Nicholas Kermode and Military Rehabilitation and Compensation Commission - [2012] AATA 188

[2012] AATA 188

Division Veterans' Appeals Division

File Number(s)

2009/0947

Re

Nicholas Kermode

APPLICANT

And

Military Rehabilitation and Compensation Commission

RESPONDENT

DECISION

Tribunal
Deputy President D G Jarvis
Professor D Ben-Tovim (Member)

Date 2 April 2012

Place Adelaide
1. The tribunal sets aside the decision under review, and in place of that decision, decides that the respondent is liable for compensation under ss 14, 16, 19, 24 and 27 of the Safety, Rehabilitation and Compensation Act 1988 (Cth) for the applicant’s conditions of post-traumatic stress disorder and claustrophobia that were materially contributed to by his employment on 10 February 1964.
2. The tribunal remits the matter to the respondent, pursuant to s 43(1)(c)(ii) of the Administrative Appeals Tribunal Act 1975 (Cth), for reconsideration in accordance with the reasons for decision in this matter in order to calculate the compensation payable to the applicant; and
3. The tribunal reserves liberty to apply, on or before 17 April 2012, in relation to the costs of the proceedings, and orders that in the absence of any such application, the respondent is to pay the applicant’s reasonable costs of the proceedings.
D G Jarvis
... [Signed] ...
(Deputy President)

CATCHWORDS
COMPENSATION – Commonwealth employee – Sailor on HMAS Melbourne at time of collision with HMAS Voyager – liability accepted for PTSD, claustrophobia and alcohol abuse – later claim for permanent impairment – respondent decided to reject claim for permanent impairment and revoke earlier acceptance of liability – held that distress from the failure of common law proceedings against the Commonwealth was an independent intervening cause, but only to extent that it resulted in additional hospital and medical expenses – assessment of compensation for permanent impairment – interpretation of Table 5.1 of Guide to the Assessment of the Degree of Permanent Impairment – decision set aside and remitted to respondent.

PRACTICE AND PROCEDURE – Jurisdiction – compensation – reviewable decision rejecting liability – held that AAT has jurisdiction to assess permanent impairment notwithstanding that reviewable decision did not address that matter.

LEGISLATION
Safety, Rehabilitation and Compensation Act 1988 (Cth), ss 14, 24 and 27

CASES
Comcare v Emery (1993) 32 ALD 147

Commonwealth v Muratore (1978) 141 CLR 296
Irwin v Military Rehabilitation and Compensation Commission (2009) 174 FCR 574
Lees v Comcare (1999) 56 ALD 84
March v E & MH Stramare Pty Ltd (1991) 171 CLR 506
Re Berry and Comcare (2006) 91 ALD 453
Re Cavanagh and Comcare (2008) 106 ALD 143
Re Dwight and Comcare [2006] AATA 730
Re O’Maley and Comcare (1997) 48 ALD 300
Re Emery and Comcare (1992) 15 AAR 477
Whittaker v Comcare (1998) 86 FCR 532

Secondary Material
Guide to the Assessment of the Degree of Permanent Impairment, 1st Edition

Diagnostic and Statistical Manual of Mental Disorders, 4th Edition, Text Revision

REASONS FOR DECISION
Deputy President D G Jarvis
Professor D Ben-Tovim (Member)
2 April 2012
INTRODUCTION

In the evening of 10 February 1964, HMAS Melbourne collided with HMAS Voyager. The Voyager sank, with the loss of 82 lives. It was Australia’s worst peace-time naval disaster.
The applicant, Nicholas William Kermode, was a steward on board HMAS Melbourne at the time of the collision. In April 1997, he claimed compensation pursuant to the Safety, Rehabilitation and Compensation Act 1988 (Cth) (the SRC Act) for post-traumatic stress disorder (PTSD) which he claimed was caused by the collision. In July 1997 a delegate of the respondent, the Military Rehabilitation and Compensation Commission, accepted the claim and determined that Mr Kermode suffered PTSD, specific phobia (namely claustrophobia) and alcohol abuse, and that his military service had contributed in a material degree to those conditions. Following that determination, the Commission made weekly incapacity payments to Mr Kermode, and met his medical expenses.
In November 2003, Mr Kermode claimed compensation for permanent impairment. In a primary determination made on 17 January 2007, the Commission determined in effect that Mr Kermode had no present entitlement to compensation for medical expenses, weekly incapacity payments, permanent impairment, or household and attendant care services. Following a request for reconsideration of this determination, the Commission made a reviewable decision in August 2007 revoking its determination in July 1997 to accept liability for the claimed conditions, on the basis that the available evidence indicated that the 1997 decision was issued in error. Mr Kermode has applied to this tribunal for review of this reviewable decision.
ISSUES BEFORE THE TRIBUNAL
The Commission disputes Mr Kermode’s assertions as to his experiences in the aftermath of the collision between the Melbourne and the Voyager and their effect on him, and disputes that he suffers from the claimed conditions of PTSD, claustrophobia and alcohol abuse. There is conflicting evidence before us as to whether Mr Kermode suffers from PTSD or alcohol abuse, and (if he suffers from claustrophobia) whether that condition is contributed to in a material degree by the collision (or any other aspect of his employment by the Navy).
The issues before the tribunal are:
(a)whether the original determination made in July 1997 to accept liability for the claimed conditions should be revoked;
(b)whether Mr Kermode is entitled to compensation for PTSD, claustrophobia and alcohol abuse;
(c)whether the effect on Mr Kermode of the consequences of failing in a common law action for damages against the Commonwealth constituted an independent intervening event, such that the Commission is not liable for compensation in respect of expenses and incapacity after that intervening event; and
(d)if the Commission is liable for compensation for permanent impairment, at what amount should such compensation be assessed.
A question was also raised as to whether, if we found the Commission liable, we had jurisdiction to assess the amount of compensation on the grounds that generally this tribunal has no jurisdiction to review decisions unless the relevant issue has been determined by another authorised person in the relevant tier of decision-makers (Lees v Comcare (1999) 56 ALD 84), and in this case the Commission has not itself made a determination as to the assessment of the degree of permanent impairment. We are satisfied, however, that we have jurisdiction to determine that issue, and would not be prevented from doing so because the delegate who made the reviewable decision was empowered to consider the assessment of compensation, but declined to do so because of the view that she took of liability: see Irwin v Military Rehabilitation and Compensation Commission (2009) 174 FCR 574 at [2] and [26], Re Cavanagh and Comcare (2008) 106 ALD 143 at [28]-[33], and Re Berry and Comcare (2006) 91 ALD 453 at [52]-[61]. In the last case, I pointed out in effect that this tribunal’s jurisdiction is determined by the scope of the application made by the applicant, and is not confined by the scope of what the respondent actually considers when making the primary and reviewable decisions.
BACKGROUND
The following background facts are not in contention, and are based upon the evidence of Mr Kermode and the documentary material before us.
Mr Kermode is aged 67. He went to a technical high school, but struggled with academic studies, and did not enjoy subjects involving carpentry or sheet metal work. He left school during his second year to help support his recently widowed mother. He joined the Post Master General’s department as a junior postal officer, delivering telegrams.
He joined the Royal Australian Navy on 2 June 1962, when he was 17 years old. He trained as a naval steward. He enjoyed his training, and was given the nickname “Jerry” by his fellow recruits because he sometimes used to act the clown. This nickname was apparently a reference to the American actor Jerry Lewis.
In January 1964, Mr Kermode joined the Melbourne as a steward, second class. At that stage the Melbourne had a complement of some 500 to 800 sailors, being less than its full complement. In the period prior to collision with the Voyager, he enjoyed serving on the Melbourne. He had been serving on the ship for just under five weeks before the collision with the Voyager. We shall refer below to his evidence as to his knowledge of the collision, and his activities following the collision.
On the day after the collision, the Melbourne returned to the Garden Island dock yards in Sydney. Significant damage had been done to the bow of the Melbourne, and it was put in dry dock for repairs. He stayed on a shore base, HMAS Kuttabul, and later Mr Kermode went on leave and returned to his home in Adelaide.
In April 1964 he re-joined the Melbourne, after the damage done to it in the collision with the Voyager has been repaired. Almost immediately afterwards he sailed to Jervois Bay when there was a day-time re-enactment of the event, which he understood was an exercise so that mistakes that had been made at the time of the collision would be avoided in the future.
He continued to serve on the Melbourne for about 18 months. He was allotted for duty on the Melbourne in the operational areas of Malaysia, Brunei and Singapore from 24 February to 7 April 1965, and from 21 April to 7 May 1965. He was also allotted for duty in the operational area of Vietnam from 31 May to 22 June 1965. He attained the rank of steward on 19 April 1964, was promoted to being an acting leading steward in November 1965, and then became a leading steward in November 1966. After leaving the Melbourne, he was allotted to HMAS Vendetta, where he became the Captain’s steward. He was later drafted to HMAS Perth. He had signed up with the Navy for a period of nine years, but decided that he needed to get out of the Navy, and received an honourable discharge on 24 September 1969, after serving for a little over 7 years and 3 months.
After his discharge, he was employed as a parking inspector by the Adelaide City Council from 1969 to 1977. In the latter part of this employment he became a back-up chauffeur. From 1977 to 1982 he worked at the Highways Department as a traffic inspector, where his duties included inspecting and weighing trucks at weigh bridges and at other places in country South Australia. From 1982 to 1995 he worked for the State Government as a chauffeur. He started as a spare driver, driving various dignitaries and members of Parliament, and then became a driver for State Ministers. He injured his back in July 1995 in the course of his work as a chauffeur, and went on compensation. In 1996 he settled his worker’s compensation entitlement for a lump sum, and also negotiated a voluntary separation package and ceased work for the State Government.
Mr Kermode had been appointed a justice of the peace, and it was suggested to him that he could conduct marriage ceremonies. He decided to become a marriage celebrant, and he was appointed to this position in about 1995 or 1996, and has conducted marriage ceremonies since then. He said that the early years after he had ceased employment with the State Government were his most “productive” (and he gave estimates ranging from 30 to 50 ceremonies a year), but since then more marriage celebrants had been appointed, and in recent times he has conducted very few marriage ceremonies.
Claims made by the applicant against the Commonwealth
In November 1995 Mr Kermode instituted proceedings in the Supreme Court of New South Wales against the Commonwealth of Australia claiming damages for PTSD sustained as a result of the Voyager collision. He had seen an advertisement in a newspaper lodged by a Victorian lawyer, who offered to conduct proceedings on behalf of persons who had been involved in the Voyager collision. Mr Kermode understood that he would not be charged fees for his lawyer’s services, that the Commonwealth had admitted liability for the collision, and that the issue to be determined by the Court would be the amount of damages to which he was entitled. In the event, the Commonwealth disputed that Mr Kermode was suffering from PTSD. The proceedings were heard before a Judge and jury in Sydney in September 2002, and the trial lasted for seven days. Mr Kermode was very dissatisfied with the way his case was handled by his solicitor, and also concerned that there had been a late change in the senior counsel who represented him. The jury decided the case in favour of the Commonwealth, and Mr Kermode was ordered to pay the Commonwealth’s legal costs.
On a date subsequent to his back injury in July 1995, Mr Kermode also claimed a service pension on the grounds of permanent incapacity pursuant to the Veterans’ Entitlements Act 1986 (Cth) (VE Act). According to a letter dated 30 January 1996, a delegate of the Repatriation Commission determined that Mr Kermode was permanently incapacitated for work, but that his income exceeded the limit for which a pension could be paid, and so the application was declined (exhibit A17, page 1).
After Mr Kermode had settled his entitlement for State worker’s compensation in respect of his back injury and had negotiated a package to terminate his employment, he lodged a further claim under the VE Act dated 28 June 1996 for a service pension for disability (exhibit R2). This claim listed a number of disabilities. He described the first such disability as “bad nerves, stress, anxiety, depression”, and the second disability as “agoraphobia, claustrophobia, bad dreams/nightmares, blinding headaches, stress” (exhibit R2, Question 17). His general practitioner, Dr Mei Wee, provided diagnoses in respect of the disabilities claimed, and her diagnoses included post-traumatic stress disorder, acute anxiety and phobic disorder. We understand that this claim was subsequently allowed by the Repatriation Commission.
It appears that on a subsequent occasion prior to March 1998, Mr Kermode made a further claim under the VE Act for disability arising from his operational service in Vietnam in 1965. The Repatriation Commission rejected that claim, and we understand that Mr Kermode withdrew an appeal to this tribunal, presumably on the basis that there was no evidence to the effect that his operational service had caused PTSD.
On 29 April 1997 Mr Kermode claimed compensation under the SRC Act for PTSD, which he attributed to the Voyager disaster in February 1964. The claim form refers to “attached papers”, and to a “psychiatric report” (exhibit A2). Regrettably the Commission has been unable to determine from its file what papers were attached to the claim form. However, the Commission determined to accept liability for “PTSD, specific phobia and alcohol abuse”, being the conditions referred to in a psychiatric report dated 15 April 1997 from Dr Michelle Atchison, who was Mr Kermode’s treating psychiatrist (exhibit R1, T6, page 42). We therefore infer that the attachments to the claim form at least included that medical report.
Finally, as mentioned above, Mr Kermode claimed compensation under the SRC Act for permanent impairment for PTSD, claustrophobia and alcohol dependence on 5 November 2003. The reviewable decision of the Commission in relation to that claim gave rise to the Commission revoking its 1997 determination to accept liability.
Applicant’s evidence as to the collision and its aftermath
Mr Kermode’s evidence as to the collision and its aftermath was as set out below.
Immediately before the collision he was in an officers’ ward room on deck 4 of the Melbourne. He and the officers were watching a movie, but whilst he was not technically on duty at the time, he was assisting with serving drinks to officers. He felt a “sound like banging” and that the ship “shuddered”. The tripod being used to show the movie moved across the deck, as did tables and chairs, and crockery in the pantry rattled. He said “we were bewildered” and they knew that they had hit something pretty hard. There was then panic, and disorder, and screaming and the officers were looking at each other in disbelief, and did not know what to do. He then heard an order through the ship’s loud speaker system requiring in effect that the hatches should be closed and the ship should go to water-tight integrity.
He felt terrified, that he would be locked in the apartment and would go down with the ship and drown. He left the officers’ ward room, crossed the passageway to the starboard side of the ship and went up a ladder to 3 deck where there was an open outer compartment, where sailors assembled in their uniforms when entering and leaving harbour. He went like a “human bullet”. His heart was racing, he was sweating and suffocating because he felt ill, and was fearful of his life and bewildered. He was in a state of shock.
When he got to 3 deck, the main lights went off, but there was emergency lighting. He could see that the Voyager had been cut in half, and saw the silhouette of one half of it gliding past. He heard screaming and yelling from crew on the Voyager. It was “surreal, absolutely horrific”. He said it was almost like watching a movie. The crew on the Voyager were running around and jumping over the side. He could see sailors from the Voyager in the water. There was also a lot of screaming on the Melbourne, and it was “absolutely horrific, chaos” and no one seemed to know what they were doing. He was concerned about the Melbourne and did not know the extent of the damage to it. He thought the Melbourne was going to go down as well.
He was ordered by the Chief Petty Officer to get over the side. He thought that if he did that he would not survive. He waited until the Melbourne was stationary or nearly stationary. Sailors were then putting boats over the side of the Melbourne. He realised that there was a chance that he would survive. He then went over the side. He was unable to say how long it was between when he got to 3 deck and when he went into the water.
When he was in the water he heard screaming. He saw rafts (being inflatable dinghies) on the water, and the silhouettes of people in the water. Some people were not moving and he assumed that they were dead bodies. He had seen schools of sharks in the area prior to the collision, but because he was in the water at night he had no idea what was beneath him, and he was concerned about sharks while he was in the water. He saw a raft not too far away from the Melbourne and got into it. However, there were no oars in it and the raft just drifted. He had a feeling of helplessness; he could not do anything. There were spotlights scouring the water, and he saw the rear section of the Voyager sinking. He felt physically sick, but did not vomit. Later he was pulled back to the Melbourne by a motorised cutter.
When he got back on to the Melbourne he assisted to help bring stretchers back on board, but he was ordered to go back to the mess deck and he did this. He felt guilty because he had not gone overboard immediately and had therefore disobeyed an order.
Next day the Melbourne proceeded slowly back to Garden Island. The crew were ordered not to discuss matters with their shipmates, friends or families, or the media, and to “go ashore and get pissed and forget about it”. After arriving at Garden Island, Mr Kermode and other sailors went to a nearby hotel. On the way there they were accused by passers-by of being murderers, and Mr Kermode was hit on the shoulder by a flour bomb. He did not understand the hatred towards them or what they had done to deserve such treatment, and he felt terrible. He stayed at the hotel with other sailors for hours, and got very drunk.
Mr Kermode said that after the collision and during his subsequent period on leave, he did not sleep well. He would wake up in a cold sweat, feeling disturbed, and his clothing would be saturated with perspiration. He had nightmares in which he re-lived the events following the collision. He went to hotels close to HMAS Kuttabul before he went on leave, and also drank every time he went on leave or went ashore, at every opportunity. He said that he felt better when he was drunk.

After he re-joined the Melbourne in April 1964 his feelings towards the Navy had changed. He no longer felt safe on board ship. He was concerned that the ship might run into another ship again, and he felt unable to escape those fears. He felt anxious, tense and always tired. He felt guilty that he had not saved anyone. He could no longer see that he had a future in the Navy.
Mr Kermode experienced further stress when the Melbourne went to Vietnam in May and June 1965. He was concerned that the ship could be shelled, sunk or torpedoed. He felt particular stress and trapped on occasions when orders were made for the ship to be closed up or to go to action stations. His nightmares intensified during his time in waters off Vietnam.
During his service on the Melbourne after the collision he felt trapped because most of the areas were enclosed by hatchways and ladders, and he took every opportunity to go up to the flight deck or to outer decks. He was later allotted to HMAS Vendetta, and he arranged to be transferred to sleeping quarters which were closer to the deck than those to which he had originally been assigned. Nevertheless, he found his service on the Vendetta stressful. He decided that he needed to get out of the Navy; he was sick of being in closed areas and did not feel happy or secure any longer.
Applicant’s evidence as to his symptoms and complaints after his discharge from the Navy
Mr Kermode’s evidence as to his symptoms and complaints after his discharge from the Navy was as set out below.
Since the time of the collision he has been like two people, one good and kind, and the other bad, moody and bad tempered. He has no control over his moods.
He enjoyed his work as a parking inspector, because it was outdoors. He also enjoyed working as a driver. However, he lost the opportunity to continue that work with the Council, and there was a change in the duties of parking inspectors which meant that they were required to do more office work, inside a building where there were a lot of people and a lot of activity. He had difficulty in coping with this work and became uptight and anxious.
As a result he left the Council, and in May 1977 he obtained a position as a prison officer. However, he found that this work was confined to the cell area. He felt claustrophobic and resigned from this position after completing only three days. He then resumed his work at the Adelaide City Council. Later in 1977 he obtained a position with the Highways Department and he worked there until 1982. He also enjoyed this work until there were changes that entailed inspectors doing office work. He did not like that work at all.
After that he obtained the position as a chauffeur with the South Australian Government and enjoyed this work. However, he found that work increasingly difficult, and felt increasingly stressed. He also experienced problems with one particular Minister whom he found very difficult to work with. There were also occasions when he was required to make deliveries in city buildings. Whilst he would use stairs wherever possible, there were occasions when he had to use lifts. He found this stressful and this made his claustrophobia more intensive.
He gave up his work as a Ministerial chauffeur after he injured his back in 1995. He received treatment, including in particular treatment from a chiropractor which assisted his recovery from this injury. He was offered a position with the government doing office work, but declined this position, and negotiated a termination package. He has not worked since then, except for conducting marriage ceremonies in his capacity as a marriage celebrant.
He has continued to suffer sleep disturbance and nightmares and has continued to re-live the events surrounding the Voyager collision. He continued to drink heavily until about 10 years ago, when he was diagnosed with diabetes. As a result of this, he substantially reduced his consumption of alcohol. There is no evidence that he has suffered from alcohol abuse or alcohol dependence in recent years. He has continued to be moody and irritable. He finds it difficult to travel in aeroplanes, and has continued to suffer from the effects of claustrophobia.
His claustrophobia also had an effect on the houses where he lived. For the first four years of his marriage he lived in a small townhouse which had belonged to his wife. He found that too claustrophobic, and he and his wife later built a house to incorporate a sense of openness, with large windows, a courtyard and high vaulted ceilings. Later they moved because a nursing home opened on the corner opposite, and this generated increased traffic. They then lived in a rented house for a time, and later bought two other houses in which to live. They again had open features. They finally bought their current house, where they have lived since 1999. He described this house as very spacious, light and airy, with an open area at the rear, and with an opening electric roof and skylights which he arranged to have installed.
Other lay evidence
Mrs Kermode gave evidence. We found her to be a careful witness who provided further information relevant to Mr Kermode’s symptoms and functioning, and we accept her evidence. She first met her husband in 1974, and they have been married since 1976. She said that ever since she has known her husband he has exhibited unusual behaviour during the night; her sleep has often been interrupted by her husband mumbling in his sleep, throwing his arms around and waking up perspiring heavily, with his night clothing often quite wet and the bed linen damp. On occasions she would see him being quite withdrawn and taking a Panadol, but she observed that he never used to complain much and would keep his problems to himself. She also noticed that he did not like going to the beach, on plane trips or in lifts, has had obvious mood swings throughout the 36 years of their marriage, and would be upset if there was a lot of noise in or around the house. He had problems with drinking until he was diagnosed with diabetes, and after that he reduced his drinking. She also referred to their having moved houses, to Mr Kermode having become paranoid about the increased traffic after a nursing home had been built close to the first house that they had built, and to his having wanted to have light and open space in the houses where they have lived. She noticed that he became increasingly irritable, short-tempered and stressed as the 1990s progressed, but seemed to be easier to live with after he stopped work. She also described a marked deterioration and breakdown which Mr Kermode suffered following the loss of the court case in Sydney, and the adverse effect on him of the cessation of his compensation payments and bankruptcy proceedings issued against him for the costs of the failed court proceedings, and her concern that he was suicidal.
She said that from 2007 to 2012 Mr Kermode’s condition gradually “settled down” and has become reasonably stable over recent years. She said that she had been with him on most occasions when he conducted marriage ceremonies. They have a fairly limited social life and occasionally go to RSL clubs together for relatively short periods. They do not have a wide circle of friends. She makes sure that his medication is always there for him in the morning and during the course of the day, and said that she generally keeps an eye on him and regards herself as his carer and companion.
One Stanley Riley also gave evidence. We are mindful that he was only asked to provide a statement in connection with Mr Kermode’s application very recently, but he gave his evidence in a forthright manner, and we accept that he gave an honest recollection of the matters to which he referred. He gave evidence that he joined the Royal Australian Navy in July 1958 as a steward. He said that he had met Mr Kermode at HMAS Cerberus, before the collision, and said that Mr Kermode was well-liked by people in the Navy, was a happy-go-lucky sort of fellow who got on well with everyone including the officers and seamen, and was a bit of a clown who was given the nickname ‘Jerry’ (exhibit A7, page 17).
Mr Riley was drafted to the Melbourne in January 1964, and described his experience of the collision with the Voyager, and its effect on him. His evidence confirms the horrific nature of the situation after the collision, and the extent of the confusion on board the Melbourne. He also said that after the collision and during the confusion that followed, he went to his locker to get spare towels. His locker was close to Mr Kermode’s locker, and he briefly saw Mr Kermode “taking off his wet gear” (exhibit A7, page 18), that Mr Kermode’s white top and bell trousers were wet and there was a small pool of water where he had been standing, and he saw Mr Kermode put his wet clothes over the door of his locker.
Mr Riley also described a change in Mr Kermode’s demeanour after the collision. He said he saw quite a bit of Mr Kermode over the months after the collision, because they were both on the Melbourne. He noticed that during this time Mr Kermode appeared a completely changed man and “had sort of gone into his shell ... was not sociable” and “had become a bit argumentative” (exhibit A7, page 19). Since his discharge from the Navy in 1967, he has only seen Mr Kermode once, in 2001, when he stayed at his home overnight.
Medical evidence
Mr Kermode said that for about 15 years since 1979 his general practitioner had been a Dr Low of the Melrose Park Medical Centre. He referred to having longstanding conditions of psoriasis and hypertension, which he consulted Dr Low about, and which flares up when he is stressed. He said that he stopped seeing Dr Low in 1995, when Dr Low left to work elsewhere, and he then started seeing Dr Mei Wee at the same practice. The records of the practice were summoned by the Commission, and it appears that he last saw Dr Low in June 1995, and started seeing Dr Wee in July 1995.
The section 37 documents include copies of medical reports from Dr Michelle Atchison, Professor Jonathan Phillips and Professor A C McFarlane, AO (all of whom were called to give evidence by Mr Kermode), and Professor R D Goldney, Drs W Blakemore, R Milton and F Roldan (all of whom were called by the Commission). We shall refer below to the reports and evidence of those doctors. In addition, the section 37 documents include copies of reports from other psychiatrists to whom Mr Kermode was referred for assessment, namely Drs R Wu (report dated 1 February 1996, exhibit R1, T3, page 28), W Knox (report dated 2 July 2002, exhibit R1, T17, page 100), B Holwill (report dated 8 July 2002, exhibit R1, T18, page 105), G Rawson (report dated 23 June 2003, exhibit R1, T22, page 131) and M Ewer (report dated 28 March 2006, exhibit R1, T26, page 158; report dated 20 October 2006, exhibit R1, T29, page 185 and report dated 1 March 2007, exhibit R1, T32, page 207). In addition, the section 37 documents include the report dated 27 August 1996 by Dr Wee, Mr Kermode’s general practitioner, to which we have referred above, and a report dated 23 October 1997 from a clinical psychologist, Mr Keith Smith (exhibit R1, T10, page 51).
In summary we have received evidence from six psychiatrists and one psychologist, and copies of reports from eleven psychiatrists and two psychologists (including the practitioners who gave evidence), as well as the report from Dr Wee and the summoned records to which we referred above. A number of the reports had been sought in connection with the proceedings in the Supreme Court of New South Wales or the claims under the VE Act, but in each case they addressed the issue of whether Mr Kermode was suffering from PTSD.
Parties’ contentions
Counsel for the applicant, Mr Cameron, submitted that we should accept the evidence of Mr and Mrs Kermode and Mr Riley, the evidence and opinions of Drs Atchison, Phillips and McFarlane, and also the opinions expressed in the medical reports from those other doctors who had examined Mr Kermode and concluded that he was suffering from PTSD. He further contended that on that basis, we should find that Mr Kermode has at all material times been suffering from PTSD and claustrophobia as a result of the Voyager disaster, that the 1997 acceptance of liability should not have been revoked, and that Mr Kermode is entitled to compensation under ss 16, 19, 24 and 27 of the SR Act.
Counsel for the respondent, Mr Cole, accepted that the Voyager collision constituted an horrendous and traumatic event, but submitted that that of itself did not mean that Mr Kermode suffered PTSD. He contended that the diagnosis of PTSD was dependent on whether Mr Kermode had given a truthful account of the effect of his response to the event and of his asserted symptoms. He submitted that as a result, we should not find that Mr Kermode was suffering from PTSD, claustrophobia or alcohol abuse, that the Commission had correctly revoked the 1997 acceptance of liability for those conditions, and that Mr Kermode was not entitled to compensation for permanent impairment. He relied upon the evidence of Professor Goldney and Drs Milton, Roldan and Blakemore to the effect that Mr Kermode is not suffering from PTSD. He accepted that (consistently with cases such as Commonwealth v Muratore (1978) 141 CLR 296), it was necessary for there to be evidence of changed circumstances to justify the Commission’s decision to revoke its earlier determination to accept liability for compensation. However, he submitted that there was evidence of such changed circumstances in the form of the medical reports on which the Commission relies, and also the outcome of the common law proceedings in the Supreme Court of New South Wales, which were decided adversely to Mr Kermode. Mr Cole further contended that the loss of the proceedings, resulting in the subsequent order made by the Court for Mr Kermode to pay the costs of the proceedings, and bankruptcy proceedings to enforce that order, constituted an independent intervening event, and as a result the Commission is not liable for compensation for incapacity or medical or hospital expenses or impairment after that intervening event.
LEGISLATIVE SCHEME
Section 14(1) of the SRC Act provides for compensation for injuries suffered by employees of the Commonwealth, Commonwealth authorities or licensed corporations, and provides as follows:
"14(1) Subject to this Part, Comcare is liable to pay compensation in accordance with this Act in respect of an injury suffered by an employee if the injury results in death, incapacity for work, or impairment."
The requisite connection between a psychological condition suffered by an employee and his or her employment is provided for indirectly, via the definitions of "injury" and "disease" in s 4(1) of the SRC Act. Under the Act as in force at the relevant time these definitions provided relevantly as follows:
"injury means:
(a)a disease suffered by an employee; or
(b)an injury (other than a disease) suffered by an employee, that is a physical or mental injury arising out of, or in the course of, the employee's employment; or
(c)an aggravation of a physical or mental injury (other than a disease) suffered by an employee (whether or not that injury arose out of, or in the course of, the employee's employment), being an aggravation that arose out of, or in the course of, that employment;
but does not include any such disease, injury or aggravation suffered by an employee as a result of reasonable disciplinary action taken against the employee or failure by the employee to obtain a promotion, transfer or benefit in connection with his or her employment.
...
disease means:
(a) any ailment suffered by an employee; or
(b) the aggravation of any such ailment;
being an ailment or an aggravation that was contributed to in a material degree by the employee's employment by the Commonwealth or a licensed corporation."
The word "ailment", which is used in paragraph (a) of the definition of "disease", is defined in s 4(1) to mean "any physical or mental ailment, disorder, defect or morbid condition (whether of sudden onset or gradual development)". The word "aggravation" is defined to include "acceleration or recurrence".
Section 7(4) of the SRC Act provides:
"For the purposes of this Act, an employee shall be taken to have sustained an injury, being a disease, or an aggravation of a disease, on the day when:
(a)the employee first sought medical treatment for the disease, or aggravation; or
(b) the disease or aggravation resulted in the death of the employee or first resulted in the incapacity for work, or impairment of the employee;
whichever happens first."
Section 16 of the SRC Act provides in effect that where an employee suffers an injury, Comcare is liable to pay the cost of reasonable medical treatment obtained in relation to the injury.
Section 19 provides in effect that Comcare is liable to make incapacity payments where an employee is incapacitated for work as a result of an injury, and provides for how such incapacity payments are calculated.
Section 24 provides for compensation for injuries resulting in permanent impairment, and for the amount of compensation payable for permanent impairment, including compensation for non-economic loss, which is to be assessed pursuant to s 27. Under s 24(7), if Comcare determines that the degree of permanent impairment is less than 10%, compensation is not payable to the employee for permanent impairment.
Section 28 of the SRC Act makes provision for Comcare to prepare a Guide to the Assessment of the Degree of Permanent Impairment, and under ss 28(4), where Comcare (or on review, this Tribunal) is required to assess the degree of permanent impairment of an employee resulting from an injury, the provisions of the Guide are binding in the carrying out of the assessment, and the assessment must be made under the relevant provisions of the Guide.
CONSIDERATION
By virtue of s 7(4) of the SRC Act, the injuries for which Mr Kermode claims compensation are deemed to have occurred on the date when Mr Kermode first sought treatment for the claimed conditions. Reference to Mr Kermode suffering from PTSD appears to be first referred to in Dr Low’s notes of 12 May 1995. Dr Low’s notes are very difficult to decipher, but as far as we can ascertain, do not include any reference to claustrophobia or alcohol abuse. His condition of claustrophobia was first referred to in a medical report dated 27 August 1996 from Dr Mei Wee (exhibit R1, T5, page 40). As mentioned above, she took over the role of his general practitioner in about July 1995, and we infer that Mr Kermode first sought medical treatment for this condition between then and the date of her above report. The first reference to alcohol abuse appears in the first report provided by Dr Atchison, which was dated 15 April 1997, and we infer that Mr Kermode first sought treatment for this condition after he was referred to Dr Atchison in January 1997.
It was accepted that the criteria for the diagnosis of PTSD are those referred to in the Diagnostic and Statistical Manual of Mental Disorders, 4^th Edition, Text Revision, published by the American Psychiatric Association (DSM-IV-TR). There is no dispute that Mr Kermode’s involvement in the Voyager disaster meant that he had experienced or witnessed a traumatic event that involved actual death or serious injury, being the first paragraph of Diagnostic Criteria A of DSM-IV-TR for PTSD. Further, it has not been suggested that he experienced, witnessed or was confronted with any other relevant traumatic event during his lifetime apart from the Voyager disaster.
The specific questions before us as to liability for compensation are whether we accept the evidence as to Diagnostic Criteria A(2) for PTSD in DSM-IV-TR, namely that Mr Kermode’s response to the collision involved intense fear, helplessness or horror; whether we accept the evidence of the symptoms which he asserts; and if so, whether these were caused by the collision. Mr Kermode’s evidence as to the collision, his experience during its aftermath, and his subsequent symptoms have been narrated above. We must also decide whether we accept his evidence as to his symptoms of claustrophobia, which (as Mr Cole pointed out) is also diagnosed by reference to subjective symptoms. Further, as Mr Cole submitted, the opinions expressed by the doctors who diagnosed Mr Kermode as suffering from PTSD and claustrophobia also entail their having accepted the history provided by Mr Kermode as to his response to the collision and as to his asserted symptoms, and if the history he provided to those doctors was fabricated, there would be no basis for their diagnoses.

In support of his submission that we should not accept Mr Kermode’s evidence, and that the history provided to medical practitioners was untrue or unreliable, Mr Cole criticised a number of aspects of the evidence and history provided by Mr Kermode. We will address his principal criticisms in turn.
The first, and a major, criticism of Mr Kermode’s credibility was based upon the stark contrast between on the one hand, his evidence that after the collision he was ordered to get into the water and that he did so and his history to a number of doctors to this effect, and on the other hand, the history provided to Drs Milton and Roldan, and on one occasion initially to Dr Blakemore, that he was never in the water and remained on deck at all times.
On the face of it, the conflict in Mr Kermode’s account of this aspect of the events following the trauma is very significant, and calls in to question the credibility of his evidence and of the history he has provided to practitioners who have provided reports. However, we observe that (leaving aside the one occasion with Dr Blakemore, to whom we will refer further below) the history of not having gone into the sea was only given to two practitioners, and not on any of the many other occasions when he narrated the events surrounding the collision to various other practitioners. Mr Kermode was asked about his examination by Dr Roldan. He said that he could only remember the consultation in a general way, that he felt sick because he had been on a plane travelling from Adelaide to Sydney prior to the appointment, that he found Dr Roldan very uncompassionate and did not develop any rapport with him. In cross-examination Mr Kermode said that he just wanted to get the interview over, but if he did say that he had not been in the water, that was not the truth. He said he could not even remember seeing Dr Milton in November 2001. He also said during his evidence that he had a sense of guilt because he had not followed orders by getting into the water as soon as he had been told to do so, and also that he thought that Drs Roldan and Milton were representing the Commonwealth, and that if they reported his failure to comply with the order to get into the water, he might get into trouble.
We have noted that the first reference to Mr Kermode not getting into the water appears in the second report provided by Dr Blakemore, being the report of 11 March 1998. Dr Blakemore reported that he interviewed Mr Kermode about a questionnaire form filled out in the period following the collision (being a form dated 24 February 1964), and told Mr Kermode that he interpreted this form as implying that Mr Kermode had been on the deck and not in the water (see exhibit R1, T11, page 61). According to Dr Blakemore’s report, Mr Kermode then became a little agitated, and said that it was from the deck that he could see the bodies floating in the sea, and that that was where the PTSD came from. However, the report records that Mr Kermode then went on to give a history of the order given to him and other men to go over the side to dinghies down below, and of his doing so and being aware of dangers, and that there might be sharks in the water. We further note that Dr Blakemore also referred in his third report, dated 16 September 2002, to his questioning of Mr Kermode at the time of the examination in March 1998, and reported that he had then told Mr Kermode that he had stated in the questionnaire form that he had stayed on the Melbourne all the time (exhibit R1, T19, at page 117). In fact, the questionnaire form does not state, or in our view imply, this. We think it unfortunate that Dr Blakemore referred to the questionnaire form in the way he apparently did when he saw Mr Kermode at the time of his second and third assessments.
Professor McFarlane provided a very detailed curriculum vitae, and gave evidence as to his extensive research into PTSD and his involvement with veterans suffering from that condition. He was asked to advise generally as to the relevance of discrepancies in the account of a major stressful event by a person who experienced the event, and whether such discrepancies were inconsistent with the existence of PTSD related to that event. He concluded that inconsistencies in memory do not exclude the existence of PTSD following a traumatic event. He referred to particular examples of incorrect, inconsistent or modified recall, the relevance of the interviewing technique, and literature to the effect that traumatic memories are stored in a less successful way than verbally based memory.
Whilst we do not, for the reasons we have said, place weight on the inconsistent history obtained by Dr Blakemore, and notwithstanding Professor McFarlane’s evidence, we have some difficulty in understanding Mr Kermode’s explanation for the history he gave to Drs Milton and Roldan to the effect that he had not been in the water. Nevertheless, we accept Mr Kermode’s evidence that he was ordered to get into the sea, that he complied with this order after some delay, and that his getting into the sea was a component of his response of intense fear, helplessness or horror to the trauma of the Voyager collision. Mr Kermode referred to being in the sea not only in his evidence before us, but also in a statement apparently provided in connection with his claim under the VE Act, and in an annexure to that claim (exhibit R2), and (with the exception only of Drs Milton and Roldan) this is also recorded by those doctors who provided reports that included a history of the events following the collision. Further, as mentioned above, the witness Riley described seeing a small pool of water on the deck adjacent to where Mr Kermode had been standing, and to his having changed his wet clothes. This evidence provides some corroboration to Mr Kermode’s evidence that he had got into the sea. In any event, Professor Phillips pointed out that Mr Kermode had not had one isolated experience, and being in the water was but one of a series of traumatic experiences to which Mr Kermode had been subjected following the collision. Further, Dr Atchison thought that the fear of being trapped below deck when the crew started to close the hatches around him, as well as his apparent feeling of guilt about not obeying an order and being exposed as a coward, were the matters that had caused Mr Kermode the most distress and had caused his symptoms, and that she was never as much concerned about what happened after he had got up on to the deck of the Melbourne.
Mr Cole referred to further inconsistencies in histories recorded by various doctors as to such matters as to whether Mr Kermode used a rope, jumped or slipped into the sea, whether he got into a dinghy immediately or only after some delay, and the varying periods for which he said he was in the water. It may be that some of these inconsistencies arose from an imperfect understanding on the part of those who obtained the relevant histories, or from the way in which they narrated the histories they obtained. Further, these matters appear to be of less significance, and inconsistencies which could be explained by difficulties in recall or other matters referred to by Professor McFarlane. We do not think that we should reject Mr Kermode’s evidence because of inconsistencies of the above kind.
A further attack on Mr Kermode’s credibility was based upon the accepted lack of any evidence in his Naval records of any complaints of anxiety, stress, sleep disorders or nightmares or other symptoms that could be related to the trauma of the collision. As to this, Mr Kermode said that he did go to the sick bay on two occasions to complain of symptoms, but was told to go away and that he would get over his problem in time. He also said that he did not want to appear to be a “cissy”, and he did not seek medical attention, because of the culture of the Navy to keep feelings to “yourself”. We note that at the time of his discharge, there was no examination of his emotional stability or mental capacity (see exhibit R1, PT43, page 266). Mr Kermode also signed a form prior to his discharge to say that he did not suffer from any disabilities, but said he did this because he did not want his service record to refer to any disabilities as this might impede him in obtaining a job in civilian life.
Mr Cole also drew attention to the absence of any record of symptoms of emotional or mental disorders in the notes of Mr Kermode’s general practitioner, Dr Low, prior to 12 May 1995, and he pointed out that by that time Mr Kermode had lodged a claim under the VE Act. However, the summoned records of Dr Low are extremely difficult to read, and his notes are very brief; in many cases they consist of one or two lines of handwriting against the date of the relevant consultation. Further, Mr Kermode said in effect that he had had his symptoms for many years since the collision, that he had come to accept that that was how he was, and he did not realise until about the time of the above consultation with Dr Low that there was anything wrong with him.
It was further contended on behalf of the Commission that Mr Kermode’s record of promotion in the Navy, record of stable employment after his discharge, his practising as a marriage celebrant, and his participation in RSL branches and some Anzac Day marches were inconsistent with his having the symptoms of which he complains. As against this, Mr Kermode gave the evidence to which we have referred above of increasing difficulty in performing his duties with the Navy, and that instead of making the Navy his career, he felt unable to continue, and applied for a discharge prior to completing the nine years for which he had signed up. Further, he gave evidence of difficulties with aspects of his employment in civilian life, including the effects of claustrophobia and problems arising from stress. He said he had been encouraged by Dr Atchison to conduct marriages, and did not find it stressful, notwithstanding that it often involved an initial contact with people who were then strangers. He also said that on some occasions he had been unable to participate in Anzac Day marches, and his involvement with the RSL represented his main outside social contacts. We accept his evidence of these matters, and do not accept the criticism of his evidence on the above grounds.
Mr Cole also drew attention to Mr Kermode’s differing attribution of his symptoms after he had lodged his claim under the VE Act for a disability pension in respect of operational service in Vietnam. In particular, Mr Cole pointed out that when Mr Kermode had seen Dr Blakemore in 1996, at a time when Mr Kermode was claiming a service pension, he made little of his experience in Vietnam, and the history of his problems was attributed to the Voyager collision. However, when he saw Dr Blakemore again in 1998, Mr Kermode focussed on the anxiety which he experienced when the Melbourne was in Vietnamese waters. Mr Kermode also then gave a different version of the nightmares he had been experiencing, and described nightmares that he attributed to his time in Vietnam which he had not referred to at the time of the 1996 examination. Attention was also drawn to other aspects in which Mr Kermode’s accounts of nightmares varied, but we do not attach significance to the differing evidence as to the recall of nightmares.
Whilst, as mentioned above, Mr Kermode gave evidence of the stress and anxiety that he felt when the Melbourne was in Vietnam, we are concerned that he changed the emphasis and magnified those concerns following his later claim under the VE Act, and it appears that he did so in order to promote the claim he was then making in respect of his operational service. We think that Mr Cole’s criticism of Mr Kermode’s evidence in this respect is justified, but we are nevertheless satisfied, for reasons referred to below, that he is suffering from PTSD and claustrophobia.
Evaluation of medical evidence
We consider that Mr Kermode’s treating psychiatrist, Dr Michelle Atchison, was in the best position to diagnose Mr Kermode’s condition and advise as to its effect on his functioning. She has extensive experience in relation to PTSD, and estimated that between one-half and two-thirds of her patients are ex-servicemen and war veterans. We found her evidence to be balanced, fair and objective. She said that she has seen Mr Kermode on 141 occasions for an average of approximately 30 minutes since she started treating him in March 1997, and has seen him at intervals of approximately one month. It is clear that she has developed a rapport with him and a very good understanding of his psyche and mental state, and the history and cause of his symptoms. She is satisfied that his presentation has been genuine, and arrived at the diagnosis of PTSD by reference to the diagnostic criteria in DSM-IV-TR. She has also spoken to Mr Kermode’s wife in the course of treating Mr Kermode, and agreed that Mrs Kermode’s witness statement (exhibit A12) is broadly consistent with Mr Kermode’s situation over the years during which she has known him. She said that he has provided a consistent history to her of the impact of the Voyager disaster on his naval career and subsequent civilian employment. She confirmed her diagnoses of claustrophobia as well as PTSD. She considers that towards the end of his working life, various parts of his life had started to fall apart, and that he was developing a range of problems which were associated with PTSD, stress and anxiety.
We note that Dr Atchison obtained a consistent history of Mr Kermode being ordered to jump into the water and there being a delay before he did so, and that Mr Kermode had feelings of guilt for not obeying the order immediately. She is aware of the inconsistent history in this respect provided to others. However, for the reasons referred to in paragraph 68 above, she was not as much concerned about the issue of whether he got into the sea; indeed, she said that she suspected that he probably stayed on deck, and was distressed at failing to comply with the order.
Professor Phillips is a very experienced and distinguished psychiatrist, and has had a particular interest in mood and post-trauma disorders. We found his evidence to be helpful and persuasive. He considered that Mr Kermode had obsessive personality traits that would have made him vulnerable to the effects of a significant trauma. When he first examined Mr Kermode, in June 1998, he concluded that there was an ongoing phobic disorder of enclosed spaces, and an incomplete post-traumatic disorder, with symptoms having been a problem for him over a considerable period of time. He thought that the symptoms were triggered by emotional trauma at the time of the collision.
When Dr Phillips examined Mr Kermode again in August 2010, he obtained a further history from Mr Kermode, and reviewed the reports that had been provided prior to that time. He thought that the diagnosis of PTSD could not reasonably be disputed, and that it was related to the very high level of stress experienced at the time of the Voyager collision. He arrived at a formal diagnosis of late onset PTSD, and carefully related Mr Kermode’s symptoms to the diagnostic criteria for that condition in DSM-IV-TR. He said in cross-examination that Mr Kermode’s inconsistent history as to whether he had got into the water did not affect his opinion. He said in effect that the shock of the event could not be confined to any particular moment of time, or to the period when he was in the water, but included the experiences Mr Kermode had had from the time of the collision when he was below deck to the time when bodies were being brought back on to the Melbourne. He said that he could state “with a high degree of certainty” that Mr Kermode suffers late onset PTSD (exhibit A14, page 15, para 77).
We also note that six of the seven practitioners who were not called but had provided medical reports arrived at an unqualified diagnosis of PTSD due to the Voyager collision, and the seventh practitioner, Dr Ewer, reached the same conclusion conditionally upon the tribunal accepting Mr Kermode’s history of the collision and its aftermath.
We prefer the evidence of Dr Atchison and Professor Phillips, and the opinions expressed by the other practitioners referred to in the preceding paragraph, to the evidence and opinions of the medical witnesses called by the Commission, for reasons to which we now refer.
As we understand it, none of the practitioners called by the Commission had as much experience and expertise in relation to the disorder of PTSD as is the case with Dr Atchison and Professors Phillips and McFarlane. As to Dr Blakemore, he initially diagnosed PTSD, but changed his opinion in his two later reports because of his concerns about inconsistencies in the history he had obtained. However, we note that the history he recorded on the third occasion that he saw Mr Kermode was consistent with the thrust of his evidence before us and with the history recorded in earlier witness statements and other practitioners’ reports, and we are concerned that Dr Blakemore’s revised opinion was unduly affected by his incorrect interpretation of the 1964 questionnaire form, to which we have referred above.
Professor Goldney was asked to examine Mr Kermode and assess his level of permanent impairment, if any, arising from his accepted PTSD (exhibit R3, Tab 9). He proceeded to obtain a history of Mr Kermode’s symptoms, his family and personal history and other events that might have been affecting his emotional functioning, and arrived at an assessment of impairment by reference to Table 5.1 of the Guide. Professor Goldney then went on to say that in his opinion Mr Kermode did not have PTSD, but had an adjustment disorder related to other issues in his life. However, Professor Goldney reached this conclusion without obtaining a complete history from Mr Kermode of the events that took place on the night of the collision, or their effect on him. Professor Goldney appeared to be sceptical about the veracity of Mr Kermode’s history as to the collision, notwithstanding that he had not himself obtained an appropriate history or made his own assessment of the existence or relevance of the inconsistencies referred to in some of the reports that he reviewed. Further, he appeared to place considerable emphasis on Mr Kermode’s employment record, both in the Navy after the collision and also after his discharge, and on other aspects of his activities, and said that these matters were inconsistent with someone who had a “pervasive psychiatric condition”. His reasoning indicates that he made a subjective assessment of the extent to which Mr Kermode’s functioning had to be affected by his symptoms in order to diagnose PTSD, rather than to apply the diagnostic criteria in DSM-IV-TR. In any event, he did not appear to have adequately inquired into or taken into account the difficulties, including with employment that Mr Kermode experienced in the years after the collision. He did not obtain a complete history from Mr Kermode. Although Professor Goldney did obtain a full history from Mr Kermode at the time of his second examination in November 2009, he appears to have been concerned to confirm his earlier opinion, and he appeared to have taken the position of an advocate, rather than to have provided an objective opinion.
We also had difficulty with the objectivity of Dr Milton’s evidence. He appears to have drawn adverse inferences from many aspects of the history Mr Kermode provided, and not to have accepted Mr Kermode’s account of his intense reaction to the trauma of the Voyager collision, including in particular his fear of being trapped below deck if the Melbourne had sunk. He thought that the absence of any earlier records by Dr Low of Mr Kermode having suffered emotional symptoms prior to 12 May 1995 constituted proof that he did not have such symptoms. He also concluded, without inquiry, that Dr Wee had taken over as Mr Kermode’s general practitioner because Dr Low would not support his claim for PTSD as a result of the Voyager collision. He prepared an annotated chronology, and later a further lengthy unsolicited medical report dated 3 February 2012, apparently as an aide memoire, but these documents indicate that he was adopting the position of an advocate that was inconsistent with his proper role as an expert witness (see exhibits R10 and R12).

Dr Roldan prepared a very detailed report after examining Mr Kermode in October 2001. His report indicates that in many instances, he had reservations about the history he obtained, and this and his concern about the inconsistencies highlighted by others who had examined Mr Kermode on behalf of the Commonwealth appeared to be significant factors in his conclusion that he could find no evidence of any psychological impairment. His conclusions, reservations and concerns, and a number of his assumptions, are contrary to other evidence before us that we have accepted. We do not accept Dr Roldan’s opinion.
Did the outcomes of the loss of the common law proceedings constitute independent intervening events?
As mentioned above, the jury decided the common law proceedings adversely to Mr Kermode in September 2002. Soon afterwards he was ordered to pay the Commonwealth’s costs. He became suicidal, and Dr Atchison arranged for him to be admitted to the Repatriation General Hospital in November 2002, where he remained as an inpatient for a few weeks. He was then readmitted briefly in December 2002. Mr Kermode attributed the worsening of his condition to his having to re-live the events of the Voyager collision when he was preparing for the hearing of the common law proceedings and when giving evidence. We think it likely that it was a combination of re-living the events, losing the proceedings and being ordered to pay costs that resulted in the worsening of Mr Kermode’s condition. It also appears that he was subsequently greatly distressed when in late 2006 or early 2007 bankruptcy proceedings were issued against him to recover the costs.
However, we are satisfied that Mr Kermode was already incapacitated from work as a result of his PTSD and claustrophobia prior to the worsening of his condition referred to in the preceding paragraph. It appears that his condition remained worse for quite some time after his admissions to hospital, and that it was probably also exacerbated by the service on him of bankruptcy proceedings. We think it likely that if it had not been for the loss of the Court proceedings and its after effects, Mr Kermode would not have required hospitalisation, and to the extent that he incurred additional expense for his hospitalisation and more frequent medical treatment than the pattern of treatment he had been receiving prior to the period from September 2002 until early 2007, we are not satisfied that the Commission is liable for compensation for the resulting additional expenses for psychiatric treatment.
In reaching our conclusion, we have taken into account in particular the evidence of Dr Atchison and Mr Kermode’s wife as to his condition in the periods before and after the Court case, including Mrs Kermode’s evidence to the effect that from 2007 to 2012 his condition gradually settled down and has become reasonably stable over recent years. As we have said, we are satisfied that Mr Kermode’s employment contributed to the conditions of PTSD and claustrophobia in a material degree (being the connection with employment required by the definition of “disease” in s 4(1) of the SRC Act at the relevant time). However, applying a common sense approach to causation in accordance with the approach to issues of causation referred to in March v E & MH Stramare Pty Ltd (1991) 171 CLR 506 at 515, per Mason CJ and at 522 per Deane J, we consider that the effects of the loss of common law proceedings resulted in the increased expenses that arose from the worsening of Mr Kermode’s condition, and to that extent the loss of the proceedings should be regarded as an independent intervening event. We accordingly find that the Commission is not liable for such additional expenses.
Summary and conclusion as to liability
For the reasons referred to above, and after having regard to Mr Kermode’s evidence and the medical evidence which we have accepted, we are satisfied that Mr Kermode is suffering from PTSD and claustrophobia as a result of the Voyager collision. We find that the Commission’s 1997 acceptance of liability should not have been revoked, and that the Commission has remained liable for continuing incapacity payments from and after 17 January 2007.
In reaching the above conclusions, we have also taken into account the evidence of Mr Kermode’s wife, who confirmed that he has during their married life displayed the symptoms and difficulties which he described, and which are consistent with Mr Kermode’s own evidence. We have also taken into account the evidence of Mr Riley as to the change in Mr Kermode’s demeanour following the Voyager collision.
We further find that Mr Kermode has not, for approximately the last 10 years after he was diagnosed with diabetes, suffered from alcohol abuse or alcohol dependence, and that the Commission is not liable for compensation for that condition.
ASSESSMENT OF DEGREE OF PERMANENT IMPAIRMENT
As mentioned above, the assessment of the degree of permanent impairment is to be made by reference to the Guide prepared by Comcare pursuant to s 28 of the SRC Act. It is agreed that the first edition of the Guide is applicable.
The word “impairment” is defined in s 4(1) of the SRC Act to mean “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”.
Under s 24, liability for compensation only arises where the claimed impairments are permanent. Under s 4(1), “permanent” is defined as “likely to continue indefinitely”. Section 24(2) provides that for the purposes of determining whether an impairment is permanent, the following matters are to be taken into account:
“(a) the duration of the impairment;
(b) the likelihood of improvement in the employee’s condition;
(c)whether the employee has undertaken all reasonable rehabilitative treatment for the impairment; and
(d)any other relevant matters.”
We are satisfied that Mr Kermode has suffered impairment as a result of PTSD and claustrophobia, and that that impairment is permanent within the meaning of s 24(2) of the SRC Act.
The introduction to the Guide explains the approach of the Guide to be both the assessment of the degree of permanent impairment, which is measured as far as possible by objective criteria, and non-economic loss, which entails a subjective assessment of the effects of the impairment on the employee’s life. The Guide provides, at page 3:
“(Impairment) relates to the health status of an individual and includes anatomical loss, anatomical abnormality, physiological abnormality and psychological abnormality. Throughout this guide emphasis is given to loss of function as a basis of assessment of impairment and as far as possible objective criteria have been used.
Impairment is measured against its effect on personal efficiency in the ‘activities of daily living’ in comparison with a normal healthy person. The measure of ‘activities of daily living’ is a measure of primary biological and psychosocial function such as standing, moving, feeding and self care.
Non-economic loss, which is assessed in accordance with Part B of the Guide, is a subjective concept of the effects of the impairment on the employee’s life. It includes pain and suffering, loss of amenities of life, loss of expectation of life and any other real inconveniences caused by the impairment.
Whilst ‘activities of daily living’ are used to assess impairment they should not be confused with ‘lifestyle effects’ which are used to assess non-economic loss. ‘Lifestyle effects’ are a measure of an individual’s mobility and enjoyment of, and participation in, recreation, leisure activities and social relationships. It is emphasised that the employee must be aware of the losses suffered. While employees may have equal ratings of impairment it would not be unusual for them to receive different ratings for non-economic loss because of their different lifestyles.”
The Guide goes on to explain that the concepts of “employability” and “incapacity” are not included in the assessment of impairment and non-economic loss, because incapacity is influenced by factors other than the degree of impairment, and is separately compensated by weekly payments.
Table 5.1 of the Guide provides for the assessment of the degree of impairment in the case of psychiatric conditions. Mr Cameron contended that the level of impairment of Mr Kermode’s conditions satisfied both the 40% and 50% levels of impairment, and that in accordance with Whittaker v Comcare (1998) 86 FCR 532 at 544 – 554, he should be given the benefit of the higher assessment, namely the 50% level.
Mr Cole submitted that Mr Kermode was capable of performing “activities of daily living” (as defined in the Guide) without supervision or assistance, and so did not qualify for a rating exceeding 10%, since each of the criteria in excess of 10% required a need for some supervision and direction in activities of daily living. He further contended that Mr Kermode fitted into the 5% criteria, since he only met one of the three criteria referred to in the 5% and 10% levels.
The expression "activities of daily living" is defined in the glossary of the Guide as follows:
"Activities of daily living are activities which an individual needs to perform to function in a non-specific environment ie: to live. The measure of activities of daily living is a measure of primary biological and psychosocial function. They are:
Ability to receive and respond to incoming stimuli
Standing
Moving
Feeding (includes eating but not the preparation of food)
Control of bladder and bowel
Self care (bathing, dressing etc)
Sexual function.”
Table 5.1 provides that the criteria applicable to the various percentage degrees of impairment are as follows:
“% DESCRIPTION OF LEVEL OF IMPAIRMENT
0Reactions to stressors of daily living WITHOUT loss of personal or social efficiency AND capable of performing activities of daily living without supervision or assistance.
5Despite the presence of ONE of the following is capable of performing activities of daily living without supervision or assistance.
. reactions to stressors of daily living with minor loss of personal or social efficiency
. lack of conscience directed behaviour without harm to community or self
. minor distortions of thinking.
10Despite the presence of MORE THAN ONE of the following is capable of performing activities of daily living without supervision or assistance.
[and the same impairments as for the 5% level are repeated]
15ANY ONE of the following accompanied by a need for some supervision and direction in activities of daily living.
. reactions to stressors of daily living which cause modification of daily patterns
. marked disturbances in thinking
. definite disturbance in behaviour
20ANY TWO of the following accompanied by a need for some supervision and direction in activities of daily living.
[and the same impairments as for the 15% level are repeated]
25ALL of the following accompanied by a need for some supervision and direction in activities of daily living.
[and the same impairments as for the 15% level are repeated]
30ANY ONE of the following accompanied by a need for supervision and direction in activities of daily living.
. hospital dischargees who require daily medication or regular therapy to avoid remission
. loss of self control and/or inability to learn from experience causing considerable damage to self or community
40MORE THAN ONE of the following accompanied by a need for supervision and direction in activities of daily living.
[and the same impairments as for the 30% level are repeated]
50ONE of the following
. severe disturbances of thinking and/or behaviour which entail potential or actual harm to self and/or others
. need for supervision and direction in a confined environment
60BOTH of the following
[and the same impairments as for the 50% level are repeated]
90Very severe disturbance in all aspects of thinking and behaviour such as to require constant supervision and care in a confined environment and assistance with all aspects of activities of daily living."
In support of his argument, Mr Cameron referred to the decision of this tribunal in Re Emery and Comcare (1992) 15 AAR 477. It appears from what the tribunal said at [24] that to find that some supervision and direction in activities of daily living is needed, there is no requirement that all, or most, or any particular one of the functions listed in the definition of “activities of daily living” have been adversely affected. The tribunal further concluded that the term “activities of daily living” was not limited to the basic mechanics of an activity, but due weight must be given to the psychosocial aspect of the function. We agree with respect with the tribunal’s analysis in this case, and note that it was upheld on appeal in Comcare v Emery (1993) 32 ALD 147. The tribunal found on the facts of that case that Mr Emery had a need for supervision and direction in the activities of daily living, and assessed the level of impairment at 25%. The Federal Court referred on appeal to the evidence before the tribunal that supported that finding.
Assessments of the degree of permanent impairment involve evaluating all relevant evidence and will depend on the facts of each case. In the present matter a number of the specific impairment criteria referred to in the 10% to 30% levels of impairment may well apply to Mr Kermode, but having regard to Mr Cole’s submission, it is necessary first to consider whether he is “capable of performing activities of daily living without supervision or assistance” (emphasis added). Mr Kermode was cross-examined about his ability to perform each of the functions referred to in the definition of “activities of daily living”. Whilst it is apparent that Mr Kermode’s wife has continued to provide very considerable and admirable assistance to him, which has included the preparation of meals, housework and ensuring that he takes the variety of medication that he needs on a daily basis, Mr Kermode admitted that he would be capable of performing those functions without assistance. He was also asked about each of the other activities listed in the definition, and we find from his answers that he is or would be capable of performing each of the functions without supervision or assistance.
It is also apparent that Dr Atchison has assisted Mr Kermode greatly over the long period for which she has treated him, but according to the note in the introduction to Table 5.1, we must make our assessment “on optimum medication at a stage where the condition is reasonably stable”. This suggests that the references in the Table to “assistance” must contemplate some form of assistance other than that provided by a medical practitioner prescribing medication. It is clear that Dr Atchison has also greatly assisted Mr Kermode by counselling during his monthly consultations with her, which last on an average about 30 minutes. However, the relevance of this treatment must be assessed by reference to the requirement for “supervision and direction”, to which we referred above, in conjunction with the definition of “activities of daily living”, which as explained in paragraph 104 below is also restrictive. Without meaning in any way to detract from the importance of Dr Atchison’s continuing treatment, we are not satisfied that Mr Kermode needs the periodic counselling provided by Dr Atchison in order to perform all or any of the basic functions and activities referred to in this restrictive concept.
We are satisfied that Mr Kermode meets the 10% level of impairment. He clearly has reactions to stressors of daily living with loss of personal or social efficiency, having regard to his nightmares, irritability and the effects of claustrophobia. In addition, his continued pre-occupation with the Voyager collision and its after effects constitute distortions of thinking.
We do not think that Mr Kermode meets the thresholds in excess of 10%. The structure of Table 5.1 is that the introductory words that precede the references to specific impairments describe ascending levels of impairment, commencing with the employee being “capable of performing the activities of daily living without supervision or “assistance”, then requiring a “need for some supervision and direction in activities of daily living”, and then “a need for supervision and direction in activities of daily living”. The change in language which we have highlighted indicates the increasing level of impairment from the 10% to 40% levels; the 10% level criterion can be satisfied by a capability to undertake the relevant activities, whereas the reference to “need” in the higher levels indicates that there is a requirement for some supervision and direction; and the reference to “direction”, in our view, connotes some form of instruction, and a more intensive involvement than might be entailed in the concept of assistance. It is significant that all of the criteria up to and including the 40% level are applied by reference to the defined expression “activities of daily living’. The definition is restrictive, in that it refers to a list of specific basic activities or functions, being activities or functions that might not be affected by a psychiatric condition that in other respects might cause a significant level of impairment. The definition expressly provides that it is a measure of psychosocial as well as biological function, but even so, it seems somewhat unsatisfactory as a measure of impairment from a psychiatric condition (see also the comments of the tribunal in Re O’Maley and Comcare (1997) 48 ALD 300 at [68]). Nevertheless, we are required to assess the level of impairment by reference to the terms of the definition, notwithstanding its restrictive scope.
We have found that Mr Kermode is capable of performing activities of daily living without supervision or assistance, and consistently with that finding, we are not satisfied that he has “some need for supervision and direction in activities of daily living”, or “a need” for supervision and direction in one or more of the activities that are included in the definition of “activities of daily living”. Further, the 30% and 40% thresholds apply to “hospital dischargees who require daily medication or regular therapy to avoid remission” (emphasis added). Whilst the expression “hospital dischargees” is potentially ambiguous, as appears from the discussion of this tribunal in Re Dwight and Comcare [2006] AATA 730, we doubt whether the expression applies to someone like Mr Kermode who was discharged from hospital some nine years ago, and where it has not been suggested that his treatment has been required to avoid remission that would result in a further period of hospitalisation. Further, we are not satisfied that in Mr Kermode’s case, there is a need for supervision and direction “in a confined environment” as required by the 50% threshold. On the contrary, he has been managing to live at home in the community.
ASSESSMENT OF NON-ECONOMIC LOSS
This is to be assessed by reference to the formula provided for in s 27(2) of the SRC Act, with the amounts there appearing, indexed in accordance with s 13, and by reference to Part B of the Guide. We will consider the Tables relevant to the present matter in turn. In doing so, we have taken into account the assessments made by Dr Atchison in Exhibit A3, although we have based our assessments on all of the evidence, and in some cases they differ marginally from her assessments, as they appear in exhibit A3.
Table 1: Both parties accept that the score for pain is 2, and we agree that this is appropriate. As to suffering, Mr Kermode claims a score of 4, and the Commission proposes 2. We do not think that 4 is appropriate, because this would require little time when free of symptoms, and we do not think that Mr Kermode’s symptoms are sufficiently persistent to meet this score. On the other hand, he does not recover quickly after episodes, and 2 would not be appropriate. We think that he best meets the criteria for a score of 3.

Table 2: Neither party claims a score for mobility, and we agree that this is correct. The Commission claims that an appropriate score under the heading of “Social Relationships” is 1, but we find that Mr Kermode is suffering from more than minor interference with personal relationships, and that the appropriate score is 2. As to recreation and leisure activities, we assess a score of 2, having regard to his participation in Anzac Day, RSL and marriage celebrant activities.
Table 3: It was contended on behalf of Mr Kermode that he has suffered loss of a non-economic nature that is not adequately covered by Tables 1, 2 and 4, warranting a score of 3. Dr Atchison also made an assessment in exhibit A3 that equates to a score of 3. In doing so, she referred to Mr Kermode’s claustrophobia (which affected the kind of house he lives in, and his use of public transport and flying) and his incapacity for work. This last factor cannot be taken into account under the terms of the Guide, as mentioned above. We think that the appropriate score is 2, having regard to the effects of his claustrophobia and his intolerance to noise. Table 4 is not applicable as it refers to loss of expectation of life, and is it not suggested that this is applicable.
In summary, we allocate the following scores for the assessment of non-economic loss, and Mr Kermode’s compensation for permanent impairment and non-economic loss should be assessed as follows, using the formula in Part B of the Guide:

Date of assessment

02/04/2012

S24/27 Amount

     Total

Whole person impairment %

            10

$163,535.42

$16,353.54

First half of    $30,662.91

           10%

$30,662.91

$3,066.29

From tables in the PI Guide:

Weight

Sub-Totals

Pain score

            2

0.5

                1

Suffering score

            3

0.5

1.5

Mobility score

0.6

                -

Social relationship score

            2

0.6

1.2

Recreations and leisure score

            2

0.6

1.2

Other loss score

            2

    1

2.0

Loss of expectation of life score

    1

                -

SUM TOTAL

6.9

Second half of    $30,662.91

$30,662.91

46%

$14,104.94

Assessment
Section 24: $16,353.54
Section 27: $17,171.23
Grand total  $33,524.77

The effect of our decision as to liability will necessitate re-instating weekly incapacity payments, and investigating whether any refunds will be required in respect of payments of social security or Medicare benefits. We think it appropriate that the matter should be remitted to the Commission, so that it can make the necessary computations of the amounts involved.
DECISION
The tribunal:
(i)sets aside the decision under review, and in place of that decision, decides that the respondent is liable for compensation under ss 14, 16, 19, 24 and 27 of the Safety, Rehabilitation and Compensation Act 1988 (Cth) for the applicant’s conditions of post-traumatic stress disorder and claustrophobia that were materially contributed to by his employment on 10 February 1964;
(ii)remits the matter to the respondent, pursuant to s 43(1)(c)(ii) of the Administrative Appeals Tribunal Act 1975 (Cth), for reconsideration in accordance with the reasons for decision in this matter, in order to calculate the compensation payable to the applicant; and
(iii)reserves liberty to apply, on or before 17 April 2012, in relation to the costs of the proceedings, and orders that in the absence of any such application, the respondent is to pay the applicant’s reasonable costs of the proceedings.

I certify that the preceding 112 paragraphs are a true copy of the reasons for the decision herein of Deputy President D G Jarvis and Professor D Ben-Tovim, Member.
..... [Signed] ....
Associate
Dated 2 April 2012

Date(s) of hearing

31 January 2012 and 1, 2, 3, 6, 7, 8 and 9 February 2012

Date final submissions received

24 February 2012

Counsel for the Applicant

Messrs R Cameron and J Teague

Solicitors for the Applicant

Astrid M Macleod

Counsel for the Respondent

Mr S Cole

Advocate for the Respondent

Mr M La Vista

Solicitors for the Respondent

Australian Government Solicitor

Division	Veterans' Appeals Division
File Number(s)	2009/0947
Re	Nicholas Kermode
APPLICANT
And	Military Rehabilitation and Compensation Commission
RESPONDENT

Tribunal	Deputy President D G Jarvis Professor D Ben-Tovim (Member)
Date	2 April 2012
Place	Adelaide

Date of assessment	02/04/2012	S24/27 Amount	Total
Whole person impairment %	10	$163,535.42	$16,353.54
*First half of $30,662.91*	10%	$30,662.91	$3,066.29
From tables in the PI Guide:	Weight	Sub-Totals
Pain score	2	0.5	1
Suffering score	3	0.5	1.5
Mobility score	0.6	-
Social relationship score	2	0.6	1.2
Recreations and leisure score	2	0.6	1.2
Other loss score	2	1	2.0
Loss of expectation of life score	1	-
SUM TOTAL	6.9
*Second half of $30,662.91*	$30,662.91	46%	$14,104.94
Assessment Section 24: $16,353.54 Section 27: $17,171.23 Grand total $33,524.77

Date(s) of hearing	31 January 2012 and 1, 2, 3, 6, 7, 8 and 9 February 2012
Date final submissions received	24 February 2012
Counsel for the Applicant	Messrs R Cameron and J Teague
Solicitors for the Applicant	Astrid M Macleod
Counsel for the Respondent	Mr S Cole
Advocate for the Respondent	Mr M La Vista
Solicitors for the Respondent	Australian Government Solicitor