GOVERNMENT CLEANING SERVICES v ELLUL SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL MAHONEY P, PRIESTLEY and BEAZLEY JJA 17 July 1996, 12 August 1996 [1996] NSWCA 225 WORKERS COMPENSATION — Assessment and amount of compensation — Award under s66 and s67 Workers Compensation Act 1987 Application of s68A — Whether trial judge must accept "available evidence". Workers Compensation Act 1987, s68A(1), (2), (8) 1. Appeal be dismissed. 2. Amend order No 3 made by Armitage J on February 1996 so as to insert 4 May 1995 instead of 21 July 1993. 3. The appellant to pay the respondent's costs of the appeal. Mahoney P The facts are stated in the judgment of Beazley JA which I have had the advantage of reading. I agree with her Honour's judgment and with the orders she proposes. In deference to the submissions made by Mr Hoeben SC I shall add a short observation upon the operation of s68A(8). As Beazley JA has said, this is a curious provision. Its objective is no doubt that of avoiding avoidable litigation. That is a desirable objective. It is desirable that legislation should contain an appropriately worded provision for this purpose. But, as the argument has indicated, it is unlikely that the present provision will achieve that effect. It may be that the craftsman of the subsection intended to use in the formulation of it what is currently described as plain English. The use of language of that kind is, in my respectful opinion, to be welcomed. But if litigation is to be avoided, it is necessary that plain language be precise language and that it be used to express precise thought. The concepts involved in the criteria used in s68A ("difficult", "costly", "absence" and "at odds") are not precise and their imprecision may well defeat the purpose to which the subsection was directed. Upon the basis of the reasoning of Beazley JA, it is not necessary to pursue further the difficult questions which the terms of the subsection pose. As her Honour has said, there was no available evidence of the proportion of loss solely due to the pre-existing condition and accordingly the result achieved by the trial judge may be accepted. Priestley JA I agree both with Mahoney P and Beazley JA. Beazley JA This is an appeal from a decision of Armitage J of the Compensation Court dated 15 February 1996. The only issue on the appeal is whether his Honour properly applied the provisions of s68A of the Workers' Compensation Act 1987 (the Act). The section was inserted into the Act by cl29 of Schedule 1 of the WorkCover Legislation Amendment Act 1995 and commenced operation on 1 January 1996. Before dealing with the terms of the section it is appropriate to refer briefly to the facts. 2 UNREPORTED JUDGMENTS The respondent worker had been employed by the appellant as a cleaner since 1969. Her duties as a cleaner involved her using polishers as well as scrubbing and polishing floors, carrying buckets of water, carrying other heavy materials, and performing other strenuous activities associated with cleaning. The respondent brought proceedings under the Act claiming compensation under s66 and s67 in respect of permanent loss of the use of the right arm at or above, or in the alternative, below the elbow; for permanent impairment of the back and for permanent loss of use of the right leg at or above the knee. The respondent alleged her back injury was due to five separate incidents between July 1987 and July 1993 as well as to the nature and conditions of her employment. The only loss relevant to the s68A issue is the permanent impairment to the respondent's back. There was agreement amongst all medical practitioners whose medical reports were tendered (no doctor gave oral evidence) that the respondent had sustained an injury to her low back. She had undergone a decompressive laminectomy for spinal stenosis in May 1994. Prior to surgery, x-rays and a CT scan of her lumbar spine showed an age related canal stenosis. The CT scan also showed a bulging of the L3/4 disc encroaching the theca and complete disc degeneration with minor bulging at L4/S. There was also disc bulging at LS/S1. A CT myleogram done in about 1993 had shown a complete obstruction to the dye flow at L4/S. Dr Benanzio, who provided a medico-legal report to the respondent's solicitors after reviewing all the radiological evidence, or reports of the radiological evidence, from January 1989 until July 1993, considered that the respondent had: "lower lumbar disc pathology, which was precipitated by a first accident on 31 July 1987, with a strain apparently acting on pre-existent degenerative changes which had remained silent up till that time. The condition was repeatedly aggravated by other strains, with paraethesia radiating to the right lower limb related to nerve root compression by a prolapsed disc. " He stated that her condition was "directly related" to the several accidents she had had. Professor Gye was essentially of the same opinion. Dr Giblin and Professor Gye each gave an assessment of the degree of impairment of the respondent's back. Dr Bryan, who provided a medico-legal report to the appellant, was of the opinion that the problem with the respondent's back was due to injury that occurred in the course of her work, to the fact that she was excessively heavy, and had well established degenerative changes in the low back. He considered the injury was an aggravation of pre-existing degenerative changes. He attributed 50% of her low back impairment to "the degenerative changes and constitutional degenerative changes in the lumbar spine and to her excessive weight. The remainder due to the injury and the failure to relieve or reverse the problem completely following operation of the back." Counsel for the respondent submitted that the trial judge was bound, pursuant to s68A, to accept this evidence, there being no other evidence of the proportion of loss due to the plaintiffs pre-existing degenerative changes. The trial judge held that (leaving aside Dr Bryan's 50% attribution), the medical evidence was to "the same effect" and found that "the total impairment of the [respondent's] back... on a permanent basis [was] 25%... of a most extreme case." The trial judge rejected Dr Bryan's finding as to the cause of 50% of the impairment to the back, stating: URJ GOVERNMENT CLEANING SERVICES v ELLUL (Beazley JA) 3 "T am quite unconvinced that this view should be implemented in the findings which I make in relation to impairment of the applicant 's back, firstly because it is not apparently shared by the other doctors in the case and in particular by Professor Gye, whose reports were tendered in the [appellant's] case and who could have been asked about it, and by Dr Benanzio, and secondly because if the [respondent's] did have any significant problem by way of degeneration in her low back predating the first of her work injuries as related above, it was silent and asymptomatic, whereas the [respondent's] now has florid symptoms both in her low back and right leg, and at an earlier time in her left leg, following the various traumata at work described by her. It thus appears to me that the role of the pre-existing degenerative changes in the production of the applicant's low back and right leg symptoms is minor and I shall reflect this in the findings I make in relation to s68A to which I shall shortly come." Later in his judgment, his Honour dealt with the effect of s68A. Having rejected Dr Bryan's evidence, he stated that it was not possible on the medical evidence to determine the extent of the deductible proportion of the loss due to constitutional degenerative changes in accordance with s68A(1) and (2). He thus invoked the provisions of s68A(8). APPELLANT'S SUBMISSION Counsel for the appellant advanced a number of submissions in respect of the operation of s68A. First, he submitted that the onus was upon the worker to establish entitlement to compensation and therefore the extent of loss due to injury and that there was no onus upon an employer to establish "the defence" provided by s68A. Secondly, he submitted that s68A operates, relevantly, in respect of a pre-existing condition or abnormality, "not to something which is actually producing symptoms or causing actual impairment". Thirdly, that under s68A, the trial judge was bound to accept Dr Bryan's attribution of 50% as it was the only "available evidence" to the effect that the deductible proportion for the pre-existing condition or abnormality was greater than 10%. S68A provides, relevantly: "(1) If a loss suffered by a worker as a result of an injury is permanent impairment of the back, neck or pelvis, no compensation is payable under this Division, by the employer who is liable in respect of the injury, for any proportion of the loss that is due to: (a) a previous injury for which compensation has been paid or is payable under this Division, or (b) any other previous injury or any pre-existing condition or abnormality (2) The proportion of a loss for which no compensation is payable because of subs(1) is the "deductible proportion" for that loss... (8) If there is a deductible proportion for a loss but the extent of the deductible proportion will be difficult or costly to determine (because, for example, of the absence of medical evidence), it is to be assumed (for the purpose of avoiding litigation) that the deductible proportion is 10%, unless this assumption is at odds with the available evidence " It will be noticed that subs(1) provides that no compensation is payable under Division 1 of Pt3 of the Act (which includes s66 and s67) for: "any proportion of... loss due to... any pre-existing condition or abnormality" The "loss", the proportion of which gives no entitlement to compensation, is that loss referred to in the opening words of the subsection namely, loss which is permanent impairment of, relevantly, the back. No compensation is payable for such proportion of the loss, that is, for such proportion of the permanent 4 UNREPORTED JUDGMENTS impairment, as is due to a pre-existing condition or abnormality. It is clear from the terms of s68A(1) that the subsection is not concerned with any pre-existing condition or abnormality which is not causing any permanent impairment. The section does not directly provide any mechanism whereby the deductible proportion is to be determined. Subs(8), however, operates as a default mechanism if the extent of the deductible proportion "will be difficult or costly to determine (because, for example, of the absence of medical evidence)". Subs8 is a curious provision which appears to have several levels of operation. In seeking to understand those levels, I leave to one side for the moment the question of onus. First, and as I have said, the subsection only,operates if the deductible proportion will be difficult or costly to determine. Thus, if there is evidence before the trial judge which the trial judge accepts, subs(8) has no role to play. That would be the case whether the evidence accepted by the trial judge was adduced by the worker or by the employer. Secondly, if it would be difficult or costly to determine the deductible proportion, the subsection specifies that the deductible proportion is assumed to be 10%, subject only to the qualification "unless the assumption is at odds with the available evidence". One reason why it might be difficult or costly to determine the deductible proportion is averted to by the section by way of example, namely, the "absence of medical evidence" Presumably, this phrase means the absence of medical evidence properly admitted in the proceedings. However, it is apparent from the structure of the subsection that the assumption does not operate only in those circumstances. Other circumstances might include where the opinions of the medical witnesses differed and it was proposed to call them to give oral evidence and to be cross examined - a process which could be costly. Thirdly, and this is the difficult part of the subsection, the 10% assumption is to be made "unless [it] is at odds with the available evidence". "Available evidence" is not defined. Presumably it means the evidence which has been properly admitted by the trial judge in accordance with the law of evidence. The question is, however, whether it means something different from evidence which is accepted or preferred by the trial judge. Fourthly, the subsection does not specify that if there is "available evidence" with which an assumption of 10% is at odds, the trial judge must accept that evidence instead of the assumed 10%. The question is whether that is the intent of the provision. For reasons which will become apparent, it is not necessary to resolve either this question or the question posed by the third consideration above for the purposes of this case. However, I should state that there are difficulties in a construction which means that the trial judge must act upon the "available evidence" if that phrase means such evidence as has been admitted, regardless of whether the trial judge has accepted or preferred that evidence. Such evidence, although admitted may be proved to be flawed, eg, because it proceeded upon a false premise. Why should such evidence be acted upon, unless it could be argued that flawed evidence was not "available evidence". Alternatively, the "available evidence" may have covered a significant range, eg, from 35% to 75%. The trial judge, in the ordinary course, may have properly determined not to accept any of that evidence. Does the subsection require the trial judge, having first determined not to accept the evidence, to then reconsider that evidence and determine which of the previously unaccepted evidence she (or he) then prefers. It may be that the answer to this conundrum lies in the onus issue. In other words, it may be that, URJ GOVERNMENT CLEANING SERVICES v ELLUL (Beazley JA) 5 except to the extent that subs(8) does operate, the party with the onus under s68A has to establish, in accordance with the usual principles of admissibility of evidence and standard of proof, the deductible proportion. The question of onus was not fully argued as it might otherwise have been as both counsel accepted that the issue had not loomed large at trial as there was clear evidence that the respondent had pre-existing degenerative changes. As the appeal must fail for reasons unconnected with the question of onus, it is also appropriate to leave that question to a case where it is clearly in issue. "AVAILABLE EVIDENCE IN THIS CASE" The only evidence which touched upon the deductible proportion of loss due to a pre-existing condition was that of Dr Bryan. Dr Bryan attributed 50% of the "problem with the back" to 3 causes: degenerative changes in the lumbar spine; constitutional degenerative changes in the lumbar spine; and the respondent's excessive weight. The "problem with the back" was the combination of signs and symptoms which he addressed in his report. He considered that the respondent's back condition could improve by "drastic weight reduction alone", her weight at that time being about 100 kgs. Dr Bryan also appears to have drawn a distinction between other operative causes of her total impairment - the degenerative changes and constitutional degenerative changes to which I have referred, "the injury" and "the failure to relieve or reverse the problem completely following operation on the back". Dr Bryan does not clarify what he means by "the injury". However, a reading of his two reports indicates that the reference to the injury probably means each of the specific instances referred to in his first report. In this regard, Dr Bryan refers to three injuries: a sprain in 1987, a fall in 1988 and an incident in 1990. It will be recalled that the respondent's case was based on 5 separate injuries, although nothing turns on that for the purposes of the appeal. Dr Bryan does not explain the distinction which he drew between degenerative changes and constitutional degenerative changes. Having regard to the whole of the medical evidence and to the basis upon which the applicant brought and proved her claim, namely that her impairment was caused by a series of specific incidents as well as by the nature and conditions of her employment over 24 years, it is possible that the distinction he intended to draw was between a pre-existing condition - the constitutional degenerative changes - and other degenerative changes, presumably caused by the nature and conditions of her employment. However, it is not necessary for this court to decide whether that is what was encompassed by Dr Bryan's opinion. The fact is, there was no available evidence of the proportion of loss which was solely due to a pre-existing condition. The trial judge was, therefore, required to apply the assumption in subs(8), albeit for reasons different from those expressed by him. INTEREST The appellant also appealed against the trial judge's award of interest on the awards made under s66 and s67, from 21 July 1993. Since his Honour's decision, and since the appeal in this matter was filed, this court has held that interest is payable in respect of sums awarded by the court in respect of proceedings commenced prior to the commencement of amendments made by the WorkCover Legislation Amendment Act 1995, but not for any period before a claim for compensation was made: St Vincent's Private Hospital v Maher and Anor (unreported, NSWCA (Mahoney P, Clarke and Cole JJA), 1 May 1996). 6 UNREPORTED JUDGMENTS Counsel for the respondent indicated that the respondent had already agreed to be bound by this decision. There was an issue as to whether the respondent had so stated its position at the callover of this appeal. It is not necessary for this Court to enter into that matter. If any question of costs is thereby raised it can be 5 dealt with by the taxing officer. Both parties agreed that the trial judge's order as to interest should date from 4 May 1995 and an order to that effect will be made. 1. Appeal be dismissed. 2. Amend order No 3 made by Armitage J on 15 February 1996 so as to 10 insert 4 May 1995 instead of 21 July 1993. 3. The appellant to pay the respondent's costs of the appeal. Counsel for the appellant: CRR Hoeben SC 15 Solicitors for the appellant: Messrs Rankin and Nathan Counsel for the respondent: MJ Cranitch SC with WS Strathdee Solicitors for the respondent: Messrs Doherty Partners