CLUTHA LTD v DANSWAN SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL KIRBY P, MEAGHER and Cripps JJA 19 February 1993, 5 April 1993 [1993] NSWCA 64 WORKERS' COMPENSATION — statutory lump sum — loss of left leg at or above the knee — entitlement under s66 Workers Compensation Act 1987 — earlier injury received prior to commencement of 1987 Act — whether worker's loss resulted both from pre and post 1987 injuries — whether loss deemed to have resulted from injury received after commencement of 1987 Act — held: (affirming Moroney CCJ): By Schedule 6, Pt6, CL6 to the Workers Compensation Act 1987 the loss should be treated as having resulted from the injury received after the commencement of that Act. STATUTES — construction — transitional provisions — artificiality and technicality of — need for care in application of provisions. LAW REFORM — lump sum compensation — compensation calculation — losses resulting from injuries before and after commencement of 1987 Act — proper approach to — possible need for provision to allow credit in respect of sums already paid under s16 Workers' Compensation Act 1926 — reference by Kirby P to possible need for law reform. Bennett v General Motors Holdens Ltd (1940) 40 SR (NSW) 117 (FC) applied. Workers' Compensation Act 1926, s16. Workers Compensation Act 1987, s66, s67, Schedule 6. Kirby P A number of grounds of appeal were argued in this matter. The only one of difficulty is the amended third ground which concerns the operation of the transitional provisions in Schedule 6 to the Workers Compensation Act 1987. For the disposition of the other grounds, I am in agreement with Cripps JA and wish to add nothing to what his Honour has said. Successive injuries to the same leg There is no doubt that Mr Peter Danswan (the worker), who is the respondent to this appeal, received an injury to his left leg after the commencement of Division 4 of Pt3 of the 1987 Act. That injury appears to have occurred in November 1990. It was so found by the judge of the Compensation Court (Moroney CCJ). The complication in the case arises from the fact the worker had received an injury to the same leg before the commencement of that Division. That injury likewise arose out of his employment by Clutha Ltd (the employer), which is the appellant in the proceedings. In respect of the earlier injury to the left leg, the worker was paid compensation pursuant to the provisions of the Workers' Compensation Act 1926, s16. The amount paid was $720. Differentiation of injuries for pain and suffering award When the matter was before Moroney CCJ for decision, it became necessary for his Honour to differentiate between the impact of the pre 1987 and post 1987 injuries to the left leg. That necessity arose for the purpose of determining compensation under s67 of the 1987 Act for pain and suffering. Compensation for pain and suffering was a benefit introduced by the 1987 Act but confined to the consequences of injuries 2 UNREPORTED JUDGMENTS received after its commencement. For this purpose, Moroney CCJ determined that the proportion of the left leg injury attributable to the post 1987 injury (ie that in November 1990) was 7.5%. He had earlier had to resolve the assessment of the loss of the left leg at or above the knee at the time of trial. He did so by choosing between two opinions which were placed before him in medical reports. One (by Dr JR Higginbotham) estimated a 20% loss. The other (by Dr RD Johnston) estimated a 15% 1086. Moroney CCJ resolved this difference in favour of Dr Johnston's assessment. He also knew that, for the 1971 injury, the worker had been assessed under s16 of the 1926 Act as having suffered a 7.5% loss of the left leg. It was for that loss that he had received the compensation previously stated. Moroney CCJ went on: "So what I am looking at in effect, and although the findings are different, the 7.5% in respect of the 1971 injury, having been in respect of permanent loss of efficient use of the leg, and my finding at the present time of 15% of loss of the leg at or above the knee, in accordance with the schedule and the Table.... I think in reality what I am looking at here, is an increase or loss of 7.5% in real terms due to the fresh injury, and it is in respect to that that I will make an award for pain and suffering. " As his Honour appears to have recognised, there was an element of artificiality in this reasoning: 1. There was a comparison of different injuries to the leg at different times, nineteen years apart; 2. There was a comparison by reference to a figure of 15% loss taken from a fairly arbitrary choice between the reports of Drs Higginbotham and Johnston; and 3. There was a difference between the subject matter of the respective assessments. In 1971 attention was addressed (as the Table then provided) to the loss of the left leg as a whole. In 1990 it was addressed to a more specific part of the left leg, viz that at or above the knee. Nonetheless, Moroney CCJ felt himself able to make the assessment for the purpose of determining the award for pain and suffering. The conclusion may have had its arbitrary elements. But it was firmly reached and just as firmly expressed. The employer contends that the same logic should have been applied to the assessment of the lump sum payable for loss of the left leg at or above the knee for the purposes of s66 of the 1987 Act. If this argument had been accepted by his Honour, the proper allowance for the "loss" suffered in November 1990 would have been 7.5%. The worker would have kept the payment earlier made to him. But he would have received 7.5% as a result of the injury received in 1990. He would thus have recovered an award of compensation of $5,442 and not the sum awarded by Moroney CCJ with the purported order that "credit be given" for the sum earlier paid under s16 of the 1926 Act. Ihave some sympathy for the complaint of the employer. S66 of the 1987 Act, like s16 of the 1926 Act, involves a number of artificialities. They have been increased and not reduced by the new legislation. There would appear to be no legal basis for his Honour's order providing for credit to be made. The artificialities of the interpretation adopted by Moroney CCJ are plain. They are referred to in the reasons of Cripps JA. URJ CLUTHA LTD v DANSWAN (Kirby P) 3 Nowhere does Moroney CCJ specifically state that the worker's loss in respect of the left leg at or above the knee resulted both from an injury received before the commencement of the 1987 Act and an injury received after that commencement. This is what his Honour said: "As to the left leg, as I said there is evidence that the applicant has suffered further loss of the leg at or above the knee as a result of the injury suffered by him in November 1990. The 1971 injury to the leg has been assessed as a 7.5% loss, and the sum of $720 had been paid. Pt6 of Div 6, Sch 6, I think it is, anyway it is 6,6,6, requires me to find that the whole of the loss in the leg is a result of the injury under the new Statute. What is the evidence as to the whole of the loss at the present time?" From this question, his Honour proceeded to resolve the difference between Drs Higginbotham and Johnston earlier mentioned; to find a total loss as at the award of 15% 1066 of the left leg at or above the knee; and therefore to award the worker under s66 of the 1987 Act $10,884.30 with the order for credit to which T have referred. The suggested basis for this reasoning is CL6 of Pt6 of Schedule 6 to the 1987 Act. That clause provides: "6. If a loss mentioned in the Table to Division 4 of Pt3 of this Act resulted both from an injury received before the commencement of that Division and an injury received after that commencement, the loss shall, for the purposes of determining the amount of compensation payable in accordance with this Part and this Schedule, be treated as having resulted from the injury received after that commencement." Need for special attention to transitional provisions It will be observed that the clause does not, as his Honour apparently thought, require him to find that the whole of the loss of the leg is the result of the injury under the 1987 statute. This was only required if he concluded, as a matter of fact, that the loss "resulted both from an injury received before... and an injury received after that commencement". With every respect to his Honour, who does not appear to have had beside him the terms of the Workers Compensation Act 1987, it does not appear that he specifically addressed his attention to the "loss" suffered by the worker for the purposes of s66 of that Act. When he did so for the purposes of s67 he was able to differentiate the causes of the "loss" in question and to dissect that part of it which could fairly be attributed to the November 1990 injury. Although this dissection was never properly performed for the purposes of the s66 assessment, and although his Honour did not specifically find that the "loss" disclosed before him resulted both from the 1971 and 1990 injuries, I think it is probably fair to infer from his reasoning that this was his intention. Once again it falls to this Court to say that, in the application of compensation or other statutes, it is dangerous to proceed to determine a point of law without having the statute close at hand and referring to its precise terms when that becomes necessary. The special perils of transitional provisions in legislation are well known. It is surprising to me that a judge of the Compensation Court would not have the current Act with him on the bench at all times. This Court inevitably faces difficulties in performing its task where findings of fact, pertinent to statutory provisions, are not made by reference to the precise terms of the Act and where an impression of the operation of the Act is voiced which is not strictly accurate but has been used for the purpose of determining factual findings and deriving legal conclusions from them. 4 UNREPORTED JUDGMENTS Conclusion: result flows from Act - possible need for reform Assuming, however, that the proper interpretation of what Moroney CCJ decided was that the worker had a loss of the kind mentioned in the Table to the 1987 Act and that this resulted both from an injury received before and after the commencement of that Act, there is no doubt that CL6 of Pt6 of Schedule 6 to the 1987 Act deems that loss to have resulted from the injury received after the commencement of the 1987 Act in its entirety. This may be artificial. But this area of the law is full of artificial distinctions and applications. A similar protest of artificiality was voiced in 1940 in Bennett v General Motors Holdens Ltd (1940) 40 SR (NSW) 117 (FC), 124. Jordan CJ answered that the objection was "immaterial if the result necessarily flows from the language of the legislature". The same answer was given more recently by this Court in respect of a similar protest about the operation of the schedule. See J Odlin Shopfitting International Pty Ltd v Kaljanac, Court of Appeal, unreported, 15 March 1993. I would give the same reply once again. Of course, in some cases it will be perfectly possible to differentiate, by medical evidence addressed precisely to the issue, the loss resulting from a pre-1987 injury and a loss resulting from an injury received after the commencement of that Act. In such a case Schedule 6, Pt6, CL6 will not apply. The worker will be entitled only to the loss resulting from the injury received after the commencement of the new statute. Where, however, as here, no such differentiation was found, it is not possible for this Court to manipulate the deeming provision in the Schedule to confine its operation as if it included words such as "unless the worker has been paid compensation in respect of an injury received before the commencement of that Divisions'. No such limitation is stated in the clause. It would exceed the legitimate bounds of statutory construction for the Court to imply it. No other provision of the Act, including the transitional provisions, was pointed to by either party to relieve the employer of the consequence of this possibly unjust result. The injustice is highlighted if, as I would believe, there is no authority in the Compensation Court to order or provide for the deduction of compensation already paid under s16 of the 1926 Act in respect of the loss resulting from the injury received before the commencement of the 1987 Act. There may be other bases upon which such payments could be withheld or recovered if paid. Cf Miller vy CSR Ltd (Trading as CSR Timber Products Pty Ltd), Court of Appeal, unreported, 12 March 1993. These were not explored in the present proceedings. Clearly the result of this determination (which could affect a large number of cases involving multiple injuries happening both before and after the commencement of 1987 Act) deserves some attention on the part of the legislature. Orders Agreeing as I do otherwise with what Cripps JA has written, I concur in the order which he has proposed. Meagher JA I agree with Cripps JA. Cripps JA On 5 February 1992 Judge Moroney of the Compensation Court made an award under the Workers Compensation Act 1987 in favour of Peter Danswan pursuant to which Clutha Ltd, his employer, was ordered to pay compensation (including lump sums pursuant to s66 and s67) in respect of work related injuries to his legs in 1989 and 1990. Of relevance to the present appeal the award provided: URJ CLUTHA LTD v DANSWAN (Cripps JA) 5 2. That the respondent pay the applicant, as lump sum compensation under s66, $10,884.30 in respect of 15% loss of use of the applicant's left leg at or above the knee. 3. That credit be given to the respondent for $720.00 paid pursuant to the former Act. 5. That the respondent pay the applicant, as lump sum compensation under s67, $7,000.00 in respect of pain and suffering resulting from the said loss; such sum of $7,000.00 to be apportioned as to $3,500.00 in respect of past pain and suffering and as to $3,500.00 in respect of future pain and suffering. 7. That the respondent pay the applicant, as lump sum compensation under s67, $30,000.00 in respect of pain and suffering resulting from injury of the applicant's right leg; such sum of $30,000 to be apportioned as to $15,000.00 in respect of past pain and suffering and as to $15,000.00 in respect of future pain and suffering. 10.... O.4, 0.6 and O.8 were concerned with interest ordered to be paid on the lump sums. O.10 and O.11 have no relevance in the appeal. At the hearing certain grounds of appeal were added and two grounds of appeal were abandoned. The following grounds of appeal were argued: 1A. That His Honour erred in that he awarded compensation pursuant to s66 on the basis of 15% loss of use of the left leg at or above the knee although he had found, in the course of his judgment, that the Respondent had suffered a 7 1/2% loss of use as a result of the injury alleged in November 1990. 1B. His Honour erred in determining that he was required by the Terms of Schedule 6, Pt6, CL6 of the Workers' Compensation Act 1987 to find that the full extent of the loss of use of the left leg resulted from the injury in November 1990. 2. His Honour erred in that the amount awarded by him as compensation for pain and suffering resulting from the loss to the right leg is not reasonably proportionate to the maximum rate of compensation payable in a most extreme case. 4. His Honour has erred in that the amount awarded by him as compensation for pain and suffering resulting from the loss to the right leg is excessive. 5. His Honour has erred in that the interest awarded is excessive. 6. His Honour erred in finding that the respondent (Mr Danswan) had suffered a loss pursuant to s67 of the Act." Ground 6 was added at the hearing. It alleges that the learned judge erred in finding that the respondent became entitled to an award for pain and suffering under s67 by reason of the loss of use of his left leg because that loss should have been assessed at 7 1/2% (see s67(2) of the Act). The sole ground upon which it is alleged that the learned judge erred in the award of interest is that, if he awarded excessive lump sums under s66 and s67, it followed that the award of interest would have to be recalculated. 6 UNREPORTED JUDGMENTS Mr Danswan is a coal miner employed by Clutha Ltd. He has been employed by Clutha for about 25 years. In 1971 he injured his left knee. Later Dr Segelov removed a torn medial meniscus. He was away from work for approximately three months and he was awarded the sum of $720.00 in 1976 pursuant to the provisions of s16 of the Workers Compensation Act 1926. After his return to work, he worked underground and was a member of the underground rescue team. He said his left knee gave him no trouble until the end of the 80s when he said he became aware of occasional discomfort in his left knee. He twisted his right knee in 1988 and was away from work for a week. On 10 April 1989 he slipped and injured his right knee. It became swollen and he was unable to continue working. Dr Giblin carried out an arthroscopy on 11 May 1989 which revealed a vertical tear in the medial meniscus. The tear was resected arthroscopically. He complained that his right knee did not improve despite rest and physiotherapy. On 24 August 1989 he underwent further surgery referred to as a "high tibial osteotomy (right)". He was off work for a period of approximately 44 weeks. He returned to work in March 1990 on restricted duties. On 10 November 1990 he again slipped and injured his left knee. On 22 January 1991 an arthroscopy was performed on his left knee. Prior to the claim the subject of this appeal Mr Danswan was paid a lump sum pursuant to s66 of the Act in respect of a 30% loss of use of the right leg at or above the knee. As I would understand it, there is no challenge to the view that Mr Danswan's loss with respect to his right leg was more severe than the loss of efficient use of his left leg at or above the knee. Dr Johnston was of the opinion that he suffered 15% permanent loss of function of his left leg at the knee level. The medical findings, together with the complaints made by Mr Danswan and accepted by Moroney CCJ, entitled the learned judge, in my opinion, to make the lump sum awards with respect to the losses. That is to say, I am not satisfied that the amount awarded for pain and suffering resulting from the loss of the use of the right leg was not reasonably proportionate to the maximum (see Offset Alpine Printing Pty Ltd v Porteous, Court of Appeal, 30 October 1992 unreported). It would appear that on any view of the matter the order that credit was to be given for $720 was probably unauthorized but no one has complained. Having determined that Mr Danswan was entitled to compensation under s66 for more than 10% of the maximum entitlement, Moroney CCJ then awarded compensation pursuant to s67(1). That is the consequential finding that is challenged under ground 6 of the appeal. If his Honour erred in the finding he made and was required to make a finding of 7.5% then, plainly enough, he was not entitled to make an award for pain and suffering under s67. The judge made it clear that, when assessing compensation pursuant to s67, he did not award compensation for pain and suffering that had occurred prior to the 1990 injury. That is to say, he had regard to CL2 of Pt6 which provides that pain and suffering can only be awarded in respect of injuries received after the commencement of Division 4 of Pt3 of the Workers Compensation Act 1987. The principal ground of appeal is whether Moroney CCJ erred with respect to the lump sum award under s66 calculated by reference to 15% loss of the efficient use of the left leg st or above the knee. He was entitled to have regard to Clutha's specialist medical witness, Dr Johnston, and to conclude that there was now a 15% loss of efficient use of the left leg at or above the knee. Moroney CCJ referred to the fact that Mr Danswan had received $720.00 in respect of a 7 1/2% permanent loss of efficient use of his left leg pursuant to s16 of the 1926 Act. As to this he said: "As to the left leg, as I said there is evidence that the applicant URJ CLUTHA LTD v DANSWAN (Cripps JA) 7 has suffered further loss of the leg at or above the knee as a result of the injury suffered by him in November 1990. The 1971 injury to the leg had been assessed as a 7.5 per cent loss, and the sum of $720 had been paid." Later he said: "What is the evidence as to the whole of the loss at the present time? Dr Johnson (sic) on behalf of the respondent says 15 per cent, Dr Higginbotham says 20 percent... I intend to find that he has a 15 percent loss of the left leg at or above the knee, and the lump sum payment for that is $10,884.30." In reaching his conclusion as to the lump sum based on 15% loss Moroney CCJ had regard to CL6 of Pt6 of Schedule 6 to the Act which provides: "Tf a loss mentioned in the Table to Division 4 of Pt3 of this Act resulted both from an injury received before the commencement of that Division and an injury received after that commencement, the loss shall, for the purposes of determining the amount of compensation payable in accordance with this Part and this Schedule, be treated as having resulted from the injury received after that commencement." Schedule 6 is concerned with Savings Transitional and Other Provisions consequent upon the repeal of the Workers' Compensation Act 1926 and the commencement of the Workers Compensation Act 1987. The question in the present case is, therefore, whether his Honour was correct in awarding compensation on the basis of a 15% loss of efficient use of the left leg at or above the knee or whether, and if not, what lesser lump sum should have been awarded. Mr O'Connor QC, on behalf of Clutha, submits that the award should have been calculated by reference to 7.5% of the loss of efficient use of the left leg because that was the loss that resulted from the injury in 1990. Mr O'Connor QC submits that the learned judge was required, as a matter of law, to make a finding that Mr Danswan was entitled to compensation calculated by reference to a 7.5% entitlement of the maximum amount under the Table and not 15%. He submits that no money is payable in respect of the 1971 injury because Mr Danswan cannot be compensated again for any loss of efficient use of his leg arising out of the 1971 injury. He points to the possible absurdity if Moroney CCJ is correct. He submits that people who have received injuries to the same body part referred to in the Table before 1987 and after 1987 will be treated differently to people who have received successive losses before 1987 or who may suffer successive losses after 1987. He says that if Mr Danswan had lost 90% of the efficient use of his left leg at or above the knee a few months prior to the commencement of the Workers' Compensation Act 1987 and had received an award pursuant to s16 for 90% of the loss of use of his left leg and if shortly after the commencement of the 1987 Act he had another injury which of itself added only 8% to his notionally perfect member, he would be entitled to compensation calculated by reference to 98% of the loss of his left leg at or below the knee. In my opinion, CL6 is not ambiguous. Read literally it provides that where, as in the present case, a worker has suffered a 15% loss as the result of an injury before and after the 1987 Act, for the purposes of determining the amount of compensation payable, the loss is to be treated as having resulted from the injury (the 1990 injury) received after that commencement. To give the subsection the interpretation contended for by Mr O'Connor QC necessitates reading into the section the words to the effect "subject to deduction of loss resulting from pre 1987 injury". To add those words alters the whole meaning of the clause. But even if there were any ambiguity about the matter, I am not persuaded that 8 UNREPORTED JUDGMENTS recourse to what is said to be a purposive approach would yield a different result. Under the 1926 Act a number of cases established the position that lump sum compensation for successive injuries to the one member was payable, calculated in each case, by reference to the effect of the injury to that member as it was at the time of the injury the subject of the claim (see Bennett v General Motors Holdens Ltd (1940) 40 SR (NSW) 117, King v Hayward (1943) 67 CLR 488 and Rodios v Trefle (1937) 54 WN (NSW) 197) In Bennett it was held that where a worker had suffered successive losses and had been paid compensation for the first loss, he was nonetheless entitled to compensation with respect to a second loss being compensation calculated by reference to the Table Amount "however defective the part may have been before the injury" (at 124). At 124 Jordan CJ said: "Thus if a worker had lost a finger in early infancy or whilst on a holiday, and subsequently lost his defective hand as the result of a compensatable injury, he would be entitled to receive 600 pounds, the whole sum allowed by the table for the loss of a hand. If he permanently lost half the use of his defective hand, he would be entitled to half that sum." The abovementioned cases are, in my opinion, applicable with respect to claims for losses under the 1987 Act except, of course, where the legislature has provided to the contrary. By way of illustration, s71 of the 1987 Act provides that where compensation is paid or becomes payable under the Act (or under s16 of the former Act) for a loss being the loss of proportion (but not all of it) of a thing and an occupational disease and the worker suffers a further loss of that thing: "compensation is payable under this Division for the further loss, but only the proportion of that further loss of the thing shall be taken into account in calculating the compensation payable". With respect to the new category of loss, Note (g) to the table provides that: "In the case of the impairment of the back, neck or pelvis, compensation is payable only in respect of the degree of permanent impairment suffered as a result of the injury concerned and as if any impairment existing before that injury did not exist." In my opinion, Moroney CCJ was correct, on the findings made, to conclude that Mr Danswan was entitled to compensation calculated by reference to a 15% loss of efficient use of the left leg at or above the knee. If that is an unintended result, it is for the legislature and not the Court to correct. Accordingly, I would dismiss the appeal and order the appellant - to pay the respondent's costs of it. Appeal dismissed with costs. Counsel for the Appellant: CE O'Connor QC/BA Odling Instructed by: Sparke Helmore and Withycombe Counsel for the Respondent: GF Little Instructed by: Maguire and McInerney