Pellow and Military Rehabilitation and Compensation Commission (Compensation)

Pellow and Military Rehabilitation and Compensation Commission (Compensation) [2017] AATA 1011 (18 January 2017)
Division:GENERAL DIVISION
File Number: 2015/1622
Re:Lionel Pellow
APPLICANT

AndMilitary Rehabilitation and Compensation Commission
RESPONDENT

DECISION
Tribunal:Deputy President Gary Humphries
Date:18 January 2017
Place:Canberra

The Tribunal affirms the Commission’s decision of 12 February 2015.
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Deputy President Gary Humphries
Catchwords
WORKERS COMPENSATION –– meaning of disease –– whether employment contributed to injury to a significant degree –– distinction between ailment and injury (other than disease) –– duration of employment –– predisposition of employee to skin condition –– weight of medical evidence where not able to be tested in cross-examination –– whether claim assessed at date of injury or at date of lodgement of claim –– decision affirmed
Legislation
Safety, Rehabilitation and Compensation Act 1988
Cases
Australian Postal Corporation v Burch 85 FCR 264
Freeman and Military Rehabilitation and Compensation Commission [2016] AAT 741
Military Rehabilitation and Compensation Commission v May [2016] HCA 19
REASONS FOR DECISION
Deputy President Gary Humphries
18 January 2017

Lionel Pellow was a young share farmer in rural New South Wales when he was called up to do national service in 1969. He subsequently served in the Australian Army from January 1970 to November 1971, and returned to farming immediately thereafter. His national service had come at a cost: his place at a farm at West Wyalong had been taken by others while he served his country, and he was forced to start again on the land when he returned.
Though at that time a fit young man who participated in a range of sports, Mr Pellow has had a lifelong problem with his skin. Of Anglo-Celtic heritage on both sides of his family, his skin is prone to redden and burn after short periods of exposure to the sun, and from an early age he was encouraged to cover his skin – which his dermatologist, Dr Kumar, later described as Fitzpatrick type II skin.
As a farmer, both before and after his military service, he had preferred to wear long trousers, long-sleeved shirts and a broad-brimmed hat. In the Army, however, it was standard procedure to wear shirt sleeves rolled up, shorts and – during a 17 month stint as a driver with 3 Cadet Brigade in Rockhampton, Queensland – a beret. In the tropics, he told the Tribunal, he experienced quite intense exposure to the sun, even when in the cabin of an army vehicle.
In the years subsequent to his discharge, Mr Pellow continued to experience problems with his skin, and (he told the Tribunal) frequently had skin lesions cut off during occasional visits to his doctor. During his resumption of farming from 1971 to 1999, he drove tractors (which had cabins), worked sheep and tended to some 1000 pigs in a piggery shed. The problems with his skin continued to trouble him, however, and eventually contributed to a decision by him and his wife in 2000 to give up farming and move to Batemans Bay, where he worked for the next 10 years in his own building supply company.
In 2012 he was diagnosed with a melanoma, which was soon excised with no apparent recurrence by the time of the Tribunal hearing. Other problems, including regular removal of skin lesions, have continued.
On 27 March 2014 Mr Pellow made a claim for compensation citing skin cancer affecting his arms, legs and back. He claimed that his injury occurred while in Rockhampton, saying All my work in the transport area was outside exposed to the sun. He made it clear at the hearing, however, that significant exposure to the sun also occurred during training at Kapooka and Puckapunyal, before his posting to Rockhampton.
A delegate of the Military Rehabilitation and Compensation Commission (the Commission) denied liability for Mr Pellow’s skin condition on 13 June 2014. That decision was affirmed on reconsideration on 12 February 2015, and Mr Pellow now seeks the Tribunal’s review of that refusal.
The Issues before the Tribunal
There was little in dispute before the Tribunal with respect to the facts surrounding the development of Mr Pellow’s skin condition. It was submitted by the Commission – and I accept, for reasons discussed below – that his condition is most appropriately characterised as a disease pursuant to s 5B of the Safety, Rehabilitation and Compensation Act 1988 (the Act). It was also agreed between the parties that Mr Pellow’s military service contributed to the onset of that disease.
What was in contention before the Tribunal was the extent of that contribution. Mr Pellow argued – supported by a report of his dermatologist, Dr Kumar – that his condition was significantly contributed to by his military service in 1970-71, pursuant to s 5B(1) of the Act. The Commission, conversely, contended that the contribution made by his military service did not reach the threshold in s 5B(1), and relied in this contention on reports of Professor Richard Fox and Doctor David Gorman, together with their testimony before the Tribunal.
The issue before the Tribunal, therefore, is the extent of the contribution made by Mr Pellow’s 22 months of military service, and whether it reaches the s 5B(1) threshold necessary for him to recover compensation for the condition.
The applicable law
Section 14 of the Act renders an employer liable to pay compensation in respect of an injury suffered by an employee where it results in death, incapacity for work or impairment. Injury is defined in s 5A to include a disease, which in turn is defined in s 5B(1):
In this Act:
"disease " means:
(a) an ailment suffered by an employee; or
(b) an aggravation of such an ailment;
that was contributed to, to a significant degree, by the employee's employment by the Commonwealth or a licensee.
The distinction between an ailment and an injury (other than a disease) (s 5A) is sometimes difficult to make. In this case, the medical evidence (discussed below) suggests that Mr Pellow’s skin cancers were made up of either malignant melanomas or solar keratoses, both of which are best characterised as slow-developing conditions representing long accumulation of exposure of the skin to the sun. As such they may be said to fall into the classic description of ailments rather than injuries.
The Full Federal Court in Australian Postal Corporation v Burch 85 FCR 264 (at 268) observed:
In lay terms injury and disease are different concepts, notwithstanding that there may be some instances where the appropriate categorisation is problematic. But one would unhesitatingly speak of cancer or influenza as a disease and a broken leg or concussion as an injury.
The distinction between ailment and injury has been recently elucidated by the High Court in Military Rehabilitation and Compensation Commission v May [2016] HCA 19. The majority there observed (at [45]-[46]):
45. "Injury" in par (b) [of the then definition of injury in s 4(1)] is used in its "primary" sense. As Gleeson CJ and Kirby J explained in Kennedy Cleaning Services Pty Ltd v Petkoska, if "something ... can be described as a sudden and ascertainable or dramatic physiological change or disturbance of the normal physiological state, it may qualify for characterisation as an 'injury' in the primary sense of that word" (emphasis added).
46. That physiological change or disturbance of the normal physiological state may be internal or external to the body of the employee. It may be, for example, the breaking of a limb, the breaking of an artery, the detachment of a piece of the lining of an artery, the rupture of an arterial wall or a lesion to the brain. Each would be described as an "injury" in the primary sense. (references omitted)
The Tribunal notes in passing that a sudden and ascertainable… disturbance of the normal physiological state appears to be absent in Mr Pellow’s case. The majority in May went on to say that "suddenness" is not necessary for there to be an "injury" in the primary sense (at [47]), but then added:
That an "injury" in the primary sense can arise, and can be described, in a variety of ways does not mean that "suddenness" is irrelevant. As the Full Court said, "suddenness" is often useful where there is a need to distinguish a physiological change from the natural progress of an underlying (and in one sense, closely related) disease (as occurred in Zickar v MGH Plastic Industries Pty Ltd and Kennedy Cleaning). But it is the physiological change – the nature and incidents of that change – that remains central.
48. That an "injury" in the primary sense can arise, and be described, in a variety of ways was recognised by Gleeson CJ and Kirby J in Kennedy Cleaning when their Honours stated:
"[C]onsideration [must] be given to the precise evidence, on a fact by fact basis, concerning the nature and incidents of the physiological change accepted at trial. If this evidence amounts, relevantly, to something that can be described as a sudden and ascertainable or dramatic physiological change or disturbance of the normal physiological state, it may qualify for characterisation as an 'injury' in the primary sense of that word." (emphasis added) (references omitted)
Following May, Deputy President Forgie considered the appropriate categorisation of an applicant’s malignant melanoma in Freeman and Military Rehabilitation and Compensation Commission [2016] AATA 741. She concluded:
In the case of Ms Freeman’s condition, Professor Fox has described Ms Freeman’s condition as a “disease”. Melanoma may be a malignant tumour whose parenchyma is composed of anaplastic melanocytes or any tumour, benign of malignant, of melancytes. It involves a disturbance of the normal functions of the body, to adopt the words of Spender J in Mooi. The evidence from both Professor Fox and Dr Sedal is that sun exposure increases a person’s overall risk to his or her contracting melanoma. Having regard to all of the evidence, I am not satisfied that … Ms Freeman’s melanoma resulted from any definite or distinct incident or exhibited any definite or distinct physiological change or disturbance for the worse which, even if not sudden, was identifiable. I am not satisfied, therefore, that she suffered an injury in the primary or ordinary sense of that word but I am satisfied that she has suffered from an ailment and so satisfied the [(a)] of the definition of “disease”. (at [80], references omitted)
In the absence of any definite or distinct incident or of any identifiable definite or distinct physiological change or disturbance here, the Tribunal finds that Mr Pellow’s condition is better categorised for the purposes of the Act as an ailment rather than an injury.
For an ailment to be compensable, it must meet the relevant causal relationship to employment set out in the Act. In this case, the development of Mr Pellow’s ailment appears to straddle the period before and after the amendments made to the Act in 2007. The effect of those amendments was, inter alia, to raise the threshold of the relevant causal relationship between the complained-of condition and employment. Before 2007 a condition was compensable if employment had made a material contribution to it; after the amendments, it was necessary for employment to make a significant contribution. As noted above, significant means substantially more than material (s 5B(3)).
The Commission submitted that the relevant state of the law governing Mr Pellow’s claim was that which applied at the date of injury. It submitted that, pursuant to s 7(4) of the Act, that date is the date on which he first sought treatment of the disease. Mr Pellow had a malignant melanoma excised in 2012, though he also gave evidence that hundreds of skin lesions were cut off during occasional visits to his doctors over the years preceding that operation, and there was some suggestion of medical attention to his skin condition between 2008 and 2012. In a submission after the hearing, the Commission also referred to a notation in Dr James’s (his GP) clinical notes of treatment for a solar keratosis on 4 September 2006. The Tribunal regards the removal of skin lesions as more of a preventative measure than as treatment for a disease, and so the date of injury should be regarded as 2012, that is, five years after the 2007 amendments to the Act.
The Tribunal notes in passing the reference to this question in May, where the High Court said (at [4]):
This appeal is concerned with the [SRC] Act as at 29 November 2002, being the date Mr May lodged his claim.
Whether this represents a shift in the previous understanding of the date by which the relevant law was determined – from the date of injury to the date of lodgement of a claim – is hard to say. Certainly, by whichever test is applied, the current version of the law is that which applies to Mr Pellow’s claim.
The medical evidence
The Commission called two doctors to give evidence.
Professor Richard Fox had not examined Mr Pellow but wrote two reports, basing his conclusions on the reports of other examining doctors and on photographs of Mr Pellow’s skin. He also told the Tribunal he had extensive experience diagnosing skin conditions in hundreds of members of the Australian Defence Force. In a report of 2 June 2014 regarding Mr Pellow he made no diagnosis but concluded as follows:
Given his service duration was of 21½ months i.e. some 3% of his lifetime potential accumulation of solar damage and given that his service was in Northern Queensland where sun intensity is approximately twice that of Southern Australia I have assessed his service contribution at some 6%.
In his report of 28 November 2016, he commented on photographs of Mr Pellow’s skin, saying:
Mr Pellow has gross sun damage (actinic) skin covering his face, neck, arms and chest etc.
This would reflect lifelong accumulative ultraviolet damage.
He considered that it was very unlikely that the melanoma which had been excised from Mr Pellow in 2012 would return. He also disputed the conclusion of Dr Kumar that brief military service could amount to 10 to 20 percent of the cause or aggravation of his skin condition:
This does simply not accord with the concept that his skin damage melanoma etc relate to lifelong cumulative damage.
Under cross-examination by Mr Pellow, Prof Fox agreed that people in the age range 15-24 (during which Mr Pellow served in the Army) are particularly susceptible to the development of malignant melanomas, but said that he had taken that into account in reaching his conclusions about the contribution from military service.
Prof Fox indicated that he did not believe the skin condition he witnessed in the photographs of Mr Pellow could have been produced solely by sun exposure during military service. He told the Tribunal Mr Pellow has some of the most extensive sun damage based on those photographs that I’ve seen in a long time. He said that the skin damage exhibited must have been the product of a long period of exposure to the sun.
In a report of 2 February 2015, Dr David Gorman noted that his physical examination of Mr Pellow had revealed:
…marked erythema, particularly over his arms. There was erythema with keratosis on his arms and the dorsum of his hand.
Over the rest of his body, there was much less damage.
Dr Gorman diagnosed malignant melanoma and solar keratosis on the arms, noting that Mr Pellow no longer suffered from the melanoma. Dr Gorman agreed with the report of Prof Fox dated 2 June 2014, in which Prof Fox found that Mr Pellow’s military service had contributed six percent to the onset of his skin condition, concurring that the contribution should be described as minor.
In his testimony, Dr Gorman noted Mr Pellow’s extreme genetic predisposition to sun damage and suggested that even brief exposure during childhood, given that predisposition, could have set his skin condition in train. He also concurred with Prof Fox’s view that the damage on Mr Pellow’s back could not have been the product principally of sun exposure during 22 months of military service.
Two reports of Dr Sandeep Kumar were also before the Tribunal. In one dated 3 February 2016 he described the melanoma excised from Mr Pellow’s right upper arm in March 2012 as being of an advanced grade. In this report he also attributed 10-20% of Mr Pellow’s skin condition to his military service.
Dr Kumar was not called to give live evidence, though the potential consequences of this decision were explained to Mr Pellow. Dr Kumar’s written opinions contradicted, in some respects, those of Prof Fox and Dr Gorman; Prof Fox, in particular, disputed some of the conclusions Dr Kumar had reached, including those relating to the mortality rate from melanoma in Australia. On balance, the Tribunal attaches greater weight to the evidence of Prof Fox and Dr Gorman because that evidence was able to be tested in cross-examination, and the conclusions they arrived at appear to be consistent with the evidence.
The Tribunal finds that the condition the subject of this claim is best described as malignant melanoma and solar keratosis, consistent with the diagnosis of Dr Gorman.
Consideration
Mr Pellow’s chief contention during the hearing was that he – as a child and young adult prior to military service and then subsequently to military service – consistently exercised an exceptional degree of care to protect himself from the sun. This arose from his family’s awareness from an early age of the particular susceptibility of his skin to solar damage. It was only during his military service in 1970-71 that the measures he usually took had to be set aside to conform to the then prevailing soldiering procedures, including that sleeves were always rolled up, shirts sometimes discarded and shorts worn in the tropics.
Mr Pellow’s evidence was that on account of his fair skin he was frequently covered up as a child. He told the Tribunal I have about a two-minute tolerance before I go red. His practices as a farmer, both before and after his military service, reflected the sensitivity of the skin. He always wore long trousers and a broad-brimmed hat in the summer, and the tractors he drove had UV-rated tinted windows. During recreation periods, such as at the beach, he always wore zinc cream and, from the 1970s, sunscreen. Nonetheless, at the age of 50 his skin was so damaged that he gave up farming and moved to a desk job in Batemans Bay. Although he had had some treatment of the skin on his back, which was unpleasant to look at, generally it’s my arms that are the issue, and my legs.
Mr Pellow entered the Army in January 1970 at 40 degree heat, and during basic training at Kapooka was required to parade for hours wearing a slouch hat, with the consequence that he was burnt badly on one side of his face. He then trained on trucks at Puckapunyal in Victoria before being transferred to Rockhampton in Queensland. There he worked as a driver, his uniform consisting of a shirt with rolled-up sleeves, shorts and a beret. Both sides of his face were burnt in Rockhampton from time to time because the beret offered no sun protection.
This history was put to both Prof Fox and Dr Gorman; the former did not resile from his assessment that six percent of the skin damage was attributable to military service. Dr Gorman told the Tribunal that if Mr Pellow’s evidence was fully accepted, he would increase his estimate of the military service’s contribution to 12 percent (though he noted that this hypothesis is difficult to swallow).
The Tribunal accepts that Mr Pellow has had a lifelong preoccupation with protecting his skin and, mindful that he is prone to burning and damage, has consciously taken steps to shield it from the sun. If this was the state of the evidence in these proceedings, and there was no medical evidence, it would be tempting to accept the hypothesis he put forward in support of his claim, that is, that a period of sustained exposure to the sun while in the Army made a significant contribution to the onset of malignant melanoma and solar keratosis later in life.

Here, however, there is medical evidence, it is clear and compelling, and it substantially undermines this hypothesis. That evidence is that exposure to the sun over a much longer period than the 22 months of military service has been overwhelmingly responsible for the damaged state of Mr Pellow’s skin. That evidence suggests that exposure during military service could have made no more than a minor contribution to the condition, which falls short of the significant contribution threshold required under the Act.
There are sound reasons for the Tribunal to accept the medical evidence over Mr Pellow’s evidence in this regard. In the circumstances where the Tribunal is confronted with a frank injury, such as a fractured limb, the evidence of an applicant as to the course of his injury may sometimes be preferred to that of a doctor, in that the physical indicators of the condition are readily seen, felt and understood by a medically unqualified person. They are sudden and immediately identifiable. Generally speaking that cannot be said, however, of a disease like cancer, where the genesis of the condition will characteristically take place over many years with few physical manifestations of the developing disease observable by the person affected. In such circumstances the evidence of medical specialists as to the origins and course of such a disease must of necessity be preferred, because through training and experience they enjoy insights which a layperson cannot substitute through observation.
As already indicated, the Tribunal cannot attach much weight on the untested reports of Dr Kumar, to the extent that they are inconsistent with the evidence of Prof Fox and Dr Gorman. The latter evidence is consistent: the contribution from military service to Mr Pellow’s claimed condition is in the order of about six percent. The Tribunal accepts that evidence. It is consistent with the factors in s 5B(2) which the Tribunal is invited to consider in weighing up whether employment makes a significant contribution to an ailment, particularly the duration of Mr Pellow’s employment in the Army and his non-Army related activities, such as his exposure to the sun as a farmer.
Previously-decided cases in which the significant contribution threshold in s 5B has been in issue are not helpful in calibrating that statutory threshold against particular percentage contributions found in the case of individual applicants. Nonetheless, it seems clear that a six percent contribution from employment to an ailment cannot be regarded as a contribution to a significant degree. Indeed, even if the hypothesis put to the Tribunal by Mr Pellow were accepted, and Dr Gorman’s consequent estimate of a 12 percent contribution was adopted by the Tribunal, it is doubtful that even this contribution would reach the required threshold.
In the alternative, if the Tribunal is wrong about the appropriate statutory threshold, and the relevant test is a material contribution rather than a significant contribution, it finds that a six percent contribution from military service still fails to meet that lower threshold.
The Tribunal cannot accept that Mr Pellow’s military service has contributed, to a significant degree, to his skin condition and accordingly it affirms the Commission’s reconsideration decision of 12 February 2015.

I certify that the preceding 41 (forty -one) paragraphs are a true copy of the reasons for the decision herein of Deputy President Gary Humphries

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Associate
Dated: 18 January 2017

Date of hearing: 6 December 2016

Applicant: In person

Counsel for the Respondent: John Wallace

Solicitors for the Respondent: Sparke Helmore Lawyers

[2017] AATA 1011

18 January 2017

Key Legal Topics

Areas of Law

Administrative Law

Employment Law

Legal Concepts

Appeal

Causation

Expert Evidence

Judicial Review

Natural Justice

Statutory Construction

Date of hearing:	6 December 2016
Applicant:	In person
Counsel for the Respondent:	John Wallace
Solicitors for the Respondent:	Sparke Helmore Lawyers