NCR (AUSTRALIA) PTY LTD v NIKOLOV SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL MAHONEY, PRIESTLEY and POWELL JJA 7 June 1994, 7 June 1994 [1994] NSWCA 216 APPEAL from Compensation Court — Claim for compensation under s66 of the Workers Compensation Act 1987 — Approach to be adopted in deciding what Judge meant by his judgment and the correctness of his award — Held: Error of law in formulation of award — Appeal upheld. ORDERS 1. Appeal upheld and the award below set aside. 2. The amounts awarded in the Compensation Court of New South Wales be amended so that there be substituted in para2(1) of that Court's award the sum of $14,400 (in lieu of $24,000) and in para2(2) the sum of $4,800 (in lieu of $12,000). 3. The respondent to pay the costs of the appeal. Mahoney JA This is an appeal from the Compensation Court. The applicant was injured in July 1987 and applied for compensation and as far as is here relevant, compensation under s67 of the Workers Compensation Act 1987. The appeal is an appeal only on law. The learned judge in assessing the compensation payable under s66 referred to the extent of the injury which the applicant had suffered to his back and to his neck. He reviewed the evidence and then said: "The Act of course as it has been illuminated by the Court of Appeal in recent times, requires the court to make an assessment by comparing the applicant's case with that of a most extreme one, when it comes to assess permanent impairments of the neck and back. Having regard for the whole of the evidence, it seems to me that the permanent impairment of the applicant's back is equivalent to thirty per cent of the maximum amount under s66(1), and that the permanent impairment of the neck is fifteen per cent of that amount, those amounts are $24,000 and $12,000 respectively." His Honour therefore ordered payment of those amounts accordingly. The court is informed that at the relevant time the maximum amount specified in s66(1) was $80,000. Provision is made in relation to the impairment of the back and the neck in the Table which follows s73, to the effect that permanent impairment of the back or the neck may attract compensation ranging from no compensation to sixty per cent of the maximum and Note (a) to the Table says: "Where a range of percentages is provided by the Table, the maximum percentage is payable only in a most extreme case and the percentage payable in any other case shall be reasonably proportionate to that maximum percentage having regard to the severity of the matter..." Therefore it appears that the maximum amount which could be awarded in respect of permanent impairment of the back (I shall take that as the relevant example) is sixty per cent of $80,000, namely $48,000. The court then in assessing the amount to be awarded under the section where there is less than a most extreme case and in accordance with Note (a) has to assess a proportion of a most extreme case and apply that proportion to, as in this case, $48,000. 2 UNREPORTED JUDGMENTS The application of the Act in this regard has been the subject of consideration in a number of cases and in my opinion the questions to be answered in the construction of the Act are now relevantly clear. As I see the procedure to be followed in a case such as this, it involves three steps. First, this Court must first decide what in fact the judge below did decide. That is, it must determine what on its proper construction is the meaning of the judgment given. Secondly, it must then determine whether what the judge decided was open to be decided on the evidence as it was before him. Thus for example if the judge decides, as he did here, that there was a certain percentage of impairment of the back, the court must determine as in the ordinary course whether the evidence supported the percentage impairment which the judge found. This is an ordinary procedure which the court follows on appeal and does not turn on anything particularly required by the 1987 Act. Thirdly, when the court has determined those questions, the court must then determine whether what the judge did below in applying that percentage of impairment and its relation to the most extreme case was correct, having regard to the terms of s66. The first question to be decided in the present case is what the judge meant when he said what he did in the passage which I have cited. When his Honour said that the permanent impairment of the applicant's back is equivalent to thirty per cent of the maximum amount under s66(1) he was employing an elision in his language; the language he used does not clearly set out precisely what is intended to be conveyed. However in my opinion, having regard to the whole of the judgment, what his Honour meant was that the permanent impairment of the applicant's back was such that he was entitled to thirty per cent of the maximum amount available under s66(1). In the present case that was thirty per cent of the amount of $48,000. The amount which his In the present case that was thirty per cent of the amount of $48,000. The amount which his Honour selected, $24,000, was in fact thirty per cent of $80,000. $80,000 could of course have no possible relevance to the present case: it was not "the maximum amount under s66(1)" in relation to back injury. The only sum relevant in considering an award for permanent impairment of the back was sixty per cent of $80,000, namely as I have said, $48,000. It appears that his Honour stated the effect of the Act in this regard when he said what he did. Therefore in my opinion his Honour fell into error in treating the amount to be given for the permanent impairment of the applicant's back as being equivalent to thirty per cent of the maximum amount available under s66(1) and in assessing that amount at $24,000. Counsel have both referred to several decisions of this Court in which the construction of these sections has been considered. In some of the cases to which reference has been made, if not all of them, the real difficulties which the court felt in the determination of the case arose from the difficulties in deciding the first two questions to which I have referred. In some of these cases the court has had difficulty in deciding precisely what it was that the judge decided. Thus, it is possible to argue in a case such as the present that when the judge fixed a figure of say thirty per cent permanent impairment what his Honour was doing was in fact trying to fix a figure of reference which would give a sum of thirty per cent of $80,000. If a judge approached the matter in that way he would in my respectful opinion be approaching it in a wrong way. The issue to be decided in the particular case is what is the proportion of impairment of the back having regard to a most extreme case. When that proportion is decided then that proportion will be URJ NCR (AUSTRALIA) PTY LTD v NIKOLOV (Powell JA) 3 applied to the sum which is sixty per cent of what is from time to time the maximum sum fixed by the Act. The sum of $80,000 was that amount at the relevant time. I do not think that the cases to which reference has been made illustrate any divergence by the court from the line of reasoning to which I have referred. The cases have been concerned, as I have indicated, with the application of or the decision of the first two questions to which I have referred. It therefore follows in my opinion that the judge erred both in relation to the award of $24,000 compensation in respect of the spinal injury and $12,000 in respect of the neck injury. However, as Mr Neilson has properly put, this appeal is an appeal only upon a question of understood is one of law for which the court can give relief. That depends upon a categorisation of what the judge did. In my opinion the judge misunderstood the nature of the task that he was required to undertake. As I understand his judgment, he misunderstood the proper construction of the relevant section. He seems to have misunderstood the application to the maximum amount in s66(1) of the figures in the Table and the terms of the notes as they then were to that Table. The misunderstanding of the effect of the statute is of course an error of law. In my opinion what occurred here was an error of law. In these circumstances I would propose that the appeal be upheld, that the award be set aside and that there be substituted for the award that was made an award corrected in accordance with the views which I have expressed. That would appear to involve the substitution in para2(1) of $14,400 for $24,000 and in para2(2) of the amount of $4,800 for the amount of $12,000. It does not appear that there is any other alteration which is required. Counsel may if necessary refer the court to any other consequential alteration which would follow from the setting aside of the judgment in the manner to which I have referred. I would therefore propose the orders to which I have referred. Priestley JA I agree with what has been said by Mahoney JA. The case is one ofthose which, once the error of law has been identified, permits a ready adjustment of the awards made below and thus is a suitable case for this court simply to substitute awards instead of remitting the matter to the Compensation Court to be dealt with there. Powell JA It seems to me that the proper interpretation to be placed upon whatManser CCJ has said in his judgment is that indicated by Mahoney JA. This being so, it is abundantly clear that what his Honour has done in calculating the sums provided for in the Award is either to use a wrong multiplier or a wrong multiplicand. Such a course of action is, in my view, clearly one involving an error of law and for those reasons I support the Orders proposed by Mahoney JA. MAHONEY JA: The orders of the court therefore are that the appeal be upheld and the award amended as I have indicated. It would appear to follow that the appellant is entitled to costs. INGRAM: I submit that your Honours need to further amend the award to allow the respondent interest on those sums of $14,000 and $4,800 from the date of the award of Judge Manser. 4 UNREPORTED JUDGMENTS MAHONEY JA: The effect of the court's order is, as it ordinarily applies, that the court sets aside the award below, substitutes for it another award and that award takes effect from the date of the original judgment. The provisions made in para4 concerning interest will have effect on that award. 1. Appeal upheld and the award below set aside. 2. The amounts awarded in the Compensation Court of New South Wales be amended so that there be substituted in para2(1) of that Court's award the sum of $14,400 (in lieu of $24,000) and in para2(2) the sum of $4,800 (in lieu of $12,000). 3. The respondent to pay the costs of the appeal. Counsel for the Claimant: GW NEILSON Instructed by: HUNT AND HUNT Counsel for the Opponent: JW INGRAM Instructed by: D STANEFSKA AND ASSOCIATES