DAHDAH v KENAN PTY LTD T/AS WILANDRA NURSING HOME SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL MAHONEY, PRIESTLEY and CLARKE JJA 22 June 1994, 30 June 1994 [1994] NSWCA 78 WORKERS COMPENSATION ACT — award for partial incapacity under s11(1) — hospital and medical expenses under s10 — application of s10. The appellant worker was awarded compensation for partial incapacity under s11(1) of the Workers Compensation Act. In regard to hospital and medical expenses under s10 of the Act the judge ordered that the respondent pay certain of the worker's expenses but refused to order payment of other expenses. Held: s10 of the Act required the court to consider firstly, the nature of the injury received by the worker, and secondly, whether the treatment was reasonably necessary as a result of that injury. References by the judge in his decision to the worker's "partial incapacity" did not indicate that he failed to apply s10 correctly. ORDERS Appeal dismissed with costs. Mahoney JA I agree with the judgment of Priestley JA. In the course of argument of the appeal, it was agreed that essentially two items remained in dispute: the hospital expenses and Dr Bannister's fees. It was agreed that what his Honour had done had been to make appealable orders in respect of each of these: the form of what was said in relation to Dr Bannister's fees is accepted as embodying an order for payment of the proportion of those fees to which reference was made during argument. I agree with Priestley JA that his Honour directed his attention to the assessment which, in the circumstances, s10 of the Workers Compensation Act 1926 required. I see no error in what he did. Priestley JA The question in this appeal is whether a judge in the Compensation Court was correctly interpreting s10 of the Workers Compensation Act 1927, when he refused to make an order for payment of a worker's hospital and medical expenses amounting to approximately $12,000. The question arose from the following circumstances. The worker suffered an injury in February 1977 in the course of her employment. Her employer was a company conducting a nursing home. In proceedings which she began in 1978, decided by his Honour Judge Langsworth, she was awarded compensation for her injury for a closed period. In later proceedings which came before his Honour Judge Davidson in 1987, she claimed further compensation on the basis of total incapacity resulting from the injury. Judge Davidson did not accept her case of total incapacity. He thought she was greatly exaggerating the effects of the injury. There was conflicting medical evidence about the extent and the reality of the effects of the injury upon her. He said that one problem which had been posed for him was whether the worker should be believed at all. He concluded that while it was almost an impossible task, because of the worker's presentation, to decide whether there was any basis at all for her complaints, there was some objective evidence to support some degree of persisting symptomatology. Because there 2 UNREPORTED JUDGMENTS was some objective evidence for some complaint of continuing pain, he accepted her proposition that she had had pain ever since the date of the injury although, in his view, she had certainly exaggerated that in her evidence. In the result, Judge Davidson rejected the worker's claim pursuant to s9 for total incapacity; held there was no warrant for an award under s11(2) as she regarded herself as being totally unemployable; and held that she was entitled to an award under s11(1) for partial incapacity. In regard to the extent of the award to be made under s11(1), the trial judge said that his view was "that because of the presentation that she has adopted I cannot accept that she has the major degree of incapacity which has been assessed by some of the medical practitioners. Rather, taking a view from the objective evidence in her case and setting aside her own subjective complaints, I feel it is proper that she should have an award of a lesser degree than her own symptomatology might suggest." He then made awards of compensation covering the various periods from 14 November 1978 to the date of his judgment and continuing. In regard to hospital and medical expenses under s10, he ordered the respondent to pay them, but added "With regard to the s10 order I grant liberty to the respondent to apply in respect of any matters that might be called into dispute." The worker made use of the liberty to apply a little over three years later. By notice of motion dated 12 January 1991 she applied for orders that the respondent pay certain medical and hospital expenses. The motion came on for hearing before Judge Davidson, and was decided by him, on 10 December 1991. He ordered that certain of the worker's accounts be paid, but refused to order payment of others. Stated very broadly, the accounts in regard to which he refused to make an order related to treatment of the worker carried out on the footing that she had a greater degree of incapacity than had been found by the trial judge in his 1987 decision. The worker then appealed in regard to the decisions under s10 which were adverse to her. In the appeal, it was contended that the way in which the judge expressed his reasons for his conclusion showed that he had misunderstood s10. The relevant part of s10 is subs(1) which was as follows: "(1) Where as a result of an injury received by a worker (a) it is reasonably necessary that any medical or hospital treatment be afforded, or any ambulance service rendered, to him; or (b) it is appropriate that any such treatment, being treatment by way of rehabilitation, be afforded to him, his employer shall, subject to and to the extent provided by this section, be liable to pay, in addition to any compensation otherwise provided the cost of that treatment or service and the expenses specified in subs(1A)." In his 1991 reasons the trial judge noted that in his 1987 reasons he had concluded the worker had overstated her case and was only satisfied she was partially incapacitated, and continued: "As to this, the respondent submits that the amount awarded by me throughout the periods from 14 November 1978 culminating in the continuing amount of $80 per week clearly indicates that I did not consider that her partial incapacity was of a very extensive degree. It was further submitted by the respondent "that the only medical treatment which could be regarded as being reasonably necessary, was treatment for that degree of partial incapacity which I determined [ie in the URJ DAHDAH v KENAN PTY LTD T/AS WILANDRA NURSING HOME (Priestley JA) 3 1987 proceedings]. It was therefore argued that any medical expenses that were incurred for alleged total incapacity were not reasonably necessary. It was submitted that the applicant was professing a degree of incapacity in excess of that which was in fact found to be the case, the respondent should not suffer the expense of that." He then referred to his findings in 1987, in effect accepting the respondent's submission as valid in that respect. He went on: "Tt appears to me that much of the cost of the treatment now claimed under s10 is for hospitalisation and treatment of the applicant when she was allegedly totally incapacitated. There is no doubt that the central part of the evidence given by Dr Bannister is to this effect. I agree with the respondent's submission that the effect of my judgment is that the applicant should only be entitled to s10 expenses reasonably incurred for the treatment of the limited degree of partial incapacity." He then discussed the claimed items, indicating which he thought were reasonably claimed by reference to the criterion whether they "would be of assistance in the ongoing treatment of the applicant even for the limited partial incapacity which I had found." For the appellant worker it was contended that the trial judge had decided whether or not to allow the claimed expenses by reference to whether they were claimed in respect of total incapacity or not. It was submitted that there was no reference to incapacity, whether total or partial, in s10, and that this was not the proper test. By adopting such a test, the judge was excluding, for example, a possibility of making an order for payment of expenses, which although incurred for investigation and/or treatment of a condition of total incapacity were nevertheless reasonably necessary for the treatment of the worker in her actual condition. There is one passage in his Honour's reasons which may be thought to give some support to this submission. In this passage he said: "Tt may be that among the expenses now claimed, some relate to treatment which would be proper for the degree of incapacity which I did find. However, it is not possible to differentiate with any finality the relevant amounts as the evidence now stands." Although on one view this may give some foothold for the submission made for the appellant, it seems to me that that support disappears in light of what the judge said immediately afterwards. He went on: "However, in an effort to resolve the dispute between the parties, I would have thought that all the hospital bills claimed would be for alleged total incapacity and should not be allowed." - here he specified the bills he was speaking of, and then continued by specifying other bills, in regard to which he said "T consider that ought to be allowed as being appropriate to partial incapacity... it would appear to me that they would be reasonable diagnostic procedures and would be of assistance in the ongoing treatment of the applicant even for the limited partial incapacity which I had found." I read his Honour's remarks in these paragraphs as saying in substance that although the materials before him did not enable him "to differentiate with any finality" between those expenses he did not think he should allow because they were primarily for treatment for a condition which in his view the applicant did not suffer from, and those which related to treatment which would be proper for 4 UNREPORTED JUDGMENTS the degree of incapacity which he did think the applicant suffered from, nevertheless, despite the difficulties in separating the two types of expense, and because it was desirable to resolve the dispute between the parties without further delay and expense, he would do the best he could on the materials before him. I do not think that he was refusing to consider, or in the event did not consider, expenses, which although incurred in respect of the worker's alleged state of health amounting to total incapacity, may have been reasonable in part, because of the state of her health as the judge found it to be. The essential question raised by the point sought to be made by the appellant is whether the judge was deciding which expenses he would allow and which refuse by reference to the allegedly wrong criterion earlier mentioned. The words of s10(1) relevant to the present circumstances, put in a somewhat different order, make an employer "liable to pay... the cost of... treatment... where as a result of an injury received by a worker... it is reasonably necessary that... treatment be afforded...". The provision seems to me to require the court to ask the following questions: (a) what was the injury received by the worker; (b) as a result of that injury was the treatment reasonably necessary? The two questions are related. The second one can only be answered by reference to what the court has decided about the injury received by the worker. The focus of the provision is on the "injury received" and, as the appellant submits, it is that injury which is to be considered, not the degree of incapacity it causes. But to refer to the latter does not show that the former is not being considered. A reference to the degree of incapacity resulting from an injury is not necessarily a reference which excludes reference to the injury itself. To speak of a worker's partial incapacity may sometimes be a convenient and brief way of referring to the injury that was received by the worker. It seems to me that it was in that sense that Judge Davidson was referring to partial incapacity in the first passages from his 1987 reasons which I earlier set out. In my opinion, his reasons as a whole do not show that he was under any misunderstanding of s10 when he approached the task of separating those expenses of the appellant which he should allow under the section from those which he should refuse. In the first paragraph above set out from his Honour's 1991 reasons, for example, in which he recorded the respondent's submission that the amount of the earlier award indicated the judge did not consider the applicant's "partial incapacity was of a very extensive degree", it seems to me that part of the meaning was that the injury received by the appellant and its condition at the various times relevant for the court to consider were much less serious than she was claiming. The other passages I have cited seem to me to require a similar interpretation. It seems to me, to put it in other words, that when the judge spoke from time to time of "partial incapacity", he was referring not only to the finding of partial incapacity he had made in 1987, but also to the injury she had received which was the foundation for that finding. Bearing in mind that his Honour had the terms of s10 in contemplation when delivering his ex tempore reasons, I have little doubt that the meaning I put upon his words is not only one which is open, but which is much more likely than the differing one contended for by the appellant. In my opinion his Honour's reasons disclose no error of understanding of the statutory provision he was applying, and the appeal should be dismissed with costs. Clarke JA I agree with Priestley JA. URJ DAHDAH v KENAN PTY LTD T/AS WILANDRA NURSING HOME (Clarke JA) 5 Appeal dismissed with costs. Counsel for the Appellant: MJ CRANITCH Instructed by: GLOVER AND GLOVER Counsel for the Respondent: GJ MCCREADY Instructed by: VANDERVORDS