Nolan and Military Rehabilitation and Compensation Commission

[2008] AATA 870

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2008] AATA 870

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2007/5331

GENERAL ADMINISTRATIVE DIVISION		)
Re		BRIAN NOLAN

Applicant

And MILITARY REHABILITATION AND COMPENSATION COMMISSION

Respondent

DECISION

Tribunal Deputy President P E Hack SC and Dr M L Denovan, Member

Date30 September 2008

PlaceBrisbane

Decision

The Tribunal:
(a) sets aside the decision under review;

(b) substitutes a decision that the applicant has a degree of permanent impairment of 12%; 
(c) remits the matter to the respondent to determine the amount of compensation payable;
(d) gives liberty to apply within 14 days in relation to the costs of the proceedings;
(e) orders that, in the absence of any such application, the respondent is to pay the applicant’s costs of, and incidental to, these proceedings to be taxed.  

..............Signed.................

Deputy President

CATCHWORDS

COMPENSATION – permanent impairment – injury sustained as a result of military service – hearing loss – tinnitus – whether pre-existing hearing loss is to be disregarded – pre-existing hearing loss needs to be deducted from the resulting hearing loss – whether each of hearing loss and tinnitus amounts to an injury – found that there are two functional impairments resulting from one injury – decision under review set aside – decision substituted

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

Canute v Comcare (2006) 226 CLR 535

Fellowes v Military Rehabilitation & Compensation Commission [2008] FCAFC 140

Parker v Military Rehabilitation & Compensation Commission (2007) 96 ALD 624

REASONS FOR DECISION

30 September 2008	Deputy President P E Hack SC and Dr M L Denovan, Member
Introduction

1.The applicant, Mr Brian Nolan, enlisted in the Army Reserve in March 1997. In September 1998, during the course of some training, an explosive charge was detonated in close proximity to the right side of Mr Nolan’s head.

2.In January 2006 Mr Nolan made a claim for compensation for injury arising from that incident. By a determination made on 29 June 2006, the respondent, the Military Rehabilitation and Compensation Commission, accepted liability to pay compensation to Mr Nolan in accordance with the Safety, Rehabilitation and Compensation Act 1988 (Cth) (the SRC Act) for an injury described by the Commission as “bilateral sensorineural hearing loss with tinnitus”.

3.As part of his claim made in January 2006 Mr Nolan sought compensation pursuant to ss 24 and 27 of the SRC Act, that is, on the basis that he had a permanent impairment. On 12 October 2006 the Commission determined that no compensation was payable to Mr Nolan under ss 24 or 27 of the SRC Act. That determination was affirmed on reconsideration on 27 September 2007. Mr Nolan now seeks a review of the decision in this Tribunal.

4.The issues we have to decide are these:

(a)whether we should ignore a small degree of pre-existing hearing loss in determining the extent of Mr Nolan’s hearing loss resulting from the incident of January 2006;

(b)whether each of the hearing loss and the tinnitus is an “injury” as that term is used in the SRC Act.

The evidence

5.Despite the hearing extending over two days there was, ultimately, no real dispute regarding the facts. That was so because, after the first day of the hearing in May 2008, further scrutiny of the hearing tests by both parties confirmed, and it was agreed, that post-service Mr Nolan has a binaural hearing loss of 16.3%. It is accepted that the hearing loss amounts to a permanent impairment as that expression is used in the SRC Act.

6.There was, as well, agreement that a hearing test that was undertaken on Mr Nolan in March 1997, around the time of his enlistment in the Army Reserve, showed a hearing loss of 2.9%. There is some controversy about that result. The controversy arises because testing was undertaken across only four frequencies rather than the six recommended by the National Acoustic Laboratory. It is also relevant to note that the evidence of Mr Nolan is that he was unaware of having experienced hearing loss prior to the event of September 1998. The evidence of Dr Scoppa was that a hearing loss at this level would not be noticeable to the subject.

The legislation

7.By virtue of s 24(1) of the SRC Act there is a liability[1] to pay compensation to an employee “(w)here an injury to an employee results in permanent impairment”. The amount of compensation is assessed by reference to “the degree of permanent impairment of the employee resulting from an injury under the provisions of the approved Guide”. That Guide, in the present case, is the first edition, approved by notice published on 27 July 1989 which applies to claims received on or before 28 February 2006.

[1]In the present case the effect of s 147 of the SRC Act is that the liability is that of the Commission, rather than Comcare.

8.Table 7.1 of the Guide deals with hearing loss and converts the percentage loss of hearing to a whole person impairment value by dividing the binaural percentage hearing loss by two. Table 7.2 deals with tinnitus. It is common ground that Mr Nolan’s tinnitus condition warrants an assessment of 5% whole person impairment by reference to that Table.

9.Prior to an amendment effected by s 53 of Schedule 2 to the Safety, Rehabilitation and Compensation and Other Legislation Amendment Act 2001 (Cth)[2], s 24(7) of the SRC Act provided that, subject to an irrelevant exception:

[2]        No. 144, 2001.

“where [the Commission] determines that the degree of permanent impairment of the employee is less than 10%, an amount of compensation is not payable to the employee under this section.”

The amendment repealed s 24(7) and substituted s 24(7) and (7A). Subsection 24(7A) now provides:

“Subject to section 25, if:

(a)the employee has a permanent impairment that is a hearing loss; and

(b)Comcare determines that the binaural hearing loss suffered by the employee is less than 5%;

an amount of compensation is not payable to the employee under this section.”

By virtue of s 56 of Schedule 2 to the amending Act the amendments had effect:

“only in relation to claims for compensation in respect of permanent impairment resulting from an injury suffered by an employee after the day on which this Act receives the Royal Assent.”

The date of the Royal Assent was 1 October 2001. Counsel for Mr Nolan, Ms Scott-McKenzie, accepts that Mr Nolan’s permanent impairment falls to be determined by reference to the Act as it stood before the 2001 amendments with the result that compensation for permanent impairment is not payable to Mr Nolan if his degree of permanent impairment is determined to be less than 10%.

The pre-existing hearing loss

10.Ms Scott-McKenzie submitted that the pre-existing hearing loss ought to be ignored. This contention was advanced in two alternative ways. First, it was said that the results of the March 1997 hearing test should be disregarded as it was not conducted according to the procedures then in place for undertaking hearing tests. Because it was conducted at four frequencies rather than six as was required it was, in the opinion of Dr Joseph Scoppa, an ear, nose and throat physician, “unreliable for comparison with other audiograms conducted where all six required frequencies have been tested”. But, as Dr Scoppa made plain in his evidence before us, the pre-existing hearing loss could not have been less than 2.9%. We would then not disregard the hearing loss on this basis.

11.The second basis on which it was said that we should ignore the pre-existing hearing loss was than it had not been noticeable to Mr Nolan. It was said that the hearing loss of 16.3% “resulted from” the workplace incident. We do not accept that that is so. A hearing loss of 16.3% may be the result of the incident but it did not result from that incident. As has recently been affirmed, where the question is what degree of permanent impairment has resulted from an injury, “allowance [must] be made for … existing permanent impairment”[3].

[3]Fellowes v Military Rehabilitation & Compensation Commission [2008] FCAFC 140 at [33].

12.It does not matter that Mr Nolan was unaware of the pre-existing hearing loss. It existed, as a matter of fact. That is, there was pre-existing damage to the ears, and the extent to which that damage had caused hearing loss was capable of being measured. Moreover the medical evidence[4] established that the workplace accident added to the pre-existing loss.

[4]Exhibit 6, the report of Dr Scoppa.

13.The present case is readily distinguishable from that of Parker v Military Rehabilitation & Compensation Commission[5] relied upon by Mr Nolan. In that case there was evidence of a pre-existing condition that would have lead to the permanent impairment that occurred as the unintended consequence of medical treatment. Unlike the present case there was no evidence that the condition was one that was capable of being characterised as a permanent impairment. The loss of sight in that case was the consequence of surgery and it was not possible to entirely attribute the loss to the pre-existing condition, which was the requirement of the Guide in relation to the aggravation of a pre-existing condition.

[5] (2007) 96 ALD 624.

14.It follows that in our view the binaural hearing loss, and the degree of permanent impairment, resulting from the workplace accident in September 1998 is to be calculated by deducting the pre-existing hearing loss from the resulting hearing loss, that is, there is a binaural hearing loss of 13.4% which converts to a whole person impairment percentage of 7%[6].

[6]        Rounded up from 6.7%.

One injury or two?

15.Mr Dubé, who appeared for the Commission, submitted that each of the hearing loss and tinnitus constituted an injury, with the result, given that both had a degree of whole person impairment of less than 10%[7], that Mr Nolan was not entitled to compensation for permanent impairment. The argument for Mr Nolan was that there was but one injury, which had two functional impairments – hearing loss and tinnitus.

[7] See s 24(7) of the SRC Act.

16.It is first necessary to determine what is meant by “injury” in the present context. At the time relevant to these proceedings[8] “injury” was defined in these terms:

[8]       The definitions of the terms “injury” and “disease” were amended in minor respects by the Safety, Rehabilitation and Compensation and other Legislation Amendment Act 2007 but the earlier definitions of those terms continue to apply to injuries sustained prior to 12 April 2007.

“(1)In this Act, unless the contrary intention appears:

…

injury means:

(a)a disease suffered by an employee; or

(b)an injury (other than a disease) suffered by an employee, being 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.

…”

The term “disease” was defined as meaning:

“(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.”

Finally, “ailment” was defined as:

“any physical or mental ailment, disorder, defect or morbid condition (whether of sudden onset or gradual development).”

17.What is meant by “injury” was the subject of the decision of the High Court in Canute v Comcare[9]. The Court there said[10]:

“At this juncture, three things may be observed about the concept of ‘an injury’. First, the Act does not oblige Comcare to pay compensation in respect of an employee's impairment; it is liable to pay compensation in respect of ‘the injury’. Secondly, the term ‘injury’ is not used in the Act in the sense of ‘workplace accident’. The definition of ‘injury’ is expressed in terms of the resultant effect of an incident or ailment upon the employee's body. Thirdly, the term ‘injury’ is not used in a global sense to describe the general condition of the employee following an incident. The Act refers disjunctively to ‘disease’ or ‘physical or mental’ injuries and, at least to that extent, it assumes that an employee may sustain more than one ‘injury’. The use in s 24(1) of the indefinite article in the expression ‘an injury’ reinforces that conclusion.”

[9] (2006) 226 CLR 535.

[10] (2006) 226 CLR 535 at 540, [10].

18.It is also relevant to note the following extract from the Principles of Assessment chapter of the Guide, where it is said under the heading “Combined Impairments” [11]:

“It is important to realise that impairment is system or function based and that a single injury or disease may give rise to multiple loss of function. When more than one table applies to a single injury separate scores should be allocated to each functional impairment. Where two or more injuries give rise to the same impairment a single rating only should be given.”

[11]At page 5 of the Guide.

19.We do not accept the Commission’s argument. According to Dr Scoppa, whose evidence we accept, the explosion created an acoustic trauma which caused the ear drum to forcibly move into the inner ear,

resulting in permanent damage to the hair cells. That trauma produced two symptoms, hearing loss and tinnitus. In our view neither the hearing loss nor the tinnitus is an “injury” – the injury is the permanent damage to the hair cells from which the hearing loss and the tinnitus resulted.

20.The Commission put before us an extract from a well-known medical text in which tinnitus is described as a separate condition. We do not doubt that in some setting it may be so described. But we think that Dr Scoppa put the matter rather well when he said that a headache may be regarded as a condition but in truth it will invariably be the symptom of an underlying pathology. 

The result

21.On the view we take of the matter Mr Nolan has two functional impairments that resulted from his injury. The hearing loss amounts to a whole person impairment of 7%. The tinnitus results in a whole person impairment of 5%. The combined value, by reference to Table 14.1 of the Guide, is 12%.

22.We would set aside the decision under review and substitute a decision that Mr Nolan has a degree of permanent impairment of 12%. We would remit the matter to the Commission to determine the amount of compensation payable. Subject to any submissions that the Commission wishes to make within 14 days we would order the Commission to pay Mr Nolan’s costs of the proceedings.

I certify that the 22 preceding paragraphs are a true copy of the reasons for the decision herein of Deputy President P E Hack SC and Dr M L Denovan, Member

Signed:         ........................Signed..............................................
  Jacqueline Woods, Associate

Dates of Hearing  29 May and 5 September 2008 
Date of Decision  30 September 2008
Counsel for the Applicant         Ms S Scott-McKenzie
Solicitors for the Applicant        Slater and Gordon
Solicitors for the Respondent    Sparke Helmore