O'Mullane and Comcare

[2002] AATA 1251

DECISION AND REASONS FOR DECISION [2002] AATA 1251

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No Q2002/733

GENERAL ADMINISTRATIVE DIVISION          )          
           Re      MICHAEL O'MULLANE   
  Applicant
           And    COMCARE  
  Respondent

DECISION

Tribunal       Mr R G Kenny, Member    

Date6 December 2002

PlaceBrisbane

Decision      The Tribunal affirms the decision under review.           

…..(Sgd) R G Kenny…..
  Member
CATCHWORDS
WORKER'S COMPENSATION – definition of injury - whether incapacity present - whether sea going allowance payable
Safety, Rehabilitation and Compensation Act 1988 ss 4, 8, 9, 14, 19
Health Insurance Commission v Van Reesch (1996) 45 ALD 302
Re Perry and Department of Defence (AAT No 11718, 21 March 1997)

REASONS FOR DECISION

6 December 2002   Mr R G Kenny, Member                

Background

1. Michael O'Mullane (the applicant) served in the Royal Australian Navy from 21 September 1976 until he was discharged on medical grounds on 15 October 2000 at which time he held the rank of chief petty officer marine technician. On 26 May 1998, he lodged (see T3) a claim for compensation under the Safety, Rehabilitation and Compensation Act 1988 (the Act) for the effects of a back injury initially sustained in July 1994 and, on 7 August 1998, a delegate of the Military Compensation and Rehabilitation Service accepted liability for lower lumbar dysfunction (see T5).

2. On 13 July 2000, Comcare determined that sea going allowance was payable to the applicant from 11 May 1999 until his discharge (see T14).  On 26 June 2001, a further determination was made that sea going allowance was not payable to the applicant and an overpayment was raised (see T21). That decision was affirmed on 11 December 2001 (see T30) and, on 12 February 2002, the applicant sought review of that decision by the Administrative Appeals Tribunal (the Tribunal). The matter is to be determined under the Administrative Appeals Tribunal Act1975.
   Appearances

3. The applicant attended the hearing but was not represented. Mr M Belcher from the Australian Government Solicitor's office appeared on behalf of Comcare (the respondent).

4. In evidence were the T documents (T1-T32) and supplementary T documents (T33-T104) (Exhibit 1) as well as:

   Exhibit 2 – a letter, dated 29 October 2002, with annexure from S Jeffries from Information Management – Defence Personnel; and
   Exhibit 3 – a letter, dated 21 November 2001, with annexure from Z Murray, Director of Entitlements – Defence Personnel.

Applicant's Case

1. The applicant, who was born on 19 June 1959, said that he first injured his back in July 1994 whilst serving on HMAS Warrnambool and that this resulted in a period of convalescence and then return to sea duties, for which he was receiving sea going allowance, some twelve days later. He again experienced episodes of pain in his back on 9 March 1995 and 14 May 1996 on board HMAS Bendigo and, after each incident, returned to sea duties. He underwent physiotherapy sessions for his back in March 1995 and in January 1998. On 6 April 1998, he was posted, for a period of three years, to Nuship Melville which was being constructed and prepared for sea trials in Cairns preparatory to being accepted into naval service. There were further occasions when he sought treatment for his back. On 29 May 1998, he was treated for back pain after hurting it in sneezing three days earlier. He had further physiotherapy in July 1998 and complained of sciatic pain after a period of prolonged standing in October 1998. This resulted in a referral by Dr J Provan for a CT scan and consultation with orthopaedic surgeon, Dr W Clarke, who arranged for an MRI to be carried out. As a result of these tests, Dr Clarke diagnosed L5/S1 intervertebral disc prolapse for which he eventually had surgery in July 1999.

2. The applicant said that, while he was posted to Nuship Melville, he was on shore duties and was not in receipt of sea going allowance but also said that this would have been paid to him when the vessel was delivered and commissioned into navy service. He said that, before that happened, he was posted to Shore Command in Cairns because of his back problem and did not receive the sea going allowance. He had completed all of the training necessary to take up his position on the Melville and had been engaged on the vessel during short sailing sessions. His posting occurred only a few weeks before the Melville was commissioned.

3. The applicant said that this back problem had been caused by the initial injury in 1994 and had remained with him since that time with various exacerbations during his service. He had been on medication at various times and it was not until 1998 that tests were conducted to enable a diagnosis to be made.
   Respondent's Case

4. Mr Belcher noted that the respondent had, on 7 August 1998, accepted liability for "acute lower lumbar dysfunction on 16 July 1994" (see T5) but submitted that the injury which gave rise to the applicant's incapacity for work was that which occurred on or about 9 October 1998 and which led to the diagnosis of L5/S1 intervertebral disc prolapse by Dr Clarke. He conceded that this may have had its genesis in the 1994 injury but was a separate and distinct injury in accordance with the definition of injury in sub-section 4(1) of the Act in that an aggravation of an injury falls within that definition. From 9 October 1998, the applicant began to experience sciatic pain and radiological symptoms for the first time and this was noted by Dr Clarke who, in a report dated 24 August 1999, referred to the applicant as having "prolapsed his intervertebral disc at L5/S1 during October 1998" (see T78).

5. Mr Belcher also submitted that, at the time of that 1998 injury, the applicant was posted to shore duties with Nuship Melville, continued with shore duties when he was posted to Support Command in Cairns on 12 March 1999 and remained at that level until he was discharged on 15 October 2000. It followed that there was no incapacity, as set out in sub-section 4(9) of the Act, suffered by the applicant from the date of injury until his discharge. He submitted that, even if the applicant had been in receipt of sea going allowance when he was injured in 1994, this was no longer relevant to his circumstances in 1998 because sea going allowance had ceased in February 1997.
   10. Mr Belcher referred to the decision of the respondent on 13 July 2000 (see T14) where the applicant's claim for compensation was determined and where the assessment included an amount for loss of sea going allowance in the period from 11 May 1999 until the time of his discharge. He submitted that these amounts were incorrectly assessed as they were not payable to the applicant because there was no incapacity prior to discharge. Whilst conceding that compensation was payable from the date of discharge, he submitted that this would not include an amount for loss of sea going allowance.
   Legislation and Issues for Determination
   11. The Act makes provision for compensation to be paid by the Commonwealth in relation to work-related injuries or diseases to be paid to nominated classes of Commonwealth employees, including those serving in the Royal Australian Navy. Compensation for injuries that have resulted in impairment is paid in accordance with Part II of the Act and sub-section 14(1) thereof reads:

   "14 Compensation for injuries
   (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."

12. The amount of compensation payable is calculated in accordance with section 19 which, in so far as relevant, reads:

"(2)     Subject to this Part, Comcare is liable to pay to the employee in respect of the injury, for each week that is a maximum rate compensation week during which the employee is incapacitated, an amount of compensation worked out using the formula:
  NWE - AE
where:
AE is the greater of the following amounts:

(a)the amount per week (if any) that the employee is able to earn in suitable employment;

(b)the amount per week (if any) that the employee earns from any employment (including self-employment) that is undertaken by the employee during that week.

NWE is the amount of the employee's normal weekly earnings."

13. The means of calculating NWE are set out in section 8 of the Act which, in so far as relevant, read:

"(1)     For the purposes of this Act, the normal weekly earnings of an employee (other than an employee referred to in subsection (2)) before an injury shall be calculated in relation to the  relevant period under the formula:
  [NH x RP] + A
where:
NH is the average number of hours worked in each week by the employee in his or her employment during the relevant period;
RP is the employee's average hourly ordinary time rate of pay during that period; and
A is the average amount of any allowance payable to the employee in each week in respect of his or her employment during the relevant period, other than an allowance payable in respect of special expenses incurred, or likely to be incurred, by the employee in respect of that employment.
…

(6)       Subject to this section, if the minimum amount per week payable to an employee in respect of his or her employment by the Commonwealth or a licensed corporation at the date of the injury is increased, or would have been increased if the employee had continued in that employment, because of:

(a) the attainment by the employee of a particular age;

(b) the completion by the employee of a particular period of service; or

(c) the receipt by the employee of an increase in salary, wages or pay by way of an increment in a range of salary, wages or pay applicable to the employee or to his or her office, position or appointment;

the normal weekly earnings of the employee before the injury, as calculated under the preceding subsections, shall be increased by the same percentage as the percentage by which that minimum amount per week is increased, or would have been increased, as the case may be."

14. The relevant period, for the purposes of that provision in this matter, is described in sub-section 9(1) of the Act which reads:

"(1) For the purposes of calculating the normal weekly earnings of an employee before an injury, a reference in section 8 to the relevant period is, subject to this section, a reference to the latest period of 2 weeks before the date of the injury during which the employee was continuously employed by the Commonwealth or a licensed corporation."

15. Also relevant in this matter are the following definitions in sub-sections 4(1) and (9) of the Act:

"4(1) …
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.
…
aggravation includes acceleration or recurrence.
…

4(9)     A reference in this Act to an incapacity for work is a reference to an incapacity suffered by an employee as a result of an injury, being:

(a) an incapacity to engage in any work; or

(b) an incapacity to engage in work at the same level at which he or she was engaged by the Commonwealth or a licensed corporation in that work or any other work immediately before the injury happened."

16. The issues for determination are whether the applicant suffered incapacity from an injury during his employment and whether any incapacity payments should include an amount that takes into account sea going allowance.
Consideration

1. The applicant injured his back in July 1994 and then had further episodes of back pain prior to October 1998. In each case, the applicant was returned to full duties. An Outpatient Clinical Record, dated 9 October 1998, reports that he "started getting sciatic-type pain down left leg continuously over last few days" and an earlier report, dated 5 October 1998 describes him as having "aggravated back on week-end (prolonged standing)" (see T34/15). A Specialist Referral and Report was completed by Dr J Provan on 14 October 1998 (see T56/44) and the applicant subsequently had a CT scan conducted and was seen by orthopaedic surgeon Dr W Clarke who requested that an MRI scan also be conducted.
   18. Having seen the results of those tests, Dr Clarke completed a report on 20 November 1998 which included a diagnosis of left sided L5/S1 intervertebral disc prolapse and he referred to a history given by the applicant of his having experienced "left leg nerve root symptoms for the first time" in October 1998 (see T58/46). In a further report, dated 15 March 1999, Dr Clarke referred to the applicant as having injured his L5/S1 intervertebral disc in July 1994 but also disc prolapse as having been sustained in October 1998 (T62/65). In another report, dated 24 August 1999, (see T78/102), Dr Clarke stated:

   "After some years of back pain, he prolapsed a fragment of intervertebral disc at L5/S1 during October 1998. After a long period of conservative treatment, the left sided L5 and S1 nerve roots were decompressed on 27 July 1999, removing the remains of a sequestrated fragment of disc."

19. In 1999, a series of medical boards were conducted in relation to the applicant's fitness and these resulted in his being medically downgraded, to his being posted from Nuship Melville to Support Command (Cairns) (see T6/13) and, eventually, to his being declared Medically Unfit for Naval Service (see T88/119). He was discharged on 15 October 2000.
20. In Health Insurance Commission v Van Reesch (1996) 45 ALD 302, the Full Federal Court held that a disc prolapse occurring in the setting of a previous history of back pain could constitute an injury, in contrast to a disease, and I am satisfied that this is the case in relation to the applicant. His presentation of symptoms from October 1998 was different in character from what he had described on previous occasions when he presented with back pain and, in particular, he described the referral of pain into his leg as being felt then for the first time. Dr Clarke, who has had a long and close association with the applicant, described the disc as having prolapsed at that time. On that evidence, I am satisfied that the applicant suffered an injury, as defined in sub-section 4(1) of the Act, to his back on or about 9 October 1998 and the respondent has not disputed that the injury resulted from the applicant's employment.
21. The respondent is liable to pay compensation to the applicant for the incapacity he suffered as a result of his injury. It is not disputed that compensation is payable to him from the time of his discharge from the Navy. In the period prior to his discharge, section 4(9)(b) of the Act is relevant and the issue is whether there was an incapacity to engage in work at the same level at which he was engaged immediately before the injury happened.
22. In evidence (exhibit 2) was a schedule of the gross fortnightly pay entitlements of the applicant throughout his naval service and these show that sea going allowance was not paid to him after 24 February 1997. From the time of the injury until his discharge, the applicant maintained the same rank but experienced a posting form Nuship Melville to Support Command (Cairns). I am satisfied that, in neither of these positions, was he entitled to receive the sea going allowance and I am also satisfied that he did not receive sea going allowance in those periods.
23. The applicant submitted that he had completed all of the training necessary to join the Melville after the vessel was commissioned into the Navy and was only a few weeks short of realising that appointment when he was reposted. The applicant's case in analogous to that which arose in Re Perry and Department of Defence (AAT No 11718, 21 March 1997) where the Tribunal dealt with a Naval officer who was injured during a course which he was thereby required to discontinue with the result that he was not able to attain the qualification that the course promised on completion and posting. Whilst recognising that the officer had a legitimate expectation that the allowance associated with the qualification would be payable to him, the Tribunal determined that this would only be so if the qualification was gained and the relevant posting made. I am satisfied that the applicant was not eligible to receive sea going allowance unless and until he was serving on the Melville in a sea going capacity after it had been commissioned by the Navy. The fact that his posting from the vessel before that could occur means that he does not meet that requirement. This means that the amount of sea going allowance is not included in item A in the calculation formula in sub-section 8(1) of the Act.
24. In his application for review, the applicant referred to sub-section 8(6) of the Act as being relevant. That provision was also relied upon by the solicitors who were acting for him at an earlier stage and who wrote a letter on his behalf on 3 January 2002 (see T31). The letter describes the applicant as being in receipt of sea going allowance at the time of his injury in 1998 and the Tribunal has determined that this was not the case. Nonetheless, I have given consideration to sub-section 8(6) of the Act which applies if the minimum amount per week payable to an employee would have been increased if the employee had continued in that employment, because, inter alia, of the completion by the employee of a particular period of service. The provision then requires the normal weekly earnings of the employee to be increased by that amount. However, in the applicant's case, there is no evidence that the applicant's remuneration would have increased while posted to the Melville unless the vessel was commissioned into the Navy. That was not a matter to be determined by the mere passage of time which would have enabled the applicant to complete a particular period of service. It was a matter to be determined by the procedures surrounding the acceptance or otherwise of the vessel by the Navy. I am satisfied that sub-section 8(6) is not applicable to the applicant's situation.
25. In accordance with the decision of the respondent on 13 July 2000, the applicant's assessment included an amount for loss of sea going allowance. In the decision under review, it was determined that that sea going allowance was not payable to the applicant and an overpayment was raised.  The Tribunal affirms that decision.
Decision
26. The Tribunal affirms the decision under review.

I certify that the 28 preceding paragraphs are a true copy of the reasons for the decision herein of Mr R G Kenny, Member

Signed:         ......................................................................
  Associate

Date of Hearing  22 November 2002
Date of Decision  6 December 2002
The Applicant Appeared in Person
Solicitor for the Respondent    Mr M Belcher, Australian Government Solicitor