LEONE HOLDINGS PTY LIMITED v JW KIRKWOOD PTY LIMITED SUPREME COURT OF NEW SOUTH WALES — COURT OF APPEAL MEAGHER, SHELLER and POWELL JJA 12 April, 9 June 1995 [1995] NSWCA 259 In April 1982 John Loewenthal sustained injuries to his back and left leg in the course of his employment with JW Kirkwood Pty Limited, the respondent. In March 1992 he injured his back in the course of employment with Leone Holdings Pty Limited, the appellant with which he had commenced work in September 1985. In an application for determination under the Workers Compensation Act 1987 (WCA) by the worker against Leone and Kirkwood, her Honour Judge Truss held that the worker was either totally or partially incapacitated for work for various periods as a result of the April 1982 and March 1992 injuries in a proportion of one-third for the first and two-thirds for the second. In respect of the permanent back impairment and loss of the use of his left leg, an award was entered pursuant to s66 against Leone. Apportionment of the liability to pay compensation pursuant to s22(1) was refused. Leone appealed against this part of her Honour's decision. Held: 1. Although the first injury was received before and the second after the commencement of the WCA, Division 4 of Part 3 still applies; Schedule 6, Part 6, clause 1. 2. Clause 6 provides that in a case where a loss results from an injury received before and an injury received after the commencement of Division 4, the loss shall, for the purposes of determining the amount of compensation payable, be treated as having resulted from the injury received after the commencement. 3. Her Honour's conclusion that the worker had sustained permanent impairment and loss "as a result of the injuries in April 1982 and on 22 March 1992" means no more than that the two injuries collectively contributed to the loss. As s22 only applies when there is common liability for the same compensation, her Honour correctly held that there could be no apportionment; Insurer's Guarantee Fund- NEM General Insurance Association Limited (In Liquidation) v GIO General Limited (1994) 33 NSWLR 247. Powell JA. I agree with Sheller JA Meagher JA. I agree with Sheller JA. Sheller JA. INTRODUCTION On 19 September 1977 John Richard Loewenthal commenced employment with JW Kirkwood Pty Limited (Kirkwood) as manager of an orchard. In April 1982 he injured his back and left leg in the course of his employment while cutting down trees with a chainsaw. He returned to work on 18 October 1982 but had further time off work as a result of back and leg pain in 1983 and 1985. On 30 September 1985, or it may have been a year earlier, the worker ceased employment with Kirkwood and commenced employment with Leone Holdings Pty Limited (Leone). On 22 March 1992 he injured his back in the course of his employment with Leone while dismounting from a tractor or trailer. He has been off work ever since. APPLICATION FOR COMPENSATION 2 UNREPORTED JUDGMENTS The worker applied for a determination under the Workers Compensation Act 1987 (WCA) against Leone, as first respondent, and Kirkwood, as second respondent. Her Honour Judge Truss heard the application and gave her decision on 21 March 1994. Her Honour found that as a result of the April 1982 and March 1992 injuries the worker was either totally or partially incapacitated for work for various periods. He was paid compensation for such incapacity until 8 March 1993. Since that date he had been partially incapacitated for work as a result of the injuries in a proportion of one-third for the first and two-thirds for the second and had suffered a permanent back impairment equivalent to 40 per cent of a most extreme case of back impairment and permanent loss of the efficient use of the left leg at or above the knee equivalent to 15 per cent of the total loss thereof and below the knee equivalent to 15 per cent of the total loss thereof. Her Honour entered awards in respect of the back impairment and loss of use of the left leg against the first respondent, Leone, pursuant to s 66 of the WCA. She refused to apportion the liability to pay compensation for such permanent impairment or loss pursuant to s 22 (1) of the WCA. Leone appeals from this part of her Honour's decision. APPORTIONMENT UNDER SECTION 22 The first injury was received before and the second injury after the commencement of the WCA. Schedule 6, Part 6 to the WCA contains savings and transitional provisions relating to compensation for non-economic loss. Clause 1 provides that Division 4 of Part 3 which deals with compensation for non-economic loss applies whether the injury was received before or after the commencement of that division. Clause 6 provides for the case where aDivision 4 loss results both from an injury received before and an injury received after the commencement of that division. In such case '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'; cl 6 (1). Judge Truss held that cl 6 meant that the award for permanent impairment and loss was payable by Leone. Since Kirkwood was not liable there was no basis for apportionment under s 22 (1). That subsection, so far as presently material, provides: If: (b) a loss suffered by a worker as referred to in Division 4 of Part 3 results from more than one injury to the worker, liability to pay compensation under this Act is to be apportioned in such manner as the Compensation Court determines. Subsection (2) provides that liability to compensation under the Act includes (a) the liability of an employer. In respect of the permanent impairment to the worker's back her Honour considered that note (g) at the foot of the 'Table of Compensation for Permanent Injuries' set out under s 73 of the WCA led to the same result. That note provides, so far as presently material, In the case of the impairment of the back .... 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. Her Honour referred to Clutha Limited v Danswan (1993) 9 NSWCCR 225 1993 and New South Wales Department of Technical and Further Education v Pitt (1993) 9 NSWCCR 309. URJ LEONE HOLDINGS PTY LIMITED v JW KIRKWOOD PTY LIMITED (Sheller JA) 3 Leone submits that cl 6 and note (g) concern only the manner in which compensation payable is to be determined and are irrelevant to the question whether the condition of s 22 (1) is satisfied, namely whether a loss suffered by a worker as referred to in Division 4 of Part 3 'results from more than one injury to the worker', so that liability to pay compensation is to be apportioned if, when the injuries were received, the employers of the worker were different. The Statute Law (Miscellaneous Provisions) Act 1990 amended cl 6 to substitute the phrase 'for the purposes of determining the amount of compensation payable in accordance with this Part and this Schedule' (my emphasis) for the phrase 'for the purposes of this Part and this Schedule'. The added words emphasise that the clause is directed to quantifying compensation payable, by treating the injury as received after the commencement of the WCA, rather than to questions of liability. The explanatory note which was headed 'Clarification of Transitional Provisions' said: The proposed amendments to Parts 3, 4, 6 and 7 of Schedule 6 put it beyond doubt that the transitional provisions contained in those Parts do not negate the liability of any employer to pay compensation or of any insurer to indemnify an employer for payment of compensation in respect of injuries received before the commencement of the Act but merely established the benefits applicable in each instance (item (16) — (19)). Leone submits that her Honour found that the worker sustained permanent impairment and loss 'as a result of the injuries in April 1982 and on 22 March 1992'. Accordingly it submits that the condition for the application of s 22 (1) is satisfied. Insurers" Guarantee Fund — NEM General Insurance Association Limited (In Liquidation) v GIO General Limited (1994) 33 NSWLR 247 concerned an award made pursuant to sll (2) of the Workers Compensation Act 1926 uponthe basis of notional total incapacity. The insurer at risk at the time of the last injury having causative effect upon the incapacity of the worker was alone liable; National and General Insurance Co Limited v South British Insurance Co Limited (1982) 149 CLR 327. Handley JA at 266, after reviewing the cases, held that the section, apart from subs (4), 'only applies in a Morris v George [(1977) 2 NSWLR 552$] case where there is a common liability in two or more employers or insurers and it authorises an apportionment of that liability so as to exonerate each employer or insurer from so much of that liability as is apportioned to another. ... The section (apart from subs (4) which is not presently relevant) requires a common liability of two or more employers or two or more insurers for the same compensation.' His Honour said that there were two insurers but no common liability because one, the respondent, was alone liable to the employer and the worker. There was therefore no basis for apportionment. The other member of the majority, Meagher JA, at 260-261 decided the case simply on the basis that the section could only refer to multiple liabilities. The President dissented. MLC Insurance Limited v Pinto & Anor (1994) 8 ANZ Insurance Cases 75336 concerned an award of compensation against an employer for total incapacity resulting from the aggravation of a disease caused by the work undertaken by the worker in the course of his employment. Clarke JA at 75338 agreed with the opinion expressed by Handley JA in the Insurers Guarantee Fund case. At 75339, he pointed to the difference between a case in which the incapacity had resulted from two, or more, distinct injuries and one where the various injuries had collectively resulted in the total incapacity of the worker, to the difference between a finding that an injury was a contributing cause to an incapacity and a finding that the incapacity resulted from the injury; Morris v George at 566-568 4 UNREPORTED JUDGMENTS and NEM v Calver (1983) 3 NSWLR 107 at 109. It follows that a finding that incapacity resulted from each of two injuries would be rare. CONCLUSION In the present case Judge Truss" finding that the worker had sustained permanent impairment and loss 'as a result of the injuries in April 1982 and on 22 March 1992' could mean no more than that the two injuries collectively contributed to the loss. She did not find that the two injuries each resulted in the permanent impairment and the permanent loss. Accordingly she correctly held that there could be no apportionment under s 22 (1). There was no common liability of Kirkwood and Leone for the same compensation. This conclusion is reached without offending the intention of the 1990 amendment to cl 6 that the transitional provisions do not negate the liability of any employer to pay compensation. What is absent here is common liability of the sort discussed in the Insurers Guarantee Fund case and Morris v George. It is for this reason that s 22 does not apply. Leone sought leave to re-argue the apportionment cases but they have been recently reaffirmed in this Court more than once. Nothing was put which persuades me that they were wrongly decided. The appeal should be dismissed with costs. Appeal dismissed with costs. Counsel for the appellant: WP Kearns/CJ Wynyard Solicitors for the appellant: AO Ellison and Co Counsel for the first respondent: CRR Hoeben Solicitors for the first respondent: Leigh Virtue and Associates Solicitors for the second respondent: Whiteley Ironside and Shillington