Wagener and Comcare
[2003] AATA 1083
•29 October 2003
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2003] AATA 1083
ADMINISTRATIVE APPEALS TRIBUNAL )
) No S2002/221
GENERAL ADMINISTRATIVE DIVISION ) Re TREVOR GEORGE WAGENER Applicant
And
COMCARE
Respondent
DECISION
Tribunal Deputy President D G Jarvis Date29 October 2003
PlaceAdelaide
Decision The Tribunal:
1. sets aside the decision under review and substitutes a decision that the time when the applicant’s incapacity for suitable employment in consequence of his accepted work-related injury was likely to continue indefinitely was the time of the applicant’s second knee replacement operation; and
2. reserves liberty to apply in relation to the costs of the proceedings.
D G Jarvis
(Signed)
Deputy President
CATCHWORDS
COMPENSATION – incapacity to engage in suitable employment – time when likely to continue indefinitely – permanent impairment – evidence available at hearing disproving earlier prognosis – relevance of engaging in employment to determination of incapacity for suitable employment
Safety, Rehabilitation and Compensation Act 1988 - s 31
McDonald v Director-General of Social Security (1984) 6 ALD 6
Re Watson and Commissioner for Superannuation (1981) 3 ALN N80
Re Tiknaz and Director-General of Social Services (1981) 4 ALN N44
Comcare v Murphy [1996] FCA 83
Bwllfa & Merthyr Dare Steam Collieries (1981) Ltd v Pontypridd Waterworks Co [1903] AC 426
Freeman v Defence Force Retirement and Death Benefits Authority (1986) 5 AAR 156REASONS FOR DECISION
29 October 2003 Deputy President D G Jarvis 1. In a reviewable decision dated 15 March 2002, the respondent varied a determination which had been made on 17 April 2001 and was to the effect that on the basis of certain medical evidence:
· it was not appropriate at that stage to assess the applicant’s incapacity for employment due to the potential for improvements in the applicant’s level of capacity for work; and
· a decision in relation to the applicant’s entitlement under s31 of the Safety, Rehabilitation and Compensation Act 1988 (“the Act”) would be deferred for a period of 12 months.
In its reviewable decision, the respondent determined instead that the applicant was entitled to incapacity payments pursuant to s31 of the Act with effect from 31 May 2001. For the reasons which follow I have decided to set aside the reviewable decision, and I determine that the respondent is liable to pay compensation to the application under s31 of the Act on and from the date of the operation to replace the applicant’s right knee.
2. At the hearing, the applicant was represented by Mr Geoffrey Britton of counsel, instructed by T F Owen & Co, and the respondent was represented by Ms K Bean of the Australian Government Solicitor’s Office.
3. The Tribunal received in evidence the following documents:
(a)the documents lodged pursuant to s37 of the Administrative Appeals Tribunal Act 1975 (exhibit A1 : T Documents, T1 – T42);
(b) statement of Mr Wagener dated 1 August 2003 (exhibit A2);
(c)bundle of medical reports from Dr R Nowosilskyj dated 1 May 1996, 17 July 1996, 12 August 1996, 12 December 2000, 15 June 2001, 17 December 2001, 23 April 2002 and 24 February 2003 including a copy of the briefing letter dated 5 February 2003 from the applicant’s solicitors to Dr Nowosilskyj (exhibit A3);
(d)determination dated 16 July 1996 (exhibit A4);
(e)decision on review of 16 July 1996 determination dated 5 June 1997 (exhibit A5);
(f)letter dated 30 April 1996 from Mr Wagener to Mr Warren Flavel, Deputy Commonwealth Ombudsman (exhibit R1);
(g)extract from bundle of notes and reports provided by Dr Nowosilskyj in answer to Summons (exhibit R2); and
(h)extract from medical records of the Repatriation General Hospital provided in answer to Summons (exhibit R3).
4. Oral evidence was given by the applicant and his general practitioner, Dr R Nowosilskyj, and also by Dr G Long, a consultant occupational physician, who was called by the respondent.
Background
5. The applicant was born on 4 September 1948. After leaving school and a short period of work as a car-park attendant he joined the Royal Australian Air Force on 15 August 1966 and was discharged on 8 September 1972 as a leading aircraftsman. During his service with the Royal Australian Air Force, he played Division 1 soccer and Division D rugby league. He had a cartilage operation in July 1972, being shortly prior to his discharge, and his discharge was delayed until he had recovered from this operation.
6. On 17 July 1984 the applicant lodged a claim for compensation in relation to a condition described as “cartilage left knee damage” which he claimed arose out of an injury he sustained whilst playing sport for the RAAF (T3). The respondent accepted liability for this condition. On 22 November 1993 liability to pay the difference between the income which the applicant would have received as a leading aircraftsman with the Royal Australian Air Force and the income which he was then receiving from his then employer was redeemed pursuant to s30 of the Act by payment of a lump sum of $48,503.00.
7. On 6 June 1996, the respondent issued a determination stating that the applicant was not indefinitely incapacitated for employment and was thus not entitled to ongoing incapacity payments under s31 of the Act, and that decision was affirmed on review on 9 June 1997 (see exhibits A4 and A5). The applicant did not apply to this Tribunal for a review of that latter determination.
Issue for Determination
8. It was common ground in the proceedings before me that the applicant subsequently became entitled to incapacity payments pursuant to s31 of the Act, and the issue before me was to determine the date from which the applicant became incapacitated for work to the extent that he was not able to engage in suitable employment and his incapacity was likely to continue indefinitely, so that the applicant was entitled to compensation payments pursuant to s31 of the Act. The applicant accepts that as he did not seek a review of the decision made by the respondent on 9 June 1997, he is not entitled to compensation under s31 of the Act in respect of any period prior to that date.
Evidence and Findings of Fact
9. The applicant gave evidence of the matters referred to in paragraph 5 above, and I make the following further findings of fact, based on the applicant’s evidence. After leaving the Air Force the applicant worked in his father’s building business for about 2 weeks but his knees were giving him trouble and he was put on sickness benefits for about 3 months. After that he worked in Sydney as a sales clerk for just under 2 years, and then returned to Adelaide and worked for Hannimex as a sales clerk for about a year selling sporting goods. He was then transferred to the Educational Division of Hannimex as a products manager for South Australia and the Northern Territory, and he worked in that position for 4½ to 5 years. He then worked for about 18 months as an audio visual products manager. After that he worked for a company which sold medical supplies and later he became the bookshop manager of an affiliated company which sold books. He later worked for a surgical supply business and sold their medical books until this business was taken over. He and his wife then joined another couple in a new medical health care bookshop. He sold his share in that business in 1992 on the advice of his orthopaedic surgeon, Dr Keene.
10. The applicant said that he was then away from work for about 2 or 3 years, and had an operation on his left knee in April 1992 and an operation on his right knee in December 1992. His knees had been causing him a great deal of trouble. He was in pain constantly and had difficulty in standing or walking and was not able to be on his feet for more than half an hour at a time. After these knee operations, he obtained work at Zamel’s in late 1993 as a store manager at their Arndale store. He had to give this work up because he was on his feet a great deal during the week and also at weekends and his knees could not cope. He agreed in cross-examination that he ceased work at Zamel’s in January 1994. He has not worked full time since.
11. The applicant holds a Sales Certificate with the Australian Institute of Management and also attended a Xerox sales training course. He also holds an Associate Diploma for Business Management from the South Australian Institute of Technology, and holds a marketing certificate. He obtained all these qualifications before 1995, in consequence of attempts to qualify himself for work.
12. From 1992 or 1993 onwards the applicant developed pain in his lower back. On the basis of medical opinion it was considered that the problem with his lower back was the result of his difficulties in mobility as a result of his knee problems. On 2 June 1995 he was awarded the sum of $26,909.13 under s24 and s27 of the Act, for permanent impairment and non-economic loss on the basis of a 10% whole impairment in his lower back. In 1999 or 2000 the applicant developed pain in his ankles and back as a result of problems with his knees, and he applied for a further lump sum for permanent impairment. On 16 July 2001 he was awarded a further $26,728.30 upon the basis of 20% whole person impairment of the lower back.
Evidence as to Subsequent Employment
13. The applicant’s evidence as to his subsequent employment was unsatisfactory, although it is clear that he was increasingly affected by the various disabilities from which he was suffering. He said that he worked for Safety Care Australia as a sales representative in 1995/96 and he was there for 6 to 8 months or maybe a little less. He said that it was not a full-time job but was a commission job only, and his hours of work fluctuated according to whether there was stock there and how the business was going and whether he was capable and felt like working, and he would work maybe 10, 15 or sometimes 20 hours a week. In cross-examination a letter which the applicant wrote to the Assistant Commonwealth Ombudsman on 30 April 1996 (exhibit R1) was put to him. On the basis of the information in this letter, he agreed that he resigned from Zamel's in January 1994, and commenced with Safety Care Australia on 23 February 1994 and resigned from that company on 26 April 1995. He further admitted in cross-examination that he commenced with another company, Wyatt Stationery, on 6 November 1995 and quit on 18 March 1996, having worked full time as from 4 December 1995. He said he had forgotten all about his employment by that employer when giving his evidence-in-chief.
14. The applicant said that in 1997/98 he obtained a little work selling computer software as a telephone salesman from a company called Financial Medical Solutions. He said this was not a full-time job and not a paid job but a fill-in job and he was hoping to get some work from doing this. He said his hours varied, depending on how he felt, sometimes it was 2 or 3 hours a day, sometimes 4 hours a day, sometimes 2 days a week. He said he was on a disability support pension at that stage and was just getting petrol money for his work and it was just something to do. He said that he was on a disability support pension at that stage, and the company was not prepared or able to pay him any retainer, and he did not want to be put on a commission because he would have lost his pension and this would have been too risky in case he did not effect sales on which commission would be earned.
15. Counsel for the respondent cross-examined the applicant in some detail about certain notes relating to his employment which were made by the applicant’s general practitioner, Dr Nowosilskyj, during consultations with the applicant. The consultations to which the notes in question relate took place on various dates from 24 January 1997 to 22 December 1999. The applicant admitted that by and large the doctor’s notes were likely to be a “very, very accurate account” of what he said to his doctor (transcript p28). The applicant thought that some of the specific matters included in the notes did not relate to his work as a computer software salesman, but instead related to his earlier commission employment by Safety Care Australia, but on his evidence and on the information in exhibit R1, this employment had finished in 1995. I refer in particular to the cross-examination where the applicant was asked whether he recalled saying to Dr Nowosilskyj in June 1999 that he may be losing his job as it was closing down, and in answering this question he denied that he had a job then and said that he was then still recovering from his first knee replacement operation (transcript p43).
16. The applicant was also asked in cross-examination regarding an assessment made of him by Ms Helen Vaile of CRS Australia. Her report is included in exhibit R2. In particular, reference was made to a passage in Ms Vaile’s report reading:
“This year he carried out ‘work experience’ for several months in the area of computer software sales. He reported that he performed well but all the months of work experience never came to fruition as a full time job. The would-be employer has recently been convicted of fraud relating to another business venture.”
The applicant did not admit saying these things to her, and again asserted that he did not work after the middle of 1998 and that the relevant events happened before his first knee operation.
17. The applicant also said that in 2000 he did some occasional work at weekends but not every weekend, driving people around in a “mover wagon”.. He said he would have done this 6 times at the most and had to stop doing this work because he did not have the relevant licence. He said that he was still on narcotics at the time and after doing this work he would be stiff or sore for 2 or 3 days afterwards. He said he received pocket money only for this work. When he was asked in cross-examination about a reference to this work in Dr Nowosilskyj’s notes, he admitted that he might have been doing this work as at 22 December 1999, although he said he thought it was in 2000. He also admitted that as at December 2000 he had written off to do a course in office administration but decided not to do it because of the cost of the course. He agreed that at that stage he still wanted to work but he was unable to do so.
18. In re-examination (which occurred some 11 days after the applicant’s evidence-in-chief and cross-examination as to these matters) the applicant said that he could not remember too well because of his medication, but had spoken to his daughter, and as a result thought that he was still selling fire extinguishers until that work came to an end some time in 1997, and it would have been around about the middle of or late 1997 that he started with Financial Medical Solutions. It also appears from his re-examination that his employment in 1997 was for Prime Safety. The applicant had not previously referred to employment by this organisation, but this would explain certain of Dr Nowosilskyj’s notes, and the discrepancies between those notes and the applicant’s earlier evidence. I find the applicant’s evidence in relation to his employment by Financial Medical Solutions to be quite unreliable due to his difficulty in recalling events which occurred more than 4 years previously. I consider that the contemporaneous records made by Dr Nowosilskyj and the history obtained by Ms Vaile are a correct record of what the applicant said to them. I find that his employment by Financial Medical Solutions as a telephone salesman came to an end in about mid 1999, and not mid 1998 as the applicant said. Apart from this I accept the applicant’s evidence as to his employment after leaving Zamel’s.
Findings as to the Applicant’s Medical Condition
19. The applicant has consulted a number of doctors since he left the Royal Australian Air Force. These include Colonel Peter Byrne, a general surgeon, who treated him in 1985, Mr Gregory Keene, an orthopaedic surgeon who specialises in the treatment of knees and Dr R Nowosilskyj who has been his general practitioner since about 1973 or 1974. In order to counteract pain from his problems with his knees and back, he was prescribed narcotics and “to an extent” admitted that he became dependent on them. An operation was performed in September 1998 by Mr Keene to replace his left knee, and in February 2000 Mr Keene performed an operation to replace his right knee. His recovery from this latter operation was complicated by an infection requiring a prolonged period of antibiotics. As a result of his knee replacement operations, he is experiencing less pain in his knees, but still has moderate pain. The applicant estimated that he has had about 30 surgical procedures on his knees from 1985 up to 2000. In addition to the problems with his knees, he has extreme pain in his back and ankles. He has become depressed at his inability to do anything. He underwent treatment at the Pain Clinic at the Repatriation General Hospital in 2001. This had no effect on his condition, but helped him to cut down on medication including narcotics which he had been taking. He gave up endone, but still takes methadone tablets. When his back problem developed he had problems bending, squatting and lifting, and he could not go upstairs. He first noticed problems with his ankles in 1999 or 2000, and had pain and severe cramps. His ankles gave way and he could walk only short distances because of soreness in his ankles. He cannot walk normally or up inclines, and he has to stop walking every 10 to 15 minutes. He has difficulty in sitting and also performing any physical tasks.
20. The T documents include a number of medical reports, in addition to the reports of the 2 doctors who gave oral evidence. These other reports are as follows.
(a) report dated 17.6.85, from Gary R Melrose, a physiotherapist (T4);
(b) report dated 31.7.85, from Mr A J Williamson, a physiotherapist (T5);
(c) reports dated 8.8.85 and 7.11.85, from Dr Peter D Byrne (T6);
(d)reports dated 24.2.86, 23.10.88 and 30.6.93, from Dr Gregory Keene (T7, T8, and T10);
(e)reports dated 25.7.00, 15.8.00 and 26.10.00, from Dr Orso Osti (T13, T14 and T15);
(f)report dated 31.5.01, from Mr Duthie Mills (T26);
(g)report dated 6.2.02, from Dr Peter Slattery, the Director of the Pain Management Unit, Repatriation General Hospital (T31); and
(h)report dated 20.2.02, from Ms Carmel Tapping, a psychologist from the Pain Management Unit, Repatriation General Hospital (T32).
21. The reports referred to in paragraphs (a), (b), (c) and (d) confirm the early history of the applicant’s difficulties with his knees. I note that in his report of 8 August 1985, Mr Peter Byrne reported that the joint degeneration in the applicant’s left knee resulted from sporting activities and general wear and tear while serving in the Royal Australian Air Force, and he considered that the applicant was not fit for heavy manual labour, extensive walking, running or climbing on a continuous basis, and was probably not fit to work in cramped conditions where his knees would be flexed for long periods. He was fit for light driving (preferably with automatic transmission), office duties, or bench work. In his report of 7 November 1985, Mr Byrne reported that the applicant had sustained joint degeneration in the right knee on and off the sporting field while serving in the Royal Australian Air Force, as had been earlier reported in relation to the left knee, and he considered that the applicant’s capacity for employment as a result of the problems with the right knee were the same as those indicated in the report of 8 August 1985.
22. Dr Gregory Keene, in his report of 24 February 1986, described the condition of the applicant’s knees and confirmed that this was the result of service with the Royal Australian Air Force, and was permanent. He considered that the applicant was totally unfit for work as a storeman and for any activity involving heavy lifting, stair climbing or heavy work, but he was fit for employment in light manual work or sedentary work, such as office work. He considered that his condition would deteriorate with time, and he would require further treatment in the future, including possible knee replacements. In his report of 30 June 1993, Dr Keene referred to his advancing osteoarthritis of both knees, which was severe, and considered that the applicant was totally incapacitated for any work other than sedentary work.
23. The reports referred to in sub-paragraphs 20(g) and 20(h) above are from the Pain Management Unit of the Repatriation General Hospital. The report from Dr Slattery confirmed that the applicant’s military employment and related conditions were definitely the cause of any psychological and drug dependency he has experienced and were probably the cause of any depression he has experienced. Dr Slattery further reported that the applicant’s medical conditions would be expected to continue to cause pain indefinitely, and it would be reasonable that the applicant would have the option to continue some appropriate pain relieving medication indefinitely. The report from Ms Carmel Tapping of 20 February 2002 states that on examination on 21 March 2001 a depression anxiety stress scale indicated that the applicant’s level of depression was in the extremely severe range, and he had a moderate level of anxiety and a stress level in the severe range. The report further indicated that on a later examination on 6 February 2002, his depression, anxiety and stress levels remained in the severe to extremely severe range. Neither of these reports include any assessment of the applicant’s capacity for employment.
24. In his report dated 25 July 2000, Dr Osti said that he had examined the applicant on 30 April 1999 and his presentation was consistent with chronic low back pain and the presence of degeneration of the lower spinal motion segments and disc protrusion at L4-5 with impingement of the left L5 nerve root. His spinal condition was compounded by chronic bilateral knee disabilities. He considered that the applicant was currently unfit to work in a physical capacity and might have difficulties in performing clerical/administrative duties on a full-time basis. However, he said that one would expect him to be able to cope with clerical/administrative tasks at least on a part-time basis, possibly up to 20 hours per week with the following restrictions: no repetitive climbing of ladders or stairs, no prolonged standing or walking, no forward bending, no repetitive lifting over 10 kgs. He would also have difficulties with driving for prolonged distances. Dr Osti’s report of 15 August 2000 is not material. In his report of 26 October 2000, Dr Osti said that he had reassessed the applicant on 8 September 2000 and he obtained a history that at the time of his reassessment, the applicant’s spinal condition had deteriorated gradually and had been compounded by further deterioration of his bilateral lower limb disabilities. He had undergone a right total knee replacement and was suffering from increasing pain in both ankles. His spinal pains had increased. Dr Osti repeated his earlier diagnosis and said that the applicant was currently unfit to work in a physical capacity and “would have significant difficulties in performing clerical/administrative duties on the basis of his severe and diffuse musculo-skeletal symptoms and the need for large daily narcotic intake”. He considered that the applicant would be a poor candidate for spinal surgery and advised him to seek the opinion of an experienced pain specialist and that he would require ongoing supervision by Dr Keene for his lower limb disabilities. Dr Osti did not express any opinion as to the permanency of the applicant’s incapacity for work.
25. In his report dated 31 May 2001, Mr Duthie Mills said that he had assessed the applicant on 28 May 2001. His report relates to the condition of his ankles, and he considered that it was reasonable to accept that the bilateral knee replacement led to his ankle symptoms. He further considered that from an orthopaedic viewpoint alone, the applicant was fit enough to carry out suitable light part-time employment which did not involve prolonged travel, repetitive bending or lifting, prolonged standing, walking or sitting. However, he further considered that the various combination of the applicant’s symptoms together with his undoubted chronic pain dysfunction syndrome, his requirement for rest and analgesic medication made it “unlikely that Mr Wagener could be accounted fit enough to carry out even part-time light, selected alternative work currently.” Once again, Mr Mills did not express any opinion on the permanency of the applicant’s incapacity for work.
26. The applicant’s general practitioner, Dr Nowosilskyj, gave oral evidence to amplify the history and opinions reported in the bundle of medical reports comprising exhibit A3. I have carefully considered those reports and I refer to the following specific reports.
(a)In his report of 1 May 1996, which is addressed to Mr W Flavel, Assistant Commonwealth Ombudsman, Dr Nowosilskyj stated that the applicant had severe osteoarthritis of both knees, degenerative disc disease at 2 levels in his spine, an anxiety/depression state secondary to his increasing disabilities and frustration arising from the condition of his knees and spine, drug (analgesic) needs and a probable pain syndrome, and synovial osteochrondromatosis. He said that he was not fit for employment at that time or in the foreseeable future. He continued:
“Trevor has, contrary to medical advice, needed to seek employment, purely because of financial needs. Whilst in employment, most of which was an aggravating factor to his physical and psychological state, he required time off work and eventual resignation due to medical grounds”.
He considered that the applicant’s degree of disability had deteriorated significantly since his redemption pay out (which was on 22 November 1993). He concluded:
“I understand Trevor is planning to seek further assistance from the Defence Centre. Giving (sic) the deterioration plus development of new but related conditions plus the fact that he is (a) ‘not able to engage in suitable employment: and (b) the incapacity is likely to continue indefinitely,’ then I would support his attempts at an improvement in his claim status.”
(b)In his report of 17 July 1996 to John Nelson of the Department of Defence, Dr Nowosilskyj reported that Dr Keene was very, very surprised with the rapid and extensive deterioration of the osteoarthritis in the applicant’s knees, and felt that total knee replacements were indicated then, and he considered that the applicant was unemployable and would be so for probably 2 years.
(c)In his report dated 12 August 1996, which is addressed to the Wakefield Pain Clinic, Dr Nowosilskyj referred to the osteoarthritis of the knees and his need for a bilateral total knee replacement, and to the extent of his drug use which had then reached 80 endone per week, and he sought help to cut back the applicant’s drug use.
(d)In his report dated 12 December 2000 to the applicant’s solicitors, Dr Nowosilskyj referred to the applicant’s physical problems with his knees, lower back and ankles, and also referred to his depression resulting from his physical limitations, his inability to work, his overuse of medication and his very limited network of social contacts. He also referred to his narcotic drug dependence and his excessive use of oral morphine. He said he was dependent psychologically on narcotic medication and as a result should not drive and was “not really fit for work”.. He said that taking into account all of the factors he had mentioned, he did not see that the applicant was employable. He said that should his conditions of depression and drug dependence be much improved, then it “could be possible that he may be fit for some very light sales work but even then, I find it hard to imagine that he would be able to cope with this”. He added that any such employment, given his knees, back and ankles, would be difficult for him to obtain and said that his mobility was very limited and his musculo-skeletal state was not very flexible. He thought that his incapacity for work, both medically and in terms of work likely to be available to him, was of a permanent nature.
(e)In his report dated 15 June 2001 to the applicant’s solicitors, Dr Nowosilskyj referred to assessments of the applicant made by a rheumatologist and by the Flinders Medical Centre Pain Unit, and he expressed the opinion that the applicant was not presently fit for work and that his inability to work, physically and psychologically, is not likely to change for the better, and he would remain unfit for employment.
(f)Dr Nowosilskyj’s report dated 17 December 2001 was addressed to the South Australian Housing Trust and related to an application for assistance for housing. In this report, Dr Nowosilskyj briefly described the applicant’s various disabilities, and confirmed his opinion that the applicant was not fit for employment due to his medical conditions.
(g)In his report dated 23 April 2002, Dr Nowosilskyj said that the issues of disability and incapacity relate to both physical and psychological factors involving real pain, secondary to osteoarthritis and altered body biomechanics, as well as pain syndrome and dependence on narcotic analgesics. He said further that these problems “basically date back to 1996, although he did have steadily increasing problems from 1983. He certainly has been unfit for any employment from 1996.”
(h)Finally, in a further report dated 24 February 2003 to the applicant’s solicitors, Dr Nowosilskyj again summarised the applicant’s problems and said:
“Now that Trevor’s condition is basically stable (although the ankle and spine do cause problems) and with a retrospective view, Trevor has been totally incapacitated since, at least, the date of the first TKR, ie 29/09/1998. However, he was already in difficulties prior to that as a high tibial osteotomy of the (L) knee was carried out earlier to delay the eventual knee replacement – because of his young age at that time.
Taking everything into account and with the benefit of hindsight and all the information now before me, I think it not unreasonable to say that Trevor has been unemployable in any capacity, due to his various disabilities and incapacities, and other problems, directly related to his compensable problems, since about February 1997. It is at that time he did have plans for a commission job but he was unable to cope with it – both physically and psychologically.
He had been unable to work full time since 1995 but had, at various times, actively been looking for work between 1995-1997.
It is a little difficult to give a precise time of full disability but, I feel, it precedes the first knee replacement.
Probably to be fair, in that he was looking for work, I would suggest mid 1997 as the time from which he became not suited to any employment by way of training, experience, education etc.”
27. Dr Nowosilskyj confirmed the contents of his various reports in his evidence. In cross-examination, he was asked about an interview which he gave to Mr John Nelson of the Military Compensation Service on 4 June 1996. Notes of this interview prepared by Mr Nelson are included in exhibit R2. In particular, Dr Nowosilskyj was asked about paragraph 6 of those notes, which recorded that Dr Nowosilskyj agreed with the following analysis:
· that the applicant’s underlying orthopaedic condition(s) did not on their own prevent him from becoming employed, since he was sufficiently well educated, qualified and experienced to succeed in a variety of sedentary, clerical or management jobs, or in most employment which incorporated sensible physical restrictions;
· his anxiety and depression were also addressed with some success, and it was reasonable to expect that eventually these conditions would cease to be an incapacitating factor;
· that the high drug intake was also being addressed with some success thus far, and his recent referral to a pain clinic would assist in eliminating incapacity due to endone;
· it was reasonable to expect that the same means would reduce his pain state to well below incapacitating levels, even before knee replacement surgery in 4 years’ time, and this surgery would then substantially improve Mr Wagener’s condition.
Dr Nowosilskyj agreed in cross-examination that there was an expectation of these matters at that time, and this is what was hoped to be achieved. Dr Nowosilskyj also confirmed various references in his records to the applicant’s employment over the period since June 1996. As to his report of 12 December 2000, Dr Nowosilskyj admitted in cross-examination that at that time he hoped that following the referral to the pain clinic the applicant could come off all narcotics. Whilst he expected some improvement in consequence of the proposed second knee replacement operation, the applicant would nevertheless be left with significant and permanent disability because of his other problems, namely his back condition and his depression.
28. In his oral evidence Dr Long confirmed the opinions which he had expressed in his two reports dated 13 March 2001 (T18) and 6 June 2002 (T39). In his first report, Dr Long recounted in detail the applicant’s background, the history of his work injuries and his current situation, and his clinical findings on examination. According to the history he obtained, the symptoms with his ankles were then of relatively recent onset, having been first noticed in late 2000 according to this history which he obtained. As regards the applicant’s capacity for employment, he concluded that it would not be practical for the applicant to be at work at that time given the combination of his multiple medical complaints, both physical and psychological. He continued:
“I anticipate this level of incapacity will continue for some time but believe the notion of permanency has yet to be confirmed. In particular I note he is to attend the Flinders Medical Centre Pain Management Unit in the near future and I believe there remains potential for substantial improvement in his level of incapacity if he is willing to comply with such a treatment program. Motivation will however be a key factor here.”
He went on to say that he had spoken to Dr Nowosilskyj and confirmed his concurrence with the above view. In cross-examination, Dr Nowosilskyj said that he himself had reservations about this view, but Dr Long’s opinion constituted encouragement for his patient, and he thought that it was a reasonable view. Dr Long then added in his report that it might be appropriate to review the applicant’s circumstances in 12-18 months.
29. In his subsequent report of 6 June 2002, Dr Long described further developments since his previous assessment and his current situation and findings on examination. He pointed out that certain further investigation and treatment in relation to his bilateral ankle condition had not been undertaken, and he was just commencing a water-based exercise program at the Repatriation General Hospital, and he thought that there may be benefit in relation to his ankle complaints from this program. In these circumstances, he considered that the permanency and stability of his condition could not be said to be established and that it would be inappropriate to determine a whole person impairment at that time. In cross-examination, Dr Long admitted that this report focused on the applicant’s problems with his ankles, and apart from a substantial change in his use of drugs, the applicant was still reporting a fairly high level of disability and interference with his day-to-day activities. He still considered the applicant unemployable at that time.
Legislation
30. Section 31(1) of the Act provides as follows:
“(1) Where:
(a)at any time after a lump sum is paid to an employee under section 30 in respect of an injury, the injury results in the employee being incapacitated for work to the extent that the employee is not able to engage in suitable employment; and
(b)the incapacity is likely to continue indefinitely;
Comcare is liable to pay compensation to the employee under this section during the period of the incapacity.”
The words “suitable employment” are defined in s4(1) of the Act. In the present matter, the applicant has had a diversity of experience in the workforce, but it is not in dispute that he is now unable to engage in suitable employment, and the only issue before me is the date when his incapacity became such that it was likely to continue indefinitely.
Consideration of Issues Arising
31. Under s31(a) of the Act, it is necessary to determine whether the applicant’s injury has resulted in the applicant being incapacitated for work to the extent that he is not able to engage in suitable employment. The parties were not able to refer me to any authoritative decision on the interpretation of the words used in s31(1)(b), namely “the incapacity is likely to continue indefinitely”. However, those words are the same as the words used in the definition of “permanent” in s4(1) of the Act, and the concept of “permanent impairment” is referred to in various other sections of the Act, namely s14(3), where the exclusion of an injury caused by the serious and wilful misconduct of an employee does not apply where the injury results in “serious and permanent impairment”; s24(1), which provides for compensation for “permanent impairment”; and s124, the transitional section relating to injuries occurring before the commencement of the Act, where it is necessary to determine when an impairment became “permanent”.. I note that s24(2) expressly lists the matters to which Comcare should have regard when determining whether an impairment is permanent. It provides as follows:
“(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.”
These specific criteria are not repeated in the other sections, including in particular s31.
32. Counsel for the applicant referred to the Shorter Oxford Dictionary meanings of “likely” and “indefinite”. The relevant meaning of “likely” is “seeming as if it would happen, or prove to be as stated; probable”. The relevant meaning of “indefinite” is “indeterminate, vague, undefined … (of) indetermined extent …”. A judicial interpretation of the concept of permanent incapacity of work in the context of social security entitlements is contained in the judgment of Woodward J in McDonald v Director-General of Social Security (1984) 6 ALD 6. His Honour said, at pp 13-14:
“The vital contrast between temporary and permanent incapacity must be based upon an assessment of future prospects at the time the decision is made. It is not inconsistent with the notion of permanent incapacity that the pensioner’s position should be reviewed from time to time. Unexpected improvement in the person’s condition, advances in medical science, the achievement of fresh skills, or even changes in the labour market, could bring to an end an incapacity which had been thought to be permanent.
In my view the true test of a permanent, as distinct from temporary, incapacity is whether in the light of the available evidence, it is more likely than not that the incapacity will persist in the foreseeable future …
There will be many cases in the difficult borderline region between temporary and permanent incapacity where the Director-General or the AAT will have to decide which is the more appropriate description. It is not necessary to have a ‘settled expectation’ of permanency before so finding; a belief – even on a fine balance – that indefinite duration is more likely than foreseeable termination, will suffice.”
His Honour’s analysis and the dictionary meanings referred to above provide helpful guidance to the interpretation of s31(1)(b) of the Act.
33. In considering the time when the applicant’s injury resulted in an incapacity for suitable employment which was likely to continue indefinitely it is proper in my view to consider not only the evidence available to the decision-maker when the reviewable decision was made, but also subsequent events up to the time of the hearing before this Tribunal. I refer again in this regard to the above passage from McDonald’s case where Woodward J said that the distinction between temporary and permanent incapacity “must be based upon an assessment of future prospects at the time the decision is made” (emphasis added). I also refer to Re Watson and Commissioner for Superannuation (1981) 3 ALN N80, where the Tribunal set aside a decision under the Superannuation Act which was based on a prognosis of disability that had not occurred, and to Re Tiknaz and Director-General of Social Services (1981) 4 ALN N44, where subsequent events discounted a suggestion that the applicant’s disability was not permanent. These authorities and others, including Jebb v Repatriation Commission (1988) 80 ALR 329, are discussed in Professor Dennis Pearce’s very helpful text on the Administrative Appeals Tribunal: see Pearce Administrative Appeals Tribunal (2003) paragraph 9.21. The Tribunal is not of course confined either to the material which was before the primary decision-maker or to the events which had occurred up till that time, and is required on the material in evidence before it to make the correct or preferable administrative decision: see Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577 at 589; Nevistic v Minister for Immigration and Ethnic Affairs (1981) 34 ALR 639 at 640-1. In Comcare v Murphy [1996] FCA 83, O’Loughlin J decided that the Tribunal was required to take into account evidence up to the date of the hearing, and it was an error of law to disregard relevant medical evidence available after the date of the application for review.
34. The above decisions are consistent with the approach of the common law to the assessment of damages, where courts traditionally have regard to events or developments between the date of the injury and the date of the trial which are relevant to the proper assessment of damages, even though the cause of action is complete at the time of the injury and the plaintiff is thereupon entitled to have the damages assessed (see Luntz Assessment of Damages for Personal Injury and Death 3rd Ed. (1990) para 1.4.1, and the cases there cited, including in Bwllfa & Merthyr Dare Steam Collieries (1981) Ltd v Pontypridd Waterworks Co [1903] AC 426 at 431, where Lord Macnaghten said that an arbitrator should “avail himself of all information at hand at the time of making his award which may be laid before him. Why should he listen to conjecture on a matter which has become an accomplished fact? Why should he guess when he can calculate? With the light before him, why should he shut his eyes and grope in the dark?”
35. Counsel for the applicant referred to the profound and diverse effects of the applicant’s work injury. He submitted that Dr Nowosilskyj was best placed to assess the time when the applicant became permanently incapacitated for suitable employment. He referred to the profound problems which the applicant had with his knees in the first half of 1997, and submitted that the date of the first knee replacement operation could mark the time when permanent incapacity occurred. He submitted that the applicant’s work as a telephone salesman selling computer software should be likened to work experience, and should not be regarded as evidence that he was not permanently incapacitated for suitable employment, because the applicant did not receive income for the work he did, and reference was made to the very limited hours when the applicant undertook that unpaid work. Counsel submitted that the existence of this telephone work indicated that the applicant had not given up his attempts to obtain employment, but this did not answer the question of when it was that the applicant became permanently incapacitated for suitable work. Counsel further submitted that if I accepted Dr Nowosilskyj’s opinion on incapacity, it would be open to me to find that permanent incapacity occurred on one of the following dates:
(a) the day after the review of the reviewable decision made on 9 June 1997;
(b)the date of the first knee replacement operation which occurred in September 1998, or alternatively the expiration of a recuperation period following that operation of say 3 months;
(c)the date when the applicant finished his telephone sales work;
(d)the time when the applicant last worked as a driver, which was very early in 2000; or
(e)the date of the second knee replacement operation in February 2000, or alternatively the expiration of a recuperation period of say 3 months after that operation.
Counsel pointed out that the knee replacement operations were not a panacea which had cured the applicant’s problems, but had merely assisted him in his day-to-day life and had produced some reduction in his level of pain. However, the operations had not restored his capacity to engage in employment.
36. Counsel for the respondent emphasised that the test in s31 was not to determine the commencement of the period when the applicant became permanently incapacitated for suitable employment, but rather to determine the date when that incapacity was likely to continue indefinitely. She further submitted that the relevant date should not be a date prior to when the applicant ceased working, and so the date should not be earlier than the cessation of the driving work, which was very early in 2000. It was contended that the fact that the applicant was doing this work was illustrative of a capacity to do the work and referred to the applicant’s evidence that on some occasions he had worked up to 12 hours a night doing this work. Counsel further pointed out that the applicant had engaged in the telephone sales work until about mid 1999, and apparently (based on Dr Nowosilskyj’s notes) that work ceased not because the applicant was no longer capable of doing it, but because the business closed down. She referred further to the improvement in the applicant’s level of pain following the second knee operation, and submitted that I should scrutinise the evidence of capacity for employment following that operation. There was potential for improvement as a result of that operation and the extent of permanent incapacity for work did not crystallise until after that operation and after a period of rehabilitation of about 2 months. Counsel invited me to prefer the evidence of Dr Long to that of Dr Nowosilskyj, on the grounds that Dr Nowosilskyj had agreed with Dr Long’s assessment as confirmed in Dr Long’s report of 13 March 2001 to the effect that permanency of incapacity had not been confirmed at that time (see paragraph 28 above), that Dr Nowosilskyj had not considered all of the potential areas of employment for which the applicant was suited such as, in particular, telephone sales work, and that Dr Nowosilskyj was very closely aligned to the applicant. She further submitted that having regard to his assessment in May 1996 that incapacity had become permanent, Dr Nowosilskyj was a “trifle cavalier” in his assessment of this issue, whereas Dr Long’s assessment was more objective and scientific. She also drew attention to Dr Long’s qualifications to make assessments of capacity for employment. Counsel concluded that it was not appropriate to find permanent incapacity until all reasonable treatment options had been exhausted, and in this case until the outcome of the second knee replacement operation was known.
37. In determining the issue before me, it is relevant but in my view not conclusive to examine the nature of any suitable employment which the applicant undertook during the period leading up to and during the span of dates contended for by the parties as the commencement of permanent total incapacity to undertake suitable employment. In a different context, it has been held that the engaging in employment, or the loss of employment, is not conclusive for the purposes of determining a capacity to undertake employment (see Freeman v Defence Force Retirement and Death Benefits Authority (1986) 5 AAR 156 at 164, where Sheppard J (with whom Sweeney J agreed) said in the context of a reclassification of a member’s percentage of incapacity in relation to civil employment pursuant to s34 of the Defence Force Retirement and Death Benefits Act 1973:
“The Act itself takes no account of his actual earning capacity at a given time, although the fact that he has engaged in particular employment will be a relevant factor for the Authority to consider when determining his percentage of incapacity. But there may be cases where, although a member is employed, he is doing his work with such difficulty or under such stressful circumstances that it is plain that he has not any real capacity for it. The fact that he is in employment may be due to the kindness of an employer or of fellow employees or both, or because of his ability, at least for the time being, to mask his disabling condition.”.
A similar proposition was referred to by Beaumont J at page 169.7.
38. On the evidence before me the applicant continued to engage in employment after 9 June 1997, being the earliest of the dates put forward by counsel for the applicant as the commencement of permanent incapacity. Based on my finding in paragraph 18 above, the applicant continued to engage in telephone sales work until about mid 1999. I am satisfied that the applicant would have had difficulties in carrying out the telephone sales work and that he could only do this work during restricted hours because of his disabilities. However, his employment in this function demonstrated that he had a limited capacity to undertake that type of work up until when the business closed down. The fact that he then ceased that form of employment did not mean that he thereupon lost his capacity to undertake it, or that his incapacity for suitable employment thereupon became permanent.
39. I am mindful that Dr Nowosilskyj had expressed the view in his report of 1 May 1996 that the applicant’s incapacity to engage in suitable employment was likely to continue indefinitely (see paragraph 26(a) above). He also put the commencement date of permanent incapacity for work as 1996 in his report of 23 April 2002 (see paragraph 26(g) above), and in his report of 24 February 2003, he referred to a commencement date of about February 1997 (see paragraph 26(h) above). I am also mindful that Dr Nowosilskyj was seeing the applicant on a regular basis and was therefore in a very good position to reassess the progression of his disabilities. However, Dr Nowosilskyj was clearly very sympathetic to the applicant perhaps in consequence of his professional relationship with him as his general practitioner, and he appears not to have taken account of the employment in which the applicant actually engaged in the period after the commencement dates which Dr Nowosilskyj suggested. Further, Dr Nowosilskyj agreed with the analysis made by Mr Nelson on 4 June 1996 (see paragraph 27 above) and also (apparently tentatively) agreed with the opinion expressed by Dr Long in his report of 13 March 2001 (see paragraph 28 above). In these circumstances, and in the light of all the evidence before me, I do not accept Dr Nowosilskyj’s suggested commencement dates. I also note that Dr Osti found following his examination on 30 April 1999 that the applicant had some capacity to undertake clerical/administrative tasks at least on a part-time basis, possibly up to 20 hours per week, subject to various restrictions which he enumerated (see paragraph 24 above). Whilst I do not attach undue weight to this report because Dr Osti was not called to give evidence and he made no reference at all in this report to the applicant’s anxiety or depression, this opinion is nevertheless consistent with the fact (as I have found) that the applicant was carrying out telephone sales work at this time.
40. I do not regard the fact that the applicant engaged in driving work in the period just before and after Christmas 1999 as demonstrating that the applicant had a capacity to engage in that form of employment. He was not accredited to engage in that activity, and his contract of employment would, for that reason, have been illegal. Having regard to his dependence on pain relieving drugs, it is most unlikely that he would have attained the necessary licence to work as a driver carrying passengers.
41. With the benefit of hindsight, and taking into account the evidence available to me up to the date of the hearing, I find further that Dr Long’s opinion that “permanency” had yet to be confirmed as at 13 March 2001, and that he had the potential for substantial improvement in his level of incapacity, were not correct, and that by then, the applicant’s incapacity to undertake suitable employment was likely to continue indefinitely.
42. There is no medical evidence before me to the effect that the applicant lost the capacity to do telephone work after the cessation of his work with Financial Medical Solutions and prior to the time of his second knee replacement operation, and I do not think it can be found or inferred from the applicant’s evidence that this was so. The applicant has various significant disabling conditions which have led to increasing incapacity in spite of the various attempts made by the doctors to whom he was referred to assist him. Again with the benefit of hindsight, it is now known that the operation to replace his right knee was of only marginal assistance to the applicant in that there was a reduction in pain, but his other severely disabling conditions remain notwithstanding the 2 replacement knee operations. He has not worked since his second knee replacement operation. His recovery from the operation was complicated by the post-operative infection. Taking into account all of the evidence before me, I find that the time when the applicant’s total incapacity to engage in suitable employment was likely to continue indefinitely was the date of his second knee replacement operation. The actual date of the second knee replacement operation was not established from the evidence before me, but presumably there is no dispute between the parties about this.
43. For the reasons referred to above, I set aside the decision under review and substitute a decision that the time when the applicant’s incapacity to engage in suitable employment was likely to continue indefinitely was the time of the applicant’s second knee replacement operation. I reserve liberty to apply in relation to the costs of the proceedings in case the parties are unable to reach agreement as to costs.
I certify that the 43 preceding paragraphs are a true copy
of the reasons for the decision herein
of Deputy President D G JarvisSigned: .......................................................................................
N. Quirke AssociateDate/s of Hearing 11 and 22 August 2003
Date of Decision 29 October 2003
Counsel for the Applicant Mr G Britton
Solicitor for the Applicant T F Owen & Co
Counsel for the Respondent Ms K Bean
Solicitor for the Respondent Australian Government Solicitor's Office
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