Nanda v Noteflow Pty Ltd

Case •

[2008] NSWWCCPD 64

•

24 June 2008
WORKERS COMPENSATION COMMISSION
REFERENCE OF A QUESTION OF LAW TO THE COMMISSION CONSTITUTED BY THE PRESIDENT
CITATION: Nanda v Noteflow Pty Ltd [2008] NSWWCCPD 64
APPLICANT: Chatan Nanda
RESPONDENT: Noteflow Pty Ltd
INSURER: CGU Workers Compensation (NSW) Ltd
INTERVENER WorkCover Authority of NSW
FILE NUMBER: WCC337-08
DATE OF DECISION: 24 June 2008
SUBJECT MATTER OF DECISION: Question of law; section 351 of the Workplace injury Management and Workers Compensation Act 1998 application of Part 7 of Chapter 7 of the 1998 Act, and threshold requirements under section 151H of the Workers Compensation Act 1987.
PRESIDENTIAL MEMBER: President Judge Keating
HEARING: On the papers
REPRESENTATION: Appellant: PK Simpson
Respondent: Sparke Helmore
Intervener: WorkCover Authority of NSW
ORDERS MADE:

The answer to the question posed in this question of law application is as follows:

For the purpose of satisfying the threshold requirements under section 151H of the Workers Compensation Act 1987, in respect of injuries occurring before 27 November 2001, the application of Part 7 of Chapter 7 of the Workplace Injury Management and Workers Compensation Act 1998 is not limited to those injuries compensable under the Table of Disabilities pursuant to section 66 of the Workers Compensation Act 1987 Act.

The Respondent to pay the Applicant’s costs of the referral of the question of law, and the Authority to pay its own costs.

BACKGROUND TO THE REFERRAL OF THE QUESTION

  1. Mr Nanda who was employed by Noteflow Pty Ltd, as a pastry cook injured his back on 17 April 2001 when he lifted a 25 kg bag of flour. He initially brought a claim under the Workers Compensation Act 1987 (‘the 1987 Act’), in the former Compensation Court (53907-02) for lump compensation pursuant to sections 66 and 67 in respect of permanent impairment of his back, permanent loss of use of both legs and loss of sexual function. These claims were resolved by way of a settlement. He later brought proceedings in the Workers Compensation Commission (‘the Commission’), (WCC1993-06), for weekly compensation benefits and section 60 expenses, which also resolved by settlement.

  1. It is common ground that Mr Nanda has previously obtained compensation under section 66, assessed according to the Table of Disabilities in accordance with the findings made by an Approved Medical Specialist, Dr Middleton who assessed the following impairments:

    1)    15% impairment of the back

    2)    10% loss of use of the left leg at or above knee

    3)    5% loss of use of the right leg at or above knee

  1. On 18 January 2008, Mr Nanda made a further claim and filed fresh proceedings in the Commission (WCC 337-08) seeking weekly compensation benefits, section 60 expenses, and additional benefits under sections 66 and 67 for gastro-intestinal reflux disease (‘GRD’), a condition he alleges was caused by the medication prescribed for his back injury. He also sought a determination of the degree of Whole Person Impairment (‘WPI’) as a result of his injury, for the purposes of the threshold requirements under section 151H of the 1987 Act, the threshold for work injury damages claim.

  1. Prior to the arbitration hearing on 14 March 2008, the Worker discontinued the claims for weekly compensation benefits, section 60 expenses and lump sum compensation under sections 66 and 67.

  1. The only issue remaining in dispute between the parties was that relating to whether, an Approved Medical Specialist (‘AMS’) in assessing the degree of permanent impairment under section 322 of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’), could take into account the gastro –intestinal reflux disease in determining whether the injuries sustained met the 15% WPI threshold.

  1. The Applicant argues that there is no impediment to such a referral. He argues that the plain words of section 151H make it clear that the degree of permanent impairment that results from an injury is to be assessed in accordance with Part 7 of Chapter 7 (Medical Assessment) of the 1998 Act (see sections 322 and 367 of the 1998 Act), irrespective of whether the injury occurred before the provisions became operative on 27 November 2001.

  1. The Respondent argued that gastro-intestinal reflux was not a compensable injury in the Table of Disabilities under section 66 of the 1987 Act, for injuries sustained prior to 1 January 2002, and therefore no regard could be had to the condition, GRD for the purposes of an assessment of WPI under section 151H.

  1. On 27 March 2008 Commission received an ‘Application for Leave to Refer a Question of Law’ to the President (‘the Question of Law Application’), from an Arbitrator on his own motion. The Arbitrator submitted a written statement of reasons (‘statement of reasons’) accompanying the application. 

  1. Both parties supported the Arbitrator’s referral.

  1. The WorkCover Authority of NSW (‘the Authority’) has exercised its right under section 106 of the 1998 Act to intervene in these proceedings and it filed submissions on the question of law on 16 June 2008.

THE QUESTION

  1. The parties agreed that the question of law referred is as follows:

For the purposes of satisfying the threshold requirements under section 151H of the Workers Compensation Act 1987 in respect of injuries occurring before 27 November 2001, is the application of Part 7 of Chapter 7 of the Workplace Injury Management and Workers Compensation Act 1998 limited to those injuries, compensable under the Table of Disabilities pursuant to section 66 of the 1987 Act?

LEAVE

  1. Before granting leave to refer the question, I must be satisfied that the question meets the requirements of section 351(3) of the 1998 Act, which provides:

“3)    The President is not to grant leave for the referral of a question of law under this section unless satisfied that the question involves a novel or complex question of law.”

  1. The Arbitrator in his statement of reasons stated that both he, and the parties, agreed that the question posed was both novel and complex within the meaning of section 351 of the 1998 Act. The Arbitrator noted that in the seven years of operation of the Commission neither he nor Counsel had been required to consider the particular question and he was not aware of any authority on the issue.

  1. The Arbitrator also stated that the determination of the issue in dispute requires an interpretation of the legislation, with application, not only to the parties in the current proceedings, but, more broadly within the jurisdiction.

  1. The Authority submitted that the question was neither novel nor complex.  Notwithstanding this threshold submission, the Authority also made helpful submissions on the substantive issue.

  1. Neither party to the proceedings addressed the threshold requirement in their written submissions.

  1. I am satisfied, from the Arbitrator’s statement of reasons accompanying the Application, and the parties’ submissions on the substantive issue, that the question posed is both complex and novel. The question requires an interpretation of the interaction and scope of the legislative provisions, including the savings and transitional provisions in relation to the statutory compensation scheme as assessed under section 66 of the 1987 Act, and the legislative provisions in relation to the claiming of work injury damages. It involves a determination as to the jurisdiction of the Commission and it has relevance not only to the parties in the current proceedings but also to other work injury damages threshold disputes.

  1. Leave to refer the question of law is granted.

ON THE PAPERS REVIEW

  1. Section 354(6) of the 1998 Act provides:

“(6)   If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”

  1. Having regard to Practice Directions Numbers 1 and 5, documents that are before me, including the written submission by the parties and the Authority, filed after the direction hearing on 30 April 2008, I am satisfied that I have sufficient information to proceed ‘on the papers’, without holding any conference or formal hearing, and that this is the appropriate course in the circumstances. 

LEGISLATION

Permanent impairment compensation

  1. The current sections 65 and 66 of the 1987 Act apply to injuries received on or after 1 January 2002.

  1. Section 65(1) reads:

“65  Determination of degree of permanent impairment

(1) For the purposes of this Division, the degree of permanent impairment that results from an injury is to be assessed as provided by this section and Part 7 (Medical assessment) of Chapter 7 of the 1998 Act.”

  1. Section 66 (1) reads:

“66    Entitlement to compensation for permanent impairment

(1)A worker who receives an injury that results in permanent impairment is entitled to receive from the worker’s employer compensation for that permanent impairment as provided by this section. Permanent impairment compensation is in addition to any other compensation under this Act.”

  1. These sections were inserted by the Workers Compensation Legislation Amendment Act 2001 No 61, now repealed, and replaced the former section 66. However for injuries sustained prior to 1 January 2002, the savings and transitional provisions contained in Schedule 6 Part 18C clause 3 of the 1987 Act state that subject to some exceptions, which are not relevant in the present case, the new provisions of section 66 do not apply to injuries received before the commencement of the amendments.

  1. Clause 4 of Part 18C of Schedule 6 provides:

“(1) In the case of a new claim in respect of an injury received before the commencement of the lump sum compensation amendments, compensation under Division 4 of Part 3 (as in force before the commencement of those amendments) may not be awarded by the Commission if there is an impairment dispute unless the dispute has been assessed by an approved medical specialist under Part 7 of Chapter 7 of the 1998 Act.

(2)   An assessment certified in a medical assessment certificate pursuant to the medical assessment of an impairment dispute is conclusively presumed to be correct as to the matters in dispute in any proceedings in respect of the claim for compensation concerned.

(3) For the purposes of this clause, Part 7 of Chapter 7 of the 1998 Act extends (with such modifications as may be prescribed by the regulations) to the assessment of an impairment dispute as if it were a medical dispute under that Part.

(4)     In this clause, impairment dispute means a dispute about whether a loss or impairment exists and, if so, the nature and extent of the loss or impairment.”

  1. For the purposes of clause 4 of Part 18C of Schedule 6 of the 1987 Act, Chapter 7 of the 1998 Act is modified by Regulation 223 of the Workers Compensation Regulation 2003 which provides:

“223. The following modifications are prescribed to Part 7 of Chapter 7 of the 1998 Act as that Part applies to a new claim in respect of an injury received before the day on which that Part commences:

(a) omit section 322 (Assessment of impairment),

(b)omit section 323 (Deduction for previous injury or pre-existing condition or abnormality).”

  1. Therefore, for injuries received before 1 January 2002, the assessment of permanent impairment is made in accordance with the Table of Disabilities as contained in the former section 73 and the Commission may not award compensation under Division 4 of Part 3 unless the dispute has been referred to an AMS under Part 7 of Chapter 7 of the 1998 Act.

Work Injury Damages

  1. The provisions of the 1987 and 1998 Acts relating to work injury damages were substantially amended by the Workers Compensation Legislation Further Amendment Act 2001 No 94, now repealed.

  1. Clause 9 of Part 18C of Schedule 6 deals with amendments relating to common law damages. Clause 9(1) reads:

“(1) An amendment made by Schedule 1 to the Workers Compensation Legislation Further Amendment Act 2001 applies in respect of the recovery of damages after the commencement of the amendment (and so applies even if the injury concerned was received before the commencement of the amendment) but does not apply in respect of the recovery of damages if proceedings for their recovery were commenced in a court before the commencement of the amendment” (emphasis added).

  1. Section 151H of the 1987 Act, as amended by Workers Compensation Legislation Further Amendment Act 2001 provides:

“151H     No damages unless permanent impairment of at least 15%

(1)     No damages may be awarded unless the injury results in the death of the worker or in a degree of permanent impairment of the injured worker that is at least 15%.

Note. Section 322 of the 1998 Act provides that the assessment of the degree of permanent impairment is to be made in accordance with WorkCover Guidelines. That section also provides that impairments that result from the same injury are to be assessed together.

(2)     …

(3)     …

(4) The degree of permanent impairment that results from an injury is to be assessed as provided by this section and Part 7 (Medical assessment) of Chapter 7 of the 1998 Act.

(5)    …”

  1. Section 151H became operational on 27 November 2001 and, in accordance with the savings and transitional provisions referred to at [29] above, applies retrospectively to injuries received before the commencement of the section provided that proceedings for the recovery of damages had not been commenced prior to the commencement of the amendments.

  1. Therefore section 151H applies to claims for work injury damages commenced on or after 27 November 2001 and establishes a permanent impairment threshold for the recovery of damages. No damages may be awarded unless the degree of permanent impairment is at least 15% (section 151H(1)).

  1. Under section 151H(4), the degree of permanent impairment that results from an injury is to be assessed as provided by section 151H and Part 7 (medical assessment) Chapter 7 of the 1998 Act.

WorkCover Guidelines

  1. Section 322 of the 1998 Act, which is found within Part 7 of Chapter 7 of the 1998 Act, requires that the assessment of the degree of permanent impairment of an injured work for the purposes of the Workers Compensation Acts is to be made in accordance with the WorkCover Guidelines. 

  1. The source of the power to issue guidelines is in section 376(1).

  1. The WorkCover Guidelines referred to in section 322 of the 1998 Act, as currently in force are the ‘WorkCover Medical Assessment Guidelines’ (‘WorkCover Guidelines’), which were issued by the WorkCover Authority under sections 328, 331 and 376 of the 1998 Act and commenced on 1 November 2006, replacing guidelines dated 19 December 2003.

  1. These WorkCover Guidelines in turn refer to the ‘WorkCover Guides for the Evaluation of Permanent Impairment’ (‘the WorkCover Guides’), which sets out the procedure to be applied to the assessment of whole person impairments.

  1. The WorkCover Guides, as currently in force, were issued on 24 October 2006 under section 376 of the 1998 Act and apply to all assessments of the degree of permanent impairment conducted after 1 November 2006.  The Guides are based on the American Medical Association’s (AMA) Guides for the Evaluation of Permanent Impairment, fifth edition (‘AMA5’).

  1. The WorkCover Guides are to be used in the assessment of the level of permanent impairment conducted for “the purposes of awarding lump sum payment under the statutory benefits of the NSW Workers Compensation Scheme and also for determining access to Common Law, domestic assistance and commutation claims” (see WorkCover guides page 3) (emphasis added).

  1. In my view, the reference to “access to Common Law”, in the WorkCover Guides, reinforces a conclusion that they apply to the assessment of permanent impairment for the purposes of satisfying the threshold requirements under section 151H.

DISCUSSION AND FINDINGS

  1. It is common ground that the Worker has received compensation under section 66 for his back injury as referred to in paragraph [2] above, it is also common ground that the Table of Disabilities, as it applied to injuries received prior to 1 January 2002, did not include as an injury for which compensation was payable for the condition known as GRD from which, Mr Nanda alleges he now suffers.

  1. However, GRD is a condition recognised by Chapter 6.2 of AMA5 and is compensable under the current lump sum compensation regime.

  1. The current section 66 in the 1987 Act applies to post 1 January 2002 injuries for the purposes of establishing an entitlement to lump sum compensation for permanent impairment as a result of a work injury. The amount of permanent impairment compensation payable is calculated according to the appropriate formula, expressed in section 66, as in force at the date the injury was received (section 66(3) of the 1987 Act).

  1. Mr Nanda was injured on 17 April 2001 and his entitlement to payment of lump sum compensation under section 66 was correctly assessed under the Table of Disabilities in existence as at the date of the injury.

  1. The Applicant correctly, in my view, makes the point that it was open to the legislature to exempt certain injuries from the operation of section 151H. It did not do so.

  1. In the question of law application the Arbitrator refers on a number of occasions to “converting from the table of disabilities assessments to WPI” (see paragraphs 13(3) and 28 of statement of reasons). 

  1. The Arbitrator in his statement of reasons accompanying the question of law application, paraphrased the Respondent’s submission as follows:

“…the Applicant first mandatorily must have a calculable and available entitlement for GRD under the Table of Disabilities, without which there can be no AMA5 WPI conversion available for work injury damages claims purposes; in other words, the Respondent arguing that, as there is no category under the Table of Disabilities for GRD impairment, it is not available to the Applicant to have an AMS simpliciter determine a WPI calculation under AMA5 for it for threshold claim purposes” (Arbitrator’s Statement of Reasons page 4 paragraph 13(3)) (emphasis added).

  1. The Arbitrator noted the Respondent’s further submission:

“27.   That a Table of Disabilities entitlement for GRD must exist for there to be any available AMA 5 conversion to it for work injury damages threshold claims purposes.

28. That the above is so (it is submitted) is reflected in the fashion in which the prior proceedings’ MACs of Doctors Middleton and Korbel were undertaken.  Illustratively, there, in the MAC of Dr Korbel, he first assessed a sexual organs Table of Disabilities permanent loss of efficient use at 5%, converted under AMA5 by the doctor at 0% WPI. Equally illustratively, that Dr Middleton first assessed the respective permanent loss of efficient use Table of Disabilities impairments as to the back (15%), left leg above the knee (10%) and the right leg above knee (5%) before undertaking the conversion of those impairments under AMA5 to 8% WPI (lumbar spine) (inclusive of the right and left leg impairments)” (Arbitrator’s statement of reasons page 6, [27] and [28]) (emphasis added)).

  1. The Respondent makes the same submission on this application. I have considered the certificates issued by Drs Middleton and Korbel. In neither case was there any attempt to convert an assessment under the Table of Disabilities with a permanent impairment assessment under the WorkCover Guides. The Respondent’s submission in this regard is with respect misguided. In Dr Middleton’s certificate he noted the matter had been referred to him for two reasons. Firstly, in respect of the WPI assessment “for a threshold dispute” and secondly, to determine whether there had been any deterioration in the existing impairments (the subject of an earlier an earlier award).

  1. Dr Middleton in Table 1 of his Certificate, made an assessment “in accordance with the Table of Disabilities for injuries received before 1 January 2002”. He assessed the impairments referred to in paragraph [2] above.  In a separate table he assessed the WPI identifying by reference to the chapter, tables and page references in the WorkCover Guides and AMA5, the basis for his WPI assessment at 8%.  There is no reference to be found anywhere in his certificate of any process of “conversion”. The two assessments were independent of each other and based on different criteria.      

  1. Dr Korbel, to whom the Worker was referred for an assessment of loss of use of his sexual organs, undertook a similar exercise and concluded that the Worker had a 5% loss of use of sexual organs after applying the Table of Disabilities. In a separate table he assessed the Worker’s WPI with respect to loss of use of sexual organs by reference to the page, chapter and paragraph references in the WorkCover Guides and AMA5 relevant to the assessment. He undertook no conversion.

  1. No table or chart exists in the legislation, regulation, rules WorkCover Guidelines, WorkCover Guides, or under AMA5 to convert disabilities found under the Table of Disabilities to WPI findings.  Such charts exist for the purposes of combining values under AMA5 in respect of separate impairments to reach a total Whole Person Impairment (see page 605 of the AMA5), but that is an entirely different issue.

  1. The Respondent next submits that there was no “dispute” in existence and in the absence of a dispute there was nothing to refer to an AMS. It argues that section 151H(1) provides that no damages can be awarded unless the injury results in at least 15% permanent impairment of the worker. Section 4 at the 1998 Act defines “permanent impairment compensation” to mean compensation for permanent impairment under section 66 of the 1987 Act. Section 66 and its accompanying table at section 73, provide a full list of compensable injuries under section 66 for injuries before 1 January 2002. These did not include an item for gastrointestinal reflux disease.

  1. Section 319(c) of the 1998 Act defines “medical dispute” relevantly as follows:

“(c)the degree of permanent impairment of the worker as a result of an injury.”

  1. The dispute before the Arbitrator leading to the referral of the question of law clearly concerned a dispute in relation to the degree of permanent impairment of a worker as a result of an injury.

  1. There was no claim for “permanent impairment compensation” before the Arbitrator. The claims for permanent impairment compensation have been previously resolved. The only issue before the Arbitrator concerned the dispute as to the degree of permanent impairment insofar as it related to satisfaction of the threshold requirements of section 151H. It is that dispute which in my view brings into operation the provisions of Part 7, Chapter 7 and in particular, enlivens the operation of sections 321, 322 and 319 of the 1998 Act.

  1. It follows therefore that I reject the Respondent’s argument that there was “no dispute” before the Arbitrator precluding him from referring the impairment assessment to an AMS.

  1. In the recent decision of JC Equipment Hire Pty Ltd v The Registrar of the Workers Compensation Commission of NSW [2008] NSWCA 43 (‘JC Equipment’) for Tobias JA, although dealing with a different issue to the instant case, noted the dichotomy between damages on the one hand and statutory compensation on the other.

  1. The resolution of this issue turns on the construction of section 151H. No damages are recoverable unless the 15% threshold in that section is satisfied. In determining if that threshold is satisfied, the degree of permanent impairment must be assessed as provided by Part 7 (Medical assessment) of Chapter 7 of the 1998 Act (see section 151H(4)). Part 7 provides that the assessment of the degree of permanent impairment for the purpose of the Workers Compensation Acts is to be made in accordance with the WorkCover Guidelines (section 322 of the 1998 Act). The worker’s entitlement under the Table of Disabilities is irrelevant as that is not the issue in dispute. In respect of the current dispute (the extent of Mr Nanda's whole person impairment) the question is whether he has, as a result of his injury, sustained a 15% whole person impairment, as assessed under the new scheme for the assessment of lump sum compensation (Part 7 of Chapter 7 of the 1998 Act). The new scheme provides that Mr Nanda's GRD may be taken into account in determining his whole person impairment. This view is consistent with the decision of Tobias JA in JC Equipment where his Honour said at [60]:

“Section 149 of the 1987 Act emphasises the dichotomy between damages on the one hand and statutory compensation on the other. The fact that statutory compensation may be retained by a worker injured by his or her employer’s negligence is unsurprising given that work injury damages are now confined to present and future economic loss. The scheme of the legislation is, simply, that non-economic loss is determined in accordance with the provisions of ss 66 and 67 of the 1987 Act, whereas economic loss (where fault on the part of the employer causing the relevant injury is established) is recoverable as damages.  The confining of such damages to economic loss does not, in my view, blur the dichotomy between a claim for lump sum compensation (as defined in s 4 of the WIM Act) on the one hand and work injury damages (as defined by s 250 of that Act) on the other.”

  1. As the Applicant submits, although this decision was in relation to a different point, the passage cited lends weight to the argument that the scheme for workplace injury damages is quite separate to a worker’s entitlement to obtain lump sums under section 66 and section 67.

  1. I am therefore satisfied that the statutory compensation scheme for the payment of compensation benefits for permanent impairment compensation and the modified common law provisions in Part 5 of the 1987 Act are separate and distinct schemes. The assessment of the degree of permanent impairment provided for by section 151H of the 1987 Act and Chapter 7, Part 7 of the 1998 Act in respect of determining the degree of permanent impairment for the threshold requirements for work injury damages, is separate and distinct from the assessment of permanent impairment compensation as provided for by sections 65 and 66 of the 1987 Act and Chapter 7, Part 7 of the 1998 Act.

CONCLUSION

  1. The answer to the question of law in this matter is:

For the purpose of satisfying the threshold requirements under section 151H of the Workers Compensation Act 1987, in respect of injuries occurring before 27 November 2001, the application of Part 7 of Chapter 7 of the Workplace Injury Management and Workers Compensation Act 1998 is not limited to those injuries compensable under the Table of Disabilities pursuant to section 66 of the Workers Compensation Act 1987 Act.

COSTS

  1. The Respondent to pay the Applicant’s costs of the referral of the question of law, and the Authority to pay its own costs.

His Hon. Judge Greg Keating

President

24 June 2008

I, MELANIE CURTIN, CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF HIS HONOUR JUDGE GREG KEATING, PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.

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