Return to Work Corporation of South Australia v Opie
[2022] SASCA 12
•24 February 2022
SUPREME COURT OF SOUTH AUSTRALIA
(Court of Appeal: Civil)
RETURN TO WORK CORPORATION OF SOUTH AUSTRALIA v OPIE & ANOR
[2022] SASCA 12
Judgment of the Court of Appeal
(The Honourable Justice Doyle, the Honourable Justice Livesey and the Honourable Justice Bleby)
24 February 2022
WORKERS' COMPENSATION - ASSESSMENT AND AMOUNT OF COMPENSATION - AMOUNT OF COMPENSATION DURING INCAPACITY - LUMP SUM PAYMENTS - PERMANENT IMPAIRMENT AND LOSS
STATUTES - ACTS OF PARLIAMENT - INTERPRETATION - GENERAL APPROACHES TO INTERPRETATION
WORKERS' COMPENSATION - ENTITLEMENT TO COMPENSATION - EMPLOYMENT RELATED INJURY, DISABILITY OR DISEASE - GENERALLY
This is an appeal against a decision of the Full Bench of the South Australian Employment Court, concerning the question of whether, where there exists more than one “equally valid, applicable method” of assessment of whole person impairment under the Return to Work Act 2014 (SA) (the Act), the method that results in the highest degree of permanent impairment must be used.
The first respondent worked as a timber moulder. In April 1992, he suffered a work-related injury and underwent spinal fusion. He was assessed as having a 15 per cent loss of the full and efficient use of the lumbar spine. He received a lump sum payment of compensation for non-economic loss pursuant to s 43 of the now repealed Workers Rehabilitation and Compensation Act 1986 (SA).
In January 2014, he suffered another work-related injury to his L4-L5 disc. He underwent further surgery, which included the removal of the earlier internal fixation of the L5-S1 level and an extension of the fusion to include the L4-L5 level. At that time, whole person impairment (WPI) and non-economic loss were assessed pursuant to s 22 and s 58 of the Return to Work Act 2014 (SA). An orthopaedic surgeon assessed the worker to have an overall 28 per cent WPI, before deducting 21 per cent for pre-existing WPI.
In the first instance, the trial judge was satisfied that the earlier spinal fusion following the initial injury left the respondent with a degree of pre-existing permanent impairment, which s 22(8)(g) mandated be assessed and then deducted in accordance with the Impairment Assessment Guidelines (the Guidelines).
On appeal, the Full Bench found that s 22(8)(b) represented an alternative to s 22(8)(g), which must be preferred under chapter 1.38 of the Guidelines so as to ensure the assessment of a higher degree of permanent impairment.
The appellant complained that the Full Bench had erred in finding that s 22(8)(b) can be applied to the exclusion of s 22(8)(g) if that results in the highest degree of permanent impairment; and that it had failed to apply s 22(8)(g) where a portion of the impairment was due to pre-existing injury that caused the worker to suffer an impairment before the work injury.
The respondent filed a further cross-appeal relating to the respondent’s monetary entitlement pursuant to s 58 of the Act. The cross-appeal concerned the question whether reg 5(2) of the Return to Work (Transitional Arrangements) (General) Regulations 2015 (SA) is invalid because it operates in a manner inconsistent with s 58(5) of the Act.
Held (by the Court):
1.The principle that requires use of the method which results in the highest degree of permanent impairment is not of general application. It only operates where “the Guidelines and AMA 5 … specify more than one equally valid, applicable method … to establish the degree of an injured person permanent impairment”. The Guidelines and AMA 5 did not specify more than one equally valid, applicable method, and no finding to that effect was open. The Full Bench erred in finding that chapter 1.38 of the Guidelines could be relied on to permit the use of s 22(8)(b) to the exclusion of s 22(8)(g).
2.Regulation 5(2) of Return to Work (Transitional Arrangements) (General) Regulations 2015 has not been shown to be invalid.
3. Permission to cross-appeal is granted.
4. The notice of contention is dismissed.
5. The appeal is allowed, and the cross-appeal dismissed.
Return to Work Act 2014 (SA) ss 22, 22(8)(b), 22(8)(g), 58(4), 58(5), 58(7); Workers Rehabilitation and Compensation Act 1986 (SA) s 43, referred to.
Opie v Return to Work SA [2017] SAET 138; Opie v Return to Work Corporation of South Australia [2020] SAET 62; Opie v Return to Work Corporation of South Australia and Attorney-General for the State of South Australia [2020] SAET 180; Return to Work (SA) v Opie [2020] SASC 201; Frkic v Return to Work Corporation of South Australia [2019] SAET 1; Frkic v Return to Work Corporation of South Australia [2020] SAET 16; Frkic v Return to Work Corporation of South Australia [2020] SASC 42; Frkic v Return to Work Corporation of South Australia (No 2) [2020] SASCFC 59; Gooch v Return to Work Corporation of South Australia [2020] SAET 27; Onody v Return to Work Corporation of South Australia [2019] SASCFC 56; Return to Work SA v Walker [2019] SAET 85; Marrone v Employers Mutual Limited (2013) 116 SASR 501; Beneficial Finance Corporation Ltd v Price Waterhouse (1996) 68 SASR 19; Pooraka Holdings Pty Ltd v Participation Nominees Pty Ltd (1989) 52 SASR 148; Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 250 CLR 503; Lingenberg v Gallichio (2013) 40 VR 60; Resi Corporation v Munzer [2016] SASCFC 15; Amaca Pty Ltd v Werfel [2020] SASCFC 125; DL v The Queen (2018) 266 CLR 1; Black-Clawson International Ltd v Papierwerke Waldhof-Aschaffenburg AG [1975] AC 591; R v Sexton [2018] SASCFC 28; Whalan v Kogarah Municipal Council [2007] NSWCA 5; Hunter v Transport Accident Commission & Avalanche [2005] VSCA 1; SZKLO v Minister for Immigration and Citizenship (2008) 102 ALD 115; Beale v Government Insurance Office of NSW (1997) 48 NSWLR 430; Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247; Redman v Return to Work Corporation of South Australia [2021] SASCA 25; State of South Australia v Collings (1996) 65 SASR 432; The State of South Australia in right of the Department for Education and Child Development v Dolan [2021] SASCFC 30; Paschalis v Return to Work Corporation of South Australia & Anor [2021] SASCFC 44; Alcoa Holdings Ltd v Lowthian [2011] VSC 245; Taylor v Mountain Pine Furniture Pty Ltd [2006] VSC 499, considered.
RETURN TO WORK CORPORATION OF SOUTH AUSTRALIA v OPIE & ANOR
[2022] SASCA 12Court of Appeal: - Civil: Doyle, Livesey and Bleby JJA
THE COURT:
Introduction
This appeal concerns the question whether, as a matter of law, the Return to Work Act 2014 (SA) (the Act) generally requires that, where there exists more than one “equally valid, applicable method” of assessment of whole person impairment (WPI), the method which results in the highest degree of permanent impairment must be used.
The cross-appeal raises the question whether reg 5(2) of the Return to Work (Transitional Arrangements) (General) Regulations 2015 (SA) (the Transitional Regulations) is invalid because it operates in a manner inconsistent with s 58(5) of the Act.
For the reasons that follow, the Full Bench of the South Australian Employment Court erred in finding that chapter 1.38 could be relied on to permit the use of s 22(8)(b) to the exclusion of s 22(8)(g) of the Act. The principle that requires use of the method which results in the highest degree of permanent impairment is not of general application; it is located in chapter 1.38 of the Impairment Assessment Guidelines (the Guidelines), not the Act, and it operates only where “The Guidelines and AMA5 … specify more than one equally valid, applicable method … to establish the degree of an injured person’s permanent impairment”. In this case, the Guidelines and the American Medical Association Guides to the Evaluation of Permanent Impairment (5th edition) (AMA 5) did not specify more than one equally valid, applicable method and no finding to that effect was open.
Moreover, it has not been shown that reg 5(2) of the Transitional Regulations is invalid.
Accordingly, the appeal must be allowed, the cross-appeal dismissed and the decision of the Full Bench set aside.
Factual background
The respondent worker was born on 4 December 1967 and is now 54 years of age.
On 21 April 1992, whilst working as a timber moulder, the respondent lifted a large steel and timber mould and twisted as he did so. He injured his L5-S1 disc, resulting in lumbar spine pain and a right sided sciatica (the initial work injury).
On 10 August 1993, the respondent underwent spinal fusion at the L5-S1 level. He was later assessed as having a 15 per cent loss of the full and efficient use of the lumbar spine. He received a lump sum payment of compensation for non-economic loss pursuant to s 43 of the now repealed Workers Rehabilitation and Compensation Act 1986 (SA) (the 1986 Act). The respondent was relieved of much of his pain and symptoms and he eventually returned to normal duties.
On 17 January 2014, whilst digging a trench and lifting a pick in the course of his employment, the respondent felt an acute, sharp pain to the lower back, with radiation of pain and numbness to the left buttock. He developed a further radiation of symptoms in the left leg, with some paraesthesia to the left foot. It was determined that the respondent had suffered an injury to the L4-L5 disc (the 2014 work injury).
On 28 April 2014, the respondent underwent a left sided L4 foraminotomy and then a left L5 root canal decompression. His symptoms remained. On 18 August 2014, he underwent more major surgery involving the removal of the earlier internal fixation of the L5-S1 level and an extension of the fusion to include the L4-L5 level.
By late 2015 the respondent’s condition had stabilised and the process for the assessment of WPI commenced pursuant to s 22 of the Act.
Whilst the s 22 assessment process became protracted, Mr Robin Jackson, orthopaedic surgeon, ultimately assessed an overall 28 per cent WPI before deducting 21 per cent for pre-existing WPI.[1]
[1] Opie v Return to Work SA [2017] SAET 138, [11]-[19] (Ardlie DPM), which included 1 per cent for scarring; Opie v Return to Work Corporation of South Australia [2020] SAET 62, [9] (Rossi DPJ, with whom Calligeros and Cole DPJJ agreed).
The appellant’s nominated claims agent determined that the appellant was entitled to a lump sum payment of $15,185 for non-economic loss pursuant to s 58 of the Act, whereupon the respondent applied to the Tribunal for a review of that decision. The two principal issues were whether Mr Jackson had underestimated the impact of the respondent’s compensable injury on the activities of daily living (so as to result in a small increase in the WPI assessment) and, more significantly, whether the deduction for pre-existing impairment was appropriate in circumstances where the respondent maintained that he enjoyed a high level of function before the 2014 work injury.
The Tribunal decision
At trial, the Deputy President was satisfied that there should be an increase in the WPI for the two-level spinal fusion between L4 and S1 to 29 per cent, reflecting the views of the respondent worker’s medical expert, Dr Reece Jennings, which incorporated an allowance of 3 per cent for impairment of the activities of daily living and 2 per cent for disfigurement of the skin following surgery.[2]
[2] Opie v Return to Work SA [2017] SAET 138, [47] (Ardlie DPM).
On the question whether there should be a deduction for pre-existing permanent impairment, the Deputy President preferred the evidence of Mr Jackson and was satisfied that the earlier spinal fusion following the initial injury left the respondent with a degree of pre-existing permanent impairment which s 22(8)(g) mandated be assessed in accordance with the Guidelines and then deducted.
The Deputy President accepted the assessment of Mr Jackson that, in accordance with the Guidelines and Table 15-3 of the AMA 5, the first fusion following the initial work injury required an allowance of 20 per cent pre-existing impairment because the appellant came within Diagnosed Related Estimates (DRE) Lumbar Category IV. Deducting 20 percent from the assessment of 29 per cent resulted in an assessment of 9 per cent WPI.[3]
[3] Opie v Return to Work SA [2017] SAET 138, [48] (Ardlie DPM).
The Full Bench reasons
The reasons of the Full Bench commenced with the approach it took to s 22 of the Act in Frkic v Return to Work Corporation of South Australia (Frkic),[4] as well as the case of Gooch v Return to Work Corporation of South Australia (Gooch),[5] a case involving disfigurement arising from surgical treatment.[6] The Full Bench noted that permission to appeal Frkic to the Full Court of the Supreme Court of South Australia had been refused.[7]
[4] Opie v Return to Work Corporation of South Australia [2020] SAET 62, [25] (Rossi DPJ, with whom Calligeros DPJ and Cole DP agreed); Frkic v Return to Work Corporation of South Australia [2020] SAET 16.
[5] Gooch v Return to Work Corporation of South Australia [2020] SAET 27.
[6] Opie v Return to Work Corporation of South Australia [2020] SAET 62, [27]-[29] (Rossi DPJ, with whom Calligeros DPJ and Cole DP agreed).
[7] Frkic v Return to Work Corporation of South Australia [2020] SASC 42 (Kourakis CJ).
Before the Full Bench in Frkic, s 22(8)(b) was not in issue.[8]
[8] Frkic v Return to Work Corporation of South Australia [2020] SAET 16, [33]-[34] (Farrell, Kelly and Rossi DPJJ).
After referring to ss 22(8)(b) and 22(8)(g) of the Act, as well as chapter 1.38 of the Guidelines, the Full Bench in this case observed that in the case of Gooch the worker was “entitled to the benefit of the method which gave rise to the higher percentage of whole person impairment at the end of the process”.[9] Utilising s 22(8)(b) of the Act, the Full Bench observed that Mr Gooch was entitled to have an unrelated injury or cause “disregarded” and was, therefore, entitled to an assessment based upon a separate assessment for the subject disfigurement so as to confer “the higher overall percentage of whole person impairment”.[10] The Full Bench then explained its approach to the case (the subject of this appeal) as follows:[11]
Similarly, in the present case, there are at least two ways in which the degree of whole person impairment that applies to the work injury of 17 January 2014 could be assessed. The first is the method adopted by Dr Jackson and as modified by the Deputy President as to the impairment upon the activities of daily living. That method assessed the overall whole person impairment of the lumbar spine having regard to the double level fusion between L4 and S1. For the reasons explained by the Full Bench in Frkic, because that method of assessment incorporates the pre-existing whole person impairment as a result of the fusion at the L4-L5 level, in such circumstances, s 22(8)(g) would apply. The impairment from the fusion at the L4-L5 level would not be regarded as being an impairment from an unrelated injury or cause and s 22(8)(b) of the RTW Act would not apply.
[9] Opie v Return to Work Corporation of South Australia [2020] SAET 62, [28] (Rossi DPJ, with whom Calligeros DPJ and Cole DP agreed).
[10] Opie v Return to Work Corporation of South Australia [2020] SAET 62, [29] (Rossi DPJ, with whom Calligeros DPJ and Cole DP agreed).
[11] Opie v Return to Work Corporation of South Australia [2020] SAET 62, [30] (Rossi DPJ, with whom Calligeros DPJ and Cole DP agreed).
The Full Bench described the “second method” of assessment as one involving a separate assessment of the fusion to the L4-L5 level.[12] Utilising what was described as “the second and equally valid method of assessment of the degree of whole person impairment that applies to the work injury of 17 January 2014”, involving a separate assessment of WPI,[13] the Full Bench held that the second method came within the ambit of s 22(8)(b) because the pre-existing 20 per cent WPI “is to be disregarded because it is an impairment arising from an unrelated injury or cause”.[14] That is, the worker’s pre-existing impairment was effectively ignored and not brought to account. On the second method, the Full Bench held that s 22(8)(g) “does not apply” with the result that no deduction for the worker’s pre-existing impairment was made under this provision either, resulting in an assessment of 24 per cent WPI.[15]
[12] Opie v Return to Work Corporation of South Australia [2020] SAET 62, [31] (Rossi DPJ, with whom Calligeros DPJ and Cole DP agreed).
[13] Opie v Return to Work Corporation of South Australia [2020] SAET 62, [33] (Rossi DPJ, with whom Calligeros DPJ and Cole DP agreed).
[14] Opie v Return to Work Corporation of South Australia [2020] SAET 62, [34] (Rossi DPJ, with whom Calligeros DPJ and Cole DP agreed).
[15] Opie v Return to Work Corporation of South Australia [2020] SAET 62, [33]-[34] (Rossi DPJ, with whom Calligeros DPJ and Cole DP agreed).
The Full Bench concluded that the Deputy President erred at trial in failing to recognise “the alternative method of assessment and in failing to apply chapter 1.38 of the [Guidelines].”[16]
[16] Opie v Return to Work Corporation of South Australia [2020] SAET 62, [35] (Rossi DPJ, with whom Calligeros DPJ and Cole DP agreed).
The Full Bench rejected the respondent’s alternative submission that, if s 22(8)(g) of the Act applied, only the monetary payment should be deducted and not the earlier WPI assessment. In so far as the respondent relied upon the reasons of Blue J in Onody v Return to Work Corporation of South Australia (Onody),[17] the Full Bench held that Onody’s case involved the aggravation of a previous work injury, whereas in this case there is no relevant aggravation of a previous work injury.
[17] Onody v Return to Work Corporation of South Australia [2019] SASCFC 56, [22]-[25], [36], [41] (Blue J) and [119] (Parker J).
After the decision of the Full Bench in April 2020, the Full Court of the Supreme Court granted permission to appeal in Frkic.[18]Ultimately, the appeal in that matter was resolved. Permission to appeal was granted in this case because of the importance of the issues raised in these cases.[19]
[18] Frkic v Return to Work Corporation of South Australia (No 2) [2020] SASCFC 59.
[19] Return to Work (SA) v Opie [2020] SASC 201.
The subsequent Full Bench decision
Some months following the first Full Bench decision the parties put submissions on two further matters. The first concerned a correction to the degree of impairment. The parties agreed that, on the findings of the Full Bench, the correct WPI was 25 per cent. The second matter concerned whether the respondent was entitled to compensation under Schedule 1 of the Return to Work Regulations 2015 (the 2015 Regulations) or by reference to the Workers Rehabilitation and Compensation Regulations 2010 (the 2010 Regulations).
It was common ground that the respondent would obtain a higher compensation payment under the 2015 Regulations.
The respondent’s contention was that by ss 58(4) and 58(5) of the Act his lump sum entitlement must represent a portion of the prescribed sum calculated in accordance “with the regulations” but, importantly, the regulations “must provide for compensation that at least satisfies the requirements of Schedule 8 …”.[20] Insofar as the Transitional Regulations require that the 2010 Regulations be used, it was contended that the amounts assessed using the 2010 Regulations were, “for a large number of levels of WPI”, less than the amount provided for by Schedule 8 and, accordingly, the 2010 Regulations did not therefore satisfy s 58(5), were invalid, and must be disregarded.[21]
[20] Opie v Return to Work Corporation of South Australia and Attorney-General for the State of South Australia [2020] SAET 180, [11] and [15] (Calligeros DPJ, with whom Rossi DPJ and Cole DP agreed).
[21] Opie v Return to Work Corporation of South Australia and Attorney-General for the State of South Australia [2020] SAET 180, [15] (Calligeros DPJ, with whom Rossi DPJ and Cole DP agreed).
Relevantly, reg 5 of the Transitional Regulations provides:
(1)In this regulation— relevant compensating authority in relation to a worker means—
(a) unless paragraph (b) applies—the Corporation;
(b) if the relevant existing injury arose from employment by a self-insured employer—the self-insured employer;
2010 regulations means the Workers Rehabilitation and Compensation Regulations 2010.
(2) The table set out in Schedule 4 of the 2010 regulations will continue to apply in respect of an existing injury—
(a) despite the revocation of those regulations by regulations under the Return to Work Act 2014; and
(b) despite (if relevant) any assessment of a worker’s degree of whole person impairment in respect of the existing injury being made under the Return to Work Act 2014 rather than under the repealed Act (and if such an assessment is made under the Return to Work Act 2014 in respect of an existing injury then regulation 39(1) and Schedule 4 of the 2010 regulations will apply as if any reference to a worker's whole of person impairment assessed under Part 4 Division 5 of the repealed Act were a reference to a worker’s degree of whole person impairment assessed under Part 2 Division 5 of the Return to Work Act 2014).
(3) Subregulation (4) applies (subject to subregulation (5)) in relation to a worker in respect of an existing injury that has given rise to an entitlement to compensation for non-economic loss under section 43 of the repealed Act if—
(a) the existing injury has affected more than 1 part of the body; and
(b) there has been, before 1 July 2015, a determination under Part 4 Division 5 of the repealed Act, or an order of the Workers Compensation Tribunal, that has given rise to an entitlement to the payment of compensation under that Division but the determination or order (or a combination of both) has not covered all aspects of the non-economic loss suffered by the worker.
(4) A worker to whom this subregulation applies may receive compensation for the non-economic loss to the extent that it has not been covered by a determination or order referred to in subregulation (3) if—
(a) an application under this subregulation is made to the relevant compensating authority before 1 July 2016; and
(b) the injury to which the application relates has stabilised (whether before or after that date); and
(c) the relevant compensating authority is satisfied that the compensation for non-economic loss with respect to the injury to which the application relates is payable in accordance with the provisions of Part 4 Division 5 of the repealed Act (and the 2010 regulations in the manner contemplated by subregulation (2)).
(5) Subregulation (4) does not apply in relation to—
(a) an aggravation, acceleration, exacerbation, deterioration or recurrence of an existing injury that occurs on or after 1 July 2015; or
(b) any sequelae that occurs on or after 1 July 2015.
Whilst the respondent accepted that the Full Bench in Return to Work SA v Walker (Walker) had held that the 2010 Regulations should be used as the basis of an award in similar circumstances, [22] it was submitted that that decision was made per incuriam.
[22] Return to Work SA v Walker [2019] SAET 85 (Dolphin PJ, Gilchrist and Hannon DPJJ).
The Full Bench in this case acknowledged the respondent’s contention that Schedule 8 to the Act identified four bands or ranges of WPI, whereas Schedule 3 of the 1986 Act had identified five bands or ranges of WPI. Whilst, in general terms, the amount payable under the 2010 Regulations under various percentage bands is less than the minimum amount provided for by Schedule 8, that was not so in the circumstances of this particular case and, accordingly, the requirements of Schedule 8 under s 58(5) of the Act were satisfied.[23]
[23] Opie v Return to Work Corporation of South Australia and Attorney-General for the State of South Australia [2020] SAET 180, [24] and [34] (Calligeros DPJ, with whom Rossi DPJ and Cole DP agreed).
Referring to Marrone v Employers Mutual Ltd,[24] the Full Bench explained the way in which the bands or ranges under Schedule 8 of the Act and Schedule 1 of the 2015 Regulations can be charted as a parabolic curve, so that higher WPI assessments receive greater monetary awards than lower WPI assessments. In addition, the Full Bench explained the “reductive effect” when two or more WPI assessments are combined, so that with each “additional impairment that is combined the reductive effect becomes greater”, utilising the Combined Values Chart in AMA 5 mandated by chapter 1.27 of the Guidelines.[25]
[24] Marrone v Employers Mutual Limited (2013) 116 SASR 501, [14]-[15] (Kourakis CJ).
[25] Opie v Return to Work Corporation of South Australia and Attorney-General for the State of South Australia [2020] SAET 180, [28]-[29] (Calligeros DPJ, with whom Rossi DPJ and Cole DP agreed).
The Full Bench rejected the challenge to the decision in Walker on the basis that it was not “plainly wrong”,[26] and held that the finding made in relation to reg 5(2) was “persuasive”.[27] In particular, having regard to the legislative history,[28] the Full Bench accepted that reg 5(2) was a “stand-alone” provision which prescribed the scale applicable to all WPI assessments in respect of injuries that occurred during the currency of the 1986 Act.[29] In other words, as the respondent’s 2014 injury was an “existing injury” for the purposes of clause 29 of Schedule 9 of the Act, the respondent was not entitled to an assessment under the Act but, instead, only to an assessment made under the 2010 Regulations pursuant to reg 5(2) of the Transitional Regulations.[30] That is, effectively, an assessment made under the 1986 Act.
[26] Opie v Return to Work Corporation of South Australia and Attorney-General for the State of South Australia [2020] SAET 180, [37]-[39] (Calligeros DPJ, with whom Rossi DPJ and Cole DP agreed) citing Beneficial Finance Corporation Ltd v Price Waterhouse (1996) 68 SASR 19, 24 and 62; and Pooraka Holdings Pty Ltd v Participation Nominees Pty Ltd (1989) 52 SASR 148, 157.
[27] Opie v Return to Work Corporation of South Australia and Attorney-General for the State of South Australia [2020] SAET 180, [36]-[39] (Calligeros DPJ, with whom Rossi DPJ and Cole DP agreed).
[28] Citing Commissioner ofTaxation v Consolidated Media Holdings Ltd (2012) 250 CLR 503, 520 (French CJ, Hayne, Crennan, Bell and Gageler JJ).
[29] Opie v Return to Work Corporation of South Australia and Attorney-General for the State of South Australia [2020] SAET 180, [36] (Calligeros DPJ, with whom Rossi DPJ and Cole DP agreed) citing Return to Work SA v Walker [2019] SAET 85, [32]-[33] (Dolphin PJ, Gilchrist and Hannon DPJJ).
[30] Clause 44 of the Transitional provisions does not apply: it only operates where the entitlement to non-economic loss was determined under the 1986 Act in respect of an “existing injury”, whereupon no assessment may be made under the Act in relation to the same injury or any other injury arising from the same trauma.
The Appeal, Cross Appeal and Notice of Contention
The appellant appeals against the decision of the Full Bench, contending that it erred in its construction of s 22 of the Act on the following grounds:
1.Finding that s 22(8)(b) can be applied to the exclusion of s 22(8)(g) if that results in the highest degree of permanent impairment on the basis that chapter 1.38 of the Guidelines sanctions this; and
2.Failing to apply s 22(8)(g) where a portion of the impairment is due to pre‑existing injury that caused the worker to suffer an impairment before the work injury.
As mentioned, permission to appeal was granted before the hearing.
The respondent cross-appealed on the following grounds:
1.The Full Bench erred in applying reg 5(2) of the Transitional Regulations in determining the cross-appellant’s monetary entitlement pursuant to s 58 of the Act;
2.The Full Bench erred in applying Schedule 4 of the 2010 Regulations in determining the cross-appellant’s monetary entitlement pursuant to s 58 of the Act;
3.The Full Bench erred in failing to apply Schedule 1 of the 2015 Regulations in determining the cross-appellant’s monetary entitlement pursuant to s 58 of the Act; and
4.The Full Bench erred in declining to determine the cross-appellant’s challenge to the validity or meaning of reg 5(2) of the Transitional Regulations and therefore in its application to the determination of the cross-appellant’s monetary entitlement pursuant to s 58 of the Act.
By way of a Notice of Contention filed without objection following the hearing of the appeal, the respondent contended, in the alternative, that in addition to the reasons given by the Full Bench:
1.The decision of the Full Bench, insofar as it allowed the appeal, should be upheld on the basis that the reasons of the trial Judge were inadequate or, alternatively;
2.That that issue should be remitted to the Full Bench for determination in the event that the appeal is allowed.
The appellant’s contentions
The appellant contends that neither chapter 1.38 of the Guidelines nor the uncontroversial recital of it by the Full Bench in Frkic, provides any warrant for s 22(8)(b) to be applied to the exclusion of s 22(8)(g) on the premise that they each represent “equally valid, methods of assessment” and that the method (or sub-section) which results in the higher degree of permanent impairment should be used.
The appellant illustrates the significance of the difference in approach by reference to the outcomes in this case. Following the trial, the Deputy President applied s 22(8)(g) and concluded that the appropriate WPI was 9 per cent. On this approach, the pre-existing and new impairments are assessed together and then a deduction is made for the pre-existing impairment. By contrast, the Full Bench applied s 22(8)(b) in concluding that the appropriate WPI assessment was 24 per cent (albeit later corrected to 25 per cent). On this approach to s 22(8)(b) only the new impairment was assessed, and no deduction was made for pre-existing impairment on the premise that there is no need for a deduction.
The respondent’s contentions
The respondent contested the appellant’s analysis of the Full Bench decision, and construed chapter 1.38 of the Guidelines as stipulating that the Tribunal was obliged to choose the method which gave rise to the highest degree of impairment.
The respondent’s contentions commenced with the arguments made at trial and then those made on appeal to the Full Bench. The respondent emphasised that, although the appellant had submitted that the impairment arising from the 2014 work injury should be regarded as an impairment in the lumbar spine, with the result that pre‑existing impairment had to be disregarded or deducted, the relevant injury and impairment was only to or from the L4-L5 level and there had been no previous injury at that level which caused impairment. On that basis, s 22(8)(g) of the Act did not apply.
The respondent also emphasised that the DRE method of assessment under AMA 5 did not turn on the overall effect on the worker’s movement, pain or symptoms but rather, only on the extent of any loss of motion at the particular motion segment. The DRE Category IV applied by the Full Bench assumed “loss of motion segment integrity” comprising a “complete or near complete loss of motion of a motion segment due to development fusion, or successful or unsuccessful attempt at surgical arthrodesis (fusion)”.[31] The term “motion segment” is defined in AMA 5 to include any particular level of the spine, with the result that L5-S1 and L4-L5 are separate “motion segments” within the meaning given by AMA 5.[32] On this approach, the respondent submitted that there could be no deduction or, at best, a more limited form of deduction, reflecting the actual level of pre-existing impairment which, in this case, was absent. The respondent relied upon the decision of the Victorian Court of Appeal in Lingenberg v Gallichio.[33]
[31] AMA 5, Chapter 15, Part 15.4, Table 15-3 at 384.
[32] See AMA 5, Chapter 15, Part 15.1b at 378.
[33] Lingenberg v Gallichio (2013) 40 VR 60.
The respondent criticised the reasons of the Deputy President on the grounds that they were “legally inadequate” because they failed to address arguments regarding the nature of the injury and impairment and, more particularly, there were no findings as to whether the relevant injury and impairment was to the L4-L5 disc or to the whole of the lumbar spine. Insofar as the reasons of the Deputy President were said to be inadequate, the respondent relied upon Resi Corporation v Munzer.[34]
[34] Resi Corporation v Munzer [2016] SASCFC 15, [69]ff (Lovell J, with whom Sulan and Stanley JJ agreed).
The respondent contended that, without making findings on these matters, the Deputy President erroneously applied a reduction of 20 per cent for the earlier L5-S1 fusion.
Accordingly, as the initial injury was to the L5-S1 disc, and as the 2014 work injury was to the L4-L5 disc, the former did not contribute to the latter and, particularly, did not contribute to the loss of segment motion or to impairment of the L4-L5 disc. In those circumstances, s 22(8)(g), properly understood, had no work to do.
Alternatively, if the relevant impairment was to the whole of the lumbar spine then it necessarily followed that the L4-L5 injury represented an aggravation of the prior injury and s 22(8)(g) of the Act would not apply. In that event, s 58(7) of the Act applied, as did chapter 1.30 of the Guidelines, with the result that only the prior monetary payment should be deducted from any award. Nonetheless, the respondent emphasised that his primary case was that no aggravation was involved. Rather, there were separate injuries with separately assessable impairments for which no deduction was required to be made.
The appellant’s reply
In response, the appellant contended that, in fact, the argument that the L5‑S1 and L4-L5 injuries represented separate motion segments for the purposes of AMA 5 was not advanced at trial, nor was it explored in the evidence or cross-examinations of Mr Jackson and Dr Jennings.
The proper approach, according to the appellant, was that multi-level involvement within a region of the spine must be assessed by reference to each region which is impaired, with the regional impairments combined so as to determine total spinal impairment.[35] Insofar as it might be said that there is any inconsistency between AMA 5 regarding separate motion segments, and the Guidelines regarding the need to address an individual’s total spinal impairment, the Guidelines take precedence by virtue of chapter 1.3 and the opening words to chapter 4 regarding “The spine”.
[35] See the Guidelines at Chapter 4.23 and AMA 5, Chapter 15, Part 15.2a.
The appellant emphasised that the very effect of the surgery undertaken after the 2014 work injury involved the removal of the previous L5-S1 inserted fixation and an extension of the fusion so as to include the L4-L5 level. The result was that there was a two-level spinal fusion between L4 and S1. It was that which the Deputy President found comprised a 29 per cent WPI, necessarily incorporating impairment due to the earlier injury and for which the 20 per cent reduction was properly made.
Insofar as submissions were made as to whether the 2014 injury comprised an aggravation of the earlier injury, so as to invoke s 58(7) of the Act, the appellant emphasised that both parties jointly contended that there was no causal connection between the initial work injury of 21 April 1992 and the later work injury of 17 January 2014.
Finally, on the question of the adequacy of the reasons of the Deputy President, the appellant emphasised that any question about the adequacy of the reasons ought to be determined by this Court or remitted for further consideration by the Full Bench. Any failure to provide adequate reasons would not support the decision made by the Full Bench because the ordinary remedy is a retrial.
Inadequate reasons?
It is convenient to first address the complaint about the adequacy of the Deputy President’s reasons before addressing the appeal and finally, the cross-appeal.
In Amaca Pty Ltd v Werfel the Full Court explained the approach taken to determining the adequacy of reasons:[36]
The provision of adequate reasons remains an essential aspect of the judicial function and the failure to provide them is inimical to the open and transparent resolution of litigation, whatever the nature of the case.[37]…
So, it is necessary for the Judge to “engage with the case presented”[38] and to “expose his or her reasoning on points critical to the contest between the parties”, whether as to evidence or as to argument.[39] The reasons must deal with the substantial points that have been raised, including findings on “material questions of fact”.[40] Where a “party has relied on evidence or material which the judge has rejected, the judge should refer to that evidence or material and, in giving reasons which deal with the substantial points that have been raised, explain why that evidence or material has been rejected”.[41]
As has been said many times, this is necessary so as to avoid the losing party entertaining a justifiable sense of grievance, as well as to facilitate the conduct of any appeal.[42] The appeal court should not have to speculate about the basis for any particular finding made at trial.[43]
Nonetheless, the extent of the obligation to provide adequate reasons varies, depending upon the nature and conduct of the particular case. There are no “set standards” nor any “optimal, even desirable, level of detail required”.[44]
As well, even if the reasons (or aspects of the reasons) are apparently “inadequate”, this alone does not necessarily vitiate the entire decision under appeal. Rather, the inadequacy must relate to “material” aspects of the case. That is, issues on which the parties were divided, the resolution of which affected the outcome.
[36] Amaca Pty Ltd v Werfel [2020] SASCFC 125, [19]-[23] (Kourakis CJ, Nicholson and Livesey JJ).
[37] See DL v The Queen (2018) 266 CLR 1, [32]-[33] (Kiefel CJ, Keane and Edelman JJ); R v Sexton [2018] SASCFC 28, [170]-[181] (Kourakis CJ, with whom Peek and Nicholson JJ agreed), which concerned criminal trials by Judge alone.
[38] Whalan v Kogarah Municipal Council [2007] NSWCA 5, [40] (Mason P, Ipp and Tobias JJA).
[39] DL v The Queen (2018) 266 CLR 1, [131] (Nettle J).
[40] DL v The Queen (2018) 266 CLR 1, [130] (Nettle J).
[41] Hunter v Transport Accident Commission & Avalanche [2005] VSCA 1, [21] (Nettle JA, with whom Batt and Vincent JJA agreed).
[42] See SZKLO v Minister for Immigration and Citizenship (2008) 102 ALD 115; Beale v Government Insurance Office of NSW (1997) 48 NSWLR 430, 431, 441-442 (Meagher JA); Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247, 257-258 (Kirby P).
[43] Resi Corporation v Munzer [2016] SASCFC 15, [71] (Lovell J, with whom Sulan and Stanley JJ agreed).
[44] Resi Corporation v Munzer [2016] SASCFC 15, [71] (Lovell J, with whom Sulan and Stanley JJ agreed).
At the trial the parties filed a joint Statement of Issues and essentially asked that the Tribunal determine whether any impairment arising from the initial work injury had to be taken into account, including whether the compensation received for the 2014 work injury was affected by any pre-existing impairment.
The worker called evidence from Dr Jennings and the Corporation called evidence from Mr Jackson. Both doctors applied the DRE method of assessment. Neither doctor suggested an alternative method of assessment and none was put in cross-examination. Dr Jennings assessed the worker as a DRE category V and made an allowance of 3 per cent for impact on the activities of daily living, resulting in an assessment of 28 per cent WPI. Dr Jennings expressed the view that there was no pre-existing impairment and therefore “nothing to deduct”.[45]
[45] Opie v Return to Work SA [2017] SAET 138, [7] (Ardlie DPM).
Mr Jackson assessed the worker as a DRE category IV and made an allowance of 2 per cent for impact on the activities of daily living, giving an assessment of 27 per cent WPI. Utilising the Guidelines, he explained in evidence that he allowed 20 per cent for the prior fusion, which was a “lifetime impairment… It’s permanent”:[46]
[46] Opie v Return to Work SA [2017] SAET 138, [9] (Ardlie DPM).
Q: … Mr Hall’s first operation had been an outstanding success?
A: A very good success. Very good success. Well, it must have, to do that sort of work.
Q:Yes. In those circumstances would you regard it as surprising, if not for the fact that you were undertaking a process which you understood required you to assess the outcome of that surgery in 1994 using the DRE categories - would it surprise you for it to be suggested, as is the effect of your reports, that effectively threequarters of this man's overall present impairment is due to the prior injury and surgery?
A:I don't think you can put it that way, because impairment is something you can measure, and very definitely you can get an impairment for a spinal fusion, and that 20 per cent is a lifetime impairment, isn’t it. It’s permanent. That’s what it means by AMA Guides’ permanent impairment. So this man was very good at this time, but anybody would tell you that he was going to almost certainly strike trouble in the future because you fuse any level of the spine, you're going to place more stress above and below that fused level. In this case the level is already solid because you’re dealing with the sacrum. The level at L4-5 was going to show excess of wear with the passage of time, and this man almost certainly would have developed symptomatology in his lower back at some stage in the future. But impairment is measured, and that 20 per cent is a lifetime impairment.
…
This man became symptomatic following an injury. He had further surgery. Impairment ratings - and I’m only going on the [Guidelines] here - give him that rating, but I don't think you could argue it in the way you are trying to put this: that threequarter per cent. It doesn’t work that way when you're doing impairments. “Disability” is a better term to use.
Q: So if you were using the term “disability”, my argument might carry weight?
A:Well, obviously his disability was minimal prior to this incident, and it’s now considerable, but that’s disability, and disability has a very, very wide focus. It’s in the eye of the beholder, ultimately in the eye of the Court, but this has been overcome now by impairment, and impairment is something you measure. It's not my estimation.
The Deputy President preferred the evidence of Dr Jennings that the worker came within DRE category V and he adopted his assessment that there was a 29 per cent whole person impairment. [47]
[47] Opie v Return to Work SA [2017] SAET 138, [47] (Ardlie DPM).
The Deputy President rejected the evidence of Dr Jennings that there was no prior impairment following the initial injury, and he preferred the evidence of Mr Jackson that there was a pre-existing 20 per cent impairment.[48]
[48] Opie v Return to Work SA [2017] SAET 138, [44]-[46] (Ardlie DPM).
Following these findings, which were plainly open to him, the Deputy President was required to determine whether the pre-existing 20 per cent impairment was to be brought to account. Applying s 22(8)(g) of the Act he held that:[49]
From the 29% there is to be a deduction of 20% giving a final WPI of 9%. Whilst the result may seem unfair the obligation is to apply the legislation.
[49] Opie v Return to Work SA [2017] SAET 138, [48] (Ardlie DPM).
Having regard to the issues presented for determination, it cannot be said that the reasons are inadequate. Though the consideration and ultimate conclusions are expressed in brief terms, to the point of being terse, the issues presented were addressed and the reasoning plain.
The issues and complaints now pressed were not in issue at the trial and represent an attempt to pursue new points for the first time in the course of a second appeal.[50] Whilst that attempt must be rejected, it ought not be thought that there is necessarily any merit in the attempt to avoid the effect of the Guidelines and AMA 5, as will be explained.
[50] Redman v Return to Work Corporation of South Australia [2021] SASCA 25, [99] (Livesey JA with whom Bleby JA agreed); The State of South Australia in right of the Department for Education and Child Development v Dolan [2021] SASCFC 30, [69]-[75] (Livesey J, with whom Doyle J agreed).
Determination of the Appeal
Section 22(8) of the Act provides as follows:
(8) An assessment must take into account the following principles:
(a) if a worker presents for assessment in relation to injuries which occurred on different dates, the impairments are to be assessed chronologically by date of injury;
(b) impairments from unrelated injuries or causes are to be disregarded in making an assessment;
(c) impairments from the same injury or cause are to be assessed together or combined to determine the degree of impairment of the worker (using any principle set out in the Impairment Assessment Guidelines);
(d) impairment resulting from physical injury is to be assessed separately from impairment resulting from psychiatric injury;
(e) in assessing impairment resulting from physical injury or psychiatric injury, no regard is to be had to impairment that results from consequential mental harm;
(f) in assessing the degree of permanent impairment resulting from physical injury, no regard is to be had to impairment that results from a psychiatric injury or consequential mental harm;
(g) any portion of an impairment that is due to a previous injury (whether or not a work injury or whether because of a pre-existing condition) that caused the worker to suffer an impairment before the relevant work injury is to be deducted for the purposes of an assessment, subject to any provision to the contrary made by the Impairment Assessment Guidelines;
(h) assessments are to comply with any other requirements specified by the Impairment Assessment Guidelines.
The operation of s 22(8)(b) and s 22(8)(g) and the Guidelines was recently reviewed by the Full Court in Paschalis v Return to Work Corporation of South Australia (Paschalis).[51] It may be accepted that:[52]
… the Act is intended only to compensate work injuries and impairments caused by work injuries. That is clear from the objects and scheme of the Act as a whole. On their face, and when read together, ss 22(8)(b) and 22(8)(g) express the same legislative intention: only a work injury, or an impairment to the extent that it is attributable to a work injury, is to be assessed and compensated. The appellant’s proposed interpretation of s 22(8)(b) carries with it the prospect that workers might be compensated for injuries or impairments arising from injuries or causes which have no relevant connection to a compensable work injury. That is, to simply ignore impairment from an unrelated injury or cause which forms part of the worker’s presenting impairment could confer a form of windfall because the assessment would necessarily include something which is not compensable. That approach is inconsistent with the objects and scheme of the Act as a whole.
[51] Paschalis v Return to Work Corporation of South Australia& Anor [2021] SASCFC 44, [120]-[126], [186]-[221] and [230]-[235] (Livesey and Bleby JJA).
[52] Paschalis v Return to Work Corporation of South Australia & Anor [2021] SASCFC 44, [198] (Livesey and Bleby JJA).
The Guidelines are drawn on the premise that they and AMA 5 address assessable body systems. That is reflected in the structure of the Guidelines, which identifies, amongst other matters, “The spine” as a matter for discrete assessment. That is also reflected in AMA 5, Chapter 15 between pages 373 and 431.
The Guidelines stipulate that the evaluation of impairment of the spine is to be done using the DRE method of assessment.[53] No other method of assessment is specified. And, when undertaking the procedure necessary to evaluate impairment of the spine using the DRE method of assessment, that must be undertaken by reference to the particular region of the spine which is relevant, see chapter 4.17 of the Guidelines. Those regions are:
1.The lumbar region, Table 15-3 of AMA 5 at page 384;
2.The thoracic region, Table 15-4 of AMA 5 at page 389; and
3.The cervical region, Table 15-5 of AMA 5 at page 392.
[53] Guidelines, Chapter 4.1.
Within the relevant region of the spine (be it the lumbar, thoracic or cervical regions) separate spinal impairments are not to be combined. Rather, the highest DRE category within that region is chosen. By contrast, where there are impairments across different spinal regions, these may be combined using the combination tables. More particularly, disc lesions at the transition zones L5-S1 are rated within the region of the lumbar spine.[54] Depending upon whether there is any difference in activity levels before and after an injury, there is scope to allocate up to an additional 3 per cent WPI.[55]
[54] See Guidelines, Chapter 4.23.
[55] See Guidelines, Chapters 4.24 and 4.25.
In this case, the Tribunal was not presented with more than one equally valid, applicable method specified by the Guidelines or AMA 5 to establish the degree of the respondent’s permanent impairments within the lumbar spine. Contrary to the contentions of the respondent, it was neither necessary nor appropriate for the examiner and the Deputy President to distinguish between different segment levels when determining impairment to the region of the lumbar spine.
Both the Guidelines and AMA 5 stipulated the DRE method and, under both, additional allowance could be made for any impact on the activities of daily living as well as for disfigurement as the result of surgical scarring. It is implicit in the finding made by the Full Bench that the method adopted by Mr Jackson, as modified by the Deputy President – the so-called first method – was a valid, applicable method of assessing the respondent’s degree of permanent impairment to the lumbar spine.
Neither the Guidelines nor AMA 5 relevantly specified more than one applicable method, being the DRE method.
It follows that, in the circumstances of this case, chapter 1.38 was not engaged.
Accordingly, the Full Bench made an error of law in applying the principle embodied in chapter 1.38, which requires the selection of the highest degree of permanent impairment where there is more than one equally valid applicable method of establishing permanent impairment.
Moreover, by framing the question of choice between equally valid, applicable methods by reference to whether s 22(8)(g) applied (as the Deputy President found and the Full Bench assumed) or whether, by contrast, only s 22(8)(b) applied (but, as the Full Bench found, did not require that any deduction be made), this too represented an error of law.[56] First, these provisions do not come within the terms of chapter 1.38: that only applies where the Guidelines and AMA 5, not the Act, stipulate more than one applicable method. Second, and perhaps more importantly, these statutory provisions do not represent different methods of assessing permanent impairment. When engaged, they require that impairments from unrelated injuries or causes be disregarded (s 22(8)(b)) or, where any portion of an impairment is due to a previous injury, deducted (s 22(8)(g)), so as to ensure that a worker is not compensated for impairments which are not relevantly caused by work injuries.[57] As both provisions implement the same legislative policy, their application ought result in the same outcome; where s 22(8)(b) and s 22(8)(g) both apply, they ought result in the same WPI assessment.
[56] Opie v Return to Work Corporation of South Australia [2020] SAET 62, [30] and [34] (Rossi DPJ, with whom Calligeros DPJ and Cole DP agreed).
[57] Paschalis v Return to Work Corporation of South Australia & Anor [2021] SASCFC 44, [201], [203], [206], [208]-[221] (Livesey and Bleby JJ); Alcoa Holdings Ltd v Lowthian [2011] VSC 245, [70] (Forrest J).
As was emphasised in Paschalis and in Alcoa Holdings Ltd v Lowthian (Alcoa),[58] the cases on s 22(8)(b) and its predecessors show that the word “disregarded” has, before the introduction of s 22(8)(g), been used in a broad way. The circumstances of a particular case may require that impairments from unrelated injuries or causes be disregarded in the sense of being deducted or subtracted under s 22(8)(b). Whether that is so depends on the nature of the impairment caused by the work-related injury and the connection, if any, between that and any impairment caused by any unrelated injury or cause, “so as to ensure that the impairment assessment relates solely to that resulting from the compensable injury”.[59] That is, the word “disregarded” in s 22(8)(b) is used “in the sense of excluding so much of an impairment assessment as is due to unrelated injuries and causes” to ensure that compensation does not “extend to impairment caused by unrelated injuries and causes”.[60] In some cases, for example where a deduction results in a nil assessment, the Tribunal may be required to “do its best to assess the degree of underlying impairment”.[61] Nonetheless, a deduction will be required where to do otherwise results in a “windfall … with compensation being paid for a degree of impairment that had no connection with the compensable injury”.[62]
[58] Paschalis v Return to Work Corporation of South Australia & Anor [2021] SASCFC 44, [201], [203], [206], [208]-[221] (Livesey and Bleby JJ); Alcoa Holdings Ltd v Lowthian [2011] VSC 245, [70] (Forrest J).
[59] Alcoa Holdings Ltd v Lowthian [2011] VSC 245, [59]-[60] (Forrest J).
[60] Lingenberg v Gallichio (2013) 40 VR 60, [14] (Nettle and Neave JJA).
[61] Lingenberg v Gallichio (2013) 40 VR 60, [30] (Nettle and Neave JJA).
[62] Alcoa Holdings Ltd v Lowthian [2011] VSC 245, [59]-[60] (Forrest J).
As Appendix 1 to the Guidelines demonstrates, a deduction may be necessary in cases of unrelated injuries, as well as in cases of pre-existing conditions or injuries where they are relevant, because they affect the region or body part the subject of the assessment:
Unrelated injury
An unrelated injury means any injury or cause that is not the work injury or relevant to that injury. Impairments from injuries or causes unrelated to the work injury are not to be included in calculating the degree of whole person impairment. When the assessor makes their assessment, the % impairment may include impairments from unrelated injuries or causes but the degree of permanent impairment attributable to these unrelated injuries or causes must be disregarded (i.e. deducted) and not included in the whole person impairment assessment. If there are known unrelated injuries or causes that are relevant to the work injury or injuries to be assessed, the requestor must advise the assessor by identifying the relevant injuries and requesting that the unrelated injuries or causes be disregarded (i.e. deducted).
Pre-existing condition or injury
A pre-existing condition or injury means a condition or injury that is not medically related to the work injury. The value of the % impairment attributable to these pre-existing conditions or injuries must be deducted in the summary table before giving the final WPI rating. If there are known pre-existing conditions or injuries, the requestor must advise the assessor by identifying the relevant injuries and requesting that any impairments arising from such injuries be deducted.
That is to say, the Guidelines do not require that separate spinal impairments be combined but, rather, that the highest DRE category be chosen within the relevant region,[63] and if there is impairment from an unrelated injury or cause, it is necessary that it be “disregarded (i.e. deducted)”.[64] As Forrest J emphasised in Alcoa, it is implicit in AMA 5 that an assessment of pre-existing impairment must, in appropriate cases, be subtracted from the current impairment assessment.[65]
[63] See Guidelines, Chapter 4.23.
[64] Appendix 1 to the Guidelines, set out above.
[65] Alcoa Holdings Ltd v Lowthian [2011] VSC 245, [70] (Forrest J).
It follows that the Full Bench erred insofar as it found that s 22(8)(b) represented an alternative to s 22(8)(g), which must be preferred under chapter 1.38 of the Guidelines so as to ensure the assessment of a higher degree of permanent impairment. There was no scope to choose between them. To the extent that, in the circumstances of this particular case, both s 28(8)(g) and s 22(8)(b) applied, they both required that the impairment attributable to the earlier injury be deducted.
And, as mentioned, as only one method of assessment was specified, in the circumstances of this case the application of ss 28(8)(g) and 22(8)(b) should have resulted in the same assessment of WPI. That approach is consistent with the result in the case of Frkic,[66] where a fall in the course of employment caused a fracture to the L2 vertebrae. At the time of the fall, a complete fusion at that level had developed by reason of pre-existing, non-work-related ankylosing spondylitis. There was only one valid method of assessment of impairment stipulated by the Guidelines and AMA 5, and so chapter 1.38 of the Guidelines did not apply. It was necessary to make a deduction for pre-existing impairment, notwithstanding the worker’s subjective history of good function before his work injury, being a 20 per cent reduction for pre-injury impairment, leaving a compensable balance of 8 per cent impairment.[67]
[66] Frkic v Return to Work Corporation of South Australia [2020] SAET 16. Although, as earlier emphasised, the application of s 22(8)(b) was not pressed before the Full Bench in that case.
[67] Frkic v Return to Work Corporation of South Australia [2019] SAET 1, [64]-[66] (Calligeros DPJ).
In that case, as was said in this case, the result seems unfair because the worker had subjectively described little or no functional impairment before the subject work injury. That, however, is the by-product of ensuring that “like cases should be treated alike”, described as “one of the fundamental principles of justice” in workers compensation by Bongiorno J in Taylor v Mountain Pine Furniture Pty Ltd:[68]
The Accident Compensation Act1985 requires the Medical Panel to assess impairment using the AMA Guides. This attempt by the legislature to introduce some degree of objectivity into the assessment of impairment for compensation purposes represents a significant application of the rule of law in an area where one of the fundamental principles of justice – that like cases should be treated alike – has particular importance. Nothing would discredit a compensation system more quickly than the idiosyncratic application of criteria to the determination of an injured person’s impairment and hence their entitlement to compensation at a particular level. Although the efficacy of the application of the AMA Guides to achieve a just result for injured people may be debated, as the law stands they must be applied regardless of any personal view of the assessor called upon to make the assessment. Whilst the interpretation of medical matters referred to in the Guides and the exercise of clinical judgment must be left to the medical examiner who is applying them, it is not within that medical examiner’s remit to ignore an express direction contained in the Guides as to how a particular objective fact is to be treated in making an assessment. Thus it was not within the power of the Medical Panel in this case to reach its assessment of Mr Taylor’s impairment after taking into account the effects of surgery performed on his cervical spine.
[68] Taylor v Mountain Pine Furniture Pty Ltd [2006] VSC 499, [21] (Bongiorno J).
Indeed, as was explained in Frkic:[69]
A rigid spine as a result of developmental fusion or surgical arthrodesis at a single or multiple levels may produce considerable variability of functional impairment from patient to patient. An important element of the assessment of whole person impairment under the RTW Act is to standardise the methods of assessment. In some instances radiological findings give rise to a percentage of impairment without regard to the individual functional impact of the findings. This is part of an overall scheme involving generally a single assessment and prescribed steps relating to that assessment. An important object of the scheme of assessment is to reduce the risk of disputed proceedings. Objective evidence rather than subject outcomes is a feature.
[69] Frkic v Return to Work Corporation of South Australia [2020] SAET 16, [48] (Farrell, Kelly and Rossi DPJJ).
In these circumstances, the appeal should be allowed.
Determination of the Cross-Appeal
The essence of the respondent’s contention on the cross-appeal is that because some workers may receive considerably less under the 2010 Regulations when compared with what is recoverable under the 2015 Regulations, reg 5(2) of the Transitional Regulations is invalid because ss 58(4) and 58(5) of the Act are not satisfied.
The Attorney-General intervened for the State of South Australia before the Full Bench on 6 July 2020 pursuant to s 50 of the South Australian Employment Tribunal Act 2014 (SA) and s 9 of the Crown Proceedings Act 1992 (SA) in relation to the question of law raised regarding the validity of reg 5(2) of the Transitional Regulations. The Attorney‑General made submissions before the Full Bench as well as before this Court.
Sub-sections (4) and (5) of s 58 of the Act provide:
(4)Subject to this section, the lump sum will be an amount that represents a portion of the prescribed sum calculated in accordance with the regulations.
(5)Regulations made for the purposes of subsection (4) must provide for compensation that at least satisfies the requirements of Schedule 8 taking into account the assessment of whole person impairment undertaken for the purposes of this Division.
Schedule 8 to the Act is in the following terms:
Schedule 8—Minimum amounts of compensation according to degree of impairment under regulations
Degree of whole person impairment
Minimum compensation payable under regulations
5% - 9% (inclusive)
$11 800 (indexed)
10% - 29% (inclusive)
$20 768 (indexed)
30% - 49% (inclusive)
$117 668 (indexed)
50% - 100% (inclusive)
$472 000 (indexed)
By clause 29(1) of Part 10, “Transitional provisions”, within Schedule 9 to the Act:
29—General provision
(1) Subject to the other provisions of this Part, this Act applies to and in relation to—
(a) an injury that is attributable to a trauma that occurred before the designated day and that is a compensable injury under the repealed Act (an existing injury); and
(b) an injury that is attributable to a trauma that occurred on or after the designated day (a new injury).
By reason of clause 29 of the Transitional provisions, the respondent’s 2014 work injury is an “existing injury” for the purposes of the Act.
By clause 44 of the Transitional provisions, a person whose entitlement to non-economic loss has been determined under the 1986 Act in respect of an existing injury is not entitled to an assessment under the Act in relation to the same injury (or any other injury arising from the same trauma). There is no suggestion that the respondent’s entitlement to compensation for the 2014 work injury had been determined under the 1986 Act. However, that does not necessarily mean that any entitlement to compensation must be assessed and calculated pursuant to s 58 of the Act.
In Walker, the Full Bench held that reg 5(2) of the Transitional Regulations required that all “existing injuries” be compensated according to the 2010 Regulations made under the 1986 Act rather than the 2015 Regulations made under the Act.[70] That finding was made notwithstanding recognition that cases of uncompensated “existing injuries” ostensibly come within the Act by reason of clause 29(1) of Part 10, Transitional provisions.[71]
[70] Return to Work SA v Walker [2019] SAET 85.
[71] Return to Work SA v Walker [2019] SAET 85, [9]-[10] (Dolphin PJ, Gilchrist, and Hannon DPJJ).
For the Attorney-General, emphasis was given to clause 69 of the Transitional provisions, which confers a specific regulation-making power on the Governor directed to additional provisions of a saving or transitional nature, consequent upon the enactment of the Act. That clause came into operation on 4 December 2014.[72]
[72] The South Australian Government Gazette, 4 December 2014.
Regulation 5(2) of the Transitional Regulations came into operation on 19 March 2015.[73]
[73] The South Australian Government Gazette, 19 March 2015.
Other regulations, such as regs 5(3) to 5(6) inclusive, were by amendment included in the Transitional Regulations by Gazettal dated 25 June 2015. These were not intended to commence until 1 July 2015. Section 58 of the Act was declared by Gazettal on 4 December 2014 to not be operative until 1 July 2015.
The Attorney-General submitted that the scheme of the Transitional provisions and the Transitional Regulations was to ensure that entitlements to lump sum compensation for workers with existing injuries would be preserved at the same level as were enjoyed under the repealed Act.
The Attorney-General also submitted that, consistently with the decision in Walker’s case, reg 5(2) is not to be read as being subject to s 58, including s 58(5), because it operated as an independently operating Transitional provision. To make the same point differently, the reference in ss 58(4) and 58(5) to “regulations” is confined to regulations made under the Act and not to regulations made under the Transitional provisions.
In our view, the Attorney-General’s submissions should be accepted.
The entitlement to compensation by way of non-economic loss in respect of existing injuries is to be determined by reference to the Transitional Regulations, and thereby the 2010 Regulations, rather than the 2015 Regulations. The clear effect of reg 5(2) of the Transitional Regulations was to preserve the approach to compensation which applied under the 1986 Act and the 2010 Regulations.
As the Full Bench in Walker acknowledged, amendments to the law which change the available level of compensation raise difficult challenges, and the results are not always satisfactory. Nonetheless, what is required is “the faithful application of the rules of statutory interpretation”.[74] After referring to the legislative history, the Full Bench emphasised that reg 5(2) came into operation on 19 March 2015, at a time when “no assumptions could be made as to when [the Act] would become operational”, with the result that “it could not have been assumed that reg 5(2) would have no work to do” until the Act commenced, as it turned out, on 1 July 2015. That is, it could not have “meant one thing while it stood alone, and another thing when the balance of reg 5 of the Transitional Regulations was promulgated”.[75]
[74] Return to Work SA v Walker [2019] SAET 85, [21] (Dolphin PJ, Gilchrist and Hannon DPJJ), citing State of South Australia v Collings (1996) 65 SASR 432, 434-435 (Doyle CJ, with whom Millhouse and Williams JJ agreed).
[75] Return to Work SA v Walker [2019] SAET 85, [25]-[30] (Dolphin PJ, Gilchrist and Hannon DPJJ).
The Full Bench in Walker found that, as it was necessary to construe each instrument by reference to the time “when the document was made”,[76] the result was that reg 5(2) should be regarded as a “stand-alone provision” prescribing the scale applicable to all whole person impairment assessments for injuries occurring during the 1986 Act.[77]
[76] Citing Black-Clawson International Ltd v Papierwerke Waldhof-Aschaffenburg AG [1975] AC 591, 613-614 (Lord Reid).
[77] Return to Work SA v Walker [2019] SAET 85, [31]-[32] (Dolphin PJ, Gilchrist and Hannon DPJJ).
It should be noted that these aspects of the decision in Walker were not challenged. Rather, the challenge depended on the contention that reg 5(2) “purports to pick up and apply” s 58 and the 2015 Regulations leading, as mentioned, to difficulties with the operation of ss 58(4) and 58(5). If that contention is rejected then the challenge must fail. It has not been shown that the decision in Walker is wrong, still less plainly so. Granted, there are undoubted difficulties with each approach. In our view, however, it has not been demonstrated that it is wrong to view reg 5(2) as a stand-alone provision, determining the scale applicable to whole person impairment assessments concerning injuries occurring during the 1986 Act.
It may be doubted whether s 58 of the Act is, in these circumstances, of any relevance. Having regard to the legislative history and context, the reference to “the regulations” in ss 58(4) and 58(5) is best understood as a reference to the 2015 Regulations and not to the 2010 Regulations applied pursuant to the Transitional Regulations made under the regulation-making power contained in clause 69 of the Transitional provisions.
On this approach, it is irrelevant whether an assessment made under the 2010 Regulations satisfies s 58(5), because the assessment is not made and compensation for non-economic loss is not awarded pursuant to s 58.
We reject the challenge to Walker’s case and conclude that it has not been shown that reg 5(2) of the Transitional Regulations is invalid.
Whilst the issues presented are of some importance, warranting the grant of leave to appeal, the cross-appeal should be dismissed.
Conclusions
The following orders should be made:
1.Permission to cross-appeal is granted.
2.The notice of contention is dismissed.
3.The appeal is allowed and the cross-appeal dismissed.
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