Mathieson and Comcare - [2002] AATA 858

DECISION AND REASONS FOR DECISION [2002] AATA 858

ADMINISTRATIVE APPEALS TRIBUNAL )

) No V00/1272

GENERAL ADMINISTRATIVE DIVISION        )
           Re      SCOTT MATHIESON
  Applicant
           And    COMCARE
  Respondent

DECISION

Tribunal Mr J. Handley, Senior Member

Date26 September 2002
PlaceMelbourne

Decision      The decision under review is set aside and in substitution IT IS DECIDED- 1. The applicant suffered a permanent whole person impairment by reason of bilateral knee injuries at 1 December 1988 at 10%. 2. The permanent whole person impairment at the time of this review was 30%. 3. The applicant is entitled to compensation pursuant to s.24 of the Safety, Rehabilitation & Compensation Act 1988 ("the Act"). 4. The applicant is remitted to the respondent to assess compensation pursuant to s.27 of the Act. 5.     The respondent shall pay the applicants costs.
  ..........Sgd. Mr J. Handley........................
  Senior Member
CATCHWORDS
Compensation - Bilateral knee injuries in 1963 - whether any permanent impairment at 1 December 1988 - whether any qualitative/quantitative deterioration of 10% or more since 1 December 1988 - decision set aside.
Brennan v Comcare (1994) 122 ALR 615
Comcare v Levett (1995) 60 FCR 14
Department of Defence as Delegate of Comcare v West (1998) 156 ALR 651
Blackman v Australian Telecommunications Corporation (1990) 12 AAR 11

REASONS FOR DECISION

26 September 2002 Mr J. Handley, Senior Member

The applicant applies to review a reviewable decision made by the respondent on 28 September 2000. That decision affirmed a primary determination made on 2 August 1999.
The respondent decided that the applicant suffered knee injuries in 1963 when he was a member of the Royal Australian Navy. Having read a report of the applicant's treating orthopaedic specialist, the respondent determined that the knee injuries became permanent in 1963. It followed, according to the determination, that the provisions of the Commonwealth Employees Compensation Act 1930 ("the 1930 Act") applied. Additionally, the respondent - having decided that it was "probable that your incapacity for work will be total and permanent"- pointed to s12 of the 1930 Act which prohibited lump sum compensation for permanent impairment in the event of total and permanent incapacity.
The hearing of this application commenced on 21 December 2001. Mr Trigar of counsel appeared on behalf of the applicant and Mr Wallace of counsel appeared on behalf of the respondent. The application did not then conclude and (by reason of considerable difficulties associated with finding a compatible date) the application resumed on 13 May 2002, where evidence was heard from medico-legal specialists.
Mr Trigar submitted that the applicant was seeking compensation pursuant to s24 of the Safety, Rehabilitation and Compensation Act 1988 ("the 1988 Act") for knee injuries. He said that the applicant was presently receiving weekly compensation for total incapacity by reason of osteoarthritis of the patello femoral joints of both knees, as a result of the dislocation of both patella whilst he was a member of Royal Australian Navy between 1963 and 1975. Within those years, the applicant was engaged as a leading hand cook.
Mr Trigar said that the applicant first suffered a dislocation of his left patella whilst a member of the crew of HMAS Cerberus in 1963 and subsequently to the right knee. Surgery was undertaken by Mr Schumak upon the right knee on 7 June 1967 and on the left knee by Mr Faithful on 16 June 1972. In 1975, the applicant was discharged from the Navy and thereafter has been engaged in a number of different employments until approximately 1994. Thereafter, he was unemployed for some years, was employed in prospecting in about 1997 and was engaged in some casual work in 1998. Thereafter, it was said that Mr Mathieson has been totally and permanently incapacitated.
Mr Trigar submitted that the injuries to the applicant's knees did occur before 1988. The impairment to both knees however became permanent after 1 December 1988, thereby giving rise to a lump sum entitlement for permanent impairment pursuant to s.24 of the 1988 Act. In the alternative, it was put that the applicant would demonstrate that he had suffered a significant deterioration of a qualitative and quantitative degree greater than 10% subsequent to 1 December 1988.
In so far as the alternate basis for the claim is concerned, the applicant relied on a full Federal Court decision of Department of Defence as Delegate of Comcare v West (1998) 156 ALR 651.
Mr Wallace on behalf of the respondent, submitted that the applicant suffered impairments to his left and right knees respectively in 1963 and 1965, which he continues to suffer. By reason of the conceded total incapacity for employment and the injuries having occurred during the currency of the 1930 Act, the applicant is disentitled to lump sum compensation for permanent impairment.
Scott Mathieson
Mr Mathieson is presently single, having previously been married on two occasions and divorced from both marriages. He said that he joined the Royal Australian Navy in 1963 having enlisted as a member of HMAS Cerberus, initially as a cook, but eventually qualifying as a leading hand cook. He was discharged on 10 March 1975.
Prior to service, Mr Mathieson said that he had "no problem" with his legs. He competed in the sports of football, tennis, water polo, swimming, cricket, basketball and volleyball.
On a date that he could not recall, Mr Mathieson said that his right knee "gave way". Thereafter, he said, he suffered frequent dislocations of that knee and his left knee. Surgery had subsequently been undertaken with respect to both knees.
The applicant - who presently receives a pension from the Department of Veterans' Affairs for post-traumatic stress disorder and hearing loss at 100% of the General Rate - said that his memory was "hazy", but said there were many occasions between 1963 and 1975, whilst he remained enlisted, where he had difficulty walking and where he was an inpatient of hospitals. He said the surgery he underwent was unsuccessful.
There was an occasion during his service in November 1973 where he was hit by a hockey stick during a game of hockey and thereafter suffered pain. Whilst a member of the crew of HMAS Penguin there was an occasion, also, where the applicant recalled dislocating his knees when tipping rubbish, which resulted in hospitalisation. The applicant said that he complained that his knees at discharge were "not right", however he acknowledged that the discharge medical forms recorded him as being "fully fit".
Subsequent to discharge, Mr Mathieson was engaged in a wide variety of employment, a summary of which is found at pages 21 and 22 of the T documents.
Between 1975 and 1976, he worked with a security firm in Sydney which required mobile and foot patrol. Mr Mathieson said that he had difficulty then with his knees, but they did not interfere with his work. He experienced similar difficulty with another security firm in Sydney between 1977 and 1978.
Between 1978 and 1979, he was employed in Port Hedland in Western Australia, fitting plaster sheets to ceilings. Mr Mathieson said he worked from a scaffold and described the work as "light". He said he performed that work with difficulty.
In 1979, he was engaged as a catering supervisor at Mt Newman in Western Australia, and at about that time he and his former wife were also engaged in self-employment in a business which was a nursery and gun shop. (The name of the business was "Guns and Roses").
Between 1979 and 1991, he was employed at Mt Newman driving large trucks which transported iron ore from open cut mines. The vehicles are known as "Haulpaks", which carried either 120 or 190 or 200 tonnes of material. Mr Mathieson said that the vehicle was activated by buttons located on the floor of the cabin of the vehicle which were depressed using his foot. He said that one button was depressed to cause the vehicle to move forward and another button to cause the vehicle to stop. He said he obtained access to the cabin of the vehicle by climbing approximately 12 steps on a ladder, which was either at 45 degrees or vertical to the vehicle. (Mr Mathieson volunteered that he would be unable to drive those vehicles presently because he would be unable to climb into the cabin. He said when he places weight on his legs his knees collapse). Whilst in Mt Newman, Mr Mathieson was also a union executive for the Transport Workers' Union. He said his employment was eventually terminated, but said that it was not by reason of his knee injuries.
Between 1991 and 1993, Mr Mathieson was engaged as a supervisor in Mandurah in Western Australia, responsible for persons in the collection and propagation of seeds and cuttings along sand dunes. Essentially, he was engaged in rehabilitation and stabilisation of sand dunes. He said that his knees were painful and that walking was an effort.
Between 1993 and 1994, he returned to security work in Mandurah, and then engaged in some gold prospecting in Western Australia.
In 1998, he returned to Victoria and lived in Shepparton where he obtained some casual seasonal work with a local cannery, lifting boxes from a conveyor belt onto pallets. He recalled that his legs were then painful and he was working from a concrete floor. Mr Mathieson said that at the end of each day he "suffered" and he was "swallowing" panadeine forte and panadol tablets.
With respect to his treatment, Mr Mathieson said he attended Dr Stirling in Shepparton who issued prescriptions for medication and certificates. He had been treated by either Mr Connelly or Mr Anderson in Mandurah in the early 1990's. He recalled that he had had an arthroscope in Western Australia, because one of his knees had dislocated.
At the present time, Mr Mathieson said that his knees ache, especially in winter. He says he walks at a slow pace and he is careful when walking on uneven ground. He says he is forever at risk of his knees dislocating – even when in bed. He uses a walking stick when he leaves his house, which has been fitted with handrails. Mr Mathieson said that his knees have worsened over the last "few years" and he is now unable to walk one hundred yards. He says that he drives his car to a local shop. He said on occasions when he is "careless", his knees lock and he suffers intense pain.
In cross-examination, Mr Mathieson was referred to a typed document at page 17-20 of the T-documents, and a 6 page handwritten letter received as exhibit 5. The typed document was completed in support of a claim for invalidity service pension, pursuant to the Veterans' Entitlements Act 1986. The handwritten document was said by Mr Mathieson to be in support of his compensation claim. Both documents are virtually identical and are signed by Mr Mathieson.
Mr Mathieson was taken to the first page of the typed document found at page 17 where, in relation to his sporting activities, it is recorded "all that stopped when I had the first operation". Mr Mathieson said that he then ceased competitive, representative, sport only.
In relation to his discharge from naval service, the applicant said that he complained about his knee pains even though he was regarded as fit for sea duty. He said that he did not regard himself then as being fit.
Subsequent to discharge, Mr Mathieson said that he has suffered increased frequency of knee dislocations. He acknowledged that his knees did dislocate during service and painkilling medication was consumed.
In order to determine the extent of the applicant's discomfort by reason of his knee injuries during service Mr Mathieson was asked a number of questions concerning his ability to squat. His attention was also drawn to a report from Mr Coates, an orthopaedic surgeon found at page 79 (dated 16 March 1999) where it is recorded "he told me that he had difficulty in undertaking activities, such as squatting …". Mr Mathieson said he is now unable to squat but agreed he was able to squat in earlier years. Mr Mathieson said that he could not recall "any great difficulty with activity during navy service". He said that there were "a million ladders in the navy and I had to do this all day".
In relation to his employment subsequent to discharge, Mr Mathieson said that when he was self-employed fitting plaster sheets, he mainly supervised sub-contractors, whereas he and other employees fitted steel studs in the construction of house frames.
In relation to his Haulpak driving, Mr Mathieson said that he would have to climb between 8 and 16 steps into the cabin of the vehicle once per day and descend the steps once per day also. He said he had his lunch and morning and afternoon smoko in the cabin of the vehicle, as it was air-conditioned. He recalled, however that, he was finding greater difficulty climbing into and out of the Haulpak around 1990. He said the cabin was not cramped and described it as being about the same size as a car body.
In re-examination, Mr Mathieson was taken to a number of medical reports found within the T-documents. At page 38, is a report of a medical examination of 21 September 1992 where Mr Mathieson was found to have suffered recurrent dislocations of his left knee, however on examination it was found that he had good movement, but the presence of crepitus. He was found to be fit for sea service. At page 141, is a report completed by Mr Faithful who performed the second operation. On 15 March 1973, it is reported that although he was consuming panadol, Mr Mathieson was apparently able to play squash, his knee joint movements were reported to be "full and pain free without crepitus" and was "cleared" to play football.
Prior to 1990, Mr Mathieson said that there were occasions where his legs would "give way", but he had not fallen. He said in recent years there have been episodes where he has fallen. He said his legs now are "weaker" and that he now suffers "100% more dislocation now than before". He said that prior to 1990, his knees were dislocating every 2 or 3 months.
He said his employment as a Haulpak driver was terminated because of "industrial issues". Nonetheless, he acknowledged that it was becoming more difficult to climb into and out of the vehicles and he was using his arms to assist ascent and descent.
David Conroy
Mr Conroy is an orthopaedic surgeon who gave evidence on the resumption of the hearing on 13 May 2002. He provided a report that on 25 November 1999 that arose out of a consultation with the applicant as arranged by the solicitors. That report is found at T23.
Mr Conroy said that on the history he obtained, the applicant had good knee function prior to his service in Navy and unrestricted use of his legs subsequent to surgery and certainly prior to 1 December 1988. Subsequent to that date, he noted on the applicant's history that there had been a slow and progressive, but accelerating, deterioration in the applicant's knees.
He noted that the applicant did have a pre-existing developmental abnormality, which predisposed him to dislocation of the patella. He said that the effects of the pre-existing developmental abnormality and the subsequent development of osteoarthritis was responsible for the progressive increase in the applicant's symptoms of pain and discomfort. In his experience, osteoarthritis, once established, progresses exponentially. He estimated the applicant's impairment at December 1988 at 10% and at the date of his examination in 1999 at 30%.
In cross-examination, Mr Conroy acknowledged that his opinion was based on the history that was given to him and that he had only consulted the applicant on one occasion (in 1999). He agreed that he was giving an opinion "in retrospect", by having to provide an assessment of the impairment at December 1988.
The applicant's history of working for 13 years as a heavy truck driver until 1990 influenced Mr Conroy in his opinion. He noted in his report that the applicant had told him that he ceased work because of "painful knees".
With respect to his assessment of a 10% impairment in 1988, Mr Conroy said that he regarded the criteria in Table 9.5 of the Comcare Guide and was of the opinion that the applicant could "rise to a standing position and walk, but has difficulty with grades and steps". He acknowledged that he did not express that opinion in his report. Similarly, he agreed that he did not express in his report an opinion that would justify the criteria as against a 20% impairment. When pressed on this issue, he agreed that his assessment of 10% was an "estimate". He acknowledged that the applicant may have had an assessment of 0% impairment at December 1988, or he may have had an impairment of 20% at December 1988. Mr Conroy said that had the applicant given him a history of his knees being always "sore and tender" with constant pain, more so in the right since 1972, he probably would have given an assessment of 20%. This is because the criteria of being able to "rise to a standing position and walk but has difficulty with grades, steps and distances" would have been achieved. Additionally, the recurring dislocations would probably indicate to him that the applicant would have difficulty with grades, steps and distances. Equally, he was of the opinion that the applicant's difficulty with being able to cope as a truck driver by 1990 probably translated into difficulty negotiating grades, steps and distances. Mr Conroy said it was possible, but not probable, that the applicant had a 20% impairment at 1988, but because "it was not possible to say either way" he estimated the impairment at 1988 at 10%.
With respect the applicant's work as a truck driver, Mr Conroy said that he understood that the applicant climbed into and out of his truck on many occasions per day, but then onto a wharf, thereby not being exposed to climbing a ladder. Nonetheless, he said it was possible that the applicant's work as a truck driver did aggravate and accelerate the osteoarthritis of his knees.
With respect to the pre-existing developmental abnormality in his knees, Mr Conroy said he did not apportion any responsibility between that condition and the subsequent work episodes, because he was not asked to do so. Nonetheless, he thought that no percentage assessment should be attributed to the pre-existing condition because in his experience "a lot of people have this abnormality and don't have recurrent dislocation of the patella". Mr Conroy disagreed with an opinion expressed by Mr Jones, who examined the applicant on behalf of the respondent, that 50% of any impairment suffered by the applicant was due to the pre-existing abnormality.
With respect to whether the applicant suffered any loss of range of movement prior to 1 December 1988, Mr Conroy said that it does not necessarily follow that osteoarthritis precipitates lost range of movement. He said that he "suspected" that the applicant had normal range of movement. He acknowledged that having to squat would be a test of range of movement, but said that the tests would need to determine whether there was active or passive range of movement and whether there was weight bearing.
In re-examination, Mr Conroy was taken to an opinion expressed by Mr Faithful, the applicant's treating surgeon of 15 March 1973 (refer page 141 T documents). Noting that the applicant was then "cleared" to play football and was playing squash, Mr Conroy was of the opinion that the applicant's condition at that time was "not severe".
The witness was then taken to two reports which were received into evidence on the resumed day of hearing. Both reports were completed by Mr Anderson, an orthopaedic surgeon of Murdoch, Western Australia who reported on 3 November 1994 and 1 December 1994. In the former report, Mr Anderson noted (in part):
"… He had functioned well until a couple of months ago when he developed progressive soreness and swelling and severe pain two weeks ago when walking up a step".

In the report of 1 December 1994 Mr Anderson (in part) recorded:

"I scoped Scott's knee last week and fortunately with the joint debridement he seems very happy with the present state with no pain. Nevertheless he has severe wear changes. At the patello femoral articulation this has been denuded down to the bare bone in places and there were similar fairly severe changes in the medial compartment. The lateral joint was quite well preserved. He may be looking at more major surgery at some stage. …"

Mr Conroy was of the opinion that these reports indicated that the applicant was "going well" until 1994 when he attended Mr Anderson.
In terms of the qualitative and quantitative differences in the applicant's knee conditions prior to and subsequent to 1988, Mr Conroy said that in terms of quality the applicant had been coping well, but with difficulty and pain. He was satisfied that by 1993 and 1994 he had increasing complaints and his quality was then deteriorating because his knee conditions were becoming worse. In terms of quantitative changes, Mr Conroy was satisfied that, at 1988, the applicant had a 10% impairment, but acknowledged that it may be less or more. At his consultation in 1999 he assessed the impairment at 30% under Table 9.5. He thought the applicant's symptoms and pain were exponentially worse since 1988 and probably since 1994.
Roger Coates
Mr Coates is an orthopaedic surgeon practicing in Shepparton. He examined the applicant at the request of the respondent on 16 March 1999 and provided a report on the same day. The report is found at T10 page 79.
Mr Coates became acquainted with the two reports of Mr Anderson referred to earlier which were read into evidence. Mr Coates was of the opinion that the reports gave "some objective indication of the extent of the degenerative process at 1994".
On the basis of the Comcare Guide at Table 9.5, Mr Coates said that it was speculative to assess the impairment at 1 December 1988, because that date was many years ago. However given that the applicant had undertaken surgery and had suffered symptoms "on and off", he said an appropriate assessment was 10%. He also said that that assessment was made as his "best guess". At 16 March 1999, he assessed the impairment then at 30% under the same Table.
In cross-examination to his report, Mr Coates said that he had obtained a history from Mr Mathieson that pain was experienced in the knees subsequent to surgery and that the applicant had suffered "a lot of difficulty with his knees with both getting in and out of the trucks" (report page 2). With respect to the frequency of dislocation of the applicant's patella, Mr Coates said that most persons who suffer from it are able to describe it and observe it. He noted that the applicant did have a pre-existing congenital abnormality predisposing him to patello femoral dislocation, which he regarded as a significant factor in the subsequent recurring dislocations. When asked to comment upon an opinion expressed by Mr Jones that 50% of the cause of dislocations was due to congenital factors, Mr Coates said that he agreed. He was of the opinion that the applicant would require total knee replacement of his right knee and further surgery upon his left knee.
Mr Coates again expressed the opinion that it was speculative to assess the degree of impairment at 1 December 1988. When the applicable criteria against impairments of 10, 20 and 30% under Table 9.5 were read to him, he said that if there was a history of ongoing fluctuating pain subsequent to surgery, it is likely that the applicant would have had probable difficulty with grades, steps and distances at 1988. This was however, a matter of degree and Mr Coates had no history of the applicant's complaints at 1988.
With respect to the opinions expressed by Mr Anderson in his reports, Mr Coates said that the applicant probably did have significant damage to his articular cartilage at 1988 by reference to the appearance of "severe wear changes" and the patello femoral articulation being "denuded down to bare bone".
In re-examination, Mr Coates said that he had a history of the applicant having difficulty getting into and out of trucks in Western Australia, but on the history taken the applicant was able to cope with his symptoms.
When he learnt that the applicant had been "cleared to play football", Mr Coates was of the opinion that this was indicative of the applicant "not (having) a lot of trouble with his knees".
With respect to the surgery undertaken in 1963 and 1972, Mr Coates reported that the procedure then was known as a "Hauser", commonly performed to prevent recurring episodes of patella dislocation. He said in evidence (as he reported) that there has subsequently been a high incidence of patello femoral osteoarthritis following that surgical procedure, yet at the time of surgery it was conventional and the standard treatment.
With respect to the reported increase in symptoms, Mr Coates noted that a person in the position of the applicant could expect to have considerable wearing of cartilage and bone exposure. He said symptoms then become "more intractable". If cartilage had been present, patients can usually "get by with little trouble". However he noted that the applicant has had significant deterioration and his symptoms have worsened at a rate greater than the worsening of actual physical damage. It was his opinion that since 1988, the applicant has had less tolerance and therefore been unable to cope with the increased symptoms. He noted that the applicant had previously worked but is now totally incapacitated and it followed, he said, that the function of the applicant's knees has deteriorated. It was his opinion that the process of deterioration commenced during and as a result of his Navy service.
Michael Shannon
Mr Shannon examined the applicant at the request of the respondent on 20 March 2001 and provided a report dated 22 March 2001. That report was received into evidence. Mr Wallace drew to the attention of Mr Shannon what appeared to be an error in his report at page 4, where he answered a question asked of him by the respondent's solicitors prior to the consultation. The question asked whether the applicant's condition "became after 1 December 1988 so different in its pathology or in its effect on him that it can be said to be a new impairment". Mr Shannon reported "his condition has clearly deteriorated since 1998, but I do not think that this could be regarded as significantly different in pathology, but rather in the rate of progress". The correction made by Mr Shannon was to delete the reference to "1998" and substitute "1988".
In cross-examination, Mr Shannon said that in his experience a person with osteoarthritis would not necessarily expect an exponential deterioration. He said the rate of deterioration can vary between persons and it was impossible to predict. He noted that the applicant had worsened since 1988 and his inability to work as a truck driver beyond 1991 was due to the increase in his symptoms.
Mr Shannon said he had no history of the applicant playing football subsequent to surgery and whilst he understood that the applicant's truck in Western Australia was automated, and he climbed into and out of it once per day only, his opinion remained because in his experience repeated activity with knees flexed was likely to contribute to the osteoarthritis.
When asked to give an opinion of the applicant's impairment under Table 9.5, Mr Shannon said that 10% was appropriate because the applicant was capable of rising and walking on level surfaces.
When asked to assess the qualitative and quantitative changes in the applicant's knees, Mr Shannon said that it was impossible to do so because he had examined the applicant on one occasion only. He noted however that the applicant had told him that his knees had become significantly worse. When Mr Shannon became aware of the opinions expressed by Mr Anderson in his two reports of 1994, he said the contents were "consistent" with his understanding of the applicant.
When Mr Shannon said that there will be continued deterioration because of the presence of osteoarthritis and by increasing symptoms. He said the inevitability of these changes occurred since 1963 when he first had surgery. He disagreed that the applicant had suffered any acceleration in the condition by reason of his employment with the Navy and said there was no evidence known to him of any worsening in the condition after 1988, although he "accepted" that the applicant reached a point where he was unable to work.
Clive Jones
Mr Jones is an orthopaedic surgeon who examined the applicant on 15 August 2001 and reported to the respondent on 23 September 2001. His report was received into evidence and the respondent relied upon it.
In cross-examination, Mr Jones was taken to the second page of his report where he recorded "It seems clear from the history and also from this individual's medical records that there was patella instability even before he joined the Navy….". Mr Jones was asked to identify the "medical records" that he referred to and the history he obtained which would support the opinion of "instability" before enlistment. Mr Jones could not point to any such documents and indicated that he had not recorded in his notes at consultation a history of this type.
Mr Jones did agree that the applicant did have "unstable kneecaps" throughout and subsequent to service and that the service with the Navy had contributed to this condition. He also agreed that the Hauser operative procedure was reasonable treatment, but the consequences are known to contribute to osteoarthritis.
When asked to comment upon whether the applicant's symptoms subsequent to 1988 had significantly worsened, Mr Jones said that a person with osteoarthritis once established can expect worsening, however he said that there was a "slow downhill progression" in the applicant since 1988. He dismissed the applicant's apparent ability to work until 1991, but not subsequently, as evidence of significant deterioration. This is because in his experience, the ability to undertake employment was largely due to motivational factors.
Mr Jones was then invited to read the two reports of Mr Anderson of 1994. He then agreed that it would appear that there had been significant changes in the osteoarthritis the applicant suffered prior to the 1994 consultations. He agreed that in each person the course of osteoarthritic deterioration differs, but it can become exponential in terms of the manifestation of symptoms, but not necessarily in the underlying pathology. He noted that the arthroscope undertaken by the applicant with Mr Anderson in 1994 produced relief in symptoms. It was his opinion however that the applicant could expect to suffer a return of symptoms, at a future date subsequent to that procedure.
Conclusion and Reasons for Decision
In the present application, the applicant suffered injuries, which gave primary rights under the operation of the 1930 Act. The applicant, however, seeks to recover lump sum compensation for permanent impairment under the operation of the 1988 Act.
The latter Act, by reason of the combined operation and effect of ss.24 and 124 confers rights on injured applicants in certain circumstances. In the present application, the "impairment" and whether it is "permanent" needs to be identified. Additionally, if the "impairment" is "permanent", a finding will need to be made as to when it became "permanent".
Entitlement to compensation in circumstances where primary injury occurred prior to the commencement of the 1988 Act, but recovery is sought under that Act, has been the subject of analysis in the Federal Court in many notable cases particularly Brennan v Comcare (1994) 122 ALR 615, Comcare v Levett (1995) 60 FCR 14 ("Levett"), Blackman v Australian Telecommunications Corporation (1990) 12 AAR 11 ("Blackman") and Department of Defence as Delegate of Comcare v West (1998) 156 ALR 651 ("West").
In West, the Court extensively discussed the above and other authorities on this and similar issues. Heerey J being the minority, followed the findings of the Full Federal Court in Blackman. O'Connor and Merkell JJ, being the majority, followed the authority of the Full Federal Court in Levett by repeating that the conclusions in Blackman should be treated with "some caution".
Merkell J delivered the judgement on behalf of the majority in West which recorded at page 668-
"The present state of the authorities can be summarised as follows:
·the gradual worsening of a permanent impairment in accordance with its natural progress does not constitute a series of new impairments each giving rise to a separate liability to pay compensation: see Blackman at 14 and Brennan at FCR 570-1 per Gummow J; cf Brennan at FCR 558-9 per Burchett J;
·the observation in Blackman at 14 that a permanent impairment which worsened significantly or is such that the variation between it and the earlier permanent impairment is substantial does not result in a new permanent impairment, is to be approached with "some caution": see Brennan at FCR 558-9 and 560-1 per Burchett J and at 571 per Gummow J and Levett at FCR 20".
The present case requires resolution of the question left unresolved in the current state of the Authorities, that is, whether a deterioration in a permanent impairment, which existed as at 1 December 1988, is capable of constituting a new permanent impairment.
At page 669, His Honour answered the above question in the following terms-
"A loss of the entitlement conferred under ss24 and 25 by reason of s124(3) only occurs when the permanent impairment the subject of the claim is the permanent impairment that the employee suffered as at 1 December 1988. On my reasoning, and that of Burchett J in Brennan, where a change in a permanent impairment occurring after the commencement date is such that, quantitatively and qualitatively, it is properly to be characterised as a further or new impairment occurring after the commencing date it is compensable by a lump sum payment under ss24 and 25. That conclusion is consistent with the language used and with the statutory policy to be discerned from ss24, 25 and 124 of providing benefits to workers in respect of a further permanent impairment that occurs after the commencing day irrespective of whether the injury that resulted in the impairment occurred before or after the commencing day. It also avoids capricious and arbitrary outcomes under workers' compensation legislation, which is of a remedial nature and should be construed liberally: see Brennan at FCR 559 and the cases there referred to".
In the present application, Mr Mathieson suffered injuries to his knees when employed by the Royal Australian Navy in about 1963. He remained enlisted until he was discharged in 1975. Prior to discharge, he had surgery on his right knee in 1967 and upon his left knee in 1972. Mr Mathieson was able to engage in sport after surgery and continued in his employment with the Navy.
After discharge, Mr Mathieson worked as a security guard in Sydney for about 3 years until 1978. He then moved to Western Australia, where he worked in the building industry for approximately 12 months and then as a catering supervisor and in self-employment for approximately 12 months. Thereafter, he drove large trucks in open cut mines for approximately 12 years until 1991. He was then employed for approximately 2 years, engaged in work rehabilitating sand dunes and then engaged in some further security work and gold prospecting for approximately 12 months. He did not work between 1994 and 1998, when he returned to Victoria, and worked for one season of three or four months at a cannery in Shepparton.
The only medical record of any significance between the surgery of 1972 and the late 1990's are the reports of Mr Anderson, the orthopaedic surgeon of Western Australia who reported in November and December 1994. It appears that at November 1994, Mr Mathieson "functioned well until a couple of months ago". At an arthroscope conducted in December, 1994 the presence of "severe" wear changes was observed with significant degeneration within the knee.
It is of course impossible at the present time to determine the extent of any impairment existing in 1988. Any finding upon that issue can only be by reference to the symptoms then present, as may be elicited from the history given to the Doctors and the evidence in these proceedings.
The other question, which must of course also be determined, is whether any impairment at 1 December 1988 was "permanent". That is not a question I regard as presenting any real difficulty. I am satisfied and find as a fact on the evidence Mr Mathieson gave and that of the medical witnesses that the applicant did suffer an impairment, which was permanent at 1 December 1988. Section 4 of the 1988 Act defines "permanent" as "likely to continue indefinitely". At 1 December 1988, the applicant had had pain, discomfort and progressive symptoms in his knees for the preceding 25 years. I doubt that there can be any controversy as to a finding of an impairment then being permanent.
Additionally, I am satisfied that there was an "impairment". "Impairment" is defined also at s.4 of the 1988 Act as "the loss, the loss of the use, or the damage or malfunction, of any part of the body or of any bodily system or function or part of such system or function".
Mr Coates was of the opinion that the impairment of the applicant's knees became permanent in 1963 when they were injured. There is no evidence which would permit that finding. It is true that the injuries then occurred, but it could not then be determined that the injuries, then, were permanent. In fairness, perhaps Mr Coates is referring to the probability of a degenerative process emerging, which would permit a finding of an impairment being permanent by reason of that degenerative process.
Mr Conroy was asked by the applicant's solicitors to determine whether there was a permanent impairment at December 1988. He reported that there was a 10% impairment at 1988. He did not report or say in evidence whether the impairment then was permanent. Mr Jones was of the opinion that the condition became "permanent" at the time of surgery in both 1964 and in 1972. Mr Shanon reported that the impairment of the applicant was permanent, but he did not record when that occurred. All of the doctors agreed that subsequent to the injury in 1963, the applicant has suffered a degenerative disease within his knees which has caused considerable deterioration. Initially, symptoms were an indicator of the extent of the disease process. More recently, it appears that the applicant's incapacity is a clear manifestation of the extent of the impairment.
The applicant did have mobility at 1 December 1988 and was able to work. Mr Conroy thought that the applicant had a 10% impairment at 1 December 1988, although he was somewhat equivocal. Mr Coates did not have a history on the extent of the applicant's symptoms at 1988, however it was his belief that the applicant then would have had difficulty with grades, steps and distances. Mr Jones assessed the applicant as presently having a 20% impairment, but it appears that he has determined that degree of impairment by reference to the AMA impairment guides. Mr Shanon believes the applicant presently has 10% impairment. Having regard to the criteria against an impairment of 10% under Table 9.5, I am satisfied that the extent of the applicant's impairment at 1 December 1988 was 10%. I do so because I find as a fact that at that time, based on the evidence heard and the documents read containing the applicant's history, he would have then been able to rise to a standing position and walk, but have difficulty with grades and steps. I also find that at 1 December 1988, the applicant's impairment was permanent.

Subsequent to 1 December 1988, I am satisfied and find as a fact that the applicant's condition has deteriorated. I am satisfied and find as a fact that quantitatively and qualitatively the extent of the worsening has amounted to a new impairment, which is compensable under s.24 of the Act. The extent of the compensation is the difference between the extent of impairment at 1 December 1988 and the finding of impairment at the time of this review which, for reasons which will follow, I am satisfied is 30% pursuant to Table 9.5.
I have reached that conclusion having regard to the report and evidence of Mr Coates who found that at the time of his assessment in March 1999 the applicant had an impairment of 30% under Table 9.5. Mr Conroy also was of the opinion that the applicant had an impairment between 20 and 30% under Table 9.5. Mr Shanon found that there had been no worsening of the applicant's condition since 1988, a conclusion I regard as being harsh and unsupported by the evidence. Mr Jones acknowledged that the disease process suffered by the applicant would predictably cause a worsening of the applicants condition however he dismissed the applicant's incapacity from the early 1990's as being related to the deterioration but rather more related to the applicant's motivation. I would also dismiss those conclusions and find that comments as to the applicant's motivation are inconsistent with the applicant obviously being able to work from 1963 until the early 1990's in the presence of significant and deteriorating bilateral knee injuries.
On balance, therefore, I prefer the evidence of Drs Conroy and Coates to the evidence of Drs Jones and Shannon.
In the circumstances, the decision under review should be set aside and in substitution for it I am satisfied that the applicant has suffered a further permanent impairment subsequent to 1 December 1988 namely, 20% pursuant to table 9.5 of the Comcare Guide.
By reason of these findings, the applicant also has an entitlement pursuant to s.27 of the 1988 Act. There was no evidence to permit any findings as to entitlement under this section. This part of the application is remitted to the respondent for assessment of compensation.
Having regard to these findings, the applicant is entitled to have his legal costs paid by the respondent pursuant to the applicable Tribunal practice direction.
I certify that the 88 preceding paragraphs are a true copy of the reasons for the decision herein of Mr J. Handley, Senior Member.
Signed:         Katherine Navarro................................
  Associate
Date/s of Hearing  21 December 2001 and 13 May 2002
Date of Decision  26 September 2002
Counsel for the Applicant        Mr P Trigar
Solicitor for the Applicant         KCI Lawyers
Counsel for the Respondent    Mr Wallace
Solicitor for the Respondent    Tress Cocks & Maddox