from 25 November 1997, only if the depression from which she was then suffering was something other than the continuation of an on‑going depressive illness which did not fall within the definition of "disability", but was a new "disease" which did fall within the definition.
In this context, I take the term "pre‑existing disease" to mean a disease by which the worker was affected immediately before the relevant recurrence, aggravation or acceleration: not before the commencement of the employment.
The question then arises, whether if pre‑existing disease is excluded, there can ever be a recurrence, aggravation or acceleration of the disease which is not excluded also. That is, of course, a question of construction.
In my opinion, the question should be answered in the affirmative. That is because the Act allows a recurrence (etc) of a pre‑existing disease to be a disability, where the employment contributed significantly to that recurrence. And it does so, without placing any restriction on the kind of pre‑existing disease which might recur, or be aggravated or accelerated by the subsequent employment.
If a pre‑existing disease was caused by stress, but was not excluded by s 5(4), then it would be a disability. The "recurrence, aggravation, or acceleration" limb of the definition would then be unnecessary: the worker would already be disabled.
Thus, in my view, the Act does not prevent a disability arising where a pre‑existing disease – albeit caused by matters which are excluded – recurs or is aggravated or accelerated by matters which are not.
Against that background, I turn to consider in more detail the findings of fact made by the review officer. Relevantly, for present purposes, they were:
•When the respondent saw Dr Thomas on 23 May 1997, she was predominantly concerned about the letter she had received, her fear or expectation of likely termination of her employment and problems with the way in which her supervisor had dealt with her and in particular, the discipline she had received.
•In May 1997, the respondent developed a disease, namely, depression, the predominant cause of which was discipline and expectation of dismissal.
•The respondent continued to be treated by Dr Thomas or other medical practitioners in relation to the same condition from May through to November 1997.
•The respondent's condition in November 1997 was a continuation of and "mere" recurrence of the depression from which she had been suffering since May 1997.
The review officer placed the words "mere" in quotation marks in her reasons. It is not clear why she did so. However, it seems likely that the review officer based her reasons on the decision of Canale v Commissioner of Main Roads (Workers' Compensation Board of Western Australia, application 50/59). The review officer quoted the following passage from the judgment of Mr N W Mews, Chairman, (at page 164):
"Considerable confusion often arises as to what is a recurrence of an old injury, and what should be regarded as a new injury. It is not possible to lay down any rule to completely answer the problem in the multitudinous circumstances from which it arises. Generally however, I would say that an injury or condition recurred where it flared up either spontaneously or because of the ordinary stresses and strains of living and working, and that any consequent incapacity would be related to the original accident. On the contrary, even though the first injury left a weakness, even a great weakness and a potential site of trouble, where that trouble is precipitated by a new incident of an accidental nature such as could well originate trouble in its own right, then that trouble should be regarded as a new injury from which the later incident is the direct cause."

In relation to that part of the review officer's decision, the Compensation Magistrate said as follows:
"The question for the review officer was whether there had been in November a recurrence, aggravation or acceleration of a pre‑existing disease where the appellant's employment had been a contributing factor and had contributed to a significant degree. Given the existence of a pre‑existing disease (ie, the depression found by the review officer to have been contracted by the appellant in May), contributed to by the appellant's employment to a significant degree, then the review officer had to determine whether, in November, there had been (with acknowledgements to the Macquarie and Oxford English Dictionaries, whose definitions I paraphrase):
i)A return or renewal of, or reversion to, a state of depression;
ii)An increase in the intensity, severity, gravity or seriousness of the appellant's depression; or
iii)A quickening or hastening of the development of the appellant's depression.
The review officer might have disposed of the first possibility (and perhaps even the second and third possibilities) by her finding of fact that there had been a 'continuation' of the appellant's depression between May and November, which finding seems incompatible with a return or reversion to a previously existing state. Unfortunately, the finding is clouded somewhat by the conjoined notion of a 'mere' recurrence. While I understand that two concepts were being distinguished, it does seem odd, on the face of things, to say of something that it was not a recurrence (within the meaning of Section 5) because it was a 'mere' recurrence (within the meaning, presumably, of Canale's case). More importantly, it seems to me that attention to Canale's case may have caused the review officer to have focussed on 'recurrence' at the expense of 'aggravation' and 'acceleration'.
In short, in my opinion, Canale's case had no part to play in the deliberations required of the review officer, and these grounds of appeal should be upheld. That result requires that the matter be remitted to the review officer for further consideration. Because the other grounds of appeal are directed to the disability found by the review officer to have occurred in May 1997, I will deal with them so that the review officer will be aware of the extent to which she will have to reconsider her decision."
The appellant contends that the Compensation Magistrate erred, essentially on the basis that the reference to Canale's case was unnecessary. The appellant relies on the finding that the respondent's condition in November 1997 was a continuation of the depression from which she suffered since May 1997. The appellant contends that the review officer equated a "mere" recurrence of the depression to a continuation of that depression, which was not compensable.
However, it was the respondent's contention that she had suffered an aggravation of her depressive illness in November 1997. Before the events of 24 or 25 November her condition was improving: she was coping and able to work. Thereafter, she could not cope and was certified as unfit for work. It was therefore necessary for the review officer to determine the cause.
In considering that question, it was inappropriate for the review officer to apply the decision in Canale's case, which was decided in a different legislative context. The decision in Canale's case is that where there has been an injury or condition which has recurred (either spontaneously or as a result of the ordinary stresses and strains of living and working) any consequent incapacity would be related to the original cause. The case is not concerned with aggravation or acceleration of a condition
If the review officer took the Canale approach, she failed to ask the right question. The question she should have asked was whether, in November 1997, there was a recurrence, aggravation or acceleration of a pre‑existing depressive illness to which the respondent's employment had been a contributing factor and had contributed to a significant degree. In answering that question, the provisions of s 5(5) of the Act must be taken into account.
In my view, given the ambiguity in the review officer's reasons, the Compensation Magistrate was right to remit the matter to her for further consideration. I would therefore dismiss the appeal.