Ulrich and Military Rehabilitation and Compensation Commission
[2004] AATA 885
•23 August 2004
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2004] AATA 885
ADMINISTRATIVE APPEALS TRIBUNAL )
) No N2004/484
GENERAL ADMINISTRATIVE DIVISION ) Re STUART ULRICH Applicant
And
MILITARY REHABILITATION AND COMPENSATION COMMISSION
Respondent
DECISION
Tribunal Mrs Josephine Kelly, Senior Member Date23 August 2004
PlaceSydney
Decision The decision under review is affirmed
[sgd] Senior Member
CATCHWORDS
WORKERS’ COMPENSATION – permanent impairment – liability initially accepted for 68% whole person impairment – liability subsequently extended for ulnar nerve lesion affecting 4th and 5th fingers - impairment not increased by 10% or more – liability for further compensation payments denied under s25(4) SRC Act – impairments to fingers not excluded from operation of 25(4) by 24(8) – decision affirmed
LEGISLATION
Safety, Rehabilitation and Compensation Act 1988 sections 24, 25, 27
CASELAW
Comcare v Mihajlovic (2000) 170 ALR 420
Re Laven and Comcare (2003) 76 ALD 253
Canute and Comcare [2004] AATA 627
Simpson and Comcare [2003] AATA 1168
Bennett and Comcare [2003] AATA 929
Page v Telstra Corporation Ltd [2004] FCAFC 80 (30 March 2004)
REASONS FOR DECISION
23 August 2004 Mrs Josephine Kelly, Senior Member BACKGROUND
1. The facts in this application are not in dispute. The Applicant, Mr Stuart Ulrich, suffered injuries on 2 August 1999 when he was a Corporal in the Australian Regular Army. He was an adventure training leader participating in an exercise in the Bungonia State Reserve. He fell approximately 80 feet over a cliff when a safety line failed while he was abseiling.
2. On 6 October 1999 the Respondent (“the Commission”) accepted liability to pay Mr Ulrich compensation under the Safety, Rehabilitation and Compensation Act 1988 (“the Act”) for various conditions resulting from the fall (T7 in Exhibit 1).
3. On 21 September 2000, the Commission determined that Mr Ulrich had suffered a whole person permanent impairment of 68% as a result of the conditions for which liability had been accepted (T18 in Exhibit 1) (“the 2000 determination”).
4. Section 24 of the Act provides for compensation for permanent impairment. The assessment of permanent impairment is carried out by applying the criteria in the various tables in the Guide to the Assessment of the Degree of Permanent Impairment (“the Guide”). The Guide is prepared pursuant to s 28 of the Act. Where the person has impairments to discrete parts of the body, as does Mr Ulrich, the Combined Values Chart (Table 14.1) applies to calculate the degree of whole person permanent impairment.
5. On 6 June 2002 liability was extended to include depression on and from 24 April 2002 (T26 in Exhibit 1).
6. On 26 November 2002 Mr Ulrich sought a reassessment of his injuries (T28 in Exhibit 1).
7. Doctor P.L. Harvey-Sutton saw Mr Ulrich on 21 January 2002 for assessment of his permanent impairment. She provided a report dated 30 January 2002 (T31 in Exhibit 1).
8. On 18 March 2003, liability was extended to include ulnar nerve lesion affecting the 4th and 5th fingers of Mr Ulrich’s left hand (T32 in Exhibit 1).
9. On 16 January 2004 the Commission determined that no further payment could be made under sections 24 and 27 of the Act as Mr Ulrich’s whole person impairment had not increased by 10% or more (T42 in Exhibit 1) as required by s 25(4) of the Act.
10. Mr Ulrich requested a reconsideration of that determination on 5 February 2004 (T43 and T44 in Exhibit 1). He said “I am claiming for reconsideration of compensation related to fingers on the left hand” (T43 in Exhibit 1). The fingers involved were the third, fourth and fifth fingers. The third finger had been assessed in 2000, but the fourth and fifth fingers had not as liability was not accepted for injuries to those fingers until 6 June 2002.
11. The reviewable decision was made on 10 March 2004. It affirmed the determination of 16 January 2004.
THE ISSUES
12. The issue in this case is whether s 25(4) of the Act applies to the subject assessment so that the increase in the degree of impairment of the whole person must be 10% or more, that is, whether Mr Ulrich’s whole person permanent impairment must be at least 78% compared to the 2000 determination of 68%.
13. It is not necessary for the purposes of this decision to detail the assessment of the degree of impairment in either the reviewable decision or in the determination of 16 January 2004. However, the reviewable decision took into account matters in a way more beneficial to Mr Ulrich than was the case in the determination it reviewed. The result was that the 16 January 2004 determination found a permanent impairment of 73% and the reviewable decision found a permanent impairment of 75%. In either case, the increase in the degree of permanent impairment is not 10% or more than the 2000 assessment of 68%.
THE LEGISLATION
14. Sections 24 and 25 of the SRC Act provide:
“Section 24 - Compensation for injuries resulting in permanent impairment
(1) Where an injury to an employee results in a permanent impairment, Comcare is liable to pay compensation to the employee in respect of the injury.
(2) For the purpose of determining whether an impairment is permanent, Comcare shall have regard to:
(a) the duration of the impairment;
(b) the likelihood of improvement in the employee's condition;
(c) whether the employee has undertaken all reasonable rehabilitative treatment for the impairment; and
(d) any other relevant matters.
(3) Subject to this section, the amount of compensation payable to the employee is such amount, as is assessed by Comcare under subsection (4), being an amount not exceeding the maximum amount at the date of the assessment.
(4) The amount assessed by Comcare shall be an amount that is the same percentage of the maximum amount as the percentage determined by Comcare under subsection (5).
(5) Comcare shall determine the degree of permanent impairment of the employee resulting from an injury under the provisions of the approved Guide.
(6) The degree of permanent impairment shall be expressed as a percentage.
(7) Subject to section 25, if:
(a) the employee has a permanent impairment other than a hearing loss; and
(b) Comcare determines that the degree of permanent impairment is less than 10%;
an amount of compensation is not payable to the employee under this section.
(7A) Subject to section 25, if:
(a) the employee has a permanent impairment that is a hearing loss; and
(b) Comcare determines that the binaural hearing loss suffered by the employee is less than 5%;
an amount of compensation is not payable to the employee under this section.
(8) Subsection (7) does not apply to any one or more of the following:
(a) the impairment constituted by the loss, or the loss of the use, of a finger;
(b) the impairment constituted by the loss, or the loss of the use, of a toe;
(c) the impairment constituted by the loss of the sense of taste;
(d) the impairment constituted by the loss of the sense of smell.
(9) For the purposes of this section, the maximum amount is $80,000.
Section 25 - Interim payment of compensation
(1) Where Comcare:
(a) makes a determination that an employee is suffering from a permanent impairment as a result of an injury; and
(b) is satisfied that the degree of the impairment is equal to or more than 10% but has not made a final determination of the degree of impairment;
Comcare shall, on the written request of the employee made at any time before the final determination is made, make an interim determination of the degree of permanent impairment under section 24 and assess an amount of compensation payable to the employee.
(2) The amount assessed by Comcare under subsection (1) shall be an amount that is the same percentage of the maximum amount specified in subsection 24(9) as the percentage determined by Comcare under subsection (1) to be the degree of permanent impairment of the employee.
(3) Where, after an amount of compensation has been paid to an employee following the making of an interim determination, Comcare makes a final determination of the degree of permanent impairment of the employee, there is payable to the employee an amount equal to the difference (if any) between the amount payable under section 24 on the making of the final determination and the amount paid to the employee under this section.
(4) Where Comcare has made a final assessment of the degree of permanent impairment of an employee (other than a hearing loss), no further amounts of compensation shall be payable to the employee in respect of a subsequent increase in the degree of impairment, unless the increase is 10% or more.
(5) If Comcare has made a final assessment of the degree of permanent impairment of an employee constituted by a hearing loss, no further amounts of compensation are payable to the employee in respect of a subsequent increase in the hearing loss, unless the subsequent increase in the degree of binaural hearing loss is 5% or more.
THE SUBMISSIONS
15. Mr Ulrich relied on s 24(8) of the Act. As I understand his argument it was that s 24(8) renders s 24(7) inapplicable and therefore he is entitled to compensation under s 24 and consequently s 27. He says the 10% limits in s 25(1) and s 25(4) do not apply. He said that if those limits did apply it would be unfair. For example, in relation to a finger, it would be unlikely that a finger would give rise to a 10% permanent impairment as required by s 25(1) and 25(4), so that it would be unlikely a person suffering such an impairment would ever have an entitlement under either of those provisions. He distinguished the authorities relied on by Mr Johnson (listed later) as they did not deal with a part of the body referred to in s 24(8).
16. The apparent unfairness in the legislative scheme in relation to s 25(4) in Mr Ulrich’s case is this. If the fourth and fifth fingers had been included in the one assessment with his other impairments, his whole person impairment would be 75%, assuming the same assessment was made as has now been made. It follows that he would have been entitled to compensation pursuant to s 24 and to compensation for non-economic loss pursuant to s 27 reflecting that finding. However, if s 25(4) applies to the current assessment, although he has the same degree of whole person impairment, he is entitled to no further compensation pursuant to s 24 and hence s 27, because he has not satisfied the 10% increase requirement.
17. Mr Ulrich relied upon the decision of the Full Court of the Federal Court in Page v Telstra Corporation Ltd [2004] FCAFC 80 (30 March 2004). In that case the Court considered the effect of s 24(8)(a) and found that partial loss of use of a finger was included within the scope of that exemption. That decision did not address the operation of s 25(4).
18. A further matter Mr Ulrich addressed and which was supported strongly by his father, Mr Ulrich senior, was what is referred to in the application to the Tribunal as “Fraudulent Misconduct”. In summary, Mr Ulrich senior and the Applicant complained about the Commission’s treatment of Mr Ulrich. As I explained to Mr Ulrich and his father during the hearing, the matters complained of are not relevant to my consideration of this application.
19. Mr Johnson for the Commission argued as follows. Section 24(8) has effect only in relation to the operation of s 24(7). That is, the threshold relevantly established by s 24(7) does not apply in relation to the impairments set out in 24(8) (a) to (d). Section 24(8) has no effect in relation to the operation of s 25(4) or s 25(1).
20. He relies on Justice Finn’s decision in Comcare v Mihajlovic (2000) 170 ALR 420, in particular paragraphs 20 to 26. In summary, he submitted that s 25(4) applies to determinations under s 24. Section 25(4) requires a subsequent 10% increase in the degree of permanent impairment of the employee before further amounts of compensation are payable where there has been a previous final assessment. He also referred to the cases of Re Laven and Comcare (2003) 76 ALD 253, Canute and Comcare [2004] AATA 627, Simpson and Comcare [2003] AATA 1168 and Bennett and Comcare [2003] AATA 929 which follow Mihajlovic.
21. An issue that was adverted to during discussion with Mr Ulrich was whether the 2000 assessment was an “interim decision” within the meaning of s 25(1) or a “final assessment” to which s 25(4) applied. If it was an interim decision, the degree of permanent impairment the subject of the reviewable decision (75%) could be argued to be the final decision. That is, the increased impairment from 68% to 75% would be recognised as compensable under s 24 and s 27.
22. In response to this question Mr Johnson relied on Re Laven (paragraphs 29 to 32). In that case, Deputy President R P Handley said that it is clear from the structure of Division 4 of Part II of the Act that s 24 determinations are final, whereas s 25(1) determinations are interim. If a determination is interim, no compensation for non-economic loss under s 27 would have been payable. Mr Johnson said that the 2000 determination (T18 in Exhibit 1) was clear on its face. It was a final assessment within the meaning of s 25(4).
23. I raised a further matter during argument. In s 25(4), what does the 10% refer to? Does it require an increment in the degree of permanent impairment of 10% or more (that is to 78% from 68%)? Or does it require an increase in impairment of 10% from the previous assessment, that is in this case from 68% to 68% + (68% x 10%) = 68% + 6.8% = 74.6%? In Mr Ulrich’s case, does the section require an impairment of 78% or 74.6%?
24. Mr Johnson relied on the decision of Mihajlovic and those that followed it (set out above in paragraph 20) to support the interpretation that an additional degree of impairment of 10% is required, that is, 78% in this case.
FINDINGS
25. While there may be unfairness in the effect of s 25(1) and 25(4), it is my opinion that contrary to Mr Ulrich’s submission, s 25(4) applies to increases in impairment subsequent to a final assessment, including where the impairment is one listed in s 24(8) (a) to (d). Section 24(8) does not negate the operation of s 25(1) or 25(4). It applies only to s 24(7). That s 25(4) applies to s 24 is clear from Justice Finn’s decision in Mihajlovic, despite its being “oddly located” (paragraph 20 of that decision) in the statute.
26. Further, it is clear from Mihajlovic that the 10% in s 25(4) is that referred to in s 24(7) and s 25(1)(b) (see paragraph 21). Therefore, in this case Mr Ulrich’s entitlement to further amounts of compensation would only arise when the increase of his whole person impairment subsequent to the final determination (that of 2000) was 10%, that is his whole person impairment was 78%.
27. Compensation for permanent impairment is just one of the various types of compensation for injuries available under the Act. Others include for loss or damage to property (s 15), for medical expense (s 16), for injuries resulting in death and funeral expenses (ss 17 and 18), for injuries resulting in incapacity (s 19), where an employee is maintained in hospital (s 22), and for household and attendant care services (s 29). That compensation for permanent impairment is not available does not mean that compensation under other provisions is also unavailable.
28. The legislature has determined that permanent impairment is compensable in certain circumstances. First there has to be an impairment of 10% or more (s 24(7)), except in the case of hearing loss and those impairments listed in s 24(8). Secondly, an interim payment may be made where there is a permanent impairment of 10% or more but a final determination has not been made (s 25(1)). There is no relevant exemption for hearing loss or the impairments listed in s 24(8) in relation to an interim determination pursuant to s 25(1).
29. It is important to note that there is no relevant operative distinction between “final determination” in s 25(1) and (3) and “final assessment” in s 25(4) (Mihajlovic at paragraph 20). When a final assessment (determination) has been made, no further amount of compensation is payable unless the subsequent degree of impairment is 10% or more. Notably hearing loss is exempted from the effect of s 25(4).
30. The degree of the impairments in s 24(8) is not fixed. In Page, Justices North and RD Nicholson commented (at paragraph 47) that the Parliament had identified the impairments listed in s 24(8) “as being of such adverse importance to the prospects of an employee to be rehabilitated” that they were excluded from the operation of 24(7). However, while that is so, for whatever reason, the Parliament has determined that there is to be no exemption for the impairments listed in s 24(8) from the 10% requirement in s 25(4). That is in clear contrast to hearing loss which is exempt from the operation of s25(4) with the same degree of impairment being set in s 25(5) as in s 24(7A)
31. Turning to the question of whether the 2000 determination of whole person permanent impairment (T18 in Exhibit 1) was an interim or final decision, the compensation payable is set out in that document as follows:
“The total amount of compensation payable has been assessed as $112,555.64 which consists of $79,211.15 under section 24 of the Act for impairment, plus $33,344.49 under Section 27 of the Act for non-economic loss component.”
32. It is clear from that extract and the totality of the document, that the 2000 determination was a final assessment of the degree of permanent impairment, to use the language of s 25(4). Compensation was payable pursuant to ss 24 and 27. It was not an interim determination within the meaning of s 25(1). The document T18 does not use the language of s 25(1). It follows that s 25(4) applies in Mr Ulrich’s case.
DECISION
33. For the above reasons, the decision of 10 March 2004 is affirmed.
I certify that the 33 preceding paragraphs are a true copy of the reasons for the decision herein of Mrs Josephine Kelly, Senior Member
Signed: Guy Moloney .....................................................................................
Associate
Date/s of Hearing 16 August 2004
Date of Decision 23 August 2004
Counsel for the Respondent G Johnson
Solicitor for the Respondent Australian Government Solicitor
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