PANTIC and COMCARE
[2011] AATA 340
•23 May 2011
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2011] AATA 340
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2009/4765
GENERAL ADMINISTRATIVE DIVISION ) Re LJUBINKA PANTIC Applicant
And
COMCARE
Respondent
DECISION
Tribunal Professor RM Creyke, Senior Member
Dr Bernard Hughson, MemberDate23 May 2011
PlaceCanberra
Decision The decision under review is set aside. The matter is remitted to Comcare to assess the amount of lump sum compensation, if any, payable in accordance with section 50 of the Compensation (Commonwealth Government Employees) Act 1971 (Cth). ...................[sgd]..........................
Professor RM Creyke, Presiding member
CATCHWORDS
WORKERS’ COMPENSATION – permanent impairment sustained prior to 1988 – entitlement under Compensation (Commonwealth Government Employees) Act 1971 – weekly incapacity payments received – whether precluded from entitlement under section 39(14) – decision under review set aside.
Compensation (Commonwealth Government Employees) Act 1971 (Cth) ss 5, 39, 45, 46, 50
Safety, Rehabilitation and Compensation Act 1988 (Cth) ss 4, 24, 124
Comcare v Levett (1995) 38 ALD 518
Department of Defence v West (1998) 50 ALD 712
Hoyle v Telstra Corporation; Razmovski v Telstra Corporation (1997) 144 ALR 483
Hoyle v Telstra Corporation; Razmovski v Telstra Corporation (1997) 145 ALR 148
Re Morris and Comcare (2007) 97 ALD 189
REASONS FOR DECISION
20 May 2011 Professor RM Creyke, Senior Member
Dr Bernard Hughson, Member1. Mrs Ljubinka Pantic was a cleaner at the Royal Canberra Hospital. On 7 September 1985, she slipped on a floor at work, sustaining an injury to her right elbow. She returned to work in 1986, continuing to work full time, with various short periods off work until 23 November 1990, when she accepted a redundancy.
2. Liability was accepted for the condition on 3 October 1985 under the Compensation (Commonwealth Government Employees) Act 1971 (Cth) (the 1971 Act) for ‘injury to the right elbow’.
3. In 1997, the accepted condition was redefined as ‘pain in right elbow (lateral epicondylitis) now resulting in chronic pain syndrome’.
4. Mrs Pantic sought compensation for permanent impairment on 6 September 2007.
5. On 8 September 2008, Comcare rejected the application on the basis that Mrs Pantic’s impairment did not equate to at least 10 per cent under the relevant table in the Guide to the Assessment of the Degree of Permanent Impairment (2nd ed) (Guide), the version of the Guide applying as at 6 September 2007.
6. The rejection was made in accordance with the terms of the Safety, Rehabilitation and Compensation Act 1988 (Cth) (1988 Act) on the basis of a medical report that the condition became permanent in 1989, that is, after the commencement of the 1988 Act.
7. On 23 December 2008, Comcare affirmed the initial decision.
8. On 1 October 2009, Mrs Pantic sought further review by the Tribunal. The substantive appeal was heard on 12 April 2011.
Legislation
In an agreement between the parties, reached at the hearing, it was accepted that Mrs Pantic’s condition became permanent prior to 1 December 1988. Accordingly, the relevant legislation is the Compensation (Commonwealth Government Employees) Act 1971 (Cth) (1971 Act), as amended by the transitional provisions in the 1988 Act. The following are the relevant provisions of the 1971 Act.
Compensation (Commonwealth Government Employees) Act 1971 (Cth)
5(1) ‘permanent’ means likely to continue indefinitely;
39 (1) Subject to this section, where an injury to an employee results in a
loss specified in sub-section (2), the compensation payable inrespect of that injury is $28,000, or such higher amount as is prescribed , and that compensation is payable to the employee.…
(3) Subject to this section, where an injury to an employee … results in a loss specified in sub-section (4), the compensation payable in respect of that injury is an amount equal to such percentage of $28,000 or, if an amount is prescribed for the purposes of sub-section (1), of that amount as is specified in sub-section (4) in relation to that loss, and that compensation is payable to the employee.
(4) The losses and percentages referred to in the last preceding subsection are the losses and percentages set out in the following table:-
Nature of Loss Percentage … … Loss of arm below elbow, loss of hand or loss of thumb and four fingers of the one hand 70 …
(11) The compensation payable under this Act in respect of an injury resulting in partial loss by an employee of the efficient use of a part of the body specified in sub-section (4) or of the efficient use of such a part of the body for the purposes of the employment of the employee immediately before the injury … is such percentage of the amount of compensation that would be payable under sub-section (3) in respect of an injury resulting in the loss by the employee of that part of the body as is-
a) the percentage by which the injury resulted in the efficient use, immediately before the injury, of that part of the body being reduced; or
b) the percentage by which the injury resulted in the efficient use, immediately before the injury, of that part of the body for the purposes of the employment of the employee immediately before the injury being reduced,
whichever is the greater percentage.
….
(14) An amount of compensation referred to in this section is not payable in respect of an injury so long as the employee is, or is likely to become, totally incapacitated for work where the incapacity for work results, or, if it occurs, will result, in whole or in part from that injury.
(15) In this section, 'loss’ means a permanent loss.
9. Section 45 provides for compensation for injuries resulting in total incapacity. Section 45(9) provides:
45(9) Subject to sections 47 and 50, where a determination is made that an amount of compensation is payable to the employee under section 39 in respect of an injury that resulted in a loss referred to in that section or a determination is made that the liability of the Commonwealth to make further payments to the employee under section 46 in respect of an injury is to be redeemed, compensation is not payable to the employee under this section in respect of a period of incapacity for work resulting from that injury, being a period occurring after the date of the making of the determination.
10. Section 46 provides for compensation for injuries resulting in partial incapacity. Section 46(5) provides:
46(5) Subject to section 47 [dealing with incapacity while undergoing or as a result of medical treatment], where a determination is made that an amount of compensation is payable to the employee under section 39 in respect of an injury that caused a loss referred to in that section or a determination is made that the liability of the Commonwealth to make further payments to the employee under this section in respect of an injury is to be redeemed, compensation is not payable to the employee under this section in respect of a period of incapacity for work resulting from that injury, being a period occurring after the date of the making of the determination.
11. Section 50 provides:
50(1) Where:
a) An injury in respect of which a lump sum was paid to an employee in pursuance of section 39…results in the employee, at any time after the payment of that lump sum, being totally incapacitated for work; and
b) The incapacity is likely to continue indefinitely,
compensation is payable to the employee in accordance with this section during the period of the total incapacity.
(2) The Compensation is –
a) an amount per week equal to the amount per week that would be payable to the employee under a provision of this Act … during the period of that incapacity if the lump sum had not been paid, less an amount (if any) ascertained in accordance with the formula:
A-B
52C
Where:
A is the lump sum that was paid to the employee;
B is the sum of the amounts that would, but for the payment to the employee of that lump sum, have been paid to the employee under section 46 in respect of the period that commenced on the date on which the Commissioner determined that the lump sum was to be paid to the employee and ends on the date on which compensation became payable to him under this section; and
C is the number of years in the complete expectation of life of the employee at the date on which compensation became payable to him under this section ascertained by reference to the prescribed Life Tables; or
b) an amount per week that is prescribed for the purposes of this section in respect of a class of persons in which the employee is included,
whichever is the greater.
12. The relevant sections of the 1988 Act are:
Safety, Rehabilitation and Compensation Act 1988 (Cth)
4(1) impairment means the loss, the loss of the use, or the damage or malfunction, of any part of the body or of an bodily system or function or part of such system or function.
permanent means likely to continue indefinitely.
24 Compensation for injuries resulting in permanent impairment
(1) Where an injury to an employee results in a permanent impairment, Comcare is liable to pay compensation to the employee in respect of the injury. …
(3) Subject to this section, the amount of compensation payable to the employee is such amount, as is assessed by Comcare under subsection (4), being an amount not exceeding the maximum amount at the date of the assessment.
(4) The amount assessed by Comcare shall be an amount that is the same percentage of the maximum amount as the percentage determined by Comcare under subsection (5).
(5) Comcare shall determine the degree of permanent impairment of the employee resulting from an injury under the provisions of the approved Guide.
(6) The degree of permanent impairment shall be expressed as a percentage.
(7) Subject to section 25, if:
(a) the employee has a permanent impairment other than a hearing loss; and
(b) Comcare determines that the degree of permanent impairment is less than 10%;
an amount of compensation is not payable to the employee under this section. …
…
124 Application of Act to pre-existing injuries
(1) Subject to this Part, this Act applies in relation to an injury, loss or damage suffered by an employee, whether before or after the commencing day.
(1A) Subject to this Part, a person is entitled to compensation under this Act in respect of an injury, loss or damage suffered before the commencing day if compensation was, or would have been, payable to the person in respect of that injury, loss or damage under … the 1971 Act. …
(3) A person is not entitled to compensation under section 24 … in respect of a permanent impairment … being an impairment … that occurred before the commencing date, if:…
(b) the person was not entitled to receive compensation of a lump sum in respect of that impairment or death:
… (iii) … under the 1971 Act as in force when the impairment … occurred.
(4) The amount of compensation (if any) that a person is, by virtue of this section, entitled to receive under section 24 … in respect of a permanent impairment being an impairment … that occurred before the commencing day, shall be the same as the amount of the compensation that would have been payable to that person, if this Act had not been enacted, under:…
(c) … the 1971 Act as in force when the impairment or death occurred.…
Issues
13. At the hearing it was agreed that Mrs Pantic suffered an impairment of 10 per cent in respect of an injury which became permanent prior to the commencement of the 1988 Act. This means the Mrs Pantic’s entitlement to compensation must be assessed under the 1971 Act, and there is no need to consider the Guide. The remaining issues for consideration are:
·Whether Mrs Pantic has an entitlement to compensation under the 1971 Act; and
·If so, the amount of compensation, if any, to which Mrs Pantic is entitled.
History
14. Mrs Pantic sustained an injury to her right elbow at work when she slipped at work on 7 September 1985. She returned to work after a few weeks. The accepted injury was categorised as ‘pain in right elbow (lateral epicondylitis) now resulting in chronic pain syndrome’.
15. She was off work immediately after the injury until 28 September 1985 and received compensation payments for that period. Mrs Pantic was also off work for a week from 13 to 24 January 1986, for 2 days in February 1986 and 5 days in March 1990.
16. When the Royal Canberra Hospital closed in 1989, Mrs Pantic’s position was transferred to Woden Hospital. She was certified unfit for work continuously from 10 October 1990. In the same year, the cleaning services at Woden Hospital were privatised and Mrs Pantic was made redundant from 23 November 1990. She has not worked since.
17. The payment certificates provided appear to indicate that Mrs Pantic was paid total incapacity benefits from 10 October 1990 until 23 November 1991. From that time she was paid partial incapacity benefits until she turned 65 on 25 April 2004.
18. On 23 July 2007, Mrs Pantic completed a non-economic loss questionnaire. On 6 September 2007 she lodged an application for permanent impairment in relation to her accepted condition. The claim form stated that she suffered an impairment to the right upper limb.
19. At the hearing the parties agreed the following facts:
·The applicant suffered an impairment that became permanent on or around 7 April 1987 (but certainly prior to 1 December 1988).
·As at 6 September 2007, the applicant was unable to undertake work of any kind and therefore was totally incapacitated for work and this total incapacity was significantly contributed to by her compensable injury (with other factors such as age also significantly contributing to this total incapacity).
· As at 23 November 1990 the applicant was not totally incapacitated for work.
· The applicant suffered a loss of the use of her arm at or above her elbow of 10% as assessed in accordance with s 39 of the Compensation (Commonwealth Government Employees) Act 1971.
Consideration
Whether Mrs Pantic has an entitlement to compensation under the 1971 Act
20. Mrs Pantic applied for compensation for permanent impairment in 2007. Section 24(1) of the 1988 Act provides that ‘Where an injury to an employee results in a permanent impairment, Comcare is liable to pay compensation … in respect of the injury’.
21. Mrs Pantic was an employee, being formerly employed by the Royal Canberra Hospital, under the auspices of the ACT Department of Health, an ACT Government Agency classified as a ‘Commonwealth authority’ for the purposes of the 1988 Act.[1] She was also covered by the 1971 Act which provides in section 7 that it applied to someone ‘employed under a law of … a Territory or under a contract of service’. Mrs Pantic suffered an injury to her right elbow, while at work, an injury for which Comcare accepted liability on 3 October 1985.
[1] By Commonwealth Gazette S252, 1 July 1994, the ACT Public Service was declared to be a 'Commonwealth authority' for the purpose of the Act.
22. Mrs Pantic’s injury to her elbow led to an ‘impairment’ in that she suffered ‘the loss of the use’ of her arm for the purposes of employment. For an injury to be ‘permanent’ it means that it is ‘likely to continue indefinitely’.[2] It has been agreed that Mrs Pantic’s accepted injury became permanent on or around 7 April 1987, that is prior to 1 December 1988, the commencing day of the 1988 Act.
[2] Safety, Rehabilitation and Compensation Act1988 (Cth) (Act) s 4(1) – definition of ‘permanent’.
23. As Mrs Pantic did not apply for compensation for permanent impairment until 6 September 2007, that is, after the commencement of the 1988 Act, the transitional provisions found in Part X of that Act apply. Section 124 of the Act appears in Part X. Section 124(1) provides: ‘Subject to this Part, this Act applies to an injury … suffered by an employee, whether before or after the commencing day’.
24. This provision is relevant since it provides for an injury that was, or could have been, accepted under the 1971 Act, but for which no application for compensation for permanent impairment was sought until after 1 December 1988. The effect of section 124(1) is to create an entitlement to lump sum compensation under section 24(1) of the Act in respect of a permanent impairment suffered before 1 December 1988.[3]
[3] Comcare v Levett (1995) 131 ALR 645.
25. On the facts agreed by the parties and accepted as correct by the Tribunal, Mrs Pantic’s impairment had become permanent prior to 1 December 1988. On that basis, section 124(1) of the Act applies to her circumstances. That entitlement is, however, subject to any qualifications in Part X.
26. Section 124(3) provides such a qualification when it states:
A person is not entitled to compensation under s 24 … in respect of a permanent impairment … being an impairment … that occurred before the commencing date, if …
(b) the person was not entitled to receive compensation of a lump sum in respect of that impairment …
(iii)… under the 1971 Act as in force when the impairment … occurred.
27. It has been accepted that this provision does not exclude, for example, injuries not covered by section 39(4), such as psychological injuries.[4] However, it does apply to conditions covered by sections 45(9), 46(5) and 39(4), provisions which are discussed later.
[4] Hoyle v Telstra Corporation Ltd; Razmovski and Telstra Corporation Ltd (1997) 144 ALR 483 at 493.
28. Section 124(4) reinforces that qualification when it restricts the amount of compensation payable under section 24 for impairments that became permanent before 1 December 1988 to: 'The amount of the compensation that would have been payable to that person ... under ... the 1971 Act as in force when the impairment ... occurred'. Section 124(1A) also provides that a person is entitled to compensation for an injury suffered before 1 December 1988 if ‘compensation was, or would have been, payable to the person … under … the 1971 Act’.
29. Section 39 of the 1971 Act provided for payment of lump sum compensation in respect of the loss of particular functions or limbs, or part of functions or limbs. The amount of the lump sum was specified in section 39(4) of the 1971 Act which contains a 'Table of Maims'.
30. Section 39(4) referred only to a lump sum payment for total loss of an arm above or below the elbow, not simply an incapacitating injury to the elbow. Section 39(11), however, provides for compensation:
… in respect of an injury resulting in partial loss by an employee of the efficient use of a part of the body specified in sub-section (4) or of the efficient use of such a part of the body for the purposes of the employment of the employee … is such percentage of the amount of compensation that would be payable under sub-section (3) … as is-
(a) the percentage by which the injury resulted in [the reduction of] the efficient use …of that part of the body; or
(b)… [the reduction of] the efficient use … of that part of the body for the purposes of the employment.
31. This provision would have permitted Mrs Pantic to be compensated under the 1971 Act for the percentage reduction in efficient use, or the efficient use for the purposes of employment, of her arm above the right elbow. The impairment she suffered was, therefore, compensable under the 1971 Act.[5] Accordingly, Mrs Pantic would not have been prevented under section 124(3) from claiming compensation for permanent impairment for her elbow injury.
[5] Department of Defence v West (1998) 50 ALD 712 at 716 (Heerey J dissenting, but only as to the outcome).
32. However, section 39(14) provides that compensation is not payable under the section ‘in respect of an injury so long as the employee is, or is likely to become, totally incapacitated for work where the incapacity for work results, or, if it occurs, will result, in whole or in part from that injury’. The interpretation of this provision is central to the outcome in this matter.
33. Section 39(14) of the 1971 Act reflects a policy identifiable from other provisions in that Act. Those provisions, in particular, sections 45, 46 and 50, were designed to prevent a person receiving both a lump sum payment and weekly compensation payments. Sections 45 and 46 of the 1971 Act provided for the payment respectively of compensation for total incapacity and for partial incapacity. Section 50 provided a formula for determining the amount of recurrent payments after payment of compensation in the form of a lump sum.
34. Section 45(9) provided that where a decision had been made to pay lump sum compensation for an injury then, subject to section 50 of the 1971 Act, 'compensation is not payable to the employee ... after the date of the ... determination'. This provision was replicated in the case of partial incapacity where the compensation payments had been redeemed by a lump sum (section 46(5)). These provisions applied to cases where a decision had been made to pay compensation in the form of a lump sum.
35. Section 50 then provided that if 'at any time after the payment of that lump sum [the employee became] totally incapacitated for work and the incapacity is likely to continue indefinitely', future compensation payments were to be made according to a formula which reduced the amount of payments by the amount of the lump sum. As the Full Court said in Hoyle v Telstra 'the effect of [the formula] was that the lump sum payment was to be treated as payment in advance of the weekly compensation payable under s 50'.[6] The formula assumes that a lump sum payment has occurred.
[6] Hoyle v Telstra Corporation; Razmovski v Telstra Corporation (1997) 145 ALR 148 at 153. There were two applications considered in the case, one from Mr Hoyle and another from Mr Razmovski. The case is referred to by both titles depending on the report series. As the Full Court uses Hoyle as the first named party, the Tribunal does likewise for the purpose of this decision.
36. As the Full Court explained in Hoyle:
The effect of ss 39(14), 45(9), 46(5) and 50, therefore was that an employee could not retain the benefit of a lump sum payment and at the same time have the benefit of weekly compensation payments in respect of a period of total incapacity. Consistently with that policy, and in order to prevent totally incapacitated employees taking a lump sum payment, s 39(14) of the 1971 Act made it clear that the lump sum provided for in s 39(3) was not to be payable so long as an employee was, or is likely to become, totally incapacitated for work, where the incapacity resulted, or would result, in whole or in part from that injury.[7]
[7] Ibid.
37. As the Court concluded the effect of section 39(3) and (14) is 'that there is no entitlement to receive [lump sum] compensation so long as an employee is, or is likely to become, totally incapacitated for work'. These provisions led the Full Court in Hoyle to concede that if at some point an employee ceased to be totally incapacitated, their entitlement to compensation would be reactivated.[8] That finding was also conceded by counsel for Comcare in the hearing in this matter.
[8] Id at 154.
38. As counsel said ‘the test is whether you are totally incapacitated for work at all times under the old Act for the exclusion in section 124(3) to apply’. That concession reflects the fact that the grant of a lump sum is dependent on the injury being ‘permanent’, that is ‘likely to continue indefinitely’; a definition which appears in both the 1971 Act and the 1988 Act.
39. In Hoyle, since one of the two applicants had been totally incapacitated throughout the period prior to the date of the claim for permanent impairment and there was no evidence to indicate that the other party was not in a similar position, both were caught by section 39(14) and had no entitlement. As the facts indicate, that is not the position in relation to Mrs Pantic.
40. By contrast, in Re Morris and Comcare[9] when an employee suffered two injuries but did not become totally incapacitated, except for a short period, between the time of the first injury and the second injury, section 39(14) did not preclude a finding that lump sum compensation was payable for the period of partial incapacity prior to the time of the second injury. These facts are comparable to those applying to Mrs Pantic.
[9] Re Morris and Comcare (2007) 97 ALD 189.
41. Apart from certain relatively short periods in 1985 and 1986, Mrs Pantic did not become totally incapacitated until after 23 November 1990. For the most part she had only been partially incapacitated for the period following her suffering the injury in 1985. Her impairment became permanent on 7 April 1987. On that basis and in accordance with the policy of the 1971 Act, as discussed, and the relevant cases, provided the compensation payable to her was not nil, she was eligible for a lump sum compensation payment under the terms of the 1971 Act during her period of partial incapacity.
42. That is not the end of the matter. Counsel for Comcare argued that Sackville J in the first instance hearing in Hoyle[10] had indicated that section 124(3) must be read in conjunction with section 124(4), a finding upheld by the Full Court.[11] Section 124(4) provides that ‘no compensation would have been payable to the person’ if, at the time of the claim for permanent impairment, the employee was totally incapacitated for work. In other words, if section 39(14) of the 1971 Act is applied to Mrs Pantic at the date of her claim for permanent impairment in 2007, by which time she was totally incapacitated, she would have been disentitled to any lump sum payment. The issue of the time at which the section 39(14) test must be applied, therefore becomes critical.
[10] Hoyle v Telstra Corporation; Razmovski v Telstra Corporation (1997) 144 ALR 483
[11] Hoyle v Telstra Corporation (1997) 145 ALR 148 at 155-156.
43. Counsel for Comcare also argued that the policy behind sections 45(9), 46(5), and 50, as reflected in section 39(14) meant that ‘ongoing regular compensation payments would have stopped’ on application for a lump sum compensation payment. In other words:
… you got one or the other but not both, and the policy behind section 39(14) was that workers were to be discouraged from taking a lump sum payment which might look attractive in the short term, but thereby giving up the greater weekly payments they would receive by total incapacity payments under section 45 … therefore, taking a short-term gain but sacrificing the longer term benefit. And parliament saw fit to discourage workers from doing that.
44. If section 39(14) has that effect, Mrs Pantic who had been in receipt of weekly compensation payments for both partial and total incapacity, would not have been entitled also to claim a lump sum. This too is an issue which needs further exploration.
Time of application of section 39(14) of the 1971 Act
45. The first issue in relation to section 39(14) is the time at which the test for whether ‘compensation was not payable’ is to be considered. Counsel for Mrs Pantic contended there were four options:
·At the date of the onset of the impairment;
·At the date the condition became permanent;
·At the date of the repeal of the 1971 Act; or
·At the date of claim for the permanent impairment.
46. Counsel for Mrs Pantic argued that the test could be applied at any time up to the date of the claim for permanent impairment.
47. As indicated earlier, counsel for Comcare maintained that the time at which the assessment must be made was the time of the application for permanent impairment.
48. There are conflicting authorities on the issue. Sackville J noted at first instance in Hoyle v Telstra Corporation Ltd:
The use of the past tense in s 124(3)(b) focuses attention on the claimant's entitlement to lump sum compensation under the 1971 Act (as in force when the impairment occurred) at some time in the past. The paragraph does not specify the precise time in the past at which the claimant's entitlement is to be considered. However, the use of the past tense suggests that the notional assessment of the claimant's entitlement under the 1971 Act is to be carried out by reference to a date or period preceding the commencing day. [12]
[12] Hoyle v Telstra Corporation (1997) 144 ALR 483 at 493.
49. He acknowledged, however, that section 124(3) must be interpreted consistently with section 124(4). According to Sackville J, that sub-section, in conjunction with section 39(14) of the 1971 Act, provided that a person who suffered a pre-commencing day permanent impairment should receive no lump sum compensation in respect of that impairment if, at the time of the claim, the person was totally incapacitated for work. [13] ‘At the time of the claim’ meant the time of the claim for permanent impairment under the Act. In Mrs Pantic’s case that would have been in 2007. His findings on this issue are, therefore, equivocal.
[13] Id at 494.
50. The Full Court in Hoyle did not clearly address this issue. The Court said at one point that ‘Our reasoning in reaching that conclusion [as to the effect of section 124 of the Act and section 39(14) of the 1971 Act] is not significantly different from the reasoning of Sackville J’.[14] That statement could be taken to encompass Sackville J’s findings in relation to the time for application of the test. Against this, the Court also noted at one point ‘If at some time before the commencing day, either of the appellants had ceased to be totally incapacitated for work, there would have been an entitlement’.[15] The Court’s findings, tied as they were to the facts of the case, did not definitively identify the point in time for the test to be applied.
[14] Hoyle v Telstra Corporation Ltd (1997) 145 ALR 148 at 156.
[15] Id.
51. By implication, however, since the Full Court acknowledged that had an employee suffered periods of partial incapacity, interspersed with periods of total incapacity prior to making the claim for permanent impairment, they would not have been excluded from lump sum compensation during those periods of partial incapacity, the Court had assumed that the entire period during which the person suffered a permanent impairment must be considered.
52. The Tribunal dealt with the issue in Re Morris and Comcare. In that case the applicant had suffered two work-related injuries but was only partially incapacitated after the first. The Tribunal’s findings rejected two of the options for the date of the test, namely, the 1 December 1988, and the date the impairment became permanent, opting instead for a test that entitlement was precluded ‘if at no time was the person entitled to a lump sum in respect of that impairment under the 1971 Act’.[16]
[16]Re Morris and Comcare (2007) 97 ALD 189 at 194.
53. After consideration of these relevant cases, the Tribunal finds that the matter must be considered in stages. The question of when the test is to be applied does not arise until there has been an application for permanent impairment under the Act. However, although this may explain why the time of the claim for permanent impairment may have been referred to in the decisions of Sackville J and of the Full Court in Hoyle, it does not determine when the test is to apply.
54. As the facts of the cases indicate, the Court and the Tribunal must of necessity consider the period from the time when permanent impairment arose until the date of the claim for compensation for that impairment. The level of incapacity during that period must be assessed. That suggests that the test must be considered throughout that period.
55. The Tribunal notes that one of the difficulties of so concluding is that the terms of sections 45(9), 46(5), and 50 are couched in prospective terms, but the test needs to be applied retrospectively. The terms of the relevant provisions in the 1971 Act are based on an assumption that a decision has been made to award a lump sum and the provisions deal with the question of whether in the future the person is then entitled to continue to receive weekly compensation payments.
56. Section 39(14) is also prospective in operation. The use of ‘is or is likely to become’ indicate that the provision is intended to cover the present and a future time when considering whether that provision is applicable. At the same time, transitional provisions necessarily apply to circumstances which have arisen in the past. So the requirement in the transitional provisions that findings be made in relation to provisions in an earlier Act, provisions which were designed to operate prospectively, creates an interpretive anomaly. The interpretation of section 39(14), and the time at which the test for whether compensation is payable is to be applied, need to be seen in this context.
57. Addressing this inconsistency requires recourse to other aids to construction. Section 39(14) is ambulatory in its intent. The words ‘so long as’ indicate that to be the case. The Tribunal accordingly finds that section 39(14) was intended to apply continuously from the time of permanent impairment to the time of the application in order to prevent a person who had received a lump sum compensation payment later seeking to receive weekly compensation for the same injury.
58. That means that any test must be applied to circumstances arising in the past up to and including the date of the decision in relation to the claim for permanent impairment. That is consistent with the findings on this issue in Re Morris, but also takes into account the comments in Hoyle both at first instance and in the Full Court. Those findings did not preclude the acceptance of entitlement to a lump sum payment under the 1971 Act if, at some time prior to the claim, the person was not totally incapacitated by their accepted injury.
59. These findings are reinforced by the Full Court in Hoyle where the Court hypothesised:
If, at some time before the commencing day, either of the appellants had ceased to be totally incapacitated for work, there would have been an entitlement to compensation under s 39(3) of the 1971 Act. Further, if either of the appellants ceased to be totally incapacitated at some time after the commencing day, s 124(3) might not preclude entitlement to compensation under s 24 of the Compensation Act.[17]
[17] Hoyle v Telstra Corporation Ltd (1997) 145 ALR 148 at 156.
60. Although this statement was obiter given that both applicants had been totally incapacitated from the time their permanent impairment occurred, the Full Court clearly left open the possibility that section 39(14) would not have precluded a lump sum payment in accordance with the provisions of the 1971 Act had there been periods when either applicant had not been totally incapacitated. It followed that the Court did not preclude application of the test in section 39(14) at times preceding the date of the claim for permanent impairment.
61. This statement covers the situation of Mrs Pantic who, apart from the period immediately following her injury, had only brief periods of total incapacity before the commencing day. Indeed, although Mrs Pantic was in receipt of total incapacity payments between 10 October 1990 and 24 November 1991, she was on partial incapacity payments from that time until she turned 65 on 25 April 2004. Subject to the short periods of incapacity for work prior to 1990, and the approximately twelve months from October 1990 to November 1991, Mrs Pantic was only partially incapacitated. In accordance with this statement from Hoyle she would not be precluded from eligibility for consideration of lump sum compensation at these times of partial incapacity.
62. These conclusions favour the arguments for Mrs Pantic. However, before any conclusion may be reached, two further arguments must be taken into consideration. The first is the general principle accepted in Hoyle that an applicant should not be better off under the terms of the Act than they would have been under the 1971 Act. The second is related, namely, that it was a policy of the 1971 Act that a person who was totally incapacitated could not both receive a lump sum payment in relation to an injury while subsequently receiving weekly payments in relation to the same injury.
Policy argument
63. These policies are supported in the leading cases. The Full Court summarised the general principles applicable to the transitional arrangements for payments as between the 1988 Act and the 1971 Act:
…it is clear that the parliament proceeded on the basis that, where the entitlement to compensation under the [1988 Act] has a relevant nexus with a period before the commencing day, the appropriate general principle should be that an employee is not to be deprived of any compensation that would have been payable under the 1971 Act but for its repeal, but is not to be entitled to any greater compensation than would have been payable under that act.[18]
[18] Id at 152.
64. In line with this general principle, the related policy discernible in the 1971 Act was, as described by Sackville J in Hoyle that ‘a person’s entitlement to lump sum compensation under the 1971 Act could vary from time to time, depending on … degree of incapacity’.[19] If a period of total incapacity for work was followed by a period of partial incapacity for work, the employee’s entitlement to lump sum compensation was reactivated during that subsequent period.
[19] Hoyle v Telstra Corporation (1997) 144 ALR 483 at 492.
65. However, the Full Court also said on these issues that:
… an employee could not retain the benefit of a lump sum payment [under section 39(3) and (4)] and at the same time have the benefit of weekly compensation payments in respect of a period of total incapacity.[20]
[20] Hoyle v Telstra Corporation Ltd (1997) 145 ALR 148 at 153.
66. The Court emphasised that the exclusion under section 39(14) is consistent with this policy to prevent payment of both lump sum and weekly compensation.[21]
[21] Hoyle v Telstra Corporation (1997) 144 ALR 483 at 492.
67. These pronouncements mean that, under the 1971 Act an employee could not enjoy the benefit of a lump sum and continue to get weekly incapacity payments during periods of total incapacity. To prevent double dipping, in calculating the amount of any weekly payment, the lump sum payment ‘was to be treated as payment in advance of the weekly compensation payable’.[22] As the Court had said, that policy was to be taken into account in making assessments under the Act in order to meet the principle that an employee was ‘not to be entitled to any greater compensation than would have been payable’ under the 1971 Act.
[22] Id.
68. What the Tribunal is being asked to do in this case is to apply these principles, to someone who has received weekly compensation and subsequently seeks to receive a lump sum payment for permanent incapacity. That is the reverse of the situations covered by the relevant provisions in the 1971 Act which envisage that a lump sum has been paid and weekly compensation payments are sought subsequently. The task for the Tribunal, therefore, does not fit happily with the language of the 1971 Act provisions. Nonetheless, that task was undertaken in the previous cases on this section. The Tribunal proposes to do likewise.
69. In accordance with these principles, as Mrs Pantic was not ‘totally incapacitated for work’ until after 21 November 1991 she would have been entitled to receive a lump sum payment.
70. That finding has to take into account, however, the related policy under the 1971 Act that, had Mrs Pantic sought a lump sum payment at any time under the 1971 Act, the amount of such payment must be calculated in accordance with section 50 and could well be nil. That is, following a calculation of the amount to which Mrs Pantic was entitled under section 39(11) in the periods during which she was not totally incapacitated, deductions are to be made in accordance with the formula in section 50, for the weekly compensation payments she received while totally incapacitated. The Tribunal notes, therefore, that the amount payable to Mrs Pantic may become nil under section 124(4), through the application to her of the formula in section 50.
71. The Tribunal did not receive evidence of such calculations. However, it finds that Mrs Pantic was not precluded by section 39(14) from receiving a lump sum payment by the terms of section 124(3) of the Act. The Tribunal notes in that context the agreed fact that Mrs Pantic’s injury was assessed as a 10 per cent level of impairment for the purposes of qualifying for payment under the Act.
72. The matter must be remitted to Comcare to assess the amount of a lump sum, if any, to which she may be entitled, applying the formula in section 50.
I certify that the 72 preceding paragraphs are a true copy of the reasons for the decision herein of Professor RM Creyke, Senior Member and Dr Bernard Hughson, Member.
Signed: .............................[sgd]........................................................
C. Baillie AssociateDate of Hearing 12 April 2011
Date of Decision 23 May 2011Counsel for the Applicant Allan Anforth
Solicitor for the Applicant Daniel Steiner
Capital LawyersCounsel for the Respondent Andrew Berger
Solicitor for the Respondent Loretta Tolland
Australian Government Solicitor
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