A Cat Amongst the Pidgeons? More on Permanent Impairment from the Court of Appeal

On 22 December 2014, the Court of Appeal delivered judgment in Sukkar v Adonis Electrics Pty Ltd [2014] NSWCA 459, a decision with potentially far reaching implications for workers submitting permanent impairment claims in New South Wales.

The issue of most significance is the Court’s interpretation of WCR Schedule 8,clause 11, which provides that the 2012 permanent impairment reforms do not extend to a claim made before 19 June 2012 that specifically sought  compensation under section 66 or 67 of the 1987 Act.

The reforms are of considerable importance given that they:

  • restrict permanent impairment compensation to workers with a degree of WPI greater than 10%
  • allow only one claim for permanent impairment

Three days before Sukkar, President Keating of the WCC decided in Cram Fluid Power Pty Ltd v Green [2014] NSWWCCPD 84 (confirming an earlier decision of Caulfield v Whelan Kartaway Pty Ltd [2014] NSWWCCPD 34) that workers who made permanent impairment claims before 19 June 2012 were not subject to the 2012 reforms. Keating DCJ rejected the employer’s argument that only unresolved claims as at 19 June 2012 were excluded from the reforms, concluding that the transitional provisions, including Clause 11, did not support that proposition – in accordance with the unchallenged aspects of the Court of Appeal decision in Goudappel v ADCO Constructions [2013] NSWCA 94 and the decision of the High Court in ADCO Constructions v Goudappel [2014] HCA 18. Keating DCJ also expressed a view, although not necessary to determine the case, that the “one claim” restriction would only apply prospectively, allowing workers with previously finalised claims to bring one further claim after 19 June 2012.

In Sukkar, a case involving a worker who had previously received hearing loss lump sum compensation in 1996, continued to be employed by the same employer, and submitted a claim for 9% further loss on 19 June 2012,the Court of Appeal partially reformulated and answered two questions of law as follows:-

Q1 – Do the amendments to Div 4,Pt 3 of the Workers Compensation Act 1987(the 1987 Act) introduced by Sch 2 of the Workers Compensation Legislation Amendment Act 2012 apply to claims for permanent impairment compensation for hearing loss (to which s 17 of the 1987 Act has application) made on or after 19 June 2012 when a worker has made a previous claim for permanent impairment compensation for hearing loss prior to 19 June 2012?

Ans – A claim for lump sum compensation for permanent impairment made on or after 19 June 2012 is a claim to which the 2012 Amending Act applies by virtue of the transitional provision in cl 15, Pt 19H, Sch 6 to the 1987 Act. If there is an unresolved claim, specifically for lump sum compensation for permanent impairment, made before 19 June 2012, the 2012 Amending Act will not apply to it.

Q2-  If yes [to question 1], whether in claims for compensation pursuant to s 66 of the 1987 Act, including hearing loss claims (to which s 17 of the 1987 Act has application), involving the same pathology of injury arising from multiple injurious events of injury, the multiple injuries can be aggregated for the purpose of determining whether or not the worker’s claim exceeds the s 66(1) threshold?

Ans – The scope of the injury involving hearing loss should be determined by applying s 17 of the Workers Compensation Act. A second claim with respect to “an injury”, being the loss of hearing which had arisen before, and was the subject of, a prior claim, whether made before or after 19 June 2012, is prevented by s 66(1A). Section 66(1A) would not preclude a claim for a further loss of hearing, post-dating the prior claim, being a further injury. The question is not capable of further answer.

McColl JA’s judgment does not really touch on the Clause 11 issue because she found that the deeming provision of s.17 of the 1987 Act meant the injury which was the subject of the claim occurred on 19 June 2012. Thus, the worker had not sought permanent impairment compensation before that date and it was not necessary to consider the transitional provisions. Her Honour also rejected the notion that it was possible to aggregate impairments from two different causative events for the purposes of the threshold. She did not think any changes were required to Question 1 ( simply answered by Keating DCJ in the affirmative) and she thought Question 2 could be answered in the negative in circumstances where a worker has made a prior claim for compensation pursuant to s.66 in respect of that injury. She did not consider it was necessary to make any reference to Clause 11 or to the ‘second claim” issue. In fact, she specifically observed that the respondents did not contend that the claim should be rejected because it was a second claim contrary to s.66(1A).

Basten JA drafted the answers that were eventually adopted by the Court. He thought the effect of Clause 11 was to preclude reliance on the pre-2012 reform s.66 unless the claim made prior to 19 June 2012 specifically sought lump sum compensation. That is correct, however His Honour thought it was relevant that the previous claim had been finalised and introduced into his answer to the first question the concept of an unresolved claim made before 19 June 2012 being exempt from the amendments. His Honour considered that the amendments applied to Mr Sukkar because the only outstanding claim was made on 19 June 2012 and the threshold was not satisfied. His Honour did not think it was possible to aggregate impairments from the two injuries to satisfy the threshold, primarily because the worker would be prevented by s.66(1A) from bringing a second claim. He has not provided any authority for that view, nor has he undertaken any analysis of the transitional issues.

Beech-Jones J strongly rejected the notion that workers who had made a claim for compensation before 19 June 2012 were protected from the 2012 reforms. He thought the reference to “claim” in Clause 11 (and Clause 15 of part 19H, Schedule 6 of the 1987 Act- amendments do not extend to claims made before 19 June 2012) means “the claim under consideration”.  His Honour  does not refer to any authority despite this point being considered by both the Court of Appeal and the High Court in Goudappel. His Honour also held that it was not possible to aggregate the claims because the worker was restricted by s.66(1A) from bringing a second claim; finding that the amendments apply to all claims made on or after 19 June 2012 except lump sum claims made before 19 June 2012. His Honour considered that a worker is only entitled to one claim whether or not it is made before or after the amendments.

Conclusion

The first question asks whether the reforms apply to lump sum hearing loss claims (to which s.17 of the 1987 Act has application) made after 19 June 2012 where a worker has made a prior lump sum hearing loss claim. The answer, read in the context of the question, is that the reforms apply to such claims made after 19 June 2012 but not to unresolved claims. There is nothing novel about those concepts. There is no reference in the answer to claims that have been previously made and resolved.

The second question asks whether hearing impairments resulting from multiple injuries (same pathology) can be aggregated for threshold purposes.  The answer suggests that whether a prior claim is made before or after 19 June 2012 only one claim can be brought in respect of each hearing loss injury by virtue of s.66(1A) so, in effect, the question of aggregation does not arise. The answer is not properly responsive to the question, which asks whether injuries can be aggregated and makes no reference to more than one claim. Further,the question refers to claims generally(including hearing loss), however the answer relates only to hearing loss claims.

The effect of the decision is to establish that:

  • the 2012 reforms apply to:

-claims for lump sum compensation for hearing loss made on or after 19 June 2012

  • the 2012 reforms do not apply to

-unresolved lump sum claims for hearing loss as at 19 June 2012

  • it is not possible to aggregate impairments from separate hearing loss injuries for threshold purposes

At first blush, the judgments of Basten JA and Beech-Jones J and the answers to the questions provided by the Court provide support for the contention that only unresolved claims lump sum claims as at 19 June 2012 are exempt from the 2012 amendments and that if a worker has brought any prior lump sum claim then s.66(1A) will operate to prevent a further claim.
However, there are concerns in relation to the absence of any cogent analysis or reasons for the relevant aspects of these judgments, the disconnect between the questions and the answers and, particularly, to the fact that the findings in relation to the ‘second claim’ issue were made in circumstances where the respondents did not agitate that issue. It is also possible to interpret the answers as only being relevant to s.17 hearing loss claims.

In the absence of clarity from the Court of Appeal, it is likely arbitrators of the Commission will prefer Keating DCJ’s interpretation of Clause 11, supported by the unchallenged aspects of the Court of Appeal decision and the High Court decision in the Goudappel appeals. Further consideration by the Court of Appeal would appear to be inevitable.

It also remains to be seen whether Mr Sukkar will seek leave to appeal to the High Court.