DEMOLON PTY LTD (T/AS P and T CORFE) v PARBURY BUILDING PRODUCTS LTD SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL PRIESTLEY, and CLARKE JJA and HUNTER AJA 6 March, 28 March 1996 [1996] NSWCA 147 S22 Workers Compensation Act 1987 — apportionment of liability — incapacity resulting from more than one injury — causation in workers compensation cases Workers Compensation Act 1987 — transitional and savings provisions — injuries received before and after commencement of Act In August 1985 the second respondent, Warren James Seccombe, suffered an injury to his knee whilst working for the appellant, Demolon Pty Ltd. In 1989 he commenced employment with the first respondent, Parbury Building Products Pty Ltd, and during that employment suffered another injury to his knee. The worker claimed compensation against both employers and Neilson CCJ made an award in his favour for weekly payments as well as a lump sum award. His Honour was of the opinion that he did have power to apportion the liability, and he apportioned 60 per cent of the award to the appellant (the first employer) and 40 per cent to the first respondent (the second employer). The first employer appealed against the award on the basis that his Honour was in error in concluding that he had power to apportion the liability, and in error in apportioning 60 per cent of the liability, calculated in accordance with the relevant provision of the new rather than the old Act, to the first employer. The Court dismissed the appeal. HELD: (1) The trial judge had power to apportion liability between the two employers: Council of Sutherland Shire v Baltica General Insurance Co Ltd and Ors (Court of Appeal, 28 March 1996, unreported). (2) His Honour was correct in determining the amount of compensation on the basis that where one injury was received before and one injury after the commencement of the Act, the loss and incapacity are to be treated as having resulted from the injury received after that commencement. ORDERS Appeal dismissed with costs. Priestley JA I agree with Clarke JA. Clarke JA On 1 August 1985 Warren James Seccombe ("the worker') suffered an injury to his right knee when he kicked a steel bar and fell down whilst employed as a labourer mill hand by the appellant Demolon Pty Ltd ("the first employer"). He was off work, and had four arthroscopies, in the period following the accident and ending on 16 July 1986. Upon returning to work he stayed in the employment of the first employer until 1989. On 20 March of that year he commenced employment with the first respondent, Parbury Building Products Pty Ltd ("the second employer'). While in this employment, on 15 June 1989, he suffered another injury to his right knee. Following this injury he had a great deal of treatment but has been continuously unemployed except for a period between September 1993 and March 1994 when he did casual work with Nobel Timbers. 2 UNREPORTED JUDGMENTS The worker claimed compensation against both employers and on 27 October 1995 Neilson CCJ made an award in his favour for weekly payments for total incapacity between February 1990 and October 1991 and for partial incapacity from October 1991 to the date of trial and continuing. His Honour also made awards under s66 and s67 of the Workers Compensation Act 1987 ("the Act"). These awards were made against the second employer upon the basis that the worker's incapacity and losses resulted from the second injury suffered by the worker. At the same time his Honour reserved his decision upon the question whether he had power to apportion the award between the first and the second employers although he did indicate that if he did have that power he would apportion 60 per cent of the award to the first employer and 40 per cent to the second employer. On 10 November 1995 Neilson CCJ gave judgment in which he concluded that he did have power to apportion the liability and he made an award in accordance with his earlier indication, except insofar as the lump sum award under s67 was concerned. It is unnecessary in this judgment to deal with that exception for it has not been the subject of any challenge. The first employer appealed against the award and raised two discrete grounds of appeal. They were: (1) That his Honour was in error in concluding that he had power to apportion the liability; (2) That he erred in apportioning 60 per cent of the liability to the first employer. In my opinion the first ground of appeal should be dismissed for the reasons which were given in Council of Sutherland Shire v Baltica General Insurance Co Ltd and Ors (Court of Appeal, 28 March 1996, unreported). The second ground, put shortly, is to the effect that the trial judge failed to make a just and equitable apportionment in the special circumstances of the case as, according to the argument, he was required to do pursuant to s22A of the Act (which was introduced by amendment in September 1995). The point is a neat one. The first injury occurred in 1985 before the Act came into law and at a time when s16 of the Workers Compensation Act 1926 provided a worker's sole entitlement in respect of incapacity and sole remedy for permanent loss. In its written submissions the first employer put this proposition: "He (ie the judge) could only order the appellant to pay 60 per cent of its separate liability to the worker pursuant to the provisions of the 1926 Act as kept in force by the 1987 Act, Schedule 6 Pt4(4) and Pt6(4)". Schedule 6 to the Act set out the savings and transitional provisions. Schedule 6 Pt4 CL(4)(1) makes provision for the weekly payments of compensation payable under the Act in respect of any period of incapacity for work occurring after the commencement of the relevant division in the Act in respect of an injury received before that commencement. The particularly relevant provision is CL4(1)(c) which stipulates that s11(1) of the former Act applies instead of s40 of the Act. Pt6 of Schedule 6 deals with the compensation for non economic loss and the first employer relied upon CL(4) which provided that: "Where the loss resulted from an injury received before the commencement of the relevant division of the Act the amount of compensation should be determined in accordance with s16 of the former Act." UWFEMOLON PTY LTD (T/AS P and T CORFE) v PARBURY BUILDING PRODUCTS LTB (Hunter AJA) Accordingly, it is submitted that the court ought, in accordance with justice and equity, to have required the first employer to pay 60 per cent of the compensation, in respect of incapacity and permanent loss, calculated in accordance with the provision of the old Act. The difficulty with the first employer's submissions is that both the clauses to which I have made specific reference deal with a case of loss and/or incapacity resulting only from an injury received before the commencement of the relevant division of the Act. They do not deal with the situation which occurs when the loss, or incapacity, resulted both from an injury received before the commencement of the relevant division and an injury received after that commencement. In that situation Schedule 6 Pt4 CL(4)(3), which relates to incapacity, and Schedule 6 Pt6 CL(6)(1), which relates to permanent loss, both provide that the relevant loss or incapacity, as the case may be, should be treated as having resulted from the injury received after the commencement of the relevant division. In this case the worker received one injury before and one injury after the commencement of the division. The two provisions to which I have just drawn attention apply. The loss and the incapacity are to be treated, for the purposes of determining the amount of compensation, as having resulted from the injury received after that commencement. The instruction given in these sections is clear and they were followed by the trial judge in this case. He determined the amount of compensation upon the basis that the injury from which the incapacity and loss resulted was received after the commencement of the Act. The provisions to which counsel for the appellant drew the court's attention are irrelevant for they were expressly concerned with the case of a single injury. Having determined the appropriate amounts of compensation for which the second employer was liable to pay the worker the trial judge set about the task of apportioning that liability. Although the word 'apportionment' may not be completely accurate to describe the task which the legislation requires the judge to undertake, the statutory provision required the trial judge to determine what proportion of that liability should be attributed to the first employer. It would, no doubt, have been more simple if the Legislature had spoken of 'contribution' but reference to s22A(4) (which was introduced in September 1995), in which the word 'contribution' is used, indicates that what the trial judge was required to do was to determine what contribution should be made by the first employer in respect of the liability found against the second employer. In these circumstances there is no basis upon which a judge could pay regard to some other liability such as that which would have arisen if the only injury had been the one which occurred prior to the coming into force of the Act. I recognise that the result of this construction of the Act may be that the first employer may incur a greater pecuniary liability than if the compensation had been assessed under the 1926 Act. But that result seems to me to flow naturally from the wording and scheme of the Act. This opinion is reinforced by the addition of CL(6) to Pt2 of Schedule 6 in September 1995 wherein it is expressly stated that the amendments made to s22 made in September 1995 and the provisions of s22A extend to a situation where one or more of the injuries concerned was received before the commencement of the Act and one or more of those injuries was received after that commencement. The first employer's submission should be rejected and as a consequence the appeal should be dismissed with costs. Hunter AJA I agree with Clarke JA. UNREPORTED JUDGMENTS Appeal dismissed with costs. Counsel for the Appellant: JN West QC, FFJ Davis Solicitors for the Appellant: NW Aussel Counsel for the Respondent: C O'Connor QC, J Fernan Solicitors for the Respondent: PW Turk and Associates