FEDERAL COURT OF AUSTRALIA Telstra Corporation Limited v Treloar [2000] FCA 1170 WORKERS' COMPENSATION – Commonwealth employees – transitional provisions of the Safety, Rehabilitation and Compensation Act 1988 (Cth) – injuries suffered before 1 December 1988 – entitlement to additional compensation for non-economic loss under s 27 PRECEDENTS – stare decisis – circumstances in which appropriate for Full Court to refuse to follow decision of the same court Compensation (Commonwealth Government Employees) Act 1971 (Cth) ss 39, 41 Safety, Rehabilitation and Compensation Act 1988 (Cth) ss 24, 27, 124 Schlenert v Australian and Overseas Telecommunications Corporation (1994) 49 FCR 139 followed Comcare v Bozicevic (1997) 74 FCR 260 followed Hoyle v Telstra Corporation Limited (1997) 75 FCR 390 discussed Collector of Customs v Agfa-Gevaert Ltd (1995-96) 186 CLR 389 cited Nguyen v Nguyen (1990) 169 CLR 245 cited Young v Bristol Aeroplane Co Limited [1944] KB 718 referred to Clutha Developments Pty Ltd v Barry (1989) 18 NSWLR 86 cited Queensland v Commonwealth (1977) 139 CLR 585 cited Transurban City Link Ltd v Allan (1999) 168 ALR 687 cited Commonwealth v Hospital Contribution Fund (1982) 150 CLR 49 cited John v Federal Commissioner of Taxation (1989) 166 CLR 417 cited Northern Territory v Mengel (1995) 185 CLR 307 cited Esso Australia Resources Ltd v Commissioner of Taxation (1999) 168 ALR 123 cited Babaniaris v Lutony Fashions Pty Ltd (1987) 163 CLR 1 cited TELSTRA CORPORATION LIMITED v KEITH TRELOAR N 644 of 1999 JUDGES: BRANSON, FINKELSTEIN & GYLES JJ PLACE: SYDNEY DATE: 22 SEPTEMBER 2000 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 644 of 1999 On Appeal from the Administrative Appeals Tribunal BETWEEN: TELSTRA CORPORATION LIMITED Applicant AND: KEITH TRELOAR Respondent JUDGES: BRANSON, FINKELSTEIN & GYLES JJ DATE OF ORDER: 22 SEPTEMBER 2000 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The appeal be dismissed. 2. The applicant pay the respondent's costs. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 644 of 1999 On Appeal from the Administrative Appeals Tribunal BETWEEN: TELSTRA CORPORATION LIMITED Applicant AND: KEITH TRELOAR Respondent JUDGES: BRANSON, FINKELSTEIN & GYLES JJ DATE: 22 SEPTEMBER 2000 PLACE: SYDNEY REASONS FOR JUDGMENT BRANSON and FINKELSTEIN JJ: 1 Mr Treloar suffered severe and permanent facial disfigurement from skin cancers resulting from the conditions of his employment with Telstra Corporation Limited ("Telstra"), and the treatment to remove those cancers. At the time, workers' compensation for injuries suffered by an employee of the Commonwealth or of a prescribed authority of the Commonwealth (Telstra was such an authority) was governed by the Compensation (Commonwealth Government Employees) Act 1971 (Cth) ("the 1971 Act"). 2 By virtue of his injury, Mr Treloar was entitled to compensation under s 41 of the 1971 Act, subsection (1) of which provided: "The compensation payable under this Act in respect of an injury that results in severe and permanent facial disfigurement to an employee is such amount, not exceeding $14,000 or such higher amount as is prescribed, as is determined in accordance with this section, and that compensation is payable to the employee." He made a claim for compensation but the claim was wrongly refused. Before the decision denying compensation could be reconsidered or reviewed, the 1971 Act was repealed and replaced by the Safety, Rehabilitation and Compensation Act 1988 (Cth) ("the 1988 Act") which came into force on 1 December 1988. Notwithstanding the repeal of the 1971 Act, Mr Treloar was still entitled to receive compensation for his injury. The transitional provisions in Part X of the 1988 Act make provision for the payment of compensation to an employee who has suffered a compensable injury when the 1971 Act, or earlier workers' compensation legislation, was in force. In particular, s 124(1) provides in substance that the 1988 Act applies in relation to injuries, loss or damage suffered by an employee before or after 1 December 1988 and s 124(1A) states that the compensation that is payable to a person entitled to compensation under the 1988 Act in respect of an injury suffered before 1 December 1988 is that which would have been payable to that person under the relevant earlier legislation. There are certain restrictions and limitations imposed upon the right to receive compensation in respect of an injury suffered before 1 December 1988 which will be mentioned later. 3 Section 14 of the 1988 Act provides, so far as is here relevant, that Comcare is liable to pay compensation in accordance with the Act in respect of an injury suffered by an employee if the injury results in impairment. The injury suffered by Mr Treloar resulted in a permanent impairment for the purposes of 1988 Act. Section 24 of the 1988 Act provides for the calculation and payment of compensation in respect of an injury which results in a permanent impairment. The amount of compensation payable under s 24 is determined by assessing the degree of permanent impairment as a percentage and multiplying that percentage by $80,000. However, s 24(7) provides that compensation is not payable in circumstances where Comcare determines that the degree of permanent impairment is less than 10%. One limitation on the operation of the 1988 Act, as it applies to injuries suffered before 1 December 1988, is that by virtue of s 124(1) and (1A) the amount of compensation that a person is entitled to receive under s 24 in respect of a permanent impairment, must be the same as the amount of compensation that would have been payable under the relevant repealed Act: see s 124(4). Accordingly, and this was not in dispute, the amount of compensation to which Mr Treloar was entitled under s 24 was limited to the amount he would have received under s 41 of the 1971 Act. 4 On 5 May 1988 the decision not to pay compensation to Mr Treloar was reviewed under s 62 of the 1988 Act and it was decided that he should receive lump sum compensation of $4,500 in respect of his claim. The compensation was payable under s 24 of the 1988 Act. That amount was determined in accordance with s 41 of the 1971 Act. 5 An employee who suffers an injury after 1 December 1988 that results in permanent impairment is entitled not only to compensation in respect of that injury under s 24 of the 1988 Act, but also to compensation under s 27. Section 27(1) provides: "Where an injury to an employee results in a permanent impairment and compensation is payable in respect of the injury under section 24, Comcare is liable to pay additional compensation in accordance with this section to the employee in respect of that injury for any non-economic loss suffered by the employee as a result of that injury or impairment." The amount of compensation payable is to be assessed in accordance with the formula set out in subsection (2). One element in that formula is the degree of permanent impairment suffered by the employee, expressed as a percentage, as determined under s 24. 6 Mr Treloar was of opinion that he was also entitled to additional compensation in accordance with s 27, notwithstanding that he had suffered his injury before 1 December 1988. He applied for compensation under that section but his application was denied. Mr Treloar sought review of that decision by the Administrative Appeals Tribunal under s 64 of the 1988 Act. The sole issue that was before the Tribunal was whether "as a matter of law [Mr Treloar] is entitled to compensation under s 27 of the 1988 Act". 7 The Tribunal found in favour of Mr Treloar, holding that he was entitled to additional compensation. The Tribunal said that it was bound to come to that conclusion in view of two decisions of the Full Court of the Federal Court, Schlenert v Australian and Overseas Telecommunications Corporation (1994) 49 FCR 139 and Comcare v Bozicevic (1997) 74 FCR 260. 8 To understand the effect of these decisions, and the reason for the Tribunal's reliance upon them, it is necessary to make further reference to s 124 of the 1988 Act. We have already noticed the restriction that subsection (4) imposes upon the operation of subsections (1) and (1A). Subsections (2) and (3) should also be mentioned. They provide: "(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." 9 The object of s 124 is to ensure that an employee who is entitled to workers' compensation under the 1971 Act or under earlier repealed legislation does not lose that entitlement by reason of the repeal of those Acts, by providing that the 1988 Act applies to injuries suffered before the commencement of the 1988 Act and that the compensation that is payable to the injured employee is the same as it would have been under any of the repealed Acts. In other words, speaking generally, s 124 attempts to bring about a situation where an injured employee is neither worse-off nor better-off in consequence of the passing of the 1988 Act and the repeal of the earlier workers' compensation Acts: see generally Hoyle v Telstra Corporation Limited (1997) 75 FCR 390 at 392, 394 and 398. 10 In Schlenert the Full Court was concerned with an employee who had suffered a work related injury before 1 December 1988 which was compensable under the 1971 Act. The injury resulted in a permanent impairment and the employee was therefore entitled to compensation under s 24 of the 1988 Act. The question that arose for consideration was whether the employee was also entitled to additional compensation under s 27. The employer argued that because compensation for non-economic loss was not payable under the 1971 Act, or any of its predecessors, it would be inconsistent with the objects of s 124 to permit the employee to recover "additional compensation" under s 27. Particular reliance was placed on s 124(2) which denies entitlement to compensation in respect of injury, loss or damage if that injury, loss or damage was not compensable under the 1971 Act. The employer submitted that it was not correct to construe subsections 124(1A) and (2) as if the reference to compensation did not include "additional compensation" under s 27. 11 The employer's submissions were accepted by Lockhart J who held that the employee was not entitled to any compensation under s 27. But the arguments did not convince the majority, Sheppard and Einfeld JJ. They held that, on the proper construction of the statute, an injured employee's entitlement to compensation under s 27 depended only upon the satisfaction of two conditions, the existence of a permanent impairment and an entitlement to compensation for that impairment under s 24. Accordingly it did not matter, so the majority held, that compensation of the kind payable under s 27 was not payable under the 1971 Act. What was important they said, was that the language of s 124(2) did not limit the operation of s 27. Thus it followed that if compensation was payable under s 24 because of the operation of s 124, additional compensation was payable under s 27. 12 The same result was reached by the Full Court in Bozicevic. That also was a case where an employee had suffered an injury causing permanent impairment before 1 December 1988. The employee was entitled to compensation for that injury under s 24 of the 1988 Act. The employee also sought compensation under s 27. The Full Court was asked to reject that claim on the ground that Schlenert had been wrongly decided and that the views of Lockhart J should be preferred. The Court (Foster, Carr and North JJ) declined the invitation to reconsider Schlenert and found in favour of the employee. Carr J, in separate reasons, considered that subsections 124(4), (5), (8), (11) and (12) confirmed the view that had been reached by the majority in Schlenert. In passing, we note that Hoyle, another decision of the Full Court, referred to Schlenert with apparent approval, although it does not appear to have been argued in that case that Schlenert was incorrectly decided. 13 There is a feature of this case that distinguishes it from the facts under consideration in Schlenert and Bozicevic. In each of those cases the injured employee was entitled to compensation under the table of maims found in s 39 of the 1971 Act. Neither employee had been entitled to compensation under s 41 of the 1971 Act. The Tribunal regarded this difference as immaterial, saying: "The Tribunal is unable to draw any significance from the fact that compensation for facial disfigurement was provided for under s 41 rather than s 39 of the 1971 Act. The clear words of s 41 give no indication that compensation for facial disfigurement is considered any different to compensation for the conditions which are compensable under s 39. In the Tribunal's opinion, this is an insufficient basis on which to distinguish the present case from the decisions in Schlenert and Bozicevic." In the result, applying the ratio of Schlenert and Bozicevic, the Tribunal "determine[d] that [Telstra], having decided that [Mr Treloar] is entitled to compensation under s 24 of the 1988 Act, is also liable to pay compensation to [Mr Treloar] under s 27". 14 Telstra appeals this determination pursuant to s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) which is limited to appeals on questions of law. Telstra contends that the question of law that arises is the proper construction of Part X of the 1988 Act, and in particular the proper construction of s 124. It identifies the alleged error of law as the failure by the Tribunal to construe s 124 so as to restrict the entitlement to compensation that is payable under s 24 and s 27 to the type of compensation that had been payable under the 1971 Act. It was not suggested that this did not raise a question of law: see generally Collector of Customs v Agfa-Gevaert Ltd (1995-96) 186 CLR 389. 15 Recognising the difficulty that confronts it in light of the decisions in Schlenert and Bozicevic, Telstra relied upon the difference in facts between this case and the earlier decisions. It also put forward arguments to support its general contentions that were different from the arguments raised in Schlenert and Bozicevic. In particular it argued that the effect of s 124(4), which limits the amount of compensation that an injured employee is entitled to receive under s 24 to that which would have been payable to that person under one of the repealed Acts, limits Mr Treloar's entitlement under the 1988 Act to such sum as he would have received under s 41 of the 1971 Act. It points out that the effect of subsection 124(4) had not been considered by the majority in Schlenert. Nor had it been considered by Foster and North JJ in Bozicevic. 16 In support of its contentions, Telstra relies on the manner in which the Tribunal found that compensation under s 27 was to be calculated as demonstrating the flaw in the Tribunal's reasoning, and, by inference, in demonstrating the error in the reasoning of the majority in Schlenert and all the judges in Bozicevic. The Tribunal noted that the compensation to which Mr Treloar was entitled should be assessed in accordance with the formula in s 27(2) which is based upon a determination under s 24 of the degree of permanent impairment that he suffered. Telstra points out that to assess compensation that is payable under s 24 there is no need for there to be a determination of the degree of permanent impairment suffered by Mr Treloar because his entitlement under s 24 is calculated under s 41 of the 1971 Act. It also placed reliance on the limitation contained in s 24(7), namely that if the degree of permanent impairment of an employee is less than 10 per cent, no compensation is payable under s 24. 17 Telstra says that it would be impermissible for a person with an impairment which was permanent before 1 December 1988 to be entitled to a benefit under s 24 of the 1988 Act without the need to establish a permanent impairment of 10 per cent or more but, in relation to s 27, to be required to have an assessment made, purely notionally, of the percentage determined under s 24 to be the degree of that permanent impairment. Telstra accepts that the restriction imposed by s 24(7) does not operate in the case of an employee whose entitlement to compensation under s 24 arises by s 124(1A). In that circumstance the amount of compensation is that provided for in s 124(4), namely the amount that would have been payable under the repealed Act. But Telstra says that it would be impermissible to require a person, who did not need to establish a permanent impairment of 10 per cent or more in order to be entitled to a benefit under s 24, to have an assessment made, purely notionally, of the percentage determined under s 24 in relation to the employee's claim under s 27. 18 We do not agree that this is a flaw in the reasoning of the Tribunal, provided it is accepted that Schlenert and Bozicevic were correctly decided. In that event, the amount of compensation payable under s 24 is not dependent upon a calculation of the degree of permanent impairment. It is true that the amount of compensation payable under s 27 is dependent upon that calculation. Thus, provided there is an entitlement to compensation under s 24, there must be an assessment of the degree of permanent impairment for the purpose of determining the claim under s 27. To describe this calculation as notionally made under s 24 may be an accurate description of what occurs, but it does not deny the need for it to occur. In the end, if there is an error, it is not to be found in the reasoning of the Tribunal but in the cases upon which it relied. 19 This brings us directly to the point of distinction between this case and the facts under consideration in Schlenert and Bozicevic. The employee in each of those cases was entitled to compensation under s 39 of the 1971 Act which was determined by reference to the percentages in the table of maims set out in s 39(4). Here Mr Treloar was entitled to compensation under s 41 which involves no assessment whatsoever of percentages. As Telstra points out, that section proceeds by reference to a lump sum. 20 The point of difference between the two classes of case cannot be denied. But the difference is of no relevance to the application of the principle established in Schlenert and followed in Bozicevic. That principle is that if an employee is entitled to compensation under s 24 in respect of an impairment which was permanent before 1 December 1988, the employee is also entitled to additional compensation under s 27. The additional compensation is not affected by the amount of compensation that is payable under s 24 nor by the manner in which it is calculated. The compensation payable under s 24 is the amount the employee would have received under the relevant repealed Act. But compensation under s 27 is not dependent upon the calculation of that amount. Accordingly, the earlier cases are not relevantly distinguishable. 21 Telstra submits that there is a further difference between this case and the earlier cases. It asserts that compensation payable under s 41 of the 1971 Act in respect of an injury that results in severe and permanent facial disfigurement includes that which is referred to as compensation for "non-economic loss" and is now compensable under s 27. Telstra argues that to allow an employee to recover non-economic loss twice (once under s 41 and again under s 27) would be contrary to the principles of Part X of the 1988 Act. But it is no more contrary to those principles than the decisions in Schlenert and Bozicevic would permit. In each of those cases the employee was entitled to compensation under the 1988 Act which was of a character that was not payable under any repealed Act. This was recognised as anomalous but was held to be the product of the proper construction of the statute, a construction which was arrived at by taking other more compelling considerations into account. If Telstra is correct, certain employees may now be entitled to recover non-economic loss twice. That is the result of the construction placed upon s 24 by the earlier decisions. If those decisions were correctly decided, it is but one more anomaly that is brought about by a proper construction of the enactment. 22 In the end, as we think counsel for Telstra recognised, the only basis for setting aside the decision of the Tribunal is if we hold that Schlenert and Bozicevic were wrongly decided and we agree to depart from them. The question is whether we should reconsider those decisions. This is a matter of no small interest. Recently there have been a number of occasions when a Full Court has reconsidered an earlier decision of another Full Court. Sometimes a court of five judges has been empanelled to reconsider an earlier appellate decision. In these circumstances it is as well to express our view on the circumstances in which a Full Court may properly reconsider one of its earlier decisions, particularly when that decision concerns the construction of a statute. Different considerations may apply in other areas of law. 23 The doctrine of stare decisis takes its name from the Latin phrase "stare decisis et non quieta movere" which translates as "stand by the thing decided and do not disturb the calm". It is a doctrine based on policy. The rationale for the doctrine can be grouped into four categories: certainty, equality, efficiency and the appearance of justice. Stare decisis promotes certainty because the law is then able to furnish a clear guide for the conduct of individuals. Citizens are able to arrange their affairs with confidence knowing that the law that will be applied to them in future will be the same as is currently applied. The doctrine achieves equality by treating like cases alike. Stare decisis promotes efficiency. Once a court has determined an issue, subsequent courts need not expend the time and resources to reconsider it. Finally, stare decisis promotes the appearance of justice by creating impartial rules of law not dependent upon the personal views or biases of a particular judge. It achieves this result by impersonal and reasoned judgments. 24 In Australia, however, intermediate appellate courts regard themselves as free to depart from previous decisions: Nguyen v Nguyen (1990) 169 CLR 245 at 268-270. This is not so in England where until 1966 even the House of Lords regarded itself as bound by its own decisions. In Young v Bristol Aeroplane Co Limited [1944] KB 718 at 729-730 the Court of Appeal held that, in the exercise of its civil jurisdiction, it should follow its own previous decisions unless a case fell within one of three exceptional situations: (a) where there were conflicting decisions; (b) where a previous decision, though not expressly overruled, was inconsistent with a decision of the House of Lords; (c) where a previous decision was given per incuriam in the sense that the court had overlooked a relevant statute, acted in ignorance of a previous decision of its own or of a court of co-ordinate jurisdiction. 25 As has been recognised in this country, rigid adherence to the doctrine of precedent preventing a court from overruling its own earlier decisions cannot be justified. Experience and better reasoning, academic and judicial criticism, the observation of unintended consequences, and other factors, may demonstrate judicial error or the need to reconsider a statement of legal principle. However, in those jurisdictions where a superior court will overrule its own decision it is by no means clear in what circumstances it will undertake that task. In the absence of firm rules to indicate when a court will review an earlier decision, there is a risk that reviews will be occasioned by subjective reference to judges' political, social, judicial or moral philosophies. 26 Speaking generally, appellate courts accept that they should act with caution before reviewing an earlier decision: see, eg, Clutha Developments Pty Ltd v Barry (1989) 18 NSWLR 86 at 99-101. Courts have said it may be done if the earlier decision is "manifestly wrong" or "clearly erroneous", or if "strong reasons" are shown, or if the "maintenance [of the earlier authority] is contrary to the public interest": see the examples given by Aickin J in Queensland v Commonwealth (1977) 139 CLR 585 at 620ff; see also Transurban City Link Ltd v Allan (1999) 168 ALR 687 at 694. But, apart from suggesting caution, the cases provide little real guidance as to the circumstances in which it will be appropriate to review an earlier decision. 27 The problem is very real when what is at issue is the construction of a statute. For one thing, statutory language is often ambiguous. Courts can struggle to determine the legislative intent. It is often impossible to discover any legislative intent. In many instances the generality of the statutory language is deliberate and allows the courts to develop a body of law to fill the gaps. This may lead to disagreement among judges about what the statute means. It would be sound policy that once that intent has been discerned by an appellate court then that should be the end of the matter. 28 The view which we prefer is that unless an error in construction is patent, or has produced unintended and perhaps irrational consequences not foreseen by the court that created the precedent, the first decision should stand. In other areas of the law a precedent may be reconsidered if its underlying reasoning is outdated or is inconsistent with other legal developments. Perhaps, with some modification, in some instances these factors could also be applied to cases concerned with the construction of statutes. Accordingly, we venture to suggest it would be on a rare occasion that an intermediate appellate court (contrast the position of the High Court, as to which see Babaniaris v Lutony Fashions Pty Ltd (1987) 163 CLR 1) will allow an issue concerning the construction of a statute, past and closed and especially a repealed statute, to be thrown open, producing as it clearly will, uncertainty, disruption to the conduct of affairs, a sense of grievance in those who may consequently receive treatment less favourable than that received by others under the same statute and additional cost and expense. In this case, the number of individuals who will relevantly be affected by the construction of the statute may be assumed to be, by reason of the passage of time, relatively small. 29 Returning to the instant case, we accept that it is arguable that the reasoning of Lockhart J in Schlenert is to be preferred to that of the majority. Indeed, in the absence of authority, we may well have taken the same view of the legislation as his Honour did. However, as we have said, in a case involving the construction of a statute it is no surprise that the language employed is found to be ambiguous in the strict sense (capable of two or more meanings) or in the general sense (of doubtful meaning). In refusing special leave to appeal in Schlenert, Mason CJ, speaking for the court, observed that the issue sought to be raised in the proposed appeal was a question of statutory construction turning on the meaning of particular words and their context in a complex statute (Telstra Corporation Ltd v Schlenert (1994) 18 Leg Rep page SL 4). Where the competing views have been exposed and analysed in such a case, and a particular construction is reached and, as in this case, is confirmed by a later decision, there will rarely be occasion to enquire into the matter again. In this case, no clear or patent error has been demonstrated. The decisions were not per incuriam. It has not been demonstrated that the construction preferred by the earlier courts has produced unintended consequences such as to throw real doubt on the decision. No court in another jurisdiction has arrived at an opposite result on similar legislation. To the extent that it is suggested that the construction preferred by the earlier courts does not reflect the intention of the legislature, it may be noted that Parliament could have, but has not, moved to amend the legislation. In other words, no basis has been demonstrated for the reconsideration of the earlier decisions. 30 We would dismiss the appeal with costs. I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Branson and Finkelstein. Associate: Dated: 21 September 2000 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 644 of 1999 On Appeal from the Administrative Appeals Tribunal BETWEEN: TELSTRA CORPORATION LIMITED Applicant AND: KEITH TRELOAR Respondent JUDGE: branson, finkelstein & gyles jj DATE: 22 SEPTEMBER 2000 PLACE: SYDNEY REASONS FOR JUDGMENT GYLES J: 31 I have had the advantage of reading the judgment of Branson and Finkelstein JJ in draft. I gratefully adopt their Honours' analysis of the issues. This demonstrates that if the reasoning of the majority of Schlenert v Australian & Overseas Telecommunications Corporation (1994) 49 FCR 139 ("Schlenert") is applied to the present case, then the "appeal" should be dismissed. The question is whether the reasoning in Schlenert should be applied in the present case. The underlying facts and the precise statutory provisions here are different from those considered in Schlenert. The question whether the reasoning in a previous decision should be extended to a new situation is distinct from the question as to whether the previous decision should be overruled, although guidance may be obtained from considering the principles applicable to that question 32 Branson and Finkelstein JJ have referred to several of the leading authorities on the application of precedent. The starting point must be the necessary caution which is referred to by their Honours, and which finds clear expression in the following passage from the judgment of Dawson, Toohey and McHugh JJ in Nguyen v Nguyen (1989-1990) 169 CLR 245: "Where a Court of Appeal holds itself free to depart from an earlier decision, it should do so cautiously and only when compelled to the conclusion that the earlier decision is wrong. The occasions upon which the departure from previous authority is warranted are infrequent and exceptional and pose no real threat to the doctrine of precedent and the predictability of the law ..." 33 There is no well-developed body of jurisprudence in this Court as to the issue here. However, there is a well trodden path in the High Court on the question as to when it will overrule a previous decision. It may be that the occasions for an intermediate court to depart from an earlier decision are more sparing than in the case of a final court, as error can be corrected on appeal, although, as the result of the application in Schlenert shows, the grant of special leave cannot be assumed in relation to issues of statutory construction. Constitutional cases may need to be considered with care. Nonetheless, the body of High Court authority is, at the least, a useful guide. Branson and Finkelstein JJ have referred to the judgment of Aickin J in Queensland v Commonwealth (1977) 139 CLR 585 at 620ff, which reviews the earlier authorities - see also the judgments of Barwick CJ at 594, Gibbs J at 599-600, Stephen J at 602-4. Reference should also be made to the judgment of Gibbs CJ in Commonwealth v Hospital Contribution Fund (1982) 150 CLR 49 at 55-8; to John v Federal Commissioner of Taxation (1989) 166 CLR 417 at 438-440; to Northern Territory v Mengel (1995) 185 CLR 307 at 338; and to Esso Australia Resources Ltd v Commissioner of Taxation (1999) 168 ALR 123 at 137-8 (par 55). It is not necessary to repeat all that is said in these judgments on the question. I shall refer to some passages of significance for this case. 34 In John v Federal Commissioner of Taxation (supra), Mason CJ, Wilson, Dawson, Toohey and Gaudron JJ said (at 439-440) (omitting citations): "On the other hand, there are special considerations applicable to the doctrine of stare decisis in cases of statutory construction. Those considerations were adverted to in Babaniaris v Lutony Fashions Pty Ltd, although that case was not concerned with the question whether this Court should overrule its own earlier decision. In that case Mason J said: "The fundamental responsibility of a court when it interprets a statute is to give effect to the legislative intention as it is expressed in the statute. If an appellate court, particularly an ultimate appellate court, is convinced that a previous interpretation is plainly erroneous then it cannot allow previous error to stand in the way of declaring the true intent of the statute: Blair v Curran; Platz v Osborne; Concrete Constructions Pty Ltd v Barnes; Lancashire & Yorkshire Railway Co v Mayor &c of Borough of Bury. It is no part of a court's function to perpetuate error and to insist on an interpretation which, it is convinced, does not give effect to the legislative intention: Bourne v Keane." See also per Wilson and Dawson JJ. These comments are highlighted when the Court is called upon to consider an earlier decision in which there was a division of opinion among the justices of the Court constituting the majority and there was a persuasive dissent. This is not because such a decision is any the less a precedent; it is only that those circumstances point to a possibility that the decision may later be challenged as erroneous. But in the end the justification for not following an earlier decision construing a statute must be that in the view of the Court that earlier decision was wrong, that it was wrong in a significant respect, and that the Court should give effect to the intention of the Parliament. The same considerations, in our view, apply with equal force if the issue is identified as one of the application of a statutory provision, rather than one of statutory construction in the strict sense." Stephen J in Queensland v Commonwealth (supra) at 603 said: "… what was in issue was the interpretation of the words of the section in their context. There existed no precedent cases nor any settled principles of the law which provided clear guidance. The case was very much one upon which different minds might reach different conclusions, no one view being inherently entitled to any pre-eminence as conforming better than others to principle or to precedent. In such a context phrases such as "plainly wrong" and "manifest error", which have gained currency in this field, are merely pejorative." See, to the same effect, Aickin J at 621: "The expression "manifestly wrong" has many times been used to indicate a basis upon which a prior decision may be overruled. With great respect to those who have used it, the expression, used without some qualification or explanation, suggests a subjective criterion not easily applied to distinguish one opinion from another." 35 There was a persuasive dissent in Schlenert and the majority each gave a separate judgment, but against that a differently constituted Full Court in Comcare v Bozicevic (1997) 74 FCR 260 ("Bozicevic") followed Schlenert notwithstanding an invitation to do otherwise. Two of the members of that bench did so principally on the basis of not disturbing a previous decision, whereas the other member of the bench independently came to the view that the same result should follow in the case itself. A later Full Court in Hoyle v Telstra Corporation Ltd (1997) 75 FCR 390 ("Hoyle") referred to Schlenert without disapproval. 36 These considerations indicate that it may not be an appropriate course to overrule Schlenert or Bozicevic. That, however, is not the issue. The issue is whether their reach should be extended. I have come to the conclusion that it should not. I am very much influenced by the fact that the reasoning of the Court in Hoyle is inconsistent with the Administrative Appeals Tribunal ("AAT") decision in the present case. The Court, in Hoyle, said (at 394): "Upon analysis of the whole of s 124, we consider that it is clear that the Parliament proceeded on the basis that, where the entitlement to compensation under the [1988] Act has a relevant nexus with a period before the Commencing Day, the appropriate general principle should be that an employee is not to be deprived of any compensation that would have been payable under the 1971 Act but for its repeal, but is not to be entitled to any greater compensation than would have been payable under that Act." This represents the last word on the topic by a unanimous Court. It was the result of a thorough analysis of the legislation, and represents a rational general principle which can be applied here. It should be applied unless there are compelling reasons to the contrary. The manner in which the Court referred to Schlenert is curious at first sight. Their Honours said (at 393): "Section 124 makes no reference to compensation under s 27. That also introduced a new head of compensation. Under the 1971 Act there was no entitlement to compensation for non-economic loss of the nature introduced by s 27. To be consistent with s 124(5) it might be expected that compensation under s 27 would have been excluded in relation to an injury which was sustained before the Commencement Day. However, that was probably thought unnecessary. As the Full Court of this Court held in Schlenert v Australian & Overseas Telecommunications Corporation (1994) 49 FCR 139, once entitlement to compensation under s 24 is established, entitlement to compensation under s 27 follows. It seems that s 27 was inserted as part of the quid pro quo for the abolition of common law rights to sue for damages effected by s 44 of the Act: see per Sheppard J at 150." 37 I shall return to this after having explained why, in any event, I regard Telstra's argument here as demonstrably correct in relation to a vital aspect of the legislation which has not been referred to by any of the judges who have hitherto considered the application of s 27. It is submitted on behalf of Telstra that Schlenert cannot be given practical application because of the terms of s 27(2), which are as follows: "The amount of compensation is an amount assessed by Comcare under the formula: ($15,000 x A) + ($15,000 x B) where: A is the percentage finally determined by Comcare under section 24 to be the degree of permanent impairment of the employee; and B is the percentage determined by Comcare under the approved Guide to be the degree of non-economic loss suffered by the employee." 38 The application of this section depends upon: (1) The approved Guide as described by s 28(1) of the Act as follows: "Comcare may, from time to time, prepare a written document, to be called the "Guide to the Assessment of the Degree of Permanent Impairment", setting out: (a) criteria by reference to which the degree of the permanent impairment of an employee resulting from an injury shall be determined; (b) criteria by reference to which the degree of non-economic loss suffered by an employee as a result of an injury or impairment shall be determined; and (c) methods by which the degree of permanent impairment and the degree of non-economic loss, as determined under those criteria, shall be expressed as a percentage." (2) The percentage determined under s 24 to be the degree of permanent impairment of the employee. This, in turn, also depends upon the Guide and requires fixing a percentage. The relevant portions of s 24 are: "(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." 39 However, it was held in Bozicevic by Foster and North JJ (at 267) that: "The approved Guide can have no application in the context of the 1971 Act. It applies only to calculations made under s 24 in respect of the 1988 Act. Accordingly, in our view, it cannot have been contemplated that calculations provided for by s 24, based upon the Guide, … would have any bearing on the amount of compensation available for permanent impairment under s 124(4)." This is self evidently correct, and has the consequence that the operation proposed for s 27 simply cannot work in a case such as the present. 40 Furthermore, neither s 39 of the 1971 Act, which Bozicevic decided applied to the calculation of s 24 benefits in that case nor s 41 of the 1971 Act which is applicable to this case operates by the application of a percentage. Section 41 was as follows (so far as relevant): "41. (1) The compensation payable under this Act in respect of an injury that results in severe and permanent facial disfigurement to an employee is such amount, not exceeding $14,000 or such higher amount as is prescribed, as is determined in accordance with this section, and that compensation is payable to the employee. … (3) Where a claim is made for compensation in respect of an injury that results in facial disfigurement to an employee, the Commissioner shall arrange for the constitution of a medical board to examine the employee. … (6) The members of the medical board shall, in accordance with the next succeeding sub-section, give to the Commissioner a certificate or certificates, as prescribed – (a) stating whether they are of the opinion that the injury resulted in severe and permanent facial disfigurement to the employee; and (b) if they are of that opinion – specifying the amount (not exceeding $14,000 or such higher amount as is prescribed) of the compensation that, in their opinion, should be paid in respect of that disfigurement." 41 The existence of the problem is not simply a case of one judge's opinion against another on a topic upon which minds can differ. It is not merely an anomaly. It is fundamental to the operation of the legislative scheme. This demonstrates that the legislature never contemplated that s 27 of the 1988 Act would have any role to play in relation to cases caught by the transitional provisions, for the reasons outlined in Hoyle. This explains why s 27 is not referred to in s 124. It was a new benefit, the only gateway to which was s 24 as framed to apply to post 1988 Act cases. When analysed in this way, the comment in Hoyle about Schlenert makes sense. Section 27 can apply once entitlement to compensation under s 24, as framed in relation to post 1988 Act cases, is established. This is not such a case. 42 In Schlenert, Bozicevic and the AAT decision here, there was no attempt to calculate the s 27 benefit – it was simply returned to the delegate to do so. Thus, the inherent impossibility of the exercise was not appreciated. By contrast, the officers in the present case who considered, and reconsidered, the case clearly saw, and enunciated, the problem. The respondent has not proposed any solution. 43 It also follows from this analysis that once the first (and correct) step was taken in Bozicevic (to the advantage of pre-1988 Act claimants in relation to s 24 of the 1988 Act) it was inconsistent to follow Schlenert in relation to s 27, as to do so involved two quite different applications of s 24 to the same set of facts. 44 These considerations lead me to the view that the reasoning in Schlenert should not be applied in the present case, and that for the AAT to do so was an error of law. It should have upheld the decision under review that the respondent's entitlement was to be calculated by applying s 41 of the 1971 Act. The appeal should succeed. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles. Associate: Dated: 21 September 2000 Counsel for the Applicant: Mr A Robertson SC and Mr J Wallace Solicitor for the Applicant: Sparke Helmore Counsel for the Respondent: Mr R Hunt and Mr J de Berg Solicitor for the Respondent: Marsdens Date of Hearing: 24 May 2000 Date of Judgment: 22 September 2000