FEDERAL COURT OF AUSTRALIA COMPENSATION – permanent impairment – whether a permanent impairment which worsens significantly is the same, or a different, permanent impairment for the purposes of awarding lump sum compensation pursuant to the Safety, Rehabilitation and Compensation Act 1988 (Cth) Safety, Rehabilitation and Compensation Act 1988 (Cth), ss 24, 25, 124 Administrative Appeals Tribunal Act 1975 (Cth), s 44 Brennan v Comcare (1994) 50 FCR 555, considered Blackman v Australian Telecommunications Corporation (1990) 12 AAR 11, considered Comcare v Levett (1995) 60 FCR 14, considered Australian Telecommunications Commission v Leech (1982) 69 FLR 409, cited Slattery v Comcare (1996) 70 FCR 131, cited Hoyle v Telstra Corporation Ltd (1997) 75 FCR 390, cited Hope v The Council of the City of Bathurst (1980) 144 CLR 1, cited Spencer v Secretary, Department of Social Security (1998) 154 ALR 489 DEPARTMENT OF DEFENCE AS DELEGATE OF COMCARE v ROBIN WEST AG 2 of 1998 JUDGES: O'CONNOR, HEEREY, MERKEL JJ PLACE: MELBOURNE (HEARD IN CANBERRA) DATE: 31 JULY 1998 IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY AG 2 of 1998 on appeal from the administrative appeals tribunal BETWEEN: DEPARTMENT OF DEFENCE AS DELEGATE OF COMCARE Applicant AND: ROBIN WEST Respondent JUDGES: O'CONNOR, HEEREY, MERKEL JJ DATE OF ORDER: 31 JULY 1998 WHERE MADE: MELBOURNE (HEARD IN CANBERRA) THE COURT ORDERS THAT: 1. The appeal be allowed. 2. The decision of the Administrative Appeal Tribunal dated 22 December 1997 be set aside and the matter remitted back to the Administrative Appeal Tribunal to be heard and determined in accordance with law. 3. No order be made as to costs. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY AG 2 of 1998 BETWEEN: DEPARTMENT OF DEFENCE AS DELEGATE OF COMCARE Applicant AND: ROBIN WEST Respondent JUDGES: O'CONNOR, HEEREY, MERKEL JJ DATE: 31 JULY 1998 PLACE: MELBOURNE (HEARD IN CANBERRA) REASONS FOR JUDGMENT O'CONNOR J I agree with the reasons for judgment of Merkel J. I certify that this page is a true copy of the Reasons for Judgment herein of the Honourable Justice O'Connor Associate: Dated: 31 July 1998 IN THE FEDERAL COURT OF AUSTRALIA AUSTRALIAN CAPITAL TERRITORY AG 2 of 1998 DISTRICT REGISTRY on appeal from the ADMINISTRATIVE APPEALS TRIBUNAL BETWEEN: DEPARTMENT OF DEFENCE AS DELEGATE OF COMCARE AppELLANT AND: ROBIN WEST Respondent JUDGES: O'CONNOR, HEEREY, MERKEL JJ DATE: 31 JULY 1998 PLACE: melbourne (HEARD IN cANBERRA) REASONS FOR JUDGMENT HEEREY J: The case before the Tribunal The appellant appeals from a decision of the Administrative Appeals Tribunal (the Tribunal) which set aside earlier decisions disallowing the respondent's claim for lump sum compensation for permanent impairment under the Safety, Rehabilitation and Compensation Act 1988 (Cth) (the 1988 Act). The Tribunal described the case in the following terms: "2. The substantial issue in this case relates to the meaning of the word 'impairment' in ss 24 and 124(3) of the 1988 Act. The parties have agreed on all relevant factual matters in a manner which squarely raises this issue for determination. Accordingly it is unnecessary to explore the applicant's medical or employment history in any detail. However a general statement of his background is required in order to illustrate how this issue arises. FACTUAL BACKGROUND 3. The applicant, who was born in 1948, suffered a serious back injury in October 1968 during the course of his employment with the Department of Defence. It is accepted that this is a compensable injury under the relevant legislation. Since then he has undergone three surgical procedures on his back. A laminectomy was performed in 1970 at which time a bulging L5/S1 disc was excised; in 1974 a posterior lateral fusion was performed, and in March 1984 he underwent a complete fusion of the L5/S1 disc spaces. 4. For some time after the 1984 surgery the applicant's condition appeared to have resolved. However by 1988 he was again suffering from recurrent back pain. Since December 1988 there has been a significant deterioration in his back condition, with increased pain and loss of movement. Also over this period the nerve root irritation in his back has led to substantial pain and loss of function in both legs. 5. At the hearing before me the parties announced their agreement as to the applicant's medical condition on 1 December 1988 and at the present time. This agreed set of facts accords with the medical evidence in the case, and thus provides an appropriate basis upon which a discussion of the legal issues can proceed. 6. The facts as agreed by the parties are as follows: · As at 1 December 1988 the applicant suffered a 10 per cent permanent impairment of his lumbar spine under Table 9.6 of the Guide to the Assessment of the Degree of Permanent Impairment ('The Guide'). · As at 18 December 1996 (and continuing to the present) the applicant suffered a 20 per cent permanent impairment in relation to his lumbar spine under Table 9.6 of the Guide. · The applicant now suffers a 20 per cent permanent impairment under Table 9.5 of the Guide in relation to both legs. There was no impairment to his legs on 1 December 1988. 7. The first of December 1988 is the date on which the 1988 Act came into force ('the commencing date'). At the time of the applicant's initial injury, the Commonwealth Employees' Compensation Act 1930 ('the 1930 Act') was in force. This was repealed by the Compensation (Commonwealth Government Employees) Act 1971 ('the 1971 Act') which was in turn repealed and replaced by the 1988 Act. 8. The issue which arises in this case is whether the transitional provisions of the 1988 Act have the effect of disentitling the applicant from receiving lump sum compensation for the permanent impairment to his back, given that this impairment arises out of his 1968 injury and that lump sum compensation was not payable for back injury under either the 1930 or the 1971 Act. In order to explore this issue it is necessary to reproduce the relevant statutory provisions." Statutory Provisions Sections 24 and 25 of the 1988 Act provide for the payment of lump sum compensation for injuries resulting in permanent impairment. Those sections, so far as are relevant here, provide as follows: "Division 4 – Injuries resulting in impairment Compensation for injuries resulting in permanent impairment 24. (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 employees'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, where Comcare determines that the degree of permanent impairment of the employee is less than 10%, an amount of compensation is not payable to the employee under this section. … Interim payment of compensation 25. (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 of 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, 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." 'Impairment', 'injury' and 'permanent' are defined in s 4 of the 1988 Act in the following terms: "'impairment' means the loss, the loss of the use, or the damage or malfunction, of any part of the body or of any bodily system or function or part of such system or function; 'injury' means; (a) a disease suffered by an employee; or (b) an injury (other than a disease) suffered by an employee, being a physical or mental injury arising out of, or in the course of, the employee's employment; or (c) an aggravation of a physical or mental injury (other than a disease) suffered by an employee (whether or not that injury arose out of, or in the course of, the employee's employment), being an aggravation that arose out of, or in the course of, that employment; but does not include any such disease, injury or aggravation suffered by an employee as a result of reasonable disciplinary action taken against the employee or failure by the employee to obtain a promotion, transfer or benefit in connection with his or her employment; … 'permanent' means likely to continue indefinitely;" The applicant's initial injury having been sustained well before the commencing date, the transitional provisions of the 1988 Act, as set out in s 124, apply in his case. Section 124, as relevant here, provides as follows: "Division 2 – Transitional provisions Application of Act to pre-existing injuries 124. (1) Subject to this Part, this Act applies in relation to an injury, loss or damage suffered by an employee, whether before or after the commencing day. (1A) Subject to this Part, a person is entitled to compensation under this Act in respect of an injury, loss or damage suffered before the commencing day if compensation was, or would have been, payable to the person in respect of that injury, loss or damage under the 1912 Act, the 1930 Act or the 1971 Act. (2) A person is not entitled to compensation under this Act in respect of an injury, loss or damage suffered before the commencing day if compensation was not payable in respect of that injury, loss or damage: (a) where the injury, loss or damage was suffered before the commencement of the 1930 Act – under the 1912 Act; (b) where the injury, loss or damage was suffered after the commencement of the 1930 Act but before the commencement of the 1971 Act – under the 1930 Act as in force when the injury, loss or damage was suffered; or (c) in any other – under the 1971 Act as in force when the injury, loss or damage was suffered. (3) A person is not entitled to compensation under section 24 or 25 in respect of a permanent impairment, or under section 17 in respect of the death of an employee, being an impairment or death that occurred before the commencing date, if: (a) the person received compensation of a lump sum in respect of that impairment or death under the 1912 Act, the 1930 Act or the 1971 Act; or (b) the person was not entitled to receive compensation of a lump sum in respect of that impairment or death: (i) where the impairment or death occurred before the commencement of the 1930 Act – under the 1912 Act; (ii) where the impairment or death occurred after the commencement of the 1930 Act but before the commencement of the 1971 Act – under the 1930 Act as in force when the impairment or death occurred; or (iii) in any other case – under the 1971 Act as in force when the impairment or death occurred. (4) The amount of compensation (if any) that a person is, by virtue of this section, entitled to receive under section 24 or 25 in respect of a permanent impairment, or under section 17 in respect of the death of an employee, being an impairment or death that occurred before the commencing day, shall be the same as the amount of the compensation that would have been payable to that person, if this Act had not been enacted, under: (a) where the impairment or death occurred before the commencement of the 1930 Act – (b) where the impairment or death occurred after the commencement of the 1930 Act but before the commencement of the 1971 Act – the 1930 Act as in force when the impairment or death occurred; or (c) in any other case – the 1971 Act as in force when the impairment or death occurred." The Tribunal summarised the historical context of the legislation and the respective contentions in the instant case as follows: "12. Before the 1988 Act there was no general system for payment of lump sum compensation to Commonwealth employees. The scheme of the 1930 and the 1971 Act was to reimburse injured employees for their medical expenses and to pay compensation on a weekly basis during periods of incapacity. Under s 12 of the 1930 Act lump sum compensation was payable in relation to certain injuries specified in the Third Schedule of the Act. These did not include back injuries. Under s 39 of the 1971 Act lump sum compensation was payable to employees where work-related injuries resulted in certain specified losses. These included the loss of the efficient use of a leg, but did not include the loss of any part of the back. ISSUES IN THIS CASE 13. With this background I return to the facts of the present case. It is conceded by the applicant that s 124(3) prevents him from claiming lump sum compensation in relation to the 10 per cent impairment to his back which occurred before 1 December 1988. The respondent for its part concedes that the applicant is entitled to receive compensation under s 24 in relation to the permanent impairment to his legs. The issue left outstanding is whether the applicant is prevented by s 124(3) from claiming lump sum compensation under s 24 for the 10 per cent back impairment which has occurred since 1 December 1988. 14. The respondent's concession as to the applicant's leg impairment was made on two bases: first, because the impairment to his legs has occurred since the commencing date and thus does not fall within the disentitling provisions of s 124(3). Even if this impairment had pre-dated the commencing date, it was an impairment which was compensable under the 1971 Act and thus would not have been affected by s 124(3)." 15. The contrast between the applicant's acknowledged entitlement in relation to the impairment in his legs and the very real dispute as to his entitlement in relation to his back amply illustrates the point at issue in this case. The whole of the permanent impairment to the applicant's legs occurred after the commencing date of the 1988 Act. Accordingly there can be no question of s 124(3) applying so as to disentitle him to compensation under s 24 in relation to that impairment. However the situation in relation to his back is entirely different, for a back impairment had already occurred before the commencing date. This being the case, the respondent says that s 124(3) disentitles the applicant to receive compensation under s 24 in relation to that impairment as there was no entitlement to lump sum compensation for it under the 1971 Act." Relevant Case Law The Tribunal reviewed the applicable authorities as follows: "17. This issue has been the subject of discussion in a number of cases, both in the Federal Court and in the Tribunal. The first of these was Blackman v Australian Telecommunications Corporation (1990) 12 AAR 11. This was an appeal from the AAT in which the applicant, who had worked with asbestos during the 1950s, was diagnosed in November 1988 as suffering from mesothelioma. He sought lump sum compensation under ss 24 and 25 of the 1988 Act in respect of his permanent impairment. The AAT determined that because that impairment had occurred before 1 December 1988, s 124(3) operated so as to disentitle him from receiving this compensation. The applicant appealed to the Federal Court where he argued that a substantial deterioration in his condition which had occurred after 1 December 1988 should be treated as constituting a fresh impairment under s 25. However this submission was rejected. The Court (Pincus, Foster and Hill JJ) said at 14: 'The only substantial argument advanced by Mr Joseph for the applicant, was that relevant 'permanent impairment' occurred after as well as before the commencing date, and that that occurring after brought s 24 into play. There was some evidence before the Tribunal that the disease, and therefore the degree of impairment, had generally worsened since the condition was first diagnosed, in accordance with its natural progress. It appears that treatment alleviated the effects of the disease at one stage, but the applicant's overall condition has tended to deteriorate. Mr Joseph's contention amounted to this: although there is only one disease and, having regard to the definition of injury in s 4(1), therefore only one 'injury', if the impairment consequent upon it has worsened substantially after the commencing date, then that worsening in itself constituted an 'impairment' within the meaning of s 124(3) occurring after the commencing date. If the contention of [sic] behalf of the applicant is correct, then each time an impairment worsens significantly, there is a new impairment within the meaning of the 1988 Act. We cannot read the relevant provisions in this way. The scheme of the Act, in particular of ss 24 and 25, is not that as a disease progresses, the aggravation of its consequences constitutes a series of new impairments, each giving rise to a separate liability to pay compensation. If that were so, then small increments of aggravation of the impairment would not be compensable at all; for under s 24(7) there is no right to compensation if the degree of permanent impairment is determined to be less than 10 per cent. As an impairment worsens, further rights to compensation may accrue under s 25, but not because there is another distinct impairment.' 18. The matter was again discussed in Brennan v Comcare (1994) 50 FCR 555. The immediate issue in that case related to the time at which it could be said that a permanent impairment first occurred within the meaning of s 124(3). The factual background in that case was not dissimilar to the present one in that Mr Brennan had suffered a series of back injuries between 1972 and 1986 and had undergone spinal surgery before the commencing date of 1 December 1988. Thereafter his condition deteriorated significantly. Mr Brennan thus sought lump sum compensation under s 24 of the 1988 Act in proceedings before the AAT. The Tribunal found that as his back condition had not stabilised by the commencing date, Mr Brennan's impairment did not occur until after that date and was thus not subject to the disentitlement contained in s 124(3)(b) of the 1988 Act. The Full Federal Court (Burchett, Ryan and Gummow JJ) held that the AAT's approach had been erroneous. A permanent impairment does not 'occur' when a condition stabilises but when it first becomes permanent, namely when it can be said to be likely to continue indefinitely. The matter was thus remitted to the AAT for reconsideration. However as it was likely that any further hearing in the AAT would raise the question of the applicability of s 124(3) in Mr Brennan's case, Burchett J embarked upon a discussion of the inter-relationship between s 124(3) and ss 24 and 25 of the 1988 Act. He pointed out that a single injury, such as a back injury, can sometimes lead to losses or malfunctions manifesting themselves in different parts of the body over time. On other occasions there might be an increase in the impairment of a single limb. Burchett J pointed out that there is nothing in the terms of ss 24 and 25 to suggest that any distinction should be drawn between these two situations. To the contrary, in all cases, the same test of 10 per cent impairment of the whole person is applied. Burchett J then turned his attention to s 124(3), and made the following observations: 'It will be observed that subs (3) talks about 'a permanent impairment' and 'that impairment'. This language is consistent with the analysis I have made of s 24, and with the notion that there may be a number of impairments arising at different times out of the same injury. Had Parliament intended to exclude the operation of the 1988 Act wherever an injury had resulted in any permanent impairment arising before the commencing date, it could easily have said so. Instead, what Parliament did provide was carefully linked to a particular impairment. Only where that impairment occurred before the commencing date do the exclusionary provisions of subs (3) operate. Unless they do, subs (1) holds sway, and an impairment is compensable under the 1988 Act. Returning then to s 24, it seems quite clear that s 124 applies without difficulty to a case where a person injured before the commencing date did not suffer an immediate impairment, but the injury resulted in one after the commencing date. Equally, it seems to me, there is no difficulty about a case where there was an impairment before the commencing date in, say, one limb, but a new impairment developed in, say, another limb after the commencing date. The concentration on the particular impairment, to which I have already drawn attention, in both s 24 and s 124 is too marked to be without effect. Each of these cases is compensable under the 1988 Act by virtue of ss 24 and 124(1), not being caught by the opening words of s 124(3). But it was urged in argument that a case, such as a weakened arm becoming much weaker, stands on an entirely different footing. There, so it was said, the first weakening of the arm is an impairment, and further weakening is not to be regarded as a further impairment, but simply as a worsening of the one impairment. The effect of this view will be better appreciated if it is remembered that any weakening of the arm may amount to an impairment, the degree of which may even be assessed at nought per cent (see s 28(5)). There is no sensible reason, in point of policy, why the benefits of the 1988 Act should be conferred upon a worker who loses the use of his right leg after the commencing date, having much earlier lost the use of the left, by reason of an injury in 1985, while the benefits of the 1988 Act are withheld from a worker who suffered a very slight loss of the use of the right leg before the commencing date, but afterwards lost its use entirely. Nor, it seems to me, is there anything peculiar about an understanding of language which treats the further loss of the use of the leg, in the latter example, as a further impairment occurring after the commencing date. (at pp 557-558).' 19. Later his Honour said: '… When the extent of permanent impairment has been determined, s 25(4) adverts to the possibility that a further degree of impairment of the employee may afterwards appear, whether related to the same or a different part of his body, no distinction being made. The subsection assumes s 24(1) will then have a further application, for it makes no positive provision of its own – it simply puts a limit on the application of s 24(1), which is not to produce a payment unless it results in an increase of 10 per cent or more. This must mean that such an increase will constitute, in the eye of the statute, a fresh impairment, for the original impairment will have been the subject of a "final assessment" under s 25(4), perhaps being also a 'final determination' within s 25(3). (at pp 558-559)'". The Tribunal's conclusion The Tribunal discussed the competing contentions. Its conclusion was expressed in the following terms: "32. In my view there is a genuine ambiguity on this issue within the 1988 Act. The terms of ss 24 and 25 tend to support the respondent's contention, namely that a permanent impairment is a single indivisible entity which 'occurs' when an impairment first becomes permanent. On the other hand, the terms of s 124, particularly subs (3), support the construction urged by the applicant, namely that a permanent impairment can occur incrementally over time. That construction, as I have already said, accords with the beneficial nature of the legislation and is likely to lead to fairer and more consistent outcomes. Moreover it is the construction which has clearly been preferred in recent times in the Federal Court, notwithstanding that the issue has not been directly raised for consideration since Blackman." Conclusion on the Appeal In 1968 the respondent suffered an injury to his back. This was an "injury" for the purposes of s 24(1) of the 1988 Act because: · it arose out of, or in the course of, his employment by the Commonwealth: definition of "injury" in s 4(1); · the fact that it occurred before the commencing date of the 1988 Act is irrelevant: s 124(1). The respondent's 1968 injury resulted in "a permanent impairment". Hence the 1988 Act applies to him, and Comcare is liable to pay compensation to him under that Act (s 24(1)), but subject to Part X (s 124(1)). Prima facie that compensation is to be assessed in accordance with ss 24(2) to (9) and 25, ie in lump sum form. But the quantum of compensation is assessed by reference to "the degree of permanent impairment of the employee": s 24(5) (emphasis added). This is a different concept from "impairment" in the sense of loss of use of any part of the body, as in the definition of s 4(1) (which is subject to the contrary intention appearing - see the opening words of s 4(1)). The question then is whether, in the assessment of the respondent's total lump sum compensation under the 1988 Act, his back impairment is excluded by reason of the operation of s 124(3). The following factors indicate an affirmative answer: (i) the respondent now has "a permanent impairment" (it has existed since 1968 and is likely to continue); (ii) the impairment takes the form of "the loss of the use, or the damage or the malfunction of" his back; (iii) that impairment "occurred" before the commencing date of the 1988 Act; and (iv) he was not entitled to lump sum compensation under the 1930 Act when the impairment occurred. An impairment is necessarily something which commences at a particular point in time (and thus "occurs") and, especially if it is a "permanent" impairment, something that continues. There is no question of any post-1988 "injury" being relevant to his present condition. There is no suggestion in the evidence of aggravation (including acceleration or recurrence). To be relevant for compensation purposes such aggravation would have to arise out of or in the course of his employment by the Commonwealth. The agreed facts do not suggest that since 1988 the respondent has developed any loss of use, or damage, or malfunction in relation to any part of his back which was not so affected before 1988. Nor is this a case of any function of his back being adversely affected in a new way after 1988. In ordinary parlance, the respondent has had for many years a bad back and since 1988 it has got worse. Put another way, the impairment of the respondent's back which commenced in 1968 has not disappeared. It still continues. And it could not be said that the respondent now has two impairments in relation to his back. I do not think this Court can or should go behind the agreement as to the facts on which the Tribunal proceeded: see pars 2-8 and 13-15 of its reasons. If the Tribunal had found facts in those terms after a contested hearing there could be no doubt that a question of law arose as to whether the respondent's claim fell within the terms of the statute: Hope v Bathurst City Council (1980) 144 CLR 1 at 7. The Court does not have a general investigative role to search out, or instigate the searching out of, other facts; particularly is this so when neither party sought such a remedy. The present case can be resolved by posing these questions. First, does the respondent have, in relation to his back, a permanent impairment? The answer is: Yes, he has loss of the use of, or malfunction of, his back. He has had that condition since 1968. It will continue indefinitely. Secondly, did that impairment occur before 1988? The answer is: Yes, it occurred in 1968. In my respectful opinion, Blackman was correct in approaching the issue in essentially this way. "Occur" is an ordinary non-technical English term. "Impairment" is defined in the Act in a way which accords with its ordinary meaning. These terms have to be applied to an infinite range of individual cases. There is no relevant ambiguity in the terms "impairment" and "occurred". In some cases there may be difficulty and uncertainty in applying those terms and determining whether there is a new "impairment" which "occurred" after 1988. It may be that an employee's condition, to use a neutral term, becomes after 1988 so different in its pathology or in its effect on the employee that an affirmative answer can be given. The respondent's claim however is not such a case. I do not think the resolution of this case calls for the application of any general principle of construction, other than the proposition that the purpose of the transitional provisions in Part X is that an employee who suffered injury prior to the 1988 Act is to be no worse off and no better off than he or she would have been had the 1988 Act not been passed: Hoyle v Telstra Corporation Limited (1997) 75 FCR 390. There is no question but that in 1968 the respondent suffered a serious permanent impairment to his back for which he was, and continues to be, entitled to compensation. However he is not entitled to compensation of a particular kind, viz a lump sum, which was not introduced until 20 years later. Orders The appeal should be allowed and the decision of the Tribunal given on 22 December 1997 set aside. In lieu thereof there should be substituted a decision that the respondent is entitled to compensation under s 24 of the Act for 20 per cent permanent impairment in respect of injury to his legs, but that the decision under review in the Tribunal be otherwise affirmed. The respondent should pay the costs of the appeal including reserved costs. I certify that this and the preceding twelve (12) pages are a true copy of the Reasons for Judgment herein of his Honour Justice Heerey. Associate: Dated: 31 July 1998 IN THE FEDERAL COURT OF AUSTRALIA AUSTRALIAN CAPITAL TERRITORY AG 2 of 1998 DISTRICT REGISTRY BETWEEN: DEPARTMENT OF DEFENCE AS DELEGATE OF COMCARE APPELLANT AND: ROBIN WEST Respondent JUDGEs: o'connor, heerey and merkel jj DATE: 31 JULY 1998 PLACE: CANBERRA REASONS FOR JUDGMENT MERKEL J The question in the present appeal is a simple one. It is whether a permanent impairment which worsens significantly is the same, or a different, permanent impairment for the purposes of awarding lump sum compensation pursuant to the Safety, Rehabilitation and Compensation Act 1988 (Cth) ("the Act"), the commencement date of which was 1 December 1988. BACKGROUND The respondent was an employee of the Commonwealth when, in 1968, he sustained a serious back injury at work. Notwithstanding operations in 1970, 1974 and 1984, as at 1 December 1988 the respondent was still suffering from recurrent back pain. The parties were in agreement that as at 1 December 1988 the respondent was suffering a "10 per cent permanent impairment of his lumbar spine under Table 9.6 of the Guide to the Assessment of the Degree of Permanent Impairment" ("the Guide"). Under the Guide a ten per cent level of impairment of the thoraco-lumbar spine was relevantly defined as "[l]oss of less than half normal range of movement". As at 1 December 1988 the respondent was not suffering from any impairment to his legs as a result of the 1968 injury. After 1 December 1988, apparently as a result of increasing disc damage, the permanent impairment to the respondent's lumbar spine worsened. The parties were in agreement that, as at 18 December 1996 and thereafter until the hearing of his claim under the Act by the Administrative Appeals Tribunal ("the AAT"), the respondent was suffering a "20 per cent permanent impairment in relation to his lumbar spine under Table 9.6 of the Guide". Under the Guide a twenty per cent permanent impairment of the thoraco-lumbar spine was relevantly defined as "[l]oss of more than half normal range of movement". There was also agreement that since 1 December 1988 the respondent suffered a new impairment as a result of the 1968 injury which was agreed to be a twenty per cent permanent impairment under Table 9.5 of the Guide in relation to both legs. Although the respondent appears to have been employed in various departments of the Commonwealth both before and after 1 December 1988 the respondent's back condition does not appear to have deteriorated as a result of any other work related injury sustained since 1968. Under the transitional provisions of the Act the respondent was entitled to lump sum compensation in respect of a permanent impairment resulting from a compensable injury irrespective of whether the injury occurred before or after the commencement date of the Act. However, under the transitional provisions a person is not entitled to compensation in respect of a permanent impairment that occurred before the commencement date, being 1 December 1988, if the person was not entitled to receive lump sum compensation in respect of that impairment under the relevant legislation which was operative when that permanent impairment occurred. The present appeal comes to the Full Court by way of appeal, under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth), from a decision of the AAT. The judicial member constituting the Tribunal determined that the respondent was entitled to compensation by way of a lump sum payment in respect of the permanent impairment that had occurred since the commencement of the Act. It was common ground between the parties that the respondent had no statutory entitlement to an award of lump sum compensation for the ten per cent impairment to his back that was agreed to have existed as at 1 December 1988. The AAT concluded that the Act provided for the respondent to be entitled to compensation for the permanent impairment of twenty per cent to both legs, which first occurred after 1 December 1988, and was also entitled to compensation for the additional ten per cent impairment to his back which had occurred since 1 December 1988. Under Table 14.1 of the Guide those specific impairments were calculated to result in a permanent impairment of the employee of twenty-eight per cent. The AAT remitted the matter for reconsideration with a direction that the respondent is suffering from "a whole person impairment of 28 per cent" under the Guide. This appeal is concerned with the decision of the AAT that there was a lump sum entitlement in relation to the further impairment to the respondent's back which occurred after 1 December 1988. The appeal requires consideration of the relevant sections of the Act, being ss 24 and 25 which confer the entitlement to a lump sum payment for permanent impairment, and s 124 which, inter alia, provides that there is no entitlement under those sections in relation to a permanent impairment that existed prior to the commencement of the Act unless the Act applicable at the date of the permanent impairment provided for such an entitlement. THE ACT The primary provision of the Act which entitles an employee to compensation for injuries resulting in permanent impairment is s 24(1) which provides: "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." "Permanent" and "impairment" are defined in s 4 as follows: "'permanent' means likely to continue indefinitely;" "'impairment' means the loss, the loss of the use, or the damage or malfunction, of any part of the body or of any bodily system or function or part of such system or function;" "Injury" is defined in s 4 as follows: "'injury' means: (a) a disease suffered by an employee; or (b) an injury (other than a disease) suffered by an employee, being a physical or mental injury arising out of, or in the course of, the employee's employment; or (c) an aggravation of a physical or mental injury (other than a disease) suffered by an employee (whether or not that injury arose out of, or in the course of, the employee's employment) being an aggravation that arose out of, or in the course of, that employment;" Section 4 defines an "aggravation" as: "'aggravation' includes acceleration or recurrence;" An entitlement to compensation under s 24(1) arises at any time an injury to an employee results in a permanent impairment. If there is an aggravation of an existing injury and that aggravation arose out of or in the course of the employee's employment by the Commonwealth then the aggravation of the pre-existing injury is distinct from the injury and is an injury in itself which affords the employee with a separate and independent right to compensation under the Act: see Australian Telecommunications Commission v Leech (1982) 69 FLR 409 at 412-413 per Fox and Lockhart JJ and Slattery v Comcare (1996) 70 FCR 131 at 133-5 and the authorities there discussed. Accordingly, under the statutory scheme any permanent impairment, whether a worsening of an existing permanent impairment or a new impairment that results from an aggravation, as defined in the Act, of an existing injury will give rise to a discrete entitlement under s 24(1). The other relevant provisions of s 24 of the Act are: "(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. … (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, where Comcare determines that the degree of permanent impairment of the employee is less than 10%, an amount of compensation is not payable to the employee under this section. …" It is to be observed that the entitlement to compensation under s 24 arises where the injury results in a permanent impairment of any part of the employee's body or bodily system or function. However, when it comes to assessing the amount of compensation the section is concerned with the degree of permanent impairment of the employee resulting from the injury: see ss 24(5) and 24(7). Clearly, when those sub-sections refer to permanent impairment of the employee the reference is not to "impairment" in its narrower defined sense in s 4(1). Put another way the defined sense, which relates to impairment of a part of the body, is excluded by a legislative intention not to use the word in that sense when reference is made in the Act to impairment of the employee. Section 25 provides for interim payment of compensation payable under s 24. Section 25(4) provides: "Where Comcare has made a final assessment of the degree of permanent impairment of an employee, 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." Plainly, the impairment of which s 25(4) speaks when it requires an increase of ten per cent is the degree of permanent impairment of the employee rather than the degree of impairment of any particular part of the employee's body or bodily system or function: cf Brennan v Comcare (1994) 50 FCR 555 at 558-559 per Burchett J. Under the statutory scheme where an injury results in a permanent impairment to any part of the body or of the bodily system or function the employee becomes entitled to compensation, but only when the total of the permanent impairment of the employee as a result of the permanent impairment to a part of the employee's body etc exceeds ten per cent. Under s 25(4) once a final assessment has been made no further compensation can be payable under s 24 until there has been a subsequent increase in the degree of impairment of the employee of ten per cent or more as a result of injury whenever caused. Part X of the Act contains transitional provisions. Relevantly, s 124 provides as follows: "(1) Subject to this Part, this Act applies in relation to an injury, loss or damage suffered by an employee, whether before or after the commencing day. (1A) Subject to this Part, a person is entitled to compensation under this Act in respect of an injury, loss or damage suffered before the commencing day if compensation was, or would have been, payable to the person in respect of that injury, loss or damage under the 1912 Act, the 1930 Act or the 1971 Act. (2) A person is not entitled to compensation under this Act in respect of an injury, loss or damage suffered before the commencing day if compensation was not payable in respect of that injury, loss or damage: (a) where the injury, loss or damage was suffered before the commencement of the 1930 Act – under the 1912 Act; (b) where the injury, loss or damage was suffered after the commencement of the 1930 Act but before the commencement of the 1971 Act - under the 1930 Act as in force when the injury, loss or damage was suffered; or (c) in any other case – under the 1971 Act as in force when the injury, loss or damage was suffered. (3) A person is not entitled to compensation under section 24 or 25 in respect of a permanent impairment or under section 17 in respect of the death of an employee, being an impairment or death that occurred before the commencing date, if: (a) the person received compensation of a lump sum in respect of that impairment or death under the 1912 Act, the 1930 Act or the 1971 Act; or (b) the person was not entitled to receive compensation of a lump sum in respect of that impairment or death: (i) where the impairment or death occurred before the commencement of the 1930 Act - under the 1912 Act; (ii) where the impairment or death occurred after the commencement of the 1930 Act but before the commencement of the 1971 Act - under the 1930 Act as in force when the impairment or death occurred; or (iii) in any other case – under the 1971 Act as in force when the impairment or death occurred. (4) The amount of compensation (if any) that a person is, by virtue of this section, entitled to receive under section 24 or 25 in respect of a permanent impairment, or under section 17 in respect of the death of an employee, being an impairment or death that occurred before the commencing day, shall be the same as the amount of the compensation that would have been payable to that person, if this Act had not been enacted, under: (a) where the impairment or death occurred before the commencement of the 1930 Act – the 1912 Act; (b) where the impairment or death occurred after the commencement of the 1930 Act but before the commencement of the 1971 Act – the 1930 Act as in force when the impairment or death occurred; or (e) in any other case – the 1971 Act as in force when the impairment or death occurred. …" The reference in s 124 to the 1912, the 1930 and the 1971 Acts are references to repealed predecessor Commonwealth legislation, which provided for workers' compensation for employees of the Commonwealth. Plainly, the policy underlying s 124 is that where the entitlement to compensation under the Act has a relevant nexus with a period before the commencement of the Act, an employee is not to be deprived of any compensation that would have been payable under the earlier applicable, but now repealed, statutory scheme but is not to be entitled to any greater compensation than would have been payable under the repealed statutory scheme: see Hoyle v Telstra Corporation Ltd (1997) 75 FCR 390 at 392, 394 and 398. In Hoyle, the Full Court concluded that employees who were totally incapacitated before the commencement date of the Act as a result of an injury which was compensable under the 1971 Act could not receive a lump sum payment under s 24 of the Act which they were not entitled to receive under the 1971 Act. THE RESPONDENT'S IMPAIRMENT Prima facie, under ss 24(1) and 124(1) the respondent is entitled to lump sum compensation in respect of the further or additional "ten per cent permanent impairment" to his lumbar spine from which the parties agreed he was suffering at the time of the hearing before the AAT. The issue arising is whether s 124(3) precludes that entitlement or any part thereof. There can be little doubt that "permanent" and "impairment" are used in s 124(3) in their defined sense. Accordingly, s 124(3) precludes an entitlement under ss 24 and 25 in respect of an indefinite loss of the use or the damage or malfunction of any part of the body etc that had occurred prior to 1 December 1988. Unfortunately, the agreement of the parties as to the respondent's permanent impairment did not descend to any greater detail than that set out above as to the nature or extent of the impairment or the patho-physiological condition that caused the initial permanent impairment and its subsequent deterioration or worsening. Although there was evidence before the AAT that the deterioration of the respondent's lumbar spine since 1 December 1988 was a significant worsening it would be inappropriate for this Court to make a decision on that basis having regard to the agreement of the parties to contest the matter before the AAT on the basis of the agreed facts in relation to the level of impairment. I say "unfortunately" as in my view a change of the underlying patho-physiological condition or a significant worsening of an impairment which is likely to have come about as a result of that change might be relevant factors in determining whether the permanent impairment that the respondent suffered at the date of the hearing was the same permanent impairment as that which he had suffered as at or prior to 1 December 1988. In these circumstances, the question arising in the present case must be whether a deterioration in the level of permanent impairment, as defined in s 4, can result in the deteriorated condition being a new permanent impairment. The appellant answers that question in the negative in reliance upon Blackman v Australian Telecommunications Corporation (1990) 12 AAR 11 in which a Full Court (Pincus, Foster and Hill JJ) observed, obiter dicta, that a permanent impairment which generally worsens as time passes, even to a stage where it has worsened significantly, is not a new impairment or a series of separate impairments as it worsens but is the same permanent impairment. Blackman concerned an employee who was diagnosed in November 1988 as suffering from mesothelioma, a malignant and fatal lung condition. The issue before the Full Court was whether a worsening of that condition in accordance with its natural progress after 1 December 1988 was a new permanent impairment and therefore compensable under ss 24 and 25 of the Act. The Full Court (Pincus, Foster and Hill JJ) said at 14: "There was some evidence before the Tribunal that the disease, and therefore the degree of impairment, had generally worsened since the condition was first diagnosed, in accordance with its natural progress. It appears that treatment alleviated the effects of the disease at one stage, but the applicant's overall condition has tended to deteriorate. Mr Joseph's contention amounted to this: although there is only one disease and, having regard to the definition of injury in s 4(1), therefore only one 'injury', if the impairment consequent upon it has worsened substantially after the commencing date, then that worsening in itself constituted an 'impairment' within the meaning of s 124(3) occurring after the commencing date. If the contention of [sic] behalf of the applicant is correct, then each time an impairment worsens significantly, there is a new impairment within the meaning of the 1988 Act. We cannot read the relevant provisions in this way. The scheme of the Act, in particular of ss 24 and 25, is not that as a disease progresses, the aggravation of its consequences constitutes a series of new impairments, each giving rise to a separate liability to pay compensation. If that were so, then small increments of aggravation of the impairment would not be compensable at all; for under s 24(7) there is no right to compensation if the degree of permanent impairment is determined to be less than 10 per cent. As an impairment worsens, further rights to compensation may accrue under s 25, but not because there is another distinct impairment. To achieve the result that a variation (substantial or otherwise) of the degree of impairment should be treated as a new impairment for the purposes of s 124(3), different language would have been necessary. The natural reading of 'impairment…that occurred before the commencement date' is such as to cover the case in which there is but a single impairment, which came into existence before the commencing date and thereafter fluctuated in intensity but generally worsened. The consequence is that the applicant is not entitled to compensation under ss 24 and 25 of the 1988 Act in respect of his permanent impairment, because it occurred, that is, came into existence, before the commencing date." The respondent answers the question of whether a deterioration in the level of impairment can result in a new permanent impairment in the affirmative in reliance upon a later Full Court (Burchett, Ryan and Gummow JJ) decision in Brennan v Comcare (1994) 50 FCR 555. Brennan concerned an employee who suffered a serious back injury prior to 1 December 1988 which resulted in a significant impairment. As the Tribunal had failed to consider whether the impairment prior to 1 December 1988 was a permanent impairment the matter was required to be remitted to the Tribunal to determine that question and, if necessary, the subsequent question whether the change in condition after 1 December 1988 was a different permanent impairment. A number of observations were made in relation to the latter issue. Burchett J said at 558: "But it was urged in argument that a case, such as a weakened arm becoming much weaker, stands on an entirely different footing. There, so it was said, the first weakening of the arm is an impairment, and further weakening is not to be regarded as a further impairment, but simply as a worsening of the one impairment. The effect of this view will be better appreciated if it is remembered that any weakening of the arm may amount to an impairment, the degree of which may even be assessed at nought per cent (see s 28(5)). There is no sensible reason, in point of policy, why the benefits of the 1988 Act should be conferred upon a worker who loses the use of his right leg after the commencing date, having much earlier lost the use of the left, by reason of an injury in 1985, while the benefits of the 1988 Act are withheld from a worker who suffered a very slight loss of the use of the right leg before the commencing date, but afterwards lost its use entirely. Nor, it seems to me, is there anything peculiar about an understanding of language which treats the further loss of the use of the leg, in the latter example, as a further impairment occurring after the commencing date." (Emphasis in original) And at 559: "If there be an ambiguity, so as to cast a doubt upon the application of the word 'impairment', even as defined, to a more serious stage of a condition which has previously manifested itself, two principles of construction would have to be considered. In the first place, the consistency of the policy of a statute, and its fairness, have repeatedly been regarded as good guides to its interpretation: Blunn v Cleaver (1993) 47 FCR 111 at 125-127; Busby v Chief Manager, Human Resources Department, Australian Telecommunications Commission (1988) 20 FCR 463 at 468; Commissioner for Railways (NSW) v Agalianos (1955) 92 CLR 390 at 397. It would be neither consistent nor fair to differentiate between the two workers losing the use of their right legs, after the commencing date, in the example I gave above. A consistent application of 'the broad policy underlying the statutory provisions' was treated by Gibbs CJ, Mason and Wilson JJ as a pointer to the right construction of the Compensation (Commonwealth Government Employees) Act 1971 (Cth) in Johnston v Commonwealth (1982) 150 CLR 331 at 339-340. Their Honours (at 341) again referred to this principle when they said that their view of the effect of the Act was in the circumstances 'wholly congruent with the policy and purposes of the Act'. The second principle was also applied in Johnston v Commonwealth. It is that workers' compensation legislation is of a remedial nature, and should be construed liberally. That view was asserted by all members of the High Court, as appears at 342 and 343. The same point was made by Fullagar J in his dissenting judgment in Wilson v Wilson's Tile Works Pty Ltd (1960) 104 CLR 328 at 335, when he referred to 'the established principle that, where two constructions of a Workers' Compensation Act are possible that which is favourable to the worker should be preferred': see also the authorities collected in Repatriation Commission v Hawkins (1993) 45 FCR 205 at 211 and Gye v McIntyre (1991) 171 CLR 609 at 619." At 560-561 Burchett J made the following observations in respect of Blackman: "Although the views expressed in the joint judgment are, of course, entitled to the greatest respect, it does seem to me that those views are obiter dicta, having regard to the facts of Blackman. The judgment does not contain any extended discussion of the relationship between the provisions, or of the kinds of instances of their application to which I have referred earlier. Nor does it mention the decisions of the High Court which determine the proper approach to the construction of workers' compensation legislation. There is no examination of any justification, in terms of 'the broad policy underlying the statutory provisions' to which Gibbs CJ, Mason and Wilson JJ referred in Johnston, for the discriminatory effect upon some types of impairment of the view taken by the Court in Blackman. It seems to me that in an appropriate case the meaning of 'impairment' and the interrelationship of ss 24 and 124 should be re-examined by a full court. However, even if the nature of an impairment consisting of the debility or other inevitable effect of a single disease entity, such as was involved in Blackman, requires that a gradual worsening of the condition not be seen as involving any fresh impairment, it would not follow that a similar result should obtain in the present case. Whether or not it should, in my opinion, will depend upon the facts as found when the Administrative Appeals Tribunal reconsiders the case. It may find there has been little or no change since the commencing date. On the other hand, it may find a significant new development has occurred involving a loss of the use or malfunction of some part of the body, bodily system or function. (Any of these would constitute an impairment within the definition in s 4.) If so, I do not think Blackman would stand in the way. In Blackman, the one state of dysfunction, (to use a neutral expression) may, at most, have got worse. But had a separate dysfunction appeared, the reasoning of the Court in that case would not have been applicable. Nor is the decision authority for such a case. Quite literally, a separate dysfunction would be an impairment within the statutory definition. It would be impossible, in construing beneficial legislation, to reject the literal effect in favour of restricting the availability of the benefits. Even if ambiguous, the Act should be construed generously, and certainly its literal meaning should not be confined without very clear warrant. In a case involving some fresh dysfunction, the difficulty created by Blackman would not be that it would stand as a decision against the acceptance of the worker's case, but rather that there would be exposed the anomaly of the Act applying to the one case and not to the other, without any discernible ground of policy to justify the distinction." Gummow J considered Blackman at 570-571: "In Blackman v Australian Telecommunications Corporation (1990) 12 AAR 11 at 14, a Full Court of this Court dealt with a submission which has some relevance to the present appeal. It was that although the relevant chain of events is triggered by the existence of the one 'injury' within the definition in s 4, if the impairment consequent upon it has worsened substantially after the commencing date, then that in itself constitutes an 'impairment' which occurred after the commencing date, within the meaning of s 124(3). The Full Court rejected that submission. It said, in a passage with which I would not disagree: 'If the contention of [sic] behalf of the applicant is correct, then each time an impairment worsened significantly there is a new impairment within the meaning of the 1988 Act. We cannot read the relevant provisions in this way. The scheme of the Act, in particular of ss 24 and 25, is not that as a disease progresses, the aggravation of its consequences constitutes a series of new impairments, each giving rise to a separate liability to pay compensation. If that was so, then small increments of aggravation of the impairment would not be compensable at all; for under s 24(7) there is no right to compensation if the degree of permanent impairment is determined to be less than 10 per cent. As an impairment worsens, further rights to compensation may accrue under s 25, but not because there is another distinct impairment.' However, the Full Court continued: 'To achieve the result that a variation (substantial or otherwise) of the degree of impairment should be treated as a new impairment for the purposes of s 124(3), different language would have been necessary. The natural reading of 'impairment ... that occurred before the commencement date' is such as to cover the case in which there is but a single impairment, which came into existence before the commencing date and thereafter fluctuated in intensity but generally worsened.' This passage is to be treated with some caution. As Burchett J points out in his judgment on the present appeal, s 24 imposes a liability upon Comcare where an injury results in a permanent impairment. The terms of the legislation are consistent with the imposition of distinct liabilities where an injury results in more than one permanent impairment, and in a particular case those results may be manifested sequentially rather than concurrently. There have been no findings of fact to indicate that the present case falls into that perhaps unusual category." (Emphasis in original) Ryan J at 561 indicated that reasoning similar to that of Burchett and Gummow JJ led him to conclude that the primary Judge's identification of error was unexceptionable. The issue was again considered by a Full Court (Lockhart, Beazley and Moore JJ) in Comcare v Levett (1995) 60 FCR 14. Levett concerned the question of whether s 124(3) disentitled an employee to make a claim under ss 24 and 25 in relation to a back injury and impairment which had been suffered prior to 1 December 1988 but became a permanent impairment after 1 December 1988. The Full Court held that as the impairment occurring prior to 1 December 1988 was not a permanent impairment the right of the employee to compensation under ss 24 and 25 was not precluded by s 124(3). However, the Court made the following observations concerning Blackman and Brennan at 19-20: "Section 124(3) was considered by Full Courts of this Court in Blackman v Australian Telecommunications Corporation (1990) 12 AAR 11 and Brennan v Comcare. The facts in those two cases differ from the facts in the present case and from each other. In Blackman it was held that the natural meaning of the expression 'impairment ... that occurred before the commencing date' in s 124(3) was such as to cover the case in which there was but a single impairment which came into existence before 1 December 1988 and thereafter fluctuated in intensity but generally worsened. The Court declined to read subs (3) so that each time an impairment worsened significantly there was a new impairment within the meaning of the 1988 Act. In Brennan Burchett J held that the language of subs (3) is consistent with the interpretation which he placed upon it, that there may be a number of impairments arising at different times out of the same injury, and that only when the relevant impairment occurred before the commencing date of the 1988 Act do the exclusionary provisions of subs (3) operate. Unless they do, subs (1) holds sway and an impairment is compensable under the 1988 Act. Gummow J reached a similar conclusion. His Honour said (at 569) that permanent impairment must have been reached before 1 December 1988 in order for the exclusion of subs (3) to operate. Ryan J agreed with Burchett J and Gummow J. Both Burchett J and Gummow J expressed the view that Blackman should be treated with some caution especially on the question of whether a gradual worsening of a condition can or cannot be seen as involving a fresh impairment (Burchett J at 560 and Gummow J at 570-571). We share that view." The present state of the authorities can be summarised as follows: · the gradual worsening of a permanent impairment in accordance with its natural progress does not constitute a series of new impairments each giving rise to a separate liability to pay compensation: see Blackman at 14 and Brennan at 570-571 per Gummow J; cf Brennan at 558-9 per Burchett J; · the observation in Blackman at 14 that a permanent impairment which worsens significantly or is such that the variation between it and the earlier permanent impairment is substantial does not result in a new permanent impairment is to be approached with "some caution": see Brennan at 558-9 and 560-561 per Burchett J and at 571 per Gummow J and Levett at 20. The present case requires resolution of the question left unresolved in the current state of the authorities, that is, whether a deterioration in a permanent impairment which existed as at 1 December 1988 is capable of constituting a new permanent impairment. The caution expressed in relation to Blackman by Burchett and Gummow JJ in Brennan and adopted by the Full Court in Levett suggests a reluctance to accept that a substantial variation, or a significant deterioration, in a person's permanent impairment is incapable of constituting a permanent impairment which is different to that which existed prior to the variation or deterioration. The decision of the AAT The AAT, after considering the authorities to which I have referred, arrived at the following conclusions: "32. In my view there is a genuine ambiguity on this issue within the 1988 Act. The terms of ss 24 and 25 tend to support the respondent's contention, namely that a permanent impairment is a single indivisible entity which 'occurs' when an impairment first becomes permanent. On the other hand, the terms of s 124, particularly subs (3), support the construction urged by the applicant, namely that a permanent impairment can occur incrementally over time. That construction, as I have already said, accords with the beneficial nature of the legislation and is likely to lead to fairer and more consistent outcomes. Moreover it is the construction which has clearly been preferred in recent times in the Federal Court, notwithstanding that the issue has not been directly raised for consideration since Blackman. 33. It follows from all I have said that I prefer the approach submitted by the applicant. I find that the applicant is suffering from a 20 per cent impairment to his legs (in accordance with Table 9.5 of the Guide) and a 10 per cent impairment in relation to his back (in accordance with Table 9.6 of the Guide). Accordingly I set aside the decision under review. The matter is remitted for reconsideration with a direction that the applicant is suffering from a whole person impairment of 28 per cent (calculated by reference to Table 14.1 of the Guide)." Can a Deterioration in a Permanent Impairment Constitute a Different Impairment? The appellant's contentions, and the dicta in Blackman, require the conclusion that under the Act a slight impairment such as a minor loss of use of a limb, which is permanent in that it is of indefinite duration, is the same impairment as the total loss of use of the limb where each impairment has resulted from the same injury. Although it is true that each impairment involves a loss of use of the limb, in my view it is not a natural use of the relevant words to say that each is the same permanent impairment. It is both more accurate and consistent with the ordinary meaning of the relevant words to say that there was initially a slight loss of use of the limb but the subsequent total loss of use of the limb was, both qualitatively and quantitatively, a different impairment. I agree with Burchett J in Brennan at 558 where his Honour said that a worker who has suffered a slight loss of use of the right leg before the commencing day but afterwards lost its use entirely is entitled to treat the further loss of the use of the leg "as a further impairment occurring after the commencing date". A loss of the entitlement conferred under ss 24 and 25 by reason of s 124(3) only occurs when the permanent impairment the subject of the claim is the permanent impairment that the employee suffered as at 1 December 1988. On my reasoning, and that of Burchett J in Brennan, where a change in a permanent impairment occurring after the commencement date is such that, quantitatively and qualitatively, it is properly to be characterised as a further or new impairment occurring after the commencing date it is compensable by a lump sum payment under ss 24 and 25. That conclusion is consistent with the language used and with the statutory policy to be discerned from ss 24, 25 and 124 of providing benefits to workers in respect of a further permanent impairment that occurs after the commencing day irrespective of whether the injury that resulted in the impairment occurred before or after the commencing day. It also avoids capricious and arbitrary outcomes under workers' compensation legislation, which is of a remedial nature and should be construed liberally: see Brennan at 559 and the cases there referred to. I have had the advantage of reading the reasons of Heerey J. The essential difference between his Honour's approach and the one which I have adopted is that I have concluded that it is not appropriate to characterise the relevant permanent impairment solely by reference to a loss of use or malfunction of part of the body or bodily system or function without regard to the nature and extent of the loss of use or malfunction. In my view the nature and extent of the loss of use or malfunction is critical to determining whether an impairment has changed to such an extent that it is a further or new impairment. His Honour's conclusion must treat a slight loss of use of a limb which progresses to a total loss of use as the same permanent impairment. For the reasons set out above I do not accept that that is so. However, in reaching my conclusion, I do not disagree with the conclusion in Blackman that gradual worsening does not result in a series of separate or further impairments. Inevitably, questions of fact and degree are involved in making a qualitative assessment as to whether, in a particular case, the permanent impairment existing as at 1 December 1988 has deteriorated to an extent that it is properly to be characterised as a further or different impairment to that which existed at the commencement date. When that question is answered in the affirmative an entitlement to lump sum compensation arises under ss 24 and 25 which is not precluded by s 124(3). Conclusion In the present case as a result of their agreed facts the parties gave little or no consideration to the underlying patho-physiological condition that caused the deterioration to the respondent's back or to a precise identification of the nature and extent of the permanent impairment which occurred since the commencement date. The relevant impairment of the respondent, as agreed as at 1 December 1988, was a loss of less than half of normal range of movement of the thoraco-lumbar spine. The subsequent impairment was agreed to be loss of more than half of normal image of movement of the thoraco-lumbar spine. The possible increase in the respondent's impairment can range from slight (eg from forty-nine to fifty one per cent impairment) which would be unlikely to constitute a new impairment, to substantial (eg from five to ninety-nine per cent impairment) which in my view would be likely to constitute a further and different impairment. In the former case it is unlikely that there would be lump sum compensation by reason of s 124(3). In the latter case it is likely that there would be lump sum compensation in respect of the further impairment under ss 24 and 25 which would not be precluded by s 124(3). For the above reasons, in my view the AAT was unable to determine the issue raised for its determination on the basis of the agreed facts. It follows that the determination made in the respondent's favour by the AAT was made without a proper factual basis for it and the AAT erred in the manner in which it interpreted the relevant statutory provisions and applied the facts to those provisions: see Hope v The Council of the City of Bathurst (1980) 144 CLR 1 at 7 and Spencer v Secretary, Department of Social Security (1998) 154 ALR 489 at 494-495. In these circumstances the appeal must be allowed. The appellant has been successful in part. However, on the issue of interpretation I have rejected the appellant's arguments to the extent that it relied on Blackman. I have also not accepted the broader argument of the respondent that any deterioration after the commencement date is a new impairment for the purposes of the statutory scheme. In all the circumstances it is appropriate to make no order as to the costs of the appeal. The appropriate orders are for the appeal to be allowed, the decision of the AAT dated 22 December 1997 to be set aside and the matter remitted back to the AAT to be heard and determined in accordance with law. I certify that this and the preceding seventeen (17) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Merkel Associate: Dated: 31 July 1998 Counsel for the Applicant: Mr H Burmester QC with Ms J Bonsey Solicitor for the Applicant: Australian Government Solicitor Counsel for the Respondent: Mr R Williams QC with Ms J Godschalk Solicitor for the Respondent: Gary Robb & Associates Date of Hearing: 9 July 1998 Date of Judgment: 31 July 1998