Frkic v Return to Work Corporation of South Australia (No 2)

[2020] SASCFC 59

SUPREME COURT OF SOUTH AUSTRALIA

(Full Court: Permission to Appeal)

FRKIC v RETURN TO WORK CORPORATION OF SOUTH AUSTRALIA (No 2)

[2020] SASCFC 59

Judgment of The Full Court

(The Honourable Justice Stanley, The Honourable Justice Doyle and The Honourable Justice Livesey)

25 June 2020

WORKERS' COMPENSATION - PROCEEDINGS TO OBTAIN COMPENSATION - DETERMINATION OF CLAIMS - APPEALS, JUDICIAL REVIEW AND STATED CASES - RIGHT OF APPEAL

The applicant seeks permission from the Full Court to appeal a decision of the Full Bench of the South Australian Employment Tribunal (SAET).

The Full Bench dismissed an appeal from a single judicial member of the Tribunal who upheld a decision of the Return to Work Corporation in relation to the assessment of the applicant’s whole person impairment (WPI).  The applicant had suffered a work injury to his lumbar spine.  Prior to that injury the applicant had suffered from a pre-existing condition of ankylosing spondylitis which had caused the fusion of his lumbar spine.  

The issue sought to be raised on appeal is the proper construction of s 22(8)(g) of the Return to Work Act 2014 (SA) (RTW Act) and the Impairment Assessment Guidelines (IAG) made pursuant to s 22 of the RTW Act. The question of construction is whether the assessment of the applicant’s WPI should have been undertaken by including in the assessment the degree of impairment attributable to the worker’s pre-existing condition.

Held, per Stanley J (Doyle J agreeing):

1. The application for permission to appeal plainly gives rise to a question of the proper construction of s 22(8) and the provisions of Chapter 1.29 and Chapter 4.13 of the IAG. The point sought to be agitated is reasonably arguable.

Held, per Livesey J (Doyle J agreeing):

1.  This case raises matters of some importance sufficient to warrant the granting of permission to appeal.

Permission to appeal is granted.

Return to Work Act 2014 (SA) s 22; Impairment Assessment Guidelines  ; American Medical Association Guidelines for the Evaluation of Permanent Impairment (5th edition)  , referred to.
Frkic v Return to Work SA [2019] SAET 1; Frkic v Return to Work SA [2020] SAET 16; Alcoa Holdings v Lothian [2011] VSC 245; Barnett v The Transport Accident Commission [1999] 15 VAR 414; Barnett v The Transport Accident Commission [2001] VSCA 12; Hines v Kotzman [2009] VSC 311; Gillat v The Transport Accident Commission (2003) 19 VAR 376, considered.

FRKIC v RETURN TO WORK CORPORATION OF SOUTH AUSTRALIA (No 2)
[2020] SASCFC 59

Full Court:      Stanley, Doyle and Livesey JJ

STANLEY J:

1. This is an application for permission to appeal from a decision of the Full Bench of the South Australian Employment Tribunal.  Whether permission to appeal to the Full Court should be granted depends upon a range of criteria including, in particular, whether the grounds of appeal raise any question of law of general importance and whether the appeal is reasonably arguable.

2. The Full Bench dismissed an appeal[1] from a single judicial member of the Tribunal who upheld a decision of the Return to Work Corporation in relation to the assessment of the applicant’s whole person impairment (WPI).[2]  The applicant had suffered a work injury to his lumbar spine.  Prior to that injury the applicant had suffered from a pre-existing condition of ankylosing spondylitis which had caused the fusion of his lumbar spine.   It was not in issue that the pre-existing ankylosing spondylitis was a developmental condition.  The applicant claimed an assessment of WPI in respect of altered motion segment integrity.

   [1]    Frkic v Return to Work Corporation of South Australia [2020] SAEAT 16.

   [2]    Frkic v Return to Work Corporation of South Australia [2019] SAET 1.

3. The issue sought to be raised on appeal is the proper construction of s 22(8)(g) of the Return to Work Act 2014 (SA) (RTW Act) and the Impairment Assessment Guidelines (IAG) made pursuant to s 22 of the RTW Act. The question of construction is whether the assessment of the applicant’s WPI should have been undertaken by including in the assessment the degree of impairment attributable to the worker’s pre-existing condition.

4. Section 22(8)(b) of the RTW Act provides that in making an assessment of WPI, impairments for unrelated injuries or causes are to be disregarded.

5. Section 22(8)(g) provides that any portion of impairment that is due to a previous injury (whether or not a work injury or whether because of a pre-existing condition) that caused the worker to suffer an impairment before the relevant work injury is to be deducted for the purposes of an assessment, subject to any provision to the contrary made by the IAG.

6. Chapter 1.29 of the IAG relevantly provides that the impairment rating of a pre-existing injury is to be determined by applying the methodology in the IAGs.  The impairment from the pre-existing injury is then subtracted from the overall impairment rating.

7. Chapter 4.13 of the IAG provides that the assessment of altered motion segment integrity is to be based upon a report of trauma resulting in injury and not on developmental or degenerative changes. 

8. The Full Bench held that for the purposes of assessment of impairment for the determination of entitlements to compensation under the RTW Act, the assessment of altered motion segment integrity is to be based upon a report of trauma resulting in an injury and not on developmental or degenerative changes.  The Full Bench reasoned that Chapter 1.29 directs that where there is a pre-existing impairment to the spine by way of developmental fusion, contributing to the impairment as assessed, then such impairment is to be assessed in accordance with the IAG, and for such impairment to be subtracted from the overall impairment rating.[3]

   [3] [2020] SAET 16 at [46].

9. Central to the applicant’s argument is the reference in Chapter 4.13 to the assessment of altered motion segment integrity being required to be based upon a report of trauma resulting in an injury and not on developmental or degenerative changes.  He submits that applying the methodology in Chapter 4.13 as stipulated by Chapter 1.29 requires that in the circumstances of the assessment of his impairment, where developmental fusion was found to have existed, there could be no deduction for the pre-existing impairment.

10. The application for permission to appeal plainly gives rise to a question of the proper construction of s 22(8) and the provisions of Chapter 1.29 and Chapter 4.13 of the IAG. I consider the point that is sought to be agitated on appeal is reasonably arguable.

11. I would grant permission to appeal. 

12. DOYLE J:            I have read the reasons of Stanley J and Livesey J.  I agree that the applicant should be given permission to appeal.

    LIVESEY J:

    Introduction

13. The applicant seeks permission to appeal pursuant to s 68(1) of the South Australian Employment Tribunal Act 2014 (SA).

14. For 30 years before his 2016 work injury the applicant worker suffered from a developmental condition, a progressive inflammatory process known as ankylosing spondylitis. This resulted in the fusion of his spine between T12 and the sacrum.  Nonetheless, he was able to work as a carpenter in Whyalla.

15. On 26 June 2016 the applicant suffered a fracture of the L2 vertebra in a fall at work. He has been incapacitated by this work injury ever since. On 23 November 2017 a neurosurgeon assessed the worker’s whole person impairment at 34 per cent pursuant to s 58 of the Return to Work Act 2014 (SA) (the Act).

16. The neurosurgeon made no explicit assessment of, nor allowance for, the pre-existing condition.

17. The proposed appeal concerns the meaning and operation of s 22(8)(g) of the Act which is in the following terms:

    An assessment must take into account the following principles:

    …

    (g)any portion of an impairment that is due to a previous injury (whether or not a work injury or whether because of a pre-existing condition) that caused the worker to suffer an impairment before the relevant work injury is to be deducted for the purposes of an assessment, subject to any provision to the contrary made by the Impairment Assessment Guidelines.

18. To this may be added s 22(8)(b):[4]

    (b)impairments from unrelated injuries or causes are to be disregarded in making an assessment;

    [4] The trial Judge did not regard this case as one involving an “unrelated injury or cause” within the meaning of s 22(8)(b) of the Return to Work Act 2014 (SA), Alcoa Holdings Ltd v Lowthian [2011] VSC 245, [59]-[60] (Forrest J); Frkic v Return to Work Corporation of South Australia [2019] SAET 1, [37]-[38] (Calligeros DPJ).

19. Both at trial and in the Full Bench the finding was that the combination of s 22(8)(g) and the relevant Impairment Assessment Guidelines required a 20 per cent deduction to be made to the whole person impairment assessment.

    The decisions below

20. The trial Judge found that the applicant was able to work as a carpenter as well as engage in recreational activities of various kinds notwithstanding his pre-existing condition.  However, he also found that part of the worker’s impairment at the time of the assessment was due to his ankylosing spondylitis and that, even before the work injury, there were functional limitations due to it.  As well, there was a loss of motion segment integrity as described in DRE Lumbar Categories IV and V of Table 15-3 at page 384 of the American Medical Association’s Guides to the Evaluation of Permanent Impairment, fifth edition (AMA5).[5]

    [5]    Frkic v Return to Work Corporation of South Australia [2019] SAET 1, [39] (Calligeros DPJ).

21. Section 22(8)(g) operates subject to any provision to the contrary made by the Impairment Assessment Guidelines (the Guidelines). Under those Guidelines chapter 1.23 requires that an unrelated or previous injury to the same part of the body as the work injury, not related to the work injury, must be disregarded.  This means that the current impairment attributable to both injuries must be assessed but that the degree of impairment attributable to the unrelated or previous injury must then be deducted.

22. The method of deduction is provided for by chapter 1.24 of the Guidelines. It requires the assessor to assess the permanent impairment of the affected part of the body by applying the methodology in the Guidelines, then deducting the permanent impairment percentage attributable to the previous or unrelated injury or cause. Only if there is no impairment from the previous or unrelated injury or cause will there be nothing to deduct. This must be “appropriately documented” in the assessment report.

23. Chapter 1.29 of the Guidelines requires that a pre-existing injury be addressed by “objective evidence to support the assessment of impairment caused by that injury (e.g. clinical evidence, medical records and reports, the worker’s history, etc)”.

24. Chapter 4 of the Guidelines concerns the spine. The effect of chapters 4.1 and 4.5 is to provide that only the “DRE model for assessment” may be used when assessing spinal impairment.[6]  In the Full Bench it was recorded that there was no challenge to the finding that there was a pre-existing impairment.[7]

    [6]    This may be contrasted with chapter 15 of AMA5 which allows either the DRE method or the “range of motion method” to be used to assess spinal impairment. According to the trial Judge, the range of motion method would have disclosed a substantial pre-existing impairment due to the fusion and its consequential impact on the worker’s range of motion, Frkic v Return to Work Corporation of South Australia [2019] SAET 1, [47] (Calligeros DPJ).

    [7]    Frkic v Return to Work Corporation of South Australia [2020] SAET 16, [14] (Farrell, Kelly and Rossi DPJJ).

25. Chapter 4.13 of the Guidelines provides that the “assessment of altered motion segment integrity is to be based upon a report of trauma resulting in an injury, and not on developmental or degenerative changes”.

26. The trial Judge rejected the submission that the effect of chapter 4.13 was that no deduction could be made for ankylosing spondylitis because it was not the result of trauma.[8]

    [8]    Frkic v Return to Work Corporation of South Australia [2019] SAET 1, [55]-[56] (Calligeros DPJ).

27. Utilising the impairment assessment made by the neurosurgeon of 28 per cent whole person impairment for the lumber spine, the trial Judge deducted 20 per cent for pre-injury loss of motion segment integrity, leaving a compensable balance of eight per cent.[9]

    [9]    Frkic v Return to Work Corporation of South Australia [2019] SAET 1, [64]-[66] (Calligeros DPJ).

28. The appeal to the Full Bench was limited to a question of law pursuant to ss 26I and 67 of the South Australian Employment Tribunal Act 2014 (SA). The interpretation of the Guidelines and AMA5 has previously been held to raise a question of law.[10]  However, the determination of impairment is a question of fact.[11]

    [10] Barnett v Transport Accident Commission (1999) 15 VAR 414, [30] (Mandie J); H J Heinz Company Australia Pty Ltd v Kotzman (2009) 31 VAR 206, [24]-[28] (Kyrou J).

    [11] Gillat v Transport Accident Commission (2003) 19 VAR 376, [27] (Nettle J).

29. The Full Bench construed the Guidelines in a manner similar to, but not precisely the same as, the trial Judge. Nonetheless, the applicant’s argument was again rejected:[12]

    Chapter 4.13 is directed to the assessment of impairment for work related back injury. Noting that table 15-3 of the AMA5 Guidelines includes, in DER Lumber Category IV, a reference to complete or near complete loss of motion of a motion segment due to developmental fusion, it is understandable that chapter 4.13 is expressed in terms to make it clear that for the purposes of assessment of impairment for the determination of entitlements to compensation under the RTW Act, the assessment of altered segment motion integrity is to be based upon the report of trauma resulting in an injury and not on developmental or degenerative changes. Chapter 1.29 operates to direct that where there is, as in the present case, a pre-existing impairment to that level of the spine by way of developmental fusion, contributing to the impairment as assessed, then such impairment is to be assessed in accordance with the IAG and, as relevant, the AMA5 Guidelines and for such impairment to be subtracted from the overall impairment rating.

    [12] Frkic v Return to Work Corporation of South Australia [2020] SAET 16, [46] (Farrell, Kelly and Rossi DPJJ).

    The proposed appeal

30. The proposed appeal centres on the meaning of chapter 4.13 and the requirement that the assessment of altered motion segment integrity be based upon a report of trauma resulting in an injury, and not on developmental or degenerative changes. It is this contention that underpins appeal grounds 3.1, 3.2, 3.3, 3.4 and 3.5:

    The Full Bench should have concluded that the effect of the Act and the Guidelines is that the pre-existing developmental condition was to be ignored for the purposes of assessing the impairment under the Act and that therefore it was also to be ignored for the purposes of any deduction under s. 22(8)(g) or that s. 22(8)(g) did not apply.

31. It may be debated whether these are all separate grounds as distinct from particulars, or different ways of putting the appeal referrable to the proper interpretation of chapter 4.13.

32. It is, respectfully, difficult to understand the alternative (proposed appeal ground 3.6):

    … the approach taken by the Full Bench disregards s. 22(8)(g) of the Act by permitting a deduction in excess of the applicant’s pre-existing impairment, thus effectively permitting the operation of the IAGs to impermissibly modify this provision of the Act.

33. That proposed appeal ground is difficult to understand for at least two reasons. The first is that the deduction in fact undertaken was not, at least arithmetically, in excess of the pre-existing impairment as assessed. Secondly, and in any event, s 22(8)(g) of the Act expressly envisages modification of the operation of that provision in the case of any “provision to the contrary made by the Impairment Assessment Guidelines”.

    Decision on permission

34. A Judge of this Court refused permission notwithstanding that the result was harsh because the construction given to the Guidelines was not on its face inconsistent with s 22(8)(g) of the Act.[13] Whilst I do not disagree, the proper construction of, and interaction between, s 22(8)(b), s 22(8)(g) and the Guidelines, generally, raises matters of some importance to the operation of the scheme, potentially affecting the resolution of matters beyond this case.

    [13] Frkic v Return to Work Corporation of South Australia [2020] SASC 42, [3] (Kourakis CJ).

35. That is, where the Act is intended only to compensate work injuries and impairments caused by work injuries,[14] how is that objective met by the provisions and Guidelines to which I have referred in the circumstances of this case? On that basis, I would grant permission.

    [14] See ss 3 and 22 of the Return to Work Act 2014 (SA).

36. I have had the benefit of reading the reasons of Stanley J and agree that the proper meaning and interpretation of chapter 4.13 within that statutory context also warrants the grant of permission.  This raises a matter of some importance to the applicant. 

37. Whether the articulation of the grounds of appeal should be reconsidered is not a matter that need now be decided.