Kelly and Comcare
[2006] AATA 700
•14 July 2006
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2006] AATA 700
ADMINISTRATIVE APPEALS TRIBUNAL )
) No A2004/227
A2005/240
GENERAL ADMINISTRATIVE DIVISION ) Re PHILLIP KELLY Applicant
And
COMCARE
Respondent
DECISION
Tribunal J.W. Constance, Senior Member Dr M.D. Miller AO, Member Date14 July 2006
PlaceCanberra
Decision 1. In matter number A2004/227 the reviewable decision of Comcare made 27 July 2004 is set aside and in substitution it is decided that pursuant to section 14 of the Safety, Rehabilitation and Compensation Act 1988 (Cth), Comcare is liable to pay to Mr Kelly compensation in respect of an injury, being an aggravation of a generalised anxiety disorder with associated depressive episodes and the associated development of a major depressive disorder, suffered by him between 30 November 2000 and 31 December 2000.
2. In matter number A2005/240 the reviewable decision of Comcare made 5 August 2005 is set aside and in substitution it is decided that pursuant to section 24 of the Act, Comcare is liable to pay to Mr Kelly compensation for permanent impairment which has resulted from the injury referred to in the decision in matter number A2004/227. The degree of permanent impairment determined in accordance with the approved guide is 10%.
3. In each matter, the parties have liberty to apply within 14 days of today in relation to costs. Should such an application not be made, Comcare shall pay Mr Kelly’s reasonable costs of the applications.
..............................................
J.W. Constance, Senior Member
CATCHWORDS
COMPENSATION – Commonwealth employees – Pre-existing anxiety and depression exacerbated by process of redundancy – Requirement to provide notice of injury – Whether Comcare prejudiced by delay – Whether delay resulted from ignorance – Awareness of compensable injury – Whether material contribution by employment – Permanent impairment.
PRACTICE AND PROCEDURE – Unsworn statements – Use in cross examination.
Safety, Rehabilitation and Compensation Act 1988 (Cth) ss 4, 7, 14, 24, 53
Telstra Corporation v Roycroft (1997) 77 FCR 358
Pacific Manning Company v Barton (2003) 74 ALD 1
Hart v Comcare (2005) 145 FCR 29
Re Nicklason and Comcare [1999] AATA 736
Re Patrick and Comcare (AAT 11609, 12 February 1997)
Trewin v Comcare (1998) 84 FCR 171
WRITTEN REASONS FOR DECISION
(Oral Reasons delivered 14 July 2006)
14 July 2006 J.W. Constance, Senior Member Dr M.D. Miller AO, Member INTRODUCTION
1. Mr Kelly commenced employment with the ACT Energy Authority in 1969. For the next 32 years he continued to be employed within that organisation and its successors, working his way up to a management position. In late November 2000, whilst holidaying in Queensland, he was made aware that his position had been determined redundant.
2. Mr Kelly applied to Comcare under section 14 of the Safety, Rehabilitation and Compensation Act 1988 (Cth) for compensation for an aggravation of pre-existing anxiety and depression caused by events surrounding that redundancy. He also made a claim under section 24 for compensation for permanent impairment arising from that condition. These claims were rejected by Comcare.
3. Mr Kelly has sought a review of Comcare’s decisions. We have decided, for the reasons which follow, that the decisions denying him compensation should be set aside.
EVIDENCE AND FINDINGS OF FACT
4. We are satisfied of the following facts on the balance of probabilities. Unless otherwise stated these findings are based on the evidence of Mr Kelly. We are satisfied he was an honest witness. At times he may have been uncertain as to some of the events of some considerable time ago, but we accept that at all times he used his best endeavours to give honest and truthful evidence.
5. Mr Kelly was born in 1952. In 1969 he commenced employment as an apprentice electrician with the ACT Energy Authority, which ultimately became part of ActewAGL. He completed his apprenticeship in 1973. Mr Kelly’s whole working career has been within the Authority and its successors.
6. By 1985 Mr Kelly had risen to become an electrical inspector, responsible for checking new electrical installations. This was a responsible position and from all indications he was coping with it very well. He was promoted to a senior role and supervised approximately six other inspectors. Throughout the 1980’s he had regular reviews of his performance and they were always good.
7. In the first half of the 1990s, Mr Kelly was functioning well at work. He was promoted through a competitive process to become a permanent Senior Inspector. Over time his duties changed and he took on a management role. In the late 1990’s the industry was deregulated. By his own choice Mr Kelly stayed in the service side of the industry. Mr Kelly had established a successful career.
8. There is no doubt that Mr Kelly suffered considerable medical problems, starting as early as the 1970s. He suffered from anxiety and bouts of depression, and during the 1970s and 1990s received considerable treatment. At times he required hospitalisation. The bouts of depression and anxiety seemed to largely relate to his concern as to travel. Nevertheless, with treatment and medication, his medical condition was under control.
9. Between 1995 and 2000 Mr Kelly consulted Dr Cullen, Psychiatrist, and his General Practitioner, Dr Kneebone. He took daily medication and was functioning well at work. Nevertheless this pre-existing condition made him vulnerable to the events that unfolded in 2000.
10. In January 2000 Mr Kelly was the acting retail marketing manager. He looked after the financial side of retail marketing and between 9 and 15 staff reported to him. He had no problems with his work and his division was producing excellent results. However in 2000 there was a degree of uncertainty among staff members as to ACTEW's future business structure.
11. In March or April 2000, the possibility of a joint venture with the Australian Gas Light Company (AGL) was first raised with Mr Kelly. On 3 October 2000 the new joint venture business between ACTEW and AGL, known as ActewAGL, commenced.[1]
[1] Ex. A1, Annexure A.
12. In early November 2000 Mr Kelly and a number of other staff received a letter from Mr Slavich, the General Manager of retail in ActewAGL.[2] Part of that letter reads as follows:
“…let me assure you that there WILL NOT be major changes in the short term. If there are to be any significant changes in the future, they will be done so after careful consideration of all the variables, with ample notice given in order to facilitate effective change. Let me also reiterate ActewAGL's commitment to only 20 involuntary redundancies in the first two years of the Joint Venture.
There are also many opportunities being created as a result of our Joint Venture with AGL. Job opportunities with AGL have already been advertised internally, I envisage that this will be common practice in the future.”
[2] Ex. A1, Annexure B.
13. Mr Kelly understood this letter to mean that there were to be no major changes in the near future. He gave evidence, which we accept, that in November 2000 there was a lot of activity in his area preparing to market the new joint venture. This involved re-branding, creating a new company logo, a new corporate image, and formalising new agreements. Mr Kelly was actively involved in that process.
14. Mr Kelly’s last day at work prior to going on a pre-arranged family holiday was 24 November 2000. On that day a branch manager’s meeting was held, at which a brochure was handed around relating to the new team that was to work on the amalgamation. After that meeting and before he went on leave Mr Kelly was asked to sign the front of the brochure as part of a group that obviously had major responsibilities in relation to the amalgamation. From Mr Kelly’s observation of that brochure and from the discussions which took place regarding it he believed he was to be actively involved in the new business. The brochure is in evidence before us.[3]
[3] Ex. A1, Annexure C.
15. We are satisfied that Mr Kelly was deliberately lulled into a false sense of security as to his future with ActewAGL. We do not know why Mr Kelly was treated in this manner but the reasons for this are not relevant in deciding the matters before us.
16. In the days before his going on leave, no mention was made in the meetings Mr Kelly attended of any impending redundancies or staff dismissals. There was a lot of talk about the restructure, but none relating to staff becoming surplus to requirements. On the day before he went on leave, Mr Kelly received an email from Mr Slavich. In that email Mr Slavich confirmed that he would be calling Mr Kelly whilst on leave on 30 November 2000, "to talk about the new ActewAGL retail organisation restructure and its impact on [Mr Kelly] ".[4]
[4] Ex. A1.
17. We accept that Mr Kelly thought the purpose of this conversation was to discuss his ongoing position with the organisation. It certainly did not cause him any concern in view of the indications he had received in the period leading up to his leave.
18. On 30 November 200, whilst holidaying in Queensland, Mr Kelly received the call from Mr Slavich. Mr Kelly said quite frankly he could not recall much of that conversation. When one takes into account the circumstances of the call and what was said, that is a perfectly acceptable explanation. Mr Slavich told him his position had gone and it was unlikely he could be feasibly redeployed elsewhere within the organisation.
19. The telephone was then handed to a Ms Tanya Hutchison, Director of Human Resources, and she read to Mr Kelly a lengthy letter from Mr Perkins, the Chief Executive of ACTEW. A copy of that letter is in evidence.[5] It is a lengthy letter to have been read over the telephone and contained various options for Mr Kelly to consider. The first option was financially the most beneficial to him as it was the only one which included an additional cash payment on termination of his employment.
[5] Ex. A10.
20. Mr Kelly believed from what was told to him by Ms Hutchison that if he tried to do anything other than take the package that was being offered he would put himself at financial risk. He was very upset and in tears as a result of the conversation.
21. Mr Kelly made further efforts to obtain more information before he returned from his holiday. Ultimately, however, he shortened his holiday and returned to work on 11 December 2000.
22. On his return he discovered that his swipe card did not work and he could not get into the building or access various floors of the building without being accompanied by another person. He spent 4 days at work in December 2000 but gave evidence he was so distressed as to his situation that he does not recall a great deal of what happened. He remembers he was crying at times. He found particularly distressing the fact that, for reasons which have not been explained to the Tribunal, his staff was reporting to someone else. This was at a time when he was supposed to be considering the options before him, one of which was that he would continue, at least for some time, as an employee.
23. On 14 November 2000 Mr Kelly received a call from a person within the organisation who he believed to be a Mr Davis from Human Resources. The caller enquired as to why Mr Kelly had not signed the redundancy papers. Mr Kelly was told he needed to sign those papers so he could leave. During the conversation Mr Kelly remarked that he did not want to leave. At that point the person to whom he was speaking became quite hostile and told Mr Kelly he had given a verbal undertaking he was going to leave and he had to leave.
24. Mr Kelly was made redundant on 15 December 2000. Technically it was a voluntary redundancy. It is not necessary for us to make any finding as to whether or not ActewAGL followed all of the appropriate procedures.
25. After the redundancy Mr Kelly met with Ms Jutta Clark. This meeting was arranged by ActewAGL to provide Mr Kelly with some assistance adjusting to his redundancy. Ms Clark arranged for Mr Kelly to receive counselling from Mr Phillip Pocock, Psychologist. That counselling took place in a number of sessions between 18 December 2000 and 26 July 2001.
26. Mr Kelly gave evidence that Mr Pocock went to great lengths to get him to acknowledge that even though ActewAGL may not have acted with his interests at heart, it was their right to hire whoever they like. We have listened to a discussion between Mr Kelly and Mr Pocock in May 2001.[6] On a number of occasions during the course of that discussion Mr Pocock did raise that ActewAGL was entitled to act as it did and that Mr Kelly needed to move on. There is no doubt that this was a focus of discussion. We make no finding, nor do we suggest that, there was any impropriety at all in Mr Pocock’s dealings with Mr Kelly. Nevertheless, we do accept Mr Kelly's evidence that the result of these discussions was he felt he needed to move on and that ActewAGL had done nothing wrong.
[6] Ex. R3.
27. By July 2001 ActewAGL had decided it was no longer appropriate for Mr Kelly to be given any further counselling assistance. In May 2001 Mr Kelly saw another psychiatrist, Dr Gupta on referral by Mr Pocock. On the advice of Dr Gupta, Mr Kelly ceased taking his medication. Shortly after, he was admitted to Canberra Hospital until his medication was re-established.
28. Following the redundancy, Mr Kelly was, in his words, "very, very stressed and depressed". To his credit he did attempt to find work. He was employed as a commission real estate agent with LJ Hooker from July 2001 to January 2002. However, after a few months of trying to work in this position he realised he simply could not do it.
29. At around the same time Mr Kelly sold his house and bought a block of land with the intention of trying to occupy himself by building a new family home. Even in the early design stage, however, he found he was unable to continue with the project due to feelings of stress and depression and had to hand it over to others.
30. In about mid 2002 Mr Kelly again attempted some work producing environmental efficiency reports, but again only managed to do this for about three weeks. At the time he says he was very depressed and simply could not apply himself. Mr Kelly's mental condition deteriorated. In February 2002 he was admitted to Hyson Green. He saw his General Practitioner Dr Watson in July 2002. He saw Dr Rohan, Psychiatrist, in August of 2002. In October 2002 he was admitted to the St John of God Hospital for rehabilitation following renewed and exacerbated problems with alcohol.
31. In January 2003 he consulted Dr Lubbe, Psychiatrist, and was admitted to Hyson Green again. This time he was admitted for an exacerbation of his anxiety and depression. In June of 2003 he was admitted to Hyson Green at Calvary Hospital following an overdose of alcohol and valium under the care of Dr Lubbe.
32. In July 2003 Mr Kelly first consulted Dr Lioulios, Clinical Psychologist. Dr Lioulios gave evidence that she has had over 150 sessions with Mr Kelly since that time. These appointments were weekly until 2006 and then fortnightly. In January 2004 Mr Kelly was again admitted to Calvary Hospital after attempting suicide for a second time.
33. It is apparent that following the redundancy, Mr Kelly's mental condition deteriorated markedly and he required substantial treatment and medication. We accept that he did receive all of the treatment reasonably available to him and he did receive all of the treatment properly required to attempt to rehabilitate him and overcome his illness.
34. We accept Mr Kelly's evidence as to his ongoing feelings of depression and stress, and we will come to those in more detail when we review the medical evidence in this matter.
USE OF UNSWORN STATEMENTS
35. In giving evidence before the Tribunal Mr Kelly was cross-examined on the basis of unsworn statements which had been filed prior to the hearing, but which were not relied upon nor verified by the makers of the statements being called to give evidence. The following is a general comment and is not intended in any manner to be a criticism of Comcare’s counsel or the instructing solicitors in this matter.
36. The Tribunal is concerned that a practice not develop whereby unsworn statements filed by a party in accordance with the Tribunal’s directions are used to cross-examine the other party in circumstances where the makers of those statements are not called to give evidence. Whilst we are not saying it has happened in this case, the practice could give rise to undue pressure being put on a party to compromise a claim when ultimately no-one verifies the statements in respect of which the party has been cross-examined.
37. We raise that matter for the consideration of appropriate persons within Comcare to ensure the requirements of the Act, and particularly recent amendments, are complied with.
ISSUES AS TO THE GIVING OF NOTICE AS REQUIRED BY SECTION 53 0F THE ACT
38. The first issue to be decided in these applications is whether Mr Kelly is entitled to the benefit of the Act at all by reason of his failure to give the requisite notice under section 53.
39. Section 53 relevantly provides:
“53 Notice of injury or loss of, or damage to, property
(1) This Act does not apply in relation to an injury to an employee
unless notice in writing of the injury is given to the relevant
authority:
(a) as soon as practicable after the employee becomes aware of
the injury;”
40. Mr Kelly became aware that he was suffering from an aggravation of his pre-existing conditions and depression as early as December 2000. This finding is based on the evidence of his discussions with Ms Clark and Mr Pocock. We are satisfied notice was not given as soon as practicable after Mr Kelly gained that awareness.
41. However, subsection 53(3) provides:
“(3) Where:
(a) a notice purporting to be a notice referred to in this section
has been given to the relevant authority;
(b) the notice, as regards the time of giving the notice or
otherwise, failed to comply with the requirements of this
section; and
(c) the relevant authority would not, by reason of the failure, be
prejudiced if the notice were treated as a sufficient notice, or….
from ignorance, from a mistake or from any other reasonable cause;
the notice shall be taken to have been given under this section.”
42. There is no dispute in this matter that the application for compensation on 27 February 2004 [7] can properly be regarded as a notice for the purposes of section 53. We proceed on that basis.
[7] Ex. A3, T2.
Was Comcare prejudiced by the failure to give notice prior to 27 February 2004?
43. We are satisfied that Comcare was not prejudiced by reason of the failure to give notice prior to 27 February 2004. Therefore, under subsection 53(3) the required notice is taken to have been given.
44. Comcare has argued that the Tribunal should find it was prejudiced because it lost the opportunity to undertake contemporaneous psychological examination of Mr Kelly. We are not satisfied that amounts to prejudice. There are ample contemporaneous records as to the treatment being provided to Mr Kelly and the assessment of his condition. We note particularly that an examination on behalf of Comcare by Dr Skinner, Psychiatrist, was not arranged until March 2005, over 12 months after Comcare became aware of the claim. If Comcare had felt it was prejudiced, one would assume it would have arranged that appointment a great deal earlier than it did.
45. Comcare also argued that it was prejudiced by reason of a lost opportunity to rehabilitate Mr Kelly. We do not agree. Mr Kelly has received very extensive therapeutic treatment and at no time was the quality or degree of this treatment criticised. This is not a case where the outcome may have been different if the injured worker had received different treatment.
46. Further, we note that Comcare denied liability within three months of receiving the claim without seeing the need for independent assessment of Mr Kelly. We accept the argument put by counsel for Mr Kelly that on that basis Comcare did not appear to be proposing that it provide any rehabilitation in addition to what was already being provided.
47. We are also satisfied all witnesses required by Comcare were available to give evidence. Comcare has not called any witnesses to attest to its suffering prejudice.
Did the failure to give notice result from ignorance?
48. In the event that we are wrong in the above finding we are satisfied that the failure to provide prompt notice resulted from ignorance in the sense that Mr Kelly did not know that he had a compensable injury. We are satisfied it was not until discussions between Dr Lioulios and Mr Kelly in December of 2003 that Mr Kelly came to recognise that he had an injury and it was an injury that was compensable. That realisation came after what Dr Lioulios described as a process of elimination over several months. We take into account evidence that there was some discussion between Mr Kelly and Dr Watson, his General Practitioner, at an earlier time. However, we are not satisfied that discussion brought Mr Kelly to an understanding of the compensable nature of the injury he had suffered.
49. On this point there is support in a decision of the Federal Court in the matter of Telstra Corporation v Roycroft (1997) 77 FCR 358, in which the Court said:
“As these authorities show, there is a thin line between “mistake” and “ignorance”. If a person acts on the basis of knowledge of the Act and that knowledge is wrong, or the facts upon which the person relies are wrong, then the person has made a mistake. If a person acts without any knowledge about the Act or an aspect of it, and consequently does not know whether or not it applies, then the person is ignorant. The distinction between ignorance and mistake requires very careful attention to the evidence, as Keely J pointed out in Connors.”[8]
[8] At 367.
50. In Pacific Manning Company v Barton, (2003) 74 ALD 1, von Doussa J. stated in relation to an application made under the same provision in the Seafarers Rehabilitation and Compensation Act 1992, that:
“In context, the “injury” referred to in s 62(1)(a) is the injury referred to in the opening words of s 62(1), namely “an injury suffered by an employee”. Section 6 provides that a reference in the Act to an injury suffered by an employee is, unless the contrary intention appears, a reference to an injury suffered by the employee for which compensation is payable under the Act…. the Act is remedial in nature and should be given a beneficial construction….The notice requirement then takes on a practical, realistic operation, namely that employees are required to give notice where and when they are aware that they have suffered an injury that causes incapacity for work or impairment and therefore attracts the benefits of the Act.” [9]
[9] At [37].
51. We are satisfied that this was a case of ignorance. We are also satisfied that once Mr Kelly ceased to be ignorant of the possibility of an entitlement, he did act promptly in making the application, and in effect, the appropriate notice was given.
Was Mr Kelly’s injury a reasonable cause for not having given notice prior to 27 February 2004?
52. Finally, we do not find that a reasonable cause for Mr Kelly not having given notice was that he was too ill during the whole of the time before he made his claim. The evidence does not support such a finding.
ISSUES AS TO COMCARE’S LIABILITY UNDER SECTION 14
53. The claim in matter A2004/227 related to an injury in November 2000.[10] The injury was described by Mr Kelly as anxiety and depression caused by his employment at ActewAGL and in particular the “forced redundancy without proper consultation.”
[10] Ex. A3, T3.
54. The reviewable decision before the Tribunal affirmed a determination that Comcare was not liable to pay compensation under section 14 for depressive disorder and generalised anxiety disorder.[11]
[11] Ex. A3, T9.
55. Section 14 relevantly provides:
“14 Compensation for injuries
(1) Subject to this Part, Comcare is liable to pay compensation in
accordance with this Act in respect of an injury suffered by an
employee if the injury results in death, incapacity for work, or
impairment.”
56. “Injury” is defined in section 4 to mean, amongst other things, a "disease" and section 4 also defines “disease” as:
“(a) any ailment suffered by an employee; or
(b) the aggravation of any such ailment;
being an ailment or an aggravation that was contributed to in a
material degree by the employee’s employment by the
Commonwealth or a licensed corporation.”
57. “Ailment” is further defined as “any physical or mental ailment, disorder, defect or morbid condition (whether of sudden onset or gradual development)”.
58. Section 4 also stipulates that “injury” does not include “a disease, injury or aggravation suffered by an employee as a result of… failure by the employee to obtain a…benefit in connection with his or her employment”.
59. The issues before the Tribunal in relation to the application of section 14 are:
1)did Mr Kelly suffer an ailment or the aggravation of an ailment;
2)if so, did his employment contribute in a material degree to the ailment or aggravation;
3)do any one of the exclusions referred to in the definition of “injury” apply; and
4)what was the date of the injury?
Did Mr Kelly suffer an ailment or the aggravation of an ailment?
60. Comcare has accepted this is the appropriate classification and on the evidence, which is uncontested, we are satisfied that there has been an aggravation of pre‑existing anxiety and episodes of depression and the subsequent development of a major depression.
Did his employment contribute in a material degree to the ailment or aggravation?
61. The nature and degree of the contribution of Mr Kelly’s employment with ActewAGL to his disease is in issue. A number of medical practitioners gave evidence in this regard, a summary of which follows.
Dr Watson
62. Dr Watson has been Mr Kelly's general practitioner since 1994.[12]
[12] Ex. A3, T5.
63. In a report of 26 April 2004 Dr Watson commented on the effect of the telephone call and subsequent redundancy on Mr Kelly. He wrote:
“The effects of this on Mr Kelly were dire. A vicious cycle of alcoholism and depression took over his life. Various medications, time in various detoxification clinics, psychologists consultations, psychiatrist consultations and admission to psychiatric wards are all a consequence of the handling of the redundancy.”
64. In oral evidence, Dr Watson said that he has frequently discussed the issue of termination with Mr Kelly and "he has not ever really recovered". Dr Watson said that in his view the psychological consequences Mr Kelly suffered stemmed more from the manner in which it was done, rather than the termination itself.
Dr Lioulios
65. As already indicated, Dr Lioulios has provided Mr Kelly with extensive counselling over a number of years. In relation to the question of the contribution of the employment she said:
“Beyond any doubt the manner in which it was done is what caused him to become ill…. His perceptions of breach of trust, his perceptions of his own lack of trust in what was real. He had a perception that something was happening, that he was going to be continuing to manage the transition. For example, he had been given indicators of that so he had a perception of reality that was basically destroyed when the termination came through.” [13]
[13] Transcript of the evidence of Dr Lioulios, 11 July 2006, p. 4.
66. In relation to the major depressive disorder Mr Kelly had developed, she said that it “absolutely wasn't present before [the redundancy] and the suicidal mind-set that has developed”.[14]
[14] Transcript of the evidence of Dr Lioulios, 11 July 2006, p. 8.
67. When Dr Lioulios first started treating Mr Kelly in July 2003, she said:
“He presented with depression and anxiety and recent suicide attempt, lots of indicators of adjustment difficulties, conflict, unable to make decisions, internal conflict and that sort of thing.”
Dr Lucas
68. Dr Lucas, Consultant Forensic Psychiatrist, gave oral evidence and provided a report of 28 March 2004.[15] He examined Mr Kelly on 22 February 2005 at the request of Mr Kelly's solicitor.
[15] Ex. A6.
69. In his report Dr Lucas diagnosed Mr Kelly as follows:
“Mr Kelly is suffering from major depression which is in part alleviated by an antidepressant, Avanza, mood stabiliser Epilim, and Valium to control anxiety. He has an established diagnosis of generalised anxiety disorder and panic disorder.” [16]
[16] Ex. A6, p. 13.
He said that Mr Kelly’s major depression had responded partly to treatment and that he continues to suffer from the long-standing generalised anxiety disorder and panic disorder. In his opinion “the manner in which Mr Kelly was dismissed from Actew has caused, or materially contributed, to his current condition”.[17]
Dr Skinner
[17] Ex. A6, p. 13.
70. Dr Skinner, Consultant Psychiatrist, gave oral evidence and provided two reports which are in evidence.[18] She examined Mr Kelly on 7 April 2005 at the request of Comcare's legal representative.
[18] Ex. R1 and Ex. R2.
71. In her report of 6 May 2005, Dr Skinner expressed the opinion that “Mr Kelly's condition has been materially contributed to by the sudden termination of his employment”.[19]
[19] Ex. R1, p. 9.
72. On the basis of the evidence of Mr Kelly, supported by Mrs Kelly, and the medical evidence to which we have referred, we are satisfied that it was the manner of redundancy, not the redundancy itself, which contributed to Mr Kelly's compensable condition. We are also satisfied it was a contribution in a material degree.
73. We accept the argument put on behalf of Mr Kelly that the aggravation of the pre-existing ailment and the development of the major depression was materially contributed to by three principal factors:
1)the lack of transparency in the process leading to Mr Kelly’s redundancy in December 2000 including Actew’s deliberate deception of him regarding his future;
2)the lack of respect shown by Actew for Mr Kelly’s contribution over 32 years of service in the organisation and in particular Mr Kelly’s perception of that lack of respect; and
3)the manner in which the decision to terminate Mr Kelly’s employment was communicated to him by telephone on 30 November 2000.
74. These factors are in accordance with the evidence of Mr Kelly and are consistent with an interview with Mr Pocock in May of 2001, approximately six months after the incident.[20] We have listened carefully to that interview during which, at various times, Mr Kelly made the following statements:
·“They did not give me the respect I deserved”
·“I was frightened and insecure”
·“I was lied to and misled”
·“I was frightened of rejection again, big time”.
[20] Ex. R3.
In giving evidence Mr Kelly confirmed that he experienced these feelings following his redundancy.
75. We also accept the opinion of Dr Skinner in her report of 5 May 2006:
“I noted that many of his admissions to Calvary Hospital refer to his anger, some of which was directed at the nature of his termination of employment. I consider that this anger rendered him more vulnerable to decompensation. If he had been able to take time to plan is retirement and receive advice about his financial situation and possible future career prospects, he might have been able to accept his situation without the psychological decompensation that has occurred.” [21]
[21] Ex. R2.
Mr Kelly was not given the opportunities outlined by Dr Skinner.
Do any one of the exclusions referred to in the definition of “injury” apply?
76. Comcare submitted that the relevant benefit Mr Kelly failed to obtain is that of ongoing employment with ActewAGL. Our earlier finding that the redundancy itself was not a contributing factor makes a finding on this issue unnecessary. However, in case we are wrong on that earlier point we will deal with the issue.
77. We agree that if the injury to Mr Kelly was a result of a failure to obtain the benefit of ongoing employment then compensation is not payable; Hart v Comcare (2005) 145 FCR 29. It is our view that the redundancy, however, was the exact opposite of a benefit, rather it was a detriment.
78. We refer to the decision of this Tribunal in the matter of Re Nicklason and Comcare [1999] AATA 736. The facts of that case appear analogous to the matters before us. Relevantly, Nicklason and Comcare involved a claim for an illness arising from the Applicant's failure to retain his employment with the Australian National Railways, at a time of the restructuring of TasRail. In deciding the issue of failure to obtain a benefit of ongoing employment in that matter, the Tribunal decided that “on the contrary we consider that the abolition of his position and his retrenchment constituted detriments”. The Tribunal went on to say:
“When some of the passengers on the Titanic failed to obtain places in lifeboats, and consequently drowned, what befell each of them was not so much the failure to obtain the benefit of a place in a lifeboat, but something essentially detrimental. Although the applicant's situation was not a life-and-death one, we think it is appropriate to view it in the same way. Such an approach to the meaning of the word "benefit" is consistent with the established principle that worker's compensation legislation is beneficial legislation, and that, all other things being equal, a provision in such legislation ought to be interpreted in the way most favourable to the worker. See Wilson v Wilson's Tile Works Pty Limited (1960) 104 CLR 328 per Fullagar J at 335.”
79. That scenario was properly contrasted with the decision of Re Patrick and Comcare (AAT 11609, 12 February 1997) where a failure to obtain one of three positions at the same level in a restructure of ATSIC constituted a failure to obtain a benefit. That case was distinguishable on the basis that it was envisaged that all the officers who had been employed under the old structure would continue to be employed. Some of them, however, would receive the benefit of being appointed to new positions sooner than others.
80. On the basis of these authorities it is our view that the correct approach when deciding whether or not a particular event constitutes a benefit is to do so with reference to the status quo. If an employee suffers an illness as a result of failing to obtain some advantage over and above the status quo then that is properly characterised as a failure to obtain a benefit. If, on the other hand, the employee suffers an illness as a result of a change which was disadvantageous when compared with the status quo, then that is in fact a detriment and the opposite of a benefit.
81. Applying the above approach to the facts before us it is apparent that the redundancy offered to Mr Kelly was a detriment. The status quo was that as of November 2000 he was employed by the new venture, ActewAGL. The effect of the changes in November 2000 was that Mr Kelly was disadvantaged and his situation worsened. In no sensible way can that be characterised as a failure to obtain a benefit. It is simply a disadvantage.
82. Counsel for Comcare argued that the decision in Trewin v Comcare[22] applies. We disagree. In our view Trewin is a case which illustrates the difference to which we have referred. It can be distinguished in that the status quo was that the worker was in temporary employment and there was a failure to obtain the benefit of permanent employment. That is not what happened here.
[22] (1998) 84 FCR 171
83. On that basis we are satisfied that even if we were to find there was a contribution, by reason of the redundancy itself, it was not a failure to obtain a benefit. Therefore the exclusion provision does not apply.
What was the date of injury?
84. Subsection 7(4) provides:
“(4) For the purposes of this Act, an employee shall be taken to have
sustained an injury, being a disease, or an aggravation of a disease,
on the day when:
(a) the employee first sought medical treatment for the disease,
or aggravation; or
(b) the disease or aggravation resulted in the death of the
employee or first resulted in the incapacity for work, or
impairment of the employee;
whichever happens first.”
85. The parties agree that Mr Kelly complained of depression to Mr Pocock in their meeting on 18 December 2000 and also to Ms Clark. In fact Comcare submitted that Mr Kelly was aware of his injury within days of his redundancy taking effect. On that basis, we are satisfied that Mr Kelly comes within section 7(4)(b). That is that the disease or aggravation first resulted in impairment, i.e. depression, no later than the end of December 2000.
ISSUES AS TO ENTITLEMENT TO COMPENSATION FOR AN INJURY RESULTING IN PERMANENT IMPAIRMENT?
86. There are 3 issues to decide in relation to Mr Kelly’s claim for permanent impairment in matter A2005/250:
1)has Mr Kelly suffered an impairment;
2)if so, is that impairment permanent; and
3)what is the degree of impairment given that compensation is only payable if the degree of impairment is less than 10%?
Has Mr Kelly suffered an impairment?
87. There was no issue between the parties that the condition from which Mr Kelly suffers is an impairment, and we are so satisfied.
Is the impairment permanent?
88. Subsection 24(2) provides:
“For the purpose of determining whether an impairment is
permanent, Comcare shall have regard to:
(a) the duration of the impairment;
(b) the likelihood of improvement in the employee’s condition;
(c) whether the employee has undertaken all reasonable
rehabilitative treatment for the impairment; and
(d) any other relevant matters.”
89. On the basis of Mr Kelly's evidence, supported by Mrs Kelly and the medical evidence, we are satisfied the impairment is permanent.
90. In support of this finding we rely on the evidence of Dr Watson in his report of 26 April 2004 where he referred to the conditions of adjustment disorder with depressed mood, depression and alcohol dependence. In his opinion the conditions were “related to his employment and the ongoing illness’s are unchanged and continue to be related to his employment.”
91. Dr Lioulios also gave evidence as to the permanent nature of the impairment. She stated:
“Unfortunately, I think Ross's prognosis is quite poor…. Without a lot of support and ongoing support he has been unable to function and I doubt that he will be able to function to the level of employment…. He has been in very active rehabilitation all the way through.” [23]
She was also asked about her knowledge of efforts by the Commonwealth Rehabilitation Service to rehabilitate Mr Kelly:
“… they've made it clear in discussions I've had with me as well as in discussions they've had with Ross, that they are doing everything that they can - they have done everything that they can. But they see little hope of him returning to employment.”
[23] Transcript of the evidence of Dr Lioulios, 11 July 2006, p. 6.
92. In his report of 28 March 2005 Dr Lucas commented on the permanency of Mr Kelly’s impairment as follows:
“Mr Kelly's prognosis is guarded given his history and the marked and prolonged disturbance of psychological and personal function suffered since leaving Actew. Mr Kelly's general level of functioning prior to leaving the company was good throughout his employment despite psychological problems requiring long term treatment and psychiatric supervision. His condition in the last four years has been a marked departure from this pattern and it seems to me unlikely he will return to his past level of functioning for at least the foreseeable future.”
93.Finally in her report of 6 May 2005 Dr Skinner noted:
“I consider that the effects of the aggravation caused by his termination of employment has not ceased, as this has set in chain the course of events leading to his present situation.” [25]
[25] Ex. R1, p. 9.
94. Dr Skinner also believed that the “effects of the pre-existing condition have probably remained stable”. She recommends that Mr Kelly continue with his present treatment, the benefit of which would be stabilisation of his condition. On the basis of these statements we find that Dr Skinner’s opinion was that it would be a stabilisation of the condition which arose from his employment.
95. We note that in evidence Dr Skinner appeared to resile from that opinion somewhat. But having listened to her cross-examination and taking into account what she clearly said in her considered report, we accept her opinion as expressed in that report in the terms to which we have referred.
96. On the basis of all the evidence, and with reference to the provisions of subsection 24(2), we are satisfied that Mr Kelly’s impairment has continued in varying degrees from December 2000 to present. We are satisfied that there is limited likelihood of an improvement in Mr Kelly's condition in the foreseeable future. We are also satisfied that he has undertaken all reasonable rehabilitative treatment for that impairment and continues to do so.
97. We are satisfied that Mr Kelly has suffered an impairment and has been incapacitated since the end of December 2000. The extent of that incapacity has varied. At times Mr Kelly has attempted to find work but even when working he found he was still impaired by the injury. We are satisfied that at no time since December 2000 has Mr Kelly had the capacity to work which he possessed prior to 30 November 2000.
What is the degree of impairment?
98. The parties have agreed that an impairment figure of 10% is appropriate and we are satisfied on the evidence before us that this is a proper assessment.
DECISION
99. In matter number A2004/227 the reviewable decision of Comcare made on 27 July 2004 is set aside and in substitution it is decided that pursuant to section 14 of the Safety, Rehabilitation and Compensation Act 1988 (Cth), Comcare is liable to pay to Mr Kelly compensation in respect of an injury, being an aggravation of a generalised anxiety disorder with associated depressive episodes and the associated development of a major depressive disorder, suffered by him between 30 November 2000 and 31 December 2000.
100. In matter number A2005/240 the reviewable decision of Comcare made 5 August 2005 is set aside and in substitution it is decided that pursuant to section 24 of the Act, Comcare is liable to pay to Mr Kelly compensation for permanent impairment which has resulted from the injury referred to in the decision in matter number A2004/227. The degree of permanent impairment determined in accordance with the approved guide is 10%.
101. In each matter, the parties have liberty to apply within 14 days of today in relation to costs. Should such an application not be made, Comcare shall pay Mr Kelly’s reasonable costs of the applications.
I certify that the 101 preceding paragraphs are a true copy of the reasons for the decision herein of J.W. Constance, Senior Member and Dr M.D. Miller AO, Member.
Signed: .....................................................................................
Joe Meagher, AssociateDate/s of Hearing 10-12 July 2006
Date of Decision 14 July 2006
Counsel for the Applicant Mr L Grey
Solicitor for the Applicant Pamela Coward & Associates
Counsel for the Respondent Ms L Walker
Solicitor for the Respondent Sparke Helmore
[24] Ex. A6, p. 14
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