JOHN LYSAGHT (AUSTRALIA) LTD v COX SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CLARKE, MEAGHER and HANDLEY JJA 31 July, 14 September 1990 [1990] NSWCA 99 On 13 April 1987 a worker made a claim for compensation under s16 of the Workers' Compensation Act, 1926 in respect of the deterioration of his hearing in each ear. The employer agreed that deterioration had occurred and offered to pay specified sums in respect of the claim. Before the worker responded the 1987 Act came into force. The worker then sought to bring a claim for binaural loss of hearing under the later Act. Such a claim was not recognised by the 1926 Act. The employer contended that by virtue of CL3 and cl5 of Pt6 of Schedule 6 (the transitional provisions) of the 1987 Act the worker was not entitled to maintain the claim. Held: (1) The worker had not agreed to receive compensation under the 1926 Act and accordingly CL3 did not apply. (2) The loss in respect of which the claim was made resulted from an injury received before the commencement of the 1987 Act and was not a loss for which compensation was payable under s16 of the 1926 Act. It followed that CL5 applied and the worker was not entitled to maintain the claim. Clarke JA The respondent suffers from industrial deafness in each ear which heclaims was caused by the noisy conditions in the appellant's factory in which he has worked at all relevant times. On 13 April 1987 his solicitors wrote to the appellant making a formal claim on his behalf under s16(1)A of the Workers' Compensation Act 1926 (as amended) ("the 1926 Act") in respect of the impairment of his hearing. In this claim the respondent's solicitors noted that the respondent may have made a previous claim for industrial deafness and sought details of any claim which he had made. The solicitors for the respondent also enclosed with the claim a copy of a medical report of Dr Senanayake. The appellant responded to the claim in a letter of 4 May 1987 in which it said that it accepted the doctor's assessment of the respondent's hearing loss. The letter also set out details of a previous claim made by the respondent and observed that the respondent appeared to have an entitlement for the specific sums of money which were mentioned in the letter. The concluding paragraph, which is of some importance, read: "Upon notification that an award has been handed down a cheque will be forwarded to you in settlement of your client's s16 entitlement." Nothing further occurred in relation to this claim prior to the commencement of the Workers' Compensation Act 1987 ("the 1987 Act") on 30 June of that year. The next relevant event occurred on 25 August 1987 when the respondent's solicitors submitted a claim on his behalf under the 1987 Act for partial binaural loss of hearing. Upon the appellant expressing the view that the respondent was unable, in the circumstances of the case, to make a claim under the 1987 act the respondent filed an application for compensation consistent with the claim made in his solicitor's letter of 25 August 1987. The claim was heard by Commissioner Kidd who entered an award in favour of the respondent. An appeal from that 2 UNREPORTED JUDGMENTS award was heard by Judge Davidson who, while upholding the appeal for reasons which are not presently relevant, determined that the respondent had properly brought his claim under the 1987 Act. The appellant has appealed to this Court pursuant to s32 of the Compensation Court Act 1984 claiming that his Honour made two errors of law which vitiated his judgment. Two basic submissions were advanced in support of this case, both of which are founded on the fact that prior to the commencement of the 1987 act the respondent had made a formal claim for compensation under s16 of the 1926 Act and the appellant had agreed to pay compensation for the respondent's hearing loss in accordance with the provisions of that Act. At the outset it should be noted that the 1987 Act repealed the whole of the 1926 Act. Accordingly, subject to the exceptions appearing in s30 of the Interpretation Act 1987 and any savings appearing in the 1987 Act, the earlier act must be considered to have been obliterated as completely from the records of the Parliament as if it had never been passed (Victorian Stevedoring and General Contracting Co Pty Ltd v Dignan, 46 CLR 73, per Dixon J, at 105). Unless, therefore, any question of an exception under s30 arises - a matter to which I will return - the rights of the parties in this appeal are to be determined in accordance with the provisions of the 1987 Act. The critical provisions of this Act are to be found in Schedule 6 which are described as "Savings, Transitional and Other Provisions". That schedule is divided into parts each of which is directed to a particular area of compensation. For instance, Pt2 is related to compensation generally, Pt3 to compensation payable on death, Pt4 to weekly payments of compensation, PtS to compensation for medical hospital and rehabilitation expenses and Pt6, which is presently relevant, to compensation for non-economic loss (table of maims). The general scheme which runs through each of those parts is that, subject to specific exceptions appearing in the relevant part, the provisions of the 1987 Act apply to all claims for compensation brought after the commencement of that Act irrespective of the date of the occurrence of injury. In other words the provisions of the 1987 Act apply to all claims whether or not the injury occurred before or after the commencement of that Act subject only to the exceptions appearing in the transitional provisions. That this is the general scheme appears clear because CL1 of each part provides that the division of the 1987 Act to which that particular part of the schedule relates applies whether or not the event (injury, death etc) which is relevant for the purposes of that part of the schedule occurred before or after the commencement of the relevant division of the Act. There are exceptions to this general scheme which are varied in nature. For instance, in Pt2 it is provided that in the case of a personal injury received before the commencement of s10 of the 1987 Act on a journey to which that section applies liability for the payment of compensation shall be determined in accordance with the provisions of s7 of the 1926 Act. There are to be found in the other parts of Schedule 6 similar provisions which require calculation of the compensation payable in accordance with the provisions of the old Act. This case is concerned with a slightly different type of exception the effect of which is to deny compensation under the 1987 Act to a worker for particular losses. The appellant claims that either CL3 or cl5 of Pt6 of Schedule 6 applies to the facts of this case with the consequence that Davidson J erred in ruling that the claim fell to be dealt with under the 1987 Act. Those clauses read as follows: URJ JOHN LYSAGHT (AUSTRALIA) LTD v COX (Clarke JA) 3 "Compensation for loss not payable if awarded or paid under former Act - occupational diseases 3. Compensation is not payable to a worker who has suffered a loss of a thing mentioned in the Table to Division 4 of Pt3 of this Act (being an occupational disease within the meaning of s71 of this Act) if compensation for the loss was awarded to the worker, or the worker received or agreed to receive compensation for the loss, in accordance with s16 of the former Act." "Compensation not payable in respect of new item if it resulted from existing injury 5. Compensation is not payable to a worker who has suffered a loss or impairment of a thing mentioned in the Table to Division 4 of Pt3 of this Act if (a) it resulted from an injury received before the commencement of that Division; and (b) it is not a loss or impairment for which compensation was payable under s16 of the former Act." The appellant's first submission was that the respondent had 'agreed to receive compensation for the loss in accordance with s16 of the 1926 Act'. For this reason he argued that the present claim, which was advanced under the 1987 Act, was not open. The argument, put simply, was that the respondent had agreed to receive compensation for the loss in accordance with the 1926 Act by giving notice of his claim in April 1987. Alternatively, it was submitted, that the combination of the claim and the appellant's response to that claim constituted the relevant agreement to receive compensation in accordance with the 1926 Act. In my opinion it is important, when considering the submissions to bear in mind that CL3 constitutes an exception to the general principle that an applicant who wishes to make a claim for compensation after the commencement of the 1987 Act must do so in accordance with the terms of that Act notwithstanding that the injury which led to the claim may have occurred before that commencement. CL3 provides that this general rule does not apply in three situations. First, it does not apply if compensation for loss flowing from an injury suffered before the commencement of the 1987 Act has been awarded in accordance with the provisions of the 1926 Act. Thus a worker who has obtained an award under sl6 of the 1926 Act in respect of a particular loss would not be entitled to maintain a claim in respect of the same loss for the additional benefits provided under the 1987 Act. Secondly, if a worker has claimed and received compensation calculated in accordance with s16 of the 1926 Act for the loss flowing from an injury received prior to the commencement of the 1987 Act he is denied the right to claim compensation for that loss under the 1987 Act. The third situation, which is presently in issue, is where "the worker... agreed to receive compensation for the loss in accordance with s16 of the former Act." The debate has been whether, on the one hand, the mere statement of the worker that he will accept compensation under the earlier Act is sufficient to debar him from claiming compensation under the equivalent provision of the 1987 Act or, on the other hand, whether he is debarred only if an agreement has been concluded, whether under seal or for valuable consideration, binding him to accept that compensation. 4 UNREPORTED JUDGMENTS It is important when considering the problem thrown up by the debate to recognise that, subject to what later appears, if one of the conditions of exception in CL3 is established the worker has no means of maintaining a claim under the 1987, or any other, Act. In other words, once an exception is established the worker is debarred from claiming under the 1987 Act and, because the 1926 Act has been repealed, is also unable to claim under that Act. There is no problem in concluding that he is debarred from claiming under either Act if he has been the recipient of an award under the earlier Act. Upon any view the worker would be able to enforce his rights under that award (23 Compensation Court Act; s119 of the 1987 Act). Likewise, it is not difficult to understand that if a worker has received compensation for his loss calculated in accordance with the legislation then in force he should be disentitled from maintaining a claim in respect of the same loss under the 1987 Act. The third exception does, however, create difficulties. It proceeds upon the assumption that the worker has received neither compensation nor an award for compensation for the loss calculated in accordance with s16 of the 1926 Act. There does not appear to be any logical reason for concluding that such a worker should be disentitled from maintaining a claim under the 1987 Act unless he had a legally enforceable entitlement to compensation for the loss under s16 of the 1926 Act. Furthermore, unless the relevant clause is to be construed to deny the worker a right to maintain a claim for the loss under the 1987 Act only when he has received, or has an enforceable right to receive, compensation for that loss under s16 of the 1926 Act its effect would be to take away substantive rights enjoyed by the worker. It is well recognised that workers' compensation legislation is of a beneficial nature. Consequently, it should not be understood, in the absence of very clear language, as taking away rights. A worker who merely gives a notification of injury, whether or not it is coupled with an indication of an intention to claim compensation under the 1926 Act, to the employer does not thereby become entitled to compensation under that Act. If, however, the appellant's first argument is correct he has, by that act, disentitled himself from recovering compensation under the 1987 Act although he has lost, upon the passing of the later Act, any right to claim compensation under the earlier one. This would be a bizarre result and one which I could not contemplate was intended by the 1987 Act. The alternative, and more acceptable, construction of CL3 is that a worker who has an enforceable right to receive compensation calculated in accordance with s16 of the 1926 Act should not be entitled to maintain a claim under the later one. The words used in the clause, viz "the worker... agreed to receive compensation", direct attention to the manner in which it is contemplated that the worker could secure an enforceable right to the compensation. That is by concluding a legally binding contract with his employer. I would conclude, therefore, that the words "agreed to receive" should be construed to mean entered into a legally binding contract entitling him to receive. I would add that I do not consider that s45 of the 1926 Act provides a reason for declining to reach this conclusion. That section relevantly provides: "(1) This act applies, notwithstanding any contract to the contrary made after the commencement of this Act." It was submitted that, in the light of this section, the parties were unable to conclude a binding agreement pursuant to which the appellant was obliged to pay an agreed sum by way of compensation to the respondent unless that agreement URJ JOHN LYSAGHT (AUSTRALIA) LTD v COX (Clarke JA) 5 was reflected in a court award. For this reason, so the argument went, the legislature could not have intended the relevant words in CL3 to refer to a binding agreement. My tentative view is that an agreement of the type I have been discussing is not contrary to the 1926 Act. Agreements between the parties are contemplated by it (see s51(4); s51(6); s16(1B)(a); s16(1B)(ai); s16(a2) and I find it difficult to accept the proposition that an agreement resolving a claim in respect of, for instance, a sense of smell (s16(ai)) is contrary to the Act. In Ashenden v Stewarts and Lloyds (Australia) Ltd, (1972) 2 NSWLR 484, this court considered whether a judge was bound to enter an award in the terms of an agreement between the parties. While the precise question now under consideration did not arise Jacobs JA did say that the parties could not bind themselves by agreement without an award of the court (p 491-2). However, as that question did not arise, neither Taylor AJA nor Hardie AJA expressed a conclusion on the need for an award to perfect the agreement (p493, p498). Both judges noted that agreements between the parties were contemplated by the Act and Taylor AJA concluded that once an agreement is made the amount payable for the loss is determined (P 493). Contrary to the argument there is much to be said for the view that an agreement resolving a claim does not contravene the Act and is binding. If that view be wrong then this would seem to be a case in which Parliament has mistaken the existing law (IRC v Dowdall, O'Mahoney and Co Ltd, 1952 AC 401). In my opinion the only rational explanation of the legislative intention underlying the third alternative in CL3 is that a worker who has a legally enforceable agreement which entitles him to receive compensation for his loss calculated in accordance with s16 of the 1926 Act should be debarred from maintaining any claim under the 1987 Act. I would, therefore, reject the appellant's first submission. The appellant submitted, in the alternative, that a legally binding contract had been established. I do not agree. The respondent had put forward a proposition. His offer had not been accepted. The appellant accepted part of the proposal contained in the letter of 13 April 1987 but, in addition, put forward additional proposals of its own and specifically said it would pay compensation only when an award had been handed down. The additional proposals were not accepted by the respondent prior to the commencement of the 1987 Act and, in my opinion, it cannot be said, on any view, that a legally binding agreement had been concluded between the parties. The second submission, which was founded on CLS, was that the subject claim resulted from an injury received before the commencement of the relevant sections of the 1987 Act and related to a loss for which compensation was not payable under s16 of the former Act. While the issue which was agitated was whether the injury was received before 30 June 1987 and it was not in dispute that the second condition was satisfied it is of some importance to explain the reason why both parties accepted that this was so. S16 of the 1926 Act created a right in a worker to receive compensation for the injuries or losses described in the schedule to that section. subsS provided that where the worker had not suffered the total loss of, for instance, a limb but had sustained a permanent loss of a proportion of the efficient use of that limb he was entitled to a percentage of the compensation set out in the table which equated the percentage of loss of efficient use. The concepts are well understood and it is 6 UNREPORTED JUDGMENTS unnecessary to explain them further. There are, however, complications. In the table one amount covers the loss of hearing of both ears and another the loss of hearing of one ear. The amount allowed for the loss of hearing of one ear is less than half the amount allowed in respect of the loss of hearing in both ears. Furthermore, there is a symbol attached to the item concerning one ear which directs attention to an explanatory note, which the parties accepted had the same status as a section of the Act, which read: "For the partial loss of earning of one ear there shall be payable such percentage of the amount that would be payable to the total loss of the hearing thereof as is equal to the percentage of the diminution of hearing". In The Commissioner for Railways v Bain, 112 CLR 246, the question arose whether a worker who had received partial loss of hearing in each ear was entitled to maintain a claim for a percentage loss of hearing of both ears or was restricted to a claim for a partial loss of hearing in each ear. The obvious significance of the distinction is that a claim in respect of partial loss of hearing of both ears was likely to result in a larger award than a claim in respect of the partial loss of hearing of each ear. It was accepted by the parties that the High Court decided in Bain's case that, as a consequence of the explanatory note, there was no power to award compensation under s16 for the partial loss of hearing of both ears. The power of the Court was, according to the accepted view of Bain, limited to awarding the worker compensation for the partial loss of hearing of each ear. The claim which has led to the present appeal was a claim for a partial loss of binaural hearing (that is, a claim for the partial loss of hearing of both ears). This is a claim which, the parties accept, is maintainable under the 1987 provisions but was not, in the light of Bain's case, maintainable under the 1926 Act. For this reason the argument has proceeded upon the basis that the second condition laid down in CLS has been satisfied. The parties are, however, at issue on the question whether the loss or impairment in respect of which compensation was claimed resulted from an injury received before the commencement of Division 4 of Pt3 of the 1987 Act. That question, in the light of the nature of the injury suffered by the respondent, falls to be resolved by reference to s17 of the 1987 Act. The relevant portion of that section reads: "17. (1) If an injury is a loss, or further loss, of hearing which is of a nature as to be caused by a gradual process, the following provisions have effect: (a) for the purposes of this Act, the injury shall be deemed to have happened (i) where the worker was, at the time when he or she gave notice of the injury, employed in an employment to the nature of which the injury was due - at the time when the notice was given;" The respondent was in the employ of the appellant at all relevant times and accordingly the injury, that is, the further loss of hearing, is deemed to have happened at the time when the notice of injury was given. In the Compensation Court Davidson J observed that the Commissioner had made a finding that the notional date of the injury was 25 August 1987 and concluded that this was a finding of fact which was not vulnerable to challenge on appeal. The position would be otherwise, however, if that factual conclusion is based on an erroneous construction of the Act. URJ JOHN LYSAGHT (AUSTRALIA) LTD v COX (Clarke JA) 7 Although the Commissioner did not give reasons in support of his statement that the injury happened on 25 August 1987 it is fairly clear, given the undisputed facts, that he made that finding upon the basis that the notice given on 13 April 1987 should be disregarded. Although the Commissioner did not give any indication why it should be disregarded Judge Davidson did turn his attention to that question albeit in the course of his discussion of the judgment of the Chief Judge of the Compensation Court in Marsden Hospital v Drayton, (2 May 1988, unreported). His Honour's view, as expressed in the judgment under appeal, was that as the notice given prior to the commencement of the 1987 Act related to the partial loss of hearing in each ear, as opposed to a claim for a binaural loss, that notice could not be regarded as falling within the terms of s17(1)(a)(i). That view, in my respectful opinion, fails to distinguish between injury and loss which are quite different concepts under the 1987 Act. Injury is defined in s4 of the 1987 Act in terms wide enough to encompass industrial deafness and s17 itself makes it quite plain that a further loss of hearing to which the employment was a contributing factor constitutes an injury under the Act. In the event of a worker suffering an injury he may bring a claim in respect of a number of different types of compensation. He may, of course, make a claim in respect of economic incapacity or hospital and allied expenses or he may make a claim for other types of compensation. One of those other types is compensation for non-economic loss which is dealt with in Division 4 of Pt3 of the 1987 Act. That Division sets forth a scheme under which, broadly speaking, a worker can claim compensation for the losses referred to within the division. In this respect it is important to observe that the loss in respect of which a claim is made is to be contrasted with the injury from which it results. In the present case the worker made a claim for binaural loss of hearing resulting from a further impairment of his hearing occurring between the time of an earlier award and the giving of the notice on 13 April 1987 (there being no contention that there was any further diminution between that date and 25 August). The injury from which the loss flowed was that further impairment of hearing. In my view it is not to the point that the loss in respect of which the claim has been made was different from the loss articulated in the notice. The sole question concerns the date on which the notice of injury, as that expression is used in s17(1)(a)(i) of the 1987 Act (that is, a notice of the further loss of hearing in each ear) was given. Upon this basis the earlier notice of 13 April fixed the date of injury. I am mindful of the fact that the table in Division 4 of Pt3 is headed "Compensation for Permanent Injuries" and that it has a sub-heading "Nature of Injuries". These headings would tend to indicate that compensation is paid for a specific injury and not loss resulting from an injury. The word "injury" is also used in that part of the table dealing with disfigurement in a way which is consistent with its use in the heading. On the other hand Note (g), dealing with the impairment of the back, neck or pelvis, is expressed in terms which make it clear that compensation is payable in respect of loss resulting from injury. Although the use of the word "injury" in the table tends to confuse the situation it is plain from s66, which creates the worker's entitlement, that it is the loss resulting from the injury, rather than the injury, which attracts an entitlement under Pt3 Division 4. Neither the headings in the table nor the misuse of the word "injury" in the part of the table dealing with disfigurement can affect the nature 8 UNREPORTED JUDGMENTS of the entitlement which arises under s66. In this case the injury, viz. the further impairment of hearing, is deemed to have occurred when notice was given on 13 April. Ican appreciate that, in the absence of an appropriate transitional provision, it is strongly arguable that a notice given prior to the commencement of an Act could not be a notice under that Act. For example s88 and s89 of the 1987 Act govern the giving of notices. The argument is not one which, however, is presently relevant for there is a transitional provision which is to be found in Schedule 6, pt9 cl2 which reads: "Saving of existing notices and claims 2.(1) A notice of injury, incapacity, damage to property or otherwise duly given under a provision of the former Act shall, after the commencement of Division 1 of Pt4 of this Act, be deemed to have been duly given under the corresponding provision of this Act. (2) A claim for compensation duly made under the former Act shall, after that commencement, be deemed to have been duly made under this Act." There is no dispute but that the notice given on 13 April was a notice of injury duly given under the provisions of the 1926 Act and, insofar as it related to the injury in respect of which the present claim is made, it is deemed by CL2 to have been given under s88. Accordingly, the Compensation Court was in error in concluding that the injury was deemed to have occurred on 25 August 1987. The undisputed facts in the case show that a notice which satisfies the terms of CLS, Part 6 of Schedule 6 of the 1987 Act had been given prior to the commencement of Division 4 of Pt3 of that Act. This being so CL5 applies and the respondent is not entitled to maintain the present claim for a binaural loss of hearing. Counsel for the respondent sought to meet the arguments which have led me to the conclusion I have expressed above in a number of ways. First, he submitted that a notice given prior to the commencement of the Act could not satisfy the terms of CLS. I have already dealt with that argument. Secondly, he mounted a complex argument to the effect that since the passing of the 1987 Act it was no longer open to the respondent to press a claim for partial bilateral loss of hearing in each ear. Counsel sought to support the argument by reference to a line of cases commencing with Apps v Commissioner for Railways, (1972) 1 NSWLR 272, in which this Court held that "where an injury not specifically mentioned in the table (which appeared in the 1926 Act) takes the form of the loss of an organ or organs forming part of a larger organ whose loss is specifically mentioned, the compensation is the percentage of the diminution of the full efficient use of the larger organ which the loss of the part or parts represents". In my opinion Apps, and the following line of authority, is clearly distinguishable. In each of the cases the particular injury in respect of which loss was claimed was not specifically mentioned in the Act. In this case the loss of hearing in one ear is specifically mentioned. The distinction, quite apart from the notes to the 1987 Act, renders Apps inapplicable. Furthermore, the 1987 Act has made express provision for the type of problem encountered in Apps case. Note C of the notes to the Table appearing in Pt3 Division 4, it seems to me, requires that where a loss may be compensated by a combination of items, or by a proportionate loss of a single item, the latter shall prevail. Accordingly where an applicant could, Note C apart, maintain one or other claim the note takes effect and dictates the claim he may advance. In this case the respondent is entitled to URJ JOHN LYSAGHT (AUSTRALIA) LTD v COX (Handley JA) 9 maintain a bilateral loss notwithstanding note C because in the light of Schedule 6, CLS that is the only claim he can maintain. In view of my conclusions it is unnecessary to consider the argument initially advanced by senior counsel for the appellant to the effect that once the respondent had given notice on 13 April 1987 and received the appellant's answer of 4 May he had an accrued right under the 1926 Act which was not affected by the 1987 Act and the survival of this right meant the respondent could not maintain a claim under that later Act. As at present advised, however, I do not think that the argument has any substance, primarily because there is to be found in the transitional provisions of the 1987 Act a clear expression of the legislative intention that that Act should apply to all claims in respect of injuries received before or after the commencement of the relevant division of the Act except those claims which are specifically mentioned in those provisions. In my opinion the following order should be made: 1. Appeal allowed. 2 Respondent to pay appellant's costs of the appeal and to have a certificate under the Suitors' Fund Act. 3. Proceedings remitted to the Compensation Court to be dealt with in accordance with these reasons. Meagher JA I agree with Clarke JA. Handley JA I agree with Mr Justice Clarke. 1. Appeal allowed. 2. Respondent to pay appellant's costs of the appeal and to have a certificate under the Suitors' Fund Act. 3. Proceedings remitted to the Compensation Court to be dealt with in accordance with these reasons. Counsel for the Appellant: P WEBB QC and M McGROWDIE Counsel for the Respondent: RF WILKINS Solicitors for the Appellant: AO ELLISON and CO Solicitors for the Respondent: MAURICE MAY and CO