Welcome to the December 2013 issue of the Edwards Michael Lawyers eBulletin

High Court Revisits “in the course of employment”

On 30 October 2013 the High Court delivered its decision in Comcare v PVYW [2013] HCA 41, a case which had attracted considerable public interest due to the somewhat peculiar circumstances in which the worker’s injury was sustained.

The worker had been required as part of her employment to visit a regional office of her employer in order to undertake various work duties, and for this purpose she had stayed overnight at a motel booked and paid for by her employer.  While at the motel the worker engaged in sexual activity with a male acquaintance, during the course of which one or other of the participants pulled a light fitting off the wall, causing physical and psychological injury to the worker.

It was accepted that while engaging in the activity the worker was behaving lawfully and was not engaged in gross misconduct.

The worker was initially unsuccessful before the AAT, however she was successful before a single Judge of the Federal Court and then Full Court of the Federal Court.  Comcare appealed to the High Court.

Allowing the Appeal by a majority of 4 to 2, the High Court concluded that if the approach adopted by the Full Court of the Federal Court was correct, the leading authority of Hatzimanolis  would need to be reconsidered as it would “otherwise effect an undue extension of an employer’s liability to pay compensation”.  The majority concluded, however, that the decision in Hatzimanolis was not intended to state the test as that adopted by the Full Court and proceeded to elucidate and clarify the Hatzimanolis test.

The majority of the High Court determined that the first enquiry to be undertaken is whether the circumstances of the injury are such as to render a case under consideration a “place” case or an “activity” case and then, once that is determined, to proceed to consider whether the injury was suffered in circumstances induced or encouraged by the employer.

As the employer did not induce or encourage the activity in which the worker was engaged, it was held that she was not in the course of employment.

Click Here to read a detailed analysis of this decision and its impact on Section 9A.

Limitation Decision a Mixed Outcome for Employers

The Court of Appeal delivered Judgment in Gallager Bassett Services NSW Pty Limited v Murdock [2003] NSW CA 386 on 20 November 2013.

Mr Murdock was granted leave pursuant to Section 151D of the Workers Compensation Act to commence proceedings out of time against his employer.

The employer (Scheme Agent) filed an Appeal, principally on the basis that it was prejudiced by its inability to recoup payments of compensation paid during an initial period by virtue of Limitations issues, and on the basis that the employer was out of time to claim contribution from another party.

The Court of Appeal found that the employer was not relevantly prejudiced in terms of recovery of benefits because it failed to commence its own recovery proceedings within time, when it had the relevant information to do so, and also on the basis that Section 151Z(1)(b) of the Workers Compensation Act would ensure that all payments of compensation would be repaid out of damages the Plaintiff recovered from the non-employer parties to the proceedings.

The employer also complained that Section 26 of the Limitation Act provided that a claim for contribution was not maintainable if brought after the first of two periods to expire; the period of 4 years from “the date of expiration of the limitation period for the principal cause of action” (Section 26(1)(b); and the period of 2 years from the date on which the cause of action for contribution first accrues to the Plaintiff or a person though whom the Plaintiff claims (Section 26(1)(a)).

The employer contended, consistent with previous authority, that the principal cause of action expired 3 years after the date of injury and so the cause of action was not maintainable 7 years from the date of injury, a period which had long since expired.

The worker argued, however, that by virtue of Section 26(3) the Limitations period is the period “fixed by or under the Limitation Act for any other enactment” and that Section 26(2) provides that the date on which a cause of action for contribution first accrues is when a relevant person is liable in respect of the damage for which contribution is claimed by Judgment in a civil action or arbitral award (or when apportionment of damage is agreed).

Barrett  JA concluded that the granting of leave under Section 151D meant that there was no longer any limitation period “fixed by or under” any legislation in respect of the proceedings.  His Honour considered that, in effect, the time bar was simply abolished, stating:-

“I am therefore of the opinion that the grant of leave to Mr Murdock under Section 151D(2) of the WCA Act in respect of proceedings against the Murdock employer not only freed Mr Murdock from the time bar that would otherwise have precluded the bringing of those proceedings by him but also freed the Murdock employer from the time bar that Section 26(1)(b) of the Limitation Act would otherwise have placed in the way of bringing any cross-claim by it against any Non-Employer Tortfeasor under Section 5 (1)(c) of the LRMPA Act”.

His Honour ultimately concluded that the relevant limitation period for bringing a claim for contribution was 2 years from the date on which a Judgment or Arbitral Award eventuates (or apportionment of damages agreed).

Thus, the effect of the decision somewhat deflates arguments previously available to employers to resist Section 151D applications on the grounds of prejudice, in terms of losing the opportunity to bring a cross-claim against a non-employer tortfeasor, but gives some comfort to Scheme Agents in terms of the opportunity to bring claims for contribution after an extended period of time.

Different considerations will apply in the event that the effluxation of time has fundamentally prejudiced an employer in terms of proving the elements of a claim for contribution against a Non-Employer Tortfeasor.

Limitations for Workers Compensation Claims

The Workers Compensation Act 1987 precludes recovery of compensation unless a claim for the compensation has been made within 6 months after the injury or accident happened (Section 261(1)).  However, Section 261(6) provides:-

“If an injured worker first becomes aware that he or she received an injury after the injury was received, the injury  is for the purposes of this section taken to have been received when the worker first became so aware”.

In Unilever Australia v Petrevska [2013] NSW CA 373, the Court of Appeal considered concepts of awareness and knowledge for the purposes of Section 261(6) in relation to a claim for hearing loss brought after the relevant 6 month initial period.

Macfarlan JA stated 1 at [33] “In a claim for compensation for boilermakers’ deafness, a worker is aware that he has received an injury to which Section 17 applies when he is aware of 2 things.  First, that he has sensorineural hearing loss (boilermakers’ deafness and any deafness of a similar origin (Section 17(2)), which is a loss of hearing of such a nature as to be contracted by a gradual process.  As noted above, because many things unrelated to employment can cause hearing loss, it is not sufficient that the worker is merely aware of a gradual loss of hearing.  In addition, and second, though liability will ultimately fall on the employer who last employed the worker in employment to the nature of which the injury was due, as opposed to the employer who actually caused the hearing loss, the worker must be aware that his hearing loss has been contributed to by his employment”.

His Honour endorsed the proposition that in some cases a worker will not be aware that he has received an injury until he has obtained expert medical evidence and advice on the relevance of that evidence.  He stressed, however, that each case will turn on its own facts.


2012 Reforms Catch Permanent Impairment Claims for Further Hearing Loss

In Sukkar v Adonis Electrics Pty Limited [2003] NSW WCC PD 59 President Keating considered a question of law involving construction and interpretation of the 2012 amendments in relation to a claim for further hearing loss.

The worker had previously received compensation in 1996 in respect of 12.9% binaural hearing loss and on 19 June 2012 he submitted a further claim in respect of an additional 9% Whole Person Impairment.

The claim was rejected by the Scheme Agent on the basis that the further claim did not exceed the “greater than 10%” threshold mandated by Section 66(1) of the Act as amended in 2012.

President Keating held that the 2012 amendments do apply to claims for permanent impairment compensation for hearing loss made on or after 19 June 2012 where a worker has made a previous permanent impairment claim for hearing loss.  It was noted that the deemed date of injury was 19 June 2012 which was, in effect, a new injury or a “further loss” of hearing as described in Section 17 of the Act.  It was on that basis that the case was distinguished from the Court of Appeal decision in Goudappel.  In other words, the worker had not made a claim of any kind in respect of the injury prior to 19 June 2012 and was therefore not in a position to access the protection provided by Goudappel. 

President Keating also determined that Mr Sukkar could not aggregate permanent impairment received from each of the injuries for the purposes of satisfying the new Section 66(1) “greater than 10%” threshold.  His Honour stated:-

“The new regime to which I have made reference, is predicated on a construction of the legislation that permits “only one claim” (emphasis added) for “an injury”.  In that sense, “injury” may mean injurious event or pathology. 

However, compensation under Section 66(1) of the 1987 Act is only payable “as provided by this Section”.  The reference to “this section” includes Section 66(1A) and the limitation on the number of claims that can be made.  It must follow that, irrespective of whether “injury” referred to in Section 66 refers to an injurious event or the same pathological condition, the one claim that may be made under the Act, as amended, must satisfy the 10% threshold before whole person compensation is payable under the Section”.

His Honour was influenced by the repeal of the former Section 66(2)(a) 2 in determining that there was no ambiguity which would allow an interpretation more favourable to the worker.

2.  Section 66(2)(a) specified the basis for calculating permanent impairment compensation where the degree of permanent impairment was not greater than 10%.

2012 Reforms do not affect Hearing Loss Injuries before 1 January 2002

In BP Australia Limited v Greene [2013] NSW WCC PD 60 Deputy President Roche was required to consider the impact of the 2012 amendments on a hearing loss claim with a 1994 deemed date of injury.

The worker submitted a claim for 15.7% binaural hearing loss (equivalent to 8% Whole Person Impairment) on 19 June 2012.  The Scheme Agent denied liability on the basis that the worker did not satisfy the “greater than 10%” Whole Person Impairment Threshold following the 2012 amendment to Section 66(1) of the Workers Compensation Act 1987. 

The Deputy President agreed with the Arbitrator that the 2012 amending Act did not repeal Clause 3 of Part 18C of Schedule 6 to the 1987 Act, which provides:-

3(1) the lump sum compensation amendments [the 2001 amendments] do not apply in respect of an injury received before the commencement of the amendments (even if the injury is subject of a claim made after the commencement of the amendments) except as follows”.  (None of the exceptions were relevant to the consideration of the present claim).

The Deputy President noted an apparent inconsistency between the above provisions and Clause 3(1) of Part 19H of Schedule 6 which effectively provides that the 2012 amendments extend to injuries, claims, and proceedings pending in the Commission before commencement of the amendments.

The Deputy President agreed with the Arbitrator that there was no basis to conclude that there was an implied repeal of Clause 3 of Part 18C, and considered that there was no clear statement of intention to abolish the pre-2012 Scheme.  He was fortified in his view by the fact that the legislature re-introduced Section 69A which invokes a 6% threshold for hearing loss claims with compensation calculated by reference to the Table of Disabilities.

The Deputy President ultimately concluded that for hearing loss injuries received before 1 January 2002, Clauses 3 and 15 of Part 19H must be read subject to Clause 3 of Part 18C.  Accordingly, the “greater than 10%” threshold introduced to Section 66(1) by the 2012 reforms do not apply to injuries received before 1 January 2002 even where claims are made on or after 19 June 2012.

Section 66A Agreement followed by further claims

Deputy President Roche has considered the proper approach where a further permanent impairment claim is made and an incompatible Medical Assessment Certificate issued compared to a previous Section 66A Agreement.

In Roche v Australian Prestressing Services Pty Limited [2013] NSWWCC PD 7, the parties entered into a Section 66A Complying Agreement in respect of a 6% Whole Person Impairment, consisting of a 2% Whole Person Impairment resulting from injury to the left ankle and a 4% Whole Person Impairment resulting from injury to the left wrist.

Subsequently, a claim was brought for additional lump sum compensation based on a report of Dr Patrick, who assessed a 16% Whole Person Impairment consisting of a 5% Whole Person Impairment resulting from injury to the lumbar spine, a 1% Whole Person Impairment resulting from injury to the left wrist and an 11% Whole Person Impairment resulting from injury to the left ankle.

Proceedings were commenced in the Commission but the claim in respect of the lumbar spine was discontinued.  The balance of the claim was referred to an Approved Medical Specialist who assessed a 9% Whole Person Impairment resulting from injury to the left ankle and a 0% Whole Person Impairment resulting from injury to the left wrist.

The Commission awarded lump sum compensation in respect of a 9% Whole Person Impairment with credit to be given for the monetary value of the 6% Whole Person Impairment paid under the Section 66A Complying Agreement.  The worker, however, argued that the 9% Whole Person Impairment assessed by the Approved Medical Specialist in respect of the injury to the left ankle should be combined with the 4% Whole Person Impairment resulting from injury to the left wrist contained in the Section 66A Complying Agreement, meaning that the overall degree of impairment was 13% Whole Person Impairment and that he was therefore also entitled to compensation pursuant to Section 67.

Deputy President Roche rejected the worker’s argument on the basis that the doctrine of estoppel does not apply in a changing situation and that, noting that the concept of “permanent impairment” does not mean “everlasting” or “perpetual”, the correct position was that the s.66A Complying Agreement reflected the position as it bound the parties at the time it was made while the Medical Assessment Certificate was conclusively presumed to be correct as to the position at the time it was given.  Thus, while the employer could not seek a refund in respect of the 4% Whole Person Impairment paid in respect of the wrist impairment which was found no longer to be present by the Approved Medical Specialist, the correct approach was to award compensation on the basis assessed by the Approved Medical Specialist with credit to be given in respect of the amount previously paid without regard to the particular body parts in respect of which payment had been previously made.

Liability for Overseas Medical Treatment

Section 60 of the Workers Compensation Act 1987 provides that an employer is liable for the cost of reasonably necessary medical or related treatment (other than domestic assistance) resulting from an injury.

Section 59 provides that the cost of treatment provided by a “medical practitioner” is payable.

In Nishi v Macquarie Group Services Australia Pty Limited [2012] NSW WCC 119 Arbitrator Sweeney decided that following amendments to the Act on 1 July 2010 the definition of Medical Practitioner is now to be found in Section 21 of the Interpretation Act 1987:-

“A person registered under the Health Practitioner Regulation National Law to practice as a Medical Practitioner (other than a student)”.

As there was no evidence that treatment provided by doctors in Singapore and China were registered under the Health Practitioner Regulation National Law to practice as Medical Practitioners, the Arbitrator held that treatment provided by those doctors was not medical or related treatment within the meaning of Section 60(1)(a) of the 1987 Act.

Conversely, Section 60(b) imposes a liability for “any hospital treatment” with no limitations in terms of geographic location or registration requirements.  Accordingly, the costs of hospital treatment in Singapore and China were allowed.