Khan v Return to Work Corporation of South Australia - [2019] SASCFC 150

SUPREME COURT OF SOUTH AUSTRALIA
(Full Court)
KHAN v RETURN TO WORK CORPORATION OF SOUTH AUSTRALIA
[2019] SASCFC 150
Judgment of The Full Court
(The Honourable Chief Justice Kourakis, The Honourable Justice Peek and The Honourable Justice Doyle)
9 December 2019
WORKERS' COMPENSATION - ENTITLEMENT TO COMPENSATION - INJURY, DISEASE OR DISABILITY
Appeal against a decision of the Full Bench of the South Australian Employment Tribunal (the Full Bench).
In January 2009, the appellant was assaulted by a former employee of the company for whom he worked. In April 2013, a consent determination was made in the South Australian Workers Compensation Tribunal awarding the appellant a sum based on a 26 per cent whole person impairment, including a nine per cent impairment of his right knee. His knee had been arthritic before the attack. The appellant subsequently underwent right knee replacement surgery and claimed for lump sum compensation pursuant to s 43 of the Workers Rehabilitation and Compensation Act 1986 (SA) (the 1986 Act). This claim was dismissed at trial, as was his appeal to the Full Bench.
The appellant appeals on the primary grounds that the majority of the Full Bench:
1. misconstrued the provisions of ss 43 and 43A of the 1986 Act in concluding that there can be only one claim (or one assessment) in respect of the impairment that a compensable injury results in; and
2. misconstrued or misapplied s 43A(9)(b) of the 1986 Act in concluding that, had there been an entitlement to an assessment of the impairment caused by the total knee replacement, the pre-existing arthritis provided a basis for reduction which the trial judge considered was required.
Held per Kourakis CJ (Peek and Doyle JJ agreeing), dismissing the appeal:
1. Section 43 of the 1986 Act provides only for a single award of lump sum compensation for the same compensable injury.
2. It is therefore unnecessary to deal with the second ground concerning how the worker’s pre-existing condition might be taken into account if a subsequent claim were available.
Workers Rehabilitation and Compensation Act 1986 (SA) ss 3, 43, 43A; Return to Work (Transitional Arrangements) (General) Regulations 2015 (SA) reg 5; Workers Rehabilitation and Compensation (Scheme Review) Amendment Act 2005 (SA), referred to.
Khan v Return to Work SA [2019] SAET 11, discussed.

WORDS AND PHRASES CONSIDERED/DEFINED
"injury"

KHAN v RETURN TO WORK CORPORATION OF SOUTH AUSTRALIA
[2019] SASCFC 150
Full Court: Kourakis CJ, Peek and Doyle JJ

KOURAKIS CJ: On 17 January 2009 the appellant, Mr Khan, was assaulted by a former employee of the company for whom he worked. He was struck across the face, head, shoulders, foot and legs by a crowbar.
On 24 April 2013, a consent determination was made in the South Australian Workers Compensation Tribunal awarding Mr Khan $61,368.00, based on a whole person impairment of 26 per cent, including a nine per cent impairment of his right knee. At the time, the consent determination was made, Mr Khan intended, to the knowledge of the Return to Work Corporation, to have a total right knee replacement at his own expense at some time after the determination was made. Mr Khan’s knee was arthritic before the attack; an arthroscopy conducted in 2008 revealed ‘bare bone arthritic change’.
This appeal concerns only the award of lump sum compensation which was made with respect to his right knee injury.
Mr Khan subsequently underwent right knee replacement surgery but he claimed that it left him with a greater impairment. His subsequent claim for an additional lump sum was dismissed at trial, as was his appeal to the Full Bench of the South Australian Employment Tribunal (SAET). It is against the Full Bench decision which Mr Khan appeals.
The medical reports which were exchanged before the consent determination was made included a report from Dr D’Onise, who assessed Mr Khan’s impairment to be zero per cent, because he could not attribute any ‘loss of joint space to the assault as opposed to the natural progression of his degenerative joint’. On the other hand, Dr Ormandy assessed the impairment at 10 per cent, but acknowledged that there may need to be an adjustment for his pre-existing arthritic condition.
An orthopaedic surgeon, Dr Waters, performed the right knee replacement surgery on 27 May 2013.
On 13 May 2016, Mr Khan brought an application for an additional award of lump sum compensation pursuant to s 43 of the Workers Rehabilitation and Compensation Act 1986 (SA) (the 1986 Act), claiming that the impairment of his right knee had increased by reason of the knee replacement surgery. The claim was made with respect to the same injury which he had suffered in January 2009, but on the grounds that Mr Khan ‘suffers from a number of other impairments arising out of [that] trauma’.
Dr D’Onise, in a report prepared for that application, assessed a 30 per cent whole person impairment as a result of the right knee following its replacement with a prosthetic. Dr D’Onise made no allowance for the past arthritis, and no deduction to the impairment, because there was no arthritis in the prosthetic.
Dr Byok also examined and provided reports on Mr Khan’s condition, both before and after the total knee replacement. Dr Byok found herself unable to assess a permanent impairment following the right knee replacement because of the inconsistencies in Mr Khan’s presentation. However, her evidence was that, if it were accepted that Mr Khan was suffering severe pain, she would assess his impairment at 30 per cent, and, if it were accepted that he was suffering only moderate pain, at 20 per cent. Dr Byok testified that she disagreed with Dr D’Onise’s approach of making no deduction for the pre-existing disability.
Mr Khan’s claim was heard and dismissed by the President of the SAET. McCusker PJ held that Mr Khan’s claim was res judicata, his entitlement to an award of a lump sum compensation pursuant to s 43 having been determined finally and conclusively before his right knee replacement. The President held that if it were open to make a further award, it would be necessary to take into account the pre-existing impairment to the right knee joint, even though it had been totally replaced by the surgery. The President would also have dismissed the claim because he was not satisfied by Mr Khan’s testimony that his impairment had in fact increased.
Mr Khan unsuccessfully appealed to the Full Bench of the SAET. The Full Bench held, by majority, that the 1986 Act did not permit more than one award of lump sum compensation with respect to an impairment of the same body part. Hannon and Calligeros DPJJ held that the tenor of ss 43 and 43A, and in particular the pre‑conditions for an award of compensation, permanence and stability, impliedly precluded multiple assessments.[1]
[1] Khan v Return to Work SA [2019] SAET 11 at [25]-[47], [112].
Lieschke DP dissented. Lieschke DP held that the 1986 Act provides for the assessment and compensation of particular impairments caused by a particular physiological condition and not for the impairment to a body part irrespective of the underlying pathology. Lieschke DP reasoned that Mr Khan had been compensated for the impairment resulting from the deterioration of his arthritic knee but had not been compensated for the impairment caused by the replacement of his knee with a prosthetic.[2]
[2] Khan v Return to Work SA [2019] SAET 11 at [139]-[141].
Hannon and Calligeros DPJJ both held that if a second claim could be made, the pre‑existing arthritic impairment must be taken into account.[3] Hannon DPJ stated:[4]
[61]The position put by Mr Warren, in the circumstances of this case, would allow the method of assessment provided by the WCG to prevail over the governing principles of assessment mandated by the repealed Act in a similar manner to that disapproved of by Forrest J in Alcoa. Whilst it is true that there was no osteoarthritis present at the time of the post-surgery assessment which was directly contributing to the ongoing impairment, the degree of impairment for which Mr Khan is now seeking compensation would not exist but for the fact of the pre‑existing condition, and the part it played in leading to the larger current impairment. Mr Warren’s contention would allow the outcome of a particular method of assessment mandated by the WCG to defeat the intent of s 43A(9)(b) that impairments from unrelated injuries be disregarded. The Tribunal must give effect to the intent of the provision, and do its best on the evidence at hand to assess the extent to which the unrelated injury or cause is playing a part in the current impairment. I consider this requires that regard be had to the historical material evidencing the role of the pre-existing impairment in the development of the ultimate condition subject to the further assessment.
[3] Khan v Return to Work SA [2019] SAET 11 at [2], [61], [128].
[4] Khan v Return to Work SA [2019] SAET 11 at [61].
I would dismiss the appeal. I would hold that s 43 provides only for a single award of lump sum compensation for the same compensable injury, essentially for the reasoning given by Hannon and Calligeros DPJJ. It is therefore unnecessary to deal with the second ground concerning how the worker’s pre‑existing condition might be taken into account if a subsequent claim were available. The issue is particularly problematic in the circumstances of this case because the injury suffered in 2009 was a secondary injury caused by the compensable deterioration of Mr Khan’s pre‑existing arthritis, and because it was that secondary injury which resulted in the surgical insertion of a prosthetic knee. Such is the complexity of the labyrinth of provisions of the heavily amended 1986 Act that discretion is the better part of valour in taking up challenges to divine its meaning.
My reasons follow.
The appeal
It is accepted on appeal that Mr Khan’s lump sum compensation was to be assessed by reference to the 1986 Act as it stood between 1 July 2013 and 30 June 2015. An argument, which had been put by Mr Khan before the Full Bench, that the transitional provision in reg 5 of the Return to Work (Transitional Arrangements) (General) Regulations 2015 (SA) gave an entitlement in addition to that which existed under the 1986 Act, is not pursued.
Sections 43 and 43A as they applied to Mr Khan were enacted by the Workers Rehabilitation and Compensation (Scheme Review) Amendment Act 2005 (SA) which was assented to on 19 June 2008. Section 43 of the 1986 Act as it stood between 1 July 2013 and 30 June 2015 provided as follows:
43—Lump sum compensation
(1) Subject to this Act, if a worker suffers a compensable injury resulting in permanent impairment as assessed in accordance with section 43A, the worker is entitled (in addition to any entitlement apart from this section) to compensation for non-economic loss by way of a lump sum.
(2) Subject to this section, the lump sum will be an amount that represents a portion of the prescribed sum calculated in accordance with the regulations.
(3) Regulations made for the purposes of subsection (2) must provide for compensation that at least satisfies the requirements of Schedule 3 taking into account the assessment of whole of person impairment under this Division.
(4) An entitlement does not arise under this section if the worker's degree of permanent impairment is less than 5%.
(5) An entitlement does not arise under this section in relation to a psychiatric impairment.
(6) If a worker suffers 2 or more compensable injuries arising from the same trauma—
(a)     the injuries may together be treated as 1 injury to the extent set out in the WorkCover Guidelines (and assessed together using any combination or other principle set out in the WorkCover Guidelines); and
(b)     the worker is not entitled to receive compensation by way of lump sum under subsection (2) in respect of those injuries in excess of the prescribed sum.
(7) If—
(a)     a compensable injury consists of the aggravation, acceleration, exacerbation, deterioration or recurrence of a prior compensable injury; and
(b)     compensation by way of lump sum has been previously paid under this section, or a corresponding previous enactment,
there will be a reduction of the lump sum payable under this section in respect of the injury by the amount of the previous payment unless such a reduction is incorporated into the provisions of the WorkCover Guidelines.
(8) For the purposes of this section, the prescribed sum is—
(a)     unless a regulation has been made under paragraph (b)—$400 000 (indexed); or
(b)     a greater amount prescribed by regulation for the purposes of this definition.
(9) In connection with the operation of subsection (8)—
(a)     the amount to be applied with respect to a particular injury is the amount applying under that subsection at the time of the occurrence of that injury; and
(b)     an amount prescribed by regulation under paragraph (b) of that subsection must be indexed so as to provide annual adjustments according to changes in the Consumer Price Index.
(10) For the purposes of this section, any degree of impairment will be assessed in accordance with section 43A (and the WorkCover Guidelines).
…
(12) In this section—
WorkCover Guidelines means the guidelines published under section 43A.
An ‘injury’ is defined by s 3 of the 1986 Act to mean any physical or mental injury, including any impairment of a limb or body part. An injury is therefore both a physiological change and the loss of function occasioned by it. However, plainly enough, the physiological change and the loss of impairment occasioned by it are not different injuries. Whether or not one aspect, or the other, of the meaning of injury is applicable in any provision of the 1986 Act will depend on the context in which the word ‘injury’ is used. In s 43(1) of the 1986 Act, the award for non‑economic loss by way of a lump sum is for ‘a compensable injury resulting in permanent impairment’; the phrase is a compendious one referring to the permanent impairment resulting from a compensable injury. The approach of Lieschke DP is physiologically sound but requires a dissection of the concepts of injury and impairment which s 43(1) has bound together. The compensable injury was the deterioration, including by way of acceleration, of his pre‑existing arthritic condition, even though the nature and degree of the associated compensable impairment may change depending on the way in which the injury is treated.
A ‘secondary injury’ is defined by s 3 as an injury that results from the aggravation, acceleration, exacerbation, deterioration or recurrence of a prior injury.
It is plain from sub-ss (2) and (3) of s 43 and Schedule 3 of the 1986 Act that the lump sum compensation must be proportionate to the degree of whole person impairment.
Section 43(7) of the 1986 Act is significant. It provides for a reduction in the lump sum when the compensable injury consists of the aggravation, acceleration, exacerbation, deterioration or recurrence of a ‘prior compensable injury’ which has been previously compensated by a lump sum. Section 43(7) does not apply to the autogenetic deterioration of a single injury. It applies only where the compensable injury for which a lump sum compensation pursuant to s 43 is sought is a secondary injury, and the primary injury had been compensated by a lump sum payment. Plainly then, the legislation contemplates, and has made provision to guard against, double compensation in those circumstances. It is significant that no such provision has been made with respect to successive awards for increasing impairments resulting from the pathogenesis of the same compensable injury.
In particular, there are no provisions for the prevention of double compensation if successive awards were to be made as the degree of the same impairment increased. I acknowledge that it might be said that it goes without saying that any subsequent entitlement is only for the additional whole person impairment which the worker has come to suffer. However, there is no textual basis for that approach. Indeed, the text suggests the converse. The entitlement conferred by s 43(1) is for ‘a compensable injury resulting in permanent impairment’. There is, on Mr Khan’s premise, only a single injury. It was the injury caused in 2009. When Mr Khan obtained his first award of lump sum compensation, it was, in part, for the compensable right knee injury resulting in a permanent impairment. The consent determination was premised on a knee impairment of nine per cent. On the application for a further payment pursuant to s 43(1) of the 1986 Act, Mr Khan claimed that he was suffering the same compensable right knee injury, but that it now resulted in a permanent impairment, as assessed by Dr D’Onise, of 30 per cent. It is difficult to see how the text of s 43 can be read so as to differentiate between the first and subsequent impairments such that it mandates a payment based on the entirety of the impairment for the first claim, but only a payment based on the incremental increase for subsequent claims.
The construction urged on Mr Khan’s behalf is also problematic in its application to the threshold imposed by s 43(4) of the 1986 Act. Mr Khan’s counsel submits that, if it were accepted that successive awards of lump sum compensation could be made, the threshold fixed by s 43(4) of the 1986 Act would not apply to each incremental claim. The threshold would be exceeded if the totality of the impairment was more than five per cent, and, having been surpassed once in order to obtain the initial award, it was forevermore satisfied. However, that contention implicitly accepts, inconsistently with the argument that s 43 allows compensation only for increase of the degree of impairment, that each successive claim is for the total impairment, and not the increment of deterioration. If each successive claim must be treated as one for the entire impairment to overcome the threshold, s 43 of the 1986 Act provides no machinery to make a deduction for the earlier award. There is no provision analogous to s 43(7) of the 1986 Act which deals with secondary injuries. It would become necessary to imply a provision against double recovery. That would leave a court with choices of legislative policy; should the adjustment be made simply by deducting the dollar amount previously paid, or should an allowance be made for increases in the prescribed sum?
Section 43(1) refers to an assessment in accordance with s 43A. It relevantly provides:
43A—Assessment of impairment
(1) This section sets out a scheme for assessing the degree of impairment that applies to a compensable injury that results in permanent impairment.
(2) An assessment—
(a)     must be made in accordance with the WorkCover Guidelines; and
(b)     must be made by a legally qualified medical practitioner who holds a current accreditation issued by the Corporation for the purposes of this section.
(3) The Minister will publish guidelines (the "WorkCover Guidelines") for the purposes of section 43 and this section.
…
(8) An assessment of the degree of impairment resulting from an injury for the purposes of this Division must—
(a)     be made after the injury has stabilised; and
(b)     subject to subsection (9), be based on the worker's current impairment as at the date of assessment, including any changes in the signs and symptoms following any medical or surgical treatment undergone by the worker in respect of the injury.
(9) An assessment must take into account the following principles:
(a)     if a worker presents for assessment in relation to injuries which occurred on different dates, the impairments are to be assessed chronologically by date of injury;
(b)     impairments from unrelated injuries or causes are to be disregarded in making an assessment;
(c)     assessments are to comply with any other requirements specified by the WorkCover Guidelines or prescribed by the regulations.
(10) An amendment or substitution in relation to the WorkCover Guidelines under subsection (4)(d) will only apply in respect of an injury occurring on or after the date the amendment or substitution takes effect.

The guidelines made pursuant to s 43A of the 1986 Act must, of course, accord with the essential structure for lump sum compensation provided by ss 43 and 43A of the 1986 Act. Those guidelines cannot inform the construction of the statutory provisions but must comply with them and must fall within the parameters set by those provisions. I accept that the guidelines may provide illustrations of issues which might arise. In that respect, they may illustrate the mischief and issues toward which ss 43 and 43A of the 1986 Act are directed, and that mischief may inform their construction. Moreover, the prescriptions as to what must be contained in the guidelines may assist in the construction of other statutes’ provisions. The guidelines do not provide any assistance of that kind in this case.
Section 43A(8) of the 1986 Act stands squarely in the way of the construction urged on Mr Khan’s behalf. Section 43A(8)(a) serves an obvious and important purpose if only a single award can be made for the same compensable injury. It ensures that the single award is not made until the injury has stabilised, thereby enhancing the prospect that the award made most closely approximates the degree of permanent impairment which the worker is likely to suffer. True it is that that approach may well mean that an award of lump sum compensation could not be made for some conditions until after a lengthy period of recovery, unless the parties consented to an award, presumably one which factored in a discount for the early receipt of what was most likely to be the future award. However, the policy reasons for providing a single lump sum are readily apparent. The making of successive awards as the impairment deteriorates creates administrative burdens and uncertainty in the management of a scheme like that established by the 1986 Act.
On the other hand, there would be little purpose and utility in the enactment of subparagraph (a) of s 43A(8) of the 1986 Act if successive awards could be made. All that would be required on Mr Khan’s construction is that there be a permanent impairment, and that the award actually made on each successive claim not exceed that degree of impairment which is likely to be permanent.
Subparagraph (b) of s 43A(8) also tells strongly against Mr Khan’s proposed construction. If the assessment must be made on the worker’s current impairment, then the SAET could not factor in any possible improvement because of future treatment. That provision is an important safeguard for workers, which supplements the requirement for permanency and stability in subparagraph (a), if only one award can be made. However, if a number of successive awards can be made, it could lead to a windfall to an injured worker who has embarked on a process of rehabilitation which leads to further recovery. On the first application, an award might be made on a degree of impairment which will be higher, on some occasions considerably higher, than the permanent or long-term impairment. I acknowledge that the SAET might adjourn an application pending treatment and recovery, but again it is telling that Parliament has not expressly conferred that discretion and has not expressly prescribed considerations to guide that discretion.
Conclusion
The textual and contextual indications of statutory intention weigh heavily against Mr Khan’s construction. I would hold that only a single award can be made pursuant to s 43 of the 1986 Act for the same compensable injury. I would dismiss the appeal.
PEEK J: I would dismiss the appeal. I agree with the reasons of Kourakis CJ.
DOYLE J: I would dismiss the appeal, and agree with the reasons of Kourakis CJ.