Saunders and Telstra Corporation Limited
[2015] AATA 8
•12 January 2015
[2015] AATA 8
Division GENERAL ADMINISTRATIVE DIVISION
File Number 2012/2626
Re Glenn Saunders
APPLICANT
And Telstra Corporation Limited
RESPONDENT
DECISION
Tribunal Deputy President S A Forgie
Date 12 January 2015
Place Melbourne
The Tribunal decides to affirm the reviewable decision of the respondent dated 9 June 2012 affirming an earlier decision dated 7 May 2012 determining that there was no liability under ss 24 and 27 of the SRC Act in respect of the applicant’s claim for “Aggravation of acute musculo-ligamentous lower back strain/adjustment disorder with depressed mood” suffered on 16 June 1999.
..[sgd] S A Forgie….
Deputy President
CATCHWORDS
COMPENSATION – election to institute action or proceeding against Commonwealth for damages for non-economic loss following determination that compensation payable for permanent impairment in relation to back injury – damages recovered – subsequent claim for compensation for psychological condition resulting from back injury – liability for injury accepted but liability for permanent impairment resulting from psychological condition refused on basis damages recovered in action instituted following election – election related only to back injury but action related to damages arising out of accident in which back injury one of injuries sustained – compensation not payable where damages recovered – decision affirmed.
LEGISLATION
Administrative Appeals Tribunal Act 1975; section 37
Industrial Relations Legislation Amendment Act 1991; section 7
Limitation Act 1974 (Tas); section 5
Safety, Rehabilitation and Compensation Act 1988; sections 4, 5, 5A, 5B, 6, 7, 13, 14, 15, 15A, 16, 17, 18, 19, 23, 23A, 24, 25, 27, 28, 29, 33, 44, 45, 48, 53, 54, 126, 143
Safety, Rehabilitation and Compensation and Other Legislation Amendment Act 2001; section 3, Schedule 2, Item 63
Workers’ Compensation Act 1926 (NSW); section 63
Guide to the Assessment of the Degree of Permanent Impairment
Commonwealth Employees’ Rehabilitation and Compensation Bill 1988CASES
Australian Postal Corporation v Sinnaiah [2013] FCAFC 98; (2013) 213 FCR 449; 136 ALD 536
Behan v Australian Telecommunications Corp [1990] FCA 502; (1990) 26 FCR 337; 99 ALR 79; 12 AAR 466; 22 ALD 545
Brown v Comcare [2003] FCA 261; 147 FCR 290
Canute v Comcare [2006] HCA 47; (2006) 226 CLR 535; 229 ALR 445; 80 ALJR 1578; 91 ALD 552
Cartledge v E. Jopling & Sons Ltd [1963] AC 758
Comcare v Mooi [1996] FCA 1587; (1996) 69 FCR 439; 137 ALR 690; 23 AAR 160; 42 ALD 495
Commonwealth of Australia v Cornwell [2007] HCA 16; (2007) 229 CLR 519; 234 ALR 148
Commonwealth of Australia v Flaviano and Anor [1996] NSWSC 451; (1996) 40 NSWLR 199
Darley Main Colliery Co v Mitchell (1886) 11 App Cas 127
Djordjevic v Australian Iron & Steel Ltd (1966) 67 SR (NSW) 441
Fellowes v Military Rehabilitation and Compensation Commission [2009] HCA 38; (2009) 240 CLR 28; 259 ALR 416; 83 ALJR 1113; 111 ALD 1
Grant v Repatriation Commission [1999] FCA 1629; (1999) 57 ALD 1
Grogan v The Commonwealth unreported; 5 June 1996
Nominal Defendant v Gardikiotis [1996] HCA 53; (1996) 186 CLR 49; 136 ALR 1
Rothwell v Caverswall Stone Co Ltd [1944] 2 All ER 350
Todorovic v Waller [1981] HCA 72; (1981) 150 CLR 402; 37 ALR 481
Tusyn v State of Tasmania (No 2) [2008] TASSC 76
Tusyn v State of Tasmania (No 3) [2010] TASSC 55OTHER MATERIAL
Chambers 21st Century Dictionary, 1999, reprinted 2004, Chambers
Macquarie Dictionary, revised 3rd edition, 2001, The Macquarie Library Pty Ltd
Shorter Oxford English Dictionary, 5th edition, 2002, Oxford University Press
REASONS FOR DECISION
Under the Safety, Rehabilitation and Compensation Act 1988 (SRC Act), Telstra accepted liability to pay compensation to Mr Glenn Saunders in respect of a back injury he had suffered. Subsequently, Telstra accepted liability to pay compensation in respect of the permanent impairment Mr Saunders suffered as a result of the injury. After calculating Mr Saunders’ entitlement to compensation in respect of permanent impairment under s 24 and in respect of non-economic loss under 27 of the SRC Act and advising him of the amount, Mr Saunders made an election under s 45 of the SRC Act to institute proceedings against Telstra for damages for non-economic loss arising from his injury. Particulars of the injury were claimed to have resulted in, among other symptoms, “psychological reaction”. Mr Saunders and Telstra settled those proceedings and signed a Release in which he released and discharged Telstra from all claims in respect of the accident and matters relating to that accident. When he subsequently claimed compensation under the SRC Act for a psychiatric injury resulting from his back injury (psychological condition), Telstra accepted liability but refused liability for compensation in respect of permanent impairment and non-economic loss. It did so on the basis that Mr Saunders had already been compensated for non-economic loss arising out of the claimed psychological condition.
The issue at the hearing was whether the election that Mr Saunders made under s 45 of the SRC Act operates so that he is not entitled to claim compensation under ss 24 and 27 in respect of his psychological condition. I have decided that Mr Saunders is not entitled to compensation under the SRC Act in respect of his psychological condition but not directly as a result of the operation of the provisions of ss 44 and 45. Rather, the result follows from a reading of those provisions together with s 48 and the definition of the expression “action for non-economic loss” in s 4(1).
I have decided that his election under s 45 related to his back condition alone and did not, and could not, relate to his psychological condition for which he had not then claimed compensation under the SRC Act. His action for damages under the general law, however, related to all of his injuries arising under the accident whether they were yet apparent or not. In so far as those damages related to his psychological condition, they were not recovered as a result of an action for non-economic loss as understood under the SRC Act. That follows from the fact that they were not recovered following an action for damages suffered as a result of that condition taken by Mr Saunders against Telstra and following an election he had made under s 45(1). The election that he had made related to his back condition and not to his psychological condition.
Under s 48(4), compensation is not payable under the SRC Act in respect of an injury after the date on which damages were recovered by an employee unless one of the ameliorating circumstances set out in s 48(5) applies. Mr Saunders cannot bring himself within one of the ameliorating provisions. In particular, he cannot do so because he did not recover the damages as a result of an action for non-economic loss in respect of his psychological condition.[1]
BACKGROUND
[1] This is not a case of Mr Saunders’ “contracting out” of his rights to claim compensation contrary to the principles in Behan v Australian Telecommunications Corp [1990] FCA 502; (1990) 26 FCR 337; 99 ALR 79; 12 AAR 466; 22 ALD 545. It is, instead, a case of the Parliament’s determining the circumstances in which compensation is payable under the SRC Act and those where it is not.
Acceptance of liability for aggravation of acute musculoligamentous strain of the lower back
From 1994 until 2006, Mr Saunders was employed as a sales consultant by Telstra Corporation Limited (Telstra). On 17 June 1999, he lodged a claim for compensation under the SRC Act in respect of “acute muscular back strain” sustained on the previous day.[2] Telstra accepted liability for “aggravation of acute musculoligamentous strain of the lower back” (back condition). It did so on 16 July 1999 and under s 14 of the SRC Act.[3]
[2] Documents lodged under s 37 of the Administrative Appeals Tribunal Act 1975 (T documents); T 6 at 7-11
[3] T documents; T7 at 12-15
Payment of compensation
Following other determinations in which Telstra accepted liability to make payments in respect of lawn mowing services[4] and home help,[5] Telstra made a determination on 15 April 2002 in which it accepted liability to pay Mr Saunders a lump sum totalling $39,822.97[6] in respect of the permanent impairment arising from his compensable back condition.[7] It described that permanent impairment as “Constant severe pain in lower back area radiating down left leg.[8] The total figure of $39,822.97 calculated by Telstra represented amounts of compensation under s 24 and two further amounts assessed under s 27. I will briefly set out the way in which those amounts are calculated.
[4] T documents; T19 at 32
[5] T documents; T32 at 94-96
[6] The lump sum was made up of $23,416.21 payable under s 24 of the SRC Act and $16,406.76 under s 27.
[7] T documents; T46 at 142
[8] T documents; T46 at 141-147
Using Table 14.1 in Part A of the Guide to the Assessment of the Degree of Permanent Impairment prepared under s 28 then in force (Guide),[9] Telstra first assessed Mr Saunders’ degree of permanent impairment resulting from his back condition under s 24. It determined it to be 19%. That led to Telstra’s determining Mr Saunders’ entitlement to compensation in respect of the permanent impairment resulting from his back condition to be $23,416.21.[10]
[9] The Guide is the Guide to the Assessment of the Degree of Permanent Impairment approved by the Minister and then in force under s 28 of the SRC Act. The Guide was used in the determination of all claims received by Comcare on or before 28 February 2006: Guide at [3]; iv. A second edition is used to determine claims made after 1 February 2006 but before 1 December 2011 and Edition 2.1 to determine those made on or after 1 December 2011. Although there are variations of detail, the structure of each remains consistent. Therefore, as only the broad structure is relevant and not the detail, I will refer to the first edition of the Guide in these reasons.
[10] T documents; T46 at 141-147
Telstra then calculated Mr Saunders’ entitlement to compensation for non-economic loss under s 27 of the SRC Act. Section 27(1) provides:
“Where an injury to an employee results in a permanent impairment and compensation is payable in respect of the injury under section 24, Comcare is liable to pay additional compensation in accordance with this section to the employee in respect of that injury for any non-economic loss suffered by the employee as a result of that injury or impairment.”
The first figure determined under s 27(2) for the purpose of applying the formula is calculated on the basis of the degree of permanent impairment already assessed under s 24. In Mr Saunders’ case, that was 19% and led to an amount of $4,390.54 as the first figure in the formula.
The second figure used in the formula depends on scores and percentages determined by using Part B of the Guide. Under that Part, Telstra attributed scores out of 5 for his pain and for his suffering under Table 1 and then combined them with the scores derived from Tables 2, 3 and 4. Table 2 requires scores to be given for three factors under the heading of “Loss of Amenities”, Table 3 for “Other Loss” and Table 4 for “Loss of Expectation of Life”. The Guide sets out criteria relevant in determining each score. In relation to Mr Saunders’ loss, Telstra calculated the following scores for each of the factors under the four tables:
Loss
Score
(1)
Pain
3
(2)
Suffering
3
(3)
Mobility
2
(4)
Social relationships
3
(5)
Recreation and leisure activities
3
(6)
Other loss
0
(7)
Loss of expectation of life
0
Table 5 requires each of the scores to be multiplied by a factor specific to the relevant loss and the total to be added. If the score equals or is greater than 15, the effect of Table 5 is that Telstra was taken to have determined Mr Saunder’s to be 100% of the maximum payable under B in the formula set out in s 27(2). In Mr Saunders’ case, the calculation carried out under Table 5 led to a figure of 7.8. The effect of Table 5 is that the figure of 7.8 had to be converted to the actual percentage of loss taking 15 as representing total loss. That led to a determination that the degree of non-economic loss suffered by Mr Saunders was 52% or a sum of $12,016.22.
Election to institute common law proceedings
Attached to Telstra’s letter dated 15 April 2002 was a form entitled “Election under section 45”. The letter was headed “Re: Permanent Injury Claim”. The letter read:
“I refer to the claim made by Mr Glenn Saunders for compensation under the Safety Rehabilitation and Compensation Act 1988 in respect of Permanent Injury/Impairment – ‘Constant severe pain in lower back area radiating down left leg’.
The matter has been considered in accordance with the provisions of the Act taking into account all available evidence on file.
Please find attached a determination along with a statement of reasons for my decision.
Also attached is a notice of rights under the Act as well as an ‘Election under Section 45’ form.
Upon the return of the ‘Section 45 form’ indicating acceptance of the determination attached, I will arrange for payment to be made.”[11]
[11] T documents; T46 at 141
Mr Saunders’ solicitors responded on 16 August 2002 referring to previous correspondence with GIO, on behalf of Telstra, and particularly to a letter dated 20 May 2002.[12] I have asked his solicitors for a copy of that letter lest it throw any light on the issues but it has not been forthcoming.
[12] T documents; T49 at 155
Attached to the letter dated 16 August 2002 was the form of election that had been completed and that had been signed by Mr Saunders. The substantive part of the form, completed read:
“I, GLENN ARHUR SAUNDERS, hereby elect:
*0 (a) to receive compensation under the Safety Rehabilitation and Compensation Act 1988 for permanent impairment and non-economic loss.
OR
R (b) to institute an action or proceeding against the Commonwealth, a Commonwealth authority or another Commonwealth employee for damages for any non-economic loss suffered as a result of the injury.
(*)Please tick selection (a) or (b)
I understand that this election is irrevocable.
I understand that the effect of being paid compensation under section 24, 25 or 27 of the Act is that I will not at a later date be able to institute an action or proceeding against the Commonwealth, a Commonwealth authority or another Commonwealth employee for damages for that non-economic loss.
I also understand that should I elect to institute an action or proceeding against the Commonwealth, a Commonwealth authority or another Commonwealth employee for damages for that non-economic loss, that I may not subsequently apply to GIO for any additional lump sum payments under section 24, 25 or 27 in respect of the injury.”[13]
Proceedings in the County Court
[13] T documents; T49 at 156
A. The Statement of Claim
Mr Saunders instituted proceedings No. C1-02-0003956 in the County Court at Melbourne (Common Law Action). As pleaded in the Statement of Claim lodged in that action, Mr Saunders alleged that, as a result of the incident on 16 June 1999, “he sustained severe injury and has suffered and will suffer loss and damage”. The injury Mr Saunders specified was:
“Injury to the low spine resulting in:
Disruption of pre-existing L4/S1 fusion requiring laminectomy and re-fusion with bone grafting and internal fixation on 10 March 2000;
Acute pain and disability;
Increased loss of spinal function;
Referred pain and weakness to the left lower limb with impaired sensation;
Damage to the L5/S1 nerve roots;
Damage to the discs and associated with ligamentous structures;
Foot drop;
Disturbed sleep;
Psychological reaction;
Sexual dysfunction, sensory loss and reduced libido.”[14]
[14] Statement of Agreed Facts lodged in the Tribunal on 22 May 2012 at [4.10] to [4.11.1]
B.The Release
Mr Saunders and Telstra reached an agreement in respect of the Common Law Action and signed a Release dated 21 April 2004 (Release). That Release begins with a recital stating:
“1. The Releasor allegedly suffered damage on 16 June 1999 (hereinafter called ‘the accident’).
2.It is alleged that the accident was caused by the negligence and/or breach of duty at common law and/or pursuant to Statute (hereinafter called ‘the allegations’) of Telstra Corporation Ltd its servants or agents … (hereinafter called ‘the Defendant’ …).
3.The allegations are expressly denied by the Defendant.
4.Pursuant to s 45 of the Safety, Rehabilitation and Compensation Act 1988 (hereinafter called ‘the SRC Act’) the Releasor has irrevocably elected (hereinafter called ‘the election’) to pursue a claim for general damages only (hereinafter called ‘the action’) in respect of the accident.
5.The action has been commenced in the County Court at Melbourne No. CI-02-0003956 by the Releasor against the Defendant.
6.It has been agreed between the Releasor and the Defendant whereby the Defendant promises to pay to the Releasor the sum of $97,500.00 inclusive of legal costs (hereinafter called ‘the settlement sum’) for and in full satisfaction of all non economic and non pecuniary loss damages suffered and incurred by the Releasor arising from or in any way connected with the said accident and upon payment of the settlement sum the said action and all further proceedings therein shall be wholly stayed and discontinued.”[15]
[15] T documents; T66A at 202A
The Release went on to state:
“NOW THIS RELEASE WITNESSETH that in consideration of the settlement sum agreed to be paid by the Defendant to KCI Lawyers, the Releasor’s Solicitors, the Releasor, his heirs and assigns hereby releases and discharges the Defendant to the extent permitted at law from all claims, demands, actions, suits and proceedings whatsoever which the Releasor, his heirs and assigns, now have or at any time hereafter may have or but for the execution of this Release could or might have had against the Defendant for or in respect of the said accident or for or in respect of any matter or thing relating thereto.
AND IT IS HEREBY FURTHER ACKNOWLEDGED that the Releasor has no entitlement to compensation for permanent impairment in respect of the accident pursuant to Sections 24 to 27 inclusive of the SRC Act by reason of the election.
AND IT IS FURTHER ACKNOWLEDGED that payment of the settlement sum is in respect of an action for damages pursuant to s 45 of the SRC Act being for non-economic loss allegedly suffered by the Releasor in and subsequent to the accident.
…”[16]
[16] T documents; T66A at 202A-202B
Claims for compensation in respect of back condition
In a decision dated 16 March 2011, Telstra accepted liability for medical treatment, being Voltaren, in respect of Mr Saunders’ back condition being acute musculoligamentous strain of the lower back.[17] It did so under s 16 of the SRC Act. On the same day, it rejected liability for a claim made under s 29 in respect of gardening maintenance.[18]
[17] T documents; T107 at 367-370
[18] T documents; T108 at 371-374
A year later, on 6 March 2012, Mr Saunders claimed compensation for an L4/5 laminectomy and spinal fusion with internal fixation.[19]
[19] T documents; T122 at 417-419
Claim for compensation with respect to adjustment disorder with depressed mood
On 8 April 2011, Mr Saunders submitted a claim to Telstra for compensation for a psychiatric condition secondary to his accepted physical injuries.[20] Telstra accepted liability for “adjustment disorder with depressed mood” (accepted psychological condition) under s 14 of the SRC Act.[21]
[20] T documents; T109 at 375-384
[21] T documents; T121 at 412-416
On receiving notice of Telstra’s determination, Mr Saunders’ solicitors wrote to Telstra on 8 March 2012 referring to its:
“… determination that Telstra is liable to pay compensation to our client in respect of an ‘adjustment disorder with depressed mood.’
Accordingly, we request that a permanent impairment assessment be arranged with respect to the chronic nature of our client’s condition as described by Dr. Majoor in her report dated 22 February 2012 pursuant to s 24 of the Safety, Rehabilitation and Compensation Act 1988.”[22]
[22] T documents; T123 at 420
Although the reference in the letter is to Mr Saunders’ accepted psychological condition, the parties have agreed that he sought the permanent impairment assessment in respect of an aggravation of acute musculoligamentous lower back strain/adjustment disorder with depressed mood (permanent impairment claim). Their agreement is consistent with Mr Saunders’ description of his condition in the Non-Economic Loss Questionnaire he signed on 3 May 2012.[23]
[23] T documents; T133 at 442
On 7 May 2012, Telstra denied liability to pay compensation under ss 24 and 27 of the SRC Act.[24] It affirmed its decision on 9 June 2012.[25]
[24] T documents; T132 at 438-440
[25] T documents; T135 at 453-458
THE SUBMISSIONS
In outline, Mr Richards submitted on behalf of Mr Saunders that the SRC Act is an injury-based scheme. He relied on the cases of Canute v Comcare[26] and Australian Postal Corporation v Sinnaiah.[27] The election that Mr Saunders made under s 45 related to his back condition. That was the only injury in respect of which he had lodged a claim for compensation at the time. Therefore, he was entitled to claim compensation under ss 24, 25 and 27 of the SRC Act in respect of his psychological condition as it was a separate injury and the election he made did not relate to it.
[26] [2006] HCA 47; (2006) 226 CLR 535; 229 ALR 445; 80 ALJR 1578; 91 ALD 552; Gummow ACJ, Kirby, Callinan, Heydon and Crennan JJ
[27] [2013] FCAFC 98; (2013) 213 FCR 449; 136 ALD 536; Cowdroy, Buchanan and Katzmann JJ
On behalf of Telstra, Mr Wallace submitted that, as Mr Saunders has made an election under s 45 in respect of his back condition, compensation is not payable under ss 24, 25 or 27 in respect of the injury. Mr Wallace set out the particulars of the Statement of Claim lodged by Mr Saunders in the County Court and pointed in particular to his reference to “psychological reaction” as one of the results of his back condition. An action under the general law for damages in respect of an accident or incident resolves all disputes regarding liability “once and for all”. He referred to authority supporting his submission and to which I will return. As Mr Saunders had recovered damages in such an action, he could not now recover damages under ss 24, 25 or 27.
After reserving my decision, I asked both parties whether the Release entered by both Mr Saunders and Telstra could be regarded as an election under s 45 in respect of his psychological condition. Responses were received from their solicitors. On behalf of Mr Saunders, it was emphasised that s 45 relates only to a particular injury and that, as no claim had been made at the date of the Release in respect of the psychological condition, it could not be read as an election in respect of that injury; only in respect of the back condition. On behalf of Telstra, it was submitted that Mr Saunders’ psychological condition had been particularised in his Statement of Claim in the County Court. The Release should be regarded as an election in respect of all injuries particularised in his claim.
In considering the issues, I have also considered s 48 but have not gone back a second time to ask the parties for further submissions. Instead, I have relied on the principles stated by the Full Court of the Federal Court in Grant v Repatriation Commission[28] when it said:
“ An inquisitorial review conducted by the AAT, as with the Refugee Review Tribunal, is one in which the tribunal is required to determine the substantive issues raised by the material and evidence advanced before it and, in doing so, it is obliged not to limit its determination to the ‘case’ articulated by an applicant if the evidence and material which it accepts, or does not reject, raises a case on a basis not articulated by the applicant: see Sellamuthu v Minister for Immigration and Multicultural Affairs [1999] FCA 247 at [23] and Satheeskumar v Minister for Immigration and Multicultural Affairs [1999] FCA 1285 at [15]).”[29]
[28] [1999] FCA 1629; (1999) 57 ALD 1 Merkel, Goldberg and Weinberg JJ
[29] [1999] FCA 1629; (1999) 57 ALD 1 at [18]; 6
CONSIDERATION
General scheme of compensation
In Attachment A, I have set out the provisions that establish the broad framework of the scheme of compensation established under the SRC Act. Stating it at its simplest and putting to one side the entitlements of the dependants of a deceased employee, the scheme provides for compensation to be paid to an employee in respect of certain injuries to an employee. The scheme also provides for compensation in respect of certain losses of, or damage to, property used by an employee when that employee has an accident arising out of, or in the course of, employment but does not suffer an injury. It does so within certain parameters both as to what it is that will be compensated and the monetary amounts of compensation. It does not permit an employee to be both remunerated for a period of time and compensated in respect of an injury for the same period of time. I will outline these limits by reference to some of the provisions relating to compensation payable in respect of an injury.
Section 5A of the SRC Act defines the “injury” in respect of which compensation is payable. That means that it must either be a disease as defined in s 5B or an injury, other than a disease, that is a physical or mental injury arising out of, or in the course of the employee’s employment. By their terms, the definitions of “injury” and “disease” both exclude certain injuries that would otherwise come within their terms.[30] Comcare’s, and so Telstra’s, liability to pay compensation under the SRC Act is limited to particular categories or types of compensation and the amount of compensation of each type is determined according to the relevant provisions. Subject to certain conditions, for example, s 16 provides for compensation in respect of medical expenses if an employee obtains medical treatment in relation to the injury. Section 29 provides that, in certain circumstances, Comcare is liable to pay for household services and attendant care services up to prescribed maxima.
[30] See [75]-[78] and [79] below
Two other examples of the categories of compensation provided for under the SRC Act are those relating to any incapacity for work or impairment that an employee suffers as a result of an injury. Division 3 of Part II of the SRC Act sets out those provisions specifying the amount of compensation that Comcare is liable to pay an employee who is incapacitated as a result of an injury. Division 4 of Part II specifies Comcare’s liability to pay compensation for an injury resulting in an impairment. In the case of both incapacity and impairment claims, Parliament has set an upper limit on the amount of compensation that may be paid to an employee.
The scheme of the SRC Act does not permit an employee to “double dip”. An employee cannot, for example, receive both payment of salary from the Commonwealth or a licensed corporation and payment of compensation for incapacity in respect of the same day. Section 33 ensures that, if compensation is paid under ss 19, 20, 21, 21A, 22 or 31 in relation to a particular day to an employee and salary has either been paid or is payable by the Commonwealth or a licensed corporation, the amount of compensation payable in respect of that day is reduced by the amount paid or payable to the employee. That section complements s 23A requiring Comcare to repay to the Commonwealth the amount of salary it has previously paid to an employee who is later determined to be entitled to compensation.
The SRC Act draws a clear line between the injury on the one hand and any incapacity or impairment suffered as a result of that injury on the other. I have set out the definitions of each at [75], [81] and [84] below. Each has a clear and distinct meaning and each is distinct from an “accident” that might give rise to an injury.[31] This was touched upon by the High Court in Canute v Comcare:[32]
“ At this juncture, three things may be observed about the concept of ‘an injury’. First, the Act does not oblige Comcare to pay compensation in respect of an employee’s impairment; it is liable to pay compensation in respect of ‘the injury’. Secondly, the term ‘injury’ is not used in the Act in the sense of ‘workplace accident’. The definition of ‘injury’ is expressed in terms of the resultant effect of an incident or ailment upon the employee's body. Thirdly, the term ‘injury’ is not used in a global sense to describe the general condition of the employee following an incident. The Act refers disjunctively to ‘disease’ or ‘physical or mental’ injuries and, at least to that extent, it assumes that an employee may sustain more than one ‘injury’. The use in s 24(1) of the indefinite article in the expression ‘an injury’ reinforces that conclusion.
…
The definition of ‘impairment’ (and by extension the concept of ‘permanent impairment’) is expressed in terms of effects on bodily parts, systems and functions. This disaggregated sense of the word is reinforced by the use of the indefinite expression ‘a permanent impairment’ in s 24(1). Textually, the Act assumes that ‘an injury’ may result in more than one ‘impairment’.”[33]
[31] Reference is made to an “accident” in ss 15, 15A, 53, 54(4), 126 and 143. Section 15 refers to compensation for loss or damage to an employee’s property when that loss or damage results from an accident arising out of, or in the course of, his or her employment by the Commonwealth or a licensed corporation. Section 15A excludes claims of this sort by members of the Defence Force but they are dealt with under other legislation. Sections 53 and 54(4) require claims to be made in writing whether the claim relates to injury or to loss or damage arising out of an accident. Section 126 relates to notices and claims under the three predecessors to the SRC Act and s 143 relates to defence-related claims.
[32] [2006] HCA 47; (2006) 226 CLR 535; 229 ALR 445; 80 ALJR 1578; 91 ALD 552; Gummow A-CJ, Kirby, Callinan, Heydon and Crennan JJ
[33] [2006] HCA 47; (2006) 226 CLR 535; 229 ALR 445; 80 ALJR 1578; 91 ALD 552 at [10]-[11]; 540-541; 448-449; 1581; 555-556
Each injury, impairment and incapacity must be considered separately. That consideration requires the application of a test of causation. In the case of an “injury” that is not a disease, the test of causation to be applied is whether the injury is a “physical or mental injury arising out of, or in the course of, the employee’s employment”.[34] Section 6 specifies a number of circumstances in which the test of causation will be found to have been satisfied but the section does not provide an exhaustive list. In the case of “incapacity” and “impairment”, the test of causation is expressed in terms of “results from”. An employee “who is incapacitated as a result of an injury” (emphasis added) may look to s 19 and related provisions for compensation. Where “an injury to an employee results in a permanent impairment”, Comcare and licensed corporations are liable to pay compensation.
[34] Definition of “injury”: SRC Act; s 5A(1)
Whether an injury has resulted in an impairment or incapacity or whether impairment or incapacity has resulted from an injury are questions to be decided on the evidence. In Rothwell v Caverswall Stone Co Ltd,[35] du Parcq LJ gave some guidance on the principles to be applied in undertaking the task:
“In my opinion, the following propositions may be formulated upon the authorities as they stand: first an existing incapacity ‘results from’ the original injury if it follows, and is caused by, that injury, and may properly be held so to result even if some supervening cause has aggravated the effects of the original injury and prolonged the period of incapacity. If, however, the existing incapacity ought fairly to be attributed to a new cause which has intervened and ought no longer to be attributed to the original injury, it may properly be held to result from the new cause and not from the original injury, even though, but for the original injury, there would have been no incapacity. …”[36]
[35] [1944] 2 All ER 350; Luxmoore and du Parcq LJJ; Scott LJ dissenting
[36] [1944] 2 All ER 350 at 365
Other principles that are relevant in undertaking this task are:
(1)“… [T]here is no foundation in the Act for any such distinction between ‘an injury’ and a consequential or secondary injury. Neither of these qualifiers finds any expression in the Act. The Act speaks exclusively in terms of ‘an injury’.”[37]
(2)“… In referring to increases in the degree of impairment, s 25(4) does not include a separate ‘injury’ resulting in a separate permanent impairment which must be individually assessed. …
…
… The task of determining for the purposes of s 25(4) whether there has been ‘a subsequent increase in the degree of impairment’ necessitates reference to the Guide, by reason of s 24(5). But, it is to be recalled, the inquiry mandated by that sub-section is as to the degree of permanent impairment ‘resulting from an injury’. To treat as going to that inquiry something which independently satisfies the statutory definition of ‘an injury’ tends to conflate into one all injuries suffered after one workplace incident. The flow-on effect in terms of s 24 thereby distorts the concept of ‘injury’ so as to assume the sense of the totality of the effects of a workplace accident, contrary to the terms of the definition.”[38]
[37] [2006] HCA 47; (2006) 226 CLR 535; 229 ALR 445; 80 ALJR 1578; 91 ALD 552 at [34]; 547;454; 1585; 561
[38] [2006] HCA 47; (2006) 226 CLR 535; 229 ALR 445; 80 ALJR 1578; 91 ALD 552 at [36]-[38]; 548; 545-455; 1585-1586; 562-563
In imposing liability upon Comcare to pay compensation for an injury resulting in a permanent impairment, s 24(1) states that it is “… liable to pay compensation to the employee in respect of the injury”. The maximum amount of compensation payable to any employee is the amount set out in s 24(9) and indexed under s 13. Comcare’s liability in a particular case is determined by reference to the degree of the employee’s permanent impairment, expressed as a percentage, resulting from the injury.[39]
[39] SRC Act; ss 24(4) and (5)
The effect of the provisions is that, although liability is expressed in terms of being “in respect of the injury”, the amount of that compensation is determined by reference to the degree of permanent impairment i.e. the degree of “… the loss, the loss of the use, or the damage or malfunction, of any part of the body or any bodily system or function or part of such system or function”[40] that was “… likely to continue indefinitely.”[41] No reference is made in that definition of “permanent impairment” to non-economic loss; only to loss, damage or malfunction of parts of the body or of its system or function. Reference to compensation for non-economic loss is made in s 27. The amount of compensation payable is assessed by reference to a formula. I have set it out at [90] in Attachment A below. It is a two part formula in which half of the amount of compensation ultimately determined depends on the employee’s degree of permanent impairment assessed under s 24 and half depends on the degree of the employee’s non-economic loss determined under the Guide.
[40] SRC Act; s 4(1), definition of “impairment”
[41] SRC Act; s 4(1), definition of “permanent”
What is meant by “non-economic loss” is found in s 4(1) where it is defined to mean “… loss or damage of a non-economic kind suffered by the employee (including pain and suffering, a loss of expectation of life or a loss of the amenities or enjoyment of life) as a result of that injury or impairment and of which the employee is aware”.[42]
[42] SRC Act; s 4(1)
The definition does not explain how the degree of non-economic loss suffered by an employee is to be assessed. That is left to s 28(1)(b). It provides that Comcare may prepare a Guide setting out, among others, “criteria by reference to which the degree of non-economic loss suffered by an employee as a result of an injury or impairment shall be determined”. At the time that Mr Saunders made his claim for permanent impairment in respect of his back condition, the criteria that Comcare has chosen to specify under Part B of the Guide come under four headings: pain and suffering; loss of amenities; other loss; and loss of expectation of life. Pain and suffering are treated as sub-groups and loss of amenities assessed under the headings of mobility, social relationships and recreation and leisure activities. I have set out the particular provisions at [93] in Attachment A below.
Each of the losses described in Part B of the Guide relating to non-economic loss is not a loss of a type that is reflected in Part A, which sets out the criteria relevant in determining the degree of an employee’s permanent impairment. Mobility might be thought to run counter to that pattern but it does not. Taking Table 9 as an example, it sets out criteria describing the level of impairment where an injury results in an impairment in an employee’s lower limb. Percentages are set on a scale beginning with 10% for being able to rise to a standing position and walking but having difficulty with grades and steps to 65% when the injury results in an employee’s being unable to stand or walk. Loss of mobility, coming under loss of amenities in the assessment of non-economic loss, is much more broadly based with its focus based on loss of mobility as a result of the relevant injury or impairment but not linked to a single type of injury.
With one exception action for damages not to lie against the Commonwealth
Like the scheme of compensation, the provision restricting proceedings for damages against the Commonwealth is linked to “an injury” or to “the loss of, or damage to, property used by an employee resulting from such an injury”.[43] An “injury” is an injury as defined in s 4(1) of the SRC Act but the “injury” to which specific reference is made in s 44(1)(a) is “… an injury in respect of which the Commonwealth, Commonwealth authority or licensed corporation would, but for this subsection, be liable … for damages”.[44] In view of the principles set out by the High Court in Canute and approved in Fellowes, I must identify each particular injury and consider the consequences that follow from s 44 and an election under s 45 in respect of each injury.
[43] I am not concerned in this case with the loss of, or damage to, property but I note that the words of s 44(1)(b) do not appear to marry with those used in s 15(1) to impose liability upon Comcare, and so upon a licensed corporation. In order to be liable under that provision, which I have set out at [94] below, an employee must satisfy two criteria. First, the employee must have an accident arising out of or in the course of his employment by the Commonwealth. Second, the accident does not cause injury to the employee but results in the loss of, or damage to, property used by the employee. It is clear that the loss or damage is linked to the accident and not to the injury. Despite that, s 44(1)(b) is couched in terms of the loss or damage resulting from an injury sustained by an employee and makes no link to an accident.
[44] SRC Act; s 44(1)
In identifying each particular injury, I must bear in mind that each must be an injury in respect of which the Commonwealth, Commonwealth authority or licensed corporation “would … be liable” for damages were it not for s 44 as qualified by s 45. It is not an injury in respect of which damages would be payable. In the context of legislation such as the SRC Act, the word “liable” carries with it the notion of that for which a person is “legally bound or responsible”.[45] The word “payable” conveys “something that can or must be paid”.[46] The two are different although whether damages are payable must necessarily be preceded by a conclusion in some form that there is a liability to pay those damages.
[45] Chambers 21st Century Dictionary, 1999, reprinted 2004, Chambers (Chambers)
[46] Chambers
The distinction between liability for damages in respect of an injury and whether compensation is payable in respect of an injury is important in analysing ss 44 and 45. Putting aside situations in which an employee dies and actions are brought by his or her dependants, the thrust of s 44 is that an injured employee’s entitlement to compensation is to be determined under the SRC Act and not under other legislation or at common law. It achieves that in this way. Subject only to one qualification, if the Commonwealth, a Commonwealth authority, a licensed corporation or other employee would, but for s 44(1), be liable for damages in respect of an injury sustained by an employee in the course of his or her employment, an action or other proceeding for damages does not lie against the Commonwealth and so on. That is the effect of s 44(1)(a). Section 44(1)(b) makes the same provision in relation to the loss of, or damage to, property used by an employee resulting from such an injury.
A.The exception: making an election to institute an action under the general law
The qualification that applies to both ss 44(1)(a) and (b) is found in s 45(1). That qualification arises when an employee makes an election to institute an action or proceeding against the Commonwealth but only comes into play if two criteria are satisfied. First, compensation must be “payable under section 24, 25 or 27 in respect of an injury” to an employee. In order for compensation to be payable under all or any of those sections, the employee must have first lodged a claim under s 54 for compensation on the basis that the injury has resulted in permanent impairment and a determination made that the Commonwealth is liable. Section 54(1) provides that:
“Compensation is not payable to a person under this Act unless a claim for compensation is made by or on behalf of the person under this section.”
The second criterion is that it must be the case that the Commonwealth, a Commonwealth authority or a licensed corporation would, but for s 44(1), be liable for damages for non-economic loss suffered by the employee “as a result of the injury” (emphasis added). That reference to “the” injury is a reference to the injury that has been the subject of the first criterion.
B. How an election is made
If those two criteria are satisfied, the employee may elect “to institute an action or proceeding against the Commonwealth … for damages for that non-economic loss” (emphasis added). The reference to “that” non-economic loss is a reference to the non-economic loss specified in the second of the criteria specified in s 45(1) i.e. to the “non-economic loss suffered by the employee as a result of the injury” (emphasis added). I have set out the definition of “non-economic loss” at [38] above. It is “… loss or damage of a non-economic kind suffered by the employee (including pain and suffering, a loss of expectation of life or a loss of the amenities or enjoyment of life) as a result of that injury or impairment and of which the employee is aware”.[47]
[47] SRC Act; s 4(1)
In Grogan v The Commonwealth,[48] McMurdo J as she then was decided in the Queensland District Court that an election under s 45 could be implied from the circumstances. The New South Wales Court of Appeal disagreed with her Honour in Commonwealth of Australia v Flaviano and Anor[49] saying:
“ An election is a choice of alternative rights or claims. It may be made expressly or implied from conduct; see Meagher, Gummow and Lehane, Equity Doctrine and Remedies, 3rd ed, at para 3915. While in some circumstances the institution of proceedings may be treated as an act of election, strictly speaking it is conduct from which an election may be inferred. Section 45 speaks of the employee electing in writing. I would infer that the employee is required so to express his or her election so that there can be no doubt about the matter. The requirements of the subsection are not met by conduct from which an election could be implied, such as the institution of proceedings to recover damages. That this is so finds support in the language of s45. Subsection (2) provides that when an election is made, subs (1) does not apply in relation to an action or other proceedings subsequently instituted by the employee against the Commonwealth (my emphasis). Subsection (4) speaks of any action or proceeding instituted as a result of an election (my emphasis). With the greatest respect to the opinion of her Honour Judge McMurdo in Grogan v The Commonwealth, I do not think Mr Flavianomade an election in writing to institute an action or proceeding within the meaning of s45 (1) by instituting the action or proceeding.”[50]
[48] Unreported; 5 June 1996
[49] [1996] NSWSC 451; (1996) 40 NSWLR 199; Meagher, Sheller and Beazley JJA
[50] [1996] NSWSC 451; (1996) 40 NSWLR 199 at 203-204 per Sheller JA with whom Meagher and Beazley JJA agreed In Brown v Comcare [2003] FCA 261; 147 FCR 290 at [18]; 294, Tamberlin J reached a similar conclusion saying “It is well settled that because the making of an election under s 45 involves the surrender of rights otherwise available under the Act, it is essential that there should be an unambiguous informed choice made in writing. … [T]he election required by s 45 is a provision going to the validity of the title to enforce the liability and not merely to the mode of enforcing it….”
C. Consequences of making an election
If the employee chooses to make an election, s 44(1) does not apply in relation to an action for damages subsequently instituted for non-economic loss “to which the election relates”. Compensation is not payable under ss 24, 25 or 27 after the date of election “in respect of the injury”.[51] It is clear that the injury that is the subject of consideration under s 44 is the same injury in respect of which the criteria must be met under s 45(1) and in respect of which an employee may make an election. That election does not relate to other injuries in respect of which an employee might not yet have made a claim for compensation or to injuries which might not have yet manifested themselves.
[51] SRC Act; s 45(2)(a) and (b)
What of injuries in respect of which an election cannot be made under s 45? They may be injuries for which a claim for compensation is yet to be made or which have not yet manifested themselves. Assuming they do not come within the particular, and in this case, irrelevant circumstances of ss 44(2) and (3), they remain subject to s 44(1). That means that an employee may not bring an action for damages against the Commonwealth in respect of those injuries.
Compensation not payable where damages recovered
Section 44(1) removes an employee’s right to institute an action or other proceeding for damages in respect of an injury in the circumstances it prescribes. Section 48 complements s 44(1) and its underlying intention i.e. that an employee who suffers an injury for which compensation is payable under the SRC Act will be compensated under that legislation only and not under the general law or another enactment. Among others, that section sets out what happens in the situation in which an employee recovers damages in respect of an injury in respect of which compensation is payable under the SRC Act. That is provided for in s 48(1)(a). I have set it and other relevant provisions of s 48 out at [100] – [103] below. There is no suggestion in s 48(1) that the remaining provisions of s 48 apply only when an employee recovers damages in an action instituted following an election under s 45. The remaining provisions of s 48 show that it is not so limited.
Sections 48(1), (3) and (4A) sets out the consequences of an employee’s recovering damages at common law in respect of an injury in respect of which compensation is payable under the SRC Act. If compensation has actually been paid to the employee, he or she must generally repay that compensation to Comcare or at least so much of it as can be repaid from the amount received by way of damages.[52] I say that an employee must “generally” repay compensation that has been paid because the employee does not have to repay compensation if the damages were recovered in an “action for non-economic loss” or by way of settlement of such an action.[53] I have set out the definition of the expression “action for non-economic loss” at [102] below. The crucial point about that definition in the context of this case is that it is an action that follows an election made by the employee under s 45(1). It follows that the exception set out in s 48(4A) does not apply to exclude from the recovery provisions of s 48(3) damages recovered otherwise than in an action for non-economic loss. That means that damages that are recovered under an action that has been instituted outside the scope of an election made under s 45(1) are not excluded from the recovery provisions in s 48(3).
[52] SRC Act; s 48(3)
[53] SRC Act; s 48(4A)
Section 48(4) of the SRC Act applies to future entitlement to compensation under the SRC Act when an employee has recovered damages in respect of, among others, an injury in respect of which compensation is payable under the SRC Act. Again, the circumstances described in s 48(1) must exist. In a case such as this, an employee must have recovered damages in respect of an injury being an injury in respect of which compensation is payable under the SRC Act. With one exception, having received those damages, compensation is no longer payable in respect of the injury after the date on which the damages were recovered. The one exception arises if the damages were recovered in one or other of the four ways set out in s 48(5). Of relevance in this case, is the way set out in s 48(5)(c). That set out in s 48(5)(c) arises if the damages are recovered as a result of an action for non-economic loss which is an action that follows an election made under s 45.
It follows that, if damages have been recovered in respect of an injury to the employee being an injury in respect of which compensation is payable without taking action for damages for non-economic loss following an election under s 45 in respect of that injury, compensation would not be payable under the SRC Act in respect of the injury after the date on which the damages were recovered. Any compensation that has been paid to the employee under the SRC Act must be repaid in the terms prescribed by s 48(3). That is to be contrasted with the situation in which an employee has first claimed compensation in respect of an injury of a sort for which the Commonwealth would be liable under the SRC Act and then takes action for non-economic loss following an election to do so under s 45. If the employee ultimately recovers damages, he or she is not obliged to repay compensation under s 48(3) and his or her entitlement to future compensation is not affected by s 48(4) although it is affected by s 45(2) i.e. compensation is not payable after the date of the election under ss 24, 25 or 27 in respect of the injury.
As with determination of liability, the election provisions and those of s 48 are also framed in terms that require them to be considered on an injury by injury basis. That means that an employee who suffers more than one injury in an accident may make different choices in respect of each of those injuries leading to different outcomes. What those outcomes are depends on an analysis of the injury in respect of which damages have been recovered, the circumstances in which those damages have been recovered and an analysis of the injury in respect of which compensation is payable.
Damages claim at common law
In Attachment B, I have summarised the parameters within which a person may institute proceedings for damages at common law in relation to a personal injury arising from an accident or incident. As Mr Wallace submitted, the approach of the courts is to permit only one action to be instituted for damages for personal injury arising from an accident or incident. Proceedings for damages for loss of, or damage to, property may be brought separately but proceedings for damages for personal injuries may not be divided in that way. That is so even though an injury may not show itself until many years later. Damages awarded are not limited to damages for non-economic loss of the sort referred to in the SRC Act.
It is clear from the provisions of ss 44 and 45 that the SRC Act modifies the operation of the common law in so far as they limit the damages an employee may seek in a common law action and limit it to the occasions on which an employee elects to exercise those common law rights rather than receive payment under ss 24, 25 or 27.
Parliament has provided for those situations in which the limitations in the SRC Act are not drawn to the attention of the State courts in which proceedings for damages are instituted. It has done so in s 48 and I have considered those provisions in the previous section of these reasons.
Application of principles in this case
The election made by Mr Saunders on 16 August 2002 was an election “to institute an action or proceeding against the Commonwealth, a Commonwealth authority or another Commonwealth employee for damages for any non-economic loss suffered as a result of the injury” (emphasis added). At the time, the injury in relation to which he had claimed compensation was his back condition but the election he signed is not framed in terms of any particular injury. As evidenced by the Statement of Claim he lodged in the proceedings that he instituted in the County Court, Mr Saunders alleged that, as a result of the incident on 16 June 1999, “he sustained severe injury and has suffered and will suffer loss and damage”. The injury that he specified was an “Injury to the low spine” resulting in physical outcome and psychological reaction he went on to specify.
At [16]-[17] above, I have set out the terms of the Release that Mr Saunders and Telstra agreed upon. It was not limited to loss or damage arising out of Mr Saunders’ back condition or to damage arising out of his psychological condition or any other condition. Instead, it was framed in terms of “the accident” and damages in respect of that accident. The damages agreed upon were for, and in full satisfaction of all non-economic and non-pecuniary loss and damages suffered and incurred by Mr Saunders arising from or in any way connected with the accident on 16 June 1999. On the basis of that Release and in light of the general law that applies in such cases and that I have set out at Attachment B, I find that they settled the matter on a “once and for all” basis. That meant that, consistent with the statement in the Release, Mr Saunders released and discharged Telstra from all claims he then had, or might have had against it but for the execution of the Release, for or in respect of the accident or for or in respect of any matter or thing related to that accident. That extended to past injuries such as his back condition and future injuries that might reveal themselves or be claimed as separate injuries. His psychological condition comes within that latter description.
Therefore, I find that the damages were recovered in respect of an injury in respect of which compensation is payable under the SRC Act. That brings Mr Saunders within the scope of s 48(1)(a) of the SRC Act and so subject to the consequences that are set out in the remaining provisions of s 48. There is no suggestion in s 48(1)(a) that the damages must have been recovered in an action following an election under s 45. There is no suggestion that a claim must first have been made in respect of the particular injury and a determination of liability made before the damages are recovered. Section 48(1)(a) is a provision that applies regardless of the circumstances in which, and time at which, an action is brought provided an employee has recovered “… damages in respect of an injury to the employee … in respect of which compensation is payable under this Act.”
In so far as the damages recovered by Mr Saunders contained a component for damages for non-economic loss resulting from his back condition, it was consistent with the election he made under s 45 on 18 July 2002. As a result of his election, compensation was not payable to him under ss 24, 25 or 27 in respect of that injury. Other than under ss 24, 25 and 27, his entitlement to compensation for his back condition under the SRC Act continued and was not affected by s 48(4) for it did not apply as he had, consistently with s 48(5)(c), obtained those damages following an election under s 45 and so as a result of an action for non-economic loss.
The Release also discharged Telstra from liability for Mr Saunders’ psychological condition for which he now claims compensation under the SRC Act. It does so not because Mr Saunders specified “psychological reaction” in his Statement of Claim but because the proceedings were, consistent with the general law under which they were instituted, settled on a “once and for all basis” in relation to all loss and damage arising from the accident.
In so far as Mr Saunders’ psychological condition is concerned, however, his action in the County Court could not be regarded as an “action for non-economic loss” for it was not action following an election under s 45. As Mr Richards submitted, the SRC Act applies to each injury so that an election under s 45 must be made in relation to a specific injury. On its face, Mr Saunders’ election was not made in relation to his psychological condition and nor could it be for, at the time he made it, compensation was not payable under ss 24, 25 or 27. It could not be payable for he had not made a claim for it and Telstra had not determined its liability. Those matters are sufficient to satisfy me that no election could be made in relation to Mr Saunders’ psychological condition. Putting those matters to one side and reading the Release in light of the Court of Appeal’s judgment in Flaviano, I am not satisfied that it should be read as an election under s 45. While it is in writing, it is not directed to making an election to institute an action so much as dealing with the consequences of an action that has already been instituted as a result of an election under s 45. Reference is made to the election in [4] of the Release.
Therefore, Mr Saunders finds himself in a situation caught by s 48(4) and the consequences of that provision not alleviated by s 48(5)(c). He has recovered damages in respect of the psychological condition as a result of the County Court proceedings but has not done so following an election under s 45. He is not entitled to compensation in respect of his psychological condition under the SRC Act. In particular, he is not entitled to compensation under ss 24, 25 or 27. As his entitlement to compensation under those three provisions is the only issue raised by the decision under review, I confine my decision to them and do not make a more broadly based decision.
Decision
Therefore, for the reasons I have given, I affirm the reviewable decision of the respondent dated 9 June 2012 affirming an earlier decision dated 7 May 2012 determining that there was no liability under ss 24 and 27 of the SRC Act in respect of a claim for “Aggravation of acute musculo-ligamentous lower back strain/adjustment disorder with depressed mood” suffered on 16 June 1999.
Footnote
I understand that this result may appear harsh but the fact that such an outcome may cause dismay was recognised when the SRC Act was introduced in the Parliament as the Commonwealth Employees’ Rehabilitation and Compensation Bill 1988. Apart from an amendment to s 48 to include s 48(4A) to ensure that an employee did not have to repay amounts of compensation under s 48(3) when damages were recovered as a result of an action for non-economic loss, ss 44 to 48 have remained in the form in which they appeared in the Bill. In his Second Reading Speech, the Hon Brian Howe, the then Minister for Social Security directly raised and addressed what was seen to be the most controversial part of the new scheme i.e. the diminution of employees’ common law rights. The Minister said:
“ Perhaps the most controversial aspect of the new legislation is that common law actions against the Commonwealth will be replaced by the comprehensive benefits which I have described. It is clear to this Government that the common law negligence action which bases its entitlement on proof of fault is a costly, inefficient and inappropriate mechanism for compensating injured workers. Delays in settling these actions act as a positive disincentive for employees to return to work and encourage them to maximise the extent and duration of their injuries. The provision of an adequate level of weekly income, substantially increased lump sum payments on death or impairment, payments for additional expenses for medical costs, aids and appliances and household help, combined with a commitment to rehabilitation and the return to suitable employment, make redundant any need for redress to the courts. Accordingly, it will no longer be possible for an employee to sue the Commonwealth or a fellow employee. Actions against third parties will also be discouraged. Employees or their dependants who sue third parties will not be entitled to receive further benefits under the scheme and will be required to pay back any amount of compensation they have received. The Commission will pursue third parties if necessary by taking over an action in place of the employee.”[54]
[54] Hansard, House of Representatives, 27 April 1988 at 2194. The reference to the “Commission” is a reference to the Commission for the Safety, Rehabilitation and Compensation of Commonwealth Employees created under the legislation but known as Comcare since the legislation was renamed as the SRC Act.
These principles were not questioned when the High Court later considered how permanent impairment arising from two separate injuries but each alone leading to the same impairment (difficulty with grades and steps as distinct from distances) should be assessed under the provisions of the Guide. It did so in Fellowes v Military Rehabilitation and Compensation Commission[121] (Fellowes) when the majority decided that:
“ The text of the Guide is therefore to be construed as providing that the whole person impairment to which it directs attention requires comparison with the ‘functional [capacities] of a normal healthy person’ rather than the capacities of the particular applicant as they existed immediately before the injury in question. The reference to two injuries causing the ‘same impairment’ requires attention to the particular identified effect on bodily parts, systems or functions that is said to have resulted from the two injuries. …
It is, nonetheless, important to make the further point that, on its proper construction, s 24(5) of the SRC Act directs attention to the degree of impairment that results from the injury resulting in the impairment identified in s 24(1). The two sub-sections of s 24 are not to be read as requiring or permitting a different identification of ‘impairment’ in their respective applications. In the application of both sub-sections the focus must fall upon ‘the loss, the loss of the use, or the damage or malfunction’ (s 4(1), ‘impairment’) of a part of the body or a bodily system or function or part of a bodily system or function. And in the present case there were separate losses of use of, or damage to, two parts of the body.”[122]
[121] [2009] HCA 38; (2009) 240 CLR 28; 259 ALR 416; 83 ALJR 1113; 111 ALD 1; Hayne, Heydon, Crennan and Bell JJ: Kiefel J dissenting
[122] [2009] HCA 38; (2009) 240 CLR 28; 259 ALR 416; 83 ALJR 1113; 111 ALD 1 at [26]-[27]; 38; 423; 119; 9
The principles identified by the High Court in both Canute and Fellowes are also relevant in applying the criterion in s 45(1)(a) of the SRC Act. Compensation must be payable under ss 24, 25 or 27 in respect of a permanent impairment in respect of an injury. There may be more than one injury and more than one impairment in respect of an injury. Therefore, it is important to identify what is an impairment and what is an injury. If there is an injury and a claim under those provisions, a determination must be made as to whether it has resulted in a permanent impairment. If there is more than one injury, a determination will be made in respect of each. An employee may make an election to institute an action for damages at any time before an amount of compensation is paid under ss 24, 25 or 27 but it will be an election made in respect of each injury.
I certify that the one hundred and twenty nine preceding paragraphs are a true copy of the reasons for the decision herein of
Deputy President S A Forgie,
Signed: ……[sgd]...........................................................
Associate
Date of Hearing 4 September 2014
Date of Last Submission 11 December 2014
Date of Decision 12 January 2015
Counsel for the Applicant Mr David Richards
Solicitor for the Applicant Ms Elinah Ioannides
KCI Lawyers
Counsel for the Respondent Mr John Wallace
Solicitor for the Respondent Ms Danielle Dight
Clarke Legal
0
8
6