BOROVAC vy CORPORATE VENTURES PTY LTD (T/as BOWSERS ASHPHALT) SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL MAHONEY, CLARKE and MEAGHER JJA 15 June 1995, 8 August 1995 [1995] NSWCA 54 WORKERS COMPENSATION ACT 1987 — APPEAL — s66 and s67 — WHEN IMPAIRMENT IS CONSIDERED PERMANENT FACTS The appellant suffered two injuries to the back in the course of his employment with the respondent. He was awarded compensation under s66 and s67 of the Workers Compensation Act 1987. The appellant submitted that the judge erred in law in awarding interest on the amount awarded under s66 only from 7 December 1988 (the date of the operation to treat the ruptured L4-5 intervertebral disc lesion) and that the judge also erred in only awarding under s67 damages for pain and suffering that occurred after the operation. HELD (PER CLARKE JA AND MEAGHER JA AGREEING) Although it was only after the beneficial effects of the operation that it could be said that all of the impairment was permanent, there was nonetheless, a permanent impairment of his back caused by the employment injury which caused pain and suffering from the time of that injury. The fact that it was not possible to measure the extent of the permanent impairment prior to the operation presents no reason for denying compensation for pain and suffering at the earliest time. There is nothing in s67 which require that the court to limit the award for pain and suffering in that way, nor to compensate pain and suffering in that way, nor to compensate pain and suffering only from the time the permanent impairment became susceptible of assessment. Similarly, both the losses under s67 and s67 flowed from the employment injury and thus interest should be awarded from that time. (per Mahoney JA) The procedure for determining a s67 award is: 1. The Court must determine and identify what is the permanent impairment of the back for which compensation is sought. 2. Whether and to what extent and in what sense that impairment is permanent. 3. The Court must then make the judgments of degree or proportion required by the Notes to the Table. The "impairment" comprehends not only the physical change produced by the injury in question but also the state of the impairment which results from the injury. In my opinion, pain and suffering will result from the impairment if it results from the condition, physical or otherwise, which produces that impairment. From the date of the original injury, the worker suffered an impairment to his back. The effect of the operation was not to remove the impairment but to cause it to cease causing pain in the leg. The impairment was therefore permanent and the pain in the leg, prior to operation, was produced by that permanent impairment. There is, therefore, no reason why compensation should not be given for it. Mahoney JA agreed with the order proposed by Clarke JA. ORDERS (1) The parties should bring in short minutes which reflect the orders I have made; (2) Stood over to (a date) for mention. 2 UNREPORTED JUDGMENTS Mahoney JA This appeal raises for consideration the construction of s67 of the Workers Compensation Act 1987. The section and its associated sections have caused a flood of litigation and that flood has not abated: at least, as far as may be judged from the appeals coming to this Court. The details of the present problem are set forth in the judgment of Clarke JA, which I have had the advantage of reading. I shall refer to them only as far as it is necessary to do so to explain the view which I have taken of s67 and its operation in this case. On 28 January 1988, whilst lifting a heavy weight, the worker suffered back pain. The pain existed in his back and his left leg and later affected both of his legs. He was absent from work for some days but subsequently was able to return to work. On 22 June 1988, whilst at work, he suffered a further injury to his back. That injury led to pain in his back and his left leg. He tried to work but unsuccessfully. The pain continued in his back and his left leg and, as I infer, interfered with the extent to which he could use his back. On 7 December 1988 he underwent an operation by Dr Matheson. Dr Matheson found that he had a left lateral L4-5 disc protrusion. There was a ruptured fragment of the disc under the left LS nerve root. A complete L4-5 discectomy was performed. The doctor reported that the worker had lost all leg pain but "as one would expect" his back pain persisted. It was the persisting back pain which was the subject of the application that he made to the Compensation Court. On 23 November 1990 the Chief Judge of the Court awarded $9876 compensation under s66 "in respect of permanent impairment of the applicant's back" and $10,000 as lump sum compensation under s67 "in respect of pain and suffering". The consequential orders were made. It is against those orders that the present appeal has been brought. The Chief Judge, in assessing these awards, concluded that it was necessary to "separate out pain and suffering resulting from the employment injury which gives rise to the scheduled loss from the pain and suffering resulting from the loss itself'. It was in respect of the latter pain and suffering that, in his Honour's opinion, s67 had operation. His Honour found that there was a distinction between the pain and suffering resulting from the injury and that resulting from the loss. For the total pain and suffering he would have assessed $15,000; for the pain and suffering resulting from what he saw to be the relevant loss, he assessed $10,000. Accordingly, his award was for the latter sum. The worker's submission in this regard has been, in effect, that his Honour misconstrued the effect of s67 in this regard and/or failed properly to apply the section, properly construed, to the facts of the present case. In order to determine the issues raised, it is necessary to examine more closely the operation of s67 and of the Table to which it refers. The power to grant compensation for the relevant pain and suffering is granted by s67(1). That subsection, as far as is here relevant, provides: "67 (1) A worker who has suffered a loss mentioned in the Table to this Division... is entitled to receive from the worker's employer by way of compensation for pain and suffering resulting from the loss... an amount not exceeding $.....". In the Table to which the section refers, the loss here in question is described as: "Permanent impairment of the back". URROVAC v CORPORATE VENTURES PTY LTD (T/as BOWSERS ASHPHALT) (Mahone? JA) The Notes to the Table provide, inter alia, two things. First, the maximum percentage of the statutory maximum compensation "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....": Note (a). Accordingly, in such a case as the present, the Court must make a judgment of the kind referred to in the Note. Second, in such a case as the present, "...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": Note (g). Again, the Court must make a judgment as to "the degree of permanent impairment suffered as a result of the injury concerned". The combined effect of these provisions is that, in such a case as the present, the Court must do, inter alia, three things: it must identify the impairment to the back which is in issue; it must determine whether, to what extent, and in what sense that impairment is permanent; and it must make the judgments of degree or proportion required by the Notes to the Table. When those determinations are made, the quantification of the compensation under s67 may be made. I shall therefore consider each of these three matters in turn and the effect that they have in a case such as the present. The Court must first determine and identify what is the (permanent) impairment of the back for which compensation is sought. The meaning of "impairment" has not, I think, been authoritatively determined in this regard and it is necessary to make certain distinctions. In its plain or ordinary meaning, "impairment" refers to that which has been injured or made worse and, more precisely, refers to the injury or state of deterioration which has been produced: see, eg, Shorter Oxford English Dictionary (1964) 962. It is not clear whether "impairment" as used in these provisions is, for example, limited to the physical condition of the back which limits its function, or whether it includes, for example, a condition where the injury suffered has made the back more painful but has not caused any deterioration in the function which the back is relevantly to perform. In its plain or ordinary meaning, the term may denote, inter alia, the state of being injured or made worse, that which has produced that state, or both of them. (Where a term has alternative meanings, the legislative draftsman sometimes comprehends by his use of it both of those meanings). In the present case, as I have indicated, the injury caused trauma to the worker's lumbar discs. As the result of that condition, he was not able to do things which, uninjured, he could have done. He suffered back pain and leg pain whilst in that condition. Surgery was performed and that caused the leg pain to cease but not the back pain. He was left with a permanent back condition and that condition, permanently, will restrict what he can do with his back and will cause pain in it. That pain may - the evidence is not completely clear - result from the physical condition in which his back has been left following the surgery or from what he attempts to do in the use of his back or from both. For the purposes of s67, how far does the term "impairment" extend? It would, in my opinion, be wrong to limit the term (and accordingly "the pain and suffering resulting from" it) to the physical defect which the trauma caused to the discs and the lumbar back. That would be too restrictive a construction of the term in the present context. The Workers Compensation Act is a remedial Act and so, if ambiguity exists, it should be construed beneficially: see Bist v London and South Western Railway Co (1907) AC 209 at 211; Bull v Attorney General for 4 UNREPORTED JUDGMENTS New South Wales (1913) 17 CLR 370. See generally Mathews v Foggitt Jones Ltd (1927) 37 CLR 455. Cf Dodd v Executive Air Services Ltd (1975) VR 668. In my opinion, the term comprehends not merely the physical injury produced by the trauma but also the general state of impairment of function and what results from that state. S67(1) limits the compensation to be awarded to "pain and suffering resulting from the loss", that is, from the (permanent) impairment of the back. An injury falling within the Act may produce both pain and suffering which arises from something other than the impairment of the worker's back and pain and suffering which results from that impairment. S67 authorises compensation only in respect of the latter: see, eg, Glennos Constructions Pty Ltd v Beccari (Court of Appeal, 22 September 1993, unreported). As to s67 generally, see Rico Pty Ltd v Road Traffic Authority (1992) 28 NSWLR 679; Alvorac General Engineering Pty Ltd v Arlotta (1993) 29 NSWLR 734; Arklow Pty Ltd v Taavao (Court of Appeal, 11 June 1992, unreported). Such an operation of the section may require the Court to make difficult dissections and it is possible that the result of the provision may in this regard produce artificial distinctions. But, in my opinion, the terms of the provisions are in this regard clear. It was no doubt apparent to the legislature that the injuries for which compensation is payable under the Act include both injuries within the Table and many kinds of injuries which are not. The legislature decided to limit the power to grant compensation for pain and suffering to (as far as is here relevant) injuries which fall within the Table. This does not mean that the provisions of the Act in this regard are to be narrowly construed or that the words "resulting from" in s67(1) are to be given a narrow operation. But in my opinion it remains clear in principle that the pain and suffering for which an order may be made under s67 is limited in this way. As the present case illustrates, a further difficulty may arise in the application of s67. This difficulty derives from the fact that the loss to which the Table applies in this regard is qualified by the term "permanent": it is only in respect of a permanent impairment of the back that compensation can be awarded. The matter is further complicated by the terms of the Notes which involve that judgments may have to be made as to proportions and the like. The arguments for the employer in the present case have called in aid the effect of the term "permanent". The arguments have suggested, for example, that the terms of s67, literally applied, indicate that the pain and suffering for which compensation can be given is not all of the pain and suffering which has resulted from the impairment of the worker's back but only such of that pain and suffering as has resulted from the permanent impairment of it. This is a problem which does not arise in relation to other parts of the Table. Thus, if the worker has lost an arm or a leg, no such question will arise. Questions of a similar kind may arise where the loss is not the loss of the thing specified in the Table but the loss of the substantial use of that thing. Such problems may require examination in an appropriate case. In the present case, the arguments have suggested, for example, that if and insofar as pain and suffering has resulted from an impairment of the worker's back and that impairment has now ceased, the impairment was not "permanent" and accordingly the pain and suffering which resulted from it has not resulted from a permanent impairment of the back. That pain and suffering must, it has been suggested, be put aside The submissions made for the employer have, in my opinion correctly, emphasised the significance of the term "permanent". But it does not follow that the requirement that the back impairment be permanent leads URRROVAC v CORPORATE VENTURES PTY LTD (T/as BOWSERS ASHPHALT) (Mahoney JA) to the results sought for the employer. The significance of the term is, in my opinion, not properly reflected in what the trial judge did. In considering the operation of the words "permanent impairment" it is important to bear in mind that the factual situations to which the terms are to be applied may be of different kinds and may be simple or complex. The impairment of a worker's back may be of different kinds. The injury suffered may, for example, impose a restriction upon what otherwise would be the ordinary functioning of the back, whether or not resulting in pain. The injury may produce pain which has the effect that the worker does, or is able to do, less with his back than otherwise would have been possible. It may produce pain without affecting the functioning of the back: he may, sustaining the pain, continue to do what previously he did. Or there may be combinations of these. Subject to what I have said, the term "impairment" may apply in situations of these different kinds. The chronology or sequence of what occurs may be of significance. Thus, to adapt (and, I fear, to over-simplify) a submission made by Mr Hislop QC, pain and suffering may flow from two back conditions, one permanent and the other not. The submission suggested that the Act requires that s67 be applied only to the former and not to the latter and that a dissection of the pain and suffering be made accordingly. If the matter be considered only in terms of concept, that is no doubt correct. But facts habitually overlap the boundaries which concepts seek to apply. As I have indicated, "impairment" comprehends not only the physical change produced by the injury in question but also the state of impairment which results from that injury. This is of significance for present purposes. Thus, if there is a permanent state of impairment and pain and suffering results from the impairment, a s67 award may be made in respect of that pain and suffering notwithstanding that from time to time it may have been produced by one physical effect of the injury and at another time by another, neither of which is permanent. If the state of impairment be permanent, even though it results for a time from one and for a time from another incident of the injury, then, in my opinion, the pain and suffering which results from the impairment is (special cases apart) within s67. For this purpose, in my opinion, pain and suffering will result from the impairment if it results from the condition, physical or otherwise, which produces that impairment. For these reasons, I agree with the conclusion of Clarke JA that his Honour erred in restricting the award under s67 as he did. The evidence established that, from the date of the original injury or injuries (no distinction has been drawn for this purpose) the worker suffered an impairment to his back. The pain in the back and whatever operated to produce it existed from the date of the injury or injuries and continued to exist. The pain in the leg was produced by that impairment. The effect of the operation was not to remove the impairment but to cause it to cease causing pain in the leg. The impairment was therefore permanent and the pain in the leg, prior to operation, was produced by that permanent impairment. There is, therefore, no reason why compensation should not be given for it. I have referred to the questions of proportion and degree which the relevant provisions of the Act pose. It is not necessary for present purposes to pursue the operation upon these provisions of other portions of the Act and the Schedules to it. If and insofar as, for example, the provisions of Notes (a) and (g) affect the operation of s67, they do not, I think, require the adoption of a construction of s67 different from that to which I have referred. I agree with the orders proposed by Clarke JA. 6 UNREPORTED JUDGMENTS Clarke JA The appellant suffered two injuries to the back in the course of his employment with the respondent. The first was on 28 January 1988 and the second on 22 June of the same year. He contended that as a result of these injuries he had received permanent impairment of his back and he sought compensation from the respondent pursuant to s66 and s67 of the Workers Compensation Act 1987 ("the Act"). His application was heard by Judge McGrath who made an award in favour of the appellant under s66 in the sum of $9,876 and ordered that interest be paid on that amount from 7 December 1988 (the date of an operation to which I will refer) at the rate of 18.5 per cent. He also made an award in favour of the appellant under s67 in the sum of $10,000 together with interest at the same rate (ie 18.5 per cent) from 7 December 1988 on the sum of $1,000. The appellant has not challenged the award under s66 but has contended that his Honour erred in law in awarding interest only from 7 December 1988 on the sum awarded under that section. The appellant has, in addition, challenged the award under s67 and the order for the payment of interest in respect of the amount payable under that section. His Honour stated at the outset that "there is no issue that, as a result (of the two injuries) particularly the first injury, the applicant suffered a low back disc lesion, which ultimately required operative treatment which was accorded to him by Dr Matheson. His Honour noted, however, that there was a serious issue between the parties as to a calculation of the degree of impairment resulting from the back injury. The evidence revealed that Dr Matheson had operated on the appellant's back at St Luke's Hospital on 7 December 1988 to treat a ruptured L4-5 intervertebral disc lesion. The history described by the appellant leading up to the operation could be summarised in these terms: On 28 January 1988 while lifting a machine with a fellow employee he suddenly had to take all the weight of the machine. He noticed pain in his back and legs. He described the sensation at the time as *something like twisted inside". He continued with his normal duties until 10 February 1988 when, having consulted an orthopaedic surgeon, Dr Bencsik, he was off work for a week. He then returned to his work performing his normal duties. On 22 June 1988 he was spraying an air conditioning duct when he had to twist his body and then he experienced further pain. He said his back was very painful and his legs were in a very bad condition. He worked on for three or four days and then returned to Sydney. Upon his return to Sydney he saw Dr Bencsik who had him admitted to Chatswood Community Hospital for traction. He was an in-patient there for two weeks and was treated with traction. He described the experience as being 'Very uncomfortable, very bad, because painful there and you have to lie all day and night flat on your back". He later had physiotherapy and on 17 October 1988 saw a neurosurgeon, Dr Matheson. It was Dr Matheson who operated on him on 7 December 1988 and the appellant said that following that operation his leg pain improved markedly. None of this history was contested and the case turned, in essence, on the resolution of a factual dispute as to the degree of impairment and a number of legal questions concerning the measurement of loss under s66 and s67 of the Act. S66, so far as is relevant, provides: URRROVAC v CORPORATE VENTURES PTY LTD (T/as BOWSERS ASHPHALT) (Clarké JA) "(1) A worker who has suffered the loss of a thing mentioned in the Table to this Division as the result of an injury is entitled to receive from the worker's employer by way of compensation for the loss... the amount equal to the percentage of $--- set out opposite to that loss in that table." The loss with which this case was concerned was the permanent impairment of the back and the relevant percentage was 0-60. His Honour held that in assessing the degree of permanent impairment of the back it was necessary to have regard to the appellant's condition after the operation which, to quote his Honour's words, "inter alia, removed much of the pain and suffering resulting from the employment injury prior to the date of operation". This approach to the assessment under s66 is clearly right for the operation effected an amelioration of the appellant's condition and it could not have been said that the degree of his back impairment prior to the operation was permanent. On the other hand the evidence demonstrated, and his Honour accepted, that the appellant did have a permanent back impairment which, after the improvement effected by the operation, should be assessed at 20 per cent of the maximum provided in the right hand column of the relevant Table in the Act in respect of a most extreme case. The appellant, as I have pointed out, does not challenge his Honour's approach to the assessment of the loss under s66 but does submit that his Honour erred in law in awarding interest on the amount awarded only from 7 December 1988 (the date of the operation). His Honour did not assign a reason for limiting the interest in the manner in which he did but it is, I think, possible to discern that reason from his Honour's approach to the assessment of compensation under s67. That section relevantly reads: "67(1) A worker who has suffered a loss mentioned in the Table to this Division... is entitled to receive... by way of compensation for pain and suffering resulting from the loss... an amount not exceeding $61,750." (This was the loss at January 1995.) It is to be noted that the award is in respect of 'compensation for pain and suffering resulting from the loss' (that is, the loss referred to in s66). His Honour noted that there was a divergence of view amongst the judges of the Compensation Court as to whether or not all pain and suffering resulting from the employment injury can be compensated under s67. He then said: "Tt seems to me that this ignores the precise wording of s67. It is not the pain and suffering resulting from the employment injury, which is the subject matter of the section, but the pain and suffering resulting from the scheduled loss". His Honour appreciated that there were difficulties involved in separating pain and suffering resulting from an employment injury from the pain and suffering resulting from the loss itself, but considered that, despite those difficulties, it was necessary, in view of the words of the section, to limit the award for pain and suffering to that suffered as a result of the loss; in this case the permanent impairment of the appellant's back. His Honour assessed the compensation at $10,000 upon the basis that, as the loss assessed under s66 was the loss after the ameliorating effects of the operation, the pain and suffering should be assessed from the time at which the permanent impairment was determined. To put it another way his Honour's view proceeded upon the basis that the appellant's pain and suffering resulting from the employment injury was not compensible in respect of the period prior to the time when the court was able to assess the degree of permanent injury. In my opinion this approach was too narrow. The relevant loss suffered by the appellant was a permanent impairment to his back. That loss was suffered as a result of the 8 UNREPORTED JUDGMENTS employment injury. Prior to the operation the degree of permanent impairment could not be assessed. It was only after the beneficial effects of the operation that it could be said that all of the impairment was permanent. Nonetheless, there was, as his Honour's factual finding made clear, a permanent impairment of his back caused by the employment injury which caused pain and suffering from the time of that injury. The fact that it was not possible to measure the extent of the permanent impairment prior to the operation presents no reason for denying compensation for pain and suffering at the earlier time. In those circumstances it seems to me that his Honour was obliged to base his award on the pain and suffering resulting from the permanent impairment which resulted, and dated, from the time of the employment injury. This obligation existed notwithstanding that the degree of that permanent impairment was not determined until after the operation. His Honour's approach, however, disregarded the properly compensible element of the pain and suffering which flowed from the permanent impairment caused at the time of injury and which continued until the operation. There is nothing in the section which requires the court to limit the award for pain and suffering in that way, nor to compensate pain and suffering only from the time the permanent impairment becomes susceptible of assessment. In a sense the section, by limiting the award for compensation for pain and suffering to that resulting from the permanent loss rather than the employment injury, may require the court to make an artificial distinction between the pain and suffering resulting from the permanent and non permanent consequences of an injury. This is because no compensation may be awarded for the pain and suffering resulting from the temporary, or remediable, consequence of the employment injury. Nonetheless no reason appears why the court should disregard the suffering flowing from the permanent impairment before the time had been reached when the court was able to evaluate the precise percentage of that impairment for the purpose of s66. In the present case his Honour was obviously concerned that his approach may be too narrow for he also assessed the compensation upon the basis that he was required to take into account the pain and suffering prior to the operation and he fixed that figure at $15,000. Insofar as there is no reason to think that his Honour was not limiting the pre- operative pain and suffering to the effects of the permanent impairment and as I myself would think the sum adopted was an appropriate one there is no reason to interfere with it. Accordingly, | would set aside of the award of $10,000 under s67 and substitute a figure of $15,000. It would seem to me that the same approach dictated his Honour's determination of the award of interest, which was, on any view, calculated at an excessive rate. Both the losses under s66 and s67 flowed from the employment injury and, contrary to his Honour's view, | see no reason why interest on those awards should not date from the same time. True it is that the permanent effects of the injury were not assessed until after the remedial operation but that presents as no reason why interest should not be awarded on the compensation for those permanent effects from the time when they were suffered. Accordingly, 1 would set aside the awards of interest and in place award interest from 28 January 1988 at the agreed rate of 12 per cent on the award under s66 and at 6 per cent on the sum of $5,000 being part of the amount awarded under s67. URDROVAC v CORPORATE VENTURES PTY LTD (T/as BOWSERS ASHPHALT) (Meagh JA) The respondent submitted that the adoption of the date of the first incident was not justified and that the awards of interest should be calculated from 22 June. Neither his Honour's factual findings nor his approach support that argument and I would reject it. ORDERS (1) The parties should bring in short minutes which reflect the orders I have made; (2) Stood over to (a date) for mention. Meagher JA I agree with Clarke JA. (1) The parties should bring in short minutes which reflect the orders I have made; (2) Stood over to (a date) for mention. COUNSEL: Appellant: C O'Connor QC and P Evans Respondent: P Webb QC and T Rowles SOLICITORS: Appellant: David Landa, Stewart and Co Respondent: McCulloch and Buggy